What changed in this filing

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Item 1. Financial Statements

2021-12-10 compared with 2021-09-09 · 148 added, 102 removed, 562 unchanged (31% of the section changed)

3 unchanged sentences

(Dollar amounts in thousands, except per share data)

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

October 30, 2021 January 30, 2021 October 31, 2020

CURRENT ASSETS:

29 unchanged sentences

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.

and 88,103,975 issued and outstanding as of October 30, 2021, January 30, 2021, and October 31, 2020, respectively.

Additional paid-in capital 188,329 127,228 93,064

3 unchanged sentences

Total liabilities and stockholders' / partners' equity $ 4,675,995 $ 4,384,482 $ 4,981,916

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

See Condensed Notes to Consolidated Financial Statements

2 unchanged sentences

(Amounts in thousands, except per share data)

Thirteen Weeks Ended Twenty-Six Weeks Ended

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

Thirteen Weeks Ended Thirty-Nine Weeks Ended

October 30, 2021 October 31, 2020 October 30, 2021 October 31, 2020

NET SALES $ 1,592,795 $ 1,349,076 $ 4,964,658 $ 4,091,797

5 unchanged sentences

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

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

OTHER (INCOME) EXPENSE, NET ( 614 ) 764 ( 1,746 ) ( 857 )

INCOME BEFORE INCOME TAXES 205,303 58,393 671,122 217,567

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

INCOME TAX (BENEFIT) EXPENSE 43,998 ( 1,193 ) 141,511 325

NET INCOME $ 161,305 $ 59,586 $ 529,611 $ 217,242

EARNINGS PER COMMON SHARE:

$ 2.06 $ 2.31 $ 3.99 $ 2.18

$ 1.99 $ 2.25 $ 3.82 $ 2.12

BASIC $ 1.77 $ 0.78 $ 5.76 $ 2.94

DILUTED $ 1.72 $ 0.74 $ 5.55 $ 2.82

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:

92,627 72,478 92,357 72,476

95,891 74,439 96,391 74,487

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

BASIC 91,140 76,771 91,951 73,908

DILUTED 93,844 80,714 95,504 77,171

See Condensed Notes to Consolidated Financial Statements

2 unchanged sentences

(Amounts in thousands)

Thirteen Weeks Ended Twenty-Six Weeks Ended

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

Thirteen Weeks Ended Thirty-Nine Weeks Ended

October 30, 2021 October 31, 2020 October 30, 2021 October 31, 2020

COMPREHENSIVE INCOME:

2 unchanged sentences

Recognized interest expense on interest rate swaps 489 2,811 2,384 7,578

Loss on swaps from debt refinancing — 1,330 — 1,330

Tax expense ( 115 ) ( 498 ) ( 548 ) ( 498 )

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

Net income — — — — — — — 161,305 — 161,305 —

Equity compensation — — — — — — 2,921 — — 2,921 —

Repurchase of common stock for retirement — — — — ( 5,723 ) ( 57 ) ( 11,941 ) ( 233,839 ) — ( 245,837 ) ( 5,723 )

Stock option exercises — — — — 1,004 10 9,603 — — 9,613 1,004

Recognized interest expense on interest rate swaps (net of tax impact of $ 115 )

— — — — — — — — 374 374 —

Balances as of October 30, 2021 — $ — — $ — 88,165 $ 882 $ 188,329 $ 1,188,271 $ ( 1,488 ) $ 1,375,994 88,165

See Condensed Notes to Consolidated Financial Statements

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

Net income — — — — — — — 59,586 — 59,586 —

Distributions to holders of Membership Units — — — ( 257,000 ) — — — — — ( 257,000 ) —

Effect of the Reorganization Transactions ( 172 ) ( 2,977 ) ( 72,306 ) ( 900,435 ) 72,478 725 66,627 836,060 — 2,977 —

Equity compensation — — — — — — 23,359 — — 23,359 —

Issuance of common stock in IPO, net of Offering Costs — — — — 15,625 156 184,726 — — 184,882 15,625

Cumulative tax effect resulting from Reorganization Transactions — — — — — — ( 148,829 ) — — ( 148,829 ) —

Share-Based Award Payments — — — — — — ( 32,819 ) — — ( 32,819 ) —

Stock option exercises — — — — 1 — — — — — 1

Unrealized loss on interest rate swaps (net of tax impact of $ 53 )

— — — — — — — — ( 278 ) ( 278 ) —

Recognized interest expense on interest rate swaps (net of tax impact of $ 221 )

