UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 11-K
(Mark One)
| x | ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
| For the fiscal year ended December 31, 2006 |
or
| o | TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the transition period from ___________ to ___________________ |
Commission File Number: 1-32227
A. Full title of the plan and address of the plan, if different from that of the issuer named below.
CABELA’S INCORPORATED 401(k) SAVINGS PLAN
B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office:
Cabela’s Incorporated
One Cabela Drive
Sidney, NE 69160
CABELA’S INCORPORATED 401(k) SAVINGS PLAN
TABLE OF CONTENTS
Page | |
| REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | 1 |
| FINANCIAL STATEMENTS: | |
Statements of Net Assets Available for Benefits as of December 31, 2006 and 2005 | 2 |
Statements of Changes in Net Assets Available for Benefits for the Years Ended December 31, 2006 and 2005 | 3 |
Notes to Financial Statements | 4-8 |
| SUPPLEMENTAL SCHEDULE: | |
Form 5500, Schedule H, Part IV, Line 4(i) – Schedule of Assets (Held at End of Year) as of December 31, 2006 | 9 |
All other schedules required by Section 2520.103-10 of the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974 have been omitted because they are not applicable.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Administrator
Cabela’s Incorporated 401(k) Savings Plan
Sidney, Nebraska
We have audited the accompanying statements of net assets available for benefits of the Cabela’s Incorporated 401(k) Savings Plan (the “Plan”) as of December 31, 2006 and 2005, and the related statements of changes in net assets available for benefits for the years then ended. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Plan is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Plan's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2006 and 2005, and the changes in net assets available for benefits for the years then ended in conformity with accounting principles generally accepted in the United States of America.
Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedule of assets (held at end of year) as of December 31, 2006, is presented for the purpose of additional analysis and is not a required part of the basic financial statements, but is supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. This schedule is the responsibility of the Plan's management. Such schedule has been subjected to the auditing procedures applied in our audit of the basic 2006 financial statements and, in our opinion, is fairly stated in all material respects when considered in relation to the basic financial statements taken as a whole.
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
Omaha, Nebraska
June 25, 2007
CABELA’S INCORPORATED 401(k) SAVINGS PLAN STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS AS OF DECEMBER 31, 2006 AND 2005 | ||||||||
2006 | 2005 | |||||||
| CASH AND CASH EQUIVALENTS | $ | 213,462 | $ | 769,017 | ||||
| INVESTMENTS, at fair value (Note 3) | 190,678,793 | 151,001,657 | ||||||
| RECEIVABLES, employer contribution | 6,540,136 | 8,883,106 | ||||||
| NET ASSETS AVAILABLE FOR BENEFITS AT FAIR VALUE | 197,432,391 | 160,653,780 | ||||||
| Adjustment from fair value to contract value for fully benefit-responsive investment contracts (Note 2) | 121,898 | 103,301 | ||||||
| NET ASSETS AVAILABLE FOR BENEFITS | $ | 197,554,289 | $ | 160,757,081 | ||||
| See accompanying notes to the financial statements. | ||||||||
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CABELA’S INCORPORATED 401(k) SAVINGS PLAN STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS FOR THE YEARS ENDED DECEMBER 31, 2006 AND 2005 | ||||||||
ADDITIONS: | 2006 | 2005 | ||||||
| Investment income (loss): | ||||||||
| Net appreciation (depreciation) in fair value of investments (Note 3) | $ | 20,598,100 | $ | (6,988,480 | ) | |||
| Interest and dividends | 10,070,146 | 4,991,782 | ||||||
| 30,668,246 | (1,996,698 | ) | ||||||
| Contributions: | ||||||||
| Employer | 6,540,136 | 8,883,106 | ||||||
| Participants | 9,014,366 | 7,691,783 | ||||||
| Rollovers | 1,068,107 | 545,800 | ||||||
| Total contributions | 16,622,609 | 17,120,689 | ||||||
| Total additions | 47,290,855 | 15,123,991 | ||||||
| DEDUCTIONS: | ||||||||
| Benefits paid to participants | 10,092,887 | 10,139,352 | ||||||
| Administrative expenses | 400,760 | 360,788 | ||||||
| Total deductions | 10,493,647 | 10,500,140 | ||||||
| NET INCREASE | 36,797,208 | 4,623,851 | ||||||
| NET ASSETS AVAILABLE FOR BENEFITS: | ||||||||
| Beginning of year | 160,757,081 | 156,133,230 | ||||||
| End of year | $ | 197,554,289 | $ | 160,757,081 | ||||
| See accompanying notes to the financial statements. | ||||||||
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CABELA’S INCORPORATED 401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2006 AND 2005 AND FOR THE YEARS THEN ENDED
1. | DESCRIPTION OF PLAN |
The following description of the Cabela’s Incorporated 401(k) Savings Plan (the “Plan”) provides only general information. Participants should refer to the Plan agreement for a more complete description of the Plan’s provisions.
