We are cautiously optimistic for 2010 - Cabela's CEO
19 Feb '10
5 min read
"We also significantly improved return on invested capital for the year," Millner said. "Return on invested capital increased 150 basis points to 11.1% at the end 2009 as compared to 9.6% at year end 2008. Increases in return on invested capital were mainly a result of strengthening our balance sheet and converting non-productive assets into cash. Throughout the year, we significantly reduced inventory levels, sold two non-core businesses, improved working capital, reduced debt levels, and generated a record $294 million of cash flow from operations."
"World's Foremost Bank also had a very good year despite the economic turmoil and significant increases in unemployment," Millner said. "For the year, managed revenue as a percent of managed credit card loans declined just 20 basis points despite a 210 basis point increase in our provision for loan losses. Charge-offs continue to be below industry average due to our conservative underwriting standards. For the year, total revenue increased 7.8% and average active accounts grew 9.1%."
"Another important long-term initiative is expanding merchandise gross margins," Millner said. "For the year, merchandise gross margins declined 70 basis points to 34.6%. This is significantly less margin deterioration than we experienced last year. Improving merchandising gross margins will be a key focus over the next several years and will be a significant contributor to further improving retail profitability."
"Throughout 2009, we improved operations in our retail business," Millner said. "As a result we have gained sufficient confidence to announce that we are in final negotiations to open two new stores in the United States. Both of these stores are expected to open in 2011 and will be our smaller, more efficient, next generation store format. We will announce more specific details when negotiations are complete."
"Additionally, since our acquisition of S.I.R. Warehouse Sports Store in Canada in 2007, we have been upgrading the infrastructure for our further expansion into Canada," Millner said. "With these efforts well underway, and our very strong results in Canada as revenue more than doubled in 2009, we are pleased to announce that we are also in final negotiations to open two new stores in Canada; both scheduled to open in 2011. Both stores will be our next generation store format, and we are very excited about expanding further into the Canadian market."
"We are cautiously optimistic for 2010 and are comfortable with current external estimates related to both revenue and earnings per share," Millner said. "This takes into consideration the new credit card regulation/legislation and net charge-offs at World's Foremost Bank being between 5.75 and 6.25%."
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