Item 1. BUSINESS

The Company

As of April 30, 2022, Casey’s General Stores, Inc. and its direct and indirect wholly-owned subsidiaries operate convenience stores primarily under the names "Casey's" and “Casey’s General Store" (collectively, with the stores below referenced as "GoodStop" or "Bucky's", referred to as "Casey's" or the "Company") throughout 16 states, primarily in Iowa, Missouri, and Illinois. All convenience stores carry a broad selection of food items (including, but not limited to, freshly prepared foods such as regular and breakfast pizza, donuts, hot breakfast items, and hot and cold sandwiches), beverages, tobacco and nicotine products, health and beauty aids, automotive products, and other nonfood items. As of April 30, 2022, 212 store locations offered car washes. In addition, all but four offer fuel for sale on a self-service basis.

During the fiscal year, the Company introduced certain stores branded or rebranded as "GoodStop (by Casey’s)". Similar to most of our store footprint, the "GoodStop" locations offer fuel for sale on a self-serve basis, and a broad selection of snacks, beverages, tobacco products, and other essentials. However, these locations typically do not have a kitchen and have limited prepared food offerings. As of April 30, 2022, 46 stores operate under the "GoodStop" brand.

The Company is also temporarily operating certain locations acquired from Buchanan Energy during the fiscal year under the name, "Bucky's." The Company is in the process of transitioning all "Bucky's" locations to either the "Casey's" or "GoodStop" brand. These locations typically have similar offerings to the “Casey’s” branded stores. The Company also operates two stores selling primarily tobacco and nicotine products, one liquor-only store, and one grocery store.

The Company acquired a dealer network from Buchanan Energy during the 2022 fiscal year. As of April 30, 2022, there were 76 dealer locations where Casey’s manages fuel wholesale supply agreements to these stores. These locations are not operated by Casey's and are not included in our overall store count in the paragraph below.

On April 30, 2022, there were a total of 2,452 stores in operation. There were 21 stores newly constructed in fiscal 2022, and we closed 20 stores in fiscal 2022. We also acquired 207 stores in fiscal 2022; 204 of those stores were opened in fiscal 2022, and 3 will be opened during the 2023 fiscal year. Finally, we opened 4 stores purchased in the prior year.

Approximately 51% of all stores in the Company were opened in areas with populations of fewer than 5,000 persons, while approximately 25% of our stores were opened in communities with populations of more than 20,000 persons. The Company competes on the basis of price, as well as on the basis of traditional features of convenience store operations such as location, extended hours, product offerings, and quality of service.

The Company operates three distribution centers - in Ankeny, Iowa adjacent, to our corporate headquarters, which we refer to as our Store Support Center, in Terre Haute, Indiana and in Joplin, Missouri - from which certain grocery and general merchandise items are supplied to our stores, primarily by our Company-operated delivery fleet. The Company also self-distributes the majority of fuel to our stores. The Company has a fleet of 365 tractors used for grocery and fuel distribution.

Our fiscal year runs from May 1 through April 30 of each year.

The Company’s internet address is www.caseys.com. We make available through our website all of our SEC filings, including current reports on Form 8-K, quarterly reports on Form 10-Q, our annual report on Form 10-K, and amendments to those reports, free of charge as soon as reasonably practicable after they have been electronically filed with the SEC. Additionally, you can go to our website to read our Financial Code of Ethics for the CEO and Senior Financial Officers, Corporate Governance Guidelines, Code of Business Conduct and Ethics, and committee charters. In the event of a waiver to the Code of Business Conduct and Ethics, any required disclosure will be posted to our website.

Casey’s, with its principal business office, and Store Support Center located at One SE Convenience Blvd., Ankeny, Iowa 50021-8045 (telephone 515-965-6100), was incorporated in Iowa in 1967.

General

Casey's corporate purpose is to make the lives of our guests and communities better every day. Many of the smaller communities in which we operate often are not served by national-chain convenience stores. We have succeeded in operating stores in smaller towns by offering, at competitive prices, a broader selection of products than does a typical convenience store. We have also succeeded in meeting the needs of residents in larger communities with these same offerings. We currently own most of our real estate, including substantially all of our stores, all three distribution centers (see discussion of ownership structure of the distribution center in Joplin, Missouri in Note 7), a construction and support services facility located in Ankeny, Iowa, and the Store Support Center facility.

The Company derives its revenue primarily from the retail sale of fuel and the products offered in our stores. Our sales historically have been strongest during the first and second fiscal quarters (May through October) relative to the third and fourth fiscal quarters (November through April). In warmer weather, guests tend to purchase greater quantities of fuel and certain convenience items such as beer, sports drinks, water, soft drinks, and ice.

