What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2021-09-09 compared with 2021-06-08 · 161 added, 122 removed, 503 unchanged (36% of the section changed)

3 unchanged sentences

(Dollar amounts in thousands, except per share data)

May 1, 2021 January 30, 2021 May 2, 2020

July 31, 2021 January 30, 2021 August 1, 2020

CURRENT ASSETS:

29 unchanged sentences

none issued and outstanding

Partners' equity, membership units authorized, issued and outstanding were 72,478,106 as of May 2, 2020

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;

93,887,109 and 91,114,475 issued and outstanding as of May 1, 2021 and January 30, 2021 respectively.

92,883,540 and 91,114,475 issued and outstanding as of July 31, 2021 and January 30, 2021, respectively.

Additional paid-in capital 187,746 127,228 —

6 unchanged sentences

ACADEMY SPORTS AND OUTDOORS, INC.

CONSOLIDATED STATEMENTS OF INCOME (LOSS)

CONSOLIDATED STATEMENTS OF INCOME

(Amounts in thousands, except per share data)

Thirteen Weeks Ended

May 1, 2021 May 2, 2020

Thirteen Weeks Ended Twenty-Six Weeks Ended

July 31, 2021 August 1, 2020 July 31, 2021 August 1, 2020

NET SALES $ 1,791,530 $ 1,606,420 $ 3,371,863 $ 2,742,721

4 unchanged sentences

INTEREST EXPENSE, NET 12,157 23,566 26,706 48,088

(GAIN) LOSS ON EARLY RETIREMENT OF DEBT, NET 2,239 ( 7,831 ) 2,239 ( 7,831 )

OTHER (INCOME), NET ( 735 ) ( 628 ) ( 1,132 ) ( 1,621 )

INCOME (LOSS) BEFORE INCOME TAXES 224,922 ( 9,507 )

INCOME BEFORE INCOME TAXES 240,897 168,681 465,819 159,174

INCOME TAX EXPENSE 50,387 1,005 97,513 1,518

NET INCOME (LOSS) $ 177,796 $ ( 10,020 )

EARNINGS (LOSS) PER COMMON SHARE:

NET INCOME $ 190,510 $ 167,676 $ 368,306 $ 157,656

EARNINGS PER COMMON SHARE:

$ 2.06 $ 2.31 $ 3.99 $ 2.18

6 unchanged sentences

ACADEMY SPORTS AND OUTDOORS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Amounts in thousands)

Thirteen Weeks Ended

May 1, 2021 May 2, 2020

COMPREHENSIVE INCOME (LOSS):

Net income (loss) $ 177,796 $ ( 10,020 )

Thirteen Weeks Ended Twenty-Six Weeks Ended

July 31, 2021 August 1, 2020 July 31, 2021 August 1, 2020

COMPREHENSIVE INCOME:

Net income $ 190,510 $ 167,676 $ 368,306 $ 157,656

Unrealized loss on interest rate swaps — ( 606 ) — ( 5,040 )

1 unchanged sentence

Tax expense ( 163 ) — ( 433 ) —

Total comprehensive income (loss) $ 178,722 $ ( 12,561 )

Total comprehensive income $ 191,046 $ 169,944 $ 369,768 $ 157,383

See Condensed Notes to Consolidated Financial Statements

2 unchanged sentences

(Amounts in thousands)

Redeemable Membership Units Partners' Equity / Stockholders' Equity Total Membership Units / Common Stock

Redeemable Membership Units Partners' / Stockholders' Equity Total Membership Units / Common Stock

Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Total Partners' /Stockholders' Equity

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Balances as of May 1, 2021 — $ — — $ — 93,887 $ 939 $ 150,370 $ 1,164,964 $ ( 2,398 ) $ 1,313,875 93,887

Redeemable Membership Units Partners' Equity / Stockholders' Equity Total Membership Units / Common Stock

Net income — — — — — — — 190,510 — 190,510 —

Equity compensation — — — — — — 27,331 — — 27,331 —

Repurchase of common stock for retirement — — — — ( 3,230 ) ( 32 ) ( 5,299 ) ( 94,669 ) — ( 100,000 ) ( 3,230 )

Settlement of vested Restricted Stock Units — — — — 836 8 ( 8 ) — — — 836

Issuance of common stock under employee stock purchase plan — — — — 35 — 945 — — 945 35

Stock option exercises — — — — 1,356 14 14,407 — — 14,421 1,356

Recognized interest expense on interest rate swaps (net of tax impact of $ 163 )

— — — — — — — — 536 536 —

Balances as of July 31, 2021 — $ — — $ — 92,884 $ 929 $ 187,746 $ 1,260,805 $ ( 1,862 ) $ 1,447,618 92,884

See Condensed Notes to Consolidated Financial Statements

ACADEMY SPORTS AND OUTDOORS, INC.

