Delaware | 1-32227 | 20-0486586 | ||
(State or other jurisdiction | (Commission | (I.R.S. Employer | ||
of incorporation) | File Number) | Identification No.) | ||
One Cabela Drive, Sidney, Nebraska | 69160 | |||
(Address of principal executive offices) | (Zip Code) | |||
Registrant's telephone number, including area code: (308) 254-5505 | ||||
Not applicable | ||||
(Former name or former address, if changed since last report) | ||||
Emerging growth company o |
Item 2.02 | Results of Operations and Financial Condition. |
Item 7.01 | Regulation FD Disclosure. |
Item 9.01 | Financial Statements and Exhibits. |
CABELA'S INCORPORATED | |||
Dated: | August 3, 2017 | By: | /s/ Ralph W. Castner |
Ralph W. Castner Executive Vice President and Chief Financial Officer |
Investor Contact: |
Andrew Weingardt |
308-255-7428 |
Cabela’s Incorporated |
Media Contact: |
Nathan Borowski |
308-255-2861 |
Cabela’s Incorporated |
CABELA’S INCORPORATED AND SUBSIDIARIES | |||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF INCOME | |||||||||||||||
(Dollars in Thousands Except Earnings Per Share) | |||||||||||||||
(Unaudited) | |||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||
July 1, 2017 | July 2, 2016 | July 1, 2017 | July 2, 2016 | ||||||||||||
Revenue: | |||||||||||||||
Merchandise sales | $ | 737,384 | $ | 786,203 | $ | 1,415,405 | $ | 1,506,118 | |||||||
Financial Services revenue | 147,196 | 135,081 | 297,195 | 275,904 | |||||||||||
Other revenue | 5,862 | 8,613 | 12,731 | 12,537 | |||||||||||
Total revenue | 890,442 | 929,897 | 1,725,331 | 1,794,559 | |||||||||||
Cost of revenue: | |||||||||||||||
Merchandise costs (exclusive of depreciation and amortization) | 496,360 | 527,409 | 961,442 | 1,015,401 | |||||||||||
Cost of other revenue | 515 | 4,138 | 1,545 | 4,291 | |||||||||||
Total cost of revenue (exclusive of depreciation and amortization) | 496,875 | 531,547 | 962,987 | 1,019,692 | |||||||||||
Selling, distribution, and administrative expenses | 335,693 | 329,682 | 663,550 | 658,871 | |||||||||||
Impairment and restructuring charges | 829 | 959 | 3,236 | 3,931 | |||||||||||
Operating income | 57,045 | 67,709 | 95,558 | 112,065 | |||||||||||
Interest expense, net | (7,689 | ) | (8,285 | ) | (15,365 | ) | (17,516 | ) | |||||||
Other non-operating income, net | 911 | 2,780 | 1,480 | 3,681 | |||||||||||
Income before provision for income taxes | 50,267 | 62,204 | 81,673 | 98,230 | |||||||||||
Provision for income taxes | 21,919 | 24,445 | 34,262 | 37,582 | |||||||||||
Net income | $ | 28,348 | $ | 37,759 | $ | 47,411 | $ | 60,648 | |||||||
Earnings per basic share | $ | 0.41 | $ | 0.55 | $ | 0.69 | $ | 0.89 | |||||||
Earnings per diluted share | $ | 0.41 | $ | 0.55 | $ | 0.68 | $ | 0.88 | |||||||
Basic weighted average shares outstanding | 68,914,407 | 68,388,426 | 68,777,332 | 68,168,772 | |||||||||||
Diluted weighted average shares outstanding | 69,352,449 | 68,909,403 | 69,332,304 | 68,799,980 |
CABELA’S INCORPORATED AND SUBSIDIARIES | |||||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||||||
