Cabela's 2014 Annual Report Download - page 26

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portion of our other vendors obtain their products from foreign countries that may also be subject to political and
economic uncertainty. We are subject to risks and uncertainties associated with changing economic and political
conditions in foreign countries where our vendors are located, such as:
x increased import duties, tariffs, trade restrictions, and quotas;
x work stoppages;
x economic uncertainties;
x adverse foreign government regulations;
x wars, fears of war, and terrorist attacks and organizing activities;
x adverse fluctuations of foreign currencies; and
x political unrest.
We cannot predict when, or the extent to which, the countries in which our products are manufactured will
experience any of the above events. Any event causing a disruption or delay of imports from foreign locations
would likely increase the cost or reduce the supply of merchandise available to us and would adversely affect
our operating results, particularly if imports of our Cabela’s branded merchandise were adversely affected as our
margins are higher on our Cabela’s branded merchandise.
In addition, trade restrictions, including increased tariffs or quotas, embargoes, safeguards, and customs
restrictions against apparel items, as well as United States or foreign 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 be adversely affected if our
revenue during the fourth quarter was substantially below expectations.
We experience seasonal fluctuations in our revenue and operating results. Historically, we have realized a
significant portion of our revenue and earnings for the year in the fourth quarter. In 2014 and 2013, respectively,
we generated 34.9% and 33.0% of our revenue, and 39.0% and 35.7% of our net income, in the fourth quarter. We
incur significant additional expenses in the fourth quarter due to higher customer purchase volumes and increased
staffing. If we miscalculate the demand for our products generally or for our product mix during the fourth quarter,
our revenue could decline, which would harm our financial performance. In addition, abnormally warm weather
conditions during the fourth quarter can reduce sales of many of the products normally sold during this time
period and inclement weather can reduce store traffic or cause us to temporarily close stores causing a reduction
in revenue. Because a substantial portion of our operating income is derived from our fourth quarter revenue, a
shortfall in expected fourth quarter revenue would cause our annual operating results to suffer significantly.
If we lose key management or are unable to attract and retain the talent required for our business, our
operating results could suffer.
Our future success depends to a significant degree on the skills, experience, and efforts of our senior
executive management and merchandising teams. With the exception of our Chairman, James W. Cabela, none of
our senior management has employment agreements other than our Management Change of Control Severance
Agreements. We do not carry key-man life insurance on any of our executives or key management personnel. In
addition, our corporate headquarters is located in a sparsely populated rural area, which may make it difficult
to attract and retain qualified individuals for key management positions. The loss of the services of any of these
individuals or the inability to attract and retain qualified individuals for our key management positions could cause
our operating results to suffer.