CONSOLIDATED STATEMENTS OF PARTNERS' / STOCKHOLDERS' EQUITY

(Amounts in thousands)

Redeemable Membership Units Partners' / Stockholders' Equity Total Membership Units / Common Stock

Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Total Partners' / Stockholders' Equity

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Balances as of May 2, 2020 172 $ 2,977 72,306 $ 988,178 — $ — $ — $ — $ ( 10,607 ) $ 977,571 72,478

Net income — — — 167,676 — — — — — 167,676 —

Equity compensation — — — 1,581 — — — — — 1,581 —

Unrealized loss on interest rate swaps — — — — — — — — ( 606 ) ( 606 ) —

Recognized interest expense on interest rate swaps — — — — — — — — 2,874 2,874 —

Balances as of August 1, 2020 172 $ 2,977 72,306 $ 1,157,435 — $ — $ — $ — $ ( 8,339 ) $ 1,149,096 72,478

(1) See Retrospective Presentation of Ownership Exchange in Note 2.

3 unchanged sentences

(Amounts in thousands)

Thirteen Weeks Ended

May 1, 2021 May 2, 2020

Twenty-Six Weeks Ended

July 31, 2021 August 1, 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:

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

3 unchanged sentences

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:

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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 provided by financing activities 13,264 495,400

Net cash used in financing activities ( 195,686 ) ( 25,127 )

NET INCREASE IN CASH AND CASH EQUIVALENTS 176,221 734,644

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(collectively, "KKR"), acquired a majority interest in the Company.

On October 6, 2020, we completed an initial public offering and as of May 1, 2021, KKR had a 44.6 % ownership interest in the Company (see Note 14).

As of July 31, 2021, KKR held an ownership interest of approximately 20 % in the Company.

The Company is one of the leading full-line sporting goods and outdoor recreational products retailers in the United States in terms of net sales.

As of May 1, 2021, we operated 259 "Academy Sports + Outdoors" retail locations in 16 states and three distribution centers located in Katy, Texas, Twiggs County, Georgia and Cookeville, Tennessee.

As of July 31, 2021, we operated 259 "Academy Sports + Outdoors" retail locations in 16 states and three distribution centers located in Katy, Texas, Twiggs County, Georgia and Cookeville, Tennessee.

We also sell merchandise to customers across most of the United States via our academy.com website.

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The Company did no t receive any proceeds from the Secondary Offering.

May 2021 Secondary Offering and Stock Repurchase

On May 5, 2021, ASO, Inc.

completed a subsequent secondary offering and concurrent share repurchase of shares of its Common Stock (see Note 14).

entered into an underwriting agreement (the “May 2021 Underwriting Agreement”), by and among ASO, Inc., Allstar LLC, Allstar Co-Invest Blocker L.P., KKR 2006 Allstar Blocker L.P., MSI 2011 LLC and MG Family Limited Partnership (collectively, the “May 2021 Selling Stockholders”), and Credit Suisse Securities (USA) LLC and J.P.

Morgan Securities LLC, as representatives of the several underwriters named therein (the “May 2021 Underwriters”), relating to an underwritten offering of 14,000,000 shares of Common Stock at $ 30.96 per share (the “May 2021 Secondary Offering”), pursuant to the Company’s Registration Statement on Form S-1 (File No.

333-255720), filed on May 3, 2021.

The May 2021 Selling Stockholders granted the May 2021 Underwriters the option to purchase, within 30 days from the date of the May 2021 Underwriting Agreement, an additional 2,100,000 shares of Common Stock.

On May 6, 2021, the May 2021 Underwriters exercised in full their option to purchase the additional shares.

The May 2021 Secondary Offering was completed on May 10, 2021.

The Company did no t receive any proceeds from the May 2021 Secondary Offering.

The May 2021 Secondary Offering also included the Company's repurchase and simultaneous retirement of 3,229,974 shares out of the 14,000,000 shares at $ 30.96 per share, the same price granted to the underwriters.

The Company allocated the excess of the repurchase price over the par value of shares acquired to Retained Earnings and Additional Paid-in Capital.

The portion allocated to Additional Paid-in Capital is determined by dividing the number of shares to be retired by the number of shares issued multiplied by the balance of Additional Paid-in Capital as of the retirement date.

The May 2021 Secondary Offering reduced the KKR ownership interest in the Company, resulting in a vesting event (the "2021 Vesting Event") for awards granted under the 2011 Unit Incentive Plan, whereby unvested time awards and performance-based awards which had previously met their performance targets vested and unvested performance-based awards which had not previously met their performance targets were forfeited.

As a result, we incurred approximately $ 24.9 million in non-cash expenses related to equity-based compensation and approximately $ 15.4 million of cash expenses related to taxes on equity-based compensation.

Additionally, approximately $ 8.2 million of Share-Based Award Payments (see Note 9) for equity-based compensation distributions were accelerated during the 2021 second quarter.

Summary of Significant Accounting Policies

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The information furnished herein reflects all normal recurring adjustments which are, in the opinion of management, necessary for a fair presentation of the results for the interim periods presented.

The results of operations for the thirteen weeks ended May 1, 2021 are not necessarily indicative of the results that will be realized for the fiscal year ending January 29, 2022 or any other period.

