Cabelas DEFA14A Additional proxy soliciting materials

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

SCHEDULE 14A

(Rule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No. )

Filed by the Registrant ☒ Filed by a party other than the Registrant ☐

Check the appropriate box:


☐		Preliminary Proxy Statement

☐		Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

☐		Definitive Proxy Statement

☒		Definitive Additional Materials

☐		Soliciting Material Under §240.14a-12

Cabela’s Incorporated

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):



☒	No fee required.

☐	Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

	(1)	Title of each class of securities to which transaction applies:
	(2)	Aggregate number of securities to which transaction applies:
	(3)	Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
	(4)	Proposed maximum aggregate value of transaction:
	(5)	Total fee paid:

☐	Fee paid previously with preliminary materials.

☐	Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

	(1)	Amount previously paid:
	(2)	Form, Schedule or Registration Statement No.:
	(3)	Filing party:
	(4)	Date Filed:

The following information was filed with the Securities and Exchange Commission on June 22, 2017 by Cabela’s Incorporated on Form 8-K (Item 8.01 Other Events):

Litigation Related to the Merger.

As previously disclosed, on October 3, 2016, Cabela’s Incorporated, a Delaware corporation (the “Company”), entered into an Agreement and Plan of Merger, by and among the Company, Bass Pro Group, LLC, a Delaware limited liability company (“Parent”), and Prairie Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Parent (“Sub”), which was amended by the Amendment to Agreement and Plan of Merger, dated as of April 17, 2017 (and as further amended from time to time, the “Merger Agreement”). The Merger Agreement provides for Sub to merge with and into the Company, causing the Company to become a wholly owned subsidiary of Parent (the “Merger”).

The following complaints have been filed in the United States District Court for the District of Delaware: (i) on June 7, 2017, a class action lawsuit captioned Adam Klein, Individually And On Behalf Of All Others Similarly Situated v. Cabela’s Incorporated, James W. Cabela, Theodore M. Armstrong, Michael R. McCarthy, John H. Edmondson, Beth M. Pritchard, Thomas L. Millner, James F. Wright, Peter S. Swinburn, Dennis Highby, and Donna M. Milrod, Case No. 1:17-cv-00698-UNA (the “Klein Complaint”); (ii) on June 7, 2017, a class action lawsuit captioned Bernard Garcarz, individually and on behalf of all others similarly situated v. Cabela’s, Inc., Theodore M. Armstrong, James W. Cabela, John H. Edmondson, Dennis Highby, Michael R. McCarthy, Donna M. Milrod, Thomas L. Millner, Beth M. Pritchard, Peter S. Swinburn, and James F. Wright, Case No. 1:99-mc-09999 (the “Garcarz Complaint”); (iii) on June 9, 2017, a class action lawsuit captioned Christopher A. Brown, Individually and on Behalf of All Others Similarly Situated v. Cabela’s Incorporated, James W. Cabela, Thomas L. Millner, Theodore M. Armstrong, John H. Edmondson, Dennis Highby, Michael R. McCarthy, Donna M. Milrod, Beth M. Pritchard, James F. Wright, and Peter S. Swinburn, Case No. 1:17-cv-00711-UNA (the “Brown Complaint”) and (iv) on June 14, 2017, a class action lawsuit captioned John Solak, On Behalf of Himself and All Others Similarly Situated v. Cabela’s Incorporated, James W. Cabela, Thomas L. Millner, Michael R. McCarthy, Dennis Highby, Theodore M. Armstrong, John H. Edmondson, Beth M. Pritchard, Donna M. Milrod, James F. Wright, and Peter Swinburn, Case No. 1:17-cv-00763 (the “Solak Complaint” and, together with the Klein Complaint, the Garcarz Complaint and the Brown Complaint, the “Merger Litigation”). The Merger Litigation relates to the Merger Agreement and the definitive proxy statement filed with the Securities and Exchange Commission (the “SEC”) on June 5, 2017 (the “Proxy Statement”) in connection with the Merger.

