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Casey's Begins Fiscal 2006 with Record Quarter

ANKENY, Iowa -- Casey's General Stores Inc. reported an all-time high in earnings for the first quarter of fiscal 2006 ending July 31, 2005. Earnings per share from continuing operations were up 37.5 percent to 44 cents compared with 32 cents for the first quarter of fiscal 2005. Total sales went up 19 percent to $860.8 million and gross profit rose 14.5 percent to a record $140 million.

"A great first quarter gave us a running start toward our annual goals," said Ronald M. Lamb, chairman and CEO.

During the quarter, the 1,375-unit chain sold 287.3 million gallons of gasoline compared to 258.5 million in the first quarter of fiscal 2005. On a same-store basis, gallons sold went up 7.7 percent. "Our average margin per gallon was 11.7 cents, considerably higher than our goal of 10.5 cents and our gross profit improved from $30.6 million to $33.5 million," Lamb said.

In grocery and other merchandise, same-store sales rose 7.4 percent and the average margin improved to 32 percent from 31.4 percent in the same quarter a year ago. Total sales increased 10.8 percent to $213.6 million and gross profit grew 13 percent to $68.4 million. "We are encouraged by the progress made in this category," said Lamb. "Point-of-sale data enhanced product management and strategic price increases helped margins without slowing sales. The lottery will be an ongoing benefit due to the commissions it adds to our bottom line and the traffic it draws to our stores."

In prepared food and fountain, total sales were up 11.6 percent to $57.6 million and same-store sales rose 7.2 percent. The average margin was 64 percent, far ahead of the 60.5 percent goal and gross profit increased from $30.3 million to $36.8 million. "Gross profit grew 21.5 percent by meeting customer demand, controlling stales, benefiting from earlier price increases on selected items and having a lower wholesale cheese price," Lamb said.

A major component of operating expenses for Casey's is bank charges, which were higher in the first quarter because more customers used credit cards to pay for more expensive gasoline. "Though operating expenses were up," said Lamb, "our sound management strategies held the increase to 9.1 percent while we grew gross profit 14.5 percent."

With acquisitions at the center of its long-term growth strategy, Casey's is continuing its pending acquisition of up to 58 stores from Gas 'N Shop Inc. Management expects to complete that transaction in the second quarter and is also pursuing other opportunities. The annual goal is to acquire an additional 30 stores and to build 10 new stores. As of July 31, 2005, Casey's completed 11 acquisitions, wrote agreements for four more and built two new stores.

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