Cabela's 2004 Annual Report Download - page 68

59.1% of our net income, in the third and fourth Ñscal quarters, respectively. We incur signiÑcant
additional expenses in the third and fourth Ñscal quarters due to higher customer purchase volumes and
increased staÇng. If we miscalculate the demand for our products generally or for our product mix during
these two quarters, our revenues could decline, which would harm our Ñnancial performance. In addition,
abnormally warm weather conditions during the third and fourth Ñscal quarters can reduce sales of many
of the products normally sold during this time period and inclement weather can reduce store traÇc or
cause us to temporarily close stores causing a reduction in revenues. Because a substantial portion of our
operating income is derived from our third and fourth Ñscal quarter revenues, a shortfall in expected third
and fourth Ñscal quarter revenues would cause our annual operating results to suÅer signiÑcantly.
A decline in discretionary consumer spending could reduce our revenues.
Our revenues depend on discretionary consumer spending, which may decrease due to a variety of
factors beyond our control, including:
‚ unfavorable general business conditions;
‚ increases in interest rates;
‚ increases in inÖation;
‚ war, terrorism or fears of war or terrorism;
‚ increases in consumer debt levels and decreases in the availability of consumer credit;
‚ adverse or unseasonable weather conditions;
‚ adverse changes in applicable laws and regulations;
‚ increases in taxation;
‚ adverse unemployment trends; and
‚ other factors that adversely inÖuence consumer conÑdence and spending.
Our customers' purchases of discretionary items, including our products, could decline during periods
when disposable income is lower or periods of actual or perceived unfavorable economic conditions. If this
occurs, our revenues would decline.
If we lose key management or are unable to attract and retain the talent required for our business, our
operating results could suÅer.
Our future success depends to a signiÑcant degree on the skills, experience and eÅorts of Dennis
Highby, our President and Chief Executive OÇcer, and other key personnel including our senior executive
management and merchandising teams. With the exception of our Chairman, Richard N. Cabela, and our
Vice Chairman, James W. Cabela, none of our senior management or directors have employment
agreements other than our Management Change of Control Severance Agreements. We do not carry key-
man life insurance on any of our executives or key management personnel. In addition, our corporate
headquarters is located in a sparsely populated rural area which may make it diÇcult to attract and retain
qualiÑed individuals for key management positions. The loss of the services of any of these individuals or
the inability to attract and retain qualiÑed individuals for our key management positions could cause our
operating results to suÅer.
Our business depends on our ability to meet our labor needs and if we are unable to do so, our
destination retail store expansion strategy may be delayed and our revenue growth may suÅer.
Our success depends on hiring, training, managing and retaining quality managers, sales associates and
employees in our destination retail stores and customer care centers. Our corporate headquarters,
distribution centers, return center and some of our destination retail stores are located in sparsely
populated rural areas. It may be diÇcult to attract and retain qualiÑed personnel, especially management
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