Cabela's 2006 Annual Report Download

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2006 annual report
Letter to Shareholders - Year in Review - Form 10-K

Table of contents

  • Page 1
    2006 annual report Letter to Shareholders - Year in Review - Form 10-K

  • Page 2
    ... our website, Cabelas.com. Retail revenue increased 32.3% to $820.3 million, led by the opening of four new stores as well as a 1.3% increase in comparable store sales. Financial services revenue increased 29.9% for the year as we continued to grow our Cabela's CLUB Visa credit card business. It...

  • Page 3
    ... honor future contributors to America's sporting heritage while honoring Jim, Dick and Mary Cabela, co-founders of Cabela's. Cabela's 2006 Annual Report Cabela's® is the world's largest direct marketer, and a leading specialty retailer, of hunting, fishing, camping and related outdoor merchandise...

  • Page 4
    ... net income increased 18.2% to a record $85.8 million compared to $72.6 million in the prior year. Cabela's ends the year with plans to open eight retail stores in 2007. November Cabela's opens its fourth store of 2006 in La Vista, Nebraska, a suburb of Omaha. Cabela's now operates 18 retail stores...

  • Page 5
    ... executive officers and the beneficial owners of 5% or more of its voting common stock as of July 1, 2006 are affiliates of the registrant. 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: 65...

  • Page 6
    ... Accounting and Financial Disclosure ...Controls and Procedures...Other Information ...PART III Directors, Executive Officers and Corporate Governance ...Executive Compensation ...Security Ownership of Certain Beneficial Owners and Management and related Stockholder Matters ...Certain relationships...

  • Page 7
    ... revise forward-looking statements, whether as a result of new information, future events or otherwise. Overview We are the world's largest direct marketer, and a leading specialty retailer, of hunting, fishing, camping and related outdoor merchandise. Since our founding in 1961, Cabela's has grown...

  • Page 8
    ...one outdoor activity, such as fly fishing, archery or waterfowl. We use the customer database generated by our direct business to ensure that customers receive catalogs matching their merchandise preferences, to identify new customers and to cross-sell merchandise to existing customers. The costs of...

  • Page 9
    ... the five product categories for our direct and retail businesses and in total in fiscal years 2006, 2005 and 2004. 2006 Direct 2005 2004 2006 Retail 2005 2004 2006 Total 2005 2004 Hunting Equipment ...Fishing & Marine ...Camping Equipment ...Clothing & Footwear . . Gifts & Furnishings ... 27.1% 12...

  • Page 10
    ...brand by communicating our wide and distinctive offering of quality products to our customers and potential customers in a cost effective manner. Our largest marketing effort consists of distributing over 135 million catalogs annually in order to attract customers to our direct and retail businesses...

  • Page 11
    ... financial information regarding our financial services business. The Cabela's CLUB Visa card loyalty program is a rewards-based credit card program, which we believe has increased brand loyalty among our customers and has helped reduce customer attrition in our merchandising businesses. Our rewards...

  • Page 12
    ... two to three times per week to our destination retail stores. Management Information Systems Our management information and operational systems manage our direct, retail and financial services businesses. These systems are designed to process customer orders, track customer data and demographics...

  • Page 13
    ... pay applicable corporate income, franchise and other taxes, to states in which our destination retail stores are physically located. Upon entering a new state, we apply for a private letter ruling from the state's revenue department stating which types of taxes our direct and retail businesses will...

  • Page 14
    ... unpaid use taxes on past sales" and "-Our destination retail store expansion strategy may result in our direct business establishing nexus with additional states which may cause our direct business to pay additional income and use taxes and have an adverse effect on the profitability and cash flows...

  • Page 15
    ... expand into markets now served by other large-format sporting goods retailers and mass merchandisers. In particular, new destination retail stores typically generate lower operating margins because pre-opening costs are fully expensed in the year of opening and because fixed costs, as a percentage...

  • Page 16
    ... prospective customers; increases in U.S. Postal Service rates, paper costs and printing costs resulting in higher catalog production costs and lower profits for our direct business; failures to properly design, print and mail our catalogs in a timely manner; failures to introduce new catalog titles...

