Exhibit 99
| Investor Contact: |
| Andrew Weingardt |
| 308-255-7428 |
| Cabela’s Incorporated |
| Media Contact: |
| Joe Arterburn |
| 308-255-1204 |
| Cabela’s Incorporated |
CABELA’S INC. ANNOUNCES SECOND QUARTER 2015 RESULTS
- U.S. Comp Store Sales Increased 0.8%, Consolidated Comp Store Sales Decreased 0.9%
- Total Revenue Increased 9.9% to $836.3 Million
- Cabela’s CLUB® Avg. Receivables Grew 12.9% and Charge-Offs Remained at Record Low Levels
- Second Quarter Diluted EPS of $0.56
SIDNEY, Neb. (July 23, 2015) - Cabela’s Incorporated (NYSE:CAB) today reported financial results for second quarter fiscal 2015.
For the quarter, total revenue increased 9.9% to $836.3 million; Retail store revenue increased 13.9% to $570.1 million; Direct revenue decreased 7.0% to $136.8 million; and Financial Services revenue increased 14.2% to $124.9 million. During the period, consolidated comparable store sales decreased 0.9%. Net income was $40.1 million compared to $43.5 million in the year ago quarter, and earnings per diluted share were $0.56 compared to $0.61 in the year ago quarter.
“We remain on track to meet our full-year expectations and continue to see strong growth in several key merchandise categories, sequential improvement in comparable store sales, and excellent performance from Cabela’s CLUB,” said Tommy Millner, Cabela’s Chief Executive Officer. “While our second quarter results fell short of expectations, we are encouraged by several positive trends in our business, including our fifth consecutive quarter of sequential improvement in comparable store sales. U.S. comparable store sales increased 0.8% for the quarter and were led by positive comparable store sales in hunting equipment, camping, fishing, firearms, ammunition, powersports, and home/gifts. Consolidated comparable store sales decreased 0.9% largely due to currency declines affecting our Canadian business and some cannibalization impact from our Edmonton store.”
“Our new format stores continue to significantly outperform our legacy stores in sales and profit per square foot,” Millner said. “During the second quarter, we opened five new stores, and we plan to open four stores in the third quarter and two stores in the fourth quarter. We are confident that these new format stores will drive improvements in profitability and return on invested capital.”
A shift in ammunition sales from the Direct channel to the Retail channel combined with further pressure from new retail square footage contributed to the 7.0% decrease in Direct revenue for the quarter. Omni-channel improvements continue to drive enhancements to the customer experience and are expected to contribute to sequential improvement in Direct channel performance for the second half of 2015.
Strong performance in hardline categories such as powersports, firearms, and ammunition and weaker performance in soft goods and apparel categories combined with a more aggressive promotional cadence contributed to the 120 basis point decrease in merchandise gross margin for the quarter. With improving trends in certain apparel categories and the anniversary of a more promotional environment, the Company expects merchandise gross margins to be mostly in line with the prior year through the second half of 2015.
“While we have benefited from cost savings over the past year, we did deleverage expenses in the second quarter by 130 basis points,” Millner said. “Our deleverage was the result of new store costs, investments in labor, and higher incentive compensation cost. Recently, we completed a detailed review of our expense base and have identified meaningful savings in the balance of 2015 and full-year 2016.”
The Cabela’s CLUB Visa program had another excellent quarter. During the quarter, growth in the average number of active credit card accounts was 7.0%. Growth in the average balance per active credit card account was 5.5%, and growth in the average balance of credit card loans was 12.9% to $4.3 billion. For the quarter, net charge-offs remained at historically low levels of 1.80%. Increased Financial Services revenue was driven by increases in interest and fee income as well as interchange income.
“With several areas of our business trending positively as we enter the second half of the year, we are confident in our outlook for full-year 2015,” Millner said. “As a result, we reaffirm our expectations for a low-double-digit growth rate in revenue and a high-single to low-double-digit growth rate in diluted earnings per share for full-year 2015 as compared to full-year 2014 non-GAAP diluted earnings per share of $2.88.”
