Cabelas 8-K Results of Operations and Financial Condition

Exhibit 99

 

FOR IMMEDIATE RELEASE Investor Contact: Chris Gay 308-255-2905 Cabela’s Incorporated   Media Contact: Joe Arterburn 308-255-1204 Cabela’s Incorporated

CABELA’S INC. REPORTS THIRD QUARTER RESULTS

-Q3 Total Revenue Increased 11.5% to $546.8 Million-

-Q3 Same Store Sales Increased 4.6% -

-Company Reported Q3 Diluted EPS of $0.20 -

SIDNEY, Neb. (November 1, 2007) – Cabela’s Incorporated (NYSE: CAB), the World’s Foremost Outfitter® of hunting, fishing, and outdoor gear, today reported financial results for its third fiscal quarter ended September 29, 2007.

Total revenue for the third quarter of fiscal 2007 increased 11.5% to a record $546.8 million compared to $490.5 million for the same period last year.  Third quarter net income was $13.2 million, or $0.20 per diluted share, compared to $15.0 million, or $0.23 per diluted share, for the same period a year ago.

During the third quarter of fiscal 2007, direct revenue increased 4.2% to $241.9 million, total retail revenue increased 17.7% to $257.3 million and same store sales increased 4.6%.  Financial services revenue increased 19.7% to $44.7 million for the third quarter of fiscal 2007.

Total revenue for the nine months ended September 29, 2007, increased 13.8% to $1.46 billion compared to $1.28 billion for the same period last year.  Net income for the nine months was $31.6 million, or $0.47 per diluted share, compared to $32.4 million, or $0.49 per diluted share, for the nine months ended September 30, 2006.

“We are pleased to report another quarter of double digit revenue growth, highlighted by a 4.6% increase in same store sales,” said Dennis Highby, Cabela’s President and Chief Executive Officer.  “Our third quarter results were impacted by higher promotional activity, resulting in lower margins, and two stores, opened in 2006, that did not meet the Company’s sales expectations.

“During the quarter, we opened a retail store in Hoffman Estates, Illinois, acquired S.I.R. Warehouse Sports Store, a Canadian specialty retailer of outdoor merchandise, and announced plans for a store in Billings, Montana, expected to open in the summer of 2008,” Highby said.  “We are on schedule to open six additional stores during the fourth quarter, including East Hartford, Connecticut; Gonzales, Louisiana; and Hammond, Indiana; all of which recently opened.  Reno, Nevada; Post Falls, Idaho; and Lacey, Washington, are all slated to open in November.  As a result of these store openings, we saw an increase in our pre-opening expenses of $3.3 million during the quarter compared to the year ago quarter.

“For the full year of 2007, we expect diluted earnings per share to increase at a high single digit growth rate,” Highby said.  “Additionally, we expect to open seven new stores in 2008, and we are highly confident in our ability to successfully execute our retail rollout strategy and grow revenue and earnings per share consistent with our long-term mid-teens growth expectations.”

Mr. Highby concluded, “Although these results were below our expectations, we remain confident that our powerful brand and multi-channel business model will allow us to continue to increase market share and significantly expand our business into the future. We remain focused on further building upon our leadership position in the industry and fully capitalizing on the many opportunities that lie ahead.”

Conference Call Information

A conference call to discuss third quarter fiscal 2007 operating results is scheduled for today (Thursday, November 1, 2007) at 4:30 p.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 the world’s largest direct marketer, and a leading specialty retailer, 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 well-established direct business and its growing number of retail stores, 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.

