Academy Sports and Outdoors, Inc. (Nasdaq: ASO) ("Academy" or the
"Company") today announced its financial results for the second
quarter ended July 31, 2021. Unless otherwise indicated,
comparisons are to the same period in the prior fiscal year.
Second Quarter 2021 ResultsNet
sales increased 11.5% to an all-time quarterly high of $1.79
billion. When compared to the same quarter in 2019, sales increased
44.8%. Comparable sales grew 11.4% on top of 27.0% last year,
making it the eighth consecutive quarter of positive comparable
sales. The sales growth was driven by the sustained strength in the
sporting goods and outdoor recreation market, improving in-stocks
and strong consumer demand across all product categories. Sales
were particularly strong in Apparel, Footwear, Field, Fitness and
Team Sports. E-commerce sales declined slightly (0.9%) after
growing 210.3% in the prior year quarter. When compared to the
second quarter of 2019, E-commerce sales increased 207.2%.
Gross margin increased 29.4% to $642.5 million,
the highest quarterly gross profit in the Company's history. The
gross margin rate improved by 500 basis points to 35.9%. This
growth was primarily driven by stronger merchandise margins from a
favorable product mix shift, higher average unit retails and less
promotional activity.
Selling, general and administrative ("SG&A")
expenses were 21.7% of sales, a 220 basis point increase. The
change was a result of higher advertising and payroll expenses that
had been pared back last year due to the pandemic as well as
non-recurring stock compensation and payroll expenses associated
with accelerated share vesting. Excluding the non-recurring
expenses, SG&A expenses would have been 19.2% of sales.
Pre-tax income increased by 42.8% to $240.9
million compared to $168.7 million.
Net income was $190.5 million compared to $167.7
million. Diluted earnings per share were $1.99 compared to $2.25
per share. The decline in earnings per share was the result of an
increase in the number of shares outstanding and higher federal
income tax. Pro forma adjusted net income, which excludes the
impact of certain non-cash and extraordinary items, increased 67.1%
to $224.6 million. Pro forma diluted earnings per share increased
29.3% to $2.34 compared to $1.81 per share.
"The Academy Sports + Outdoors team delivered
the best quarterly financial results in the Company’s history as we
surpassed the very strong store comparables from last year," said
Ken Hicks, Chairman, President and Chief Executive Officer. "We
plan to build on this continued success by further sharpening our
focus on the fundamentals of the business and investing in our
strategic initiatives with the goal of adding new customers,
gaining market share and driving sales and profit growth. I am also
excited to announce the authorization of our new share repurchase
program. This program signifies the current strength of the Company
and the confidence we have in the future of Academy."
Year-to-Date 2021 ResultsNet
sales increased 22.9% to $3.37 billion, while comparable sales
increased 22.8%. Year-to-date sales grew 45.7% compared to 2019.
E-commerce sales increased 241.9% compared to 2019 and declined
10.8% versus 2020.
Gross margin increased 51.8% to $1.21 billion.
The gross margin rate improved by 680 basis points to 35.8%.
The growth in gross profit, coupled with 70
basis points of selling, general & administrative expense
leverage, resulted in a 192.6% increase in pre-tax income to $465.8
million compared to $159.2 million.
Net income increased 133.6% to $368.3 million
compared to $157.7 million. Diluted earnings per share were $3.82
compared to $2.12 per share in the prior year to date. Pro forma
adjusted net income, which excludes the impact of certain non-cash
and extraordinary items, increased 201.9% to $407.1 million. Pro
forma diluted earnings per share were $4.22 compared to $1.81 per
share in the prior year to date.
Balance Sheet UpdateThe company
also took steps to enhance its balance sheet. As of the end of the
second quarter, the Company’s cash and cash equivalents totaled
$553.8 million with no outstanding balance on its credit facility.
Adjusted free cash flow was $169.5 million. Merchandise inventories
were $1.1 billion, an increase of 24.0% compared to the prior year
quarter and 3.2% compared to Q1 2021.
As previously reported, Academy's largest
shareholder (KKR) completed two transactions, reducing their
ownership to approximately 20% of the Company as of the end of the
quarter. As part of one of these events, Academy purchased and
retired 3.2 million shares for approximately $100 million. In
addition to the stock repurchase, the Company paid down $99 million
of its outstanding term loan and refinanced the loan's interest
rate from LIBOR + 5.0% to LIBOR + 3.75%. Based on these positive
actions, S&P (B+ from B) and Moody's (Ba3 from B1) both
upgraded the Company's debt rating.
Capital AllocationOn September
2, 2021, the Academy Board of Directors authorized a new share
repurchase program under which the Company may purchase up to $500
million of its outstanding shares over the next three years.