Conference Call Information
A conference call to discuss second quarter fiscal 2015 operating results is scheduled for today (Thursday, July 23, 2015) at 11:00 a.m. Eastern Time. A webcast of the call will take place simultaneously and can be accessed by visiting the Investor Relations section of Cabela’s website at www.cabelas.com. A replay of the call will be archived on www.cabelas.com.
About Cabela’s Incorporated
Cabela’s Incorporated, headquartered in Sidney, Nebraska, is a leading specialty retailer, and the world’s largest direct marketer, of hunting, fishing, camping and related outdoor merchandise. Since the Company’s founding in 1961, Cabela’s® has grown to become one of the most well-known outdoor recreation brands in the world, and has long been recognized as the World’s Foremost Outfitter®. Through Cabela’s growing number of retail stores and its well-established direct business, it offers a wide and distinctive selection of high-quality outdoor products at competitive prices while providing superior customer service. Cabela’s also issues the Cabela’s CLUB® Visa credit card, which serves as its primary customer loyalty rewards program. Cabela’s stock is traded on the New York Stock Exchange under the symbol “CAB”.
Caution Concerning Forward-Looking Statements
Statements in this press release that are not historical or current fact are “forward-looking statements” that are based on the Company’s beliefs, assumptions, and expectations of future events, taking into account the information currently available to the Company. Such forward-looking statements include, but are not limited to, the Company’s statements regarding remaining on track to meet full-year expectations; opening four stores in the third quarter and two stores in the fourth quarter; new format stores driving improvements in profitability and return on invested capital; omni-channel improvements contributing to sequential improvement in Direct channel performance for the second half of 2015; merchandise gross margins being mostly in line with the prior year through the second half of 2015; meaningful expense savings in the balance of 2015 and full-year 2016; and a low-double-digit growth rate in revenue and a high-single to low-double-digit growth rate in diluted earnings per share for full-year 2015 as compared to full-year 2014 non-GAAP diluted earnings per share of $2.88. Forward-looking statements involve risks and uncertainties that may cause the Company’s actual results, performance, or financial condition to differ materially from the expectations of future results, performance, or financial condition that the Company expresses or implies in any forward-looking statements. These risks and uncertainties include, but are not limited to: the state of the economy and the level of discretionary consumer spending, including changes in consumer preferences, demand for firearms and ammunition, and demographic trends; adverse changes in the capital and credit markets or the availability of capital and credit; the Company’s ability to successfully execute its omni-channel strategy; increasing competition in the outdoor sporting goods industry and for credit card products and reward programs; the cost of the Company’s products, including increases in fuel prices; the availability of the Company’s products due to political or financial instability in countries where the goods the Company sells are manufactured; supply and delivery shortages or interruptions, and other interruptions or disruptions to the Company’s systems, processes, or controls, caused by system changes or other factors; increased or adverse government regulations, including regulations relating to firearms and ammunition; the Company’s ability to protect its brand, intellectual property, and reputation; the Company’s ability to prevent cybersecurity breaches and mitigate cybersecurity risks; the outcome of litigation, administrative, and/or regulatory matters (including a Commissioner’s charge the Company received from the Chair of the U. S. Equal Employment Opportunity Commission in January 2011, the ongoing Securities and Exchange Commission investigation, audits by tax authorities, and compliance examinations by the Federal Deposit Insurance Corporation); the Company’s ability to manage credit, liquidity, interest rate, operational, legal, regulatory capital, and compliance risks; the Company’s ability to increase credit card receivables while managing credit quality; the Company’s ability to securitize its credit card receivables at acceptable rates or access the deposits market at acceptable rates; the impact of legislation, regulation, and supervisory regulatory actions in the financial services industry; and other risks, relevant factors, and uncertainties identified in the Company’s filings with the SEC (including the information set forth in the “Risk Factors” section of the Company’s Form 10-K for the fiscal year ended December 27, 2014, and Form 10-Q for the quarterly period ended March 28, 2015), which filings are available at the Company’s website at www.cabelas.com and the SEC’s website at www.sec.gov. Given the risks and uncertainties surrounding forward-looking statements, you should not place undue reliance on these statements. The Company’s forward-looking statements speak only as of the date they are made. Other than as required by law, the Company undertakes no obligation to update or revise forward-looking statements, whether as a result of new information, future events, or otherwise.
