Cabela’s Incorporated (NYSE:CAB) today reported financial results for third quarter fiscal 2016. The Company accelerated the timing of its earnings press release so that it could provide financial information to certain third parties in connection with the pending acquisition of the Company by Bass Pro Shops.

For the quarter, total revenue increased 7.6% to $996.5 million; revenue from retail store sales increased 8.1% to $688.6 million; Internet and catalog sales increased 3.6% to $167.4 million; and Financial Services revenue increased 8.8% to $134.5 million. During the period, adjusted for the shift in weeks, U.S. comparable store sales decreased 1.8% and consolidated comparable store sales decreased 2.3%.

For the quarter, net income decreased 35.4% to $28.2 million compared to $43.7 million in the year ago quarter, and earnings per diluted share were $0.41 compared to $0.62 in the year ago quarter. Adjusted for certain items, the Company reported third quarter net income of $36.8 million and earnings per diluted share of $0.53 as compared to net income of $50.3 million and earnings per diluted share of $0.71 in the year ago quarter. Third quarter 2016 GAAP results included impairment and restructuring charges and other items totaling a $0.12 reduction in earnings per diluted share. See the supporting schedules to this earnings release labeled “Reconciliation of GAAP Reported to Non-GAAP Adjusted Financial Measures” for a reconciliation of the GAAP to non-GAAP financial measures.

“During the third quarter, we successfully drove sales growth in several of our key merchandise categories through an aggressive promotional and markdown cadence; however, these promotional activities also resulted in a decrease in merchandise gross margins and were the primary contributor to the profitability shortfall,” said Tommy Millner, Cabela’s Chief Executive Officer. “Importantly, we saw the success of a variety of expense leverage efforts, and we continue to be excited about the Company’s announcement of our combination with Bass Pro Shops, which is expected to be completed in the first half of 2017.”

For the quarter, consolidated comparable store sales decreased 2.3% and U.S. comparable store sales decreased 1.8% as compared to the same quarter a year ago. Comparable store sales strength in firearms and shooting related categories as well as the camping, powersports, and optics categories was more than offset by continued softness in our apparel categories. Internet and catalog sales increased 3.6% in the quarter as a result of strength in fishing, camping, optics, powersports and shooting related categories.

Merchandise gross margins decreased by 420 basis points in the quarter to 31.4% compared to 35.6% in the same quarter a year ago. This decrease was primarily attributable to more aggressive pricing, increased discounts, merchandise mix, and efforts to right size inventory levels. A more aggressive approach to price, promotion and discounting was responsible for approximately 230 basis points of the overall decrease in merchandise gross margin. Merchandise mix was responsible for approximately 90 basis points of the overall decrease and efforts to right size inventory levels were responsible for approximately 50 basis points of the overall decrease.

Expense leverage initiatives continued to generate meaningful contributions to profitability. For the quarter, GAAP basis SD&A expenses as a percentage of total revenue decreased 20 basis points to 35.8% as compared to 36.0% in the same quarter a year ago. On a Non-GAAP basis SD&A expenses as a percentage of total revenue decreased 90 basis points to 34.6% as compared to 35.5% in the same quarter a year ago.

“We have been very pleased with our expense and process improvement initiatives which have continued to exceed our expectations,” Millner said. “It is important to note that the third quarter marks the fourth consecutive quarter of expense leverage at Cabela’s. These efforts span across the entire organization and I commend our teams for executing the implementation of these profitability enhancing improvements throughout the business.”

Cabela’s CLUB had an excellent quarter despite an increase in the loan loss reserve. Due to higher delinquency rates, the reserve for loan losses increased by $18.5 million in the quarter. For the quarter, growth in the average number of active credit card accounts was 6.8% and growth in average balance per active credit card account was 7.6% as compared to the same period a year ago. The average balance of credit card loans grew 14.8% to over $5.2 billion as compared to $4.6 billion in the year ago quarter. For the quarter, net charge-offs were 2.21%. Third quarter Financial Services revenue increased 8.8% over the year ago quarter. This increase was primarily driven by increases in interest and fee income as well as interchange income, both of which were partially offset by increases in the provision for loan losses as well as interest expense.

As a reminder, Cabela’s will not host a conference call with analysts and investors or provide guidance in connection with the results and does not plan to do so for future quarters while the acquisition of the Company by Bass Pro Shops is pending.