(Dollars in Thousands Except Par Values) | |||||||||||
(Unaudited) | |||||||||||
July 1, 2017 | December 31, 2016 | July 2, 2016 | |||||||||
ASSETS | |||||||||||
CURRENT | |||||||||||
Cash and cash equivalents | $ | 167,629 | $ | 263,825 | $ | 542,067 | |||||
Restricted cash of the Trust | 51,233 | 48,697 | 40,978 | ||||||||
Accounts receivable, net | 37,112 | 76,140 | 39,278 | ||||||||
Credit card loans (includes restricted credit card loans of the Trust of $5,517,628, $5,661,101, and $5,114,711), net of allowance for loan losses of $120,474, $118,343, and $83,950 | 5,425,509 | 5,579,575 | 5,062,226 | ||||||||
Inventories | 863,834 | 860,360 | 888,209 | ||||||||
Prepaid expenses and other current assets | 128,235 | 132,250 | 122,139 | ||||||||
Income taxes receivable | 52,555 | 75,731 | 60,180 | ||||||||
Total current assets | 6,726,107 | 7,036,578 | 6,755,077 | ||||||||
Property and equipment, net | 1,785,999 | 1,807,209 | 1,839,451 | ||||||||
Deferred income taxes | — | — | 28,417 | ||||||||
Other assets | 124,087 | 127,037 | 142,314 | ||||||||
Total assets | $ | 8,636,193 | $ | 8,970,824 | $ | 8,765,259 | |||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
CURRENT | |||||||||||
Accounts payable, including unpresented checks of $34,869, $41,132, and $28,667 | $ | 270,921 | $ | 347,784 | $ | 253,488 | |||||
Gift instruments, credit card rewards, and loyalty rewards programs | 372,740 | 387,865 | 353,570 | ||||||||
Accrued expenses and other liabilities | 147,945 | 172,744 | 165,610 | ||||||||
Time deposits | 252,358 | 177,015 | 187,324 | ||||||||
Current maturities of secured variable funding obligations of the Trust | 1,395,000 | 420,000 | — | ||||||||
Current maturities of secured long-term obligations of the Trust, net | — | 1,104,685 | 1,359,032 | ||||||||
Current maturities of long-term debt | 8,131 | 79,677 | 68,461 | ||||||||
Total current liabilities | 2,447,095 | 2,689,770 | 2,387,485 | ||||||||
Long-term time deposits | 846,709 | 991,842 | 1,009,549 | ||||||||
Secured long-term obligations of the Trust, less current maturities, net | 2,467,787 | 2,466,576 | 2,466,054 | ||||||||
Long-term debt, less current maturities, net | 654,569 | 671,509 | 842,728 | ||||||||
Deferred income taxes | 6,449 | 7,288 | — | ||||||||
Other long-term liabilities | 137,737 | 132,240 | 134,349 | ||||||||
COMMITMENTS AND CONTINGENCIES | |||||||||||
STOCKHOLDERS’ EQUITY | |||||||||||
Preferred stock, $0.01 par value; Authorized – 10,000,000 shares; Issued – none | — | — | — | ||||||||
Common stock, $0.01 par value: | |||||||||||
Class A Voting, Authorized – 245,000,000 shares | |||||||||||
Issued – 71,595,020 shares for all periods | 716 | 716 | 716 | ||||||||
Outstanding – 68,929,479, 68,502,256, and 68,465,082 shares | |||||||||||
Additional paid-in capital | 368,126 | 384,353 | 372,994 | ||||||||
Retained earnings | 1,846,220 | 1,798,809 | 1,712,510 | ||||||||
Accumulated other comprehensive loss | (33,480 | ) | (45,922 | ) | (32,788 | ) | |||||
Treasury stock, at cost – 2,665,541, 3,092,764, and 3,129,938 shares | (105,735 | ) | (126,357 | ) | (128,338 | ) | |||||
