CAB Cabelas Class A (delisted)

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

SCHEDULE 14A

(Rule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.     )

 

 

Filed by the Registrant  ☒                             Filed by a party other than the Registrant  ☐

Check the appropriate box:

 

☐		Preliminary Proxy Statement
☐		Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
☐		Definitive Proxy Statement
☒		Definitive Additional Materials
☐		Soliciting Material Under §240.14a-12

Cabela’s Incorporated

(Name of Registrant as Specified In Its Charter)

 

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

 

☒		No fee required.
☐		Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
		(1)		Title of each class of securities to which transaction applies:
		(2)		Aggregate number of securities to which transaction applies:
		(3)		Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
		(4)		Proposed maximum aggregate value of transaction:
		(5)		Total fee paid:
☐		Fee paid previously with preliminary materials.
☐		Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
		(1)		Amount previously paid:
		(2)		Form, Schedule or Registration Statement No.:
		(3)		Filing party:
		(4)		Date Filed:

 

 

 

---

The following information was filed with the Securities and Exchange Commission on June 22, 2017 by Cabela’s Incorporated on Form 8-K (Item 8.01 Other Events):

Litigation Related to the Merger.

As previously disclosed, on October 3, 2016, Cabela’s Incorporated, a Delaware corporation (the “Company”), entered into an Agreement and Plan of Merger, by and among the Company, Bass Pro Group, LLC, a Delaware limited liability company (“Parent”), and Prairie Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Parent (“Sub”), which was amended by the Amendment to Agreement and Plan of Merger, dated as of April 17, 2017 (and as further amended from time to time, the “Merger Agreement”). The Merger Agreement provides for Sub to merge with and into the Company, causing the Company to become a wholly owned subsidiary of Parent (the “Merger”).

The following complaints have been filed in the United States District Court for the District of Delaware: (i) on June 7, 2017, a class action lawsuit captioned Adam Klein, Individually And On Behalf Of All Others Similarly Situated v. Cabela’s Incorporated, James W. Cabela, Theodore M. Armstrong, Michael R. McCarthy, John H. Edmondson, Beth M. Pritchard, Thomas L. Millner, James F. Wright, Peter S. Swinburn, Dennis Highby, and Donna M. Milrod, Case No. 1:17-cv-00698-UNA (the “Klein Complaint”); (ii) on June 7, 2017, a class action lawsuit captioned Bernard Garcarz, individually and on behalf of all others similarly situated v. Cabela’s, Inc., Theodore M. Armstrong, James W. Cabela, John H. Edmondson, Dennis Highby, Michael R. McCarthy, Donna M. Milrod, Thomas L. Millner, Beth M. Pritchard, Peter S. Swinburn, and James F. Wright, Case No. 1:99-mc-09999 (the “Garcarz Complaint”); (iii) on June 9, 2017, a class action lawsuit captioned Christopher A. Brown, Individually and on Behalf of All Others Similarly Situated v. Cabela’s Incorporated, James W. Cabela, Thomas L. Millner, Theodore M. Armstrong, John H. Edmondson, Dennis Highby, Michael R. McCarthy, Donna M. Milrod, Beth M. Pritchard, James F. Wright, and Peter S. Swinburn, Case No. 1:17-cv-00711-UNA (the “Brown Complaint”) and (iv) on June 14, 2017, a class action lawsuit captioned John Solak, On Behalf of Himself and All Others Similarly Situated v. Cabela’s Incorporated, James W. Cabela, Thomas L. Millner, Michael R. McCarthy, Dennis Highby, Theodore M. Armstrong, John H. Edmondson, Beth M. Pritchard, Donna M. Milrod, James F. Wright, and Peter Swinburn, Case No. 1:17-cv-00763 (the “Solak Complaint” and, together with the Klein Complaint, the Garcarz Complaint and the Brown Complaint, the “Merger Litigation”). The Merger Litigation relates to the Merger Agreement and the definitive proxy statement filed with the Securities and Exchange Commission (the “SEC”) on June 5, 2017 (the “Proxy Statement”) in connection with the Merger.

The Company believes that the claims asserted in the Merger Litigation are without merit and intends to defend against the Merger Litigation vigorously. However, in order to moot the plaintiffs’ unmeritorious disclosure claims, alleviate the costs, risks and uncertainties inherent in litigation and provide additional information to its stockholders, the Company has determined to voluntarily supplement the Proxy Statement as described in this Current Report on Form 8-K. Nothing in this Current Report on Form 8-K shall be deemed an admission of the legal necessity or materiality under applicable laws of any of the disclosures set forth herein. To the contrary, the Company specifically denies all allegations in the Merger Litigation that any additional disclosure was or is required.

