Total Revenue Increased 16.6% to a Record $526.0 Million
Q2 Direct Revenue Increased 1.5%
Q2 Same Store Sales Decreased 1.6%
Company Reported Q2 Diluted EPS of $0.11
Company Confirms Full Year Mid-Teen % Revenue Growth and
Mid-Single-Digit % EPS Growth Guidance
SIDNEY, Neb.--(Business Wire)--
Cabela's Incorporated (NYSE: CAB), the World's Foremost
Outfitter(R) of hunting, fishing and outdoor gear, today reported
financial results for its second fiscal quarter ended June 28, 2008.
Total revenue for the second quarter of 2008 increased 16.6% to
$526.0 million compared to $451.2 million for the second quarter of
2007. Net income for the second quarter of 2008 was $7.3 million, or
$0.11 per diluted share, compared to $11.3 million, or $0.17 per
diluted share, for the second quarter of 2007.
In the second quarter of 2008, retail store revenue increased
37.1% to $273.6 million with a same store sales decrease of 1.6%;
direct revenue increased 1.5% to $207.0 million; and financial
services revenue decreased 6.7% to $38.3 million. Financial services
revenue was adversely impacted by an increase in bad debts in the
Company's credit card portfolio. Charge-off levels remain well below
industry average, and delinquency rates have stabilized as compared to
the first quarter of 2008.
Total revenue for the six months ended June 28, 2008, increased
16.2% to $1.06 billion compared to $913.3 million for the same period
last year. Net income for the six months ended June 28, 2008, was
$17.2 million, or $0.26 per diluted share, compared to $18.4 million,
or $0.27 per diluted share, for the six months ended June 30, 2007.
"During the second quarter, we achieved top-line improvements in
our direct and retail businesses despite a continued difficult
macroeconomic environment," said Dennis Highby, Cabela's President and
Chief Executive Officer. "However, revenue in our financial services
segment declined year over year due to higher net charge-offs."
"Our entire team is motivated, and we remain focused on driving
improvements across the board," Highby said. "We continue to make
progress on our initiatives to improve retail profitability and have
lowered inventory per square foot in our comp stores, leveraged salary
and wages in our retail stores and significantly improved the
performance of retail advertising."
"We also continued to grow our retail presence during the
quarter," Highby said. "Our Scarborough, Maine, store opened in May,
and we have been very pleased with the initial results. We plan to
open our 80,000 square foot store in Rapid City, South Dakota, next
month. Designed to be less capital intensive and more efficient, the
Rapid City store will be our first next generation store, and we are
very excited about its grand opening."
"We remain comfortable with our mid-teen percentage revenue growth
and mid-single digit percentage earnings growth targets for fiscal
2008, despite what we believe will be a challenging sales environment
for the remainder of the year," Highby said. "We expect continued
progress with our initiatives to further drive profitability in our
retail business and remain focused on enhancing our operating
platform. Cabela's leadership status in the industry remains intact,
and we are confident our powerful brand and market position affords us
a significant competitive advantage into the future."
Conference Call Information
A conference call to discuss second quarter fiscal 2008 operating
results is scheduled for today (Thursday, July 31) at 4:30 PM 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 a
leading specialty retailer, and the world's largest direct marketer,
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 growing number of retail stores and its well-established
direct business, 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. Cabela's stock is traded on the New York Stock Exchange under
the symbol "CAB".
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 expected revenue and earnings
growth targets for fiscal 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 strength of the economy; the level of discretionary consumer
spending; changes in consumer preferences and demographic trends; our
ability to successfully execute our multi-channel strategy; 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 rate of growth of general and administrative expenses associated
with building a strengthened corporate infrastructure to support our
growth initiatives; increasing competition in the outdoor segment of
the sporting goods industry; the cost of our products; trade
restrictions; political or financial instability in countries where
the goods we sell are manufactured; adverse fluctuations in foreign
currencies; increases in postage rates or paper and printing costs;
supply and delivery shortages or interruptions caused by system
changes or other factors; adverse or unseasonal weather conditions;
fluctuations in operating results; the cost of fuel increasing; road
construction around our retail stores; labor shortages or increased
labor costs; increased government regulation; inadequate protection of
our intellectual property; our ability to protect our brand and
reputation; decreased interchange fees received by our financial
services business as a result of credit card industry litigation;
other factors that we 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 29, 2007, and in Part II, Item 1A of the Company's
Quarterly Report on Form 10-Q for the fiscal quarter ended March 29,
2008), 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.