The Company believes that the claims asserted in the Merger Litigation are without merit and intends to defend against the Merger Litigation vigorously. However, in order to moot the plaintiffs’ unmeritorious disclosure claims, alleviate the costs, risks and uncertainties inherent in litigation and provide additional information to its stockholders, the Company has determined to voluntarily supplement the Proxy Statement as described in this Current Report on Form 8-K. Nothing in this Current Report on Form 8-K shall be deemed an admission of the legal necessity or materiality under applicable laws of any of the disclosures set forth herein. To the contrary, the Company specifically denies all allegations in the Merger Litigation that any additional disclosure was or is required.

Supplemental Disclosures.

The following disclosures supplement the disclosures contained in the Proxy Statement and should be read in conjunction with the disclosures contained in the Proxy Statement, which should be read in its entirety. To the extent the information set forth herein differs from or updates information contained in the Proxy Statement, the information set forth herein shall supersede or supplement the information in the Proxy Statement. All page references are to pages in the Proxy Statement, and terms used below, unless otherwise defined, have the meanings set forth in the Proxy Statement.

The disclosure beginning on page 86 of the Proxy Statement under the heading “Financial Projections” is hereby amended and restated in its entirety as follows:

The following table summarizes the original financial projections:

All Projections Prepared in February 2016, except as indicated

Fiscal Quarters and Years (U.S. dollars in millions, except per share amounts)


	Fourth Quarter 2016E		2016E		Fourth Quarter 2016E (Prepared in August 2016)		2016E (Prepared in August 2016)		2017E		2018E		2019E		2020E
Net Sales		N/A	$	4,317	$	1,494	$	4,350	$	4,543	$	4,757	$	5,033	$	5,355
EBITDA (1)		198		540		202		536		615		687		764		858
Adjusted Net Income (2)		N/A		224		99		221		265		303		344		396
Adjusted Net Income Per Diluted Share (EPS) (2)		N/A		3.24		1.43		3.21		3.84		4.39		4.99		5.74
Unlevered Free Cash Flow (3)		N/A		N/A		89		N/A		361		332		310		344

(1)

Represents earnings before interest, taxes, depreciation and amortization. Stock-based compensation was treated as a cash expense and was projected to be $6 million for the fourth quarter of fiscal 2016, $25 million in fiscal year 2016, $27 million in fiscal year 2017, $28 million in fiscal year 2018, $29 million in fiscal year 2019 and $30 million in fiscal year 2020. Adjustments were made for one-time, non-recurring items only for the first, second and third fiscal quarters of 2016. No such one-time, non-recurring items existed for the fourth fiscal quarter of 2016 and for fiscal 2017 through 2020.

(2)	Net income and net income per diluted share figures for the first, second and third fiscal quarters of 2016 were adjusted for one-time, non-recurring items.

(3)

Calculated by Guggenheim Securities for purposes of its discounted cash flow analysis of the Company from the financial projections provided by the Company’s management described above as tax-effected EBIT (which is EBITDA, less depreciation and amortization), plus depreciation and amortization, less capital expenditures, change in net working capital and other net assets.

Set forth in the below table is a reconciliation of Adjusted Net Income, Adjusted Net Income Per Diluted Share (EPS), EBITDA and Unlevered Free Cash Flow, as included in the original financial projections, for the periods indicated below:

All Projections Prepared in February 2016, except as indicated

Fiscal Quarters and Years (U.S. dollars in millions, except per share amounts)


	Fourth Quarter 2016E		2016E		Fourth Quarter 2016E (Prepared in August 2016)		2016E (Prepared in August 2016)		2017E		2018E		2019E		2020E
Net Income		96		224		99		210		265		303		344		396
Strategic Review and Restructuring Professional Fees		0		0		0		6		0		0		0		0
Severance		0		0		0		3		0		0		0		0
California Litigation Settlement		0		0		0		2		0		0		0		0


Adjusted Net Income	96		224		99		221		265		303		344		396
Interest	8		35		8		34		36		37		38		39
Income tax provision	57		134		58		134		157		180		207		239

EBIT	161		393		165		389		458		520		589		674
Depreciation and Amortization	37		147		37		147		157		167		175		184

EBITDA (1)	198		540		202		536		615		687		764		858

EBIT	161		393		165		N/A		458		520		589		674
Taxes	(60	)	(147	)	(62	)	N/A		(171	)	(195	)	(221	)	(253	)

