CASEYS GENERAL STORES INC Management’s Discussion and Analysis of Financial Condition and Results of Operations (in thousands of dollars). (Form 10-Q)

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Overview

Casey's 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 "Pilot", "GoodStop" or
"Bucky's", as the "Company" or "Stores") throughout 17 states, over half of
which are located in Iowa, Missouri and Illinois. All convenience stores 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 nonfood items. In addition, all but three
offer fuel for sale on a self-service basis. The Company derives its revenue
primarily from the retail sale of fuel and the products offered in its stores.
As of January 31, 2022, there were a total of 2,431 stores in operation.

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, drinks, tobacco products, and other essentials. However,
such locations typically do not have a kitchen and have limited prepared food
offerings. As of January 31, 2022, 28 stores operate under the "GoodStop" brand.

Additionally, the Company is temporarily operating certain locations acquired
from Buchanan Energy under the name, "Bucky's." Further, the Company is also
temporarily operating certain locations acquired from Pilot Corporation under
the "Pilot" name, as part of a transition services agreement. The Company plans
to eventually transition all "Bucky's" and "Pilot" locations to either the
"Casey's" or "GoodStop" brand. The Company also operates two stores selling
primarily tobacco products, one grocery store, and one liquor store.

Approximately 51% of our stores were opened in areas with populations of fewer
than 5,000 persons, while approximately 24% of all stores were opened in
communities with populations exceeding 20,000 persons. Three distribution
centers are currently in operation (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 and prepared food and dispensed beverage items are supplied to our
stores. As of January 31, 2022, the Company leased a combination of land and/or
building at 108 locations.

The Company reported diluted earnings per common share of $1.71 for the third
quarter of fiscal 2022. For the same quarter a year-ago, diluted earnings per
common share was $1.04.

The following table represents the progression of store growth through the third quarter of fiscal 2022:

                                    Store Count
Total stores at April 30, 2021        2,243
New store construction                   11
Acquisitions                                  191
Acquisitions not opened                  (5)
Prior acquisitions opened                 4
Closed                                  (13)

Total number of stores at January 31, 2022 2,431


Acquisitions in the table above include, in part, 89 stores which were acquired
from Buchanan Energy on May 13, 2021. The table excludes three sites that were
included in the transaction, but were divested by the Company shortly after
closing as part of a consent order with the Federal Trade Commission.
Additionally, it includes 48 stores from the Circle K transaction that closed in
June and 40 stores from the Pilot transaction that closed in December. For
additional discussion, refer to Note 6 in the condensed consolidated financial
statements.

Throughout the first nine months of fiscal 2022, the Company has generally seen
an increase in guest traffic and sales of certain products compared to the same
period a year ago as schools, businesses and the economy in general have gone
through various stages of reopening from COVID-19. During its second and third
fiscal quarters, the Company saw an increase in the number of COVID-19 cases
reported amongst its team members and in certain areas of its operating
territory, presumably due to the Omicron and Delta variants. That led to a
slight increase in temporary store closures for COVID-19 cleaning protocols and
the return of a patchwork of various locally imposed governmental restrictions.
However, that trend did not appear to have a negative impact on guest traffic.
Further, starting towards the end of the third quarter, and to-date, the Company
has seen a sharp decline in the number of positive COVID-19 cases amongst its
Team Members, faced fewer staffing challenges directly due to positive COVID-19
cases and did not have any COVID-19 related store closures. As part of its
continued efforts, the
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Company continues to offer its Team Members a vaccination bonus and certain
COVID-19 mitigation measures remain in place. The continued unpredictable nature
of COVID-19, including case trends, severity of new variants, the efficacy of
vaccines and the willingness of individuals to be vaccinated, further
governmental restrictions or protections, and its effect on the Company's
workforce and the economy as a whole, could again lead or contribute to
additional disruptions, labor shortages and increased operating expenses for the
foreseeable future. While COVID-19 will continue to bring 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
navigate, and eventually emerge from, the COVID-19 pandemic.

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 both periods being presented. We exclude from the
calculation any acquired stores and any stores that have been replaced with a
new store, until such stores have been open during the full time of both periods
being presented. Stores that have undergone a major remodel, had adjustments in
hours of operation, added pizza delivery, or had other revisions to their
operating format remain in the calculation.

