CASEY'S GENERAL STORES, INC. Please read the following discussion of the Company's financial condition and results of operations in conjunction with the selected historical consolidated financial data and consolidated financial statements and accompanying notes presented elsewhere in this Form 10-K. Overview The Company primarily operates convenience stores under the names "Casey's" and "Casey's General Store " in 16 Midwestern states, primarily inIowa ,Illinois , andMissouri . OnApril 30, 2021 , there were a total of 2,243 stores in operation. All but three Casey's Stores offer fuel for sale on a self-serve basis and all carry a broad selection of food (including freshly prepared foods such as pizza, donuts and sandwiches), beverages, tobacco and nicotine products, health and beauty aids, automotive products and other non-food items. We derive our revenue from the retail sale of fuel and the products offered in our stores. Approximately 55% of all Casey's Stores were opened in areas with populations of fewer than 5,000 people, while approximately 19% of all stores were opened in communities with populations exceeding 20,000 persons. CMC operates three distribution centers, through which certain grocery and other merchandise, and prepared food and fountain items, are supplied to our stores. One is adjacent to the Store Support Center facility inAnkeny, Iowa . The other two distribution centers were opened inFebruary 2016 inTerre Haute, Indiana andApril 2021 inJoplin, Missouri . AtApril 30, 2021 , the Company owned the land at 2,216 store locations and the buildings at 2,225 locations, and leased the land at 27 locations and the buildings at 18 locations. The Company's business is seasonal, and generally the Company experiences higher sales and profitability during the first and second fiscal quarters (May-October), when guests tend to purchase greater quantities of fuel and certain convenience items such as beer, isotonics, water, soft drinks and ice. The following table represents the roll forward of store growth throughout fiscal 2021: Store Count Stores atApril 30, 2020 2,207 New store construction 40 Acquisitions 5 Acquisitions not opened (3) Prior acquisitions opened 5 Closed (11) Stores atApril 30, 2021 2,243 OnMay 13, 2021 , Casey's closed on the Buchanan Energy acquisition which included 92 retail sites. The Company also closed on the 48-storeCircle K transaction in June. In total, Casey's expects to add 200 more stores next fiscal year. Long-Term Strategic Plan The Company announced an updated, long-term strategic plan inJanuary 2020 focused on four strategic objectives: reinvigorate hospitality and the guest experience; be where the guest is by accelerating unit growth; create capacity through best-in-class efficiencies; and, invest in our people and culture. The Company's plan is based on building on our proud heritage 19 -------------------------------------------------------------------------------- Table of Contents and distinct advantages to become more contemporary through new capabilities, technology, data, and processes. We believe this will best position the Company to address rapidly evolving shifts in consumer habits and other macro retail trends. Despite the challenges caused by the COVID-19 pandemic, the Company made significant progress towards its strategic plan goals during the 2021 fiscal year, examples of which include the following: •Introduced 100+ private label products and curbside pickup at all stores •Updated our branding, including the introduction of a new logo •Expanded our digital offerings and added 1.5 million Casey's Rewards members •Developed and refined capabilities across the enterprise to drive efficiencies by launching centralized procurement and asset protection departments, opening a third distribution center inJoplin, Missouri , optimizing our transportation network, and enhancing price and product optimization •Continued to add stores through a mixture of new store builds and acquisitions •Added thirteen talented and diverse individuals to the extended leadership team
COVID-19
