-Q3 Total Revenue Increased 11.5% to $546.8 Million-
-Q3 Same Store Sales Increased 4.6%-
-Company Reported Q3 Diluted EPS of $0.20-
SIDNEY, Neb.--(BUSINESS WIRE)--Nov. 1, 2007--Cabela's Incorporated
(NYSE: CAB), the World's Foremost Outfitter(R) of hunting, fishing,
and outdoor gear, today reported financial results for its third
fiscal quarter ended September 29, 2007.
Total revenue for the third quarter of fiscal 2007 increased 11.5%
to a record $546.8 million compared to $490.5 million for the same
period last year. Third quarter net income was $13.2 million, or $0.20
per diluted share, compared to $15.0 million, or $0.23 per diluted
share, for the same period a year ago.
During the third quarter of fiscal 2007, direct revenue increased
4.2% to $241.9 million, total retail revenue increased 17.7% to $257.3
million and same store sales increased 4.6%. Financial services
revenue increased 19.7% to $44.7 million for the third quarter of
fiscal 2007.
Total revenue for the nine months ended September 29, 2007,
increased 13.8% to $1.46 billion compared to $1.28 billion for the
same period last year. Net income for the nine months was $31.6
million, or $0.47 per diluted share, compared to $32.4 million, or
$0.49 per diluted share, for the nine months ended September 30, 2006.
"We are pleased to report another quarter of double digit revenue
growth, highlighted by a 4.6% increase in same store sales," said
Dennis Highby, Cabela's President and Chief Executive Officer. "Our
third quarter results were impacted by higher promotional activity,
resulting in lower margins, and two stores, opened in 2006, that did
not meet the Company's sales expectations.
"During the quarter, we opened a retail store in Hoffman Estates,
Illinois, acquired S.I.R. Warehouse Sports Store, a Canadian specialty
retailer of outdoor merchandise, and announced plans for a store in
Billings, Montana, expected to open in the summer of 2008," Highby
said. "We are on schedule to open six additional stores during the
fourth quarter, including East Hartford, Connecticut; Gonzales,
Louisiana; and Hammond, Indiana; all of which recently opened. Reno,
Nevada; Post Falls, Idaho; and Lacey, Washington, are all slated to
open in November. As a result of these store openings, we saw an
increase in our pre-opening expenses of $3.3 million during the
quarter compared to the year ago quarter.
"For the full year of 2007, we expect diluted earnings per share
to increase at a high single digit growth rate," Highby said.
"Additionally, we expect to open seven new stores in 2008, and we are
highly confident in our ability to successfully execute our retail
rollout strategy and grow revenue and earnings per share consistent
with our long-term mid-teens growth expectations."
Mr. Highby concluded, "Although these results were below our
expectations, we remain confident that our powerful brand and
multi-channel business model will allow us to continue to increase
market share and significantly expand our business into the future. We
remain focused on further building upon our leadership position in the
industry and fully capitalizing on the many opportunities that lie
ahead."
Conference Call Information
A conference call to discuss third quarter fiscal 2007 operating
results is scheduled for today (Thursday, November 1, 2007) at 4:30
p.m. Eastern Time. A webcast of the call will take place
simultaneously and can be accessed by visiting the Investor Relations
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, is the
world's largest direct marketer, and a leading specialty retailer, of
hunting, fishing, camping and related outdoor merchandise. Since the
Company's founding in 1961, Cabela's(R) has grown to become one of the
most well-known outdoor recreation brands in the world, and has long
been recognized as the World's Foremost Outfitter(R). Through Cabela's
well-established direct business and its growing number of 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
credit card, which serves as its primary customer loyalty rewards
program.
