Cabela's 2006 Annual Report Download - page 12

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Third Party Card Programs. Our bank has issued co-branded Visa credit cards for fans of International
Speedway Corp. and for customers of Woodworker’s Supply Inc., a retailer of tools for woodworking enthusiasts.
These third party programs represented only 0.7% of the total net purchases made on our co-branded Visa cards
issued by the bank in fiscal 2006. In addition, at the end of December 2006 they represented $17.3 million of
credit card loans receivable, as currently our securitization program does not accept these co-branded third party
receivables. In December 2006, we terminated the agreement with International Speedway Corp. and, subsequent
to the end of 2006, converted those cardholders into Cabela’s CLUB Visa cardholders. We also expect to sell the
Woodworker’s Supply Inc. portfolio in 2007. Neither of these transactions had nor will have a material impact on
our financial position.
Distribution and Fulfillment
We operate four distribution centers located in Sidney, Nebraska, Prairie du Chien, Wisconsin, Mitchell, South
Dakota and Wheeling, West Virginia. These distribution centers comprise nearly 3,072,000 square feet of warehouse
space and house our inventory. We ship merchandise to our direct customers via United Parcel Service and the
United States Postal Service. We use common carriers and typically deliver inventory 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, order,
monitor and maintain sufficient amounts of inventory, facilitate vendor transactions and provide financial reporting.
We continually evaluate, modify and update our information technology systems supporting the product pipeline,
including our design, sourcing, merchandise planning, forecasting and purchase order, inventory, distribution,
transportation and price management systems. We are making modifications to our technology that will involve
updating or replacing certain systems with successor systems during the course of several years, including
improvements to our customer relationship management system and improvements to our systems for multi-channel
tracking and processing of inventory.
Employees
As of January 27, 2007, we employed approximately 11,700 employees, approximately 6,300 of whom were
employed full time. We use part-time and temporary workers to supplement our labor force at peak times during
our third and fourth quarters. None of our employees are represented by a labor union or are parties to a collective
bargaining agreement. We have not experienced any work stoppages and consider our relationship with our employees
to be good.
Seasonality
We experience seasonal fluctuations in our revenue and operating results. Due to buying patterns around the
holidays and the opening of hunting seasons, our merchandise revenue is traditionally higher in the third and fourth
fiscal quarters than in the first and second fiscal quarters, and we typically earn a disproportionate share of our
operating income in the third and fourth fiscal quarters. See Item 7 “Management’s Discussion and Analysis of
Financial Condition and Results of Operations--Quarterly Results of Operations for Fiscal Years 2006 and 2005 and
Seasonal Influences.”
Government Regulation
Regulation of our Bank Subsidiary. Our wholly-owned bank subsidiary is a Nebraska state-chartered bank
with deposits insured by the Bank Insurance Fund of the Federal Deposit Insurance Corporation, or the FDIC. Our
bank subsidiary is subject to comprehensive regulation and periodic examination by the Nebraska Department of
Banking and Finance, or NDBF, and the FDIC. We also are registered as a bank holding company with the NDBF
and as such are subject to periodic examination by the NDBF.