The balance sheet as of January 30, 2021 has been derived from our audited financial statements as of that date.

The results of operations for the thirteen and twenty-six weeks ended July 31, 2021 are not necessarily indicative of the results that will be realized for the fiscal year ending January 29, 2022 or any other period.

sheet as of January 30, 2021 has been derived from our audited financial statements as of that date.

For further information, refer to our audited financial statements and notes thereto included in the Annual Report.

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Within the merchandise division sales table presented in Note 3, certain products and categories were recategorized amongst various categories and divisions, respectively, to better align with our current merchandising strategy and view of the business.

As a result, we have reclassified sales between divisions in the thirteen weeks ended May 2, 2020 for comparability purposes.

As a result, we have reclassified sales between divisions in the thirteen and twenty-six weeks ended August 1, 2020 for comparability purposes.

This reclassification is in divisional presentation only and did not impact the overall net sales balances previously disclosed.

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The following table sets forth the approximate amount of sales by merchandise divisions for the periods presented (amounts in thousands):

Thirteen Weeks Ended

May 1, 2021 May 2, 2020

Thirteen Weeks Ended Twenty-Six Weeks Ended

July 31, 2021 August 1, 2020 July 31, 2021 August 1, 2020

Merchandise division sales (1)

6 unchanged sentences

Other sales (3)

10,781 7,065 16,824 14,737

Net Sales $ 1,791,530 $ 1,606,420 $ 3,371,863 $ 2,742,721

(1) Certain products and categories were recategorized amongst various categories and divisions, respectively, to better align with our current merchandising strategy and view of the business.

As a result, we have reclassified sales between divisions in the thirteen weeks ended May 2, 2020 for comparability purposes.

As a result, we have reclassified sales between divisions in the thirteen and twenty-six weeks ended August 1, 2020 for comparability purposes.

This reclassification is in divisional presentation only and did not impact the overall net sales balances previously disclosed (see Note 2).

(2) E-commerce sales consisted of 7.4 % and 13.1 % of merchandise sales for the thirteen weeks ended May 1, 2021 and May 2, 2020, respectively.

(2) E-commerce sales consisted of 8.4 % and 7.9 % of merchandise sales for the thirteen and twenty-six weeks ended July 31, 2021, respectively, and 9.4 % and 10.9 % for the thirteen and twenty-six weeks ended August 1, 2020, respectively.

(3) Other sales consisted primarily of the sales return allowance, gift card breakage income, credit card bounties and royalties, shipping income, net hunting and fishing license income and other items.

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The following is a reconciliation of the gift card liability (amounts in thousands):

Thirteen Weeks Ended

May 1, 2021 May 2, 2020

Thirteen Weeks Ended Twenty-Six Weeks Ended

July 31, 2021 August 1, 2020 July 31, 2021 August 1, 2020

Gift card liability, beginning balance $ 63,242 $ 57,786 $ 74,253 $ 67,993

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Our debt consisted of the following (amounts in thousands) as of:

May 1, 2021 January 30, 2021 May 2, 2020

July 31, 2021 January 30, 2021 August 1, 2020

ABL Facility, due November 2025 $ — $ — $ —

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(1) Deferred loan costs are related to the Term Loan and Notes.

As of May 1, 2021, January 30, 2021 and May 2, 2020, the balance in deferred loan costs related to the ABL Facility (as defined below) was approximately $ 5.2 million, $ 5.5 million and $ 3.2 million, respectively, and was included in other noncurrent assets on our consolidated balance sheets.

Total amortization of deferred loan costs was $ 0.7 million and $ 0.6 million for the thirteen weeks ended May 1, 2021 and May 2, 2020, respectively.

Total expenses related to accretion of original issuance discount were $ 0.1 million and $ 0.3 million for the thirteen weeks ended May 1, 2021 and May 2, 2020, respectively.

The expenses related to amortization of deferred loan costs and accretion of original issuance discount are included in interest expense, net on the consolidated statements of income (loss).

As of July 31, 2021, January 30, 2021 and August 1, 2020, the balance in deferred loan costs related to the ABL Facility (as defined below) was approximately $ 4.9 million, $ 5.5 million and $ 2.9 million, respectively, and was included in other noncurrent assets on our consolidated balance sheets.

Total amortization of deferred loan costs was $ 0.7 million and $ 1.4 million for the thirteen and twenty-six weeks ended July 31, 2021, respectively, and $ 0.6 million and $ 1.3 million for the thirteen and twenty-six weeks ended August 1, 2020, respectively.

Total expenses related to accretion of original issuance discount were $ 0.2 million and $ 0.3 million for the thirteen and twenty-six weeks ended July 31, 2021, respectively, and $ 0.3 million and $ 0.5 million for the thirteen and twenty-six weeks ended August 1, 2020, respectively.

The expenses related to amortization of deferred loan costs and accretion of original issuance discount are included in interest expense, net on the consolidated statements of income.

On November 6, 2020, the Company issued the Notes (as defined below), entered into the 2020 Term Loan (as defined below), and entered into the 2020 ABL Facility (the "Refinancing Transactions").