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 its expectation that diluted earnings per share will increase at a high single digit growth rate for fiscal 2007, its ability to successfully execute its retail rollout strategy and grow revenue and earnings per share consistent with its long-term mid-teens growth expectations, and its expectation of opening seven new stores in 2008.   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 ability to negotiate favorable purchase, lease and/or economic development arrangements for new retail store locations; expansion into new markets; market saturation due to new retail store openings; the acceleration of new retail store openings; the rate of growth of general and administrative expenses associated with building a strengthened corporate infrastructure to support the Company’s growth initiatives; increasing competition in the outdoor segment of the sporting goods industry; the cost of the Company’s products; supply and delivery shortages or interruptions caused by system changes or other factors; adverse weather conditions; unseasonal weather conditions which impact the demand for the Company’s products; fluctuations in operating results; adverse economic conditions causing a decline in discretionary consumer spending; the cost of fuel increasing; delays in road construction and/or traffic planning around the Company’s new retail stores; road construction around the Company’s existing retail stores; labor shortages or increased labor costs; changes in consumer preferences and demographic trends; increased government regulation; inadequate protection of the Company’s intellectual property; decreased interchange fees received by the Company’s financial services business as a result of credit card industry litigation; other factors that the Company may not have currently identified or quantified; 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 30, 2006, and Form 10-Q for the fiscal quarter ended March 31, 2007), 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 BALANCE SHEETS (In Thousands) (Unaudited)
ASSETS	September 29, 2007		December 30, 2006		September 30, 2006
CURRENT ASSETS:
Cash and cash equivalents	$	103,114	$	172,903	$	73,315
Accounts receivable		30,657		37,812		26,766
Credit card loans held for sale		158,939		136,072		91,400
Credit card loans receivable		13,360		16,611		14,882
Inventories		669,544		484,414		504,399
Prepaid expenses and deferred catalog costs		63,858		42,502		63,011
Income taxes receivable		11,113		--		5,419
Other current assets		67,729		63,907		78,060
Total current assets		1,118,314		954,221		857,252
PROPERTY AND EQUIPMENT, NET		862,554		600,065		584,957
OTHER ASSETS:
Marketable securities		80,687		117,360		111,199
Other		103,219		79,584		66,128
Total other assets		183,906		196,944		177,327
TOTAL ASSETS	$	2,164,774	$	1,751,230	$	1,619,536
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	311,195	$	239,285	$	225,994
Unpresented checks net of bank balance		40,458		--		11,735
Accrued expenses and other liabilities		59,400		72,124		57,876
Gift certificates and credit card reward points		141,030		144,210		113,399
Accrued employee compensation and benefits		52,013		61,275		41,961
Time deposits		25,044		33,401		40,799
Short-term borrowings and current portion of long-term debt		76,760		33,294		27,356
Income taxes payable and deferred income taxes		21,774		35,245		11,960
Total current liabilities		727,674		618,834		531,080
LONG-TERM LIABILITIES		666,707		398,538		409,640
STOCKHOLDERS’ EQUITY		770,393		733,858		678,816
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	2,164,774	$	1,751,230	$	1,619,536

CABELA'S INCORPORATED AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Dollars in Thousands Except Earnings Per Share) (Unaudited)
	Three Months Ended						Nine Months Ended
	September 29, 2007			September 30, 2006			September 29, 2007			September 30, 2006
REVENUE:
Merchandise sales	$	499,182		$	450,821		$	1,325,245		$	1,171,493
Financial services revenue		44,749			37,392			121,497			98,946
Other revenue		2,878			2,240			13,357			12,082
Total revenue		546,809			490,453			1,460,099			1,282,521
COST OF REVENUE:
Cost of merchandise sales		322,547			290,747			859,042			759,079
Cost of other revenue		37			(582	)		1,671			2,894
Total cost of revenue (exclusive of depreciation and amortization)		322,584			290,165			860,713			761,973
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES		199,879			173,437			542,397			464,949
OPERATING INCOME		24,346			26,851			56,989			55,599
OTHER INCOME (EXPENSE):
Interest income		42			287			1,705			1,624
Interest expense		(4,220	)		(4,794	)		(13,690	)		(12,929	)
Other income, net		1,004			2,000			5,353			7,600
Total other income (expense)		(3,174	)		(2,507	)		(6,632	)		(3,705	)
INCOME BEFORE PROVISION FOR INCOME TAXES		21,172			24,344			50,357			51,894
PROVISION FOR INCOME TAXES		7,940			9,350			18,719			19,461
NET INCOME	$	13,232		$	14,994		$	31,638		$	32,433
EARNINGS PER SHARE:
Basic	$	0.20		$	0.23		$	0.48		$	0.50
Diluted	$	0.20		$	0.23		$	0.47		$	0.49
WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic		65,825,895			65,271,870			65,701,443			65,180,992
Diluted		67,031,102			66,484,306			67,317,482			66,492,421

