Casey's Withdraws Financial Guidance Due to COVID-19 Pandemic Impact

ANKENY, Iowa — As the COVID-19 pandemic moves into another month, Casey's General Stores Inc. provided a business update on how the crisis is impacting its operations and supply chain.

According to President and CEO Darren Rebelez, all of the Ankeny-based chain's convenience stores remain open; however, Casey's is withdrawing its financial guidance for its fiscal year 2020 as consumer behavior shifts.

"Casey's started the fourth fiscal quarter with strong momentum, with many of our strategic initiatives maturing and accelerating business performance. However, the impact of the COVID-19 pandemic has caused a decline in store traffic and consumer demand across our business, and we believe it is prudent to withdraw our financial guidance for fiscal 2020," Rebelez explained.

"Casey's maintains a strong balance sheet and ample liquidity to weather the near-term impacts and expects to emerge from the crisis in a position of strength," he added.

As the company explained, Casey's has "a strong balance sheet with significant financial flexibility." The company owns nearly all of its assets, eliminating any lease exposure, and currently has a debt/EBITDA ratio of 2.2x, which is under the 3.5x debt/EBITDA covenant in its private placement notes.

In addition, Casey's liquidity position is strong. After drawing down $100 million on its revolving credit facility to maintain maximum flexibility, the company still has $150 million in capacity under its facilities.

According to Casey's, it is taking a number of immediate steps to optimize cash flow by implementing the following initiatives:

• Deferring capital spending, including new store construction and replacement stores;
• Reviewing terms of payment to suppliers;
• Reducing inventory levels throughout the store and supply chain;
• Adjusting hours of operation at almost all stores, limiting 24-hour and extended operation stores;
• Strengthening pizza promotions for guests who are seeking meal solutions;
• Reducing prepared food production to reduce in-store stale costs;
• Expanding delivery via DoorDash at 579 stores;
• Expanding online grocery assortment at all stores; and
• Making 50 additional grocery items available via DoorDash at 579 stores.

Looking at its supply chain, Casey's owns and operates its own distribution centers and transportation fleet to service its stores, providing flexibility to navigate through this near-term challenge, according to the company.

Management is leveraging this flexibility and working with suppliers to proactively manage inventory levels and mitigate any potential risks. To date, the company has not experienced any significant supply chain disruptions, it added.

"The novel COVID-19 public health crisis presents significant challenges around the globe, and our hearts go out to all of the individuals and families impacted. At Casey's, we are tremendously grateful for the selfless efforts of everyday heroes, including frontline workers and medical professionals addressing urgent needs across our country," Rebelez said. "Our primary focus is on the health and well-being of our valued team members and guests, while maintaining business continuity across our nearly 2,200 stores that remain open and continue to serve our communities as critical businesses."