Total stockholders’ equity | 2,075,847 | 2,011,599 | 1,925,094 | ||||||||
Total liabilities and stockholders’ equity | $ | 8,636,193 | $ | 8,970,824 | $ | 8,765,259 |
CABELA’S INCORPORATED AND SUBSIDIARIES | |||||||||||||||
SELECTED FINANCIAL DATA | |||||||||||||||
(Dollars in Thousands) | |||||||||||||||
(Unaudited) | |||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||
July 1, 2017 | July 2, 2016 | July 1, 2017 | July 2, 2016 | ||||||||||||
Components of Total Consolidated Revenue: | |||||||||||||||
Merchandise sales | $ | 737,384 | $ | 786,203 | $ | 1,415,405 | $ | 1,506,118 | |||||||
Financial Services revenue | 147,196 | 135,081 | 297,195 | 275,904 | |||||||||||
Other revenue | 5,862 | 8,613 | 12,731 | 12,537 | |||||||||||
Total consolidated revenue as reported | $ | 890,442 | $ | 929,897 | $ | 1,725,331 | $ | 1,794,559 | |||||||
As a Percentage of Total Consolidated Revenue: | |||||||||||||||
Merchandise sales | 82.8 | % | 84.6 | % | 82.0 | % | 83.9 | % | |||||||
Financial Services revenue | 16.5 | 14.5 | 17.2 | 15.4 | |||||||||||
Other revenue | 0.7 | 0.9 | 0.8 | 0.7 | |||||||||||
Total | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||||||
Operating Income (Loss) by Segment: | |||||||||||||||
Merchandising | $ | (4,414 | ) | $ | 18,024 | $ | (34,485 | ) | $ | 1,629 | |||||
Financial Services | 61,459 | 49,685 | 130,043 | 110,436 | |||||||||||
Total consolidated operating income as reported | $ | 57,045 | $ | 67,709 | $ | 95,558 | $ | 112,065 | |||||||
Operating Income (Loss) by Segment as a Percentage of Segment Revenue: | |||||||||||||||
Merchandising segment operating loss | (0.6 | )% | 2.3 | % | (2.4 | )% | 0.1 | % | |||||||
Financial Services segment operating income | 43.4 | 38.3 | 45.3 | 41.6 | |||||||||||
Total operating income as a percentage of total revenue | 6.4 | 7.3 | 5.5 | 6.2 |
CABELA’S INCORPORATED AND SUBSIDIARIES | ||||
COMPONENTS OF FINANCIAL SERVICES REVENUE | ||||
(Dollars in Thousands) | ||||
(Unaudited) |
Three Months Ended | Six Months Ended | ||||||||||||||
July 1, 2017 | July 2, 2016 | July 1, 2017 | July 2, 2016 | ||||||||||||
Interest and fee income | $ | 171,938 | $ | 141,180 | $ | 336,582 | $ | 280,928 | |||||||
Interest expense | (27,283 | ) | (20,929 | ) | (53,603 | ) | (40,802 | ) | |||||||
Provision for loan losses | (45,246 | ) | (32,404 | ) | (76,332 | ) | (55,224 | ) | |||||||
Net interest income, net of provision for loan losses | 99,409 | 87,847 | 206,647 | 184,902 | |||||||||||
Non-interest income: | |||||||||||||||
Interchange income | 105,792 | 104,841 | 200,158 | 199,837 | |||||||||||
Other non-interest income | 959 | 875 | 1,716 | 1,545 | |||||||||||
Total non-interest income | 106,751 | 105,716 | 201,874 | 201,382 | |||||||||||
Less: Customer rewards costs | (58,964 | ) | (58,482 | ) | (111,326 | ) | (110,380 | ) | |||||||
Financial Services revenue as reported | $ | 147,196 | $ | 135,081 | $ | 297,195 | $ | 275,904 |
Three Months Ended | Six Months Ended | ||||||||||
July 1, 2017 | July 2, 2016 | July 1, 2017 | July 2, 2016 | ||||||||