The Company used the net proceeds from the Notes and the net proceeds from the 2020 Term Loan, together with cash on hand, to repay in full outstanding borrowings under its then-existing term loan, in the amount of $ 1,431.4 million.

We refer to the 2015 Term Loan and the 2020 Term Loan collectively as the "Term Loan".

On May 25, 2021, the Company refinanced its 2020 Term Loan and paid down approximately $ 99.0 million of the 2020 Term Loan.

We refer to the 2015 Term Loan, the 2020 Term Loan and the Amendment collectively as the "Term Loan".

On July 2, 2015, Academy, Ltd.

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The 2020 Term Loan will mature on November 6, 2027.

The 2020 Term Loan bears interest, at Academy, Ltd.’s election, at either (1) LIBOR rate with a floor of 0.75 %, plus a margin of 5.00 %, or (2) a base rate equal to the highest of (a) the federal funds rate plus 0.50 %, (b) Credit Suisse’s "prime rate", or (c) the one-month LIBOR rate plus 1.00 %, plus a margin of 4.00 %.

Quarterly principal payments of approximately $ 1.0 million are required through September 30, 2027, with the balance due in full on the maturity date of November 6, 2027.

As of May 1, 2021, the weighted average interest rate was 5.75 %, with interest payable monthly.

The terms and conditions of the 2020 Term Loan also require that the outstanding balance under the 2020 Term Loan is prepaid under certain circumstances.

In connection with the 2020 Term Loan, the Company capitalized related professional fees of $ 5.8 million as deferred loan costs.

As of May 1, 2021, no prepayment was due under the terms and conditions of the Term Loan.

On May 25, 2021, the Company refinanced its 2020 Term Loan and paid down approximately $ 99.0 million of the Term Loan (see Note 14).

The 2020 Term Loan bore interest, at Academy, Ltd.’s election, at either (1) LIBOR rate with a floor of 0.75 %, plus a margin of 5.00 %, or (2) a base rate equal to the highest of (a) the federal funds rate plus 0.50 %, (b) Credit Suisse’s "prime rate", or (c) the one-month LIBOR rate plus 1.00 %, plus a margin of 4.00 %.

Quarterly principal payments of approximately $ 1.0 million were required through September 30, 2027, with the balance due in full on the maturity date of November 6, 2027.

On May 25, 2021, Academy, Ltd.

entered into Amendment No.

4 (the “Amendment”) to the Second Amended and Restated Credit Agreement, dated as of November 6, 2020, among Academy, Ltd., as Borrower, Credit Suisse AG, Cayman Islands Branch, as the administrative agent and collateral agent, the several lenders party thereto and the several other parties named therein (as previously amended, the “Existing Credit Agreement” and as amended by the Amendment, the “Amended Credit Agreement”).

Pursuant to the terms of the Amendment, Academy, Ltd.

(i) reduced the applicable margin on LIBOR borrowings under the Existing Credit Agreement from 5.00 % to 3.75 % and (ii) utilized cash on hand to repay $ 99.0 million of outstanding borrowings under the Existing Credit Agreement, leaving an outstanding principal balance of $ 300.0 million under the Amended Credit Agreement.

Quarterly principal payments of $ 750.0 thousand are required through September 30, 2027 and borrowings under the Amended Credit Agreement will continue to mature on November 6, 2027.

All other material terms and provisions of the 2020 Term Loan remain substantially the same as the terms and provisions in place immediately prior to the effectiveness of the Amendment.

As of July 31, 2021, the weighted average interest rate was 4.50 %, with interest payable monthly.

The terms and conditions of the Amendment also require that the outstanding balance under the Loan is prepaid under certain circumstances.

In connection with the 2020 Term Loan and the Amendment, the Company capitalized related professional fees of $ 5.8 million as deferred loan costs.

As of July 31, 2021, no prepayment was due under the terms and conditions of the Term Loan.

In connection with the Amendment, the Company recognized a non-cash loss on early retirement of debt of $ 2.2 million in the thirteen and twenty-six weeks ended July 31, 2021 from the write-off of deferred loan costs and expense related to the original issuance discount associated with our 2020 Term Loan.

During the thirteen and twenty-six weeks ended August 1, 2020, we repurchased principal on our 2015 Term Loan, which was trading at a discount, in open market transactions.

The following table provides further detail regarding these repurchases (amounts in millions):

Thirteen Weeks Ended Twenty-Six Weeks Ended

August 1, 2020 August 1, 2020

Gross principal repurchased $ 23.9 $ 23.9

Reacquisition price of debt $ 16.0 $ 16.0

Net gain recognized $ 7.8 $ 7.8

On November 6, 2020, Academy, Ltd.

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During the normal course of business, we periodically utilize letters of credit primarily for the purchase of import goods and in support of insurance contracts.

As of May 1, 2021, we had outstanding letters of credit of approximately $ 17.2 million, of which $ 13.6 million were issued under the ABL Facility, and we had no borrowings outstanding under the ABL Facility, leaving the available borrowing capacity under the ABL Facility of $ 819.4 million.