About Cabela’s Incorporated

Cabela’s Incorporated, headquartered in Sidney, Nebraska, is a leading specialty omni-channel retailer of hunting, fishing, camping, shooting sports, and related outdoor merchandise. Since the Company’s founding in 1961, Cabela’s® has grown to become one of the most well-known outdoor recreation brands in the world, and has long been recognized as the World’s Foremost Outfitter®. Cabela’s offers a wide and distinctive selection of high-quality outdoor products at competitive prices while providing superior customer service. Cabela’s also issues the Cabela’s CLUB® Visa credit card, which serves as its primary customer loyalty rewards program. Cabela’s stock is traded on the New York Stock Exchange under the symbol “CAB”.

Caution Concerning Forward-Looking Statements

Statements in this press release that are not historical or current fact are “forward-looking statements” that are based on the Company’s beliefs, assumptions, and expectations of future events, taking into account the information currently available to the Company. Such forward-looking statements include, but are not limited to, the Company’s statements regarding its proposed merger with Bass Pro Shops being completed in the first half of 2017. Forward-looking statements involve risks and uncertainties that may cause the Company’s actual results, performance, or financial condition to differ materially from the expectations of future results, performance, or financial condition that the Company expresses or implies in any forward-looking statements. These risks and uncertainties include, but are not limited to: the satisfaction of the conditions precedent to the consummation of the proposed merger by and among Bass Pro Group, LLC, Prairie Merger Sub, Inc., a wholly owned subsidiary of Bass Pro Group, LLC, and the Company, including, without limitation, the receipt of stockholder and regulatory approvals; unanticipated difficulties or expenditures relating to the proposed merger; legal proceedings, judgments, or settlements, including those that may be instituted against the Company, the Company’s board of directors, executive officers, and others following the announcement of the proposed merger; disruptions of current plans and operations caused by the announcement and pendency of the proposed merger; potential difficulties in employee retention due to the announcement and pendency of the proposed merger; and the response of customers, suppliers, business partners, and regulators to the announcement of the proposed merger; the state of the economy and the level of discretionary consumer spending, including changes in consumer preferences, demand for firearms and ammunition, and demographic trends; adverse changes in the capital and credit markets or the availability of capital and credit; the Company’s ability to successfully execute its omni-channel strategy; increasing competition in the outdoor sporting goods industry and for credit card products and reward programs; the cost of the Company’s products, including increases in fuel prices; the availability of the Company’s products due to political or financial instability in countries where the goods the Company sells are manufactured; supply and delivery shortages or interruptions, and other interruptions or disruptions to the Company’s systems, processes, or controls, caused by system changes or other factors; increased or adverse government regulations, including regulations relating to firearms and ammunition; the Company’s ability to protect its brand, intellectual property, and reputation; the Company’s ability to prevent cybersecurity breaches and mitigate cybersecurity risks; the outcome of litigation, administrative, and/or regulatory matters (including the ongoing audits by tax authorities and compliance examinations by the Federal Deposit Insurance Corporation); the Company’s ability to manage credit, liquidity, interest rate, operational, legal, regulatory capital, and compliance risks; the Company’s ability to increase credit card receivables while managing credit quality; the Company’s ability to securitize its credit card receivables at acceptable rates or access the deposits market at acceptable rates; the impact of legislation, regulation, and supervisory regulatory actions in the financial services industry; and other risks, relevant factors, and uncertainties identified in the Company’s filings with the SEC (including the information set forth in the “Risk Factors” section of the Company’s Form 10-K for the fiscal year ended January 2, 2016, and Form 10-Q for the quarterly period ended April 2, 2016), which filings are available at the Company’s website at www.cabelas.com and the SEC’s website at www.sec.gov. Given the risks and uncertainties surrounding forward-looking statements, you should not place undue reliance on these statements. The Company’s forward-looking statements speak only as of the date they are made. Other than as required by law, the Company undertakes no obligation to update or revise forward-looking statements, whether as a result of new information, future events, or otherwise.

