Cabela's Incorporated reported financial results for its second fiscal quarter ended July 2, 2005 with total revenues increasing 23.2% to a record $343.9 million compared to $279.1 million for the same period last year. Second quarter net income increased to $6.0 million, or 9 cents per diluted share, compared to $2.0 million, or 3 cents per diluted share for the same period a year ago. As a result of the company's initial public offering, weighted average diluted shares outstanding increased 10.6% to 66.3 million for the second quarter of fiscal 2005 compared to 59.9 million for the second quarter of fiscal 2004.
During the second quarter of fiscal 2005, direct revenue increased 10.5% to a record $183.2 million. Total retail revenue increased 13.2% to $109.2 million and same store sales decreased 6.0%, due in part to the strong performance, during the second quarter of fiscal 2004, of the company's Hamburg, Pennsylvania, retail store. The Hamburg store contributed 2.8% to the same store sales decline. Financial services revenue increased 103.0% to $30.4 million for the second quarter of fiscal 2005.
Dennis Highby, Cabela's president and chief executive officer commented, “We are extremely pleased with our second quarter performance, which exceeded our expectations. Importantly, all three of our operating segments achieved double-digit revenue gains, and we experienced increases in both our consolidated gross margin and consolidated operating margin. However, operating margin in our retail segment decreased primarily due to new store pre-opening costs. Based on our strong momentum heading into the key fall and winter selling seasons, we are confident we will achieve our long-term top and bottom line mid-teens growth rates for fiscal 2005.”
Mr. Highby continued, “The second quarter was an exciting period for our company as we successfully opened two new destination retail stores in Texas. Both our Fort Worth and Buda locations are off to a solid start, which gives us a heightened degree of confidence as we enter new markets later this year, including Lehi, Utah in August and Rogers, Minnesota in October. We also put in place a series of strategic initiatives aimed at enhancing our infrastructure and improving our overall retail operations, including the installation of a new labor scheduling system and the implementation of a new on-line training platform for our store associates. We take great pride in our world class level of service and we continually look at ways to improve our processes and better serve our customers.”
“Over the past several months we have taken a number of important steps to increase our liquidity and more efficiently utilize our balance sheet to better support our future growth plans,” continued Mr. Highby. “During the quarter we signed a new five-year $325 million credit facility. We also completed $21 million in sales of land near our Buda, Dundee, Wheeling and Mitchell locations. Furthermore, we have made significant progress with regard to the monetization of certain of our economic bonds. We expect to receive approximately $57 million within the next few weeks from the municipality involved with our Kansas City store as a result of the retirement of Cabela's owned bonds related to that location.”
Mr. Highby concluded, “Our performance for the first half of fiscal 2005 underscores the ongoing strength of our multi-channel strategy, which includes our direct business, our growing retail operations, and our rapidly expanding financial services division. We remain very encouraged about our future prospects and believe that Cabela's powerful brand, multi-channel business model and strong financial position distinguishes us from our peers and enhances our competitive position in the marketplace. We are committed to successfully executing our long-term growth strategy in order to maximize value for our shareholders.”
CABELA'S INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Dollar Amounts in Thousands Except Per Share
and Share Amounts)
(Unaudited)
----------------------------------------------------------------------
Three months ended Six months ended
----------------------- ---------------------
July 2, July 3, July 2, July 3,
2005 2004 2005 2004
---- ---- ---- ----
REVENUES:
Merchandise sales $292,382 $262,326 $618,977 $558,685
Financial services
revenue 30,418 14,986 53,334 31,433
Other revenue 21,072 1,827 22,150 2,938
----------- ----------- ----------- -----------
Total revenues 343,872 279,139 694,461 593,056
----------- ----------- ----------- -----------
COST OF REVENUE:
Cost of merchandise
sales 188,848 170,823 402,217 357,796
Cost of other revenue 19,864 1,463 19,856 3,165
----------- ----------- ----------- -----------
Total cost of
revenue
(exclusive of
depreciation and
amortization) 208,712 172,286 422,073 360,961
----------- ----------- ----------- -----------
Gross profit 135,160 106,853 272,388 232,095
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 126,338 103,621 252,543 216,160
----------- ----------- ----------- -----------
OPERATING INCOME 8,822 3,232 19,845 15,935
----------- ----------- ----------- -----------
OTHER INCOME (EXPENSE):
Interest income 16 23 450 137
Interest expense (2,435) (2,025) (4,505) (4,045)
Other income, net 2,939 1,750 5,612 3,330
----------- ----------- ----------- -----------
520 (252) 1,557 (578)
----------- ----------- ----------- -----------
INCOME BEFORE PROVISION
FOR INCOME TAXES 9,342 2,980 21,402 15,357
INCOME TAX EXPENSE 3,326 993 7,619 5,324
----------- ----------- ----------- -----------
NET INCOME $6,016 $1,987 $13,783 $10,033
=========== =========== =========== ===========
EARNINGS PER SHARE:
Basic $0.09 $0.03 $0.21 $0.17
=========== =========== =========== ===========
Diluted $0.09 $0.03 $0.21 $0.17
=========== =========== =========== ===========