As of July 31, 2021, we had outstanding letters of credit of approximately $ 19.5 million, of which $ 15.5 million were issued under the ABL Facility, and we had no borrowings outstanding under the ABL Facility, leaving the available borrowing capacity under the ABL Facility of $ 858.4 million.

Borrowings under the ABL Facility bear interest, at our election, at either (1) LIBOR plus a margin of 1.25 % to 1.75 %, or (2) a base rate equal to the highest of (a) the federal funds rate plus 0.50 %, (b) JPMorgan Chase Bank, N.A.'s "prime rate", or (c) the one-month LIBOR rate plus 1.00 %, plus a margin of 0.25 % to 0.75 %.

1 unchanged sentence

The terms and conditions of the ABL Facility also require that we prepay outstanding loans under the ABL Facility under certain circumstances.

As of May 1, 2021, no future prepayments of outstanding loans have been triggered under the terms and conditions of the ABL Facility.

As of July 31, 2021, no future prepayments of outstanding loans have been triggered under the terms and conditions of the ABL Facility.

The ABL Facility and Term Loan agreements and the Indenture contain covenants, including, among other things, covenants that restrict Academy, Ltd.'s ability to incur certain additional indebtedness, create or permit liens on assets, engage in mergers or consolidations, pay dividends, make other restricted payments, make loans or advances, engage in transactions with affiliates or amend material documents.

1 unchanged sentence

These covenants are subject to certain qualifications and limitations.

We were in compliance with these covenants as of May 1, 2021.

We were in compliance with these covenants as of July 31, 2021.

Capitalized Interest.

We capitalized interest primarily related to construction of new stores and store renovations in the amount of $ 0.1 million and $ 0.1 million for the thirteen weeks ended May 1, 2021 and May 2, 2020, respectively.

We capitalized interest primarily related to construction of new stores and store renovations in the amount of $ 0.2 million and $ 0.3 million for the thirteen and twenty-six weeks ended July 31, 2021, respectively, and $ 0.2 million and $ 0.3 million for the thirteen and twenty-six weeks ended August 1, 2020, respectively.

Derivative Financial Instruments

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On January 19, 2021, we settled our three remaining outstanding interest rate swaps in full, which were scheduled to expire on various dates during 2021, for $ 4.1 million.

As of May 1, 2021, we do not have any derivative financial instruments outstanding.

As of July 31, 2021, we do not have any derivative financial instruments outstanding.

The fair value of these interest rate swaps is as follows (amounts in thousands) as of:

May 1, 2021 January 30, 2021 May 2, 2020

July 31, 2021 January 30, 2021 August 1, 2020

Derivatives designated as hedging instruments

Amounts included in other current assets $ — $ — $ —

Amounts included in other noncurrent assets — — —

Amounts included in accrued expenses and other current liabilities $ — $ — $ 7,485

3 unchanged sentences

The impact of gains and losses related to interest rate swaps that are deferred into AOCI and subsequently reclassified into expense as follows (amounts in thousands):

Thirteen Weeks Ended

May 1, 2021 May 2, 2020

Thirteen Weeks Ended Twenty-Six Weeks Ended

July 31, 2021 August 1, 2020 July 31, 2021 August 1, 2020

Accumulated Other Comprehensive Loss, beginning $ ( 2,398 ) $ ( 10,607 ) $ ( 3,324 ) $ ( 8,066 )

Loss deferred into AOCI — ( 606 ) — ( 5,040 )

Increase to interest expense (net of tax impact of $ 270 in the thirteen weeks ended May 1, 2021)

Increase to interest expense (net of tax impact of $ 163 and $ 433 in the thirteen and twenty-six weeks ended July 31, 2021, respectively)

536 2,874 1,462 4,767

Accumulated Other Comprehensive Loss, ending $ ( 1,862 ) $ ( 8,339 ) $ ( 1,862 ) $ ( 8,339 )

10 unchanged sentences

The following table provides the fair value hierarchy for our derivative financial instruments (amounts in thousands) as of:

Fair Value Hierarchy May 1, 2021 January 30, 2021 May 2, 2020

Interest rate swap Level 2 $ — $ — $ —

Fair Value Hierarchy July 31, 2021 January 30, 2021 August 1, 2020

Interest rate swap Level 2 $ — $ — $ 8,379

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Government treasury bills and securities, which are classified as cash and redeemable on demand.

As of May 1, 2021, January 30, 2021 and May 2, 2020, we held $ 476.0 million, $ 284.0 million and $ 662.0 million in money market funds, respectively.

As of July 31, 2021, January 30, 2021 and August 1, 2020, we held $ 383.0 million, $ 284.0 million and $ 781.1 million in money market funds, respectively.

The fair value of the Term Loan and Notes is estimated using a discounted cash flow analysis based on quoted market prices for the instrument in an inactive market and is therefore classified as Level 2 within the fair value hierarchy.

As of May 1, 2021, the estimated fair value of the Term Loan and Notes was $ 0.8 billion.

