Cabela's 2012 Annual Report Download - page 30

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20
Current and future government regulation may negatively impact the demand for our products and our
ability to conduct our business.
Federal, state, and local laws and regulations can affect our business and the demand for products. These laws
and regulations include:
• FTC regulations governing the manner in which orders may be solicited and prescribing other obligations
in fulfilling orders and consummating sales;
• state or federal laws and regulations or executive orders that prohibit or limit the sale of certain items we
offer such as firearms, black powder firearms, ammunition, bows, knives, and similar products;
• the Bureau of Alcohol, Tobacco, Firearms and Explosives governing the manner in which we sell
firearms and ammunition;
• laws and regulations governing hunting and fishing;
• laws and regulations relating to the collecting and sharing of non-public customer information; and
• United States customs laws and regulations pertaining to proper item classification, quotas, payment
of duties and tariffs, and maintenance of documentation and internal control programs which relate to
importing taxidermy which we display in our retail stores.
Changes in these laws and regulations or additional regulation, particularly new laws or increased regulations
regarding sales and ownership of firearms and ammunition, could cause the demand for and sales of our products
to decrease and could materially adversely impact our revenue and profitability. Moreover, complying with
increased or changed regulations could cause our operating expenses to increase.
Our inability or failure to protect our intellectual property could have a negative impact on our
operating results.
Our trademarks, service marks, copyrights, patents, trade secrets, domain names, and other intellectual
property are valuable assets that are critical to our success. Effective trademark and other intellectual property
protection may not be available in every country in which our products are made available. The unauthorized
reproduction or other misappropriation of our intellectual property could diminish the value of our brands or
goodwill and cause a decline in our revenue. Any infringement or other intellectual property claim made against
us, whether or not it has merit, could be time-consuming, result in costly litigation, cause product delays, or require
us to enter into royalty or licensing agreements. As a result, any such claim could have a material adverse effect on
our operating results.
Risks Related to Our Financial Services Business
We may experience limited availability of financing or variation in funding costs for our Financial
Services segment, which could limit growth of the business and decrease our profitability.
Our Financial Services segment requires a significant amount of cash to operate. These cash requirements
will increase if our credit card originations increase or if our cardholders’ balances or spending increase.
Historically, we have relied upon external financing sources to fund these operations, and we intend to continue
to access external sources to fund our growth. A number of factors such as our financial results, changes within
our organization, disruptions in the capital markets, increased competition in the deposit markets, our corporate
and regulatory structure, interest rate fluctuations, general economic conditions, possible negative credit ratings
affecting our asset-backed securities, and accounting and regulatory changes and relations could make such
financing more difficult or impossible to obtain or more expensive. In addition, several rules and regulations have
recently been proposed by the SEC that may substantially affect issuers of asset-backed securities. We have been
and will continue to be particularly reliant on funding from securitization transactions for our Financial Services
segment. Securitization funding sources include both variable funding facilities and fixed and floating rate term
securitizations. A failure to renew these facilities, to resecuritize the term securitizations as they mature, or to add
additional term securitizations and variable funding facilities on favorable terms as it becomes necessary could
increase our financing costs and potentially limit our ability to grow our Financial Services segment. In addition,