Since the fourth quarter of the Company's 2020 fiscal year, the COVID-19 pandemic has generally led to decreased store traffic and lower demand for certain of our products. Governmental and privately imposed restrictions, including those on travel, social, work and other gatherings, in-person schooling and other closures, and our guests' behavior in response to such restrictions, have contributed to such declines, which have not fully recovered to pre-pandemic levels. Overall, we saw a decrease in same-store fuel gallons of approximately 8.1% and same-store inside customer traffic of approximately 8.7%, compared to the prior year. Additionally, as a result of these factors, the manner in which we served our guests required changes at many of our locations for a portion of the 2021 fiscal year, including restrictions on self-service food and beverages, reduced prepared food offerings, limiting guest traffic in our stores and social distancing measures. Prepared food and fountain category saw a same-store sales decrease of 2.1%, compared to the prior year, due, in part, to many of these restrictions. Despite these declines, throughout the 2021 fiscal year, due to the combination of COVID-19 fuel demand dynamics, other macroeconomic factors in the oil industry, and the efforts of our fuel team, we experienced record high fuel average revenue less cost of goods sold per gallon (excluding depreciation and amortization and credit card fees), leading to historically strong financial performance for the 2021 fiscal year, including record net income, record fuel gross profit and record diluted earnings per share. Average revenue less cost of goods sold (excluding depreciation and amortization and credit card fees) per gallon increased by 30.2%, to34.9 cents in fiscal 2021 from26.8 cents in fiscal 2020. While fuel gross profit margins continue to remain strong, and remain higher than historic averages, they are lower than the highs achieved during the pandemic, which we expect will gradually decline during the next fiscal year. COVID-19 also resulted in increased operating expenses throughout the 2021 fiscal year, as we took significant proactive steps to protect the health and safety of our Team Members, guests and communities. Our top priority throughout has been their health and well-being. Examples of certain COVID-19 measures that we implemented at certain times during the 2021 fiscal year include the following: •$50 bonus to Team Members upon their full COVID-19 vaccination •provided additional compensation and operational bonuses for key field and support Team Members; •provided additional paid leave for impacted Team Members; •provided personal protective equipment for Team Members; •installed Plexiglas shields at our cash registers; •enhanced cleaning and hygiene practices; •implemented health checks in all our distribution centers; •designated exclusive shopping times for higher risk guests; •established 6-foot markings in our stores to encourage social distancing; •provided free meals for all store and distribution center Team Members; and •implemented contact-less delivery. In total, the Company spent approximately$38.4 million during the 2021 fiscal year for all COVID-19 health, safety and related measures. As schools, businesses and the economy in general have slowly reopened, and vaccinations rates in our operating territory improve and new infections decline, we have continued to see improvements in store traffic numbers. However, the unpredictable nature of the pandemic could again lead to closures, decreased traffic and demand, and increased COVID-19- 20 -------------------------------------------------------------------------------- Table of Contents related operating expenses, for the foreseeable future. While COVID-19 has resulted in, and will continue to bring, significant challenges and uncertainty to our operating environment, we believe that our resilient business model and the strength of our brand and balance sheet position us well to emerge from the pandemic. For more information related to the additional risks to the Company related to the COVID-19 pandemic, and certain conditions that may affect future performance, please refer to the "Risk Factors" section above in Item 1A. and "Forward-looking Statements" at the end of Item 7. Fiscal 2021 Compared with Fiscal 2020 Total revenue for fiscal 2021 decreased 5.1% ($468,107 ) to$8,707,189 . Retail fuel sales for the fiscal year were$4,825,466 , a decrease of 12.5% primarily due to a 8.3% decrease in the price of fuel, which decreased fuel revenue by$458,722 . Fuel gallons sold decreased 4.9% to 2.2 billion gallons, which decreased fuel revenue by an additional$249,370 . The decrease in fuel revenue was offset by a$215,348 increase to$3,811,521 (6.0%) in grocery and other merchandise and prepared food and fountain, primarily due to operating 36 more stores than one year ago. Total revenue less cost of goods sold (excluding depreciation and amortization) was 27.1% for fiscal 2021 compared with 23.4% for the prior year. Fuel cents per gallon increased to34.9 cents in fiscal 2021 from26.8 cents in fiscal 2020, primarily as a result of COVID-19, combined with the efforts of our centralized fuel team coupled with procurement improvements. The grocery and other merchandise revenue less related cost of goods sold (exclusive of depreciation and amortization) was consistent at 32.0% in fiscal 2021 and fiscal 2020. The prepared food and fountain revenue less related cost of goods sold (exclusive of depreciation and amortization) decreased to 60.1% from 60.9% during fiscal 2021 compared to the prior year, due mainly to lower volume and higher waste in the morning day part. Operating expenses increased 9.3% ($139,148 ) in fiscal 2021 primarily due to operating 36 more stores than one year ago, as well as incurring$38.4 million in COVID-related expenses and$30.7 million in incremental incentive compensation expense due to the strong performance of the company. The majority of all operating expenses are wages and wage-related costs. Depreciation and amortization expense increased 5.6% ($14,021 ) to$265,195 in fiscal 2021 from$251,174 in fiscal 2020. The increase was due primarily to capital expenditures made in fiscal 2021 and fiscal 2020. The effective tax rate increased to 23.2% in fiscal 2021 from 22.9% in fiscal 2020. The increase in the effective tax rate was due to a reduction in favorable permanent differences, offset by a decrease in state tax expense. Net income increased to$312,900 in fiscal 2021 from$263,846 in fiscal 2020. The increase was primarily due to increased fuel contribution and operating 36 more stores than one year ago. Please refer to the Form 10-K related to the fiscal year endedApril 30, 2020 , filed onJune 26, 2020 , for comparison of Fiscal 2020 to Fiscal 2019. COMPANY TOTAL REVENUE AND REVENUE LESS COST OF GOODS SOLD (EXCLUDING DEPRECIATION AND AMORTIZATION) BY CATEGORY 21
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Years ended April 30,
2021 2020 2019
Total revenue by category
Fuel $ 4,825,466 $ 5,517,412 $ 5,848,770
Grocery and other merchandise 2,724,374 2,498,966 2,369,521
Prepared food and fountain 1,087,147 1,097,207 1,074,294
Other 70,202 61,711 60,325
$ 8,707,189 $ 9,175,296 $ 9,352,910
Revenue less cost of goods sold (excluding depreciation and
amortization) by category
Fuel $ 761,247 $ 614,847 $ 466,107
Grocery and other merchandise 872,573 800,140 759,817
Prepared food and fountain 653,689 668,092 668,598
Other 68,926 61,605 60,202
$ 2,356,435 $ 2,144,684 $ 1,954,724 INDIVIDUAL STORE COMPARISONS (1)
Years ended April 30,
2021 2020 2019
Average retail sales $ 3,894 $ 4,203 $ 4,449
Average retail inside sales (3) 1,720 1,659 1,649
Average revenue less cost of goods sold (excluding depreciation and amortization) on inside sales (3)
655 647 651
Average retail sales of fuel 2,174 2,544 2,800
Average revenue less cost of goods sold (excluding depreciation and amortization) on fuel
338 280 223
Average operating income (2) 338 291 253
Average number of gallons sold 981 1,055 1,097
(1)Individual store comparisons include only those stores that had been in
operation for at least one full year and remained open on April 30 of the fiscal
year indicated.
(2)Average operating income represents retail sales less cost of goods sold and
operating expenses attributable to a particular store; it excludes federal and
state income taxes, and Company operating expenses not attributable to a
particular store.
(3)Inside sales is comprised of sales related to the grocery and other
merchandise and prepared food and fountain categories.
SAME STORE SALES BY CATEGORY (1)
Years ended April 30,
2021 2020 2019
Fuel gallons (2) (8.1) % (5.1) % (1.7) %
Grocery and other merchandise 6.6 % 1.9 % 3.6 %
Prepared food and fountain (3) (2.1) % (1.5) % 1.9
%
(1)Same-store sales is a common metric used in the convenience store industry.
