Academy Sports and Outdoors, Inc. (Nasdaq: ASO) ("Academy" or the
"Company") today announced its financial results for the first
quarter ended May 1, 2021. Unless otherwise indicated, comparisons
are to the same period in the prior fiscal year.
First Quarter 2021 ResultsNet
sales increased 39.1% to a first quarter record $1.58 billion,
while comparable sales increased 38.9%. Sales grew 46.8% compared
to the first quarter of 2019. The growth was driven by continued
strong, double-digit consumer demand across all product categories,
notably in Apparel, Footwear and Team Sports, as well as across our
entire geographic footprint. E-commerce sales declined 21.0%, as
the website anniversaried triple-digit growth in the first quarter
of 2020, as consumers shifted to online ordering at the beginning
of the pandemic last year. Over the last two years, E-commerce
sales have increased 300.0% during the first quarter.
Gross margin increased 89.2% to $563.7 million,
the highest quarterly gross profit in the Company's history. The
gross margin rate increased 950 basis points to 35.7%. This growth
was primarily driven by improved merchandise margins from a
favorable mix shift, higher average unit retails, fewer promotions
and less clearance activity.
The growth in gross profit, coupled with 450
basis points of selling, general & administrative expense
leverage, resulted in $224.9 million of pre-tax income versus a
loss of $9.5 million in the first quarter of 2020.
Net income was $177.8 million compared to a loss
of $10.0 million in Q1 2020. Diluted earnings per share were $1.84
compared to a loss of $0.14 in the prior year quarter. Pro forma
adjusted net income, which excludes the impact of certain non-cash
and extraordinary items, increased from $0.4 million to $182.5
million. Pro forma diluted earnings per share were $1.89 compared
to $0.01 per share in the prior year quarter.
“The Academy Sports + Outdoors team again
generated record-breaking sales and profits, while delivering fun
to our customers,” said Ken Hicks, Chairman, President and Chief
Executive Officer. “The strategic initiatives implemented over the
last few years, a shift in consumer spending into sports and
outdoor categories, government-issued stimulus checks, the addition
of new customers and more frequent shopping by existing customers
are driving consistent growth. We believe our broad, value-based
assortment, available through a true omnichannel experience,
positions us to continue to capitalize on these market trends."
Balance Sheet UpdateAs of the
end of the first quarter, the Company’s cash and cash equivalents
totaled $593.3 million and no amounts were drawn on its credit
facility. During the first quarter, net cash provided by operating
activities was $219.2 million compared to $90.8 million in the
first quarter of 2020.
Subsequent to the end of the first quarter, on
May 10, 2021, Academy's largest shareholders completed a secondary
offering of the Company's common stock and Academy purchased and
retired 3.2 million shares for approximately $100 million. As a
result of this reduction in shares owned by the largest owners,
Academy's largest shareholder owned approximately 31% of the
Company. 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%.
Michael Mullican, Executive Vice President and
Chief Financial Officer, said, "Based on the extraordinary sales
and margin results, the Company has fortified its balance sheet and
is also increasing its full year earnings outlook. Academy's cash
balance is stronger today than at the end of fiscal 2020 even after
using $199 million to repurchase shares and pay down a portion of
its term loan."
2021 OutlookWhile there is
still economic uncertainty from the impact of COVID-19 and other
external factors, based on the strong performance of the first
quarter and the visibility we have for the remainder of 2021, the
Company is increasing its fiscal 2021 guidance as follows:
|
|
Fiscal 2021 Guidance |
|
|
Previous |
|
New |
|
Comparable Sales |
|
(2.0)% to +2.0% |
|
+6.0% to +9.0% |
|
|
|
|
|
|
|
Net Income (in millions) |
|
$265.0 to $290.0 |
|
$400.0 to $435.0 |
|
|
|
|
|
|
|
EPS-diluted |
|
$2.70 to $2.95 |
|
$4.15 to $4.50 |
|
The EPS estimate is based on diluted weighted
average shares outstanding of 96.5 million shares and a tax rate of
23.0%.