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*T
CABELA'S INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Dollars in Thousands Except Earnings Per Share)
(Unaudited)
----------------------------------------------------------------------
Three Months Ended Six Months Ended
------------------------- -------------------------
June 28, June 30, June 28, June 30,
2008 2007 2008 2007
------------ ------------ ------------ ------------
REVENUE:
Merchandise
sales $ 480,640 $ 403,424 $ 971,551 $ 826,063
Financial
services
revenue 38,253 41,014 78,961 76,748
Other revenue 7,059 6,761 10,979 10,479
----------- ----------- ----------- -----------
Total
revenue 525,952 451,199 1,061,491 913,290
----------- ----------- ----------- -----------
COST OF REVENUE
(exclusive of
depreciation and
amortization) 316,386 260,097 630,188 538,129
SELLING,
DISTRIBUTION, AND
ADMINISTRATIVE
EXPENSES 194,714 170,850 395,365 342,518
----------- ----------- ----------- -----------
OPERATING INCOME 14,852 20,252 35,938 32,643
INTEREST (EXPENSE)
INCOME, NET (7,748) (4,409) (14,889) (7,807)
OTHER NON-
OPERATING INCOME,
NET 1,755 2,153 3,614 4,349
----------- ----------- ----------- -----------
INCOME BEFORE
PROVISION FOR
INCOME TAXES 8,859 17,996 24,663 29,185
PROVISION FOR
INCOME TAXES 1,580 6,732 7,428 10,779
----------- ----------- ----------- -----------
NET INCOME $ 7,279 $ 11,264 $ 17,235 $ 18,406
=========== =========== =========== ===========
EARNINGS PER
COMMON SHARE:
Basic $ 0.11 $ 0.17 $ 0.26 $ 0.28
=========== =========== =========== ===========
Diluted $ 0.11 $ 0.17 $ 0.26 $ 0.27
=========== =========== =========== ===========
WEIGHTED AVERAGE
SHARES
OUTSTANDING:
Basic 66,203,423 65,782,822 66,068,902 65,639,217
=========== =========== =========== ===========
Diluted 66,852,745 67,111,798 66,761,415 67,251,708
=========== =========== =========== ===========
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CABELA'S INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands)
(Unaudited)
----------------------------------------------------------------------
June 28, December 29, June 30,
ASSETS 2008 2007 2007
---------- ------------ ----------
CURRENT
Cash and cash equivalents $ 88,125 $ 131,182 $ 80,229
Accounts receivable 49,652 46,857 31,154
Credit card loans 184,024 191,893 133,050
Inventories 630,830 608,159 523,925
Prepaid expenses and other
current assets 141,232 116,297 141,773
Income taxes receivable 1,753 -- 7,063
---------- ------------ ----------
Total current assets 1,095,616 1,094,388 917,194
Property and equipment, net 916,558 904,052 733,594
Land held for sale or development 33,312 34,802 19,192
Retained interests in securitized
loans 38,390 51,777 40,091
Economic development bonds 101,316 98,035 80,269
Other assets 32,356 29,776 20,359
---------- ------------ ----------
TOTAL ASSETS $2,217,548 $2,212,830 $1,810,699
========== ============ ==========
LIABILITIES AND STOCKHOLDERS'
EQUITY
CURRENT
Accounts payable and unpresented
checks $ 169,483 $ 281,391 $ 262,351
Gift certificates and credit
card and loyalty rewards
programs 170,280 184,257 137,775
Accrued expenses 93,134 139,510 91,956
Time deposits 83,979 49,219 19,500
Short-term borrowings of
financial services subsidiary -- 100,000 27,000
Current maturities of long-term
debt 26,701 26,785 26,738
Income taxes payable and
deferred income taxes 13,157 49,942 17,863
---------- ------------ ----------
Total current liabilities 556,734 831,104 583,183
LONG-TERM LIABILITIES 808,323 553,167 472,498
STOCKHOLDERS' EQUITY 852,491 828,559 755,018
---------- ------------ ----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $2,217,548 $2,212,830 $1,810,699
========== ============ ==========
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CABELA'S INCORPORATED AND SUBSIDIARIES
SEGMENT INFORMATION
(Dollars in Thousands)
(Unaudited)
----------------------------------------------------------------------
Three Months Ended Six Months Ended
------------------- ---------------------
June 28, June 30, June 28, June 30,
2008 2007 2008 2007
--------- -------- ----------- ---------
Revenue:
----------------------------
Retail $273,624 $199,563 $ 527,999 $384,317
Direct 207,016 203,861 443,552 441,746
Financial Services 38,253 41,014 78,961 76,748
Other 7,059 6,761 10,979 10,479
-------- -------- ---------- --------
Total revenue $525,952 $451,199 $1,061,491 $913,290
======== ======== ========== ========
Operating Income (Loss):
----------------------------
Retail $ 22,406 $ 22,108 $ 49,345 $ 39,463
Direct 26,379 33,966 59,855 66,459
Financial Services 11,190 8,833 21,967 17,392
Other (45,123) (44,655) (95,229) (90,671)
--------- -------- ----------- --------
Total operating income $ 14,852 $ 20,252 $ 35,938 $ 32,643
======== ======== ========== ========
As a Percentage of Total
Revenue:
----------------------------
Retail revenue 52.0% 44.2% 49.8% 42.1%
Direct revenue 39.4 45.2 41.8 48.4
Financial Services revenue 7.3 9.1 7.4 8.4
Other revenue 1.3 1.5 1.0 1.1
-------- -------- ---------- --------
Total revenue 100.0% 100.0% 100.0% 100.0%
======== ======== ========== ========
As a Percentage of Segment
Revenue:
----------------------------
Retail operating income 8.2% 11.1% 9.3% 10.3%
Direct operating income 12.7 16.7 13.5 15.0
Financial Services operating
income 29.3 21.5 27.8 22.7
Total operating income
(1) 2.8% 4.5% 3.4% 3.6%
----------------------------
(1) The percentage of total operating income is a percentage of total
consolidated revenue.