The third quarter results reflected a 5.7% increase in same-store fuel gallons
sold, with an average fuel revenue less related cost of goods sold (exclusive of
depreciation and amortization) of 38.3 cents per gallon, compared to 32.9 cents
per gallon in the same quarter a year ago, despite a challenging rising
wholesale fuel cost environment. Same-store gallons sold were positively
impacted by higher guest traffic. The Company sold 7.5 million renewable fuel
credits for $10.2 million during the quarter, compared to the sale of 9.1
million renewable fuel credits in the third quarter of the prior year, which
generated $6.9 million.

Same-store sales of grocery and general merchandise increased 7.7% and prepared
food and dispensed beverage increased 7.4% during the third quarter. Note that
we have changed the names of the "grocery and other merchandise" category to
"grocery and general merchandise" and the "prepared food and fountain" category
to "prepared food and dispensed beverage" to better reflect the composition of
the category. There have been no changes to the makeup of the categories, and
they remain directly comparable to prior periods. The increase in grocery and
general merchandise same-store sales was primarily due to stronger sales of
packaged beverages and grocery items, such as salty snacks and candy. The
increase in prepared food and dispensed beverage same-store sales was partially
attributable to continued momentum in pizza slices. Additionally, the morning
daypart performance continues to improve due, in part, to the recent breakfast
menu relaunch, as well as an increase in guest traffic.

                Three Months Ended January 31, 2022 Compared to
                      Three Months Ended January 31, 2021
                       (Dollars and Amounts in Thousands)


                                                                                 Prepared
                                                             Grocery &            Food &
                                                              General            Dispensed
Three Months Ended January 31, 2022        Fuel             Merchandise          Beverage             Other              Total
Revenue                               $ 1,951,422          $  732,514          $  292,884          $ 71,897          $ 3,048,717
Revenue less cost of goods sold
(excluding depreciation and
amortization)                         $   237,873          $  234,064          $  169,773          $ 22,785          $   664,495
                                             12.2  %             32.0  %             58.0  %           31.7  %              21.8  %
Fuel gallons                              621,770

                                                                                 Prepared
                                                             Grocery &            Food &
                                                              General            Dispensed
Three Months Ended January 31, 2021        Fuel             Merchandise          Beverage             Other              Total
Revenue                               $ 1,100,875          $  624,465          $  264,018          $ 18,670          $ 2,008,028
Revenue less cost of goods sold
(excluding depreciation and
amortization)                         $   170,399          $  191,502          $  159,988          $ 18,292          $   540,181
                                             15.5  %             30.7  %             60.6  %           98.0  %              26.9  %
Fuel gallons                              518,408



Total revenue for the third quarter of fiscal 2022 increased by $1,040,689
(51.8%) over the comparable period in fiscal 2021. Retail fuel sales increased
by $850,547 (77.3%) as the average retail price per gallon increased 47.8%, and
the number of gallons sold increased by 103,362 (19.9%). During this same
period, retail sales of grocery and general merchandise increased
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by $108,049 (17.3%), due to operating 202 more stores than a year ago and strong
sales of packaged beverages, salty snacks, and candy. Prepared food and
dispensed beverage sales increased by $28,866 (10.9%), due to operating 202 more
stores than a year ago, increased sales of pizza slices, and the breakfast menu
relaunch. Total prepared food and dispensed beverage sales increased less than
grocery and general merchandise and fuel, due to timing of kitchen installations
in recently acquired stores.

The other revenue category historically has primarily consisted of lottery,
which is presented net of applicable costs, and car wash. As a result of the
Buchanan Energy acquisition, we acquired a dealer network of 81 stores where
Casey's manages fuel wholesale supply agreements to these stores. The activity
related to this dealer network is included in the other category and is
presented gross of applicable costs. Other revenues increased $53,227
(285.1%) for the third quarter of fiscal 2022 compared to the prior year, driven
primarily by activity related to the dealer network.

Revenue less cost of goods sold (excluding depreciation and amortization) was
21.8% of revenue for the third quarter of fiscal 2022, compared to 26.9% for the
comparable period in the prior year. Fuel revenue less related cost of goods
sold (exclusive of depreciation and amortization) was 12.2% of fuel revenue
during the third quarter of fiscal 2022, compared to 15.5% in the third quarter
of the prior year, largely attributable to higher average retail price of fuel
per gallon. Revenue per gallon less cost of goods sold (exclusive of
depreciation and amortization) per gallon was 38.3 cents in the third quarter of
fiscal 2022, compared to 32.9 cents for the comparable period in the prior year.