Interest and fee income | 12.7 | % | 11.4 | % | 12.4 | % | 11.4 | % | |||
Interest expense | (2.0 | ) | (1.7 | ) | (2.0 | ) | (1.7 | ) | |||
Provision for loan losses | (3.3 | ) | (2.6 | ) | (2.8 | ) | (2.2 | ) | |||
Interchange income | 7.8 | 8.4 | 7.4 | 8.1 | |||||||
Other non-interest income | — | 0.1 | 0.1 | 0.1 | |||||||
Customer rewards costs | (4.3 | ) | (4.7 | ) | (4.1 | ) | (4.5 | ) | |||
Financial Services revenue as reported | 10.9 | % | 10.9 | % | 11.0 | % | 11.2 | % |
CABELA’S INCORPORATED AND SUBSIDIARIES | ||||
KEY STATISTICS OF FINANCIAL SERVICES BUSINESS | ||||
(Unaudited) |
Three Months Ended | ||||||||||||||
July 1, 2017 | July 2, 2016 | Increase (Decrease) | % Change | |||||||||||
(Dollars in Thousands Except Average Balance per Active Account ) | ||||||||||||||
Average balance of credit card loans (1) | $ | 5,423,286 | $ | 4,964,603 | $ | 458,683 | 9.2 | % | ||||||
Average number of active credit card accounts | 2,074,159 | 2,041,783 | 32,376 | 1.6 | ||||||||||
Average balance per active credit card account (1) | $ | 2,615 | $ | 2,432 | $ | 183 | 7.5 | |||||||
Purchases on credit card accounts, net | 5,510,132 | 5,419,361 | 90,771 | 1.7 | ||||||||||
Net charge-offs on credit card loans (1) | 42,339 | 26,490 | 15,849 | 59.8 | ||||||||||
Net charge-offs as a percentage of average credit card loans (1) | 3.12 | % | 2.13 | % | 0.99 | % | ||||||||
(1) Includes accrued interest and fees |
Six Months Ended | ||||||||||||||
July 1, 2017 | July 2, 2016 | Increase (Decrease) | % Change | |||||||||||
(Dollars in Thousands Except Average Balance per Active Account ) | ||||||||||||||
Average balance of credit card loans (1) | $ | 5,412,522 | $ | 4,916,180 | $ | 496,342 | 10.1 | % | ||||||
Average number of active credit card accounts | 2,074,465 | 2,033,919 | 40,546 | 2.0 | ||||||||||
Average balance per active credit card account (1) | $ | 2,609 | $ | 2,417 | $ | 192 | 7.9 | |||||||
Purchases on credit card accounts, net | 10,389,328 | 10,245,980 | 143,348 | 1.4 | ||||||||||
Net charge-offs on credit card loans (1) | 85,291 | 53,863 | 31,428 | 58.3 | ||||||||||
Net charge-offs as a percentage of average credit card loans (1) | 3.15 | % | 2.19 | % | 0.96 | % | ||||||||
(1) Includes accrued interest and fees |
CABELA’S INCORPORATED AND SUBSIDIARIES | ||||
RECONCILIATION OF GAAP REPORTED TO NON-GAAP ADJUSTED FINANCIAL MEASURES (1) | ||||
(Unaudited) |
Reconciliation of GAAP Reported to Non-GAAP Adjusted Financial Measures (1) | |||||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||||
July 1, 2017 | July 2, 2016 | ||||||||||||||||||||||
GAAP Basis as Reported | Non-GAAP Adjustments | Non-GAAP Amounts | GAAP Basis as Reported | Non-GAAP Adjustments | Non-GAAP Amounts | ||||||||||||||||||
(Dollars in Thousands Except Earnings Per Share) | |||||||||||||||||||||||
Selling, distribution, and administrative expenses (2) | $ | 335,693 | $ | (10,538 | ) | $ | 325,155 | $ | 329,682 | $ | (4,592 | ) | $ | 325,090 | |||||||||
Impairment and restructuring charges (3) | $ | 829 | $ | (829 | ) | $ | — | $ | 959 | $ | (959 | ) | $ | — | |||||||||