  • Page 17
    ... Sporting Goods and Big 5 Sporting Goods; retailers that currently compete with us through retail businesses that may enter the direct business; mass merchandisers, warehouse clubs, discount stores and department stores, such as Wal-Mart and Target; and casual outdoor apparel and footwear retailers...

  • Page 18
    ... cost to deliver merchandise to the customers of our direct business and from our distribution centers to our destination retail stores may rise which could have an adverse impact on our profitability. Political and economic uncertainty and unrest in foreign countries where our vendors are located...

  • Page 19
    ... labor strikes, work stoppages or boycotts could increase the cost or reduce the supply of merchandise available to us or may require us to modify our current business practices, any of which could hurt our profitability. Due to the seasonality of our business, our annual operating results would...

  • Page 20
    ...depends on hiring, training, managing and retaining quality managers, sales associates and employees in our destination retail stores and customer care centers. Our corporate headquarters, distribution centers, return center and some of our destination retail stores are located in sparsely populated...

  • Page 21
    ... centers or return facility could cause us to lose merchandise and be unable to effectively deliver to our direct customers and destination retail stores. We currently rely on distribution centers in Sidney, Nebraska, Mitchell, South Dakota, Prairie du Chien, Wisconsin and Wheeling, West Virginia...

  • Page 22
    ... pursue general contract remedies. A default by us under these economic development agreements could have an adverse effect on our cash flows and profitability. We may incur costs from litigation or increased regulation relating to products that we sell, particularly tree stands and firearms, which...

  • Page 23
    ... our financial services business, which could limit growth of the business and decrease our profitability. Our financial services business requires a significant amount of cash to operate. These cash requirements will increase if our credit card originations increase or if our cardholders' balances...

  • Page 24
    ..., grow account balances or attract new cardholders and the profits from our financial services business could decline, for a variety of reasons, many of which are beyond our control, including: credit risk related to the loans we make to cardholders and the charge-off levels of our credit card...

  • Page 25
    ... merchandising businesses and to the strength of the Cabela's brand. In addition, transactions on cardholder accounts produce loyalty points which the cardholder may apply to future purchases from us. Adverse changes in the desirability of products we sell, negative trends in retail customer service...

  • Page 26
    ..., among others, increased delinquencies and credit losses, economic downturns and social factors, interest rate fluctuations, changes in government policies and regulations, competition, expenses, dependence upon third-party vendors, fluctuations in accounts and account balances, and industry risks...

  • Page 27
    ...offices, four distribution centers, a merchandise return center, five customer care centers and a taxidermy manufacturing facility. The following table provides information regarding the general location, use and approximate size of our non-retail principal properties: Property Location Total Square...

  • Page 28
    ... fiscal 2006. PART II ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Price Range of Common Stock We have common stock and non-voting common stock. Our common stock began trading on June 25, 2004 on the New York Stock Exchange...

  • Page 29
    ... any cash dividends on our common stock in the foreseeable future. In addition, our revolving credit facility and our senior notes restrict our ability to pay dividends to our stockholders based upon our prior year's consolidated EBITDA and our consolidated net worth, respectively. See "Management...

  • Page 30
    ... per Share and Average Sales per Gross Square Foot) 2006 2005 2004 2003 2002 Statement of Operations Data: revenue: Direct revenue ...$1,088,480 retail revenue ...820,321 Financial services revenue...137,423 Other revenue (2)...17,300 Total revenue ...2,063,524 Cost of revenue ...1,204,399 Selling...

  • Page 31
    ...businesses or for destination retail store expansion, may be limited. See "Management's Discussion and Analysis of Financial Condition and results of Operation - Bank Dividend Limitations and Minimum Capital requirements" for additional information. Average sales per gross square foot includes sales...

  • Page 32
    ... a measure of discretionary cash available to us to invest in the growth of our business and we rely primarily on our generally accepted accounting principles results and use EBITDA only supplementally. The following table reconciles EBITDA to net income: Fiscal Year (1) 2006 2005 2004 (In Thousands...