Grocery and general merchandise revenue less related cost of goods sold
(exclusive of depreciation and amortization) increased to 32.0% of revenue, from
30.7% of revenue for the comparable period in the prior year. The current year
percentage was positively impacted by the private label program, procurement
initiatives, and price increases, offset by inflationary pressures. Prepared
food and dispensed beverage revenue less related cost of goods sold (exclusive
of depreciation and amortization) decreased to 58.0% of revenue, compared to
60.6% of revenue for the comparable period in the prior year, primarily due to
cost increases for ingredients and pizza toppings, offset by menu price
increases.

Operating expenses increased $76,549 (18.5%) in the third quarter of fiscal 2022
from the comparable period in the prior year. Approximately 9% of the increase
is due to operating 202 more stores than prior year. Additionally, approximately
4% of the increase is due to same-store employee expenses, offset by a 2%
reduction in store hours. Finally, approximately 2% of the change is due to an
increase in same-store credit card fees from higher retail fuel prices and
higher sales volume and 2% is due to incentive compensation.

Depreciation and amortization expense increased by 15.9% to $75,529 in the third
quarter of fiscal 2022 from $65,185. The increase was primarily due to operating
202 more stores than a year ago and capital expenditures during the previous
twelve months.

Interest expense increased by $2,962 (25.8%), mainly attributable to the
$450,000 draws on term loan facilities to finance the acquisition of Buchanan Energy and, in part, the 40 stores of Pilot Corporation.

The effective tax rate increased to 23.4% in the third quarter of fiscal 2022, compared to 21.3% during the same period of fiscal 2021. The increase in the effective tax rate is mainly attributable to a decrease in favorable permanent differences.

Net income increased by $25,397 (65.7%) to $64,024 from $38,627 in the
comparable period in the prior year. The increase in net income was primarily
attributable to increased fuel and merchandise contribution from improved guest
traffic, offset by higher operating expenses and depreciation driven primarily
from operating 202 more stores than a year ago, higher wage rates, and an
increase in credit card fees.
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                 Nine Months Ended January 31, 2022 Compared to
                       Nine Months Ended January 31, 2021
                       (Dollars and Amounts in Thousands)
                                                                                 Prepared
                                                           Grocery &              Food &
                                                             General             Dispensed
Nine Months Ended January 31, 2022       Fuel              Merchandise           Beverage             Other              Total
Revenue                             $ 5,967,408             2,397,483             910,828           217,933            9,493,652
Revenue less cost of goods sold
(excluding depreciation and
amortization)                           704,231               785,412             545,377            70,952            2,105,972
                                           11.8  %               32.8  %             59.9  %           32.6  %              22.2  %
Fuel gallons                          1,958,061

                                                                                 Prepared
                                                           Grocery &              Food &
                                                             General             Dispensed
Nine Months Ended January 31, 2021       Fuel              Merchandise           Beverage             Other              Total
Revenue                             $ 3,380,348          $  2,074,552          $  823,605          $ 50,449          $ 6,328,954
Revenue less cost of goods sold
(excluding depreciation and
amortization)                       $   584,584          $    666,093          $  495,297          $ 49,470          $ 1,795,444
                                           17.3  %               32.1  %             60.1  %           98.1  %              28.4  %
Fuel gallons                          1,645,497


Total revenue for the first nine months of fiscal 2022 increased by $3,164,698
(50.0%) over the comparable period in fiscal 2021. Retail fuel sales increased
by $2,587,060 (76.5%) as the average retail price per gallon increased 48.4%,
and the number of gallons sold increased 312,564 (19.0%). During this same
period, retail sales of grocery and general merchandise increased by $322,931
(15.6%) due to operating 202 more stores than a year ago and strong sales of
packaged beverages, salty snacks, meat snacks, and candy. Prepared food and
dispensed beverage sales increased by $87,223 (10.6%), due to operating 202 more
stores than a year ago, increased sales of pizza slices, and the breakfast menu
relaunch. Total prepared food and dispensed beverage sales increased less than
grocery and general merchandise and fuel, due to timing of kitchen installations
in recently acquired stores.

The other revenue category historically has primarily consisted of lottery,
which is presented net of applicable costs, and car wash. As a result of the
Buchanan Energy acquisition, we acquired a dealer network of 81 stores where
Casey's manages fuel wholesale supply agreements to these stores. The activity
related to this dealer network is included in the other category and is
presented gross of applicable costs. These revenues increased $167,484
(332.0%) through the third quarter of fiscal 2022 compared to the prior year,
driven primarily by activity related to the dealer network.