Corporate Subsidiaries

Casey's Marketing Company ("CMC") and Casey's Services Company ("CSC") were organized as Iowa corporations in March 1995. Casey’s Retail Company ("CRC") was organized as an Iowa corporation in April 2004. CGS Stores, LLC was organized as an Iowa limited liability company in April 2019. Heartland Property Company, LLC was organized as a Delaware limited liability company in September 2019. CMC, CSC, and CRC are wholly-owned subsidiaries of Casey’s, while CGS Stores, LLC and Heartland Property Company, LLC are wholly-owned subsidiaries of CMC.

In addition, the acquisition of Buchanan Energy during the fiscal year (see Note 2 to the consolidated financial statement) resulted in the addition of several subsidiaries to the Company’s corporate structure, including Bucks, LLC, a Nebraska limited liability company, Buchanan Energy (N), LLC and Buchanan Energy (S), LLC, each Delaware limited liability companies, Buck’s, LLC of Collinsville, an Illinois limited liability company, and C.T. Jewell Company, Inc., a Nebraska corporation. However, the Company is in the process of merging these subsidiaries into the applicable Company legacy entities, described above.

CRC owns and/or operates certain stores in Illinois, Kansas, Minnesota, Nebraska, North Dakota, South Dakota and Michigan, holds the rights to the Company's trademarks, service marks, trade names, and other intellectual property, and performs most “corporate” functions of the enterprise. CMC owns and/or operates stores in Arkansas, Indiana, Iowa, Kentucky, Missouri, Ohio, Oklahoma, and Wisconsin, and is responsible for all of our wholesale operations, including all three distribution centers and management of the wholesale fuel network. CGS Stores, LLC owns and/or operates stores in Tennessee. Bucks, LLC owns and/or operates certain of the acquired Bucky’s locations in Iowa, Illinois, Missouri and Nebraska, and Buchanan Energy (N), LLC and Buchanan Energy (S), LLC own and/or operate certain of such stores in Illinois. CSC provides a variety of construction, maintenance and transportation services for all stores.

Store Operations

Products Offered

The Company designs, develops and delivers value to its guests through a differentiated product assortment where the right products are optimally placed, priced and promoted to drive traffic, revenue and profit. It is our practice to continually make additions to the Company’s product line, especially products with higher gross profit margins such as prepared food and our new private label offerings, described below. To facilitate many of these items, we have installed full kitchens in almost all of our stores, other than those branded as “GoodStop”.

The Company's flagship product is its handmade pizza, which we began preparing and selling in 1984. It was available in 2,332 stores (95.1%) as of April 30, 2022. In addition, we have expanded our prepared food offerings, which currently includes made to order cheesy breadsticks, sandwiches and wraps, chicken wings, chicken tenders, breakfast croissants and biscuits, breakfast pizza, breakfast burritos, hash browns, burgers, and other seasonal items. Of note, during the fiscal year, the Company launched a new lineup of breakfast items, including new bacon and egg croissants, new loaded breakfast burritos, and a breakfast handheld called the “Toastwich.” The rollout of the new breakfast menu was accompanied by the installation of bean-to-cup coffee machines across the bulk of the Company's footprint. Finally, as of April 30, 2022, the Company was selling donuts in 2,350 (95.8%) of our stores in addition to cookies, brownies, and other bakery items.

The growth in our prepared food program reflects the Company’s strategy to promote high-margin products that are compatible with convenience store operations. In the last three fiscal years, retail sales of nonfuel items have generated about 40% of our total revenue, but they have resulted in approximately 68% of our revenue less cost of goods sold (excluding depreciation and amortization). Revenue less cost of goods sold (excluding depreciation and amortization) as a percentage of revenue on prepared food items averaged approximately 60% for the three fiscal years ended April 30, 2022—substantially higher than the impact of retail sales of fuel, which averaged approximately 12%.

Each Casey’s store typically carries over 3,000 food and non-food items. The selection is a blend of differentiated private label products (which now includes over 250 items and as of April 30, 2022), as well as favored national and regional brands, many of which can be found in larger format stores. Our assortment includes product across the following categories:

• non-alcoholic beverages (soft drinks, energy, water, sports drinks, juices, coffee, tea & dairy)

• alcoholic beverages (beer, wine and spirits)

• packaged foods (snacks, candy, packaged bakery & other food items)

• tobacco & nicotine products

• frozen foods (ice, ice cream, meals & appetizers)

• non-foods (health & beauty aids, automotive, electronic accessories, housewares and pet supplies)

• services (lotto/lottery & prepaid cards)

All but four stores offer retail motor fuel products for sale on a self-service basis. Gasoline and diesel fuel are sold under the Casey’s name at the majority of our locations.