Supplemental Disclosures.

The following disclosures supplement the disclosures contained in the Proxy Statement and should be read in conjunction with the disclosures contained in the Proxy Statement, which should be read in its entirety. To the extent the information set forth herein differs from or updates information contained in the Proxy Statement, the information set forth herein shall supersede or supplement the information in the Proxy Statement. All page references are to pages in the Proxy Statement, and terms used below, unless otherwise defined, have the meanings set forth in the Proxy Statement.

The disclosure beginning on page 86 of the Proxy Statement under the heading “Financial Projections” is hereby amended and restated in its entirety as follows:

The following table summarizes the original financial projections:

---

All Projections Prepared in February 2016, except as indicated

Fiscal Quarters and Years (U.S. dollars in millions, except per share amounts)

 

		Fourth Quarter 2016E				2016E				Fourth Quarter 2016E (Prepared in August 2016)				2016E (Prepared in August 2016)				2017E				2018E				2019E				2020E
Net Sales			N/A			$	4,317			$	1,494			$	4,350			$	4,543			$	4,757			$	5,033			$	5,355
EBITDA (1)			198				540				202				536				615				687				764				858
Adjusted Net Income (2)			N/A				224				99				221				265				303				344				396
Adjusted Net Income Per Diluted Share (EPS) (2)			N/A				3.24				1.43				3.21				3.84				4.39				4.99				5.74
Unlevered Free Cash Flow (3)			N/A				N/A				89				N/A				361				332				310				344

 

(1)

Represents earnings before interest, taxes, depreciation and amortization. Stock-based compensation was treated as a cash expense and was projected to be $6 million for the fourth quarter of fiscal 2016, $25 million in fiscal year 2016, $27 million in fiscal year 2017, $28 million in fiscal year 2018, $29 million in fiscal year 2019 and $30 million in fiscal year 2020. Adjustments were made for one-time, non-recurring items only for the first, second and third fiscal quarters of 2016. No such one-time, non-recurring items existed for the fourth fiscal quarter of 2016 and for fiscal 2017 through 2020.

 

(2)	Net income and net income per diluted share figures for the first, second and third fiscal quarters of 2016 were adjusted for one-time, non-recurring items.

 

(3)

Calculated by Guggenheim Securities for purposes of its discounted cash flow analysis of the Company from the financial projections provided by the Company’s management described above as tax-effected EBIT (which is EBITDA, less depreciation and amortization), plus depreciation and amortization, less capital expenditures, change in net working capital and other net assets.

Set forth in the below table is a reconciliation of Adjusted Net Income, Adjusted Net Income Per Diluted Share (EPS), EBITDA and Unlevered Free Cash Flow, as included in the original financial projections, for the periods indicated below:

All Projections Prepared in February 2016, except as indicated

Fiscal Quarters and Years (U.S. dollars in millions, except per share amounts)

 

		Fourth Quarter 2016E				2016E				Fourth Quarter 2016E (Prepared in August 2016)				2016E (Prepared in August 2016)				2017E				2018E				2019E				2020E
Net Income			96				224				99				210				265				303				344				396
Strategic Review and Restructuring Professional Fees			0				0				0				6				0				0				0				0
Severance			0				0				0				3				0				0				0				0
California Litigation Settlement			0				0				0				2				0				0				0				0

---

Adjusted Net Income			96				224				99				221				265				303				344				396
Interest			8				35				8				34				36				37				38				39
Income tax provision			57				134				58				134				157				180				207				239
EBIT			161				393				165				389				458				520				589				674
Depreciation and Amortization			37				147				37				147				157				167				175				184
EBITDA (1)			198				540				202				536				615				687				764				858
EBIT			161				393				165				N/A				458				520				589				674
Taxes			(60	)			(147	)			(62	)			N/A				(171	)			(195	)			(221	)			(253	)
Unlevered Net Income			101				246				103				N/A				287				325				368				421
Depreciation and Amortization			37				147				37				N/A				157				167				175				184
Capital Expenditures			(41	)			(234	)			(37	)			N/A				(235	)			(262	)			(290	)			(314	)
Change in Working Capital (merchandising business)			333				150				279				N/A				148				107				66				70
Change in Working Capital (financial services business)			(296	)			(71	)			(294	)			N/A				5				(4	)			(8	)			(15	)
Change in Other Net Assets			(8	)			1				1	(3)			N/A				(1	) (3)			(1	)			(1	)			(2	) (3)
Unlevered Free Cash Flow (2)			126				239				89				N/A	(4)			361				332				310				344
Net Income Per Diluted Share (EPS)			1.40				3.24				1.43				3.05				3.84				4.39				4.99				5.74
Strategic Review and Restructuring Professional Fees			0				0				0				0.09				0				0				0				0
Severance			0				0				0				0.04				0				0				0				0
California Settlement			0				0				0				0.03				0				0				0				0
Adjusted Net Income Per Diluted Share (EPS)			1.40				3.24				1.43				3.21				3.84				4.39				4.99				5.74

