Caseys General Stores, Inc.

Good day, and thank you for standing by. Welcome to the first quarter fiscal year 2022 Casey's General Stores Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you'll need to press star 1 on your telephone. If you require any further assistance, press star 0. I would now like to hand the conference over to your speaker today, Brian Johnson, Senior Vice President, of Investor Relations and Business Development. Please go ahead.

Good morning, and thank you for joining us to discuss the results from our first quarter ended July 31, 2021. I am Brian Johnson, Senior Vice President, Investor Relations and Business Development. With me today is Darren Rebellis, President and Chief Executive Officer, and Steve Bramlich, Chief Financial Officer. Before we begin, I'll remind you that certain statements made by us during this investor call may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include any statements relating to expectations for future periods, possible or assumed future results of operations, financial conditions, liquidity and related sources or needs, the company's supply chain, business and integration strategies, plans and synergies, growth opportunities, performance at our stores, and the potential effects of COVID-19, there are a number of known and unknown risks, uncertainties, and other factors that may cause our actual results to differ materially from any future results expressed or implied by those forward-looking statements, including but not limited to the integration of the Buchanan Energy acquisition, our ability to execute on our strategic plan, or to realize benefits from the strategic plan, the impact and duration of COVID-19 and related governmental actions, as well as other risks, uncertainties, and factors which are described in our most recent annual report on Form 10-K and quarterly reports on Form 10-Q as filed with the SEC and available on our website. Any forward-looking statements made during this call reflect our current views as of today with respect to future events. and Casey's disclaims any intentions or obligations to update or revise forward-looking statements, whether a result of new information, future events, or otherwise. A reconciliation of non-GAAP to GAAP financial measures referenced in this call, as well as a detailed breakdown of the operating expense increase for the quarter, can be found on our website at www.casey.com under the investor relations link. Before I turn the call over to Darren, I'd like to point out that we changed the titles of two categories that we routinely disclose and discuss. Grocery and other merchandise has been changed to grocery and general merchandise, and prepared food and fountain has been changed to prepared food and dispensed beverage. We believe these changes provide a better description of the categories. There's been no change to the products within the categories, nor the calculation of sales and margin. With that said, I'd now like to turn the call over to Darren to discuss our first quarter results. Darren?

Thanks, Ronnie. Good morning, everyone. We're looking forward to sharing our results in a moment, but I would like to start with the top priority for Casey's, supporting our team members and their safety in the continuing battle with COVID-19 due to the Delta variant. It's been a long 18 months, and after a summer that seemed nearly normal, our team is again experiencing COVID-19 case increases and related challenges. In spite of these obstacles, our team has performed exceptionally well and truly makes life better for our communities and guests every day. I couldn't be more proud of their resiliency and commitment to Casey's. As our guests and communities shift gears from summer and head back to school, commuting to work and engaging in fall routines, Casey's will be here ready to serve them. The return to school is a time to come together in our communities. In August, Casey's Cash for Classrooms giving campaign raised almost a million dollars thanks to our generous guests and passionate team members. These funds will support grants to local schools in our footprint. The grant applications open in October, so we look forward to hearing from our communities on what their schools need. I'd also like to provide some exciting updates with respect to our board of directors. I'm proud to share that Greg Trojan, former CEO of BJ's Restaurants, has joined Casey's board. He brings 25 years of experience leading national restaurant, retail, and consumer products companies like Guitar Center, House of Blues Entertainment, and California Pizza Kitchen. Adding Greg to the Casey's board adds strategic expertise in areas that fuel the growth of our business, focusing on the guest, leading an exceptional restaurant-caliber food service program, and being a retail leader. We look forward to leveraging Greg's unique perspective and industry expertise to support Casey's growth and success. Additionally, our board of directors recently received recognition from 50-50 women on boards. This organization recognizes companies where female directors hold 50% of its corporate board seats. At Casey's, we're committed to equity and diversity and are honored to be recognized and appreciate the female leaders who hold position on our board. Finally, in July, we published our inaugural Environmental, Social, and Governance, or ESG, reports. I'm grateful to the entire Casey's team and our board for their support as we developed and delivered this first report. We understand the responsibility that comes with our role at the heart of the communities, and we are committed to creating long-term value for all stakeholders. We look forward to sharing our progress along the journey. Now let's discuss the quarter's results. As you've seen in the press release, we're off to a great start to the fiscal year. Diluted earnings per share were $3.19, just off slightly from the all-time high quarter one year ago. Adjusted EBITDA was $243.2 million, the highest quarterly EBITDA in company history. Sales volumes and margin improved dramatically as guest traffic began to rebound, driving an all-time high gross profit dollar quarter for the company. We also successfully completed the closing on two highly strategic acquisitions in the first quarter and are already seeing good performance. I'd now like to go over our results and share some of the details in each of the categories. Inside same-store sales were up 8% for the first quarter, with an average margin of 40.5%. Grab-and-go items such as pizza slices, packaged beverages, and snacks were up significantly throughout the quarter as guest traffic improved. Same-store grocery and general merchandise sales were up 7%, and the average margin was 33%, compared to 32.2% for the same period a year ago. The store resets completed towards the end of last fiscal year continue to significantly benefit this category. Packaged beverages outperformed despite high comparisons during the pandemic, achieving a two-year stacked same store growth of 17.6%. Although alcohol sales have moderated and were about flat versus pandemic-driven buying in the prior year, they still achieved a 20.2% two-year stacked sales growth. Gross profit margin improved due in part to our strategic sourcing efforts from our centralized procurement team. This category also benefits from our private label effort as we exited the quarter with a 4.4% penetration rate of the grocery and general merchandise category. Same-store prepared food and dispensed beverage sales were up 10.8%. The average margin for the quarter was 61% versus 59.7% from a year ago. Sales were up double digits in bakery items and dispensed beverages. Pizza slices were the star of the show, up close to 29% in the quarter. During the first quarter, same-store fuel gallons sold were up 9% with a fuel margin of 35.1 cents per gallon as Casey's continued to achieve strong fuel margins. The company took advantage of a favorable renewable fuel credit environment and sold $18.7 million in RINs. The fuel team has done a tremendous job balancing fuel volume and margin to optimize the profitability of the category. I would now like to turn the call over to Steve to go into some detail on the financial statements. Steve?