Cabela's 2014 Annual Report Download - page 28

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integrate new or expanded distribution centers into our inventory control process, we may not be able to deliver
inventory to our retail stores in a timely manner, which could have a material adverse effect on the revenue and
cash flows of our Retail business.
We may incur costs from litigation relating to products that we sell, particularly tree stands, firearms,
and ammunition, which could adversely affect our revenue and profitability.
We may incur damages due to lawsuits relating to products we sell, including lawsuits relating to tree stands,
firearms, and ammunition. We may incur losses due to lawsuits, including potential class actions, relating to our
performance of background checks on firearms purchases and compliance with other sales laws as mandated
by state and federal law. We may also incur losses from lawsuits relating to the improper use of firearms or
ammunition sold by us, including lawsuits by municipalities or other organizations attempting to recover costs
from manufacturers and retailers of firearms and ammunition. Our insurance coverage and the insurance provided
by our vendors for certain products they sell to us may be inadequate to cover claims and liabilities related to
products that we sell. In addition, claims or lawsuits related to products that we sell, or the unavailability of
insurance for product liability claims, could result in the elimination of these products from our product line,
thereby reducing revenue. If one or more successful claims against us are not covered by or exceed our insurance
coverage, or if insurance coverage is no longer available, our available working capital may be impaired and our
operating results could be materially adversely affected. Even unsuccessful claims could result in the expenditure
of funds and management time and could have a negative impact on our profitability and on future premiums we
would be required to pay on our insurance policies.
Legal proceedings may increase our costs and have a material adverse effect on our results of operations.
We are involved in legal proceedings that are incidental to our business. For example, on January 6, 2011,
we received a Commissioner’s charge from the Chair of the EEOC alleging that we have discriminated against
non-Whites on the basis of their race and national origin in recruitment and hiring. Although we are disputing
these allegations, we have entered into preliminary settlement negotiations with the EEOC to resolve this matter.
At the present time, we believe a loss is probable, but no reasonable estimate of the amount or range of loss
is possible. Accordingly, we have not accrued a liability related to the EEOC matter. In addition, significant
judgment is required in determining our provision for income taxes, and we are regularly under audit by tax
authorities. Although we believe our tax estimates are reasonable, the final determination of tax audits and any
related litigation could be materially different from our historical income tax provisions and accruals. Beyond this,
WFB is regularly subject to FDIC compliance examinations and has been required to pay monetary damages as a
result of past FDIC examinations and may be required to pay monetary damages resulting from FDIC compliance
examinations in the future. The defense and resolution of lawsuits, audits, examinations, and other proceedings
may involve significant expense, divert management’s attention and resources from other matters, and have a
material adverse effect on our results of operations.
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:
x FTC regulations governing the manner in which orders may be solicited and prescribing other obligations
in fulfilling orders and consummating sales;
x 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;
x the Bureau of Alcohol, Tobacco, Firearms and Explosives governing the manner in which we sell
firearms and ammunition;
x laws and regulations governing hunting and fishing;
x laws and regulations relating to the collecting and sharing of non-public customer information; and