Caution Concerning Forward-Looking Statements
Statements in this press release that are not historical or
current fact are "forward-looking statements" 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 include, but are not limited
to, the Company's statements regarding its expectation that diluted
earnings per share will increase at a high single digit growth rate
for fiscal 2007, its ability to successfully execute its retail
rollout strategy and grow revenue and earnings per share consistent
with its long-term mid-teens growth expectations, and its expectation
of opening seven new stores in 2008. 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 in any forward-looking
statements. These risks and uncertainties include, but are not limited
to: the ability to negotiate favorable purchase, lease and/or economic
development arrangements for new retail store locations; expansion
into new markets; market saturation due to new retail store openings;
the acceleration of new 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 industry; the cost of the Company's products; supply
and delivery shortages or interruptions caused by system changes or
other factors; 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; the cost of fuel
increasing; delays in road construction and/or traffic planning around
the Company's new retail stores; road construction around the
Company's existing retail stores; labor shortages or increased labor
costs; changes in consumer preferences and demographic trends;
increased government regulation; inadequate protection of the
Company's intellectual property; decreased interchange fees received
by the Company's financial services business as a result of credit
card industry litigation; 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 "Risk Factors" section of
the Company's Form 10-K for the fiscal year ended December 30, 2006,
and Form 10-Q for the fiscal quarter ended March 31, 2007), which
filings are available at the Company's website at www.cabelas.com and
the SEC's website at www.sec.gov. Given the risks and uncertainties
surrounding 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
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands)
(Unaudited)
----------------------------------------------------------------------
September 29, December 30, September 30,
ASSETS 2007 2006 2006
------------- ------------ -------------
CURRENT ASSETS:
Cash and cash equivalents $ 103,114 $ 172,903 $ 73,315
Accounts receivable 30,657 37,812 26,766
Credit card loans held for
sale 158,939 136,072 91,400
Credit card loans receivable 13,360 16,611 14,882
Inventories 669,544 484,414 504,399
Prepaid expenses and
deferred catalog costs 63,858 42,502 63,011
Income taxes receivable 11,113 -- 5,419
Other current assets 67,729 63,907 78,060
------------- ------------ -------------
Total current assets 1,118,314 954,221 857,252
------------- ------------ -------------
PROPERTY AND EQUIPMENT, NET 862,554 600,065 584,957
------------- ------------ -------------
OTHER ASSETS:
Marketable securities 80,687 117,360 111,199
Other 103,219 79,584 66,128
------------- ------------ -------------
Total other assets 183,906 196,944 177,327
------------- ------------ -------------
TOTAL ASSETS $2,164,774 $1,751,230 $1,619,536
============= ============ =============
LIABILITIES AND STOCKHOLDERS'
EQUITY
CURRENT LIABILITIES:
Accounts payable $ 311,195 $ 239,285 $ 225,994
Unpresented checks net of
bank balance 40,458 -- 11,735
Accrued expenses and other
liabilities 59,400 72,124 57,876
Gift certificates and credit
card reward points 141,030 144,210 113,399
Accrued employee
compensation and benefits 52,013 61,275 41,961
Time deposits 25,044 33,401 40,799
Short-term borrowings and
current portion of long-
term debt 76,760 33,294 27,356
Income taxes payable and
deferred income taxes 21,774 35,245 11,960
------------- ------------ -------------
Total current liabilities 727,674 618,834 531,080
LONG-TERM LIABILITIES 666,707 398,538 409,640
STOCKHOLDERS' EQUITY 770,393 733,858 678,816
