Cabela's 2013 Annual Report Download - page 99

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89
CABELA’S INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands Except Share and Per Share Amounts)
At December 28, 2013, there was $2,932 outstanding under our credit agreement, and no amounts were
outstanding at December 29, 2012. During 2013 and 2012, the daily average principal balance outstanding on
the lines of credit was $130,729 and $43,141, respectively, and the weighted average interest rate was 1.44% and
1.61%, respectively. Letters of credit and standby letters of credit totaling $17,378 and $22,143, respectively, were
outstanding at the end of 2013 and 2012. The daily average outstanding amount of total letters of credit during 2013
and 2012 was $20,536 and $15,418, respectively.
During the term of the facility, we are required to pay a quarterly commitment fee, which ranges from 0.15%
to 0.30% of the average daily unused principal balance on the line of credit. Interest on advances on this credit
facility is equal to the alternate base rate, as defined, plus the applicable margin, as defined. The applicable margin
is the percentage rate that is applicable at such time with respect to advances as set forth in the pricing schedule, a
stratified interest rate schedule based on the Company’s leverage ratio, as defined. The alternate base rate is equal
to the highest of:
• the lead lender’s prime rate,
• the sum of the federal funds rate in effect for the day plus one-half of one percent, and
• the Eurocurrency rate, as defined, plus 1.50%.
The credit agreement requires that Cabela’s comply with certain financial and other customary covenants,
including:
• a fixed charge coverage ratio (as defined) of no less than 2.00 to 1 as of the last day of any fiscal quarter
for the most recently ended four fiscal quarters (as defined);
• a leverage ratio (as defined) of no more than 3.00 to 1 as of the last day of any fiscal quarter; and
• a minimum consolidated net worth standard (as defined).
At December 28, 2013, we were in compliance with the financial covenant requirements of our $415,000
credit agreement with a fixed charge coverage ratio of 9.51 to 1, a leverage ratio of 0.85 to 1, and a consolidated net
worth that was $522,468 in excess of the minimum.
The credit agreement includes a dividend provision limiting the amount that Cabela’s could pay to
stockholders, which at December 28, 2013, was not in excess of $229,377. The credit agreement also has a provision
permitting acceleration by the lenders in the event there is a change in control, as defined. In addition, the credit
agreement contains cross default provisions to other outstanding debt. In the event that the Company fails to
comply with these covenants, a default is triggered. In the event of default, all outstanding letters of credit and all
principal and outstanding interest would immediately become due and payable. The Company was in compliance
with all financial covenants under our credit agreements at December 28, 2013, and December 29, 2012. We
anticipate that we will continue to be in compliance with all financial covenants under our credit agreements
through at least the next 12 months.
Effective August 28, 2013, the Company entered into an unsecured $20,000 Canadian (“CAD”) revolving
credit facility for its operations in Canada. This revolving credit facility replaced our $15,000 CAD unsecured
revolving credit facility, which was terminated January 31, 2013. Borrowings are payable on demand with interest
payable monthly. The credit facility permits the issuance of letters of credit up to $10,000 CAD in the aggregate,
which reduce the overall credit limit available under the credit facility. There were no amounts outstanding at
December 28, 2013, or December 29, 2012.
Advances made pursuant to the $415,000 credit agreement are classified as long-term debt. This agreement
does not contain limitations regarding the pay downs of revolving loans advanced; therefore, advances made prior
to November 2, 2015, pursuant to this agreement are considered long-term in nature.