Unlevered Net Income	101		246		103		N/A		287		325		368		421
Depreciation and Amortization	37		147		37		N/A		157		167		175		184
Capital Expenditures	(41	)	(234	)	(37	)	N/A		(235	)	(262	)	(290	)	(314	)
Change in Working Capital (merchandising business)	333		150		279		N/A		148		107		66		70
Change in Working Capital (financial services business)	(296	)	(71	)	(294	)	N/A		5		(4	)	(8	)	(15	)
Change in Other Net Assets	(8	)	1		1	⁽³⁾	N/A		(1	)⁽³⁾	(1	)	(1	)	(2	)⁽³⁾

Unlevered Free Cash Flow (2)	126		239		89		N/A	⁽⁴⁾	361		332		310		344

Net Income Per Diluted Share (EPS)	1.40		3.24		1.43		3.05		3.84		4.39		4.99		5.74
Strategic Review and Restructuring Professional Fees	0		0		0		0.09		0		0		0		0
Severance	0		0		0		0.04		0		0		0		0
California Settlement	0		0		0		0.03		0		0		0		0

Adjusted Net Income Per Diluted Share (EPS)	1.40		3.24		1.43		3.21		3.84		4.39		4.99		5.74

(1)

Stock-based compensation was treated as a cash expense and was projected to be $6 million for the fourth quarter of fiscal 2016, $25 million in fiscal year 2016, $27 million in fiscal year 2017, $28 million in fiscal year 2018, $29 million in fiscal year 2019 and $30 million in fiscal year 2020. Adjustments were made for one-time, non-recurring items only for the first, second and third fiscal quarters of 2016. No such one-time, non-recurring items existed for the fourth fiscal quarter of 2016 and for fiscal 2017 through 2020.

(2)	Calculated by Guggenheim Securities for purposes of its discounted cash flow analysis of the Company from the financial projections provided by the Company’s management described above.

(3)	Differences from calculations disclosed in the section entitled “Forward-Looking Financial Information” are the result of differences in rounding conventions.

(4)	Calculations related to Unlevered Free Cash Flow were not prepared in August 2016, as Unlevered Free Cash Flow for such period was not required for purposes of Guggenheim Securities’ discounted cash flow analysis.

The following table summarizes the updated financial projections:

All Projections Prepared in March 2017

Fiscal Quarters and Years (U.S. dollars in millions, except per share amounts)


	2017E		2018E		2019E		2020E		2021E
Net Sales (1)	$	4,226	$	4,408	$	4,640	$	4,887	$	5,190
EBITDA (1) (2)		550		586		657		700		773
Net Income		232		246		283		303		341
Net Income Per Diluted Share (EPS)		3.36		3.56		4.10		4.39		4.94
Unlevered Free Cash Flow (1) (3)		331		267		168		158		176

(1)

For purposes of its discounted cash flow analysis, Guggenheim Securities used measures of cash flow that the Company was forecasted to generate during the last eleven months of fiscal year 2017 through full fiscal year 2021 based on the financial projections. Such measures for the last eleven months of fiscal year 2017 were as follows, which remain subject to the explanatory notes set forth in the other footnotes to this table as applicable: (1) $3,970 million of net sales; (2) $523 of EBITDA; and (3) $377 of unlevered free cash flow.

(2)

Represents earnings before interest, taxes, depreciation and amortization. Stock-based compensation was treated as a cash expense and was projected to be $25 million in each of the fiscal years 2017 through 2021. Adjustments were made for one-time, non-recurring items only for the first, second and third fiscal quarters of 2016. No such one-time, non-recurring items existed for the fourth fiscal quarter of 2016 and for fiscal 2017 through 2020.

(3)

Set forth in the below table is a reconciliation of EBITDA and Unlevered Free Cash, as included in the updated financial projections, for the periods indicated below:

All Projections Prepared in March 2017

Fiscal Quarters and Years (U.S. dollars in millions, except per share amounts)


	2017E		2018E		2019E		2020E		2021E
Net Income		232		246		283		303		341
Interest		30		34		35		36		37
Income Tax Provision		141		150		173		185		208

EBIT		403		430		491		524		586
Depreciation and Amortization		147		156		166		176		187	⁽⁴⁾

EBITDA (1) (2)		550		586		657		700		773

EBIT		403		430		491		524		586


Taxes	(153	)	(163	)	(186	)	(198	)	(222	)