------------- ------------ -------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $2,164,774 $1,751,230 $1,619,536
============= ============ =============
CABELA'S INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Dollars in Thousands Except Earnings Per Share)
(Unaudited)
----------------------------------------------------------------------
Three Months Ended Nine Months Ended
------------------------- -------------------------
September September September September
29, 30, 29, 30,
2007 2006 2007 2006
------------ ------------ ------------ ------------
REVENUE:
Merchandise
sales $ 499,182 $ 450,821 $ 1,325,245 $ 1,171,493
Financial
services
revenue 44,749 37,392 121,497 98,946
Other revenue 2,878 2,240 13,357 12,082
------------ ------------ ------------ ------------
Total revenue 546,809 490,453 1,460,099 1,282,521
------------ ------------ ------------ ------------
COST OF REVENUE:
Cost of
merchandise
sales 322,547 290,747 859,042 759,079
Cost of other
revenue 37 (582) 1,671 2,894
------------ ------------ ------------ ------------
Total cost of
revenue
(exclusive of
depreciation
and
amortization) 322,584 290,165 860,713 761,973
SELLING, GENERAL
AND
ADMINISTRATIVE
EXPENSES 199,879 173,437 542,397 464,949
------------ ------------ ------------ ------------
OPERATING INCOME 24,346 26,851 56,989 55,599
------------ ------------ ------------ ------------
OTHER INCOME
(EXPENSE):
Interest income 42 287 1,705 1,624
Interest expense (4,220) (4,794) (13,690) (12,929)
Other income,
net 1,004 2,000 5,353 7,600
------------ ------------ ------------ ------------
Total other
income
(expense) (3,174) (2,507) (6,632) (3,705)
------------ ------------ ------------ ------------
INCOME BEFORE
PROVISION FOR
INCOME TAXES 21,172 24,344 50,357 51,894
PROVISION FOR
INCOME TAXES 7,940 9,350 18,719 19,461
------------ ------------ ------------ ------------
NET INCOME $ 13,232 $ 14,994 $ 31,638 $ 32,433
============ ============ ============ ============
EARNINGS PER
SHARE:
Basic $ 0.20 $ 0.23 $ 0.48 $ 0.50
============ ============ ============ ============
Diluted $ 0.20 $ 0.23 $ 0.47 $ 0.49
============ ============ ============ ============
WEIGHTED AVERAGE
SHARES
OUTSTANDING:
Basic 65,825,895 65,271,870 65,701,443 65,180,992
============ ============ ============ ============
Diluted 67,031,102 66,484,306 67,317,482 66,492,421
============ ============ ============ ============
Segment Information Three Months Ended Nine Months Ended
------------------- -----------------------
September September September September
29, 30, 29, 30,
(Dollars in Thousands) 2007 2006 2007 2006
-------------------------- --------- --------- ----------- -----------
Direct revenue $241,900 $232,172 $ 683,646 $ 656,052
Retail revenue 257,282 218,649 641,599 515,441
Financial services revenue 44,749 37,392 121,497 98,946
Other revenue 2,878 2,240 13,357 12,082
--------- --------- ----------- -----------
Total revenue $546,809 $490,453 $1,460,099 $1,282,521
========= ========= =========== ===========
Direct operating income $ 40,897 $ 35,727 $ 107,356 $ 97,420
Retail operating income 26,940 29,630 66,403 58,870
Financial services
operating income 9,569 7,689 26,961 21,815
Other operating loss (53,060) (46,195) (143,731) (122,506)
--------- --------- ----------- -----------
Total operating income $ 24,346 $ 26,851 $ 56,989 $ 55,599
========= ========= =========== ===========
As a Percentage of Total
Revenue:
Direct revenue 44.2% 47.3% 46.8% 51.2%
Retail revenue 47.1 44.6 44.0 40.2
Financial services revenue 8.2 7.6 8.3 7.7
Other revenue 0.5 0.5 0.5 0.9 0.9
--------- --------- ----------- -----------
Total revenue 100.0% 100.0% 100.0% 100.0%
========= ========= =========== ===========
As a Percentage of Segment
Revenue:
Direct operating income 16.9% 15.4% 15.7% 14.8%
Retail operating income 10.5 13.6 10.4 11.4
Financial services
operating income 21.4 20.6 22.2 22.0
Total operating income
(1) 4.5% 5.4% 3.9% 4.3%
(1) The percentage of total operating income is a percentage of total
consolidated revenue.