CABELA’S INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Dollars in Thousands Except Earnings Per Share)
(Unaudited)
 
  Three Months Ended   Nine Months Ended
October 1,
2016		   September 26,
2015		 October 1,
2016		   September 26,
2015
Revenue:
Merchandise sales $ 855,903 $ 798,455 $ 2,362,021 $ 2,202,177
Financial Services revenue 134,486 123,633 410,390 371,489
Other revenue 6,106   4,435   18,643   16,209  
Total revenue 996,495   926,523   2,791,054   2,589,875  
Cost of revenue:
Merchandise costs (exclusive of depreciation and amortization) 587,017 514,494 1,602,418 1,433,707
Cost of other revenue 2,453   —   6,744   220  
Total cost of revenue (exclusive of depreciation and amortization) 589,470   514,494   1,609,162   1,433,927  
 
Selling, distribution, and administrative expenses 356,340 333,497 1,015,211 969,493
Impairment and restructuring charges 1,454   5,587   5,385   5,587  
 
Operating income 49,231 72,945 161,296 180,868
 
Interest expense, net (6,052 ) (6,341 ) (23,568 ) (14,703 )
Other non-operating income, net 880   1,420   4,561   5,185  
 
Income before provision for income taxes 44,059 68,024 142,289 171,350
Provision for income taxes 15,819   24,316   53,401   60,811  
Net income $ 28,240   $ 43,708   $ 88,888   $ 110,539  
 
Earnings per basic share $ 0.41   $ 0.63   $ 1.30   $ 1.56  
Earnings per diluted share $ 0.41   $ 0.62   $ 1.29   $ 1.54  
 
Basic weighted average shares outstanding 68,469,845   69,914,906   68,269,130   70,750,743  
Diluted weighted average shares outstanding 69,071,494   70,710,261   68,879,148   71,653,379  
CABELA’S INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands Except Par Values)
(Unaudited)
     
October 1,
2016		 January 2,
2016		 September 26,
2015
ASSETS
CURRENT
Cash and cash equivalents $ 136,534 $ 315,066 $ 83,178
Restricted cash of the Trust 348,759 40,983 36,894
Accounts receivable, net 28,013 79,330 27,890

Credit card loans (includes restricted credit card loans of the Trust of $5,266,469, $5,066,660, and $4,615,556),
net of allowance for loan losses of $102,497, $75,911, and $65,962

5,190,104 5,035,267 4,576,997
Inventories 997,061 819,271 1,065,302
Prepaid expenses and other current assets 128,553 117,330 125,600
Income taxes receivable and deferred income taxes (at September 26, 2015, only) 46,241   77,698   164,523  
Total current assets 6,875,265 6,484,945 6,080,384
Property and equipment, net 1,826,414 1,811,302 1,822,672
Deferred income taxes 37,384 28,042 —
Other assets 144,082   138,715   120,857  
Total assets $ 8,883,145   $ 8,463,004   $ 8,023,913  
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT
Accounts payable, including unpresented checks of $11,410, $23,580, and $29,176 $ 297,851 $ 281,985 $ 365,763
Gift instruments, credit card rewards, and loyalty rewards programs 346,928 365,427 320,073
Accrued expenses and other liabilities 182,116 224,733 200,809
Time deposits 167,783 215,306 204,867
Current maturities of secured variable funding obligations of the Trust 75,000 655,000 45,000
Current maturities of secured long-term obligations of the Trust, net 1,359,379 509,673 254,811
Current maturities of long-term debt 68,452   223,452   223,472  
Total current liabilities 2,497,509 2,475,576 1,614,795
Long-term time deposits 1,008,891 664,593 683,081
Secured long-term obligations of the Trust, less current maturities, net 2,465,970 2,721,259 2,975,367
Long-term debt, less current maturities, net 820,674 635,898 785,936
Deferred income taxes — — 13,070
Other long-term liabilities 134,893 137,035 139,866
 
COMMITMENTS AND CONTINGENCIES
 
STOCKHOLDERS’ EQUITY
Preferred stock, $0.01 par value; Authorized – 10,000,000 shares; Issued – none — — —
Common stock, $0.01 par value:
Class A Voting, Authorized – 245,000,000 shares
Issued – 71,595,020 shares for all periods 716 716 716
Outstanding – 68,476,998, 67,818,715, and 69,553,315 shares
Additional paid-in capital 377,826 389,754 379,915
Retained earnings 1,740,750 1,651,862 1,573,071
Accumulated other comprehensive loss (36,381 ) (50,914 ) (40,743 )
Treasury stock, at cost – 3,118,022, 3,776,305, and 2,041,705 shares (127,703 ) (162,775 ) (101,161 )
Total stockholders’ equity 1,955,208   1,828,643   1,811,798  
Total liabilities and stockholders’ equity $ 8,883,145   $ 8,463,004   $ 8,023,913  
CABELA’S INCORPORATED AND SUBSIDIARIES
SELECTED FINANCIAL DATA
(Dollars in Thousands)
(Unaudited)
       