2021 OutlookMichael Mullican,
Executive Vice President and Chief Financial Officer, said, "Our
second quarter performance set Company records across numerous
financial metrics, including revenue, gross margin dollars and
rate, pre-tax income and net earnings. Importantly, we continue to
improve profitability at a higher rate than our sales growth. As a
result, we are increasing our fiscal 2021 guidance. Looking ahead,
we expect to utilize our capabilities to accelerate our
omnichannel, new store and other growth initiatives."
This forecast accounts for various market
scenarios due to the uncertainty from the impact of COVID-19 on the
economy and consumer. The new guidance is as follows:
|
|
|
|
|
% change (at mid-point) |
|
Updated Fiscal 2021(e) Guidance |
2020 |
2019 |
vs. 2020 |
vs. 2019 |
(in millions, except per share amounts) |
Low end |
High end |
|
|
|
|
Net Sales |
$6,465 |
$6,620 |
$5,689 |
$4,830 |
15% |
35% |
|
|
|
|
|
|
|
Comparable sales |
14.0% |
17.0% |
16.1% |
(0.7)% |
|
|
|
|
|
|
|
|
|
Income before taxes |
$670 |
$715 |
$339 |
$123 |
104% |
463% |
|
|
|
|
|
|
|
Net income |
$525 |
$560 |
$309 |
$120 |
76% |
352% |
|
|
|
|
|
|
|
Earnings per share-diluted |
$5.45 |
$5.80 |
$3.79 |
$1.60 |
48% |
252% |
|
|
|
|
|
|
|
Diluted weighted average shares outstanding |
96,500 |
96,500 |
81,431 |
74,795 |
|
|
The EPS estimate reflects a tax rate of 22.0%
and does not include any potential future share repurchases.
Conference Call InfoAcademy
will host a conference call today at 11:00 a.m. Eastern Time to
discuss its financial results. Listeners may access the call by
dialing 1-877-407-3982 (U.S.) or 1-201-493-6780 (International).
The passcode is 13721945. A webcast of the call can be accessed at
investors.academy.com.
A telephonic replay of the conference call will
be available for approximately 30 days, by dialing 1-844-512-2921
(U.S.) or 1-412-317-6671 (International) and entering passcode
13721945. An archive of the webcast will be available at
investors.academy.com for approximately 30 days.
About Academy Sports +
OutdoorsAcademy is a leading full-line sporting goods and
outdoor recreation retailer in the United States. Originally
founded in 1938 as a family business in Texas, Academy has grown to
259 stores across 16 contiguous states. Academy’s mission is to
provide “Fun for All” and Academy fulfills this mission with a
localized merchandising strategy and value proposition that
strongly connects with a broad range of consumers. Academy’s
product assortment focuses on key categories of outdoor, apparel,
footwear and sports & recreation through both leading national
brands and a portfolio of 19 private label brands, which go well
beyond traditional sporting goods and apparel offerings.
All references to "Academy," "Academy Sports +
Outdoors," "we," "us," "our" or the "Company" in this press release
refer to (1) prior to October 1, 2020 (the "IPO pricing date"), New
Academy Holding Company, LLC, a Delaware limited liability company
("NAHC") and the prior parent holding company for our operations,
and its consolidated subsidiaries; and (2) on and after the IPO
pricing date, Academy Sports and Outdoors, Inc., a Delaware
corporation ("ASO, Inc.") and the current parent holding company of
our operations, and its consolidated subsidiaries.
On the IPO pricing date, we completed a series
of reorganization transactions (the "Reorganization Transactions")
that resulted in NAHC being contributed to ASO, Inc. by its members
and becoming a wholly owned subsidiary of ASO, Inc. and one share
of common stock of ASO, Inc. issued to then-existing members of
NAHC for every 3.15 membership units of NAHC contributed to ASO,
Inc. (the "Contribution Ratio"). Unless indicated otherwise, the
information in this press release has been adjusted to give
retrospective effect to the Contribution Ratio.
Non-GAAP MeasuresAdjusted
EBITDA, Adjusted EBIT, Adjusted Net Income (Loss), Pro Forma
Adjusted Net Income (Loss), Pro Forma Adjusted Earnings Per Share,
and Adjusted Free Cash Flow have been presented in this press
release as supplemental measures of financial performance that are
not required by, or presented in accordance with, generally
accepted accounting principles (“GAAP”). These non-GAAP measures
have limitations as analytical tools. For information on these
limitations, as well as information on why management believes
these non-GAAP measures are useful, please see our Annual Report
for fiscal year 2020 filed on April 7, 2021 (the “Annual Report”),
as such limitations and information may be updated from time to
time in our periodic filings with the Securities and Exchange
commission (the "SEC"), which are accessible on the SEC's website
at www.sec.gov.
We compensate for these limitations by primarily
relying on our GAAP results in addition to using these non-GAAP
measures supplementally.
See “Reconciliations of Non-GAAP to GAAP
Financial Measures” below for reconciliations of non-GAAP financial
measures used in this press release to their most directly
comparable GAAP financial measures.