We define same-store sales as the total sales increase (or decrease) for stores
open during the full time of the periods being presented. The store must be open
for each entire fiscal year being compared. Remodeled stores that remained open
or were closed for just a very brief period of time (less than a week) during
the period being compared remain in the same store sales comparison. If a store
is replaced, either at the same location (razed and rebuilt) or relocated to a
new location, it is removed from the comparison until the new store has been
open for each entire period being compared. Newly constructed and acquired
stores do not enter the calculation until they are open for each entire period
being compared as well.
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(2)The decline in fuel gallons in fiscal 2021 as compared to fiscal 2020 was
primarily due to softer demand in due to the COVID-19 pandemic.
(3)The decline in same-store sales for prepared food and fountain for 2021 as
compared to 2020 was primarily due to the COVID-19 pandemic and the related
restrictions.
Use of Non-GAAP Measures
We define EBITDA as net income before net interest expense, income taxes,
depreciation and amortization. Adjusted EBITDA further adjusts EBITDA by
excluding the gain or loss on disposal of assets as well as impairment charges.
Neither EBITDA nor Adjusted EBITDA are presented in accordance with GAAP.
We believe EBITDA and Adjusted EBITDA are useful to investors in evaluating our
operating performance because securities analysts and other interested parties
use such calculations as a measure of financial performance and debt service
capabilities, and they are regularly used by management for internal purposes
including our capital budgeting process, evaluating acquisition targets, and
assessing store performance.
EBITDA and Adjusted EBITDA are not recognized terms under GAAP and should not be
considered as a substitute for net income, cash flows from operating activities
or other income or cash flow statement data. These measures have limitations as
analytical tools, and should not be considered in isolation or as substitutes
for analysis of our results as reported under GAAP. We strongly encourage
investors to review our financial statements and publicly filed reports in their
entirety and not to rely on any single financial measure.
Because non-GAAP financial measures are not standardized, EBITDA and Adjusted
EBITDA, as defined by us, may not be comparable to similarly titled measures
reported by other companies. It therefore may not be possible to compare our use
of these non-GAAP financial measures with those used by other companies.
The following table contains a reconciliation of net income to EBITDA and
Adjusted EBITDA for the three months and years ended April 30, 2021 and 2020,
respectively:
Three months ended Years ended
April 30, 2021 April 30, 2020 April 30, 2021 April 30, 2020
Net income 41,698 $ 62,091 $ 312,900 $ 263,846
Interest, net 11,168 13,806 46,679 53,419
Depreciation and amortization 69,897 65,193 265,195 251,174
Federal and state income taxes 11,921 16,491 94,470 78,202
EBITDA $ 134,684 $ 157,581 $ 719,244 $ 646,641
Loss on disposal of assets and impairment
charges 5,872 1,380 9,680 3,495
Adjusted EBITDA $ 140,556 $ 158,961 $ 728,924 $ 650,136
For the three months ended April 30, 2021 , EBITDA and Adjusted EBITDA decreased
14.5% and 11.6% respectively, when compared to the same period a year ago. The
decrease was due primarily to unusually high fuel margin achieved last year via
supply and demand shocks from COVID-19 and macroeconomic conditions in the oil
industry. For the year ended April 30, 2021 , EBITDA and Adjusted EBITDA
increased 11.2% and 12.1%, respectively. The increase was due primarily to
higher fuel contribution and operating 36 more stores than the same period a
year ago.
Critical Accounting Policies
Critical accounting policies are those accounting policies that management
believes are important to the portrayal of our financial condition and results
of operations and require management's most difficult, subjective judgments,
often because of the need to estimate the effects of inherently uncertain
factors.
Inventory
Inventories, which consist of merchandise and fuel, are stated at the lower of
cost or market. For fuel, cost is determined through the use of the first-in,
first-out (FIFO) method. For merchandise inventories, cost is determined through
the use of the last-in, first-out (LIFO) method.