Three Months Ended Nine Months Ended
October 1,
2016		 September 26,
2015		 October 1,
2016		 September 26,
2015
 
Components of Total Consolidated Revenue:
Merchandise sales $ 855,903 $ 798,455 $ 2,362,021 $ 2,202,177
Financial Services revenue 134,486 123,633 410,390 371,489
Other revenue 6,106   4,435   18,643   16,209  
Total consolidated revenue as reported $ 996,495   $ 926,523   $ 2,791,054   $ 2,589,875  
 
As a Percentage of Total Consolidated Revenue:
Merchandise sales 85.9 % 86.2 % 84.6 % 85.1 %
Financial Services revenue 13.5 13.3 14.7 14.3
Other revenue 0.6   0.5   0.7   0.6  
Total 100.0 % 100.0 % 100.0 % 100.0 %
 
Operating Income by Segment:
Merchandising $ 2,365 $ 32,442 $ 3,994 $ 45,978
Financial Services 46,866   40,503   157,302   134,890  
Total consolidated operating income as reported $ 49,231   $ 72,945   $ 161,296   $ 180,868  
 
Operating Income by Segment as a Percentage of Segment Revenue:
Merchandising segment operating income 0.3 % 4.0 % 0.2 % 2.1 %
Financial Services segment operating income 36.3 34.2 39.9 37.8
Total operating income as a percentage of total segment revenue 4.9 7.9 5.8 7.0
CABELA’S INCORPORATED AND SUBSIDIARIES
COMPONENTS OF FINANCIAL SERVICES REVENUE
(Dollars in Thousands)
(Unaudited)

Financial Services revenue consists of activity from the Company’s credit card operations and is comprised of interest and fee income, interchange income, other non-interest income, interest expense, provision for loan losses, and customer rewards costs. The following table details the components and amounts of Financial Services revenue as reported for the periods presented below.

  Three Months Ended   Nine Months Ended
October 1,
2016		   September 26,
2015		 October 1,
2016		   September 26,
2015
 
Interest and fee income $ 155,343 $ 124,940 $ 436,271 $ 349,833
Interest expense (23,278 ) (18,198 ) (64,080 ) (50,628 )
Provision for loan losses (43,782 ) (28,152 ) (99,006 ) (57,213 )
Net interest income, net of provision for loan losses 88,283   78,590   273,185   241,992  
Non-interest income:
Interchange income 104,376 101,249 304,213 287,452
Other non-interest income 998   826   2,543   2,329  
Total non-interest income 105,374 102,075 306,756 289,781
Less: Customer rewards costs (59,171 ) (57,032 ) (169,551 ) (160,284 )
Financial Services revenue as reported $ 134,486   $ 123,633   $ 410,390   $ 371,489  

The following table sets forth the components of Financial Services revenue as reported as a percentage of average total credit card loans, including any accrued interest and fees, for the periods presented below.

  Three Months Ended   Nine Months Ended
October 1,
2016		   September 26,
2015		 October 1,
2016		   September 26,
2015
 
Interest and fee income 11.8 % 10.9 % 11.5 % 10.7 %
Interest expense (1.8 ) (1.6 ) (1.7 ) (1.5 )
Provision for loan losses (3.3 ) (2.5 ) (2.6 ) (1.8 )
Interchange income 8.0 8.9 8.1 8.8
Other non-interest income 0.1 0.1 0.1 0.1
Customer rewards costs (4.5 ) (5.0 ) (4.5 ) (4.9 )
Financial Services revenue as reported 10.3 % 10.8 % 10.9 % 11.4 %
CABELA’S INCORPORATED AND SUBSIDIARIES
KEY STATISTICS OF FINANCIAL SERVICES BUSINESS
(Unaudited)

The following tables show key statistics reflecting the performance of the Financial Services business for the periods presented below.