The Company offers the Casey's Rewards program to bring value to guests and improve the digital guest experience. As part of this program, guests can earn points from online, in-store, or at the pump purchases. Points earned can be redeemed for donations to a local school of the guest's choice, fuel discounts, or Casey's Cash, which can be used on most products. The Rewards program is delivered through Casey’s mobile application. In addition to earning points, guests receive other program benefits such as special offers, bonus points, as well as getting a free large pizza after purchasing 10 large pizzas. In early May 2022, the Company surpassed 5 million members enrolled in the program.

Store Design

Casey’s constructs stores that are primarily freestanding and, with a few exceptions to accommodate local conditions, conform to standard construction specifications. The current larger store design measures approximately 2,450 square feet devoted to sales area, 550 square feet to kitchen space, 400 square feet to storage, and 2 large multi-stall public restrooms. There is also a smaller store design that is generally designated for smaller communities that measures approximately 1,350 square feet devoted to sales area with the remaining areas similar in size, and 2 single user restrooms. Store lots have sufficient frontage and depth to permit adequate drive-in parking facilities on one or more sides of each store. Each new store typically includes 4 to 8 islands of fuel dispensers and storage tanks with capacity for 60,000 to 70,000 gallons of fuel. The merchandising display follows a standard layout designed to encourage a flow of guest traffic through all sections of every store. All stores are air-conditioned and have modern refrigeration equipment. Nearly all locations feature a bright sign which displays the Casey’s or GoodStop name and trade/service marks.

Almost all stores remain open at least sixteen hours per day, seven days a week. Hours of operation may be adjusted on a store-by-store basis to accommodate guest traffic patterns. As of April 30, 2022, we operated 551 stores on a 24-hour basis, and another 1,694 have expanded hours. Store hours have continued to shift back to pre-COVID 19 levels, as we temporarily reduced hours at many locations in response to the pandemic.

Store Locations

The Company historically has located many of its stores in smaller towns not served by national-chain convenience stores. It believes that a Casey’s store provides a service generally not otherwise available in smaller towns and that a convenience store in an area with limited population can be profitable if it stresses sales volume and competitive prices. Our store-site selection criteria emphasize the population of the immediate area and daily highway traffic volume.

Retail Fuel Operations

Retail fuel sales are an important part of our revenue and earnings. Approximately 64% of total revenue for the year ended April 30, 2022 was derived from the retail sale of fuel. The following table summarizes (dollars and gallons in thousands) retail fuel sales for the last three fiscal years ended April 30:

			Year ended April 30,
			2022						2021						2020
Number of gallons sold			2,579,179						2,180,772						2,293,609
Total retail fuel sales			$	8,312,038					$	4,825,466					$	5,517,412
Percentage of total revenue			64.2		%				55.4		%				60.1		%
Percentage of revenue less cost of goods sold (excluding depreciation and amortization and credit card fees)			11.2		%				15.8		%				11.1		%
Average retail price per gallon			$	3.22					$	2.21					$	2.41
Average revenue less cost of goods sold per gallon (excluding depreciation and amortization and credit card fees)			36.01		¢				34.91		¢				26.81		¢
Average number of gallons sold per store*			1,047						981						1,055

*			Includes only those stores in operation at least one full year on April 30 of the fiscal year indicated.

Average retail prices of fuel during the year increased 45.7% from prior year. Fuel prices have recently reached record highs due to overall supply issues, as refiners cut production levels in response to a slowing economy during the COVID-19 pandemic and Russia's invasion of Ukraine resulted in a United States ban of Russian crude oil imports. Regardless, with the

Company's centralized fuel team and the procurement improvements implemented, we believe we are well positioned to navigate any potential future fuel price volatility.

The total number of gallons sold during this period increased by 18.3%. Gallons sold were positively impacted by a growing store count as we operate 209 more stores than the prior year and increasing store traffic. Average revenue less cost of goods sold (excluding depreciation and amortization and credit card fees) per gallon increased by 3.2%. Our centralized fuel team, coupled with fuel procurement improvements, continues to grow profitability and has been instrumental in sustaining higher than normal average revenue less cost of goods sold per gallon (excluding depreciation and amortization and credit card fees).

