UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark One)
| x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended October 2, 2004
or
| ¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Commission File Number: 1-32227
CABELA’S INCORPORATED
(Exact name of registrant as specified in its charter)
| Delaware | 20-0486586 | |
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification Number) | |
| One Cabela Drive, Sidney, Nebraska | 69160 | |
| (Address of principal executive offices) | (Zip Code) | |
(308) 254-5505
(Registrant’s telephone number, including area code)
Not applicable
(Former name, former address and former fiscal year, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to the filing requirements for at least the past 90 days.
Yes x No ¨
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).
Yes ¨ No x
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
Common stock, $0.01 par value: 64,779,202 shares, including 13,700,489 shares of non-voting common stock, as of November 3, 2004.
CABELA’S INCORPORATED
FORM 10-Q
QUARTERLY PERIOD ENDED OCTOBER 2, 2004
| Page | ||
| PART I –FINANCIAL INFORMATION |
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| 3 | ||
| 3 | ||
| 4 | ||
| 5 | ||
| 6 | ||
| Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations |
19 | |
| Item 3. Quantitative and Qualitative Disclosures about Market Risk |
36 | |
| 37 | ||
| PART II – OTHER INFORMATION |
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| 38 | ||
| 38 | ||
| 39 | ||
| 39 | ||
| 39 | ||
| 39 | ||
| 40 | ||
| 41 | ||
2
PART I – FINANCIAL INFORMATION
| Item 1. | Financial Statements. |
CABELA’S INCORPORATED AND SUBSIDIARIES
(Dollar Amounts in Thousands Except Share and Per Share Amounts)
(Unaudited)
| October 2, 2004 |
January 3, 2004 | |||||
| ASSETS |
||||||
| CURRENT ASSETS: |
||||||
| Cash and cash equivalents |
$ | 78,981 | $ | 192,581 | ||
| Accounts receivable, net of allowance for doubtful accounts of $828 at October 2, 2004, and $1,894 at January 3, 2004. |
28,624 | 32,826 | ||||
| Credit card loans receivable held for sale (Note 4) |
88,180 | 28,013 | ||||
| Inventories |
364,366 | 262,763 | ||||
| Prepaid expenses and deferred catalog costs |
50,605 | 31,035 | ||||
| Deferred income taxes |
1,290 | 1,122 | ||||
| Other current assets |
30,460 | 33,291 | ||||
| Total current assets |
642,506 | 581,631 | ||||
| PROPERTY AND EQUIPMENT, NET |
280,111 | 264,991 | ||||
| OTHER ASSETS: |
||||||
| Intangible assets, net |
5,025 | 4,252 | ||||
| Land held for sale or development |
21,492 | 9,240 | ||||
| Retained interests in securitized receivables (Note 4) |
23,060 | 20,864 | ||||
| Marketable securities |
126,091 | 72,632 | ||||
| Investment in equity and cost method investees |
4,012 | 4,266 | ||||
| Other |
5,081 | 5,677 | ||||
| Total other assets |
184,761 | 116,931 | ||||
| Total assets |
$ | 1,107,378 | $ | 963,553 | ||
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||
| CURRENT LIABILITIES: |
||||||
| Accounts payable |
$ | 117,305 | $ | 91,524 | ||
| Unpresented checks net of bank balance |
14,745 | 36,788 | ||||
| Accrued expenses and other liabilities |
36,579 | 42,939 | ||||
| Gift certificates and credit card reward points |
77,833 | 80,570 | ||||
| Accrued employee compensation and benefits |
38,189 | 57,134 | ||||
| Time deposits |
40,953 | 12,900 | ||||
| Employee savings plan |
— | 1,083 | ||||
| Current maturities of long-term debt |
28,224 | 3,013 | ||||
| Income taxes payable |
22,914 | 27,100 | ||||
| Total current liabilities |
376,742 | 353,051 | ||||
| LONG-TERM LIABILITIES: |
||||||
| Long-term debt, less current maturities |
120,822 | 139,638 | ||||
| Long-term time deposits |
49,606 | 68,764 | ||||
| Deferred compensation |
8,888 | 7,248 | ||||
| Deferred revenue |
7,796 | 5,552 | ||||
| Deferred income taxes |
17,218 | 16,785 | ||||
| Total long-term liabilities |
204,330 | 237,987 | ||||
| COMMITMENTS AND CONTINGENCIES (Note 11) |
||||||
| STOCKHOLDERS’ EQUITY: |
||||||
| Common stock, $0.01 par value: |
||||||
| Class A Voting, 245,000,000 shares authorized; 50,555,761 and 41,677,228 shares issued and outstanding at October 2, 2004 and January 3, 2004, respectively |
506 | 417 | ||||
| Class B Non-voting, 245,000,000 shares authorized; 13,700,489 and 14,927,582 shares issued and outstanding at October 2, 2004 and January 3, 2004, respectively |
137 | 149 | ||||
| Preferred stock, 10,000,000 shares authorized, no shares issued or outstanding. |
— | — | ||||
| Additional paid-in capital |
234,458 | 109,437 | ||||
| Retained earnings |
288,334 | 261,798 | ||||
| Accumulated other comprehensive income |
2,871 | 714 | ||||
| Total stockholders’ equity |
526,306 | 372,515 | ||||
| Total liabilities and stockholders’ equity |
$ | 1,107,378 | $ | 963,553 | ||
See notes to unaudited consolidated financial statements.