Long-lived Assets
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The Company monitors closed and underperforming stores for an indication that
the carrying amount of assets may not be recoverable. If the sum of the expected
future undiscounted cash flows is less than the carrying amount of the assets,
an impairment loss is recognized to the extent carrying value of the assets
exceeds their estimated fair value. Fair value is based on management's estimate
of the price that would be received to sell an asset in an orderly transaction
between market participants. The estimate is derived from offers, actual sale or
disposition of assets subsequent to year-end, and other indications of fair
value, which are considered Level 3 inputs (see Note 3 to the consolidated
financial statements). In determining whether an asset is impaired, assets are
grouped at the lowest level for which there are identifiable cash flows that are
largely independent of the cash flows of other groups of assets, which for the
Company is generally on a store-by-store basis. The Company incurred impairment
charges of $3,846 in fiscal 2021, $1,177 in fiscal 2020, and $1,167 in fiscal
2019. Impairment charges are a component of operating expenses.
Self-insurance
The Company is primarily self-insured for Team Member healthcare, workers'
compensation, general liability, and automobile claims. The self-insurance claim
liability for workers' compensation, general liability, and automobile claims is
determined actuarially at each year-end based on claims filed and an estimate of
claims incurred but not yet reported. Actuarial projections of the losses are
employed due to the potential of variability in the liability estimates. Some
factors affecting the uncertainty of claims include the development time frame,
settlement patterns, litigation and adjudication direction, and medical
treatment and cost trends. The liability is not discounted. The balances of our
self-insurance reserves were $50,526 and $44,959 for the years ended April 30,
2021 and 2020, respectively.
Recent Accounting Pronouncements
Refer to Note 1 of the consolidated financial statements for a description of
new accounting pronouncements applicable to the Company.
Liquidity and Capital Resources
Due to the nature of our business, cash provided by operations is our primary
source of liquidity. We finance our inventory purchases primarily from normal
trade credit aided by relatively rapid inventory turnover. This turnover allows
us to conduct operations without large amounts of cash and working capital. As
of April 30, 2021 , the Company's ratio of current assets to current liabilities
was 1.18 to 1. The ratio at April 30, 2020 and at April 30, 2019 was 0.36 to 1
and 0.69 to 1, respectively. The increase in the ratio is partially attributable
to an increase in cash and cash equivalents associated with an increase in cash
provided by operations and a decrease in cash used in investing. Additionally,
current liabilities decreased due to the refinancing of the 5.22% senior notes.
Refer to Note 3 of the consolidated financial statements for additional
discussion.
We believe our current $450,000 unsecured revolving credit facility, our $25,000
unsecured bank line of credit, current cash and cash equivalents, and the future
cash flow from operations will be sufficient to satisfy the working capital
needs of our business.
Net cash provided by operating activities increased $299,774 (59.4%) for the
year ended April 30, 2021 , primarily due to an increase in accounts payable and
accrued expenses, and an increase in net income, partially offset by an increase
in inventories. Cash used in investing activities in the year ended April 30,
2021 decreased $22,302 (4.8%) primarily due to a decrease in acquisition
activity. However, the Company did close on two large acquisitions during the
first quarter of fiscal 2022. Refer to Note 11 of the consolidated financial
statements for additional discussion. Cash flows used in financing activities
increased $78,785 , primarily due to payments on the revolving credit facility
during the period, offset by incremental proceeds on the Series G and Series H
notes.
Capital expenditures represent the single largest use of Company funds. We
believe that by reinvesting in stores, we will be better able to respond to
competitive challenges and increase operating efficiencies. During fiscal 2021,
we expended $450,608 for property and equipment, primarily for construction,
acquisition, and remodeling of stores compared with $471,683 in the prior year.
In fiscal 2022, we anticipate spending approximately $500 million in capital
expenditures, including store remodels for acquisitions, primarily from existing
cash, funds generated by operations, and proceeds from long-term debt.
