What changed in this filing

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Item 9A. Controls and Procedures

2022-03-29 compared with 2021-04-07 · 364 added, 366 removed, 1013 unchanged (42% of the section changed)

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Management's Annual Report on Internal Control over Financial Reporting

This Annual Report does not include a report of management's assessment regarding internal control over financial reporting or an attestation report of the Company's registered public accounting firm due to a transition period established by rules of the Securities and Exchange Commission for newly public companies.

The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act).

Internal control over financial reporting is a process to provide reasonable assurance regarding the reliability of our financial reporting for external purposes in accordance with accounting principles generally accepted in the United States of America.

The Company's internal control over financial reporting includes:

• maintaining records that in reasonable detail accurately and fairly reflect our transactions;

• providing reasonable assurance that transactions are recorded as necessary for preparation of our financial statements;

• providing reasonable assurance that receipts and expenditures of Company assets are made in accordance with management authorization;

• providing reasonable assurance that unauthorized acquisition, use or disposition of Company assets that could have a material effect on our financial statements would be prevented or detected on a timely basis.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving their control objectives.

Also projections of any evaluation of effectiveness to future periods are subject to risk that controls may become inadequate because of change in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

The Company’s management conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework and criteria established in Internal Control—Integrated Framework (2013) , issued by the Committee of Sponsoring Organizations of the Treadway Commission.

This evaluation included review of the documentation of controls, evaluation of the design effectiveness of controls, testing of the operating effectiveness of controls and a conclusion on this evaluation.

Based on this evaluation, management concluded that the Company’s internal control over financial reporting was effective as of January 29, 2022.

Deloitte & Touche LLP, an independent registered public accounting firm, has issued an attestation report on the Company’s internal control over financial reporting which is set forth herein.

Changes in Internal Control over Financial Reporting

No changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the Company's most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the stockholders and the Board of Directors of Academy Sports and Outdoors, Inc.

Opinion on Internal Control over Financial Reporting

We have audited the internal control over financial reporting of Academy Sports and Outdoors, Inc.

and subsidiaries (the “Company”) as of January 29, 2022, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of January 29, 2022, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended January 29, 2022, of the Company and our report dated March 29, 2022 expressed an unqualified opinion on those financial statements.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Annual Report on Internal Control over Financial Reporting .

Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances.

We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Deloitte & Touche LLP

Houston, Texas

March 29, 2022

Other Information

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Directors, Executive Officers and Corporate Governance

Executive Officers

Below is a list of our executive officers, their respective ages as of January 30, 2021 and a brief account of the business experience of each of them.

Name Age Position

Hicks 68 Chairman, President and Chief Executive Officer

Mullican 45 Executive Vice President and Chief Financial Officer

Lawrence 53 Executive Vice President and Chief Merchandising Officer

Johnson 54 Executive Vice President, Retail Operations

Sherry Harriman 51 Senior Vice President, Logistics and Supply Chain

Jamey Traywick Rutherford 47 Senior Vice President, Omnichannel

Manish Maini 47 Senior Vice President, Chief Information Officer

Ennis 51 Senior Vice President, Chief Human Resources Officer

Casares 45 Senior Vice President, General Counsel and Secretary

Hicks has served as the Chairman and our President and Chief Executive Officer since May 2018.

Hicks has served as a member of the board of managers of New Academy Holding Company, LLC (our predecessor company) since May 2017 and as a member of the board of directors of Academy Sports and Outdoors, Inc.

since June 2020.

Hicks served on the compensation committee of the board of managers of New Academy Holding Company, LLC from May 2017 to May 2018.

Hicks previously served as President and Chief Executive Officer at Foot Locker, Inc.

from August 2009 to February 2010, and also served as Chairman, President and Chief Executive Officer at Foot Locker, Inc.

from February 2010 to November 2014, and as Executive Chairman at Foot Locker, Inc.

from December 2014 to May 2015.

Prior to joining Foot Locker, Inc., Mr.

Hicks held senior positions at J.C.

Penney Company, Inc., Payless ShoeSource, Home Shopping Network, May Department Stores Company, and McKinsey & Company.

Hicks has served on the board of directors of Avery Dennison Corporation since July 2007 and served on the board of directors of Whole Foods Market, Inc.

from May 2017 to August 2017.