  • Page 33
    ...our destination retail stores; Financial Services, which consists of our credit card business managed and administered by our whollyowned bank subsidiary, World's Foremost Bank; and Other, which consists of aggregated non-merchandising outfitter services, our real estate land sales and corporate and...

  • Page 34
    ...such as product information, sales training and general office software applications. We completed a 574,000 square foot expansion to our Wheeling, West Virginia distribution center. We worked with local municipalities to retire $53.0 million of principal on economic development bonds related to our...

  • Page 35
    ... will continue to sell our credit card loans in the securitization markets and manage those customer accounts at the bank. Effect of Retail expansion on Direct business. When we open a destination retail store in a new market, our Direct revenue in that market generally experiences a decline during...

  • Page 36
    ... of reward program costs, interest expense and credit losses from our credit card operations. Other revenue consists primarily of land sales around our destination retail stores and our non-merchandising outfitter services. Cost of Revenue Cost of revenue for our merchandising business includes cost...

  • Page 37
    ... expenses include costs associated with general corporate management and shared departmental services such as management information systems, finance, human resources and legal. Operating Income and Gross Profit Operating income is defined as revenue less cost of revenue and selling, general and...

  • Page 38
    ... number of active customers, which we define as those customers who have purchased merchandise from us in the last twelve months, increased by 4.6%. The general product category that contributed the largest dollar volume increase to our fiscal 2006 Direct revenue growth was hunting equipment. Retail...

  • Page 39
    ... 2005, the number of average active accounts in fiscal 2006 grew by 17.5% to 853,187 and the average balance per active account grew by 5.5% to approximately $1,591. For credit card loans securitized and sold, the loans are removed from our consolidated balance sheet and the net earnings on these...

  • Page 40
    ...: Interest income ...Interchange income, net of customer reward costs ...Other fee income ...Interest expense ...Provision for loan losses ...Other ...Managed Financial Services revenue ...Average reported credit card loans ...Average managed credit card loans ...Gross Profit $ 145,425 51,086 22...

  • Page 41
    ... from the Financial Services segment of $9.0 million, or 0.8% of Direct revenue. Retail selling, general and administrative expenses comprised $34.0 million of the total increase in selling, general and administrative expense. New store operating costs related to our stores that were not open in the...

  • Page 42
    ... United States may have had some impact on our two new stores in Texas; however the primary impact was the hurricanes' effect on gasoline prices. The product categories that contributed the largest dollar volume increase to our retail revenue growth in fiscal 2005 included hunting equipment, camping...

  • Page 43
    ...in a new reward program with Visa increased our interchange income by $5.7 million for the fiscal year. Customer reward costs, which are netted against Financial Services revenue, generally increase at the same rate as Visa net purchases. However, in fiscal 2005, customer reward costs increased only...

  • Page 44
    ... costs. Property taxes increased by $1.7 million due to a credit for an estimated rebate on a state tax program recorded in fiscal 2004. Direct selling, general and administrative expenses comprised $8.6 million of the total increase in selling, general and administrative expense. Catalog production...

  • Page 45
    ... tax rate will continue to increase as we enter more states with our destination retail stores. Quarterly Results of Operations for Fiscal Years 2006 and 2005 and Seasonal Influences Due to holiday buying patterns and hunting and fishing season openings across the country, merchandise revenue...

  • Page 46
    ...2006 and fiscal year end 2005, respectively. The quality of our managed credit card loan portfolio at any time reflects, among other factors, the creditworthiness of the individual cardholders, general economic conditions, the success of our account management and collection activities, and the life...

  • Page 47
    ...of economic development bonds related to the construction of new destination retail stores, purchases of inventory, investments in our management information systems and other infrastructure, and other general working capital needs. We historically have met these requirements by generating cash from...

  • Page 48
    ... Financial Services segment relate to the generation of credit card loans and the purchase of points used in the Cabela's CLUB Visa customer loyalty rewards program from our merchandising business. The bank obtains funds for these cash requirement purposes through various financing activities, which...

  • Page 49
    ... and credit card reward points increased by $7.2 million over 2004. These increases were partially offset by increases in uses of cash. Cash used for inventory increased by $33.4 million related to the stocking of four new destination retail stores. Cash used for other current assets increased by...

