Cabela’s Inc., Q4 2008 Earnings Call Transcript

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2009-02-19 18:54:17.0

Tags: Credit Suisse First Boston, Call Transcript, Earnings, Cabela, Operational Accounting, Biotechnology, Finance, Seeking Alpha, Cabelas Inc.

Question-and-Answer Session

Operator

Thank you. Today’s question and answer session will be conducted electronically. (Operator’s instructions).

And will take our first question from Paul Lejuez with Credit Suisse.

Paul Lejuez – Credit Suisse

Hey, thanks Chris. Just a pair of question, you made a comment about the $155 million of cash flow from operations and I think you said that that was a sustainable level, but wasn’t nearly a $100 million of that generated just from reduction in inventories?

Ralph W. Castner

Paul, this is Ralph. It was, but flipside of that yields more of this when you get the K (ph). Basically, the way to get to the sustainable level is net income with $76 million and add back $64 million of DNAs (ph) so that gives you to roughly a $140 billion. You’re correct in that inventory was down. You know $90 million some, but accounts payable was also down at $83 million. So that roughly offsets the benefit we got from the inventory reduction. So we believed it’s sustainable and not dependent upon future reduction in inventory to achieve those kinds of levels.

Paul Lejuez – Credit Suisse

And then the expenses came in well below what I was looking for. How should we think about expense dollars going forward? Can we expect to see on the retail direct side of SG&A – that dollars are down in the mid to high single digit range – like we saw this quarter?

Ralph W. Castner

Well, I think, obviously, that's going to be a function of revenue. But I think we would hope for them to be down slightly more than whatever the delta in revenue is.

Paul Lejuez – Credit Suisse

Okay. So you're talking you expect leverage then in your SG&A?

Ralph W. Castner

Yes.

Operator

And we’ll take our next question comes from Rick Nelson from Stephens Incorporated.

Rick Nelson – Stephens Incorporated

Can you talk about the hunting category, I guess firearms category, what that contributed to the count in the quarter?

Dennis Highby

I'm sure Pat's going to want to add on to that, but we're excited that we have the merchandise that people want in this type of environment right now. We saw strength in ammunition firearms, reloading was big, archery is strong and just a lot of the accessories that go along with the shooting industry, and it continues to be strong in the first quarter.

 

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