Hicks graduated from the United States Military Academy located in West Point, NY, and served in the U.S.

He also earned a Masters of Business Administration with highest distinction from Harvard Business School.

Mullican has served as our Executive Vice President and Chief Financial Officer since January 2018.

He previously served as our Executive Vice President and General Counsel from February 2017 to January 2018.

Prior to joining Academy Sports + Outdoors, Mr.

Mullican served as the Managing Director of Aureus Health Services, a specialty pharmacy owned by Meijer, Inc.

Before being named Managing Director at Aureus, Mr.

Mullican held several leadership roles at Meijer, including Vice President of Business Development, and Vice President and Assistant General Counsel.

Additionally, Mr.

Mullican served as Divisional Counsel and Assistant Secretary at Family Dollar Stores, Inc., and Associate General Counsel and Assistant Secretary at Horizon Lines, Inc.

Mullican holds a Bachelor of Arts in Communication from North Carolina State University and a Juris Doctor degree from the University of Chicago Law School.

Steven (Steve) P.

Lawrence has served as our Executive Vice President and Chief Merchandising Officer since joining the Academy Sports + Outdoors team in February 2019.

Prior to joining Academy Sports + Outdoors, Mr.

Lawrence was President and Chief Executive Officer at francesca’s.

From May 2012 to September 2016, he served as Chief Merchandising Officer at Stage Stores.

Lawrence also spent nearly 12 years working in various merchandising leadership roles at J.C.

Penney after 10 years at Foley’s.

Lawrence also served on the board of directors of francesca’s from October 2016 to January 2019.

Lawrence obtained his Bachelor of Business Administration in Finance from the University of Notre Dame.

Samuel (Sam) J.

Johnson has served as our Executive Vice President, Retail Operations since joining the Academy Sports + Outdoors team in April 2017.

Prior to joining Academy Sports + Outdoors, Mr.

Johnson spent seven years with hhgregg, Inc., where he most recently served as Chief Retail Officer.

While at hhgregg, Inc., he led functions including store operations, customer relations, commercial sales, real estate and visual merchandising.

Prior to hhgregg, Inc., he spent more than 20 years in various leadership roles with Sears Holdings Corporation, including Vice President of Small Stores.

Harriman has served as our Senior Vice President, Logistics and Supply Chain since joining the Academy Sports + Outdoors team in August 2018.

Prior to joining Academy Sports + Outdoors, Mrs.

Harriman spent 29 years at Walmart, Inc., where she served in various logistics and operations roles until she was promoted to Regional Vice President – Logistics in 2007.

In 2010, she was promoted to Divisional Vice President – Supply Chain for Florida and Puerto Rico, where her team delivered innovative Supply Chain solutions that supported omnichannel strategies and disaster relief initiatives.

Harriman holds a Bachelor of Business Administration from the University of Wisconsin-Eau Claire and a Master of Business Administration from John Brown University.

Jamey Traywick Rutherford has served as our Senior Vice President, Omnichannel since joining the Academy Sports + Outdoors team in May 2018.

Prior to joining Academy Sports + Outdoors, Ms.

Traywick Rutherford spent over 17 years at AutoZone where she served in various e-commerce roles until she was promoted to Vice President, e-commerce in 2010.

She transitioned to Vice President, Merchandising in 2017.

She holds a Bachelor of Science in Environmental Science from the University of Denver, and a Master of Science in e-commerce from the University of Memphis.

Manish Maini has served as our Senior Vice President, Chief Information Officer since joining the Academy Sports + Outdoors team in June 2017.

Prior to joining Academy Sports + Outdoors, he served as the Chief Information Officer and Senior Vice President at The Children’s Place U.S.

where he led a 120-member team, and was responsible for the development and implementation of the company-wide IT strategy.

Maini also spent nine years at Ann, Inc., formerly Ann Taylor Stores Inc., where he served in various IT leadership roles, including Vice President of Enterprise Systems.

Maini holds a Bachelor of Engineering, Electronics and Communication from STJ Institute of Technology in Karnatak, India.

William (Bill) S.

Ennis has served as our Senior Vice President, Chief Human Resources Officer since March 2016.

Ennis joined the Academy Sports + Outdoors team as Vice President of Human Resources in April 2008 and served in that role until October 2010 when he was appointed as Senior Vice President, Human Resources.

