Cabela's Inc. Reports Third Quarter Results; Q3 Total Revenue Increased 12% to $429.8 Million; Company Reported Q3 Fully-Diluted EPS of $0.25.SIDNEY Sidney, city (1990 pop. 18,710), seat of Shelby co., W central Ohio, on the Great Miami River, in a farm area; founded 1811, inc. 1834. Refrigerator parts and machinery are among the items produced there. , Neb. -- Cabela's For the video game series, see . Cabela's is a Sidney, Nebraska-based direct marketer and specialty retailer of hunting, fishing, camping and related outdoor merchandise. Its direct marketing operation is one of the largest in the United States. Incorporated (NYSE NYSE See: New York Stock Exchange : CAB), the World's Foremost Outfitter out·fit n. 1. A set of tools or equipment for a specialized purpose: a welder's outfit. See Synonyms at equipment. 2. A set of clothing, often with accessories. 3. (R) of hunting, fishing, and outdoor gear, today reported financial results for its third fiscal quarter ended October October: see month. 1, 2005. Total revenue for the third quarter of fiscal 2005 increased 12.0% to another record for Cabela's of $429.8 million compared to $383.8 million for the same period last year. Third quarter net income was $16.3 million, or $0.25 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, compared to $16.5 million, or $0.25 per diluted share, for the same period a year ago. Net income for the third quarter was negatively impacted by the timing of promotional events, additional store pre-opening expenses and increased fuel prices. During the third quarter of fiscal 2005, direct revenue was similar to last year at $220.2 million. Total retail revenue increased 23.1% to $173.0 million and same store sales Same Store Sales A statistic used in retail industry analysis. It compares sales of stores that have been open for a year or more. Notes: This statistic allows investors to determine what portion of new sales has come from sales growth and what portion from the opening of decreased 8.7%. Financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. revenue increased 46.0% to $32.5 million for the third quarter of fiscal 2005. Total revenue for the nine months ended October 1, 2005, increased 15.1% to $1.124 billion compared to $976.9 million for the same period last year. Net income for the nine months was up 13.3% to $30.1 million, or $0.45 per diluted share, compared to $26.5 million, or $0.43 per diluted share, for the nine months ended October 2, 2004. Dennis Dennis is a male first name derived from the Greco-Roman name Dionysius meaning "servant of Dionysus", the Thracian god of wine, which is ultimately derived from the Greek Dios (Διος, "of Zeus") combined with Nysos or Nysa (Νυσα), where the Highby, Cabela's President and Chief Executive Officer, commented, "As we previously announced, our third quarter revenues were primarily impacted by higher fuel prices and the recent hurricanes, both of which affected our consumers' buying patterns. Despite the challenging retail environment, we are confident that we will have modest growth in net income in the fourth quarter. This represents a change from our previous annual guidance." Mr. Highby continued, "During the quarter, we announced plans for three new destination retail locations, including Richfield, Wisconsin Richfield is the name of some places in the U.S. state of Wisconsin:
(near Milwaukee Milwaukee (mĭlwŏk`ē), city (1990 pop. 628,088), seat of Milwaukee co., SE Wis., at the point where the Milwaukee, Menominee, and Kinnickinnic rivers enter Lake Michigan; inc. 1846. ), and La Vista, Nebraska La Vista is a city in Sarpy County, Nebraska, United States. The population was 11,699 at the 2000 census and had increased to 16,041 by the 2006 estimate. The town was incorprated in 1960 and is the newest city in the state. (near Omaha), both expected to open in 2006, as well as East Hartford, Connecticut East Hartford (41n47, 72w37 EST) is a town in Hartford County, Connecticut, United States. The population was 49,575 at the 2000 census. The Indians knew East Hartford as Podunk. , which is expected to open in 2007. We look forward to bringing the Cabela's experience to New England New England, name applied to the region comprising six states of the NE United States—Maine, New Hampshire, Vermont, Massachusetts, Rhode Island, and Connecticut. The region is thought to have been so named by Capt. , while at the same time further building our presence in the Midwest Midwest or Middle West, region of the United States centered on the western Great Lakes and the upper-middle Mississippi valley. It is a somewhat imprecise term that has been applied to the northern section of the land between the Appalachians ." Mr. Highby concluded, "We remain confident about our leadership position in the industry and our ability to drive long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. growth and increased profitability. We have a powerful brand, a compelling business model and significant opportunities for retail expansion across the country. As we move forward into next year, we remain focused on effectively executing our long-term strategic plan and growing revenue and net income at a mid- mid- pref. Middle: midbrain. teens growth rate." Conference Call Information A conference call to discuss third quarter fiscal 2005 operating results is scheduled for today (Thursday Thursday: see week. , October 27, 2005) at 4:30 PM Eastern Time. A webcast of the call will take place simultaneously si·mul·ta·ne·ous adj. 1. Happening, existing, or done at the same time. See Synonyms at contemporary. 