Operating income (2) (3) | $ | 57,045 | $ | 11,367 | $ | 68,412 | $ | 67,709 | $ | 5,551 | $ | 73,260 | |||||||||||
Income before provision for income taxes | $ | 50,267 | $ | 11,367 | $ | 61,634 | $ | 62,204 | $ | 5,074 | $ | 67,278 | |||||||||||
Provision for income taxes (4) | $ | 21,919 | $ | 2,993 | $ | 24,912 | $ | 24,445 | $ | 1,994 | $ | 26,439 | |||||||||||
Net income | $ | 28,348 | $ | 8,374 | $ | 36,722 | $ | 37,759 | $ | 3,080 | $ | 40,839 | |||||||||||
Earnings per diluted share | $ | 0.41 | $ | 0.12 | $ | 0.53 | $ | 0.55 | $ | 0.04 | $ | 0.59 | |||||||||||
Reconciliation of GAAP Reported to Non-GAAP Adjusted Financial Measures (1) | |||||||||||||||||||||||
Six Months Ended | |||||||||||||||||||||||
July 1, 2017 | July 2, 2016 | ||||||||||||||||||||||
GAAP Basis as Reported | Non-GAAP Adjustments | Non-GAAP Amounts | GAAP Basis as Reported | Non-GAAP Adjustments | Non-GAAP Amounts | ||||||||||||||||||
(Dollars in Thousands Except Earnings Per Share) | |||||||||||||||||||||||
Selling, distribution, and administrative expenses (2) | $ | 663,550 | $ | (19,766 | ) | $ | 643,784 | $ | 658,871 | $ | (12,095 | ) | $ | 646,776 | |||||||||
Impairment and restructuring charges (3) | $ | 3,236 | $ | (3,236 | ) | $ | — | $ | 3,931 | $ | (3,931 | ) | $ | — | |||||||||
Operating income (2) (3) | $ | 95,558 | $ | 23,002 | $ | 118,560 | $ | 112,065 | $ | 16,026 | $ | 128,091 | |||||||||||
Income before provision for income taxes | $ | 81,673 | $ | 23,002 | $ | 104,675 | $ | 98,230 | $ | 15,549 | $ | 113,779 | |||||||||||
Provision for income taxes (4) | $ | 34,262 | $ | 6,081 | $ | 40,343 | $ | 37,582 | $ | 5,949 | $ | 43,531 | |||||||||||
Net income | $ | 47,411 | $ | 16,921 | $ | 64,332 | $ | 60,648 | $ | 9,600 | $ | 70,248 | |||||||||||
Earnings per diluted share | $ | 0.68 | $ | 0.25 | $ | 0.93 | $ | 0.88 | $ | 0.14 | $ | 1.02 | |||||||||||
CABELA’S INCORPORATED AND SUBSIDIARIES | ||||
RECONCILIATION OF GAAP REPORTED TO NON-GAAP ADJUSTED FINANCIAL MEASURES (Continued) (1) | ||||
(Unaudited) |
(1) | The presentation includes non-GAAP financial measures. These non-GAAP financial measures are not prepared under any comprehensive set of accounting rules or principles, and do not reflect all of the amounts associated with the Company's results of operations as determined in accordance with GAAP. |
(2) | Consists of the following for the respective periods: |
Three Months Ended | Six Months Ended | ||||||||||||||
July 1, 2017 | July 2, 2016 | July 1, 2017 | July 2, 2016 | ||||||||||||
Consulting fees and certain other expenses primarily related to the Company’s corporate restructuring initiative and the pending merger | $ | 10,538 | $ | 4,592 | $ | 18,423 | $ | 8,245 | |||||||
Charge related to a lawsuit settlement | — | — | — | 3,850 | |||||||||||
Charges related to the early extinguishment of certain certificates of deposit | — | — | 1,343 | — | |||||||||||
$ | 10,538 | $ | 4,592 | $ | 19,766 | $ | 12,095 |
(3) | Consists of the following for the respective periods: |
Three Months Ended | Six Months Ended | ||||||||||||||