  • Page 50
    ...of the construction costs and improve the return on investment of our new retail stores. The stores we opened in 2005 and 2006 are located closer to larger populations. We believe this strategy will make our stores more convenient for our customers and will increase our market share. We successfully...

  • Page 51
    ... -risks related to our Merchandising Business-The failure of properties to generate sufficient taxes to amortize the economic development bonds owned by us that relate to the development of such properties would have an adverse impact on our cash flows and profitability." As of December 30, 2006 and...

  • Page 52
    ... chooses, subject to a monthly minimum payment requirement. The credit card account remains open after repayment of the balance and the customer may continue to use it to borrow additional amounts. We reserve the right to change the credit card account terms, including interest rates and fees, in...

  • Page 53
    ... plus a margin (which adjusts based upon certain financial ratios we achieve) and ranges from 0.65% to 1.35%. The weighted average interest rate for borrowings on the line of credit was 5.84% during fiscal year 2006. There were no principal borrowings outstanding under the credit facility as of...

  • Page 54
    ... in accounts payable in the consolidated balance sheet. The loans and payments are reflected in the financing section of our consolidated cash flow statements as advances and payments on lines of credit. The extended payment terms to the vendors do not exceed one year. The outstanding liability...

  • Page 55
    ... retail stores scheduled to open in 2007 and 2008, obligations under economic development bonds and the estimated future obligations of a capital lease. Our purchase obligations relate primarily to purchases of inventory, shipping and other goods and services in the ordinary course of business...

  • Page 56
    ...negotiations. Certain contractual aspects of these locations are still being negotiated and will be subject to customary conditions to closing. We expect the total cost of each of these destination retail stores, including the cost of economic development bonds, to fall in the estimated range of $30...

  • Page 57
    ...the sale in the store. For direct sales, revenue is recognized when the merchandise is delivered to the customer, with the time of delivery being based on our estimate of shipping time from our distribution facility to the customer. We record a reserve for estimated product returns in each reporting...

  • Page 58
    ... for catalog costs. Economic Development Bonds Debt and equity securities with readily determinable fair values are classified as "available-for-sale" and recorded at fair value, with unrealized gains and losses, net of related income taxes, excluded from earnings and reported in accumulated...

  • Page 59
    ... per diluted share). This share-based compensation expense is recorded as a component of selling, general and administrative expenses in the consolidated statement of income. For fiscal 2006, the excess tax benefit from stock option exercises totaling $495 is presented in financing activities in the...

  • Page 60
    .... Financial Services Interest Rate Risk Interest rate risk refers to changes in earnings or the net present value of assets and off-balance sheet positions less liabilities (termed "economic value of equity") due to interest rate changes. To the extent that interest income collected on managed loans...

  • Page 61
    ..., of $5.3 million on the projected pre-tax income of our Financial Services segment over the next twelve months, which could have a material effect on our operating results. Merchandising Business Interest Rate Risk One of our economic development bond agreements is priced at a variable interest...

  • Page 62
    ... Fiscal Years 2006 and 2005 and Seasonal Influences" in Item 7 of Part II of this report under "Management's Discussion and Analysis of Financial Condition and results of Operations" is incorporated herein by reference. TABLE OF CONTENTS Page rEPOrT OF INDEPENDENT rEGISTErED PUBLIC ACCOUNTING FIrM...

  • Page 63
    ... balance sheets of Cabela's Incorporated and Subsidiaries (the "Company") as of December 30, 2006 and December 31, 2005, and the related consolidated statements of income, stockholders' equity, and cash flows for each of the three years in the period ended December 30, 2006. These financial...

  • Page 64
    ...2) ...Marketable securities (Note 4) ...Other ...Total other assets ...Total assets ...LIABILITIES AND STOCKHOLDERS' EQUITY CUrrENT LIABILITIES: Accounts payable...Unpresented checks net of bank balance...Accrued expenses and other liabilities ...Gift certificates and credit card reward points (Note...