 

(1)

Stock-based compensation was treated as a cash expense and was projected to be $6 million for the fourth quarter of fiscal 2016, $25 million in fiscal year 2016, $27 million in fiscal year 2017, $28 million in fiscal year 2018, $29 million in fiscal year 2019 and $30 million in fiscal year 2020. Adjustments were made for one-time, non-recurring items only for the first, second and third fiscal quarters of 2016. No such one-time, non-recurring items existed for the fourth fiscal quarter of 2016 and for fiscal 2017 through 2020.

 

(2)	Calculated by Guggenheim Securities for purposes of its discounted cash flow analysis of the Company from the financial projections provided by the Company’s management described above.

 

(3)	Differences from calculations disclosed in the section entitled “Forward-Looking Financial Information” are the result of differences in rounding conventions.

 

(4)	Calculations related to Unlevered Free Cash Flow were not prepared in August 2016, as Unlevered Free Cash Flow for such period was not required for purposes of Guggenheim Securities’ discounted cash flow analysis.

---

The following table summarizes the updated financial projections:

All Projections Prepared in March 2017

Fiscal Quarters and Years (U.S. dollars in millions, except per share amounts)

 

		2017E				2018E				2019E				2020E				2021E
Net Sales (1)		$	4,226			$	4,408			$	4,640			$	4,887			$	5,190
EBITDA (1) (2)			550				586				657				700				773
Net Income			232				246				283				303				341
Net Income Per Diluted Share (EPS)			3.36				3.56				4.10				4.39				4.94
Unlevered Free Cash Flow (1) (3)			331				267				168				158				176

 

(1)

For purposes of its discounted cash flow analysis, Guggenheim Securities used measures of cash flow that the Company was forecasted to generate during the last eleven months of fiscal year 2017 through full fiscal year 2021 based on the financial projections. Such measures for the last eleven months of fiscal year 2017 were as follows, which remain subject to the explanatory notes set forth in the other footnotes to this table as applicable: (1) $3,970 million of net sales; (2) $523 of EBITDA; and (3) $377 of unlevered free cash flow.

 

(2)

Represents earnings before interest, taxes, depreciation and amortization. Stock-based compensation was treated as a cash expense and was projected to be $25 million in each of the fiscal years 2017 through 2021. Adjustments were made for one-time, non-recurring items only for the first, second and third fiscal quarters of 2016. No such one-time, non-recurring items existed for the fourth fiscal quarter of 2016 and for fiscal 2017 through 2020.

 

(3)

Calculated by Guggenheim Securities for purposes of its discounted cash flow analysis of the Company from the financial projections provided by the Company’s management described above as tax-effected EBIT (which is EBITDA, less depreciation and amortization), plus depreciation and amortization, less capital expenditures, change in net working capital for the merchandising business, incremental WFB equity requirement and other net assets.

Set forth in the below table is a reconciliation of EBITDA and Unlevered Free Cash, as included in the updated financial projections, for the periods indicated below:

All Projections Prepared in March 2017

Fiscal Quarters and Years (U.S. dollars in millions, except per share amounts)

 

		2017E				2018E				2019E				2020E				2021E
Net Income			232				246				283				303				341
Interest			30				34				35				36				37
Income Tax Provision			141				150				173				185				208
EBIT			403				430				491				524				586
Depreciation and Amortization			147				156				166				176				187	(4)
EBITDA (1) (2)			550				586				657				700				773
EBIT			403				430				491				524				586