2. Mathematics and can be accessed by visiting the Investor Relations Investor relations The process by which the corporation communicates with its investors. section of Cabela's website at www.cabelas.com. A replay of the call will be archived on www.cabelas.com. About Cabela's Incorporated Cabela's Incorporated, headquartered in Sidney, Nebraska Sidney is a city in Cheyenne County, Nebraska, United States. The population was 6,282 at the 2000 census. It is the county seat of Cheyenne CountyGR6. Geography Sidney is located at (41.139428, -102. , is the nation's largest direct marketer, and a leading specialty A contract under seal. A specialty is a written document that has been sealed and delivered and is given as security for the payment of a specifically indicated debt. retailer, of hunting, fishing, camping and related outdoor merchandise MERCHANDISE. By this term is understood all those things which merchants sell either wholesale or retail, as dry goods, hardware, groceries, drugs, &c. It is usually applied to personal chattels only, and to those which are not required for food or immediate support, but such as remain . Since the Company's founding in 1961, Cabela's(R) has grown to become one of the most well-known well-known adj. 1. Widely known; familiar or famous: a well-known performer. 2. Fully known: well-known facts. outdoor recreation brands in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , and has long been recognized as the World's Foremost Outfitter(R). Through Cabela's well-established direct business and its growing number of destination retail stores, it offers a wide and distinctive selection of high-quality outdoor products at competitive prices while providing superior customer service. Cabela's also issues the Cabela's Club(R) VISA See VESA. credit card through which it offers a related customer loyalty rewards program as a vehicle for strengthening its customer relationships. CAUTIONARY STATEMENT FOR THE PURPOSE OF THE SAFE HARBOR Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. PROVISIONS UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and OF 1995 Statements in this press release that are not historical or current fact are "forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. " that are based on the Company's beliefs, assumptions and expectations of future events, taking into account the information currently available to the Company. Such forward-looking statements included, but are not limited to, the Company's statements regarding net income growth in the fourth quarter, future growth rate targets, the execution of its long-term strategic plan, future store openings and its ability to drive long-term growth and increased profitability. Forward-looking statements involve risks and uncertainties that may cause the Company's actual results, performance or financial condition to differ materially from the expectations of future results, performance or financial condition that the Company expresses or implies (logic) implies - (=> or a thin right arrow) A binary Boolean function and logical connective. A => B is true unless A is true and B is false. The truth table is A B | A => B ----+------- F F | T F T | T T F | F T T | T It is surprising at first that A => in any forward-looking statements. These risks and uncertainties include, but are not limited to: the ability to negotiate favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. purchase, lease and/or and/or conj. Used to indicate that either or both of the items connected by it are involved. Usage Note: And/or is widely used in legal and business writing. economic development arrangements; expansion into new markets; market saturation In economics, "market saturation" is a term used to describe a situation in which a product has become diffused (distributed) within a market; the actual level of saturation can depend on consumer purchasing power; as well as competition, prices, and technology. due to new destination retail store openings; the rate of growth of general and administrative expenses associated with building a strengthened corporate infrastructure to support the Company's growth initiatives; increasing competition in the outdoor segment of the sporting goods Noun 1. sporting goods - sports equipment sold as a commodity commodity, trade good, good - articles of commerce sports equipment - equipment needed to participate in a particular sport industry; the cost of the Company's products; supply and delivery shortages or interruptions; adverse weather conditions; unseasonal weather conditions which impact the demand for the Company's products; fluctuations in operating results; adverse economic conditions causing a decline in discretionary consumer spending Consumer demand or consumption is also known as personal consumption expenditure. It is the largest part of aggregate demand or effective demand at the macroeconomic level. ; the cost of fuel increasing or remaining at current levels; delays in road construction and/or traffic planning around the Company's new destination retail stores; road construction around the Company's existing destination retail stores; labor shortages A Labor shortage is an economic condition in which there are insufficient qualified candidates (employees) to fill the market-place demands for employment at any price. This condition is sometimes referred to by Economists as "an insufficiency in the labor force. or increased labor costs; changes in consumer preferences and demographic See demographics. trends; increased government regulation; inadequate protection of the Company's intellectual property; other factors that the Company may not have currently identified or quantified; and other risks, relevant factors and uncertainties identified in the Company's filings with the SEC (including the information set forth in the "Factors Affecting Future Results" section of the Company's Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the fiscal year ended January January: see month. 1, 2005), which filings are available at the Company's website at www.cabelas.com and the SEC's website at www.sec.gov See .gov and GovNet. (networking) gov - The top-level domain for US government bodies. . Given the risks and uncertainties surrounding sur·round tr.v. sur·round·ed, sur·round·ing, sur·rounds 1. To extend on all sides of simultaneously; encircle. 2. To enclose or confine on all sides so as to bar escape or outside communication. n. forward-looking statements, you should not place undue reliance on these statements. The Company's forward-looking statements speak only as of the date they are made. Other than as required by law, the Company undertakes no obligation to update or revise forward-looking statements, whether as a result of new information, future events or otherwise.