As of January 30, 2021 and May 2, 2020, the estimated fair value of the Term Loan was $ 0.8 billion and $ 0.9 billion, respectively.

As of July 31, 2021 and January 30, 2021, the estimated fair value of the Term Loan and Notes was $ 0.7 billion and $ 0.8 billion, respectively.

As of August 1, 2020, the estimated fair value of the Term Loan was $ 1.3 billion.

As borrowings on the ABL Facility are generally repaid in less than 12 months, we believe that fair value approximates the carrying value.

1 unchanged sentence

Property and equipment consists of the following (amounts in thousands) as of:

May 1, 2021 January 30, 2021 May 2, 2020

July 31, 2021 January 30, 2021 August 1, 2020

Leasehold improvements $ 448,275 $ 438,287 $ 434,087

6 unchanged sentences

Property and equipment, net $ 362,784 $ 378,260 $ 396,559

Depreciation expense was $ 25.3 million and $ 27.4 million in the thirteen weeks ended May 1, 2021 and May 2, 2020, respectively and is included in selling, general and administrative expenses on the consolidated statements of income.

Depreciation expense was $ 26.0 million and $ 51.3 million, respectively, in the thirteen and twenty-six weeks ended July 31, 2021, and $ 26.7 million and $ 54.2 million in the thirteen and twenty-six weeks ended August 1, 2020, respectively, and is included in selling, general and administrative expenses on the consolidated statements of income.

Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consist of the following (amounts in thousands) as of:

May 1, 2021 January 30, 2021 May 2, 2020

July 31, 2021 January 30, 2021 August 1, 2020

Accrued interest $ 6,654 $ 7,684 $ 7,469

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Concurrent with the adoption of the 2020 Omnibus Incentive Plan, the NAHC 2011 Unit Incentive Plan (the "2011 Unit Incentive Plan") was frozen and no further issuances will be permitted as part of the 2011 Unit Incentive Plan.

As of May 1, 2021, there were 3,707,752 shares that were authorized and available for grant under the 2020 Omnibus Incentive Plan.

As of July 31, 2021, there were 3,703,285 shares that were authorized and available for grant under the 2020 Omnibus Incentive Plan.

On September 29, 2020, the Academy Sports and Outdoors, Inc.

Board of Directors adopted the 2020 Employee Stock Purchase Plan (the "ESPP"), which became effective on October 1, 2020 upon the effectiveness of the Registration Statement.

As of May 1, 2021, we have reserved a total of 2,000,000 shares of common stock for issuance and no common shares were issued or outstanding pursuant to the ESPP.

Our initial offering period related to the ESPP commenced during the thirteen weeks ended May 1, 2021.

Equity compensation expense was $ 5.9 million and $ 2.1 million for the thirteen weeks ended May 1, 2021 and May 2, 2020, respectively and is included in selling, general and administrative expenses in the statements of income.

We have reserved a total of 2,000,000 shares and as of July 31, 2021, there were 1,964,614 shares authorized and available for future issuance under the ESPP.

Equity compensation expense was $ 27.3 million and $ 33.2 million for the thirteen and twenty-six weeks ended July 31, 2021, respectively, which includes approximately $ 24.9 million in non-cash expenses related to the 2021 Vesting Event which occurred during the 2021 second quarter.

Equity compensation expense was $ 1.6 million and $ 3.7 million for the thirteen and twenty-six weeks ended August 1, 2020, respectively.

These costs are included in selling, general and administrative expenses in the statements of income.

2011 Unit Incentive Plan

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Concurrent with the adoption of the 2020 Omnibus Incentive Plan on October 1, 2020, no further Awards are authorized to be granted under the 2011 Unit Incentive Plan.

Subsequent to May 1, 2021, the May 2021 Secondary Offering (as defined in Note 14) reduced KKR's ownership interest in the Company to 31.3 % and resulted in a vesting event for awards granted under the 2011 Unit Incentive Plan, whereby unvested time awards, and performance-based awards which had previously met their performance targets, vested, and unvested performance-based awards which had not previously met their performance targets were forfeited.

Additionally, approximately $ 8.2 million of cash payments for equity-based compensation distributions will be accelerated (see Note 14).

2020 Omnibus Incentive Plan

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Cash on hand was used to fund $ 248.0 million of the distribution, with the remainder distributed through an offset of outstanding loans receivable from one member and state income tax withholding made on behalf of NAHC's members.

Holders of the outstanding granted equity Awards are entitled to receive value equal to $ 1.1257 per Award (or $ 3.5460 as converted using the Contribution Ratio), which was or will be made in the form of cash payments, additional Restricted Unit grants or Unit Option exercise price adjustments.

Cash payments due for unvested Awards will be payable upon vesting of such Awards.

Holders of the outstanding granted equity Awards were entitled to receive value equal to $ 1.1257 per Award (or $ 3.5460 as converted using the Contribution Ratio), which was made in the form of cash payments, additional Restricted Unit grants or Unit Option exercise price adjustments.

Cash payments due for unvested Awards were paid upon vesting of such Awards.