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CABELA'S INCORPORATED AND SUBSIDIARIES
FINANCIAL SERVICES REVENUE AS REPORTED ON A GAAP BASIS
(Dollars in Thousands)
(Unaudited)
----------------------------------------------------------------------
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 Six Months Ended
------------------- -------------------
June 28, June 30, June 28, June 30,
2008 2007 2008 2007
--------- --------- --------- ---------
Interest and fee income, net of
provision for loan losses $ 8,743 $ 6,334 $ 19,123 $ 11,094
Interest expense (2,660) (1,205) (6,162) (2,445)
-------- -------- -------- --------
Net interest income, net of
provision for loan losses 6,083 5,129 12,961 8,649
-------- -------- -------- --------
Non-interest income:
Securitization income 45,652 50,026 89,350 93,636
Other non-interest income 16,053 11,308 32,641 22,480
-------- -------- -------- --------
Total non-interest income 61,705 61,334 121,991 116,116
Less: Customer rewards costs (29,535) (25,449) (55,991) (48,017)
--------- -------- --------- --------
Financial Services revenue $ 38,253 $ 41,014 $ 78,961 $ 76,748
======== ======== ======== ========
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CABELA'S INCORPORATED AND SUBSIDIARIES
MANAGED FINANCIAL SERVICES REVENUE PRESENTED ON A NON-GAAP BASIS
(Dollars in Thousands)
(Unaudited)
----------------------------------------------------------------------
"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 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 a Non-GAAP Basis:
----------------------------------------------------------------------
Three Months Ended Six Months Ended
----------------------- -----------------------
June 28, June 30, June 28, June 30,
2008 2007 2008 2007
----------- ----------- ----------- -----------
Interest income $ 46,544 $ 43,738 $ 98,353 $ 87,545
Interchange income,
net of customer
rewards costs 19,996 16,285 37,823 29,750
Other fee income 7,991 6,039 15,468 12,077
Interest expense (19,596) (19,551) (41,306) (38,411)
Provision for loan
losses (14,419) (7,110) (26,821) (14,443)
Other (2,263) 1,613 (4,556) 230
---------- ---------- ---------- ----------
Managed Financial
Services revenue $ 38,253 $ 41,014 $ 78,961 $ 76,748
========== ========== ========== ==========
Managed Financial Services Revenue as a Percentage of Average Managed
Credit Card Loans:
Interest income 9.2% 10.9% 9.9% 11.1%
Interchange income,
net of customer
rewards costs 4.0 4.1 3.8 3.8
Other fee income 1.6 1.5 1.6 1.5
Interest expense (3.9) (4.9) (4.2) (4.9)
Provision for loan
losses (2.9) (1.8) (2.7) (1.8)
Other (0.4) 0.4 (0.5) 0.0
---------- ---------- ----------- ----------
Managed Financial
Services revenue 7.6% 10.2% 7.9% 9.7%
========== ========== ========== ==========
Average reported
credit card loans $ 303,701 $ 140,609 $ 332,705 $ 141,021
Average managed credit
card loans 2,013,065 1,606,616 1,987,565 1,583,918
*T
Cabela's Incorporated
Investors
Chris Gay, 308-255-2905
or
Media
Joe Arterburn, 308-255-1204
Copyright Business Wire 2008