CABELA'S INCORPORATED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollar Amounts in Thousands)
(Unaudited)
----------------------------------------------------------------------
October 1, January 1,
ASSETS 2005 2005
---------- ----------
CURRENT ASSETS:
Cash and cash equivalents $ 57,173 $ 248,184
Accounts receivable, net of allowances 28,395 33,524
Credit card loans held for sale 70,028 64,019
Credit card loans receivable, net of
allowances 9,753 5,209
Inventories 474,049 313,002
Prepaid expenses and deferred catalog costs 55,378 31,294
Other current assets 39,469 33,255
---------- ----------
Total current assets 734,245 728,487
---------- ----------
PROPERTY AND EQUIPMENT, NET 425,467 294,141
---------- ----------
OTHER ASSETS:
Marketable securities 143,812 145,587
Other 58,276 60,016
---------- ----------
Total other assets 202,088 205,603
---------- ----------
Total assets $1,361,800 $1,228,231
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 141,314 $ 100,826
Unpresented checks net of bank balance 16,494 34,653
Accrued expenses and other liabilities 46,030 50,264
Gift certificates and credit card reward
points 96,255 97,242
Accrued employee compensation and benefits 42,477 54,925
Time deposits 39,402 48,953
Current maturities of long-term debt 28,931 28,327
Current and deferred income taxes payable 20,512 38,551
---------- ----------
Total current liabilities 431,415 453,741
---------- ----------
LONG-TERM LIABILITIES
Long-term debt, less current maturities 91,469 119,825
Revolving credit borrowings 156,439 -
Other 86,139 88,311
---------- ----------
334,047 208,136
---------- ----------
STOCKHOLDERS' EQUITY 596,338 566,354
---------- ----------
Total liabilities and stockholders'
equity $1,361,800 $1,228,231
========== ==========
CABELA'S INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Dollar Amounts in Thousands Except Per Share and Share Amounts)
(Unaudited)
----------------------------------------------------------------------
Three months ended Nine months ended
---------------------- ----------------------
October 1, October 2, October 1, October 2,
2005 2004 2005 2004
---------- ---------- ---------- ----------
REVENUES:
Merchandise sales $ 393,209 $ 361,439 $ 1,012,186 $ 920,124
Financial services
revenue 32,532 22,276 85,866 53,709
Other revenue 4,012 95 26,162 3,033
----------- ----------- ----------- -----------
Total revenues 429,753 383,810 1,124,214 976,866
----------- ----------- ----------- -----------
COST OF REVENUE:
Cost of merchandise
sales 253,623 227,346 655,840 585,142
Cost of other revenue 1,371 43 21,227 3,208
----------- ----------- ----------- -----------
Total cost of
revenue
(exclusive of
depreciation and
amortization) 254,994 227,389 677,067 588,350
----------- ----------- ----------- -----------
Gross profit 174,759 156,421 447,147 388,516
SELLING, GENERAL AND
ADMINISTRATIVE
EXPENSES 148,499 130,926 401,042 347,086
----------- ----------- ----------- -----------
OPERATING INCOME 26,260 25,495 46,105 41,430
----------- ----------- ----------- -----------
OTHER INCOME (EXPENSE):
Interest income 94 132 544 269
Interest expense (3,432) (2,055) (7,937) (6,100)
Other income, net 2,350 1,897 7,962 5,227
----------- ----------- ----------- -----------
(988) (26) 569 (604)
----------- ----------- ----------- -----------
INCOME BEFORE PROVISION
FOR INCOME TAXES 25,272 25,469 46,674 40,826
INCOME TAX EXPENSE 8,997 8,966 16,616 14,290
----------- ----------- ----------- -----------
NET INCOME $ 16,275 $ 16,503 $ 30,058 $ 26,536
=========== =========== =========== ===========
EARNINGS PER SHARE:
Basic $ 0.25 $ 0.26 $ 0.46 $ 0.44
=========== =========== =========== ===========
Diluted $ 0.25 $ 0.25 $ 0.45 $ 0.43
=========== =========== =========== ===========
WEIGHTED AVERAGE SHARES
OUTSTANDING:
Basic 64,691,228 64,252,912 64,642,692 60,241,891
=========== =========== =========== ===========
Diluted 66,342,727 66,409,915 66,301,862 62,190,157
=========== =========== =========== ===========
CABELA'S INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollar Amounts in Thousands)