— — — — — — — — 2,590 2,590 —

Loss on swaps from debt refinancing (net of tax impact of $ 330 )

— — — — — — — — 1,000 1,000 —

Balances as of October 31, 2020 — $ — — $ — 88,104 $ 881 $ 93,064 $ 895,646 $ ( 5,027 ) $ 984,564 88,104

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

3 unchanged sentences

(Amounts in thousands)

Twenty-Six Weeks Ended

July 31, 2021 August 1, 2020

Thirty-Nine Weeks Ended

October 30, 2021 October 31, 2020

CASH FLOWS FROM OPERATING ACTIVITIES:

5 unchanged sentences

Amortization of terminated interest rate swaps, deferred loan and other costs 4,787 2,734

Loss on swaps from debt refinancing — 1,330

Deferred income taxes 48,991 ( 11,739 )

13 unchanged sentences

Capital expenditures ( 58,567 ) ( 21,915 )

Purchases of intangible assets ( 144 ) —

Notes receivable from member — 8,125

Net cash used in investing activities ( 58,711 ) ( 13,790 )

5 unchanged sentences

Share-Based Award Payments ( 11,214 ) ( 20,724 )

Distribution — ( 257,000 )

Proceeds from issuance of common stock, net of Offering Costs — 184,882

Proceeds from exercise of stock options 41,292 —

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

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

Upon completion of the September 2021 Secondary Offering (as defined below), KKR no longer holds an ownership interest 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 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.

As of October 30, 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 Secondary Offering was completed on February 1, 2021.

Pursuant to the Underwriting Agreement, the Underwriters purchased the shares from the Selling Stockholders at a price of $ 20.69375 per share.

Pursuant to the Underwriting Agreement, the Underwriters purchased the shares from the Selling Stockholders at a price of approximately $ 20.69 per share.

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

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

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 May 2021 Underwriters, which was at a discount to the prevailing market price at the time of repurchase (see Note 9).

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 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.

1 unchanged sentence

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.

September 2021 Secondary Offering and Stock Repurchase

On September 14, 2021, ASO, Inc.

entered into an underwriting agreement (the “September 2021 Underwriting Agreement”), by and among ASO, Inc., Allstar LLC, Allstar Co-Invest Blocker L.P.

and KKR 2006 Allstar Blocker L.P.

(collectively, the “September 2021 Selling Stockholders”), and Credit Suisse Securities (USA) LLC, as representative of the several underwriters named therein (the “September 2021 Underwriters”), relating to an underwritten offering (the “September 2021 Secondary Offering”) of 18,645,602 shares of common stock at approximately $ 43.52 per share, pursuant to the Company’s Registration Statement on Form S-1 (File No.

333-259477), filed on September 13, 2021.

The September 2021 Secondary Offering also included the Company’s repurchase and simultaneous retirement of 4,500,000 shares out of the 18,645,602 shares of common stock at approximately $ 43.52 , the same price granted to the September 2021 Underwriters, which was at a discount to the prevailing market price at the time of repurchase (see Note 9).

The September 2021 Secondary Offering was completed on September 17, 2021.

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

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 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.

The results of operations for the thirteen and thirty-nine weeks ended October 30, 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.

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

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Our most significant estimates and assumptions that materially affect the financial statements involve difficult, subjective or complex judgments by management, including the valuation of merchandise inventories and performing goodwill, intangible and long-lived asset impairment analyses.

Given the global economic climate and additional unforeseen effects from the COVID-19 pandemic, these estimates remain more challenging, and actual results could differ materially from our estimates.

Given the global economic climate and the possibility of additional unforeseen effects from the COVID-19 pandemic, these estimates remain challenging, and actual results could differ materially from our estimates.

Reclassifications

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 and twenty-six weeks ended August 1, 2020 for comparability purposes.

As a result, we have reclassified sales between divisions in the thirteen and thirty-nine weeks ended October 31, 2020 for comparability purposes.

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

9 unchanged sentences

of $ 0.01 and 300,000,000 , respectively, remain unchanged as a result of such contributions and exchanges.

All membership units and redeemable membership units in the financial statements and notes have been retrospectively adjusted to give effect to the Contribution Ratio, as if such contributions and exchanges occurred as of all pre-IPO periods presented, including the periods presented on the Balance Sheets, Statements of Income, Statements of Partners’ / Stockholders’ Equity, Note 9.

Equity and Share-Based Compensation, and Note 10.

Earnings per Common Share.

