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Cabela's Inc. Reports Record Second Quarter 2013 Results

To supplement the Company's revenue components of its Financial Services segment presented in accordance with generally accepted accounting principles ("GAAP"), the Company has disclosed two non-GAAP measures of operating results that exclude the adjustment of $1.2 million recorded in the second quarter of June 29, 2013, as an increase to interchange income for the proposed Visa settlement. Interchange income and total Financial Services revenue are presented below both as reported (on a GAAP basis) and excluding the adjustment to interchange income for the proposed Visa settlement. In light of the nature and magnitude, the Company believes these items should be presented separately to enhance a reader's overall understanding of the Company's ongoing operations as they relate to its Financial Services segment. The following non-GAAP financial measures should be considered in conjunction with the GAAP financial measures.

 
        June 29, 2013       June 30, 2012      

Increase

(Decrease)

      % Change

Three Months Ended:

Interchange income $ 85,697 $ 74,939 $ 10,758 14.4 %
Adjustment for Visa antitrust settlement (1,200 )   (1,200 )
Interchange income - 2013 non-GAAP adjusted $ 84,497   $ 74,939   $ 9,558   12.8
 
Total Financial Services revenue $ 88,578 $ 79,267 $ 9,311 11.7
Adjustment for Visa antitrust settlement (1,200 )   (1,200 )
Total Financial Services revenue - 2013 non-GAAP adjusted $ 87,378   $ 79,267   $ 8,111   10.2
 

Interchange income as a percentage of average total credit card loans -

2013 non-GAAP adjusted

10.0 % 10.0 % %
 

Financial Services revenue as a percentage of average total credit card

loans - 2013 non-GAAP adjusted

10.4 % 10.4 % %
 

Six Months Ended:

 
Interchange income $ 163,327 $ 143,366 $ 19,961 13.9 %
Adjustment for Visa antitrust settlement (1,200 )   (1,200 )
Interchange income - 2013 non-GAAP adjusted $ 162,127   $ 143,366   $ 18,761   13.1
 
Financial Services revenue $ 174,350 $ 162,722 $ 11,628 7.1
Adjustment for Visa antitrust settlement (1,200 )   (1,200 )
Financial Services revenue - 2013 non-GAAP adjusted $ 173,150   $ 162,722   $ 10,428   6.4
 

Interchange income as a percentage of average total credit card loans -

2013 non-GAAP adjusted

9.6 % 9.6 % %
 

Financial Services revenue as a percentage of average total credit card

loans - 2013 non-GAAP adjusted

10.3 % 11.0 % (0.7 )%
 
CABELA'S INCORPORATED AND SUBSIDIARIES
KEY STATISTICS OF FINANCIAL SERVICES BUSINESS
(Unaudited)

Key statistics reflecting the performance of the Financial Services business are shown in the following charts for the periods presented below.

 
        Three Months Ended  

June 29,

2013

     

June 30,

2012

     

Increase

(Decrease)

     

%

Change

(Dollars in Thousands Except Average Balance per Account)

 
Average balance of credit card loans (1) $ 3,387,851 $ 3,001,213 $ 386,638 12.9 %
Average number of active credit card accounts 1,651,288 1,492,033 159,255 10.7
 
Average balance per active credit card account (1) $ 2,052 $ 2,011 $ 41 2.0
 
Net charge-offs on credit card loans (1) $ 15,879 $ 13,948 $ 1,931 13.8

Net charge-offs as a percentage of average

 credit card loans (1)

        1.87 %       1.86 %       0.01 %        
(1) Includes accrued interest and fees
 
 
        Six Months Ended            

June 29,

2013

     

June 30,

2012

Increase

(Decrease)

%

Change

(Dollars in Thousands Except Average Balance per Account)

 
Average balance of credit card loans (1) $ 3,367,002 $ 2,984,384 $ 382,618 12.8 %
Average number of active credit card accounts 1,642,420 1,487,242 155,178 10.4
 
Average balance per active credit card account (1) $ 2,050 $ 2,007 $ 43 2.1
 
Net charge-offs on credit card loans (1) $ 31,464 $ 28,794 $ 2,670 9.3

Net charge-offs as a percentage of average

 credit card loans (1)

        1.87 %       1.93 %       (0.06 )%        
(1) Includes accrued interest and fees
 
CABELA'S INCORPORATED AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(Unaudited)

To supplement the Company's condensed consolidated statements of income presented in accordance with generally accepted accounting principles ("GAAP"), management of the Company has disclosed non-GAAP measures of operating results that exclude certain items. Total revenue, impairment and restructuring charges, operating income, provision for income taxes, net income, and earnings per basic and diluted share are presented below both as reported (on a GAAP basis) and excluding (i) the adjustment to interchange income for the proposed Visa settlement recorded in the three and six months ended June 29, 2013, and (ii) the impairment and restructuring charges recorded in the three and six months ended June 29, 2013, respectively. The impairment and restructuring charges relate to the closure of our former Winnipeg retail store in conjunction with the opening of the new Winnipeg next-generation store in May 2013. In light of the nature and magnitude, the Company believes these items should be presented separately to enhance a reader's overall understanding of the Company's ongoing operations. These non-GAAP financial measures should be considered in conjunction with the GAAP financial measures.

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