Revenue less cost of goods sold (excluding depreciation and amortization) was
22.2% of revenue for the first nine months of fiscal 2022, compared to 28.4% for
the comparable period in the prior year. Fuel revenue less related cost of goods
sold (exclusive of depreciation and amortization) was 11.8% of fuel revenue for
the first nine months of fiscal 2022 compared to 17.3% for the first nine months
of the prior year, largely attributable to higher average retail price of fuel
per gallon. Revenue per gallon less cost of goods sold (exclusive of
depreciation and amortization) per gallon was 36.0 cents for the first nine
months of fiscal 2022 compared to 35.5 cents in the prior year.

Grocery and general merchandise revenue less related cost of goods sold
(exclusive of depreciation and amortization) increased to 32.8% of grocery and
general merchandise revenue, compared to 32.1% in the prior year. Grocery and
general merchandise revenue less related cost of goods sold (exclusive of
depreciation and amortization) was positively impacted by mix shift, including
gaining market share on the private label program, procurement initiatives, and
price increases, offset by inflationary pressures. Prepared food and dispensed
beverage revenue less related cost of goods sold (exclusive of depreciation and
amortization) decreased to 59.9% of revenue, compared to 60.1% in the prior
year, primarily due to inflationary pressures, offset by a resurgence in pizza
slices, procurement initiatives, and menu price increases.

Operating expenses increased by $259,685 (21.4%) in the first nine months of
fiscal 2022 from the comparable period in the prior year. Approximately 9% of
the increase is due to operating 202 more stores than the prior year.
Additionally,
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approximately 5% of the increase is due to same-store employee expenses, with 4%
of that from higher wage rates and 1% from labor hours normalizing after
significant cuts in the prior year. Finally, approximately 2% of the change is
due to an increase in same-store credit card fees from higher retail fuel prices
and higher sales volume.

Depreciation and amortization expense increased 15.6% to $225,675 for the first
nine months of fiscal 2022 from $195,299 for the comparable period in the prior
year. The increase was primarily due to operating 202 more stores than a year
ago and capital expenditures during the previous twelve months.

Interest expense increased by $6,171 (17.4%), primarily attributable to the
$450,000 draws on the Term Loan Facilities to fund the acquisition of Buchanan
Energy and in-part, the 40 stores from Pilot Corporation. Additionally, the
amount of interest capitalized during the year has decreased by approximately
$2,018, as our current year store growth has primarily been through acquisition,
as opposed to new store builds.

The effective tax rate increased to 23.9% in the first nine months of fiscal
year 2022 compared to 23.3% in the same period of fiscal year 2021. The increase
in the effective tax rate was driven by a one-time expense to update the state
deferred tax rate following the Buchanan Energy transaction.

Net income increased by $8,812 (3.2%) to $280,014 from $271,202 in the prior
year. The increase in net income was primarily attributable to increased fuel
and merchandise contribution from improved guest traffic, offset by higher
operating expenses and depreciation driven primarily from operating 202 more
stores than a year ago, an increase in store hours, higher wage rates, and an
increase in credit card fees.

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 considered GAAP measures, 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.

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,
assessing performance, and awarding incentive compensation.

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 and nine months ended January 31, 2022 and 2021:


                                                      Three months ended                       Nine months ended
                                                January 31,         January 31,         January 31,         January 31,
                                                   2022                2021                2022                2021
Net income                                     $   64,024          $   38,627          $  280,014          $  271,202
Interest, net                                      14,431              11,469              41,681              35,510
Federal and state income taxes                     19,514              10,452              88,033              82,549
Depreciation and amortization                      75,529              65,185             225,675             195,299
EBITDA                                         $  173,498          $  125,733          $  635,403          $  584,560
Loss (gain) on disposal of assets and
impairment charges                                    838               1,649                (869)              3,808
Adjusted EBITDA                                $  174,336          $  127,382          $  634,534          $  588,368


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For the three months ended January 31, 2022, EBITDA and Adjusted EBITDA
increased 38.0% and 36.9%, respectively, when compared to the same period a year
ago. For the nine months ended January 31, 2022, EBITDA increased 8.7% and
Adjusted EBITDA increased 7.8%, compared to the same period a year ago. The
increases in EBITDA and Adjusted EBITDA are primarily attributable to increased
fuel and merchandise contribution from improved guest traffic, offset by higher
operating expenses driven primarily from operating 202 more stores than a year
ago, higher wage rates, and an increase in credit card fees.