All membership units and redeemable membership units in the financial statements and notes have been retrospectively adjusted to give effect to the Contribution Ratio, as if such contributions and exchanges occurred as of all pre-IPO periods presented, including the periods presented on the Statements of Partners’ / Stockholders’ Equity and in Note 9.

Equity and Share-Based Compensation.

Redeemable Membership Units

28 unchanged sentences

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

Thirteen Weeks Ended Twenty-Six Weeks Ended

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

Thirteen Weeks Ended Thirty-Nine Weeks Ended

October 30, 2021 October 31, 2020 October 30, 2021 October 31, 2020

Merchandise division sales (1)

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(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 and twenty-six weeks ended August 1, 2020 for comparability purposes.

As a result, we have reclassified sales between divisions in the thirteen and thirty-nine weeks ended October 31, 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 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.

(2) E-commerce sales consisted of 8.0 % of merchandise sales for the thirteen and thirty-nine weeks ended October 30, 2021, and 7.5 % and 9.8 % for the thirteen and thirty-nine weeks ended October 31, 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.

2 unchanged sentences

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

Thirteen Weeks Ended Twenty-Six Weeks Ended

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

Thirteen Weeks Ended Thirty-Nine Weeks Ended

October 30, 2021 October 31, 2020 October 30, 2021 October 31, 2020

Gift card liability, beginning balance $ 60,526 $ 55,410 $ 74,253 $ 67,993

5 unchanged sentences

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

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

October 30, 2021 January 30, 2021 October 31, 2020

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

8 unchanged sentences

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

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.

As of October 30, 2021, January 30, 2021 and October 31, 2020, the balance in deferred loan costs related to the ABL Facility (as defined below) was approximately $ 4.6 million, $ 5.5 million and $ 2.6 million, respectively, and was included in other noncurrent assets on our consolidated balance sheets.

Total amortization of deferred loan costs was $ 0.6 million and $ 2.0 million for the thirteen and thirty-nine weeks ended October 30, 2021, respectively, and $ 0.6 million and $ 1.9 million for the thirteen and thirty-nine weeks ended October 31, 2020, respectively.

Total expenses related to accretion of original issuance discount were $ 0.1 million and $ 0.4 million for the thirteen and thirty-nine weeks ended October 30, 2021, respectively, and $ 0.3 million and $ 0.8 million for the thirteen and thirty-nine weeks ended October 31, 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.

21 unchanged sentences

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.

As of October 30, 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

As of October 30, 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 thirty-nine weeks ended October 30, 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 thirty-nine weeks ended October 31, 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 the repurchase (amounts in millions):

Thirty-Nine Weeks Ended

October 31, 2020

Gross principal repurchased $ 23.9

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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 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.

As of October 30, 2021, we had outstanding letters of credit of approximately $ 20.5 million, of which $ 17.8 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 $ 982.2 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 July 31, 2021, no future prepayments of outstanding loans have been triggered under the terms and conditions of the ABL Facility.

As of October 30, 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 July 31, 2021.

We were in compliance with these covenants as of October 30, 2021.

Capitalized Interest.

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.

We capitalized interest primarily related to store renovations and information technology initiatives in the amount of $ 0.1 million and $ 0.4 million for the thirteen and thirty-nine weeks ended October 30, 2021, respectively, and $ 0.1 million and $ 0.4 million for the thirteen and thirty-nine weeks ended October 31, 2020, respectively.

Derivative Financial Instruments

1 unchanged sentence

All interest rate swaps had been designated as cash flow hedges of variable rate interest payments on borrowings under the Term Loan.

On October 28, 2020, we determined that a portion of the underlying cash flows related to $ 100.0 million of swap notional principal amount was no longer probable of occurring over the remaining term of the interest rate swaps as a result of the Company's planned Refinancing Transactions.

As a result, we reclassified approximately $ 1.3 million of losses from accumulated other comprehensive loss ("AOCI") to other (income) expense, net in our statements of income for the thirteen and thirty-nine weeks ended October 31, 2020 related to the portion of the forecasted transaction no longer considered probable of occurring.

We also de-designated a portion of our interest rate swaps as cash flow hedges, leaving $ 250 million notional principal amount designated and $ 650 million undesignated.

The remaining $ 4.0 million loss in AOCI as of October 31, 2020 related to the de-designated hedges would then be amortized as an increase to interest expense over

the original maturity of the de-designated swaps.

The de-designated $ 650 million notional principal amount of fixed interest rate swaps would have received mark-to-market treatment prospectively, with changes in fair value recorded immediately to other (income) expense, net on the statements of income.