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 conference passcode is 13719814. 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 conference
passcode 13719814. 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 (our “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 its Annual
Report on Form 10-K for the fiscal year ended January 30, 2021,
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 Matt HodgesVP, Investor
Relations 281-646-5362 Matt.hodges@academy.com |
Media ContactElise HasbrookVP,
Communications281-944-6041Elise.hasbrook@academy.com |
ACADEMY SPORTS AND OUTDOORS,
INC.CONSOLIDATED STATEMENTS OF INCOME
(LOSS)(Unaudited)(Amounts in
thousands, except per share data)
|
Thirteen Weeks Ended |
|
May 1, 2021 |
|
Percentageof Sales (2) |
|
May 2, 2020 |
|
Percentageof Sales (2) |
Net sales |
$ |
1,580,333 |
|
|
100.0 |
% |
|
$ |
1,136,301 |
|
|
100.0 |
|
% |
Cost of goods sold |
1,016,632 |
|
|
64.3 |
% |
|
838,356 |
|
|
73.8 |
|
% |
Gross margin |
563,701 |
|
|
35.7 |
% |
|
297,945 |
|
|
26.2 |
|
% |
Selling, general and
administrative expenses |
324,627 |
|
|
20.5 |
% |
|
283,923 |
|
|
25.0 |
|
% |
Operating income |
239,074 |
|
|
15.1 |
% |
|
14,022 |
|
|
1.2 |
|
% |
Interest expense, net |
14,549 |
|
|
0.9 |
% |
|
24,522 |
|
|
2.2 |
|
% |
Other (income), net |
(397 |
) |
|
0.0 |
% |
|
(993 |
) |
|
(0.1 |
) |
% |
Income (loss) before income taxes |
224,922 |
|
|
14.2 |
% |
|
(9,507 |
) |
|
(0.8 |
) |
% |
Income tax expense |
47,126 |
|
|
3.0 |
% |
|
513 |
|
|
0.0 |
|
% |
Net income (loss) |
$ |
177,796 |
|
|
11.3 |
% |
|
$ |
(10,020 |
) |
|
(0.9 |
) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (Loss) Per Common
Share: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic (1) |
$ |
1.93 |
|
|
|
|
|
$ |
(0.14 |
) |
|
|
|
|
Diluted (1) |
$ |
1.84 |
|
|
|
|
|
$ |
(0.14 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Common Shares
Outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic (1) |
92,088 |
|
|
|
|
|
72,474 |
|
|
|
|
|
Diluted (1) |
96,472 |
|
|
|
|
|
72,474 |
|
|
|
|
|
(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 BALANCE
SHEETS(Unaudited)(Dollar amounts
in thousands, except per share data)
|
|
May 1, 2021 |
|
January 30, 2021 |
|
May 2, 2020 |
ASSETS |
|
|
|
|
|
|
CURRENT
ASSETS: |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
593,288 |
|
|
|
$ |
377,604 |
|
|
|
$ |
725,615 |
|
|
Accounts receivable - less allowance for doubtful accounts of
$1,450, $1,172 and $4,432, respectively |
|
10,831 |
|
|
|
17,306 |
|
|
|
9,771 |
|
|
Merchandise inventories, net |
|
1,080,804 |
|
|
|
990,034 |
|
|
|
1,012,680 |
|
|
Prepaid expenses and other current assets |
|
30,369 |
|
|
|
28,313 |
|
|
|
27,824 |
|
|
Assets held for sale |
|
1,763 |
|
|
|
1,763 |
|
|
|
1,763 |
|
|
Total current assets |
|
1,717,055 |
|
|
|
1,415,020 |
|
|
|
1,777,653 |
|
|
|
|
|
|
|
|
|
PROPERTY AND
EQUIPMENT, NET |
|
366,005 |
|
|
|
378,260 |
|
|
|
418,476 |
|
|
RIGHT-OF-USE
ASSETS |
|
1,127,645 |
|
|
|
1,143,699 |
|
|
|
1,125,933 |
|
|
TRADE
NAME |
|
577,000 |
|
|
|
577,000 |
|
|
|
577,000 |
|
|
GOODWILL |
|
861,920 |
|
|
|
861,920 |
|
|
|
861,920 |
|
|
OTHER NONCURRENT
ASSETS |
|
7,685 |
|
|
|
8,583 |
|
|
|
11,343 |
|
|
Total assets |
|
$ |
4,657,310 |
|
|
|
$ |
4,384,482 |
|
|
|
$ |
4,772,325 |
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' / PARTNERS'
EQUITY |
|
|
|
|
|
|
CURRENT
LIABILITIES: |
|
|
|
|
|
|
Accounts payable |
|
$ |
864,966 |
|
|
|
$ |
791,404 |
|
|
|
$ |
411,263 |
|
|
Accrued expenses and other current liabilities |
|
287,592 |
|
|
|
291,351 |
|
|
|
187,736 |
|
|
Current lease liabilities |
|
82,676 |
|
|
|
80,338 |
|
|
|
105,099 |
|
|
Current maturities of long-term debt |
|
4,000 |
|
|
|
4,000 |
|
|
|
34,116 |
|
|
Total current liabilities |
|
1,239,234 |
|
|
|
1,167,093 |
|
|
|
738,214 |
|
|
|
|
|
|
|
|
|
LONG-TERM DEBT,
net |
|
781,035 |
|
|
|
781,489 |
|
|
|
1,924,641 |
|
|
LONG-TERM LEASE
LIABILITIES |
|
1,132,196 |
|
|
|
1,150,088 |
|
|
|
1,106,225 |
|
|
DEFERRED TAX
LIABILITIES, NET |
|
164,038 |
|
|
|
138,703 |
|
|
|
— |
|
|
OTHER LONG-TERM
LIABILITIES |
|
26,932 |
|
|
|
35,126 |
|
|
|
22,697 |
|
|
Total liabilities |
|
3,343,435 |
|
|
|
3,272,499 |
|
|
|
3,791,777 |
|
|
|
|
|
|
|
|
|
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 May 2, 2020 |
|
— |
|
|
|
— |
|
|
|
988,178 |
|
|
Common stock, $0.01 par value, authorized 300,000,000 shares;
93,887,109 and 91,114,475 issued and outstanding as of May 1, 2021
and January 30, 2021 respectively. |
|
939 |
|
|
|
911 |
|
|
|
— |
|
|
Additional paid-in capital |
|
150,370 |
|
|
|
127,228 |
|
|
|
— |
|
|
Retained earnings |
|
1,164,964 |
|
|
|
987,168 |
|
|
|
— |
|
|
Accumulated other comprehensive loss |
|
(2,398 |
) |
|
|
(3,324 |
) |
|
|
(10,607 |
) |
|
Stockholders' / partners' equity |
|
1,313,875 |
|
|
|
1,111,983 |
|
|
|
977,571 |
|
|
Total liabilities and stockholders' / partners'
equity |
|
$ |
4,657,310 |
|
|
|
$ |
4,384,482 |
|
|
|
$ |
4,772,325 |
|
|
(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)
|
|
Thirteen Weeks Ended |
|
|
May 1, 2021 |
|
May 2, 2020 |
CASH FLOWS FROM OPERATING
ACTIVITIES: |
|
|
|
|
Net income (loss) |
|
$ |
177,796 |
|
|
|
$ |
(10,020 |
) |
|
Adjustments to reconcile net income (loss) to net cash provided by
operating activities: |
|
|
|
|
Depreciation and amortization |
|
25,298 |
|
|
|
27,447 |
|
|
Non-cash lease expense |
|
500 |
|
|
|
12,871 |
|
|
Equity compensation |
|
5,874 |
|
|
|
2,109 |
|
|
Amortization of terminated interest rate swaps, deferred loan and
other costs |
|
2,030 |
|
|
|
919 |
|
|
Deferred income taxes |
|
25,064 |
|
|
|
(31 |
) |
|
Changes in assets and liabilities: |
|
|
|
|
Accounts receivable, net |
|
6,474 |
|
|
|
4,229 |
|
|
Merchandise inventories, net |
|
(90,769 |
) |
|
|
87,069 |
|
|
Prepaid expenses and other current assets |
|
(2,055 |
) |
|
|
1,048 |
|
|
Other noncurrent assets |
|
612 |
|
|
|
(49 |
) |
|
Accounts payable |
|
77,326 |
|
|
|
(12,149 |
) |
|
Accrued expenses and other current liabilities |
|
(29,039 |
) |
|
|
(26,428 |
) |
|
Income taxes payable |
|
21,357 |
|
|
|
— |
|
|
Other long-term liabilities |
|
(1,240 |
) |
|
|
3,741 |
|
|
Net cash provided by operating activities |
|
219,228 |
|
|
|
90,756 |
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING
ACTIVITIES: |
|
|
|
|
Capital expenditures |
|
(16,808 |
) |
|
|
(9,926 |
) |
|
Net cash used in investing activities |
|
(16,808 |
) |
|
|
(9,926 |
) |
|
|
|
|
|
|
CASH FLOWS FROM FINANCING
ACTIVITIES: |
|
|
|
|
Proceeds from ABL Facility |
|
— |
|
|
|
500,000 |
|
|
Repayment of Term Loan |
|
(1,000 |
) |
|
|
(4,563 |
) |
|
Share-Based Award Payments |
|
(2,993 |
) |
|
|
— |
|
|
Proceeds from exercise of stock options |
|
17,257 |
|
|
|
— |
|
|
Repurchase of Redeemable Membership Units |
|
— |
|
|
|
(37 |
) |
|
Net cash provided by financing activities |
|
13,264 |
|
|
|
495,400 |
|
|
|
|
|
|
|
NET INCREASE IN CASH AND CASH
EQUIVALENTS |
|
215,684 |
|
|
|
576,230 |
|
|
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD |
|
377,604 |
|
|
|
149,385 |
|
|
CASH AND CASH EQUIVALENTS AT
END OF PERIOD |
|
$ |
593,288 |
|
|
|
$ |
725,615 |
|
|
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 on early extinguishment of debt, net, severance and
executive transition costs, costs related to the COVID-19 pandemic
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 on early
extinguishment of debt, net, severance and executive transition
costs, costs related to the COVID-19 pandemic and other
adjustments. We describe these adjustments reconciling net income
(loss) to Adjusted EBITDA and Adjusted EBIT in the following
table.
|
|
Thirteen Weeks Ended |
|
|
May 1, 2021 |
|
May 2, 2020 |
Net income (loss) |
|
$ |
177,796 |
|
|
|
$ |
(10,020 |
) |
|
Interest expense, net |
|
14,549 |
|
|
|
24,522 |
|
|
Income tax expense |
|
47,126 |
|
|
|
513 |
|
|
Depreciation and
amortization |
|
25,298 |
|
|
|
27,447 |
|
|
Consulting fees (a) |
|
— |
|
|
|
56 |
|
|
Private equity sponsor
monitoring fee (b) |
|
— |
|
|
|
920 |
|
|
Equity compensation (c) |
|
5,874 |
|
|
|
2,109 |
|
|
Severance and executive
transition costs (d) |
|
— |
|
|
|
228 |
|
|
Costs related to the COVID-19
pandemic (e) |
|
— |
|
|
|
6,645 |
|
|
Other (f) |
|
350 |
|
|
|
837 |
|
|
Adjusted EBITDA |
|
$ |
270,993 |
|
|
|
$ |
53,257 |
|
|
Less: Depreciation and
amortization |
|
(25,298 |
) |
|
|
(27,447 |
) |
|
Adjusted EBIT |
|
$ |
245,695 |
|
|
|
$ |
25,810 |
|
|
(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 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 2020 first quarter 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) |
|
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 on early
extinguishment of debt, net, severance and executive transition
costs, costs related to the COVID-19 pandemic 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 |
|
|
May 1, 2021 |
|
May 2, 2020 |
Net income (loss) |
|
$ |
177,796 |
|
|
|
$ |
(10,020 |
) |
|
Consulting fees (a) |
|
— |
|
|
|
56 |
|
|
Private equity sponsor
monitoring fee (b) |
|
— |
|
|
|
920 |
|
|
Equity compensation (c) |
|
5,874 |
|
|
|
2,109 |
|
|
Severance and executive
transition costs (d) |
|
— |
|
|
|
228 |
|
|
Costs related to the COVID-19
pandemic (e) |
|
— |
|
|
|
6,645 |
|
|
Other (f) |
|
350 |
|
|
|
837 |
|
|
Tax effects of these
adjustments (g) |
|
(1,489 |
) |
|
|
(19 |
) |
|
Adjusted Net Income |
|
182,531 |
|
|
|
756 |
|
|
Estimated tax effect of change
to C-Corporation status (h) |
|
— |
|
|
|
(316 |
) |
|
Pro Forma Adjusted Net Income |
|
$ |
182,531 |
|
|
|
$ |
440 |
|
|
|
|
|
|
|
Pro Forma Adjusted Earnings
per Share |
|
|
|
|
Basic |
|
$ |
1.98 |
|
|
|
$ |
0.01 |
|
|
Diluted |
|
$ |
1.89 |
|
|
|
$ |
0.01 |
|
|
Weighted average common shares
outstanding |
|
|
|
|
Basic (1) |
|
92,088 |
|
|
|
72,474 |
|
|
Diluted (1) |
|
96,472 |
|
|
|
72,474 |
|
|
(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 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 2020 first quarter 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) |
|
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. |
(g) |
|
For the thirteen weeks ended May 1, 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 the thirteen weeks ended May 2, 2020,
this represents the tax effect of the total adjustments made to
arrive at Adjusted Net Income at our historical tax rate. |
(h) |
|
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 |
|
|
May 1, 2021 |
|
May 2, 2020 |
Net cash provided by operating activities |
|
$ |
219,228 |
|
|
|
$ |
90,756 |
|
|
Net cash used in investing
activities |
|
(16,808 |
) |
|
|
(9,926 |
) |
|
Adjusted Free Cash Flow |
|
$ |
202,420 |
|
|
|
$ |
80,830 |
|
|
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