Financial Services Information:
The following table summarizes the results of the Company's
financial services segment on a generally accepted accounting
principles ("GAAP") basis. For credit card loans securitized and sold,
the loans are removed from the Company's consolidated balance sheet
and the net earnings on these securitized assets after paying outside
investors are reflected as a component of securitization income on a
GAAP basis. Net interest income on a GAAP basis includes interest and
fee income, interest expense and provision for loan losses for the
credit card loans receivable the Company owns. Non-interest income on
a GAAP basis includes servicing income, gains on sales of loans and
income recognized on retained interests, as well as interchange income
on the entire managed portfolio.
Financial Services Revenue as
Reported on a GAAP Basis: Three Months Ended Nine Months Ended
------------------- -------------------
September September September September
29, 30, 29, 30,
(In Thousands) 2007 2006 2007 2006
------------------------------ --------- --------- --------- ---------
Interest and fee income, net
of provision for loan losses $ 9,139 $ 6,372 $ 20,233 $ 17,360
Interest expense (1,807) (1,299) (4,252) (3,600)
--------- --------- --------- ---------
Net interest income, net of
provision for loan losses 7,332 5,073 15,981 13,760
--------- --------- --------- ---------
Non-interest income:
Securitization income 50,679 44,294 144,315 120,074
Other non-interest income 13,592 10,505 36,072 28,586
--------- --------- --------- ---------
Total non-interest income 64,271 54,799 180,387 148,660
--------- --------- --------- ---------
Less: Customer rewards costs (26,854) (22,480) (74,871) (63,474)
--------- --------- --------- ---------
Financial services revenue $ 44,749 $ 37,392 $121,497 $ 98,946
========= ========= ========= =========
"Managed" credit card loans represent credit card loans receivable
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, the
Company believes the following table (see next page) on a "managed"
basis is important information to analyze revenue in the financial
services segment. The following non-GAAP presentation reflects the
financial performance of the credit card loans receivable owned by the
Company plus those that have been sold and includes the effect of
recording the retained interest at fair value. Interest income,
interchange income (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 the Company's
consolidated financial statements are not presented in this manner,
management reviews the performance of the managed portfolio in order
to evaluate the effectiveness of the Company's origination and
collection activities, which ultimately affects the income received
for servicing the portfolio.
Managed Financial
Services Revenue
Presented on Non-GAAP
Basis: Three Months Ended Nine Months Ended
----------------------- -----------------------
September September September September
(Dollars in Thousands) 29, 2007 30, 2006 29, 2007 30, 2006
---------------------- ----------- ----------- ----------- -----------
Interest income $ 48,465 $ 38,257 $ 136,010 $ 104,720
Interchange income,
net of customer
rewards costs 16,940 13,981 46,690 37,974
Other fee income 7,425 6,058 19,502 16,532
Interest expense (21,776) (17,263) (60,187) (46,590)
Provision for loan
losses (8,931) (6,442) (23,374) (18,354)
Other 2,626 2,801 2,856 4,664
----------- ----------- ----------- -----------
Managed financial
services revenue $ 44,749 $ 37,392 $ 121,497 $ 98,946
=========== =========== =========== ===========
Managed Financial
Services Revenue as a
Percentage of Average
Managed Credit Card
Loans:
Interest income 11.2% 11.0% 11.1% 10.6%
Interchange income,
net of customer
rewards costs 3.9 4.0 3.8 3.9
Other fee income 1.7 1.7 1.6 1.6
Interest expense (5.0) (5.0) (4.9) (4.7)
Provision for loan
losses (2.1) (1.8) (1.9) (1.9)
Other 0.6 0.8 0.2 0.5
----------- ----------- ----------- -----------
Managed financial
services revenue 10.3% 10.7% 9.9% 10.0%
=========== =========== =========== ===========
Average reported
credit card loans $ 182,719 $ 133,866 $ 155,073 $ 128,161
Average managed credit
card loans 1,730,886 1,394,377 1,633,446 1,315,000
CONTACT: Cabela's Incorporated
Investors:
Chris Gay, 308-255-2905
or
Media:
Joe Arterburn, 308-255-1204
SOURCE: Cabela's Incorporated
