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    Casey's Ends Year on a Strong Note

    Fourth-quarter earnings rise, but gasoline remains a challenge.

    ANKENY, Iowa -- Casey's General Stores, headquartered here, closed out its fiscal year 2007 with a strong fourth quarter -- net earnings for the company jumped to $16.574 million compared to $10.430 million for the fourth quarter of 2006.

    "We had four excellent quarters inside our stores, but the gasoline environment was difficult for much of the year," president and CEO Robert J. Myers said in a written statement. "The closing quarter's earnings were well above the $0.22 we reported for the same period a year ago because of solid gains in all three of our business categories, and a one-time benefit within grocery and other merchandise."

    The company's gas sales did not meet the annual goal of a 2-percent increase and an average margin of 0.108 cents per gallon. Instead, the company saw a 1.4-percent increase in gas sales, and an average margin of 0.104 cents. "We were encouraged that retail prices were more responsive to rising wholesale costs in the fourth quarter," said Myers. "Our margin improved significantly, and gallons sold were up as well."

    Inside the store, Casey's mostly exceeded its goals. Grocery and other merchandise saw sales increase 4.6 percent at an average margin of 32.7 percent -- due to heavier store traffic and improved product mix. "This category's performance has improved significantly over the past three years," added Myers, "and we are confident there are more benefits to be derived from point of sale and analysis of the data it provides."

    Prepared food and fountain annual same-store sales increased 11 percent with an average margin of 62 percent, just shy of the goal of 63.4 percent, which was attributed to the higher cost of goods sold that resulted from switching to a dual-cola program.

    "The real star was our proprietary prepared food program," Myers explained. "We kept the warmers full of the right product at the right time of day and were rewarded with another year of impressive gross-profit improvement."

    Casey's also exceeded its growth plans for fiscal 2007. While the company's goal was to acquire 50 stores and build 10, it finished out the year with 52 acquisitions and eight new stores. As of the fiscal year-end, the company had seven signed agreements for acquisitions that will contribute to fiscal 2008's expansion goal.

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