Forward Looking StatementsThis
press release contains forward-looking statements within the
meaning of Section 27A of the Securities Act and Section 21E of the
Securities Exchange Act of 1934, as amended. These forward-looking
statements are based on Academy's current expectations and are not
guarantees of future performance. You can identify these
forward-looking statements by the use of words such as “outlook,”
“guidance,” “believes,” “expects,” “potential,” “continues,” “may,”
“will,” “should,” “could,” “seeks,” “projects,” “predicts,”
“intends,” “plans,” “estimates,” “anticipates” or the negative
version of these words or other comparable words. The
forward-looking statements are subject to various risks,
uncertainties, assumptions or changes in circumstances that are
difficult to predict or quantify. Actual results may differ
materially from these expectations due to changes in global,
regional or local economic, business, competitive, market,
regulatory and other factors, many of which are beyond Academy's
control. Important factors that could cause actual results to
differ materially from those in the forward-looking statements are
set forth in Academy's filings with the SEC, including the Annual
Report, under the caption "Risk Factors," as may be updated from
time to time in our periodic filings with the SEC. Any
forward-looking statement in this press release speaks only as of
the date of this release. Academy undertakes no obligation to
publicly update or review any forward-looking statement, whether as
a result of new information, future developments or otherwise,
except as may be required by any applicable securities laws.
Investor Contact |
|
Media Contact |
Matt Hodges |
|
Elise Hasbrook |
VP, Investor Relations |
|
VP, Communications |
281-646-5362 |
|
281-944-6041 |
Matt.hodges@academy.com |
|
Elise.hasbrook@academy.com |
ACADEMY SPORTS AND OUTDOORS,
INC.CONSOLIDATED STATEMENTS OF
INCOME(Unaudited)(Amounts in
thousands, except per share data)
|
Thirteen Weeks Ended |
|
July 31, 2021 |
|
Percentageof Sales (2) |
|
August 1, 2020 |
|
Percentageof Sales (2) |
Net sales |
$ |
1,791,530 |
|
|
|
100.0 |
% |
|
$ |
1,606,420 |
|
|
|
100.0 |
|
% |
Cost of goods sold |
1,149,034 |
|
|
|
64.1 |
% |
|
|
1,109,919 |
|
|
|
69.1 |
|
% |
Gross margin |
642,496 |
|
|
|
35.9 |
% |
|
|
496,501 |
|
|
|
30.9 |
|
% |
Selling, general and
administrative expenses |
387,938 |
|
|
|
21.7 |
% |
|
|
312,713 |
|
|
|
19.5 |
|
% |
Operating income |
254,558 |
|
|
|
14.2 |
% |
|
183,788 |
|
|
|
11.4 |
|
% |
Interest expense, net |
12,157 |
|
|
|
0.7 |
% |
|
23,566 |
|
|
|
1.5 |
|
% |
(Gain) loss on early
extinguishment of debt, net |
2,239 |
|
|
|
0.1 |
% |
|
(7,831 |
) |
|
|
(0.5 |
) |
% |
Other (income), net |
(735 |
) |
|
|
0.0 |
% |
|
(628 |
) |
|
|
0.0 |
|
% |
Income before income taxes |
240,897 |
|
|
|
13.4 |
% |
|
168,681 |
|
|
|
10.5 |
|
% |
Income tax expense |
50,387 |
|
|
|
2.8 |
% |
|
|
1,005 |
|
|
|
0.1 |
|
% |
Net income |
$ |
190,510 |
|
|
|
10.6 |
% |
|
$ |
167,676 |
|
|
|
10.4 |
|
% |
|
|
|
|
|
|
|
|
Earnings Per Common
Share: |
|
|
|
|
|
|
|
Basic (1) |
$ |
2.06 |
|
|
|
|
|
$ |
2.31 |
|
|
|
|
Diluted (1) |
$ |
1.99 |
|
|
|
|
|
$ |
2.25 |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Common Shares
Outstanding: |
|
|
|
|
|
|
|
Basic (1) |
92,627 |
|
|
|
|
|
72,478 |
|
|
|
|
Diluted (1) |
95,891 |
|
|
|
|
|
74,439 |
|
|
|
|
(1) After effect of the retrospective presentation of the
Reorganization Transactions and Contribution Ratio(2) Column may
not add due to rounding
ACADEMY SPORTS AND OUTDOORS,
INC.CONSOLIDATED STATEMENTS OF
INCOME(Unaudited)(Amounts in
thousands, except per share data)
|
Twenty-Six Weeks Ended |
|
July 31, 2021 |
|
Percentageof Sales (2) |
|