| CABELA’S INCORPORATED AND SUBSIDIARIES | |||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF INCOME | |||||||||||||||
| (Dollars in Thousands Except Earnings Per Share) | |||||||||||||||
| (Unaudited) | |||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||
| June 27, 2015 | June 28, 2014 | June 27, 2015 | June 28, 2014 | ||||||||||||
| Revenue: | |||||||||||||||
| Merchandise sales | $ | 706,068 | $ | 646,866 | $ | 1,403,722 | $ | 1,267,063 | |||||||
| Financial Services revenue | 124,943 | 109,364 | 247,856 | 207,942 | |||||||||||
| Other revenue | 5,265 | 4,971 | 11,774 | 12,019 | |||||||||||
| Total revenue | 836,276 | 761,201 | 1,663,352 | 1,487,024 | |||||||||||
| Cost of revenue: | |||||||||||||||
| Merchandise costs (exclusive of depreciation and amortization) | 452,994 | 407,450 | 919,213 | 814,093 | |||||||||||
| Cost of other revenue | — | 68 | 220 | 1,390 | |||||||||||
| Total cost of revenue (exclusive of depreciation and amortization) | 452,994 | 407,518 | 919,433 | 815,483 | |||||||||||
| Selling, distribution, and administrative expenses | 319,892 | 281,051 | 635,996 | 558,056 | |||||||||||
| Impairment and restructuring charges | — | 641 | — | 641 | |||||||||||
| Operating income | 63,390 | 71,991 | 107,923 | 112,844 | |||||||||||
| Interest expense, net | (4,588 | ) | (5,639 | ) | (8,362 | ) | (9,324 | ) | |||||||
| Other non-operating income, net | 2,025 | 1,039 | 3,765 | 3,141 | |||||||||||
| Income before provision for income taxes | 60,827 | 67,391 | 103,326 | 106,661 | |||||||||||
| Provision for income taxes | 20,770 | 23,874 | 36,495 | 37,395 | |||||||||||
| Net income | $ | 40,057 | $ | 43,517 | $ | 66,831 | $ | 69,266 | |||||||
| Earnings per basic share | $ | 0.56 | $ | 0.61 | $ | 0.94 | $ | 0.98 | |||||||
| Earnings per diluted share | $ | 0.56 | $ | 0.61 | $ | 0.93 | $ | 0.96 | |||||||
| Basic weighted average shares outstanding | 71,065,258 | 71,031,019 | 71,168,661 | 70,901,515 | |||||||||||
| Diluted weighted average shares outstanding | 71,372,975 | 71,700,006 | 71,705,134 | 71,851,184 | |||||||||||
| CABELA’S INCORPORATED AND SUBSIDIARIES | |||||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||||||
| (Dollars in Thousands Except Par Values) | |||||||||||
| (Unaudited) | |||||||||||
| June 27, 2015 | December 27, 2014 | June 28, 2014 | |||||||||
| ASSETS | |||||||||||
| CURRENT | |||||||||||
| Cash and cash equivalents | $ | 144,234 | $ | 142,758 | $ | 133,774 | |||||
| Restricted cash of the Trust | 34,104 | 334,812 | 25,789 | ||||||||
| Accounts receivable, net | 29,469 | 62,358 | 25,102 | ||||||||
| Credit card loans (includes restricted credit card loans of the Trust of $4,421,172, $4,440,520, and $3,926,700), net of allowance for loan losses of $54,742, $56,572, and $47,350 | 4,392,769 | 4,421,185 | 3,904,938 | ||||||||
| Inventories | 900,761 | 760,293 | 803,079 | ||||||||
| Prepaid expenses and other current assets | 106,498 | 93,929 | 90,306 | ||||||||
| Income taxes receivable and deferred income taxes | 144,592 | 122,337 | 37,245 | ||||||||
| Total current assets | 5,752,427 | 5,937,672 | 5,020,233 | ||||||||
| Property and equipment, net | 1,763,483 | 1,608,153 | 1,454,130 | ||||||||
| Economic development bonds | 77,936 | 82,074 | 78,429 | ||||||||
| Other assets | 47,809 | 47,418 | 45,393 | ||||||||
| Total assets | $ | 7,641,655 | $ | 7,675,317 | $ | 6,598,185 | |||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