As of April 30, 2021 , we had long-term debt and finance lease obligations
consisting of:
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Finance lease liabilities (Note 7) 14,085
3.67% Senior notes (Series A) due in 7 installments beginning
150,000
3.75% Senior notes (Series B) due in 7 installments beginning
50,000
3.65% Senior notes (Series C) due in 7 installments beginning
50,000
3.72% Senior notes (Series D) due in 7 installments beginning
50,000
3.51% Senior notes (Series E) dueJune 13, 2025
150,000
3.77% Senior notes (Series F) dueAugust 22, 2028
250,000
2.85% Senior notes (Series G) dueAugust 7, 2030
325,000
2.96% Senior notes (Series H) dueAugust 6, 2032 325,000 Debt issuance costs (336) 1,363,749 Less current maturities 2,354 1,361,395 OnDecember 23, 2020 , the Company amended its existing credit agreement datedJanuary 11, 2019 , as amendedJune 30, 2020 to: (a) increase the revolving commitments thereunder to an aggregate principal amount of$450 million ; and (b) provide for a senior unsecured delayed-draw term loan facility in an aggregate principal amount of up to$300 million . The Amendment increased the total borrowing capacity of the revolving commitments by an aggregate principal amount of$150 million , from$300 million to$450 million . The maturity date remains unchanged, atJanuary 11, 2024 . The term loan facility may be drawn in a single borrowing for up to five months from the amendment date, and has a maturity date ofJanuary 6, 2026 . Proceeds of the term loan were used to finance theBuchanan Energy acquisition (see additional discussion at Note 11 of the condensed consolidated financial statements). Refer to Note 3 of the consolidated financial statements for additional discussion on changes to the Company's debt agreements during the fiscal 2021. Interest on the 3.67% Senior notes Series A and 3.75% Senior notes Series B is payable on the 17th day of each June and December. Principal on the Senior notes Series A and Series B is payable in various installments beginningJune 17, 2022 (Series A) andDecember 17, 2022 (Series B) throughDecember 2028 . We may prepay the 3.67% and 3.75% Senior notes in whole or in part at any time in an amount of not less than$2,000 at a redemption price calculated in accordance with the Note Agreement datedJune 17, 2013 , as amended, between the Company and the purchasers of the Senior notes Series A and Series B. Interest on the 3.65% Senior notes Series C is payable on the 2nd day of each May and November, while the interest on the 3.72% Senior notes Series D is payable on the 28th day of each April and October. Principal on the Senior notes Series C and Series D is payable in various installments beginningMay 2, 2025 (Series C) andOctober 28, 2025 (Series D) throughOctober 2031 . We may prepay the 3.65% and 3.72% Senior notes in whole or in part at any time in an amount of not less than$2,000 at a redemption price calculated in accordance with the Note Agreement datedMay 2, 2016 , as amended, between the Company and the purchasers of the Senior notes Series C and Series D. Interest on the 3.51% Senior notes Series E is payable on the 13th day of each June and December, while the interest on the 3.77% Senior notes Series F is payable on the 22nd day of each February and August. Principal on the Senior notes Series E and Series F is payable in full onJune 13, 2025 (Series E) andAugust 22, 2028 (Series F), respectively. We may prepay the 3.51% and 3.77% Senior notes in whole or in part at any time in an amount of not less than$2,000 at a redemption price calculated in accordance with the Note Agreement datedJune 13, 2017 , as amended, between the Company and the purchasers of the Senior notes Series E and Series F. Interest on the 2.85% Senior notes Series G and 2.96% Senior notes Series H is payable on the 7th day of each February and August. Principal on the Senior notes Series G and Series H is payable in full onAugust 7, 2030 (Series G) andAugust 6, 2032 (Series H), respectively. We may prepay the 2.85% and 2.96% Senior notes in whole or in part at any time in an amount of not less than$2,000 at a redemption price calculated in accordance with the Note Purchase Agreement datedJune 30, 2020 , between the Company and the purchasers of the Senior notes Series G and Series H. To date, we have funded capital expenditures primarily through funds generated from operations, the proceeds of the sale of common stock, issuance of debt, and existing cash. Future capital required to finance operations, improvements, and the anticipated growth in the number of stores is expected to come from cash generated by operations, the revolver, the bank line, 25 -------------------------------------------------------------------------------- Table of Contents and additional long-term debt or other securities as circumstances may dictate. We do not expect such capital needs to adversely affect liquidity.