August 1, 2020 |
|
Percentageof Sales (2) |
Net sales |
$ |
3,371,863 |
|
|
|
100.0 |
% |
|
$ |
2,742,721 |
|
|
|
100.0 |
|
% |
Cost of goods sold |
2,165,666 |
|
|
|
64.2 |
% |
|
1,948,275 |
|
|
|
71.0 |
|
% |
Gross margin |
1,206,197 |
|
|
|
35.8 |
% |
|
794,446 |
|
|
|
29.0 |
|
% |
Selling, general and
administrative expenses |
712,565 |
|
|
|
21.1 |
% |
|
596,636 |
|
|
|
21.8 |
|
% |
Operating income |
493,632 |
|
|
|
14.6 |
% |
|
197,810 |
|
|
|
7.2 |
|
% |
Interest expense, net |
26,706 |
|
|
|
0.8 |
% |
|
48,088 |
|
|
|
1.8 |
|
% |
(Gain) loss on early
extinguishment of debt, net |
2,239 |
|
|
|
0.1 |
% |
|
(7,831 |
) |
|
|
(0.3 |
) |
% |
Other (income), net |
(1,132 |
) |
|
|
0.0 |
% |
|
(1,621 |
) |
|
|
(0.1 |
) |
% |
Income before income taxes |
465,819 |
|
|
|
13.8 |
% |
|
159,174 |
|
|
|
5.8 |
|
% |
Income tax expense |
97,513 |
|
|
|
2.9 |
% |
|
1,518 |
|
|
|
0.1 |
|
% |
Net income |
$ |
368,306 |
|
|
|
10.9 |
% |
|
$ |
157,656 |
|
|
|
5.7 |
|
% |
|
|
|
|
|
|
|
|
Earnings Per Common
Share: |
|
|
|
|
|
|
|
Basic (1) |
$ |
3.99 |
|
|
|
|
|
$ |
2.18 |
|
|
|
|
Diluted (1) |
$ |
3.82 |
|
|
|
|
|
$ |
2.12 |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Common Shares
Outstanding: |
|
|
|
|
|
|
|
Basic (1) |
92,357 |
|
|
|
|
|
72,476 |
|
|
|
|
Diluted (1) |
96,391 |
|
|
|
|
|
74,487 |
|
|
|
|
(1) After effect of retrospective presentation of the
Reorganization Transactions and Contribution Ratio(2) Column may
not add due to rounding
ACADEMY SPORTS AND OUTDOORS,
INC.CONSOLIDATED BALANCE
SHEETS(Unaudited)(Dollar amounts
in thousands, except per share data)
|
|
July 31, 2021 |
|
January 30, 2021 |
|
August 1, 2020 |
ASSETS |
|
|
|
|
|
|
CURRENT
ASSETS: |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
553,825 |
|
|
|
$ |
377,604 |
|
|
|
$ |
884,029 |
|
|
Accounts receivable - less allowance for doubtful accounts of $822,
$1,172 and $3,323, respectively |
|
10,791 |
|
|
|
17,306 |
|
|
|
9,181 |
|
|
Merchandise inventories, net |
|
1,115,020 |
|
|
|
990,034 |
|
|
|
899,086 |
|
|
Prepaid expenses and other current assets |
|
39,050 |
|
|
|
28,313 |
|
|
|
30,495 |
|
|
Assets held for sale |
|
1,763 |
|
|
|
1,763 |
|
|
|
1,763 |
|
|
Total current assets |
|
1,720,449 |
|
|
|
1,415,020 |
|
|
|
1,824,554 |
|
|
|
|
|
|
|
|
|
PROPERTY AND
EQUIPMENT, NET |
|
362,784 |
|
|
|
378,260 |
|
|
|
396,559 |
|
|
RIGHT-OF-USE
ASSETS |
|
1,105,272 |
|
|
|
1,143,699 |
|
|
|
1,171,736 |
|
|
TRADE
NAME |
|
577,000 |
|
|
|
577,000 |
|
|
|
577,000 |
|
|
GOODWILL |
|
861,920 |
|
|
|
861,920 |
|
|
|
861,920 |
|
|
OTHER NONCURRENT
ASSETS |
|
6,602 |
|
|
|
8,583 |
|
|
|
11,079 |
|
|
Total assets |
|
$ |
4,634,027 |
|
|
|
$ |
4,384,482 |
|
|
|
$ |
4,842,848 |
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' / PARTNERS'
EQUITY |
|
|
|
|
|
|
CURRENT
LIABILITIES: |
|
|
|
|
|
|
Accounts payable |
|
$ |
816,427 |
|
|
|
$ |
791,404 |
|
|
|
$ |
726,666 |
|
|
Accrued expenses and other current liabilities |
|
277,157 |
|
|
|
291,351 |
|
|
|
245,072 |
|
|
Current lease liabilities |
|
84,981 |
|
|
|
80,338 |
|
|
|
76,485 |
|
|
Current maturities of long-term debt |
|
3,000 |
|
|
|
4,000 |
|
|
|
18,250 |
|
|
Total current liabilities |
|
1,181,565 |
|
|
|
1,167,093 |
|
|
|
1,066,473 |
|
|
|
|
|
|
|
|
|
LONG-TERM DEBT,
NET |
|
684,103 |
|
|
|
781,489 |
|
|
|
1,412,800 |
|
|
LONG-TERM LEASE
LIABILITIES |
|
1,107,709 |
|
|
|
1,150,088 |
|
|
|
1,181,819 |
|
|
DEFERRED TAX
LIABILITIES, NET |
|
185,765 |
|
|
|
138,703 |
|
|
|
— |
|
|
OTHER LONG-TERM
LIABILITIES |
|
27,267 |
|
|
|
35,126 |
|
|
|
29,683 |
|
|
Total liabilities |
|
3,186,409 |
|
|
|
3,272,499 |
|
|
|
3,690,775 |
|
|
|
|
|
|
|
|
|
COMMITMENTS AND
CONTINGENCIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
REDEEMABLE MEMBERSHIP
UNITS |