General– The Plan is a defined contribution plan covering substantially all employees of Cabela’s Incorporated (the “Company”) and its subsidiaries, except excluded employees as specified by the Plan. Employees are eligible to participate upon hire and eligible for various mandatory and discretionary matching contributions when they have completed one year of service, worked at least 1,000 hours, and are age eighteen or older. The Charles Schwab Trust Company serves as the trustee of the Plan, while Milliman, Inc. serves as the Plan record keeper. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”).
Cash and Cash Equivalents – The Company considers all highly liquid assets with an original maturity of three months or less to be cash equivalents.
Contributions– Each year, participants may elect to contribute up to 80% of their compensation on a salary deferral basis, subject to limitations specified in the Internal Revenue Code (“IRC”). Participants who have attained age 50 before the end of the Plan year are eligible to make catch up contributions. Participants may also contribute amounts representing distributions from other qualified defined benefit or defined contribution plans. For the year ended December 31, 2006, the Company contributed 100% of the first 6% of compensation that a participant contributed to the Plan. For the year ended December 31, 2005, the Company contributed 50% of the first 6% of compensation that a participant contributed to the Plan. A participant earns the Company’s matching contribution for a particular year so long as the participant is an employee of the Company on the last day of that year. Additional profit sharing contributions may be contributed at the option of the Company’s Board of Directors. For the year ended December 31, 2005, the employer elected to make a discretionary contribution of 12.5% of eligible compensation to non-highly compensated participants. No additional profit sharing contribution was made in 2006.
Investments – Participants direct the investment of their contributions, the Company matching contributions, and the Company profit sharing contributions into various investment options offered by the Plan. The Plan currently offers mutual funds, a common collective trust, and the Company’s common stock as investment options for participants.
Participant Accounts– Individual accounts are maintained for each Plan participant. Each participant’s account is credited with the participant’s contribution, the Company’s matching contributions, and allocations of (a) the Company’s discretionary contributions, (b) Plan earnings, and (c) forfeitures of terminated participants’ nonvested accounts, and charged with withdrawals, an allocation of administrative expenses, and Plan losses. Allocations are based on participant earnings or account balances. The benefit to which a participant is entitled is the benefit that can be provided from the participant’s vested account.
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Vesting– Participants are vested immediately in their contributions plus actual earnings thereon. Vesting in the Company’s matching and discretionary profit sharing contribution portion of their accounts is based on years of service. A participant is 100% vested after six years of credited service. Participants also become fully vested upon attainment of age 65 or termination of employment because of death or disability.
Payment of Benefits– On termination of service due to death, disability, retirement, or for other reasons a participant or beneficiary may elect to receive a lump-sum amount equal to the value of the vested interest in the participant’s account. The Plan also allows a pre-retirement distribution option for participants age 60 or over, as stipulated in the Plan.
Forfeitures– At December 31, 2006 and 2005, forfeited non-vested accounts totaled $87,099 and $149,104, respectively. Company matching contribution forfeitures are allocated as an additional Company matching contribution. Company matching contribution forfeitures and profit sharing contribution forfeitures are allocated to eligible employees in the ratio that each participant’s compensation bears to total compensation.
2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
Basis of Accounting – The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America.
Use of Estimates– The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires Plan management to make estimates and assumptions that affect the reported amounts of net assets available for benefits and changes therein. Actual results could differ from those estimates.
Risks and Uncertainties - The Plan utilizes various investment instruments, including mutual funds, a common collective trust, and common stock. Investment securities, in general, are exposed to various risks, such as interest rate, credit, and overall market volatility. Due to the level of risk associated with certain investment securities, it is reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect the amounts reported in the financial statements.
Investment Valuation and Income Recognition– The Plan’s investments are stated at fair value. Shares of mutual funds are valued at quoted market prices, which represent the net asset value of shares held by the Plan at year-end. Common collective trust funds are stated at fair value as determined by the issuer of the common/collective trust funds based on the fair market value of the underlying investments. Common collective trust funds with underlying investments in investment contracts are valued at fair market value of the underlying investments and then adjusted by the issuer to contract value. The Cabela’s Incorporated Unitized Stock Fund is valued at its year-end unit price (comprised of year-end market price of Cabela’s Incorporated Common Stock plus uninvested cash position).