(Unaudited)
----------------------------------------------------------------------
Nine Months Ended
----------------------
October 1, October 2,
2005 2004
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES $(138,897) $(139,719)
CASH FLOWS FROM INVESTING ACTIVITIES (143,606) (79,920)
CASH FLOWS FROM FINANCING ACTIVITIES 91,492 106,039
---------- ----------
NET INCREASE IN CASH AND CASH EQUIVALENTS (191,011) (113,600)
CASH AND CASH EQUIVALENTS, Beginning of Year 248,184 192,581
---------- ----------
CASH AND CASH EQUIVALENTS, End of Period $ 57,173 $ 78,981
========== ==========
(Dollar Amounts in Thousands)
Segment Information: Three Months Ended Nine Months Ended
-------------------------------------------
Oct. 1, Oct. 2, Oct. 1, Oct. 2,
2005 2004 2005 2004
Direct revenue $ 220,241 $ 220,975 $ 632,854 $ 592,668
Retail revenue 172,968 140,464 379,332 327,456
Financial services revenue 32,532 22,276 85,866 53,709
Other revenue 4,012 95 26,162 3,033
---------- ---------- ---------- ---------
Total revenue $ 429,753 $ 383,810 $1,124,214 $ 976,866
========== ========== ========== =========
Direct operating income $ 28,956 $ 32,609 $ 80,728 $ 81,146
Retail operating income 17,062 22,256 27,208 41,174
Financial services
operating income 17,672 10,787 46,356 21,386
Other operating income
(loss) (37,430) (40,157) (108,187) (102,276)
---------- ---------- ---------- ---------
Total operating income $ 26,260 $ 25,495 $ 46,105 $ 41,430
========== ========== ========== =========
As a percentage of total
revenue:
Direct revenue 51.2% 57.6% 56.3% 60.7%
Retail revenue 40.2% 36.6% 33.8% 33.5%
Financial services revenue 7.6% 5.8% 7.6% 5.5%
Other revenue 1.0% 0.0% 2.3% 0.3%
----- ----- ----- -----
Total revenue 100.0% 100.0% 100.0% 100.0%
----- ----- ----- -----
As a percentage of segment
revenue:
Direct operating income 13.1% 14.8% 12.8% 13.7%
Retail operating income 9.9% 15.8% 7.2% 12.6%
Financial services
operating income 54.3% 48.4% 54.0% 39.8%
Total operating income 6.1% 6.6% 4.1% 4.2%
Financial Services Information: The following table summarizes the results of the Company's financial services segment on a GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). basis. For credit card loans securitized securitized Of, related to, or being debt securities that are secured with assets. For example, mortgage purchase bonds are secured by mortgages that have been purchased with the bond issue's proceeds. and sold, the loans are removed from the Company's balance sheet and the net earnings on these securitized assets after paying outside investors are reflected as a component of securitization Securitization The process of creating a financial instrument by combining other financial assets and then marketing them to investors. Notes: Mortgage backed securities are a perfect example of securitization. May also be spelled as "securitisation. income on a GAAP basis. Net interest income on a GAAP basis includes interest and fee income, interest expense and provision for loan losses from credit card receivables Receivables An asset designation applicable to all debts, unsettled transactions or other monetary obligations owed to a company by its debtors or customers. Receivables are recorded by a company's accountants and reported on the balance sheet, and they and include all debts owed the Company owns. Non-interest income on a GAAP basis includes servicing income, gains on sales of loans and income recognized on retained interests Retained interest (also colloquially known as a payout penalty) is future, currently unpaid, interest that some lenders add to the remaining principal of a loan to determine a payout figure in the event that the loan is terminated before the completion of the original term. for the entire securitized portfolio, as well as, interchange An interchange is a location where two things meet, usually perform some kind of exchange, and possibly go on their ways again. It is most commonly used in four contexts:
(Dollar Amounts in Thousands)
Financial Services Revenue
as reported in the Three Months Ended Nine Months Ended
