Cabela's 2009 Annual Report Download - page 29

20
improper use of firearms or ammunition sold by us, including lawsuits by municipalities or other organizations
attempting to recover costs from manufacturers and retailers of firearms and ammunition. Our insurance coverage
and the insurance provided by our vendors for certain products they sell to us may be inadequate to cover claims
and liabilities related to products that we sell. In addition, claims or lawsuits related to products that we sell or the
unavailability of insurance for product liability claims, could result in the elimination of these products from our
product line reducing revenue. If one or more successful claims against us are not covered by or exceed our insurance
coverage, or if insurance coverage is no longer available, our available working capital may be impaired and our
operating results could be adversely affected. Even unsuccessful claims could result in the expenditure of funds
and management time and could have a negative impact on our profitability and on future premiums we would be
required to pay on our insurance policies.
Current and future government regulation may negatively impact demand for our products and our
ability to conduct our business.
Federal, state, and local laws and regulations can affect our business and the demand for products. These laws
and regulations include:
• Federal Trade Commission regulations governing the manner in which orders may be solicited and
prescribing other obligations in fulfilling orders and consummating sales;
• laws and regulations that prohibit or limit the sale, in certain states and localities, of certain items we offer
such as firearms, black powder firearms, ammunition, bows, knives, and similar products;
• the Bureau of Alcohol, Tobacco, Firearms and Explosives governing the manner in which we sell firearms
and ammunition;
• laws and regulations governing hunting and fishing;
• laws and regulations relating to the collecting and sharing of non-public customer information; and
• United States customs laws and regulations pertaining to proper item classification, quotas, payment
of duties and tariffs, and maintenance of documentation and internal control programs which relate to
importing taxidermy which we display in our retail stores.
Changes in these laws and regulations or additional regulation could cause the demand for and sales of our
products to decrease. Moreover, complying with increased or changed regulations could cause our operating expenses
to increase. This could adversely affect our revenue and profitability.
Our inability or failure to protect our intellectual property could have a negative impact on our operating
results.
Our trademarks, service marks, copyrights, patents, trade secrets, domain names, and other intellectual property
are valuable assets that are critical to our success. Effective trademark and other intellectual property protection
may not be available in every country in which our products are made available. The unauthorized reproduction or
other misappropriation of our intellectual property could diminish the value of our brands or goodwill and cause a
decline in our revenue. Any infringement or other intellectual property claim made against us, whether or not it has
merit, could be time-consuming, result in costly litigation, cause product delays, or require us to enter into royalty or
licensing agreements. As a result, any such claim could have an adverse effect on our operating results.
Risks Related to Our Financial Services Business
We may experience limited availability of financing or variation in funding costs for our Financial
Services business, which could limit growth of the business and decrease our profitability.
Our Financial Services business requires a significant amount of cash to operate. These cash requirements will
increase if our credit card originations increase or if our cardholders’ balances or spending increase. Historically, we
have relied upon external financing sources to fund these operations, and we intend to continue to access external
sources to fund our growth. A number of factors such as our financial results, changes within our organization,
disruptions in the capital markets, increased competition in the deposit markets, our corporate and regulatory
structure, interest rate fluctuations, general economic conditions, possible negative credit ratings affecting our asset-