Prior to joining Academy Sports + Outdoors, Mr.

Ennis spent over 19 years with Stage Stores, May Department Stores and Federated Department Stores in multiple capacities including human resources, stores, buying group, store operations and finance areas.

He currently sits on advisory boards for the Texas A&M Center for Retailing Studies and Texas Retailers Education Foundation, and he is also the governing body chair for the Houston HR Leadership Summit.

Ennis graduated with a Bachelor of Arts in Economics from the University of Texas.

Casares has served as our Senior Vice President, General Counsel and Secretary since March 2018.

He joined the company in July 2013 as Senior Director, Associate General Counsel and served as Vice President, Associate General Counsel and Assistant Secretary from March 2016 to March 2018.

Prior to joining Academy Sports + Outdoors, Mr.

Casares served as an Associate Attorney at the global law firm, Vinson & Elkins LLP, from 2008 to 2013, where he advised major and middle-market companies with mergers and acquisitions, private equity, corporate governance and capital markets.

He also served in a similar capacity as an Associate Attorney at the global law firm, Latham & Watkins LLP, from 2006 to 2008.

Additionally, Mr.

Casares has a background in finance and consulting after serving as an Associate at Growth Capital Partners.

L.P., a Strategy Consultant at KPMG Consulting, Inc., and an Analyst at Merrill Lynch & Co.

Casares holds a Bachelor of Business Administration in Finance from the University of Notre Dame and a Juris Doctor degree from Stanford Law School.

The additional information required by this Item 10 will be included in our definitive proxy statement for the 2021 Annual Meeting of Stockholders and is incorporated herein by reference.

The information concerning our executive officers is set forth under the heading “Information about our Executive Officers” in Part I of this report.

Further information required by this item will be included in our definitive proxy statement for the 2022 Annual Meeting of Stockholders and is incorporated herein by reference.

Executive Compensation

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Service-Based Restricted Stock Units 338,879 N/A (1)

Liquidity Event-Based Restricted Stock Units 1,339,330 N/A (1)

Performance-Based Restricted Stock Units 203,918 N/A (1)

2020 Employee Stock Purchase Plan — — (1)

2020 Employee Stock Purchase Plan — N/A (1)

Total 4,837,920 $ 18.88 (2)

(1) Of the plans listed above, only 2020 Omnibus Incentive Plan and the 2020 Employee Stock Purchase Plan allows for future grants of securities.

The maximum number of shares that may be granted under the 2020 Omnibus Incentive Plan (inclusive of unissued shares that were carried over from the 2011 Unit Incentive Plan) is approximately 13,161,516 shares.

Stock options and restricted stock units are counted on a one-for-one basis.

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(2) Weighted average exercise price of outstanding options only.

Additional information required by this item is incorporated by reference to the 2020 Proxy Statement filed pursuant to Regulation 14A, beginning with the subsection of the Ownership of Securities section entitled Beneficial Ownership of Company Common Stock and up to but not including the subsection entitled Section 16(a) Beneficial Ownership Reporting Compliance.

Additional information required by this item will be included in our definitive proxy statement for the 2022 Annual Meeting of Stockholders and is incorporated herein by reference.

Certain Relationships and Related Transactions, and Director Independence

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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm 74

Consolidated Balance Sheets as of January 30, 2021 and February 1, 2020 76

Consolidated Statements of Income for the fiscal years ended January 30, 2021, February 1, 2020 and February 2, 2019 77

Consolidated Statements of Comprehensive Income for the fiscal years ended January 30, 2021, February 1, 2020 and February 2, 2019 78

Consolidated Statements of Stockholders'/Partners' Equity for the fiscal years ended January 30, 2021, February 1, 2020 and February 2, 2019 79

Consolidated Statements of Cash Flows for the fiscal years ended January 30, 2021, February 1, 2020 and February 2, 2019 80

Report of Independent Registered Public Accounting Firm (PCAOB ID No.