  • Page 65
    ... Per Share) Fiscal Years 2006 2005 2004 rEVENUE: Merchandise sales ...Financial services revenue ...Other revenue...Total revenue ...COST OF rEVENUE: Cost of merchandise sales ...Cost of other revenue ...Total cost of revenue (exclusive of depreciation and amortization)...SELLING, GENErAL AND...

  • Page 66
    ... loss on marketable securities, net of tax benefit of $1,428...Derivative adjustment, net of tax benefit of $88 ...Total comprehensive income ...Stock based compensation (Note 14) ...Employee stock purchase plan issuances ...Exercise of employee stock options ...Tax benefit of employee stock...

  • Page 67
    ... public offering, net of transaction costs of $3,343 ...Net decrease in employee savings plan ...repurchase of common stock ...Net cash provided by (used in) financing activities...NET INCrEASE (DECrEASE) IN CASH AND CASH EQUIVALENTS ...CASH AND CASH EQUIVALENTS, beginning of fiscal year ...CASH...

  • Page 68
    .... The Company used $38,088 of the net proceeds to repay the outstanding balance on its open line of credit. The remaining amount was used for capital expenditures and the purchase of economic development bonds related to the construction and opening of new destination retail stores. Reporting Year...

  • Page 69
    ... to current market servicing rates. For interest-only strips, WFB estimates related fair values based on the present value of future expected cash flows using assumptions for credit losses, payment rates and discount rates commensurate with the risks involved. The future expected cash flows do...

  • Page 70
    ... Share and Per Share Amounts) WFB is required to maintain a cash reserve account as part of certain securitization programs. In addition, WFB owns Class B securities from one of its securitizations. The fair value of the cash reserve account is estimated by discounting future cash flows using a rate...

  • Page 71
    ..., fair values are estimated using present value or other valuation techniques. The fair value estimates are made at a specific point in time, based on available market information and judgments about the bonds, such as estimates of timing and amount of expected future cash flows. Such estimates...

  • Page 72
    ...and 2005. Credit Card Rewards Program - Every Cabela's CLUB Visa cardholder receives Cabela's points based on the dollar amount transacted through WFB issued "Classic" or "Gold" credit cards. These points can be redeemed for products and services of Cabela's through the Company's direct business and...

  • Page 73
    .... For purposes of estimating fair value, time deposits are pooled in homogeneous groups and the future cash flows of those groups are discounted using current market rates offered for similar products. At fiscal 2006 and 2005, the carrying amounts of the Company's time deposits were $102,196 and...

  • Page 74
    ... adjustments and unrealized gains and losses on available-for-sale securities, net of related income taxes. Earnings Per Share - Basic earnings per share ("EPS") is computed by dividing net income by the weighted average number of shares of common stock outstanding during the period. Diluted EPS...

  • Page 75
    ... - In fiscal 2006, SEC Staff Accounting Bulletin No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements ("SAB 108") became effective for the Company. SAB 108 requires that registrants quantify errors using both a balance sheet...

  • Page 76
    ... credit card loans held for sale and credit card loans receivable: Loans serviced ...Loans securitized and sold to outside investors ...Securitized loans with securities owned by WFB which are classified as retained interests ...Less adjustments to market value and allowance for loan losses ...Total...

  • Page 77
    ...management to estimate the fair value of the interestonly strips resulting from the securitization of credit card loans for the fiscal years ended: 2006 2005 Weighted average payment rates ...Weighted average life in years ...Weighted average expected credit losses ...Servicing fee ...Discount rate...

  • Page 78
    ... from the securitization trust during the fiscal years ended: 2006 2005 2004 Proceeds from new securitizations, net...Collections used by the trust to purchase new balances in revolving credit card securitizations ...Servicing fees received ...Other cash flows received by the transferor other than...

  • Page 79
    ... FINANCIAL STATEMENTS (Dollars in Thousands Except Share and Per Share Amounts) 4. MARKETABLE SECURITIES Marketable securities consisted of the following at the fiscal years ended: 2006 Gross Unrealized Gains Gross Unrealized Losses Fair Value Cost Available-for-sale: Economic development bonds...

  • Page 80
    ...last day of any fiscal quarter; a cash flow leverage ratio (as defined) of no more than 3.00 to 1.00 as of the last day of any fiscal quarter; and a minimum tangible net worth standard (as defined). The credit agreement includes a dividend provision limiting the amount that the Company could pay to...