  Three Months Ended    
October 1,
2016		   September 26,
2015		 Increase (Decrease) % Change

(Dollars in Thousands Except Average Balance per Active Account)

 
Average balance of credit card loans (1) $ 5,247,068 $ 4,570,087 $ 676,981 14.8 %
Average number of active credit card accounts 2,071,570 1,940,307 131,263 6.8
Average balance per active credit card account (1) $ 2,533 $ 2,355 $ 178 7.6
Purchases on credit card accounts, net 5,428,296 5,201,712 226,584 4.4
Net charge-offs on credit card loans (1) 28,991 19,375 9,616 49.6
Net charge-offs as a percentage of average

credit card loans (1)

2.21 %   1.70 %   0.51 %    
(1) Includes accrued interest and fees
  Nine Months Ended    
October 1,
2016		   September 26,
2015		 Increase (Decrease) % Change

(Dollars in Thousands Except Average Balance per Active Account)

 
Average balance of credit card loans (1) $ 5,027,281 $ 4,364,535 $ 662,746 15.2 %
Average number of active credit card accounts 2,046,469 1,909,881 136,588 7.2
Average balance per active credit card account (1) $ 2,457 $ 2,285 $ 172 7.5
Purchases on credit card accounts, net 15,674,276 14,750,111 924,165 6.3
Net charge-offs on credit card loans (1) 82,854 54,888 27,966 51.0
Net charge-offs as a percentage of average

credit card loans (1)

2.20 %   1.68 %   0.52 %    
(1) Includes accrued interest and fees
CABELA’S INCORPORATED AND SUBSIDIARIES
RECONCILIATION OF GAAP REPORTED TO NON-GAAP ADJUSTED FINANCIAL MEASURES (1)
(Unaudited)

To supplement our consolidated statements of income presented in accordance with generally accepted accounting principles (“GAAP”), we are providing non-GAAP adjusted financial measures of operating results that exclude certain items. Selling, distribution, and administrative expenses; impairment and restructuring charges; operating income; operating income as a percentage of total revenue; other non-operating income, net; income before provision for income taxes; provision for income taxes; net income; and earnings per diluted share are presented below both as GAAP reported and non-GAAP financial measures excluding (i) consulting fees and certain expenses primarily related to our corporate restructuring initiative and review of strategic alternatives; (ii) a charge recognized pursuant to a preliminary lawsuit settlement; (iii) impairment and restructuring charges; (iv) receipt on a note receivable balance previously written off; (v) a penalty associated with the Company’s settlement with the SEC; and (vi) incremental expenses related to the transition and closing of the Company’s distribution center in Canada. In light of the nature and magnitude, we believe these items should be presented separately to enhance a reader’s overall understanding of the Company’s ongoing operations. These non-GAAP adjusted financial measures should be considered in conjunction with the GAAP financial measures.

We believe these non-GAAP adjusted financial measures provide useful supplemental information to investors regarding the underlying business trends and performance of our ongoing operations and are useful for period-over-period comparisons of such operations. In addition, we evaluate results using non-GAAP adjusted operating income, adjusted net income, and adjusted earnings per diluted share. These non-GAAP adjusted financial measures should not be considered in isolation or as a substitute for operating income, net income, earnings per diluted share, or any other measure calculated in accordance with GAAP. The following tables reconcile these financial measures to the related GAAP adjusted financial measures for the periods presented.

  Reconciliation of GAAP Reported to Non-GAAP Adjusted Financial Measures (1)
Three Months Ended
October 1, 2016   September 26, 2015
GAAP Basis as Reported   Non-GAAP Adjustments   Non-GAAP Amounts GAAP Basis as Reported   Non-GAAP Adjustments   Non-GAAP Amounts
(Dollars in Thousands Except Earnings Per Share)
 
Selling, distribution, and administrative expenses (2) $ 356,340 $ (11,838 ) $ 344,502 $ 333,497 $ (4,658 ) $ 328,839
 
Impairment and restructuring charges (3) $ 1,454 $ (1,454 ) $ — $ 5,587 $ (5,587 ) $ —
 
Operating income $ 49,231 $ 13,292 $ 62,523 $ 72,945 $ 10,245 $ 83,190
 
Operating income as a percentage of total revenue 4.9 % 1.4 % 6.3 % 7.9 % 1.1 % 9.0 %
 
Income before provision for income taxes $ 44,059 $ 13,292 $ 57,351 $ 68,024 $ 10,245 $ 78,269
 