Percentage of revenue less cost of goods sold (excluding depreciation and amortization and credit card fees) represents the fuel gross profit divided by the gross fuel sales dollars. As retail fuel prices fluctuate in a period of consistent gross margin per gallon, the percentage will also fluctuate in an inverse relationship to fuel price. For additional information concerning the Company’s fuel operations, see Item 7, below.

Distribution and Wholesale Arrangements

CMC supplies all stores with groceries, food, health and beauty aids, and general merchandise from our three distribution centers. The stores place orders for merchandise electronically to the Store Support Center, and the orders are filled with shipments in Company-operated delivery trucks from one of the distribution centers, based on route optimization for the fleet network. Most of our existing and proposed stores are within the three distribution centers' optimum efficiency range—a radius of approximately 500 miles around each distribution center.

In fiscal 2022, a majority of the food and nonfood items supplied to stores through the distribution centers were purchased directly from manufacturers. While we consider long-term contracts for potential favorability against short-term contracts, long-term supply contracts are not typically entered into with the suppliers of products sold by our stores. We believe the practice enables us to respond to changing market conditions with minimal impact on margins.

In addition to the products discussed above, CMC supplies the majority of fuel to our stores. We have entered into various purchase agreements related to our fuel supply, which include varying volume commitments. Prices included in the purchase agreements are indexed to market prices. Additionally, during the fiscal year we acquired a fuel wholesale network from Buchanan Energy. As part of the dealer network, the Company procures and provides fuel on a wholesale basis to 76 locations.

Human Capital

Our employees, who we refer to as Team Members, are critical to our business operations and the success of the Company. As of April 30, 2022, we had 20,451 full-time, and 22,030 part-time, Team Members. Approximately 40,032 are store Team Members, approximately 263 are field management and related Team Members, approximately 555 work in and support our three distribution centers, approximately 470 are fuel or grocery drivers and approximately 1,161 work out of the Store Support Center, or perform Store Support Center functions which support the organization.

During the 2022 fiscal year, the Company held two large-scale hiring events to support its store footprint, each of which was designed to hire up to 5,000 Team Members. These events led to a significant addition of talent to our store Team Member base in an ever-challenging and competitive labor environment.

We are not a party to any collective bargaining agreements with our Team Members and believe the working relationship with our Team Members is good.

Core Values

During the 2022 fiscal year, the Company unveiled its new core values to its Team Members, as part of its evolution to build a culture of commitment – Casey’s CARES:

C – Commitment: We work hard to be the best and have a good time doing it.

A – Authenticity: We’re true to our roots by being high integrity and low ego.

R – Respect: We treat people the way they want to be treated.

E – Evolving: We’re driven to build a better future for ourselves and for our business.

S – Service: We put service first and take pride in caring for our guests, our communities, and each other.

We believe these core values serve as a solid foundation for how we treat our Team Members, how they treat one another and how we operate our business as a whole.

Total Rewards

We believe that the future success of the Company depends in large part on our ability to attract, train, retain, and motivate qualified Team Members. As such, we are committed to providing market-competitive pay and benefits for all positions and offer performance-based compensation opportunities to a large portion of our full-time Team Member base. In addition, the Company offers a 401(k) plan to eligible Team Members, with a generous 6% match made in the form of Company stock, and all full-time and part-time associates are eligible for competitive health and welfare benefits, including medical, dental, vision, disability, life insurance and other benefits. In addition, during the 2022 fiscal year, we enhanced our already competitive benefits offerings to include paid bonding leave, a new college tuition discount program with certain higher-education partners, and launched the Casey's Team Support Fund, which is designed to help team members facing financial hardships due to catastrophic circumstances.

Diversity and Inclusion

The Company is committed to building a diverse and inclusive workforce across the organization, which it believes is set by example with its Board of Directors and extended leadership team. The Board consists of twelve members, five (or 42%) of which are diverse as to gender, and three (or 25%) of which are diverse to race and/or ethnicity. The extended leadership team, which includes all of our Vice-President level executives and above, consists of thirty-two members, almost 60% of which are diverse as to gender, race and/or ethnicity. Across our entire Team Member base, 60% of our Team Members are female and 15% are diverse as to race and/or ethnicity. In addition, we have a strict Anti Harassment and Discrimination Policy of which all Team Members are trained and expected to follow and we have several mechanisms, including an Ethics and Compliance Hotline, under which Team Members and guests can report incidents confidentially or anonymously and without fear of retaliation. During the 2022 fiscal year, the Company also established a formal Diversity, Equity and Inclusion Committee to enhance its already strong culture of belonging and empowerment for all Team Members.