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

As of October 30, 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:

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

October 30, 2021 January 30, 2021 October 31, 2020

Derivatives designated as hedging instruments

2 unchanged sentences

Total derivatives designated as hedging instruments net liability $ — $ — $ ( 1,334 )

Derivatives not designated as hedging instruments

Amounts included in accrued expenses and other current liabilities — — 4,548

Total derivatives not designated as hedging instruments — — ( 4,548 )

Total derivatives net liability $ — $ — $ ( 5,882 )

For derivatives designated as hedging instruments, amounts included in AOCI are reclassified to interest expense in the same period during which the hedged transaction affects earnings, which is as interest expense is recorded on the underlying Term Loan.

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 Twenty-Six Weeks Ended

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

Thirteen Weeks Ended Thirty-Nine Weeks Ended

October 30, 2021 October 31, 2020 October 30, 2021 October 31, 2020

Accumulated Other Comprehensive Loss, beginning $ ( 1,862 ) $ ( 8,339 ) $ ( 3,324 ) $ ( 8,066 )

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

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

Loss deferred into AOCI (net of tax impact of $ 53 in both the thirteen and thirty-nine weeks ended October 31, 2020)

— ( 278 ) — ( 5,318 )

Increase to interest expense (net of tax impact of $ 115 and $ 548 for the thirteen and thirty-nine weeks ended October 30, 2021, respectively, and $ 221 for both the thirteen and thirty-nine weeks ended October 31, 2020)

374 2,590 1,836 7,357

Loss on swaps from debt refinancing in other (income) expense, net (net of tax impact of $ 330 for both the thirteen and thirty-nine weeks ended October 31, 2020)

— 1,000 — 1,000

Accumulated Other Comprehensive Loss, ending $ ( 1,488 ) $ ( 5,027 ) $ ( 1,488 ) $ ( 5,027 )

10 unchanged sentences

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

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

Fair Value Hierarchy October 30, 2021 January 30, 2021 October 31, 2020

Interest rate swap Level 2 $ — $ — $ 5,882

8 unchanged sentences

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

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.

As of October 30, 2021, January 30, 2021 and October 31, 2020, we held $ 294.0 million, $ 284.0 million and $ 767.0 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 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 of October 30, 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 October 31, 2020, the estimated fair value of the Term Loan was $ 1.4 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:

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

October 30, 2021 January 30, 2021 October 31, 2020

Leasehold improvements $ 455,542 $ 438,287 $ 435,094

6 unchanged sentences

Property and equipment, net $ 358,110 $ 378,260 $ 382,620

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.

Depreciation expense was $ 26.5 million and $ 77.8 million, respectively, in the thirteen and thirty-nine weeks ended October 30, 2021, and $ 25.5 million and $ 79.7 million in the thirteen and thirty-nine weeks ended October 31, 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:

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

October 30, 2021 January 30, 2021 October 31, 2020

Accrued interest $ 12,676 $ 7,684 $ 6,996

11 unchanged sentences

Equity and Share-Based Compensation

On September 2, 2021, the Board of Directors of the Company authorized a share repurchase program (the "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.

During the thirteen and thirty-nine weeks ended October 30, 2021, we repurchased and concurrently retired 5,722,892 and 8,952,866 shares of ASO, Inc.

common stock for an aggregate amount of $ 245.8 million and $ 345.8 million, respectively, which includes purchases that were made pursuant to the Share Repurchase Program and those that were made prior to the Share Repurchase Program.

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

As of October 30, 2021, approximately $ 254.2 million remained available for share repurchases pursuant to our Share Repurchase Program.

Share-Based Compensation

On September 29, 2020, the ASO, Inc.

2 unchanged sentences

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

As of October 30, 2021, there were 3,539,843 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.

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.

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

We have reserved a total of 2,000,000 shares and as of October 30, 2021, there were 1,964,614 shares authorized and available for future issuance under the ESPP.

Equity compensation expense was $ 2.9 million and $ 36.1 million for the thirteen and thirty-nine weeks ended October 30, 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 $ 23.4 million and $ 27.0 million for the thirteen and thirty-nine weeks ended October 31, 2020, respectively, which includes approximately $ 19.9 million of stock compensation expense associated with the vesting of certain outstanding restricted stock units as a result of the liquidity condition being achieved upon completion of our IPO.

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

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• 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.

No further Share-Based Award Payments relative to the distribution are payable as of October 30, 2021.