  • Page 81
    ... of credit in the Company's consolidated cash flow statements. The extended payment terms to the vendor do not exceed one year. The outstanding liability was $9,829 and $1,443 at the end of fiscal 2006 and 2005, respectively. WFB has an unsecured federal funds purchase agreement with a financial...

  • Page 82
    ...and restated the lease agreement for its distribution facility in Wheeling, West Virginia on April 26, 2005. The building was expanded to twice its size. The new amended lease term began on July 1, 2006, and extended the original term to June 2036. The monthly installments were increased to $83 with...

  • Page 83
    ...claims...Unrealized loss on available-for-sale securities ...Accrued expenses...Amortization...Allowance for doubtful accounts ...Other...Deferred tax liabilities: Prepaid catalog costs ...Property and equipment ...Capitalized software costs ...Credit card issuance costs ...Inventories ...Unrealized...

  • Page 84
    ...derivatives designated as cash flow hedges. The Company discontinued four foreign currency contracts during fiscal 2005 resulting in a loss of $58 recorded in earnings. Generally, the Company hedges a portion of its anticipated inventory purchases for periods up to 12 months. As of December 30, 2006...

  • Page 85
    ... construction and development of new destination retail stores. In addition, the Company is obligated to fund the remaining $1,809 of economic development bonds and construction costs related to the expansion of the distribution center in Wheeling, West Virginia. The funds are designated for use of...

  • Page 86
    CABELA'S INCORPORATED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in Thousands Except Share and Per Share Amounts) and equipping of new destination retail stores and related infrastructure development. While purchasing these bonds involves an initial cash outlay by the ...

  • Page 87
    ... balance in either a lump sum or in equal annual payments over various time periods. The charge to interest expense under this plan was $503, $633 and $595 during fiscal 2006, 2005 and 2004, respectively. Employee Charge Accounts - The Company allows employees to charge products at its retail stores...

  • Page 88
    ...a market purchase method when possible. The Company's 1997 Stock Option Plan (the "1997 Plan") provided for the granting of incentive stock options and nonqualified stock options to purchase shares of the Company's common stock to officers, directors and key employees. As of December 30, 2006, there...

  • Page 89
    ... based employee compensation expense for shares granted prior to being a public Company was $247 net of tax for fiscal 2006. The pro forma information regarding net income, required by FAS 123, as amended by FAS 148, Accounting for Stock-Based Compensation-Transition and Disclosure, is presented in...

  • Page 90
    ... NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in Thousands Except Share and Per Share Amounts) The fair value of options in the fiscal years presented was estimated using the Black-Scholes model with the following weighted average assumptions: 2006 2005 2004 risk-free interest rate based on...

  • Page 91
    ... FINANCIAL STATEMENTS (Dollars in Thousands Except Share and Per Share Amounts) The stock options outstanding and exercisable for equity share-based payment awards as of December 30, 2006, were in the following exercise price ranges: Options Outstanding Exercise Price Weighted Average Exercise...

  • Page 92
    ... outstanding shares of Class B non-voting common stock are fully paid and non-assessable. Retained Earnings - The most significant restrictions on the payment of dividends are the covenants contained in the Company's revolving credit agreement and unsecured senior notes purchase agreements. Nebraska...

  • Page 93
    ... segment sells products through direct-mail catalogs and its e-commerce websites (Cabelas.com and complementary websites); the retail segment sells products through destination retail stores of various sizes and formats; and the Financial Services segment issues co-branded credit cards. Corporate...

  • Page 94
    ... TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in Thousands Except Share and Per Share Amounts) Corporate Overhead and Other Fiscal Year 2006 Direct Retail Financial Services Total revenue from external ...revenue (loss) from internal ...Total revenue ...Operating income (loss)...As a % of...

  • Page 95
    ... United States. Net sales realized from other geographic markets, primarily Canada, have collectively been less than 2% of consolidated net merchandise sales in each reported period. No single customer accounted for ten percent or more of consolidated net sales. No single product or service accounts...