Education and Training

The Company, including its established Learning and Development Department, which serves all levels of the organization, invests significant time and resources in educating and training Team Members by providing them with educational, development and leadership opportunities. These opportunities are provided through a mix of formal onboarding training, safety training, in-person classes, virtual modules and “on-the-job” learning. For example, through its virtual modules, the Company offers over 200 hours of educational opportunities through over 400 classes, for which there were over 1.5 million enrollments during the 2022 fiscal year. In addition, the Company has a formal leadership development program – our Leadership Excellence Certification – which seeks to provide Team Members across the organization with skills necessary for leading their teams and advancing in their careers at the Company. To date, the Company has had nearly 200 Team Members certified through this program.

Competition

Our business is highly competitive. Food, including prepared foods, and nonfood items similar or identical to those sold by the Company are generally available from various competitors in the communities served by Casey’s and by certain online retailers. We believe our stores located in smaller towns compete principally with other local grocery and convenience stores, similar retail outlets, and, to a lesser extent, prepared food outlets, restaurants, and expanded fuel stations offering a more limited selection of grocery and food items for sale. Stores located in more heavily populated communities may compete with local and national grocery and drug store chains, quick serve restaurants, expanded fuel stations, supermarkets, discount food stores, and traditional convenience stores.

In addition to our inside store products, the fuel business is also highly competitive. The Company competes on the basis of brand, price, and convenience of our fuel products. We believe our locations in smaller towns are well-positioned. Similar to inside, stores compete with larger store chains with expanded fuel offerings and increased buying power in more heavily populated communities.

Examples of convenience store chains competing in the larger towns served by Casey’s include Quik Trip, Kwik Trip, Kum & Go, and other regional chains. These competitive factors are discussed further in Item 7 of this Form 10-K.

Trademarks and Service Marks

The Company regularly evaluates its portfolio of intellectual property and takes steps to review potential new trademarks and service marks and to renew existing marks. The names "Casey’s", “Casey’s General Store”, and "GoodStop (by Casey's)", the marks consisting of the Casey’s design logos (with the words “Casey’s” and “Casey’s General Store”), the weather vane, and certain of our private label product names, are registered trademarks and service marks under federal law. We believe these marks are of material importance in promoting and advertising the Company’s business. In addition, the Company has a number of other registered and unregistered trademarks and service marks that are significant to the Company from an operational and branding perspective (e.g. "Casey’s Pizza", "Casey's Here for Good", “Casey’s Rewards”, “Casey’s Cash”, "GoodStop (by Casey's)" etc.).

Government Regulation (dollars in thousands)

Underground Storage Tanks

The United States Environmental Protection Agency and several states, including Iowa, have established requirements for owners and operators of underground fuel storage tanks (USTs) with regard to (i) maintenance of leak detection, corrosion protection, and overfill/spill protection systems; (ii) upgrade of existing tanks; (iii) actions required in the event of a detected leak; (iv) prevention of leakage through tank closings; and (v) required fuel inventory record keeping. Since 1984, our new stores have been equipped with noncorroding fiberglass USTs, including some with double-wall construction, overfill protection, and electronic tank monitoring. We believe that all capital expenditures for electronic monitoring, cathodic protection, and overfill/spill protection to comply with the existing UST regulations have been completed. Additional regulations or amendments to the existing UST regulations could result in future expenditures.

The majority of states in which we do business have trust fund programs with provisions for sharing or reimbursing corrective action or remediation costs incurred by UST owners, including the Company. For the years ended April 30, 2022 and 2021, we spent approximately $577 and $849, respectively, for assessments and remediation. Substantially all of these expenditures were submitted for reimbursement from state-sponsored trust fund programs. The payments are typically subject to statutory provisions requiring repayment of the reimbursed funds for noncompliance with upgrade provisions or other applicable laws. None of the reimbursements received are currently expected to be repaid by the Company to the trust fund programs. At April 30, 2022, we had an accrued liability of $274 for estimated expenses related to anticipated corrective actions or remediation efforts, including relevant legal and consulting costs. We believe we have no material joint and several environmental liability with other parties.

Age Restricted Products

Almost all of our stores sell a variety age-restricted products, which may include beer, liquor, tobacco and other nicotine products. The sale of these products are subject to significant regulations and require the Company to procure special sales licenses from local and/or state agencies, which govern their sale. While the costs to procure such licenses is not material, the failure to comply with the conditions of the licenses, or other age-restricted products laws, could result in the suspension or revocation of such licenses, or fines related thereto. In addition to these products, the Company is also subject to rules governing lottery and lotto sales as determined by state lottery commissions in each state in which we make such sales.