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

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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 twenty-six weeks ended July 31, 2021:

The following table presents the assumptions and grant date fair values for Service Options granted in the thirty-nine weeks ended October 30, 2021:

Expected life in years 6.18

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Dividend yield —

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

The following table presents the Award grants during the thirty-nine weeks ended October 30, 2021:

Service Options Service Restricted Stock Units Performance Restricted Stock Units

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Weighted average exercise price per Award $ 27.29 N/A N/A

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

The following table presents the unrecognized compensation cost as of October 30, 2021:

Service Options Service Restricted Stock Units Performance Restricted Stock Units

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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 Twenty-Six Weeks Ended

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

Thirteen Weeks Ended Thirty-Nine Weeks Ended

October 30, 2021 October 31, 2020 October 30, 2021 October 31, 2020

Net income $ 161,305 $ 59,586 $ 529,611 $ 217,242

Weighted average common shares outstanding - basic 91,140 76,771 91,951 73,908

92,627 72,478 92,357 72,476

Dilutive effect of Service Restricted Units and Service Restricted Stock Units 72 6 14 9

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Dilutive effect of Service Options 2,207 1,081 2,381 871

2,614 571 2,427 613

Dilutive effect of Performance Unit Options and Performance Stock Options 316 1,433 757 1,392

468 1,387 962 1,390

Dilutive effect of ESPP shares — — — —

Weighted average common shares outstanding - diluted 93,844 80,714 95,504 77,171

95,891 74,439 96,391 74,487

Earnings per common share - basic $ 1.77 $ 0.78 $ 5.76 $ 2.94

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Anti-dilutive stock-based awards excluded from diluted calculation 4 4,460 60 1,648

34 1,653 43 426

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

Prior to October 1, 2020, the Company, was treated as a flow through entity for U.S.

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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 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.

For the thirteen and thirty-nine weeks ended October 30, 2021, ASO, Inc.

recorded $ 44.0 million and $ 141.5 million of income tax expense, respectively, which included changes in income taxes payable of $ 92.5 million and net deferred tax liabilities of $ 49.0 million as of October 30, 2021.

Related Party Transactions

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The Monitoring Agreement continued in effect from year-to-year, unless amended or terminated by the Adviser and us.

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 and $ 1.8 million in the thirteen and twenty-six weeks ended August 1, 2020, respectively.

Upon the completion of the IPO, in the third quarter of 2020 the Monitoring Agreement terminated and we accrued the final termination fee of $ 12.3 million.

The termination fee was equal to the net present value of the advisory fees that would have been paid from the termination date through the twelfth anniversary of the Effective Date of the Monitoring Agreement.

We recognized advisory fees related to the Monitoring Agreement, including reimbursement of expenses, of approximately $ 13.0 million and $ 14.8 million in the thirteen and thirty-nine weeks ended October 31, 2020, respectively.

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

Other Related Party Transactions

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.

In connection with the September 2021 Secondary Offering and the May 2021 Secondary Offering, we repurchased from the underwriters (1) 4,500,000 shares of ASO, Inc.

common stock at approximately $ 43.52 for approximately $ 195.8 million and (2) 3,229,974 shares of ASO, Inc.

common stock at $ 30.96 per share for approximately $ 100.0 million.

The shares repurchased were immediately retired by the Company (see Note 1 and Note 9).

We paid $ 2.7 million to KCM during the third quarter of 2020 for underwriting services in connection with the IPO.

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

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

Upon completion of the September 2021 Secondary Offering, KKR no longer holds an ownership interest in the Company.

Investments in Managers

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.

During the thirty-nine weeks ended October 31, 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.

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Prior to October 1, 2020, under NAHC's LLC agreement, certain members could require the Company to provide a tax loan on their behalf under certain circumstances.

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

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

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.

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

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).

Of the $ 257.0 million, $ 8.5 million was used to offset and satisfy the remaining balances of the notes receivable and related interest receivable from a member.

Of the $ 257.0 million, $ 8.5 million was used to offset and satisfy the remaining balances of the notes receivable and related interest receivable from a member of NAHC.

Commitments and Contingencies

Technology Related Commitments and Other

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

As of October 30, 2021, we have obligations under technology-related, construction and other contractual commitments in the amount of $ 26.2 million.

Of such commitments, approximately $ 16.5 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 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

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 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.

As of October 30, 2021, we have $ 23.1 million in related commitments through 2027, of which $ 8.3 million is payable in the next 12 months.

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