In accordance with the terms of the 2011 Unit Incentive Plan, the Company made the following adjustments to each outstanding Award (per unit components, shares and exercise prices shown above and below are converted using the Contribution Ratio as described in the Retrospective Presentation of Ownership Exchange in Note 2):

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• Additional Restricted Unit grants of 159,362 units (or 50,590 Liquidity Event Restricted Units, as converted);

• Cash payments for vested Unit Options and vested Restricted Units ("Share-Based Award Payments") of $ 24.0 million were paid through May 1, 2021.

Share-Based Award Payments payable as of May 1, 2021 for unvested awards is $ 8.2 million, which is reflected within accrued expenses and other current liabilities on the Company's consolidated balance sheets.

The May 2021 Secondary Offering resulted in the acceleration of cash payments for equity-based compensation distributions of approximately $8.2 million (see Note 14).

These exercise price adjustments did not increase the value of the Unit Options and no related additional equity compensation was or will be incurred.

• Cash payments for vested Unit Options and vested Restricted Units ("Share-Based Award Payments") of $ 32.2 million were paid in-full as of July 31, 2021.

No further Share-Based Award Payments relative to the distribution are payable as of July 31, 2021.

These exercise price adjustments did not increase the value of the Unit Options and no related additional equity compensation was incurred.

Service Option Fair Value Assumptions

The fair value for Service Options granted was estimated using a Black-Scholes option-pricing model.

The expected lives of the Service Options granted were based on the "SEC simplified" method and a mid-point assumption, respectively.

The expected lives of the Service Options granted were based on the "SEC simplified" method.

Expected price volatility was determined based on the implied volatilities of comparable companies over a historical period that matches the expected life of the Award.

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The assumptions used to calculate the fair value of Awards granted are evaluated and modified, as necessary, to reflect current market conditions and experience.

The following table presents the assumptions and grant date fair values for Service Options granted in the thirteen weeks ended May 1, 2021:

The following table presents the assumptions and grant date fair values for Service Options granted in the twenty-six weeks ended July 31, 2021:

Expected life in years 6.18

Expected volatility 44 %

Expected volatility 42 % to 44 %

Weighted-average volatility 44 %

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Dividend yield —

The following table presents the Award grants during the thirteen weeks ended May 1, 2021:

Service Options Service Restricted Units Performance Restricted Units

The following table presents the Award grants during the twenty-six weeks ended July 31, 2021:

Service Options Service Restricted Stock Units Performance Restricted Stock Units

Number of shares 900,542 185,396 192,919

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Weighted average exercise price per Award $ 27.14 N/A N/A

The following table presents the unrecognized compensation cost as of May 1, 2021:

Service Options Performance Unit Options Service Restricted Units Liquidity Event Restricted Units Performance Restricted Units

The following table presents the unrecognized compensation cost as of July 31, 2021:

Service Options Service Restricted Stock Units Performance Restricted Stock Units

Remaining expense $ 10,474,721 $ 4,495,775 $ 4,193,693

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Basic and diluted weighted average common shares outstanding and basic and diluted earnings per common share are calculated as follows (amounts in thousands except per share amounts):

Thirteen Weeks Ended

May 1, 2021 May 2, 2020

Net income (loss) $ 177,796 $ ( 10,020 )

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

Weighted average common shares outstanding - basic (1)

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Dilutive effect of Service Options (1)

2,614 571 2,427 613

Dilutive effect of Performance Unit Options and Performance Stock Options (1)

468 1,387 962 1,390

Dilutive effect of ESPP shares — — — —

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Anti-dilutive stock-based awards excluded from diluted calculation (1)

34 1,653 43 426

(1) See Retrospective Presentation of Ownership Exchange in Note 2.

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The current tax payable is based on the estimated federal and state income tax payments, while the remainder of income tax expense or benefit for the period is recorded to the net deferred tax asset or liability account.

For the three months ended May 1, 2021, ASO, Inc.

recorded $ 47.1 million of income tax expense, which included income taxes payable of $ 22.0 million and net deferred tax liabilities of $ 25.1 million.

For the thirteen and twenty-six weeks ended July 31, 2021, ASO, Inc.

recorded $ 50.4 million and $ 97.5 million of income tax expense, respectively, which included changes in income taxes payable of $ 50.9 million and net deferred tax liabilities of $ 46.6 million as of July 31, 2021.

Related Party Transactions

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Upon the completion of the IPO in the third quarter of 2020, the Monitoring Agreement terminated.

We recognized advisory fees related to the Monitoring Agreement, including reimbursement of expenses, of approximately $ 0.9 million in the thirteen weeks ended May 2, 2020.

We recognized advisory fees related to the Monitoring Agreement, including reimbursement of expenses, of approximately $ 0.9 million and $ 1.8 million in the thirteen and twenty-six weeks ended August 1, 2020, respectively.

These expenses are included in selling, general and administrative expenses in the statements of income.

Other Related Party Transactions

KKR has ownership interest in a broad range of portfolio companies and we may enter into commercial transactions for goods or services in the ordinary course of business with these companies.

We do not believe such transactions are material to our business (see Note 14).