| CURRENT | |||||||||||
| Accounts payable, including unpresented checks of $20,149, $38,790, and $8,875 | $ | 325,548 | $ | 335,969 | $ | 246,452 | |||||
| Gift instruments, credit card rewards, and loyalty rewards programs | 326,240 | 339,782 | 285,892 | ||||||||
| Accrued expenses and other liabilities | 191,934 | 216,274 | 133,965 | ||||||||
| Time deposits | 274,633 | 273,081 | 248,022 | ||||||||
| Current maturities of secured variable funding obligations of the Trust | 65,000 | 480,000 | — | ||||||||
| Current maturities of secured long-term obligations of the Trust | 467,500 | 467,500 | 255,000 | ||||||||
| Current maturities of long-term debt | 223,443 | 8,434 | 8,426 | ||||||||
| Deferred income taxes | — | — | 2,584 | ||||||||
| Total current liabilities | 1,874,298 | 2,121,040 | 1,180,341 | ||||||||
| Long-term time deposits | 552,842 | 532,975 | 593,005 | ||||||||
| Secured long-term obligations of the Trust, less current maturities | 2,643,500 | 2,579,750 | 2,452,250 | ||||||||
| Long-term debt, less current maturities | 599,617 | 491,281 | 547,674 | ||||||||
| Long-term deferred income taxes | 10,947 | 6,546 | 1,606 | ||||||||
| Other long-term liabilities | 135,679 | 126,215 | 138,947 | ||||||||
| STOCKHOLDERS’ EQUITY | |||||||||||
| Preferred stock, $0.01 par value; Authorized – 10,000,000 shares; Issued – none | — | — | — | ||||||||
| Common stock, $0.01 par value: | |||||||||||
| Class A Voting, Authorized – 245,000,000 shares | |||||||||||
| Issued – 71,598,231, 71,093,216, and 71,037,162 shares | 716 | 711 | 710 | ||||||||
| Outstanding – 70,675,975, 71,093,216, and 71,037,162 shares | |||||||||||
| Additional paid-in capital | 370,874 | 365,973 | 352,507 | ||||||||
| Retained earnings | 1,529,363 | 1,462,532 | 1,330,083 | ||||||||
| Accumulated other comprehensive income (loss) | (27,044 | ) | (11,706 | ) | 1,062 | ||||||
| Treasury stock, at cost – 922,256 shares at June 27, 2015 | (49,137 | ) | — | — | |||||||
| Total stockholders’ equity | 1,824,772 | 1,817,510 | 1,684,362 | ||||||||
| Total liabilities and stockholders’ equity | $ | 7,641,655 | $ | 7,675,317 | $ | 6,598,185 | |||||
| CABELA’S INCORPORATED AND SUBSIDIARIES | |||||||||||||||
| SELECTED FINANCIAL DATA | |||||||||||||||
| (Dollars in Thousands) | |||||||||||||||
| (Unaudited) | |||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||
| June 27, 2015 | June 28, 2014 | June 27, 2015 | June 28, 2014 | ||||||||||||
| Components of Total Consolidated Revenue: | |||||||||||||||
| Retail | $ | 570,090 | $ | 500,436 | $ | 1,094,530 | $ | 941,385 | |||||||
| Direct | 136,753 | 147,116 | 310,232 | 326,532 | |||||||||||
| Financial Services | 124,943 | 109,364 | 247,856 | 207,942 | |||||||||||
| Other | 4,490 | 4,285 | 10,734 | 11,165 | |||||||||||
| Total consolidated revenue as reported | $ | 836,276 | $ | 761,201 | $ | 1,663,352 | $ | 1,487,024 | |||||||
| As a Percentage of Total Consolidated Revenue: | |||||||||||||||
| Retail revenue | 68.2 | % | 65.7 | % | 65.8 | % | 63.3 | % | |||||||
| Direct revenue | 16.4 | 19.3 | 18.7 | 22.0 | |||||||||||
| Financial Services revenue | 14.9 | 14.4 | 14.9 | 14.0 | |||||||||||
| Other revenue | 0.5 | 0.6 | 0.6 | 0.7 | |||||||||||
| Total | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||||||
| Operating Income (Loss) by Segment: | |||||||||||||||
| Retail | $ | 89,829 | $ | 99,806 | $ | 145,384 | $ | 152,104 | |||||||
| Direct | 14,998 | 24,063 | 41,040 | 57,193 | |||||||||||
| Financial Services | 45,910 | 23,587 | 94,387 | 56,689 | |||||||||||
| Other | (87,347 | ) | (75,465 | ) | (172,888 | ) | (153,142 | ) | |||||||
| Total consolidated operating income as reported | $ | 63,390 | $ | 71,991 | $ | 107,923 | $ | 112,844 | |||||||
| Operating Income by Segment as a Percentage of Segment Revenue: | |||||||||||||||
| Retail operating income | 15.8 | % | 19.9 | % | 13.3 | % | 16.2 | % | |||||||
| Direct operating income | 11.0 | 16.4 | 13.2 | 17.5 | |||||||||||
| Financial Services operating income | 38.3 | 22.6 | 39.6 | 27.9 | |||||||||||
| Total operating income by segment as a percentage of total segment revenue | 7.6 | 9.5 | 6.5 | 7.6 | |||||||||||
| CABELA’S INCORPORATED AND SUBSIDIARIES | ||||
| COMPONENTS OF FINANCIAL SERVICES REVENUE | ||||
| (Dollars in Thousands) | ||||
| (Unaudited) | ||||
Financial Services revenue consists of activity from the Company’s credit card operations and is comprised of interest and fee income, interchange income, other non-interest income, interest expense, provision for loan losses, and customer rewards costs. The following table details the components and amounts of Financial Services revenue as reported for the periods presented below.
| Three Months Ended | Six Months Ended | ||||||||||||||
| June 27, 2015 | June 28, 2014 | June 27, 2015 | June 28, 2014 | ||||||||||||
| Interest and fee income | $ | 112,965 | $ | 94,652 | $ | 224,893 | $ | 188,871 | |||||||
| Interest expense | (16,811 | ) | (15,804 | ) | (32,430 | ) | (31,690 | ) | |||||||
| Provision for loan losses | (15,831 | ) | (10,314 | ) | (29,061 | ) | (23,028 | ) | |||||||
| Net interest income, net of provision for loan losses | 80,323 | 68,534 | 163,402 | 134,153 | |||||||||||
| Non-interest income: | |||||||||||||||
| Interchange income | 98,509 | 91,512 | 186,203 | 173,939 | |||||||||||
| Other non-interest income | 821 | 867 | 1,503 | 1,622 | |||||||||||
| Total non-interest income | 99,330 | 92,379 | 187,706 | 175,561 | |||||||||||
| Less: Customer rewards costs | (54,710 | ) | (51,549 | ) | (103,252 | ) | (101,772 | ) | |||||||
| Financial Services revenue as reported | $ | 124,943 | $ | 109,364 | $ | 247,856 | $ | 207,942 | |||||||
The following table sets forth the components of Financial Services revenue as reported as a percentage of average total credit card loans, including any accrued interest and fees, for the periods presented below.
| Three Months Ended | Six Months Ended | ||||||||||
| June 27, 2015 | June 28, 2014 | June 27, 2015 | June 28, 2014 | ||||||||
| Interest and fee income | 10.5 | % | 10.0 | % | 10.6 | % | 10.0 | % | |||
| Interest expense | (1.6 | ) | (1.7 | ) | (1.5 | ) | (1.7 | ) | |||
| Provision for loan losses | (1.5 | ) | (1.1 | ) | (1.4 | ) | (1.2 | ) | |||
| Interchange income | 9.2 | 9.6 | 8.7 | 9.2 | |||||||
| Other non-interest income | 0.1 | 0.1 | 0.1 | 0.1 | |||||||
| Customer rewards costs | (5.1 | ) | (5.4 | ) | (4.8 | ) | (5.4 | ) | |||
| Financial Services revenue as reported | 11.6 | % | 11.5 | % | 11.7 | % | 11.0 | % | |||
| CABELA’S INCORPORATED AND SUBSIDIARIES | ||||
| KEY STATISTICS OF FINANCIAL SERVICES BUSINESS | ||||
| (Unaudited) | ||||
Key statistics reflecting the performance of the Financial Services business are shown in the following tables for the periods presented below.
| Three Months Ended | ||||||||||||||
| June 27, 2015 | June 28, 2014 | Increase | % | |||||||||||
| (Decrease) | Change | |||||||||||||
| (Dollars in Thousands Except Average Balance per Account ) | ||||||||||||||
| Average balance of credit card loans (1) | $ | 4,299,130 | $ | 3,808,842 | $ | 490,288 | 12.9 | % | ||||||
| Average number of active credit card accounts | 1,903,291 | 1,778,556 | 124,735 | 7.0 | ||||||||||
| Average balance per active credit card account (1) | $ | 2,259 | $ | 2,142 | $ | 117 | 5.5 | |||||||
| Purchases on credit card accounts, net | $ | 5,071,387 | $ | 4,775,503 | $ | 295,884 | 6.2 | |||||||
| Net charge-offs on credit card loans (1) | $ | 19,337 | $ | 15,864 | $ | 3,473 | 21.9 | |||||||
Net charge-offs as a percentage of average credit card loans (1) | 1.80 | % | 1.67 | % | 0.13 | % | ||||||||
| (1) Includes accrued interest and fees | ||||||||||||||
| Six Months Ended | ||||||||||||||
| June 27, 2015 | June 28, 2014 | Increase | % | |||||||||||
| (Decrease) | Change | |||||||||||||
| (Dollars in Thousands Except Average Balance per Active Account ) | ||||||||||||||
| Average balance of credit card loans (1) | $ | 4,260,055 | $ | 3,783,171 | $ | 476,884 | 12.6 | % | ||||||
| Average number of active credit card accounts | 1,894,668 | 1,770,669 | 123,999 | 7.0 | ||||||||||
| Average balance per active credit card account (1) | $ | 2,248 | $ | 2,137 | $ | 111 | 5.2 | |||||||
| Purchases on credit card accounts, net | $ | 9,548,399 | $ | 9,031,260 | $ | 517,139 | 5.7 | |||||||
| Net charge-offs on credit card loans (1) | $ | 35,513 | $ | 32,783 | $ | 2,730 | 8.3 | |||||||
Net charge-offs as a percentage of average credit card loans (1) | 1.67 | % | 1.73 | % | (0.06 | )% | ||||||||
| (1) Includes accrued interest and fees | ||||||||||||||
| CABELA’S INCORPORATED AND SUBSIDIARIES | ||||
| RECONCILIATION OF GAAP REPORTED TO NON-GAAP ADJUSTED FINANCIAL MEASURES (1) | ||||
| (Unaudited) | ||||
To supplement our consolidated statements of income presented in accordance with generally accepted accounting principles (“GAAP”), we are providing non-GAAP adjusted financial measures of operating results that exclude certain items. Selling, distribution, and administrative expenses; impairment and restructuring charges; operating income; operating income as a percentage of total revenue; income before provision for income taxes; provision for income taxes; net income; and earnings per diluted share are presented below both as GAAP reported and non-GAAP financial measures excluding incremental expenses related to the transition to a third-party logistics provider and the closing of our distribution center in Winnipeg, Manitoba, Canada. In light of the nature and magnitude, we believe these items should be presented separately to enhance a reader’s overall understanding of the Company’s ongoing operations. These non-GAAP adjusted financial measures should be considered in conjunction with the GAAP financial measures.
We believe these non-GAAP adjusted financial measures provide useful supplemental information to investors regarding the underlying business trends and performance of our ongoing operations and are useful for period-over-period comparisons of such operations. In addition, we evaluate results using non-GAAP adjusted operating income, adjusted net income, and adjusted earnings per diluted share. These non-GAAP adjusted financial measures should not be considered in isolation or as a substitute for operating income, net income, earnings per diluted share, or any other measure calculated in accordance with GAAP. The following tables reconcile these financial measures to the related GAAP adjusted financial measures for the periods presented.
| Reconciliation of GAAP Reported to Non-GAAP Adjusted Financial Measures (1) | |||||||||||||||
| Three Months Ended | |||||||||||||||
| June 27, 2015 | June 28, 2014 | ||||||||||||||
| GAAP Basis | GAAP Basis | Non-GAAP | Non-GAAP | ||||||||||||
| As Reported | As Reported | Adjustments | Amounts | ||||||||||||
| (Dollars in Thousands Except Earnings Per Share) | |||||||||||||||
| Impairment and restructuring charges (2) | $ | — | $ | 641 | $ | (641 | ) | $ | — | ||||||
| Operating income | $ | 63,390 | $ | 71,991 | $ | 641 | $ | 72,632 | |||||||
| Operating income as a percentage of total revenue | 7.6 | % | 9.5 | % | — | % | 9.5 | % | |||||||
| Income before provision for income taxes | $ | 60,827 | $ | 67,391 | $ | 641 | $ | 68,032 | |||||||
| Provision for income taxes (3) | $ | 20,770 | $ | 23,874 | $ | 225 | $ | 24,099 | |||||||
| Net income | $ | 40,057 | $ | 43,517 | $ | 416 | $ | 43,933 | |||||||
| Earnings per diluted share | $ | 0.56 | $ | 0.61 | $ | — | $ | 0.61 | |||||||
(footnotes follow on the next page)
| Reconciliation of GAAP Reported to Non-GAAP Adjusted Financial Measures (1) | |||||||||||||||||||||||
| Six Months Ended | |||||||||||||||||||||||
| June 27, 2015 | June 28, 2014 | ||||||||||||||||||||||
| GAAP Basis | Non-GAAP | Non-GAAP | GAAP Basis | Non-GAAP | Non-GAAP | ||||||||||||||||||
| As Reported | Adjustments | Amounts | As Reported | Adjustments | Amounts | ||||||||||||||||||
| (Dollars in Thousands Except Earnings Per Share) | |||||||||||||||||||||||
| Selling, distribution, and administrative expenses (4) | $ | 635,996 | $ | (1,207 | ) | $ | 634,789 | $ | 558,056 | $ | — | $ | 558,056 | ||||||||||
| Impairment and restructuring charges (2) | $ | — | $ | — | $ | — | $ | 641 | $ | (641 | ) | $ | — | ||||||||||
| Operating income | $ | 107,923 | $ | 1,207 | $ | 109,130 | $ | 112,844 | $ | 641 | $ | 113,485 | |||||||||||
| Operating income as a percentage of total revenue | 6.5 | % | 0.1 | % | 6.6 | % | 7.6 | % | — | % | 7.6 | % | |||||||||||
| Income before provision for income taxes | $ | 103,326 | $ | 1,207 | $ | 104,533 | $ | 106,661 | $ | 641 | $ | 107,302 | |||||||||||
| Provision for income taxes (3) | $ | 36,495 | $ | 447 | $ | 36,942 | $ | 37,395 | $ | 225 | $ | 37,620 | |||||||||||
| Net income | $ | 66,831 | $ | 760 | $ | 67,591 | $ | 69,266 | $ | 416 | $ | 69,682 | |||||||||||
| Earnings per diluted share | $ | 0.93 | $ | 0.01 | $ | 0.94 | $ | 0.96 | $ | — | $ | 0.96 | |||||||||||
| (1) | The presentation includes non-GAAP financial measures. These non-GAAP financial measures are not prepared under any comprehensive set of accounting rules or principles, and do not reflect all of the amounts associated with the Company's results of operations as determined in accordance with GAAP. |
| (2) | For the three and six months ended June 28, 2014, reflects a restructuring charge for employee severance agreements and termination benefits related to our announcement of the transition to a third-party logistics provider for our distribution needs in Canada and the closing of our distribution center in Winnipeg, Manitoba, Canada. |
| (3) | For the three and six months ended June 28, 2014, the provision for income taxes is based on the effective tax rate for the respective six month periods. For the six months ended June 27, 2015, the provision for income taxes is estimated based on the non-GAAP adjusted income before provision for income taxes. |
| (4) | For the six months ended June 27, 2015, reflects incremental expenses incurred in the first quarter of fiscal 2015 related to the transition to a third-party logistics provider and the closing of our distribution center in Winnipeg, Manitoba, Canada. |
| CABELA’S INCORPORATED AND SUBSIDIARIES | ||||
| RECONCILIATION OF GAAP REPORTED TO NON-GAAP ADJUSTED FINANCIAL MEASURES (1) | ||||
| (Unaudited) | ||||
To supplement our consolidated statements of income presented in accordance with GAAP, we are providing non-GAAP adjusted financial measures of operating results that exclude certain items. Selling, distribution, and administrative expenses; impairment and restructuring charges; operating income; operating income as a percentage of total revenue; income before provision for income taxes; provision for income taxes; net income; and earnings per diluted share are presented below both as GAAP reported and non-GAAP financial measures excluding (i) incremental expenses primarily related to the transition to a third-party logistics provider and the closing of our distribution center in Winnipeg, Manitoba, Canada, (ii) impairment and restructuring charges recognized in 2014, and (iii) adjustments to the provision for income taxes related to changes in our assessments of uncertain tax positions recognized in 2014. In light of the nature and magnitude, we believe these items should be presented separately to enhance a reader's overall understanding of the Company's ongoing operations. These non-GAAP adjusted financial measures should be considered in conjunction with the GAAP financial measures.
We believe these non-GAAP adjusted financial measures provide useful supplemental information to investors regarding the underlying business trends and performance of our ongoing operations and are useful for period-over-period comparisons of such operations. In addition, we evaluate results using non-GAAP adjusted operating income, adjusted net income, and adjusted earnings per diluted share. These non-GAAP adjusted financial measures should not be considered in isolation or as a substitute for operating income, net income, earnings per diluted share, or any other measure calculated in accordance with GAAP. The following table reconcile these financial measures to the related GAAP adjusted financial measures for the periods presented.
| Reconciliation of GAAP Reported to Non-GAAP Adjusted Financial Measures (1) | |||||||||||
| Fiscal Year Ended | |||||||||||
| December 27, 2014 | |||||||||||
| GAAP Basis | Non-GAAP | Non-GAAP | |||||||||
| As Reported | Adjustments | Amounts | |||||||||
| (Dollars in Thousands Except Earnings Per Share) | |||||||||||
Selling, distribution, and administrative expenses (2) | $ | 1,251,325 | $ | (1,842 | ) | $ | 1,249,483 | ||||
| Impairment and restructuring charges (3) | $ | 641 | $ | (641 | ) | $ | — | ||||
| Operating income | $ | 335,395 | $ | 2,483 | $ | 337,878 | |||||
| Operating income as a percentage of total revenue | 9.2 | % | 0.1 | % | 9.3 | % | |||||
| Income before provision for income taxes | $ | 318,477 | $ | 2,483 | $ | 320,960 | |||||
| Provision for income taxes (4) | $ | 116,762 | $ | (2,861 | ) | $ | 113,901 | ||||
| Net income | $ | 201,715 | $ | 5,344 | $ | 207,059 | |||||
| Earnings per diluted share | $ | 2.81 | $ | 0.07 | $ | 2.88 | |||||
| (1) | The presentation includes non-GAAP financial measures. These non-GAAP financial measures are not prepared under any comprehensive set of accounting rules or principles, and do not reflect all of the amounts associated with the Company's results of operations as determined in accordance with GAAP. |
| (2) | Reflects incremental expenses primarily related to the transition to a third-party logistics provider and the closing of our distribution center in Winnipeg, Manitoba, Canada. |
| (3) | Reflects a restructuring charge related to the transition to a third-party logistics provider for our distribution needs in Canada and the closing of our distribution center in Winnipeg, Manitoba, Canada. |
| (4) | Reflects (i) the estimated income tax provision on the non-GAAP adjusted income before provision for income taxes, (ii) offsetting positions from a net operating loss carry forward, and (iii) tax adjustments related to changes in assessments of uncertain tax positions. |