3
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 2, 2004 |
September 27, 2003 |
October 2, 2004 |
September 27, 2003 |
|||||||||||||
| REVENUES: |
||||||||||||||||
| Merchandise sales |
$ | 361,439 | $ | 315,614 | $ | 920,124 | $ | 800,923 | ||||||||
| Financial services revenue |
22,276 | 15,922 | 53,709 | 41,029 | ||||||||||||
| Other revenue |
95 | (327 | ) | 3,033 | 2,406 | |||||||||||
| Total revenues |
383,810 | 331,209 | 976,866 | 844,358 | ||||||||||||
| COST OF REVENUE: |
||||||||||||||||
| Cost of merchandise sales |
227,346 | 200,427 | 585,142 | 509,604 | ||||||||||||
| Cost of other revenue |
43 | (1,477 | ) | 3,208 | 1,376 | |||||||||||
| Total cost of revenue (exclusive of depreciation and amortization) |
227,389 | 198,950 | 588,350 | 510,980 | ||||||||||||
| Gross profit |
156,421 | 132,259 | 388,516 | 333,378 | ||||||||||||
| SELLING, GENERAL AND ADMINISTRATIVE EXPENSES |
130,926 | 114,700 | 347,086 | 304,162 | ||||||||||||
| OPERATING INCOME |
25,495 | 17,559 | 41,430 | 29,216 | ||||||||||||
| OTHER INCOME (EXPENSE): |
||||||||||||||||
| Interest income |
132 | 24 | 269 | 278 | ||||||||||||
| Interest expense |
(2,055 | ) | (2,945 | ) | (6,100 | ) | (8,504 | ) | ||||||||
| Other income, net |
1,897 | 1,309 | 5,227 | 4,401 | ||||||||||||
| (26 | ) | (1,612 | ) | (604 | ) | (3,825 | ) | |||||||||
| INCOME BEFORE PROVISION FOR INCOME TAXES |
25,469 | 15,947 | 40,826 | 25,391 | ||||||||||||
| INCOME TAX EXPENSE |
8,966 | 5,710 | 14,290 | 8,987 | ||||||||||||
| NET INCOME |
$ | 16,503 | $ | 10,237 | $ | 26,536 | $ | 16,404 | ||||||||
| EARNINGS PER SHARE: |
||||||||||||||||
| Basic |
$ | 0.26 | $ | 0.20 | $ | 0.44 | $ | 0.32 | ||||||||
| Diluted |
$ | 0.25 | $ | 0.19 | $ | 0.43 | $ | 0.30 | ||||||||
| WEIGHTED AVERAGE SHARES OUTSTANDING: |
||||||||||||||||
| Basic |
64,252,912 | 52,035,101 | 60,241,891 | 50,611,169 | ||||||||||||
| Diluted |
66,409,915 | 55,351,796 | 62,190,157 | 54,209,546 | ||||||||||||
See notes to unaudited consolidated financial statements.
4
CABELA’S INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollar Amounts in Thousands)
(Unaudited)
| Nine Months Ended |
||||||||
| October 2, 2004 |
September 27, 2003 |
|||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: |
||||||||
| Net income |
$ | 26,536 | $ | 16,404 | ||||
| Adjustments to reconcile net income to net cash flows from operating activities: |
||||||||
| Depreciation |
21,009 | 18,819 | ||||||
| Amortization |
988 | 908 | ||||||
| Stock based compensation |
1,045 | — | ||||||
| Equity in undistributed net (earnings) losses of equity method investee |
(232 | ) | 174 | |||||
| Deferred income taxes |
(923 | ) | (3,034 | ) | ||||
| Other |
1,386 | 987 | ||||||
| Change in operating assets and liabilities: |
||||||||
| Accounts receivable |
4,202 | (2,762 | ) | |||||
| Origination of credit card loans held for sale, net of collections |
(61,522 | ) | (12,791 | ) | ||||
| Inventories |
(101,602 | ) | (78,689 | ) | ||||
| Prepaid expenses |
(19,570 | ) | (21,865 | ) | ||||
| Other current assets |
2,330 | (6,037 | ) | |||||
| Land held for sale or development |
(9,972 | ) | 262 | |||||
| Accounts payable |
25,780 | 1,314 | ||||||
| Accrued expenses and other liabilities |
(6,360 | ) | 1,077 | |||||
| Gift certificates and credit card reward points |
(2,737 | ) | (800 | ) | ||||
| Accrued compensation and benefits |
(18,945 | ) | (8,488 | ) | ||||
| Income taxes payable |
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