Presentation Transcript

1. Module 10 – Incorporating Additional Information

   Wilbur Benitez March 31, 2014
2. Cabela’soverview Was founded in 1961 and has been a leader in outdoor gear since Leading retailer in hunting, fishing and outdoor gear Went public in June 2004 Market Cap of 4.8B Total revenues of 3.6M in 2013 Two main segments Merchandise sales and financial services Currently seeking to expand with smaller stores Traditionally has operated using large “Legacy” stores
3. Current expansion Current retail segment consists of 50 stores 2013: Seven next generation stores were opened New stores are more productive and generate higher returns on invested capital 12.5% increase in retail space (5.8 million square feet in 2013) Future plans 2014: fourteen next generation stores are scheduled to open 2015: three next generation stores have been announced
4. Industry risk Decline in discretionary consumer spending (non-essential goods) Unseasonal weather conditions Difficult economic conditions Consumer spending, oil prices, unemployment rates, etc. Cyber security breaches (Target) Decreased consumer confidence Political and economic uncertainty in foreign countries Many vendors are located in countries such as China, Mexico and various Eastern Asian and European countries Political unrest, wars, work stoppages etc. Current and future government regulations (firearms) Laws and regulations related to hunting and fishing licenses State and Federal regulations related to items such as firearms and ammunition
5. Assets - Key line items Restricted cash of trust Credit card loans net of allowances PP&E Economic development bonds Income taxes receivable and deferred income taxes
6. Restricted cash of trust The Financial Services segment must retain a minimum 20 day average of 5% of the loans in the securitization trust
7. Credit Card Loans Net of Allowance
8. Key Points - Credit Card Loans As new stores open and more consumers are exposed to Cabela’s, the number of credit cards issued should be expected to increase The overall outstanding balance is increasing but the allowance account is decreasing Why?
9. Loans are being issued to higher credit quality customers Past due accounts are lower in 2013
10. Property Plant and Equipment Construction in progress has seen a significant increase due to the current expansion plans
11. Economic Development Bonds Government Economic Assistance When Cabela's constructs a new retail store or retail development, the Company may receive economic assistance from local governments to fund a portion or all of the Company's associated capital costs
12. Income Taxes Implied amount is not disclosed in the footnotes
13. Additional information related to Liabilities and Shareholder’s Equity Accrued expenses Long term time deposits Secured long term obligations of the trust
14. Accrued expenses Totals should be expected to increase due to expansion efforts
15. Secured Long Term Obligations Historically the financial services segment has funded growth in credit card loans through an asset securitization program. The consolidated assets of the Trust are subject to credit, payment, and interest rate risks on the transferred credit card loans. redit card loans performed within established guidelines and no events which could trigger an “early amortization” occurred during the years ended December 28, 2013, and December 29, 2012.
16. Long Term Debt and Capital Leases Cabelas has a lease agreement for a distribution facility in Wheeling, West Virginia, contract expires in 2036 Currently lease a 325,000 square foot distribution center in Tooele, Utah, that is not included in the total square footage above. Plans are to build a distribution center in Tooele, Utah, and to have it fully operational by April 2015
17. Income Statement
18. Merchandise Sales Retail – Merchandise sold in stores Direct – E-Commerce and direct mail
19. Financial Service Segment The increase in interest and fee income of $42 million was due to an increase in credit card loans. The increase in interest expense of $10 million was due to the issuances of securitization and certificates of deposit in 2013, which were used to fund growth. The increases in interchange income of $53 million and customer rewards costs of $23 million were primarily due to an increase in credit card purchases.
20. Selling, General and Administrative Expense Selling, distribution, and administrative expenses increased primarily due to increases in comparable and new store costs and related support areas Expressed as a percentage of total revenue, selling, distribution, and administrative expenses decreased 20 basis points to 33.4% in 2013
21. Increase detail by Segment dsf
22. Reconciliation of Equity Preferred Stock – Cabelas is authorized to issue 10,000,000 shares of preferred stock having a par value of $0.01 per share. None of the shares of the authorized preferred stock have been issued. Dividends - Currently no dividends are being paid and will not be paid in the foreseeable future
23. Balance Sheet Evaluation Majority of the Balance Sheet is related to the Financial Service Segment
24. Income Statement Evaluation Because merchandise cost is typically dependent on the products that are sold, SD&A expenses are a good indicator of efficiency Although the total for SD&A is increasing, it is decreasing as a percentage of revenue This can be used to measure the efficiency of the expansion

25. Questions?