Critical accounting policies

Critical accounting policies are those accounting policies that management
believes are important to the portrayal of the Company's financial condition and
results of operations. The Company's critical accounting policies are described
in the Form 10-K for the year ended April 30, 2021, and such discussion is
incorporated herein by reference. There have been no changes to these policies
in the nine months ended January 31, 2022.

Cash and capital resources

Due to the nature of the Company's business, cash provided by operations is the
Company's primary source of liquidity. The Company finances its inventory
purchases primarily from normal trade credit aided by the relatively rapid
turnover of inventory. This turnover allows the Company to conduct its
operations without large amounts of cash and working capital. As of January 31,
2022, the Company's ratio of current assets to current liabilities was 0.84 to
1. The ratio at January 31, 2021 and April 30, 2021 was 1.28 to 1 and 1.18 to 1,
respectively. The decrease in the ratio from the prior year is partially
attributable to a decrease in cash and cash equivalents associated with payments
for the acquisitions of Buchanan Energy, 48 stores from Circle K and 40 stores
from Pilot, offset by an increase in inventory due to operating 202 more stores
than a year ago and higher fuel pricing. Additionally, current liabilities have
increased partially related to accounts payable, due to increasing store count,
as well as an effort to better utilize available payment terms. Additionally,
current maturities of long-term debt and finance lease obligations increased by
$89,341 from April 30, 2021 due to $20,000 in upcoming installments due on the
Series A and Series B notes, as well as $22,500 of contractual obligations and
$45,000 of principal payments expected to be made early on the Term Loan
Facilities.

Management believes that the Bank Line of $25,000 and the Revolving Facility of
$450,000, combined with the 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 operations decreased $126,538 (19.1%) in the nine months
ended January 31, 2022 from the comparable period in the prior year, due to
changes in accounts payable. Cash used in investing in the nine months ended
January 31, 2022 increased $801,041 over prior year, due primarily to cash paid
for the acquisition of Buchanan Energy for $571,725, 48 Circle K stores for
$41,416, and 40 Pilot stores for $226,529, net of cash acquired. For additional
discussion, refer to Note 6 in the condensed consolidated financial statements.
Cash provided by financing increased $467,284, primarily due to the $450,000
draws on the Term Loan Facilities, also discussed in Note 4 and Note 6.

Purchases of property and equipment and payments for acquisitions of businesses
typically represent the largest use of Company funds. Management believes that
by acquiring, building, and reinvesting in stores, the Company will be better
able to respond to competitive challenges and increase operating efficiencies.
During the first nine months of fiscal 2022, the Company expended $1,091,579,
compared to $268,857 for the comparable period in the prior year related to
these activities. The increase from the prior year is due to the Buchanan
Energy, Circle K, and Pilot acquisitions.

From January 31, 2022the Company had long-term debt consisting of:

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Finance lease liabilities                                                   

72 176

3.67% Senior Notes (Series A) maturing in 7 installments from June 17, 2022and ending June 15, 2028

150,000

3.75% Senior Notes (Series B) maturing in 7 installments from
December 17, 2022 and ending December 18, 2028

50,000

3.65% Senior Notes (Series C) maturing in 7 installments from May 2, 2025
and ending May 2, 2031

50,000

3.72% Senior Notes (Series D) maturing in 7 installments from October 28, 2025 and ending October 28, 2031

50,000

3.51% Senior notes (Series E) due June 13, 2025                             

150,000

3.77% Senior notes (Series F) due August 22, 2028                           

250,000

2.85% Senior notes (Series G) due August 7, 2030                            

325,000

2.96% Senior notes (Series H) due August 6, 2032                            

325,000

Variable rate Term Loan Facilities, requiring quarterly installments
ending January 6, 2026                                                               438,750
Less debt issuance costs                                                              (3,182)
                                                                                   1,857,744
Less current maturities                                                              (91,695)
                                                                                   1,766,049


The Company has funded purchases of property and equipment and payments for
acquisitions of businesses primarily from the issuance of debt, existing cash,
and funds generated from operations. Future capital needs required to finance
operations, improvements and the anticipated growth in the number of stores are
expected to be met from cash generated by operations, the Revolving Facility,
the Bank Line, and additional long-term debt or other securities as
circumstances may dictate, and are not expected to adversely affect liquidity.

Warnings

This Form 10-Q, including the foregoing 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 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 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 in the Company's Form 10-K for the fiscal year
ended April 30, 2021:

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
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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.

We also caution you that other factors that we have not identified may in the future prove to be important in affecting our business and results of operations. We ask that you do not place undue reliance on forward-looking statements, as they reflect only our opinions as of the dates of the statements. 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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