Provision for income taxes (4) $ 15,819 $ 4,772 $ 20,591 $ 24,316 $ 3,668 $ 27,984
 
Net income $ 28,240 $ 8,520 $ 36,760 $ 43,708 $ 6,577 $ 50,285
 
Earnings per diluted share $ 0.41 $ 0.12 $ 0.53 $ 0.62 $ 0.09 $ 0.71

(footnotes follow on the next page)

CABELA’S INCORPORATED AND SUBSIDIARIES
RECONCILIATION OF GAAP REPORTED TO NON-GAAP ADJUSTED FINANCIAL MEASURES (Continued) (1)
(Unaudited)
  Reconciliation of GAAP Reported to Non-GAAP Adjusted Financial Measures (1)
Nine Months Ended
October 1, 2016   September 26, 2015
GAAP Basis as Reported   Non-GAAP Adjustments   Non-GAAP Amounts GAAP Basis as Reported   Non-GAAP Adjustments   Non-GAAP Amounts
(Dollars in Thousands Except Earnings Per Share)
 
Selling, distribution, and administrative expenses (2) $ 1,015,211 $ (23,933 ) $ 991,278 $ 969,493 $ (5,865 ) $ 963,628
 
Impairment and restructuring charges (3) $ 5,385 $ (5,385 ) $ — $ 5,587 $ (5,587 ) $ —
 
Operating income $ 161,296 $ 29,318 $ 190,614 $ 180,868 $ 11,452 $ 192,320
 
Operating income as a percentage of total revenue 5.8 % 1.0 % 6.8 % 7.0 % 0.4 % 7.4 %
 
Other non-operating income, net (5) $ 4,561 $ (477 ) $ 4,084 $ 5,185 $ — $ 5,185
 
Income before provision for income taxes $ 142,289 $ 28,841 $ 171,130 $ 171,350 $ 11,452 $ 182,802
 
Provision for income taxes (4) $ 53,401 $ 10,824 $ 64,225 $ 60,811 $ 4,065 $ 64,876
 
Net income $ 88,888 $ 18,017 $ 106,905 $ 110,539 $ 7,387 $ 117,926
 
Earnings per diluted share $ 1.29 $ 0.26 $ 1.55 $ 1.54 $ 0.10 $ 1.64

(1) The presentation includes non-GAAP financial measures. These non-GAAP financial measures are not prepared under any comprehensive set of accounting rules or principles, and do not reflect all of the amounts associated with the Company's results of operations as determined in accordance with GAAP.

(2) Consists of the following for the respective periods:

  Three Months Ended   Nine Months Ended
October 1,
2016		   September 26,
2015		 October 1,
2016		   September 26,
2015
Consulting fees and certain expenses primarily related to the Company’s corporate restructuring initiative and the review of strategic alternatives $ 11,838 $ 3,658 $ 20,083 $ 3,658
Charge related to a preliminary lawsuit settlement — — 3,850 —
Penalty associated with the Company’s settlement with the SEC — 1,000 — 1,000
Incremental expenses related to the transition and closing of the Company’s distribution center in Canada —   —   —   1,207
$ 11,838   $ 4,658   $ 23,933   $ 5,865
CABELA’S INCORPORATED AND SUBSIDIARIES
RECONCILIATION OF GAAP REPORTED TO NON-GAAP ADJUSTED FINANCIAL MEASURES (Continued) (1)
(Unaudited)

(3) Consists of the following for the respective periods:

  Three Months Ended   Nine Months Ended
October 1,
2016		   September 26,
2015		 October 1,
2016		   September 26,
2015
Charges for employee severance agreements and termination benefits related to our corporate restructuring and reduction in the number of personnel $ 661 $ 5,377 $ 3,997 $ 5,377
Impairment losses on property, equipment, and other assets 793   210   1,388   210
$ 1,454   $ 5,587   $ 5,385   $ 5,587

(4) For all periods presented, reflects the estimated income tax provision on the non-GAAP adjusted income before provision for income taxes. The effective income tax rate used for the non-GAAP financial measures, which were the same percentages used for the GAAP reported amounts, was 35.9% and 37.5%, respectively, for the three and nine months ended October 1, 2016, and 35.8% and 35.5%, respectively, for the three and nine months ended September 26, 2015.

(5) Reflects funds received on a note receivable where the balance was written off in a previous period and treated as a non-GAAP item.