Cabela's 2004 Annual Report Download - page 57

Our credit agreement requires that we comply with several Ñnancial and other covenants, including
requirements that we maintain the following Ñnancial ratios as set forth in our credit agreement:
‚ a current consolidated assets to current consolidated liabilities ratio of no less than 1.15 to 1.00 as
of the last day of any Ñscal year;
‚ a Ñxed charge coverage ratio (the ratio of the sum of consolidated EBITDA plus certain rental
expenses to the sum of consolidated cash interest expense plus certain rental expenses) of no less
than 2.00 to 1.00 as of the last day of any Ñscal quarter;
‚ a cash Öow leverage ratio of no more than 2.50 to 1.00 as of the last day of any Ñscal quarter; and
‚ a tangible net worth of no less than $300 million plus 50% of positive consolidated net earnings on
a cumulative basis for each Ñscal year beginning with Ñscal year ended 2004 as of the last day of
any Ñscal quarter.
In addition, our credit agreement includes a limitation that we may not pay dividends to our
stockholders in excess of 50% of our prior year's consolidated EBITDA and a provision that permits
acceleration by the lenders in the event there is a ""change in control.'' Our credit agreement deÑnes
""EBITDA'' to mean our net income before deductions for income taxes, interest expense, depreciation and
amortization. Based upon this EBITDA calculation for Ñscal 2004, dividends would not be permissible in
Ñscal 2005 in excess of $68.8 million. Our credit agreement deÑnes a ""change in control'' to mean any
circumstances under which we cease to own 100% of the voting stock in each of our subsidiaries that have
or have had total assets in excess of $5.0 million, any event in which any person or group of persons (other
than our stockholders as of May 6, 2004 and their aÇliates) acting in concert acquires beneÑcial
ownership of, or control over, 20% or more of the combined voting power of all of our securities entitled to
vote in the election of directors and such voting percentage exceeds the percentage of our common stock
owned by Mr. R. Cabela and Mr. J. Cabela as of the date of such acquisition, or any change in a majority
of the members of our board of directors within any twelve month period for any reason (other than by
reason of death, disability or scheduled retirement). As of January 1, 2005, Mr. R. Cabela and Mr. J.
Cabela collectively own 12,641,227 shares (not including 8,663,964 shares beneÑcially owned by Mr. R.
Cabela through Cabela's Family, LLC) of common stock, which represents 19.5% of our total outstanding
common stock and non-voting common stock. Our credit agreement provides that all loans or deposits
from us or any of our subsidiaries to the bank do not exceed $20.0 million in the aggregate at any time
when loans are outstanding under the revolving credit facility.
Our bank entered into an unsecured uncommitted Fed Funds Sales Agreement with a bank on
October 7, 2004. The maximum amount of funds which can be outstanding is $25.0 million of which no
amounts were outstanding at Ñscal year end 2004. On October 8, 2004, our bank entered into an
unsecured uncommitted Fed Funds Line of Credit agreement with another bank. The maximum amount
of funds which can be outstanding is $40.0 million of which no amounts were outstanding at Ñscal year
end 2004.
In addition to our credit facilities, we have from time to time accessed the private placement debt
markets. We currently have two such note issues outstanding. In September 2002, we issued
$125.0 million in senior unsecured notes bearing interest at a Ñxed rate of 4.95%, repayable in Ñve annual
installments of $25.0 million beginning on September 5, 2005. The entire principal amount under these
notes remains unpaid. In January 1995, we issued $20.0 million in senior unsecured notes bearing interest
at Ñxed rates ranging between 8.79% and 9.19% per year. The notes amortize, with principal and interest
payable in the amount of $0.3 million per month through January 1, 2007, thereafter decreasing to
$0.1 million per month through January 1, 2010. The aggregate principal balance of these notes as of
January 1, 2005 was $8.1 million. Both note issuances provide for prepayment penalties based on yield
maintenance formulas.
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