Financial Statements: ------------------------------------
Oct. 1, Oct. 2, Oct. 1, Oct. 2,
2005 2004 2005 2004
Interest and fee income $ 4,639 $ 3,778 $ 13,189 $ 8,789
Interest expense (726) (735) (2,339) (2,261)
-------- -------- -------- --------
Net interest income 3,913 3,043 10,850 6,528
-------- -------- -------- --------
Non-interest income:
Securitization income 35,576 25,277 94,495 65,648
Other non-interest income 8,069 6,484 22,640 17,752
-------- -------- -------- --------
Total non-interest income 43,645 31,761 117,135 83,400
-------- -------- -------- --------
Less: Customer rewards costs (15,026) (12,528) (42,119) (36,219)
-------- -------- -------- --------
Financial Services revenue $ 32,532 $ 22,276 $ 85,866 $ 53,709
======== ======== ======== ========
"Managed" credit card loans represent credit card loans owned by the Company plus securitized credit card loans. Since the financial performance of the managed portfolio has a significant impact on the earnings received from servicing the portfolio, we believe the following table (see next page) on a "managed" basis is important information to analyze an·a·lyze v. 1. To examine methodically by separating into parts and studying their interrelations. 2. To separate a chemical substance into its constituent elements to determine their nature or proportions. 3. revenue in the financial services segment. The following non-GAAP presentation reflects the financial performance of the credit card loans receivable we own plus those that have been sold and includes the effects of recording the retained interest at fair value. Interest, interchange (net of customer rewards) and fee income on both the owned and securitized portfolio are recorded in their respective line items. Interest paid to outside investors on the securitized credit card loans is included with other interest costs and included in interest expense. Credit losses on the entire managed portfolio are included in provision for loan losses. Although our financial statements are not presented in this manner, management reviews the performance of the managed portfolio in order to evaluate the effectiveness of its origination Origination The process through which a mortgage lender creates a mortgage secured by some amount of the mortgagor's real property. Notes: Also known as loan origination, everyone must go through the origination process when securing a mortgage for a piece of real and collection activities, which ultimately affects the income received for servicing the portfolio.
(Dollar Amounts in Thousands Except Other Data)
Managed Financial Services
Revenue: Three Months Ended Nine Months Ended
-----------------------------------------
Oct. 1, Oct. 2, Oct. 1, Oct. 2,
2005 2004 2005 2004
---------- -------- ---------- --------
Interest income $ 26,931 $ 18,536 $ 73,476 $ 50,807
Interchange income, net
of customer reward costs 15,375 10,562 39,937 27,540
Other fee income 5,555 4,535 14,797 11,737
Interest expense (10,771) (6,883) (28,792) (18,950)
Provision for loan losses (5,574) (5,344) (17,047) (15,279)
Other 1,016 870 3,495 (2,146)
---------- -------- ---------- --------
Net managed financial
services revenue $ 32,532 $ 22,276 $ 85,866 $ 53,709
========== ======== ========== ========
As a Percentage of Managed
Credit Card Loans
Managed Financial Services
Revenue
Interest income 9.5% 8.2% 9.3% 7.8%
Interchange income, net of
customer reward costs 5.5% 4.6% 5.0% 4.3%
Other fee income 1.9% 2.0% 1.8% 1.8%
Interest expense ( 3.8)% ( 3.0)% ( 3.6)% ( 2.9)%
Provision for loan losses ( 2.0)% ( 2.4)% ( 2.1)% ( 2.4)%
Other 0.4% 0.4% 0.4% ( 0.3)%
---------- -------- ---------- --------
Net managed financial
services revenue 11.5% 9.8% 10.8% 8.3%
========== ======== ========== ========
Average reported credit card
loans $ 104,035 $ 80,933 $ 104,681 $ 76,766
Average managed credit card
loans $1,128,336 $908,623 $1,058,134 $863,354
Other Data:
Average Active Accounts 726,507 619,250 704,329 602,187
Average Account Balance $ 1,553 $ 1,467 $ 1,502 $ 1,434
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