|
— |
|
|
|
— |
|
|
|
2,977 |
|
|
|
|
|
|
|
|
|
STOCKHOLDERS' /
PARTNERS' EQUITY
(1): |
|
|
|
|
|
|
Preferred stock, $0.01 par value, authorized 50,000,000 shares;
none issued and outstanding |
|
— |
|
|
|
— |
|
|
|
— |
|
|
Partners' equity, membership units authorized, issued and
outstanding were 72,478,106 as of August 1, 2020 |
|
— |
|
|
|
— |
|
|
|
1,157,435 |
|
|
Common stock, $0.01 par value, authorized 300,000,000 shares;
92,883,540 and 91,114,475 issued and outstanding as of July 31,
2021 and January 30, 2021 respectively. |
|
929 |
|
|
|
911 |
|
|
|
— |
|
|
Additional paid-in capital |
|
187,746 |
|
|
|
127,228 |
|
|
|
— |
|
|
Retained earnings |
|
1,260,805 |
|
|
|
987,168 |
|
|
|
— |
|
|
Accumulated other comprehensive loss |
|
(1,862 |
) |
|
|
(3,324 |
) |
|
|
(8,339 |
) |
|
Stockholders' / partners' equity |
|
1,447,618 |
|
|
|
1,111,983 |
|
|
|
1,149,096 |
|
|
Total liabilities and stockholders' / partners'
equity |
|
$ |
4,634,027 |
|
|
|
$ |
4,384,482 |
|
|
|
$ |
4,842,848 |
|
|
(1) After effect of retrospective presentation of the
Reorganization Transactions and Contribution Ratio
ACADEMY SPORTS AND OUTDOORS,
INC.CONSOLIDATED STATEMENTS OF CASH
FLOWS(Unaudited)(Amounts in
thousands)
|
|
Twenty-Six Weeks Ended |
|
|
July 31, 2021 |
|
August 1, 2020 |
CASH FLOWS FROM OPERATING
ACTIVITIES: |
|
|
|
|
Net income |
|
$ |
368,306 |
|
|
|
$ |
157,656 |
|
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
|
|
Depreciation and amortization |
|
51,308 |
|
|
|
54,151 |
|
|
Non-cash lease expense |
|
691 |
|
|
|
14,049 |
|
|
Equity compensation |
|
33,205 |
|
|
|
3,690 |
|
|
Amortization of terminated interest rate swaps, deferred loan and
other costs |
|
3,521 |
|
|
|
1,827 |
|
|
Deferred income taxes |
|
46,628 |
|
|
|
— |
|
|
Non-cash (gain) loss on early retirement of debt, net |
|
2,239 |
|
|
|
(7,831 |
) |
|
Casualty loss |
|
— |
|
|
|
16 |
|
|
Changes in assets and liabilities: |
|
|
|
|
Accounts receivable, net |
|
6,515 |
|
|
|
4,819 |
|
|
Merchandise inventories, net |
|
(124,986 |
) |
|
|
200,647 |
|
|
Prepaid expenses and other current assets |
|
(10,737 |
) |
|
|
(1,623 |
) |
|
Other noncurrent assets |
|
1,408 |
|
|
|
(74 |
) |
|
Accounts payable |
|
22,958 |
|
|
|
302,391 |
|
|
Accrued expenses and other current liabilities |
|
18,517 |
|
|
|
32,335 |
|
|
Income taxes payable |
|
(12,996 |
) |
|
|
— |
|
|
Other long-term liabilities |
|
(903 |
) |
|
|
11,568 |
|
|
Net cash provided by operating activities |
|
405,674 |
|
|
|
773,621 |
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING
ACTIVITIES: |
|
|
|
|
Capital expenditures |
|
(33,767 |
) |
|
|
(13,850 |
) |
|
Net cash used in investing activities |
|
(33,767 |
) |
|
|
(13,850 |
) |
|
|
|
|
|
|
CASH FLOWS FROM FINANCING
ACTIVITIES: |
|
|
|
|
Proceeds from ABL Facility |
|
— |
|
|
|
500,000 |
|
|
Repayment of ABL Facility |
|
— |
|
|
|
(500,000 |
) |
|
Repayment of Term Loan |
|
(100,750 |
) |
|
|
(25,090 |
) |
|
Debt issuance fees |
|
(927 |
) |
|
|
— |
|
|
Share-Based Award Payments |
|
(11,214 |
) |
|
|
— |
|
|
Proceeds from exercise of stock options |
|
31,678 |
|
|
|
— |
|
|
Proceeds from issuance of common stock under employee stock
purchase program |
|
945 |
|
|
|
— |
|
|
Taxes paid related to net share settlement of equity awards |
|
(15,418 |
) |
|
|
— |
|
|
Repurchase of common stock for retirement |
|
(100,000 |
) |
|
|
— |
|
|
Repurchase of Redeemable Membership Units |
|
— |
|
|
|
(37 |
) |
|
Net cash used in financing activities |
|
(195,686 |
) |
|
|
(25,127 |
) |
|
|
|
|
|
|
NET INCREASE IN CASH AND CASH
EQUIVALENTS |
|
176,221 |
|
|
|
734,644 |
|
|
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD |
|
377,604 |
|
|
|
149,385 |
|
|
CASH AND CASH EQUIVALENTS AT
END OF PERIOD |
|
$ |
553,825 |
|
|
|
$ |
884,029 |
|
|
ACADEMY SPORTS AND OUTDOORS,
INC.RECONCILIATIONS OF NON-GAAP TO GAAP FINANCIAL
MEASURES(Unaudited)(Dollar
amounts in thousands)
Adjusted EBITDA and Adjusted
EBIT
We define “Adjusted EBITDA” as net income (loss)
before interest expense, net, income tax expense and depreciation,
amortization and impairment, further adjusted to exclude consulting
fees, private equity sponsor monitoring fees, equity compensation
expense, (gain) loss on early extinguishment of debt, net,
severance and executive transition costs, costs related to the
COVID-19 pandemic, payroll taxes associated with the 2021 Vesting
Event and other adjustments. We define “Adjusted EBIT” as net
income (loss) before interest expense, net, and income tax expense,
further adjusted to exclude consulting fees, private equity sponsor
monitoring fees, equity compensation expense, (gain) loss on early
extinguishment of debt, net, severance and executive transition
costs, costs related to the COVID-19 pandemic, payroll taxes
associated with the 2021 Vesting Event and other adjustments. We
describe these adjustments reconciling net income (loss) to
Adjusted EBITDA and Adjusted EBIT in the following table.
|
|
Thirteen Weeks Ended |
|
Twenty-Six Weeks Ended |
|
|
July 31, 2021 |
|
August 1, 2020 |
|
July 31, 2021 |
|
August 1, 2020 |
Net income |
|
$ |
190,510 |
|
|
|
$ |
167,676 |
|
|
|
$ |
368,306 |
|
|
|
$ |
157,656 |
|
|
Interest expense, net |
|
12,157 |
|
|
|
23,566 |
|
|
|
26,706 |
|
|
|
48,088 |
|
|
Income tax expense |
|
50,387 |
|
|
|
1,005 |
|
|
|
97,513 |
|
|
|
1,518 |
|
|
Depreciation and
amortization |
|
26,010 |
|
|
|
26,704 |
|
|
|
51,308 |
|
|
|
54,151 |
|
|
Consulting fees (a) |
|
— |
|
|
|
36 |
|
|
|
— |
|
|
|
92 |
|
|
Private equity sponsor
monitoring fee (b) |
|
— |
|
|
|
920 |
|
|
|
— |
|
|
|
1,840 |
|
|
Equity compensation (c) |
|
27,331 |
|
|
|
1,581 |
|
|
|
33,205 |
|
|
|
3,690 |
|
|
(Gain) Loss on early
extinguishment of debt, net |
|
2,239 |
|
|
|
(7,831 |
) |
|
|
2,239 |
|
|
|
(7,831 |
) |
|
Severance and executive
transition costs (d) |
|
— |
|
|
|
3,909 |
|
|
|
— |
|
|
|
4,137 |
|
|
Costs related to the COVID-19
pandemic (e) |
|
— |
|
|
|
10,987 |
|
|
|
— |
|
|
|
17,632 |
|
|
Payroll taxes associated with
the 2021 Vesting Event (f) |
|
15,418 |
|
|
|
— |
|
|
|
15,418 |
|
|
|
— |
|
|
Other (g) |
|
364 |
|
|
|
1,092 |
|
|
|
714 |
|
|
|
1,929 |
|
|
Adjusted EBITDA |
|
$ |
324,416 |
|
|
|
$ |
229,645 |
|
|
|
$ |
595,409 |
|
|
|
$ |
282,902 |
|
|
Less: Depreciation and
amortization |
|
(26,010 |
) |
|
|
(26,704 |
) |
|
|
(51,308 |
) |
|
|
(54,151 |
) |
|
Adjusted EBIT |
|
$ |
298,406 |
|
|
|
$ |
202,941 |
|
|
|
$ |
544,101 |
|
|
|
$ |
228,751 |
|
|
(a) |
Represents outside consulting fees associated with our strategic
cost savings and business optimization initiatives. |
(b) |
Represents our contractual payments under a monitoring agreement
("Monitoring Agreement") with our private equity sponsor Kohlberg
Kravis Roberts & Co. L.P. |
(c) |
Represents non-cash charges related to equity based compensation,
which vary from period to period depending on certain factors such
as the 2021 Vesting Event, timing and valuation of awards,
achievement of performance targets and equity award
forfeitures. |
(d) |
Represents severance costs associated with executive leadership
changes and enterprise-wide organizational changes. |
(e) |
Represents costs incurred during the thirteen and twenty-six weeks
ended August 1, 2020, as a result of the COVID-19 pandemic,
including temporary wage premiums, additional sick time, costs of
additional cleaning supplies and third party cleaning services for
the stores, corporate office and distribution centers, accelerated
freight costs associated with shifting our inventory purchase
earlier in the year to maintain stock, and legal fees associated
with consulting in local jurisdictions. These costs were no longer
added back beginning in the third quarter of 2020. |
(f) |
Represents cash expenses related to taxes on equity-based
compensation resulting from the 2021 Vesting Event. |
(g) |
Other adjustments include (representing deductions or additions to
Adjusted EBITDA and Adjusted EBIT) amounts that management believes
are not representative of our operating performance, including
investment income, installation costs for energy savings associated
with our profitability initiatives, legal fees associated with our
distribution and the omnibus incentive plan, store exit costs and
other costs associated with strategic cost savings and business
optimization initiatives. |
|
|
Adjusted Net Income, Pro Forma Adjusted
Net Income and Pro Forma Adjusted Earnings Per Share
We define “Adjusted Net Income (Loss)” as net
income (loss), plus consulting fees, private equity sponsor
monitoring fees, equity compensation expense, (gain) loss on early
extinguishment of debt, net, severance and executive transition
costs, costs related to the COVID-19 pandemic, payroll taxes
associated with the 2021 Vesting Event and other adjustments, less
the tax effect of these adjustments. We define “Pro Forma Adjusted
Net Income (Loss)” as Adjusted Net Income (Loss) less the
retroactive tax effect of Adjusted Net Income at our estimated
effective tax rate of approximately 25% for periods prior to
October 1, 2020, the effective date of our conversion to a
C-Corporation. We define “Pro Forma Adjusted Earnings per Common
Share, Basic” as Pro Forma Adjusted Net Income divided by the basic
weighted average common shares outstanding during the period and
“Pro Forma Adjusted Earnings per Common Share, Diluted” as Pro
Forma Adjusted Net Income divided by the diluted weighted average
common shares outstanding during the period. We describe these
adjustments reconciling net income (loss) to Adjusted Net Income
(Loss), Pro Forma Adjusted Net Income (Loss), and Pro Forma
Adjusted Earnings Per Share in the following table.
|
|
Thirteen Weeks Ended |
|
Twenty-Six Weeks Ended |
|
|
July 31, 2021 |
|
August 1, 2020 |
|
July 31, 2021 |
|
August 1, 2020 |
Net income |
|
$ |
190,510 |
|
|
|
$ |
167,676 |
|
|
|
$ |
368,306 |
|
|
|
$ |
157,656 |
|
|
Consulting fees (a) |
|
— |
|
|
|
36 |
|
|
|
— |
|
|
|
92 |
|
|
Private equity sponsor
monitoring fee (b) |
|
— |
|
|
|
920 |
|
|
|
— |
|
|
|
1,840 |
|
|
Equity compensation (c) |
|
27,331 |
|
|
|
1,581 |
|
|
|
33,205 |
|
|
|
3,690 |
|
|
(Gain) loss on early
extinguishment of debt, net |
|
2,239 |
|
|
|
(7,831 |
) |
|
|
2,239 |
|
|
|
(7,831 |
) |
|
Severance and executive
transition costs (d) |
|
— |
|
|
|
3,909 |
|
|
|
— |
|
|
|
4,137 |
|
|
Costs related to the COVID-19
pandemic (e) |
|
— |
|
|
|
10,987 |
|
|
|
— |
|
|
|
17,632 |
|
|
Payroll taxes associated with
the 2021 Vesting Event (f) |
|
15,418 |
|
|
|
— |
|
|
|
15,418 |
|
|
|
— |
|
|
Other (g) |
|
364 |
|
|
|
1,092 |
|
|
|
714 |
|
|
|
1,929 |
|
|
Tax effects of these
adjustments (h) |
|
(11,312 |
) |
|
|
(19 |
) |
|
|
(12,801 |
) |
|
|
(39 |
) |
|
Adjusted Net Income |
|
224,550 |
|
|
|
178,351 |
|
|
|
407,081 |
|
|
|
179,106 |
|
|
Estimated tax effect of change
to C-Corporation status (i) |
|
— |
|
|
|
(43,947 |
) |
|
|
— |
|
|
|
(44,262 |
) |
|
Pro Forma Adjusted Net Income |
|
$ |
224,550 |
|
|
|
$ |
134,404 |
|
|
|
$ |
407,081 |
|
|
|
$ |
134,844 |
|
|
|
|
|
|
|
|
|
|
|
Pro Forma Adjusted Earnings
per Share |
|
|
|
|
|
|
|
|
Basic |
|
$ |
2.42 |
|
|
|
$ |
1.85 |
|
|
|
$ |
4.41 |
|
|
|
$ |
1.86 |
|
|
Diluted |
|
$ |
2.34 |
|
|
|
$ |
1.81 |
|
|