The Gartmore Morely Stable Value Fund is a stable value fund that is a collective investment trust designed for retirement trusts to earn a high level of return, consistent with and providing for stability of investment returns, preservation of capital, liquidity to pay plan benefits, high credit quality and reasonable tracking of interest rates. The fund may invest in conventional, synthetic and separate account investment contracts issued by life insurance companies, banks and other financial institutions. Characteristics of these contracts allow for their principal value to remain stable regardless of the volatility of the bond markets. Participants may ordinarily direct the withdrawal or transfer of all or a portion of their investment at contract value. Contract value represents invested principal plus accrued interest thereon.
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Purchases and sales of securities are recorded on a trade-date basis. Dividends are recorded on the ex-dividend date. Interest income is recorded on an accrual basis.
Administrative Costs– The Plan’s participants pay certain administrative costs for the Plan. Such expenses include any expenses incident to the functioning of the Plan, including, but not limited to, fees of counsel, investment managers, accountants, agents, and other costs of administering the Plan.
Payment of Benefits– Benefits are recorded upon distribution.
Adoption of New Accounting Guidance—The financial statements reflect the retroactive adoption of Financial Accounting Standards Board Staff Position (FSP) AAG INV-1 and SOP 94-4-1, Reporting of Fully Benefit-Responsive Contracts Held by Certain Investment Companies Subject to the AICPA Investment Company Guide and Defined-Contribution Health and Welfare and Pension Plans (the “FSP”). As required by the FSP, the statements of net assets available for benefits presents investment contracts at fair value as well as an additional line item showing an adjustment from fair value to contract value for fully benefit-responsive investment contracts. The statement of changes in net assets available for benefits is presented on a contract value basis and was not affected by the adoption of the FSP. The adoption of the FSP did not impact the amount of net assets available for benefits at December 31, 2005.
In September 2006, the FASB issued Statement on Financial Accounting Standards No. 157 (SFAS 157), Fair Value Measurements. SFAS 157 establishes a single authoritative definition of fair value, sets out a framework for measuring fair value, and requires additional disclosures about fair value measurements. SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007. The Company does not believe the adoption of SFAS 157 will have a material impact on the financial statements.
3. | INVESTMENTS |
The Plan’s investments that represent 5% or more of the Plan’s net assets available for benefits are as follows:
December 31, | ||||||||
2006 | 2005 | |||||||
| Cabela’s Incorporated Unitized Stock Fund | $ | 34,201,304 | $ | 27,497,189 | ||||
| Oakmark Funds: | ||||||||
| Oakmark International Fund | 32,545,407 | 22,359,183 | ||||||
| Dodge and Cox Funds: | ||||||||
| Dodge and Cox Balanced Fund | 13,250,171 | 11,234,874 | ||||||
| Dodge and Cox Stock Fund | 13,045,715 | 8,935,980 | ||||||
| PIMCO Funds: | ||||||||
| PIMCO Total Return Fund Administrative Shares | 21,142,170 | 18,204,962 | ||||||
| Vanguard Funds: | ||||||||
| Vanguard 500 Index Fund Admiral Shares | 23,175,409 | 17,567,037 | ||||||
| Allianz Funds: | ||||||||
| Allianz CCM Mid Cap Fund Instl | 11,039,280 | 10,693,363 | ||||||
| American Funds: | ||||||||
| Growth Fund of America R4 | 17,722,005 | 15,065,000 | ||||||
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During 2006 and 2005, the Plan’s investments (including gains and losses on investments bought and sold, as well as held during the year) appreciated (depreciated) in value as follows:
Year Ended December 31, | ||||||||
2006 | 2005 | |||||||
| Net change in fair value: | ||||||||
| Cabela's Incorporated Common Stock | $ | 517,850 | $ | (9,770,341 | ) | |||
| Cabela's Incorporated Unitized Stock Fund | 11,600,276 | (1,432,647 | ) | |||||
| Mutual Funds | 8,263,719 | 4,027,945 | ||||||
| Common Collective Trusts | 216,255 | 186,563 | ||||||
| Net appreciation (depreciation) in fair value of investments | $ | 20,598,100 | $ | (6,988,480 | ) | |||
4. | EXEMPT PARTY-IN-INTEREST TRANSACTIONS |
The Plan held 63,669 and 75,419 shares of common stock of Cabela’s Incorporated, the sponsoring employer, with a cost basis of $1,074,733 and $1,273,072 at December 31, 2006 and 2005, respectively. For the years ended December 31, 2006 and 2005, the Plan held 2,479,433 and 2,891,701 units of the Cabela’s Incorporated Unitized Stock Fund with a cost basis of $4,196,159 and $1,720,867, respectively. A unit is made up of Company stock and cash, which allows the stock to be traded on an automatic daily basis. The Cabela’s Incorporated Unitized Stock Fund is valued at its year-end unit price (comprised of year-end market price of Cabela’s Incorporated Common Stock plus uninvested cash position).