In connection with the May 2021 Secondary Offering, we repurchased 3,229,974 shares of ASO, Inc.

common stock at $ 30.96 per share for approximately $ 100.0 million, which were immediately retired by the Company (see Note 1).

Additionally, KKR has ownership interest in a broad range of portfolio companies and we may enter into commercial transactions for goods or services in the ordinary course of business with these companies.

We do not believe such transactions are material to our business.

Investments in Managers

During the thirteen weeks ended May 2, 2020, Managers repurchased at fair market value approximately $ 37.0 thousand of Redeemable Membership Units from a director of the Company for cash.

NAHC concurrently repurchased from Managers for cash, at fair market value, a number of NAHC membership units equal to the number of Redeemable Membership Units repurchased from the director and executive.

During the twenty-six weeks ended August 1, 2020, Managers repurchased at fair market value approximately $ 37.0 thousand of Redeemable Membership Units from a director of the Company for cash.

NAHC concurrently repurchased from Managers for cash, at fair market value, a number of NAHC membership units equal to the number of Redeemable Membership Units repurchased from the director.

Note Receivable from Member and Distribution

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On April 10, 2019, the Company loaned $ 4.0 million with a note receivable issued to a member.

The note receivable bears semi-annual compounding interest at 2.5 % with outstanding principal and interest due on April 10, 2022.

The note receivable bore semi-annual compounding interest at 2.5 % with outstanding principal and interest due on April 10, 2022.

This note receivable was recorded in other non-current assets on the balance sheet.

On April 5, 2018, the Company loaned $ 4.1 million with a note receivable issued to a member.

The note receivable bears semi-annual compounding interest at 2.1 %, with outstanding principal and interest due on April 5, 2021, and was recorded in prepaid expenses and other non-current assets on the balance sheet.

The note receivable bore semi-annual compounding interest at 2.1 %, with outstanding principal and interest due on April 5, 2021, and was recorded in prepaid expenses and other non-current assets on the balance sheet.

On August 28, 2020, the Company made a distribution to its members of record as of August 25, 2020, of $ 257.0 million (see Note 9).

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Technology Related Commitments and Other

As of May 1, 2021, we have obligations under technology related and other contractual commitments in the amount of $ 21.2 million.

As of July 31, 2021, we have obligations under technology related and other contractual commitments in the amount of $ 19.5 million.

Of such commitments, approximately $ 10.6 million is payable in the next 12 months.

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These agreements typically contain a one to three-year term and contractual payment amounts required to be paid by the Company.

As of May 1, 2021, we have $ 9.6 million in related commitments through 2027, of which $ 5.5 million is payable in the next 12 months.

As of July 31, 2021, we have $ 19.7 million in related commitments through 2027, of which $ 8.7 million is payable in the next 12 months.

Subsequent Events

Our management evaluated events or transactions that occurred after May 1, 2021, through June 8, 2021, the issuance date of the financial statements, and identified the following matters to report:

May 2021 Secondary Offering and Stock Repurchase

On May 5, 2021, ASO, Inc.

333-255720), filed on May 3, 2021.

The May 2021 Secondary Offering also included the Company's repurchase and simultaneous retirement of 3,229,974 shares out of the 14,000,000 shares.

On May 6, 2021, the May 2021 Underwriters exercised in full their option to purchase the additional shares.

The May 2021 Secondary Offering was completed on May 10, 2021.

The Company did no t receive any proceeds from the May 2021 Secondary Offering.

The May 2021 Secondary Offering reduced the KKR ownership interest in the Company to 31.3 %, resulting in a vesting event for awards granted under the 2011 Unit Incentive Plan, whereby unvested time awards and performance-based awards which had previously met their performance targets vested and unvested performance-based awards which had not previously met their performance targets were forfeited.

Additionally, approximately $ 8.2 million of cash payments for equity-based compensation distributions will be accelerated.

These expenses will be included in selling, general and administrative expenses in the statements of income.

Debt Refinancing

On May 25, 2021, Academy, Ltd.

entered into Amendment No.

Pursuant to the terms of the Amendment, Academy, Ltd.

Borrowings under the Amended Credit Agreement will continue to mature on November 6, 2027, and all other material terms and provisions of the Existing Credit Agreement remain substantially the same as the terms and provisions in place immediately prior to the effectiveness of the Amendment.

Share Repurchase Program

On September 2, 2021, the Board of Directors of the Company authorized a new share repurchase program under which the Company may purchase up to $ 500 million of its outstanding shares during the three-year period ending September 2, 2024.

Under the share repurchase program, repurchases can be made using a variety of methods, which may include open market purchases, block trades, privately negotiated transactions and/or a non-discretionary trading plan, all in compliance with the rules of the SEC and other applicable legal requirements.

The timing, manner, price and amount of any common share repurchases will be determined by the Company in its discretion and will depend on a variety of factors, including legal requirements, price and economic and market conditions.

The share repurchase program does not obligate the Company to acquire any particular number of common shares, and the program may be suspended, extended, modified or discontinued at any time.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements