Exhibit 99.2
Investor Contact:
Chris Gay
308-255-2905
Cabela’s Incorporated
CABELA’S INC. RECASTED SEGMENT RESULTS
On March 22, 2006, the Company changed the fee structure between its financial services segment and its other segments to more appropriately reflect current market conditions. This change was effective January 1, 2006. This updated fee structure includes (1) an increase in the fee paid by the financial services segment for originating a new credit card account, (2) an increase in the amount that the financial services segment pays for rewards earned by its cardholders and (3) an additional fee paid by the financial services segment for marketing equal to the amount by which the profitability of the financial services segment exceeds a 2% pre-tax return on the financial services segment’s average managed credit card loans. The segment information below reflects this change as if it had taken place in all periods presented.
(Dollar Amounts in Thousands)
Segment Information Recasted:
| | | Three months ended | | | |
| | | April 2, 2005 | | July 2, 2005 | | Oct 1, 2005 | | Dec 31, 2005 | | Fiscal Year 2005 | | FiscalYear 2004 | |
| | | | | | | | | | | | | | |
| Direct revenue | | $ | 230,739 | | $ | 184,453 | | $ | 221,792 | | $ | 407,184 | | $ | 1,044,167 | | $ | 976,157 | |
| Retail revenue | | | 97,133 | | | 109,633 | | | 173,796 | | | 239,542 | | | 620,105 | | | 498,258 | |
| Financial services revenue | | | 20,538 | | | 27,357 | | | 29,033 | | | 28,903 | | | 105,831 | | | 69,060 | |
| Other revenue | | | 2,179 | | | 22,429 | | | 5,132 | | | (182 | ) | | 29,558 | | | 12,499 | |
Total revenue | | $ | 350,589 | | $ | 343,872 | | $ | 429,753 | | $ | 675,447 | | $ | 1,799,661 | | $ | 1,555,974 | |
| | | | | | | | | | | | | | | | | | | | |
| Direct operating income | | $ | 31,350 | | $ | 29,657 | | $ | 35,072 | | $ | 75,829 | | $ | 171,908 | | $ | 156,974 | |
| Retail operating income | | | 6,756 | | | 9,387 | | | 21,268 | | | 48,484 | | | 85,895 | | | 78,454 | |
| Financial services operating income | | | 5,218 | | | 5,444 | | | 5,793 | | | 6,605 | | | 23,060 | | | 9,257 | |
| Other operating income (loss) | | | (32,301 | ) | | (35,666 | ) | | (35,873 | ) | | (62,060 | ) | | (165,900 | ) | | (147,470 | ) |
Total operating income | | $ | 11,023 | | $ | 8,822 | | $ | 26,260 | | $ | 68,858 | | $ | 114,963 | | $ | 97,215 | |
| | | | | | | | | | | | | | | | | | | | |
As a percentage of total revenue: | | | | | | | | | | | | | | | | | | | |
| Direct revenue | | | 65.8 | % | | 53.6 | % | | 51.6 | % | | 60.3 | % | | 58.0 | % | | 62.7 | % |
| Retail revenue | | | 27.7 | % | | 31.9 | % | | 40.4 | % | | 35.5 | % | | 34.5 | % | | 32.0 | % |
| Financial services revenue | | | 5.9 | % | | 8.0 | % | | 6.8 | % | | 4.3 | % | | 5.9 | % | | 4.4 | % |
| Other revenue | | | 0.6 | % | | 6.5 | % | | 1.2 | % | | (0.0 | )% | | 1.6 | % | | 0.8 | % |
Total revenue | | | 100.0 | % | | 100.0 | % | | 100.0 | % | | 100.0 | % | | 100.0 | % | | 100.0 | % |
| | | | | | | | | | | | | | | | | | | | |
As a percentage of segment revenue: | | | | | | | | | | | | | | | | | | | |
| Direct operating income | | | 13.6 | % | | 16.1 | % | | 15.8 | % | | 18.6 | % | | 16.5 | % | | 16.1 | % |
| Retail operating income | | | 7.0 | % | | 8.6 | % | | 12.2 | % | | 20.2 | % | | 13.9 | % | | 15.7 | % |
| Financial services operating income | | | 25.4 | % | | 19.9 | % | | 20.0 | % | | 22.9 | % | | 21.8 | % | | 13.4 | % |
Total operating income (1) | | | 3.1 | % | | 2.6 | % | | 6.1 | % | | 10.2 | % | | 6.4 | % | | 6.2 | % |
(1) The percentage set forth is a percentage of consolidated revenue rather than revenue by segment as it is based upon our consolidated operating income. A separate line item is not included for Other operating income as this amount is reflected in the total operating income amount, which reflects our consolidated operating results.
Financial Services Information:
The following table summarizes the results of the Company’s financial services segment on a GAAP basis. For credit card loans securitized and sold, the loans are removed from the Company’s balance sheet and the net earnings on these securitized assets after paying outside investors are reflected as a component of securitization income on a GAAP basis. Net interest income on a GAAP basis includes interest and fee income, interest expense and provision for loan losses for the credit card loans receivable the Company owns. Non-interest income on a GAAP basis includes servicing income, gains on sales of loans and income recognized on retained interests for the entire securitized portfolio, as well as, interchange income on the entire managed portfolio.
(Dollar Amounts in Thousands) Financial Services Revenue as reported in the Financial Statements Recasted: |
| | | Three months ended | | | | | |
| | | April 2, 2005 | | July 2, 2005 | | Oct 1, 2005 | | Dec 31, 2005 | | Fiscal Year 2005 | | Fiscal Year 2004 | |
| | | | | | | | | | | | | | |
| Interest and fee income | | $ | 4,105 | | $ | 4,445 | | $ | 4,639 | | $ | 4,007 | | $ | 17,196 | | $ | 12,735 | |
| | | | | | | | | | | | | | | | | | | | |
| Interest expense | | | (823 | ) | | (790 | ) | | (726 | ) | | (902 | ) | | (3,241 | ) | | (3,063 | ) |
| Net interest income | | | 3,282 | | | 3,655 | | | 3,913 | | | 3,105 | | | 13,955 | | | 9,672 | |
| | | | | | | | | | | | | | | | | | | | |
| Non-interest income: | | | | | | | | | | | | | | | | | | | |
Securitization income | | | 25,783 | | | 33,136 | | | 35,576 | | | 38,537 | | | 133,032 | | | 96,466 | |
Other non-interest income | | | 7,434 | | | 7,137 | | | 8,069 | | | 9,196 | | | 31,836 | | | 24,905 | |
Total non-interest income | | | 33,217 | | | 40,273 | | | 43,645 | | | 47,733 | | | 164,868 | | | 121,371 | |
| Less: Customer rewards costs | | | (15,961 | ) | | (16,571 | ) | | (18,525 | ) | | (21,935 | ) | | (72,992 | ) | | (61,983 | ) |
| | | | | | | | | | | | | | | | | | | | |
| Financial services revenue | | $ | 20,538 | | $ | 27,357 | | $ | 29,033 | | $ | 28,903 | | $ | 105,831 | | $ | 69,060 | |
“Managed” credit card loans represent credit card loans receivable owned by the Company plus securitized credit card loans. Since the financial performance of the managed portfolio has a significant impact on the earnings received from servicing the portfolio, the Company believes the following table (see next page) on a “managed” basis is important information to analyze revenue in the financial services segment. The following non-GAAP presentation reflects the financial performance of the credit card loans receivable owned by the Company plus those that have been sold and includes the effects of recording the retained interest at fair value. Interest income, interchange income (net of customer rewards) and fee income on both the owned and securitized portfolio are recorded in their respective line items. Interest paid to outside investors on the securitized credit card loans is included with other interest costs and included in interest expense. Credit losses on the entire managed portfolio are included in provision for loan losses. Although the Company’s financial statements are not presented in this manner, management reviews the performance of the managed portfolio in order to evaluate the effectiveness of the Company’s origination and collection activities, which ultimately affects the income received for servicing the portfolio.
(Dollar Amounts in Thousands Except Other Data) Managed Financial Services Revenue Recasted: |
| | | Three months ended | | | |
| | | April 2, 2005 | | July 2, 2005 | | Oct 1, 2005 | | Dec 31, 2005 | | Fiscal Year 2005 | | Fiscal Year 2004 | |
| Interest income | | $ | 22,869 | | $ | 23,676 | | $ | 26,931 | | $ | 29,348 | | $ | 102,824 | | $ | 71,309 | |
| Interchange income, net of customer reward costs | | | 7,311 | | | 11,812 | | | 11,876 | | | 11,469 | | | 42,468 | | | 27,449 | |
| Other fee income | | | 4,583 | | | 4,659 | | | 5,555 | | | 5,941 | | | 20,738 | | | 16,841 | |
| Interest expense | | | (8,683 | ) | | (9,338 | ) | | (10,771 | ) | | (12,862 | ) | | (41,654 | ) | | (26,750 | ) |
| Provision for loan losses | | | (5,335 | ) | | (6,138 | ) | | (5,574 | ) | | (7,207 | ) | | (24,254 | ) | | (20,208 | ) |
| Other | | | (207 | ) | | 2,686 | | | 1,016 | | | 2,214 | | | 5,709 | | | 419 | |
| Net managed financial services revenue | | $ | 20,538 | | $ | 27,357 | | $ | 29,033 | | $ | 28,903 | | $ | 105,831 | | $ | 69,060 | |
| | | | | | | | | | | | | | | | | | | | |
As a Percentage of Managed Credit Card Loans | | | | | | | | | | | | | | | |
Managed Financial Services Revenue | | | | | | | | | | | | | | | | | | | |
| Interest income | | | 9.1 | % | | 9.1 | % | | 9.5 | % | | 9.7 | % | | 9.4 | % | | 8.0 | % |
| Interchange income, net of customer reward costs | | | 2.9 | | | 4.6 | | | 4.2 | | | 3.9 | | | 3.9 | | | 3.1 | |
| Other fee income | | | 1.9 | | | 1.8 | | | 2.0 | | | 2.0 | | | 1.9 | | | 2.0 | |
| Interest expense | | | (3.5 | ) | | (3.6 | ) | | (3.8 | ) | | (4.3 | ) | | (3.8 | ) | | (3.0 | ) |
| Provision for loan losses | | | (2.1 | ) | | (2.4 | ) | | (2.0 | ) | | (2.4 | ) | | (2.2 | ) | | (2.3 | ) |
| Other | | | (0.1 | ) | | 1.0 | | | 0.4 | | | 0.7 | | | 0.5 | | | 0.0 | |
| Net managed financial services revenue | | | 8.2 | % | | 10.5 | % | | 10.3 | % | | 9.6 | % | | 9.7 | % | | 7.8 | % |
| Average reported credit card loans | | $ | 99,260 | | $ | 110,695 | | $ | 104,035 | | $ | 110,371 | | $ | 106,115 | | $ | 82,526 | |
| Average managed credit card loans | | $ | 1,006,261 | | $ | 1,038,465 | | $ | 1,128,336 | | $ | 1,206,695 | | $ | 1,095,580 | | $ | 888,730 | |