Unlevered Net Income	250		267		305		326		364
Depreciation and Amortization	147		156		166		176		187	⁽⁴⁾
Capital Expenditures	(104	)	(164	)	(241	)	(270	)	(298	)
Change in Working Capital (merchandising business)	135		28		31		23		37
Incremental WFB Equity Requirement	(99	)	(87	)	(92	)	(96	)	(115	)
Change in Other Net Assets	2		67	⁽⁴⁾	(1	)⁽⁴⁾	(1	)⁽⁴⁾	1	⁽⁴⁾

Unlevered Free Cash Flow (1) (3)	331		267		168		158		176

(1)

(2)

Stock-based compensation was treated as a cash expense and was projected to be $25 million in each of the fiscal years 2017 through 2021. Adjustments were made for one-time, non-recurring items only for the first, second and third fiscal quarters of 2016. No such one-time, non-recurring items existed for the fourth fiscal quarter of 2016 and for fiscal 2017 through 2020.

(3)	Calculated by Guggenheim Securities for purposes of its discounted cash flow analysis of the Company from the financial projections provided by the Company’s management described above.

(4)	Differences from calculations disclosed in the section entitled “Forward-Looking Financial Information” are the result of differences in rounding conventions.

NEITHER THE COMPANY NOR ANY OF ITS AFFILIATES INTENDS TO, AND EACH OF THEM DISCLAIMS ANY OBLIGATION TO, UPDATE, CORRECT OR OTHERWISE REVISE THE FINANCIAL PROJECTIONS TO REFLECT CIRCUMSTANCES EXISTING OR EVENTS OCCURRING AFTER THE RESPECTIVE DATES WHEN THE FINANCIAL PROJECTIONS WERE PREPARED OR TO REFLECT THE EXISTENCE OF FUTURE CIRCUMSTANCES OR THE OCCURRENCE OF FUTURE EVENTS, EVEN IN THE EVENT THAT ANY OR ALL OF THE ASSUMPTIONS UNDERLYING THE FINANCIAL PROJECTIONS ARE INACCURATE OR NO LONGER APPROPRIATE.

Additional Information and Where to Find It

This communication does not constitute an offer to sell or the solicitation of an offer to buy the securities of the Company or the solicitation of any vote or approval. This communication is being made in respect of the proposed Merger, among other things. The proposed Merger is being submitted to the stockholders of the Company for their consideration. In connection therewith, the Company has filed relevant materials with the SEC, including the Proxy Statement, regarding the proposed Merger, which has been mailed to the stockholders of the Company. BEFORE MAKING ANY VOTING OR ANY INVESTMENT DECISION, INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE PROXY STATEMENT REGARDING THE PROPOSED MERGER AND ANY OTHER RELEVANT DOCUMENTS FILED OR TO BE FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY, BECAUSE THEY CONTAIN IMPORTANT INFORMATION. Investors and security holders may obtain free copies of the Proxy Statement regarding the proposed Merger, any amendments or supplements thereto and other documents containing important information about the Company through the website maintained by the SEC at www.sec.gov. Copies of the documents filed with the SEC by the Company are available free of charge on the Company’s website at www.cabelas.com under the heading “SEC Filings” in the “Investor Relations” portion of the Company’s website. Stockholders of the Company may also obtain a free copy of the Proxy Statement regarding the proposed Merger and any filings with the SEC that are incorporated by reference in such Proxy Statement by contacting the Company’s Investor Relations Department at (308) 255-7428.

Participants in the Solicitation

The Company and its directors, executive officers and certain other members of management and employees may be deemed to be participants in the solicitation of proxies in connection with the proposed Merger. Information about the directors and executive officers of the Company is set forth in its definitive proxy statement for its 2016 Annual Meeting of Stockholders, which was filed with the SEC on November 17, 2016, and in subsequent documents filed with the SEC, each of which can be obtained free of charge from the sources indicated above. Other information regarding the participants in the proxy solicitation of the stockholders of the Company and a description of their direct and indirect interests, by security holdings or otherwise, is contained in the Proxy Statement regarding the proposed Merger and may be contained in other relevant materials filed with the SEC.

Cabelas Inactive DEFA14AAdditional proxy soliciting materials