|
$ |
4.22 |
|
|
|
$ |
1.81 |
|
|
Weighted average common shares
outstanding |
|
|
|
|
|
|
|
|
Basic (1) |
|
92,627 |
|
|
|
72,478 |
|
|
|
92,357 |
|
|
|
72,476 |
|
|
Diluted (1) |
|
95,891 |
|
|
|
74,439 |
|
|
|
96,391 |
|
|
|
74,487 |
|
|
(1) |
After effect of retrospective presentation of the Reorganization
Transactions and Contribution Ratio |
|
|
(a) |
Represents outside consulting fees associated with our strategic
cost savings and business optimization initiatives. |
(b) |
Represents our contractual payments under our Monitoring Agreement
with our private equity sponsor Kohlberg Kravis Roberts & Co.
L.P. |
(c) |
Represents non-cash charges related to equity based compensation,
which vary from period to period depending on certain factors such
as the 2021 Vesting Event, timing and valuation of awards,
achievement of performance targets and equity award
forfeitures. |
(d) |
Represents severance costs associated with executive leadership
changes and enterprise-wide organizational changes. |
(e) |
Represents costs incurred during the thirteen and twenty-six weeks
ended August 1, 2020, as a result of the COVID-19 pandemic,
including temporary wage premiums, additional sick time, costs of
additional cleaning supplies and third party cleaning services for
the stores, corporate office and distribution centers, accelerated
freight costs associated with shifting our inventory purchase
earlier in the year to maintain stock, and legal fees associated
with consulting in local jurisdictions. These costs were no longer
added back beginning in the third quarter of 2020. |
(f) |
Represents cash expenses related to taxes on equity-based
compensation resulting from the 2021 Vesting Event. |
(g) |
Other adjustments include (representing deductions or additions to
Adjusted Net Income) amounts that management believes are not
representative of our operating performance, including investment
income, installation costs for energy savings associated with our
profitability initiatives, legal fees associated with a
distribution to NAHC's members and our omnibus incentive plan,
store exit costs and other costs associated with strategic cost
savings and business optimization initiatives. |
(h) |
For the thirteen and twenty-six weeks ended July 31, 2021, this
represents the tax effect of the total adjustments made to arrive
at Adjusted Net Income at the estimated effective tax rate for the
fiscal year ended January 31, 2022. For thirteen and twenty-six
weeks ended August 1, 2020, this represents the tax effect of the
total adjustments made to arrive at Adjusted Net Income at our
historical tax rate. |
(i) |
Represents the retrospective tax effect of Adjusted Net Income at
our estimated effective tax rate of approximately 25% for periods
prior to October 1, 2020, the effective date of our conversion to a
C-Corporation, upon which we became subject to federal income
taxes. |
|
|
Adjusted Free Cash Flow
We define “Adjusted Free Cash Flow” as net cash
provided by (used in) operating activities less net cash provided
by (used in) investing activities. We describe these adjustments
reconciling net cash provided by operating activities to Adjusted
Free Cash Flow in the following table.
|
|
Thirteen Weeks Ended |
|
Twenty-Six Weeks Ended |
|
|
July 31, 2021 |
|
August 1, 2020 |
|
July 31, 2021 |
|
August 1, 2020 |
Net cash provided by operating activities |
|
$ |
186,446 |
|
|
|
$ |
682,865 |
|
|
|
$ |
405,674 |
|
|
|
$ |
773,621 |
|
|
Net cash used in investing
activities |
|
(16,959 |
) |
|
|
(3,924 |
) |
|
|
(33,767 |
) |
|
|
(13,850 |
) |
|
Adjusted Free Cash Flow |
|
$ |
169,487 |
|
|
|
$ |
678,941 |
|
|
|
$ |
371,907 |
|
|
|
$ |
759,771 |
|
|
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