---

Taxes			(153	)			(163	)			(186	)			(198	)			(222	)
Unlevered Net Income			250				267				305				326				364
Depreciation and Amortization			147				156				166				176				187	(4)
Capital Expenditures			(104	)			(164	)			(241	)			(270	)			(298	)
Change in Working Capital (merchandising business)			135				28				31				23				37
Incremental WFB Equity Requirement			(99	)			(87	)			(92	)			(96	)			(115	)
Change in Other Net Assets			2				67	(4)			(1	) (4)			(1	) (4)			1	(4)
Unlevered Free Cash Flow (1) (3)			331				267				168				158				176

 

(1)

For purposes of its discounted cash flow analysis, Guggenheim Securities used measures of cash flow that the Company was forecasted to generate during the last eleven months of fiscal year 2017 through full fiscal year 2021 based on the financial projections. Such measures for the last eleven months of fiscal year 2017 were as follows, which remain subject to the explanatory notes set forth in the other footnotes to this table as applicable: (1) $3,970 million of net sales; (2) $523 of EBITDA; and (3) $377 of unlevered free cash flow.

 

(2)

Stock-based compensation was treated as a cash expense and was projected to be $25 million in each of the fiscal years 2017 through 2021. Adjustments were made for one-time, non-recurring items only for the first, second and third fiscal quarters of 2016. No such one-time, non-recurring items existed for the fourth fiscal quarter of 2016 and for fiscal 2017 through 2020.

 

(3)	Calculated by Guggenheim Securities for purposes of its discounted cash flow analysis of the Company from the financial projections provided by the Company’s management described above.

 

(4)	Differences from calculations disclosed in the section entitled “Forward-Looking Financial Information” are the result of differences in rounding conventions.

NEITHER THE COMPANY NOR ANY OF ITS AFFILIATES INTENDS TO, AND EACH OF THEM DISCLAIMS ANY OBLIGATION TO, UPDATE, CORRECT OR OTHERWISE REVISE THE FINANCIAL PROJECTIONS TO REFLECT CIRCUMSTANCES EXISTING OR EVENTS OCCURRING AFTER THE RESPECTIVE DATES WHEN THE FINANCIAL PROJECTIONS WERE PREPARED OR TO REFLECT THE EXISTENCE OF FUTURE CIRCUMSTANCES OR THE OCCURRENCE OF FUTURE EVENTS, EVEN IN THE EVENT THAT ANY OR ALL OF THE ASSUMPTIONS UNDERLYING THE FINANCIAL PROJECTIONS ARE INACCURATE OR NO LONGER APPROPRIATE.

Additional Information and Where to Find It

This communication does not constitute an offer to sell or the solicitation of an offer to buy the securities of the Company or the solicitation of any vote or approval. This communication is being made in respect of the proposed Merger, among other things. The proposed Merger is being submitted to the stockholders of the Company for their consideration. In connection therewith, the Company has filed relevant materials with the SEC, including the Proxy Statement, regarding the proposed Merger, which has been mailed to the stockholders of the Company. BEFORE MAKING ANY VOTING OR ANY INVESTMENT DECISION, INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE PROXY STATEMENT REGARDING THE PROPOSED MERGER AND ANY OTHER RELEVANT DOCUMENTS FILED OR TO BE FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY, BECAUSE THEY CONTAIN IMPORTANT INFORMATION. Investors and security holders may obtain free copies of the Proxy Statement regarding the proposed Merger, any amendments or supplements thereto and other documents containing important information about the Company through the website maintained by the SEC at www.sec.gov. Copies of the documents filed with the SEC by the Company are available free of charge on the Company’s website at www.cabelas.com under the heading “SEC Filings” in the “Investor Relations” portion of the Company’s website. Stockholders of the Company may also obtain a free copy of the Proxy Statement regarding the proposed Merger and any filings with the SEC that are incorporated by reference in such Proxy Statement by contacting the Company’s Investor Relations Department at (308) 255-7428.

Participants in the Solicitation

The Company and its directors, executive officers and certain other members of management and employees may be deemed to be participants in the solicitation of proxies in connection with the proposed Merger. Information about the directors and executive officers of the Company is set forth in its definitive proxy statement for its 2016 Annual Meeting of Stockholders, which was filed with the SEC on November 17, 2016, and in subsequent documents filed with the SEC, each of which can be obtained free of charge from the sources indicated above. Other information regarding the participants in the proxy solicitation of the stockholders of the Company and a description of their direct and indirect interests, by security holdings or otherwise, is contained in the Proxy Statement regarding the proposed Merger and may be contained in other relevant materials filed with the SEC.