The table below presents our significant contractual obligations, including
interest, at
Payments due by period
Less than More than
Total 1 year 1-3 years 3-5 years 5 years
Senior notes $ 1,704,789 $ 44,638 $ 139,821 $ 304,559 $ 1,215,771
Finance lease obligations 20,723 3,110 5,681 2,039 9,893
Operating lease obligations 34,062 1,794 3,351
3,342 25,575
Unrecognized tax benefits 9,316 - - - -
Deferred compensation 16,465 - - - -
Total $ 1,785,355 $ 49,542 $ 148,853 $ 309,940 $ 1,251,239
Unrecognized tax benefits relate to uncertain tax positions and since we are not
able to reasonably estimate the timing of the payments or the amount by which
the liability will increase or decrease over time, the related timing of the
payment of the balances have not been reflected in the above "Payments due by
period" table.
At April 30, 2021 , the Company had a total of $9,316 in gross unrecognized tax
benefits. Of this amount, $7,360 represents the amount of unrecognized tax
benefits that, if recognized, would impact our effective tax rate. The total
amount of accrued interest and penalties for such unrecognized tax benefits was
$370 as of April 30, 2021 . Interest and penalties related to income taxes are
classified as federal and state income taxes in our consolidated financial
statements. The federal statute of limitations remains open for the tax years
2015 and forward. Tax years 2012 and forward are subject to audit by state tax
authorities depending on open statute of limitations waivers and the tax code of
each state.
A number of years may elapse before an uncertain tax position is audited and
ultimately settled. It is difficult to predict the ultimate outcome or the
timing of resolution for uncertain tax positions. It is reasonably possible that
the amount of unrecognized tax benefits could significantly increase or decrease
within the next twelve months. These changes could result from the expiration of
the statute of limitations, examinations or other unforeseen circumstances. The
Company has no ongoing federal or state income tax examinations. At this time,
management believes it is reasonably possible the aggregate amount of
unrecognized tax benefits will decrease by $2,000 within the next 12 months.
This expected decrease is due to the expiration of statute of limitations
related to certain income tax filing positions.
Included in long-term liabilities on our consolidated balance sheet at April 30,
2021 , was a $15,094 obligation for deferred compensation. Additionally, $1,038
was recognized in current liabilities as of April 30, 2021 related to deferred
compensation. As the specific payment dates for a portion of the deferred
compensation outstanding are unknown due to the unknown retirement dates of many
of the participants, the related timing of the payment of the balances have not
been reflected in the above "Payments due by period" table. However, known
payments of $10,623 will be due during the next 5 years.
At April 30, 2021 , we were partially self-insured for workers' compensation
claims in all 16 states of our marketing territory; we also were partially
self-insured for general liability and auto liability under an agreement that
provides for annual stop-loss limits equal to or exceeding $1,000 for auto
liability and $500 for workers' compensation and general liability. To
facilitate this agreement, letters of credit approximating $24,000 and $21,526
were issued and outstanding at April 30, 2021 and 2020, respectively, on the
insurance company's behalf. We renew the letters of credit on an annual basis.
Forward-Looking Statements
This Form 10-K, including but not limited to the Management's Discussion and
Analysis of Financial Condition and Results of Operations, contains
"forward-looking statements" within the meaning of Section 27A of the Securities
Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as
amended, and the Private Securities Litigation Reform Act of 1995. The words
"may," "will," "believe," "expect," "anticipate," "intend," "estimate,"
"project," "continue," and similar expressions are used to identify
forward-looking statements. Forward-looking statements represent the Company's
current expectations or beliefs concerning future events and trends that we
believe may affect our financial condition, liquidity and needs, supply chain,
results of operations and performance at our stores, business strategy,
strategic plans, growth opportunities, integration of acquisitions, acquisition
synergies, short-term and long-term business operations and objectives including
our long-term strategic plan, and the potential effects of COVID-19 on our
business. The Company cautions that these statements
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Table of Contents are further qualified by important factors that could cause actual results to differ materially from those in the forward-looking statements, including, without limitation, the following risk factors described more completely above in Item 1A entitled "Risk Factors": Business Operations; Pandemics or disease outbreaks, such as COVID-19, responsive actions taken by governments and others to mitigate their spread, and guest behavior in response to these events, have, and may in the future, adversely affect our business operations, supply chain and financial results; our business and our reputation could be adversely affected by a data security incident or the failure to protect sensitive guest, Team Member or supplier data, or the failure to comply with applicable regulations relating to data security and privacy; food-safety issues and food-borne illnesses, whether actual or reported, or the failure to comply with applicable regulations relating to the transportation, storage, preparation or service of food, could adversely affect our business and reputation; a significant disruption to our distribution network, to the capacity of the distribution centers, or timely receipt of inventory could adversely impact our sales or increase our transaction costs, which could have a material adverse effect on our business; we could be adversely affected if we experience difficulties in, or are unable to recruit, hire or retain, members of our leadership team and other distribution, field and store Team Members; any failure to anticipate and respond to changes in consumer preferences, or to introduce and promote innovative technology for guest interaction, could adversely affect our financial results; we rely on our information technology systems, and a number of third-party software providers, to manage numerous aspects of our business, and a disruption of these systems could adversely affect our business; increased credit card expenses could lead to higher operating expenses and other costs for the Company; our operations present hazards and risks which may not be fully covered by insurance, if insured; the dangers inherent in the storage and transport of motor fuel could cause disruptions and could expose to us potentially significant losses, costs or liabilities; consumer or other litigation could adversely affect our financial condition and results of operations; and, covenants in our senior notes and credit facility agreements require us to comply with certain covenants and meet financial maintenance tests and the failure to comply with these requirements could have a material impact to us. Governmental Actions, Regulations, and Oversight: Compliance with and changes in tax laws could adversely affect our performance; we are subject to extensive governmental regulations; governmental action and campaigns to discourage tobacco and nicotine use and other tobacco products may have a material adverse effect on our revenues and gross profit; and, wholesale cost and tax increases relating to tobacco and nicotine products could affect our operating results. Industry: General economic and political conditions that are largely out of the Company's control may adversely affect the Company's financial condition and results of operations; developments related to fuel efficiency, fuel conservation practices, climate change, and changing consumer preferences may decrease the demand for motor fuel; unfavorable weather conditions can adversely affect our business; the volatility of wholesale petroleum costs could adversely affect our operating results; and, the convenience store industry is highly competitive. Growth Strategies: We may experience difficulties implementing and realizing the results of our long-term strategic plan; we may experience increased costs, disruptions or other difficulties with the integration of the Buchanan Energy acquisition; and, we may not be able to identify, acquire, and integrate new properties and stores, which could adversely affect our ability to grow our business. Common Stock: The market price for our common stock has been and may in the future be volatile, which could cause the value of your investment to decline; any issuance of shares of our common stock in the future could have a dilutive effect on your investment; and,Iowa law and provisions in our charter documents may have the effect of preventing or hindering a change in control and adversely affecting the market price of our common stock. Although we have attempted to list the important factors that presently affect the Company's business and operating results, we further caution you that other factors we have not identified may in the future prove to be important in affecting our business and results of operations. We ask you not to place undue reliance on any forward-looking statements because they speak only of our views as of the statement dates. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.
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