July 1, 2017 | July 2, 2016 | July 1, 2017 | July 2, 2016 | ||||||||||||
Charges for employee severance agreements and termination benefits related to our corporate restructuring and reduction in the number of personnel | $ | 766 | $ | 505 | $ | 2,269 | $ | 3,336 | |||||||
Impairment losses on other property | — | — | 904 | 141 | |||||||||||
Accumulated amortization of deferred grant income relating to fair value adjustments on economic development bonds | 63 | — | 63 | — | |||||||||||
Impairment losses on property, equipment, and other assets | — | 454 | — | 454 | |||||||||||
$ | 829 | $ | 959 | $ | 3,236 | $ | 3,931 |
(4) | For all periods presented, reflects the estimated provision for income taxes on the non-GAAP adjusted income before provision for income taxes. In addition, for the three and six months ended July 1, 2017, reflects an adjustment of $1,315 and $2,673 to the provision for income taxes for nondeductible expenses to facilitate the acquisition of the Company. The effective income tax rate used for the non-GAAP financial measures was 40.4% and 39.3%, for the three months ended July 1, 2017, and July 2, 2016, and 38.5% and 38.3%, for the six months ended July 1, 2017, and July 2, 2016, respectively. A reconciliation impacting the provision for income taxes follows: |
Three Months Ended | Six Months Ended | ||||||||||||||
July 1, 2017 | July 2, 2016 | July 1, 2017 | July 2, 2016 | ||||||||||||
Provision for income taxes calculated on the non-GAAP adjustments excluding the impact of the nondeductible expenses to facilitate the acquisition of the Company | $ | 4,308 | $ | 1,994 | $ | 8,754 | $ | 5,949 | |||||||
Adjustment to the provision for income taxes for nondeductible expenses to facilitate the acquisition of the Company | (1,315 | ) | — | (2,673 | ) | — | |||||||||
Provision for income taxes on non-GAAP adjustments | $ | 2,993 | $ | 1,994 | $ | 6,081 | $ | 5,949 |
VP#J.NC@%
ME/1E7 0>NME
MI4="2M5:UTU]M55:KCRY7R?<^7[W;O6YMK?8=%4?AKK&O96@^"J#^UF+.VK,
M2;>>Q^VT[!R5-%22? N-Q/-566;4>J+6MPBFH9:''+&
MG3F'XBJV$PW5M.2+B02U.-PR_&80](?-#>57]-SP3XWY%R*ORMS3==ERN48>
M01M6SG+QWRJK4;M_Q')Q.\VJR.",%7KZ./S0' 4VME][EV(ZZ(HZ+7
M6FNE=5:I56ORHBJ ),O:MHVS8\%-MVBBO'P:Q\J(-!]Y/Q9C\68EF/4DF=.*
M4GHP$0$3;&DLV?P38^/6GO&U6SI;5+=H-7#3E79NML.N.EZ [-[K5:,T
M$Z_AK9GZMP:U7Q83*^OEH\ZO+LO:0AADO$OV>B9:CM&2Y4AEC)K[H/>]QOPU
MQY?;_P"V,T5Y>W8BX5NXT,+*-OKK0)^7P7U87Y@'2[+9G%#]VALRB[X]@_'W
MB?/Y1FGFG/\ O:N^PVK0XT>YB=>^T=.RK^Q6 .\:=%KT#S_===?==??=<>?>
M<6Z\\ZM3CKKKBC6XZZXLS6XXXLS-2C,S,SY,85\K*RQ'',
#:EVOI]KD=HN68Q^O]/R61\.\%
M@?\ U _=*GG;R$O"N'Y'U/%W';G2ET;5,[-ZI=F].C5(-:,0_-_+^I
M)BHM>-4BHBCH%50 J@?8 !.,/.G[RN;OQV)R;#JK'.NVE6+"\W[O23#QJAK
M,?,W;ZGIK^=^R-/UZ&E$\U?9//6<"N,C0;?]=\EH4RWY9+_T[?:Y_P 4N8_\
M7>:8W?P'8O:.@%^=I
M\&^/=L0"_&LS+A_%=:Y_Z%9KK_I4_MF,Q-^;@AO)?:SNW<6D^?&6B#.9/U^B
MF)D1]DR/_NBW6V>^#W6[3EC,QN:[J]H.NERX^16?N-=]%E9'_-GMY'B?QWDU
MFJS:L<*?BA=#_K(ZG^N28U1VN=L[&'0;(CP8OYCC<:+D\%!Q8S;[ADELKF&I
M:VF6G5GPTI*ORIQD1(6VT_XS@]B/M=S?.?D!.9\A2ZKQCQ_*KLO=>Y
M#F9B=MM.#58-" /DMRW0]]=)2L&M\BJU+2>8/(57$=E.U815M_S:V5 =#]*H
MZJUK+]_5:P>C/J?F",I] /Q_8_O[%NG6AZ/L_:SKC=#S5E