Segment Information
	Three Months Ended						Nine Months Ended
(Dollars in Thousands)	September 29, 2007			September 30, 2006			September 29, 2007			September 30, 2006
Direct revenue	$	241,900		$	232,172		$	683,646		$	656,052
Retail revenue		257,282			218,649			641,599			515,441
Financial services revenue		44,749			37,392			121,497			98,946
Other revenue		2,878			2,240			13,357			12,082
Total revenue	$	546,809		$	490,453		$	1,460,099		$	1,282,521
Direct operating income	$	40,897		$	35,727		$	107,356		$	97,420
Retail operating income		26,940			29,630			66,403			58,870
Financial services operating income		9,569			7,689			26,961			21,815
Other operating loss		(53,060	)		(46,195	)		(143,731	)		(122,506	)
Total operating income	$	24,346		$	26,851		$	56,989		$	55,599
As a Percentage of Total Revenue:
Direct revenue		44.2	%		47.3	%		46.8	%		51.2	%
Retail revenue		47.1			44.6			44.0			40.2
Financial services revenue		8.2			7.6			8.3			7.7
Other revenue		0.5			0.5			0.9			0.9
Total revenue		100.0	%		100.0	%		100.0	%		100.0	%
As a Percentage of Segment Revenue:
Direct operating income		16.9	%		15.4	%		15.7	%		14.8	%
Retail operating income		10.5			13.6			10.4			11.4
Financial services operating income		21.4			20.6			22.2			22.0
Total operating income (1)		4.5	%		5.4	%		3.9	%		4.3	%

 __________________

⁽¹⁾ The percentage of total operating income is a percentage of total consolidated revenue.

Financial Services Information:

The following table summarizes the results of the Company’s financial services segment on a generally accepted accounting principles (“GAAP”) basis.  For credit card loans securitized and sold, the loans are removed from the Company’s consolidated 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, as well as interchange income on the entire managed portfolio.

Financial Services Revenue as Reported on a GAAP Basis:	Three Months Ended						Nine Months Ended
(In Thousands)	September 29, 2007			September 30, 2006			September 29, 2007			September 30, 2006
Interest and fee income, net of provision for loan losses	$	9,139		$	6,372		$	20,233		$	17,360
Interest expense		(1,807	)		(1,299	)		(4,252	)		(3,600	)
Net interest income, net of provision for loan losses		7,332			5,073			15,981			13,760
Non-interest income:
Securitization income		50,679			44,294			144,315			120,074
Other non-interest income		13,592			10,505			36,072			28,586
Total non-interest income		64,271			54,799			180,387			148,660
Less: Customer rewards costs		(26,854	)		(22,480	)		(74,871	)		(63,474	)
Financial services revenue	$	44,749		$	37,392		$	121,497		$	98,946

“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 effect 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 consolidated 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.

Managed Financial Services Revenue Presented on Non-GAAP Basis:	Three Months Ended						Nine Months Ended
(Dollars in Thousands)	September 29, 2007			September 30, 2006			September 29, 2007			September 30, 2006
Interest income	$	48,465		$	38,257		$	136,010		$	104,720
Interchange income, net of customer rewards costs		16,940			13,981			46,690			37,974
Other fee income		7,425			6,058			19,502			16,532
Interest expense		(21,776	)		(17,263	)		(60,187	)		(46,590	)
Provision for loan losses		(8,931	)		(6,442	)		(23,374	)		(18,354	)
Other		2,626			2,801			2,856			4,664
Managed financial services revenue	$	44,749		$	37,392		$	121,497		$	98,946
Managed Financial Services Revenue as a Percentage of Average Managed Credit Card Loans:
Interest income		11.2	%		11.0	%		11.1	%		10.6	%
Interchange income, net of customer rewards costs		3.9			4.0			3.8			3.9
Other fee income		1.7			1.7			1.6			1.6
Interest expense		(5.0	)		(5.0	)		(4.9	)		(4.7	)
Provision for loan losses		(2.1	)		(1.8	)		(1.9	)		(1.9	)
Other		0.6			0.8			0.2			0.5
Managed financial services revenue		10.3	%		10.7	%		9.9	%		10.0	%
Average reported credit card loans	$	182,719		$	133,866		$	155,073		$	128,161
Average managed credit card loans		1,730,886			1,394,377			1,633,446			1,315,000

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