  • Page 96
    REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders of Cabela's Incorporated and Subsidiaries Sidney, Nebraska We have audited the consolidated financial statements of Cabela's Incorporated and Subsidiaries (the "Company") as of December 30, 2006 and ...

  • Page 97
    ... AND QUALIFYING ACCOUNTS Beginning of Year Balance Charged to Costs and Expenses Charged to Other Accounts Net ChargeOffs End of Year Balance (In Thousands) YEAr ENDED DECEMBEr 30, 2006: Allowance for doubtful accounts ...Allowance for credit card receivable loan losses ...YEAr ENDED DECEMBEr...

  • Page 98
    ...in accordance with accounting principles generally accepted in the United States of America. With the participation of our Chief Executive Officer and our Chief Financial Officer, management evaluated the effectiveness of our internal control over financial reporting as of December 30, 2006 based on...

  • Page 99
    ... have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated financial statements as of and for the year ended December 30, 2006, of the Company and our report dated February 26, 2007 expressed an unqualified opinion on those...

  • Page 100
    ...at the address specified above. Information contained on our website, whether currently posted or posted in the future, is not part of this document or the documents incorporated by reference in this document. On May 24, 2006, we filed with the NYSE the Annual CEO Certification regarding the company...

  • Page 101
    ...: Financial Statements: report of Independent registered Public Accounting Firm Consolidated Statements of Income -Years ended December 30, 2006, December 31, 2005 and January 1, 2005 Consolidated Balance Sheets - December 30, 2006 and December 31, 2005 Consolidated Statements of Cash Flows - Years...

  • Page 102
    ...of our registration Statement on Form S-1,...Agreements dated as of January 1, 1995, among Cabela's Incorporated and various purchasers party thereto (incorporated by reference from Exhibit 4.4 of our Current report on Form 8-K, filed on March 3, 2006, File No. 001-32227) Executive Employment Agreement...

  • Page 103
    ... Plan Non-Employee Director Stock Option Agreement (2006) (incorporated by reference from Exhibit 10.2 of our Current report on Form 8-K, filed on May 15, 2006, File No. 00132227)* 2004 Employee Stock Purchase Plan (incorporated by reference from Exhibit 10.14 of our registration Statement on Form...

  • Page 104
    ... Current report of Form 8-K/A, filed on February 1, 2006, File No. 001-32227)* Amended and restated Lease Agreement with Option to Purchase dated April 26, 2005, between Ohio County Development Authority and Cabela's Wholesale, Inc. (incorporated by reference from Exhibit 10.29 of our Annual report...

  • Page 105
    ... by reference from Exhibit 99.6 of our Annual report of Form 10-K, filed on March 1, 2006, File No. 001-32227) Sixth Amendment of the Cabela's Incorporated 401(k) Savings Plan 99.3 99.4 99.5 99.6 99.7 * (c) Indicates management contract or compensatory plan or arrangement required to be filed as...

  • Page 106
    ... Cabela * James W. Cabela * Theodore M. Armstrong * John Gottschalk * reuben Mark * Michael r. McCarthy * Stephen P. Murray President, Chief Executive Officer and Director (Principal Executive Officer) Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting...

  • Page 107
    ... financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; The registrant's other certifying officer and...

  • Page 108
    ... information; and Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. b. Date: February 27, 2007 /s/ ralph W. Castner ralph W. Castner Vice President and Chief Financial Officer...

  • Page 109
    ... of 1934 as amended; and the information contained in the report fairly presents, in all material respects, the financial condition and results of operations of the registrant. Dated: February 27, 2007 /s/ Dennis Highby Dennis Highby President and Chief Executive Officer /s/ ralph W. Castner ralph...

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    ... 3100 Omaha, Nebraska 68102 Investor Relations Inquiries Questions and requests for information should be directed to Christopher Gay, Treasurer and Manager of Investor Relations, at (308)255-2905 or via e-mail at [email protected] or by visiting the Company's website at www.cabelas.com.

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    Cabela's Incorporated One Cabela Drive Sidney, Nebraska 69160 Telephone: (308)254-5505 www.cabelas.com NYSE:CAB