The Plan reimbursed total administrative expenses of $160,385 and $119,422 for the years ended December 31, 2006 and 2005, respectively, to Cabela’s Incorporated for expenses related to the Plan.
5. | PLAN TERMINATION |
Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of Plan termination, participants will become 100% vested in their employer contributions.
6. | PLAN TAX STATUS |
The Internal Revenue Service has determined and informed the Company by a letter dated November 2, 2005, that the Plan and related trust are designed in accordance with applicable sections of the IRC. The Plan has been amended since receiving the determination letter. However, the Plan administrator believes that the Plan is designed and is currently being operated in compliance with the applicable requirements of the IRC, and that the Plan and the related trust continue to be tax exempt. Therefore, no provision for income taxes has been included in the financial statements.
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7. | RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500 |
The following is a reconciliation of net assets available for benefits per the financial statements to the Form 5500:
December 31, 2006 | ||||
| Net assets available for benefits per the financial statements | $ | 197,554,289 | ||
| Less: Adjustments from fair value to contract value for fully | (121,898 | ) | ||
| benefit-responsive investment contracts | ||||
| Net assets available for benefits per the Form 5500 | $ | 197,432,391 | ||
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CABELA’S INCORPORATED 401(k) SAVINGS PLAN SUPPLEMENTAL SCHEDULE FORM 5500, SCHEDULE H, PART IV, LINE 4(i) - SCHEDULE OF ASSETS (HELD AT END OF YEAR) AS OF DECEMBER 31, 2006 | |||||
Column B | Column C | Column E | |||
Identity of Issuer, Borrower, Lessor or Similar Party | Description of Investment Including Collateral, Rate of Interest, Maturity Date, Par or Maturity Value | Current Value | |||
| *Cabela’s Incorporated | Common Stock – 63,669 shares | $ | 1,536,333 | ||
| Unitized Stock Fund – 2,479,433 units | 34,201,304 | ||||
Mutual Funds: | |||||
| Oakmark Funds | Oakmark International Fund – 1,278,797 shares | 32,545,407 | |||
PIMCO Funds | PIMCO Total Return Fund Administrative Shares - 2,036,817 shares | 21,142,170 | |||
Vanguard Funds | Vanguard 500 Index Fund Admiral Shares - 177,466 shares | 23,175,409 | |||
| American Funds | Growth Fund of America R4 – 542,621 shares | 17,722,005 | |||
| Dodge and Cox Funds | Dodge and Cox Balanced Fund – 152,160 shares | 13,250,171 | |||
| Allianz Funds | Allianz CCM Mid Cap Fund Instl – 428,044 shares | 11,039,280 | |||
| Dodge and Cox Funds | Dodge and Cox Stock Fund – 85,010 shares | 13,045,715 | |||
| Royce Funds | Royce Total Return Fund – 543,478 shares | 7,472,823 | |||
| Marshall Funds | Marshall Mid-Cap Value Fund – 434,802 shares | 6,600,305 | |||
| T. Rowe Price Funds | T. Rowe Price New Horizons Fund – 81,375 shares | 2,627,629 | |||
Common Collective Trusts: | |||||
Gartmore Funds | Gartmore Morley Stable Value Fund Service CL IV – 316,469 shares | 6,320,242 | |||
Total Investments | $ | 190,678,793 | |||
| *Party-in-interest | |||||
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SIGNATURE
The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.
CABELA’S INCORPORATED 401(K) SAVINGS PLAN | ||
| By: | Cabela’s Incorporated, Administrator | |
Date: June 25, 2007 | By: | /s/ Ralph W. Castner |
| Ralph W. Castner | ||
| Vice President and Chief Financial Officer | ||