Consolidated Balance Sheets as of January 29, 2022 and January 30, 2021 72

Consolidated Statements of Income for the fiscal years ended January 29, 2022, January 30, 2021 and February 1, 2020 73

Consolidated Statements of Comprehensive Income for the fiscal years ended January 29, 2022, January 30, 2021 and February 1, 2020 74

Consolidated Statements of Stockholders'/Partners' Equity for the fiscal years ended January 29, 2022, January 30, 2021 and February 1, 2020 75

Consolidated Statements of Cash Flows for the fiscal years ended January 29, 2022, January 30, 2021 and February 1, 2020 76

Notes to the Consolidated Financial Statements 77

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We have audited the accompanying consolidated balance sheets of Academy Sports and Outdoors, Inc.

and subsidiaries (the "Company") as of January 30, 2021 and February 1, 2020, the related consolidated statements of income, comprehensive income, stockholders'/partners’ equity, and cash flows, for each of the three years in the period ended January 30, 2021, and the related notes and schedule listed in the Index at Item 15 (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of January 30, 2021 and February 1, 2020, and the results of its operations and its cash flows for each of the three years in the period ended January 30, 2021, in conformity with accounting principles generally accepted in the United States of America.

and subsidiaries (the "Company") as of January 29, 2022 and January 30, 2021, the related consolidated statements of income, comprehensive income, stockholders'/partners’ equity, and cash flows, for each of the three years in the period ended January 29, 2022, and the related notes and schedule listed in the Index at Item 15 (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of January 29, 2022 and January 30, 2021, and the results of its operations and its cash flows for each of the three years in the period ended January 29, 2022, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of January 29, 2022, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 29, 2022 expressed an unqualified opinion on the Company's internal control over financial reporting.

Basis for Opinion

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Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

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The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Income Taxes — Refer to Note 12 to the financial statements

Critical Audit Matter Description

On October 1, 2020, the Company completed a reorganization in which New Academy Holding Company, LLC (NAHC) was contributed by its members to Academy Sports and Outdoors, Inc.

(ASO), the newly public company, and became a wholly-owned subsidiary.

The reorganization was completed in anticipation of the initial public offering (IPO) and resulted in the recording of a net deferred tax liability of $137.3 million.

The liability consisted of the Company’s difference between the financial statement carrying value and the outside tax basis in its New Academy Holding Company, LLC (NAHC) membership units, immediately following the reorganization transactions completed as a result of the IPO, and measured at the enacted federal and state income tax rates.

The impact of the deferred tax liability was recorded as a cumulative adjustment to additional paid-in capital for the year.

Given the determination to measure and disclose the liability based on the outside tax basis and whether to record the amount to equity or income requires management to make significant judgments related to the application of the guidance, performing audit procedures to evaluate the reasonableness of management’s judgments required a high degree of auditor judgment and an increased extent of effort, including the need to consult with our experts in accounting for income taxes, as well as, the need to involve income tax specialists.

At January 29, 2022, the Company’s merchandise inventories balance was $1.2 billion.

Merchandise inventories are valued at the lower of weighted average cost or net realizable value using the last-in first-out ("LIFO") method and include the direct cost of merchandise and capitalized costs related to procurement, warehousing and distribution and are reflected net of shrinkage, vendor allowances and other valuation accounts.

We identified merchandise inventories as a critical audit matter because of the high volume of transactions and because the Company has multiple systems to process and record inventory movements which are highly automated.

This required an increased extent of effort, including the need for us to involve professionals with expertise in information technology (IT), to identify, test and evaluate the Company’s systems, software applications and automated controls.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the Company’s application of generally accepted accounting principles related to the financial statement classification of the deferred taxes resulting from the Company's reorganization included the following, among others:

• Consulted with our experts in accounting for income taxes, and with the assistance of income tax specialists, we evaluated the reasonableness of the assumptions and judgments used by management to measure and disclose the deferred tax liability based on the outside tax basis and to record the impact of the deferred tax liability in equity.

• With the assistance of our income tax specialists, we evaluated whether the sources of management’s tax basis in the NAHC units were of the appropriate character and sufficient to utilize under relevant tax law.

Our audit procedures related to the Company’s systems to process merchandise inventory transactions included the following, among others:

• Identified the significant systems used to process inventory transactions and tested the general IT controls over each of these systems, including testing of user access controls, change management controls, and IT operations controls.

• Performed testing of system interface controls and automated controls within the relevant inventory impacts, as well as the controls designed to ensure the accuracy and completeness of inventory.

• Obtained an understanding, completed risk assessment procedures, and evaluated the design and tested the operating effectiveness of business process controls over the Company’s significant inventory processes.

• Agreed weighted average cost calculations to source information including third party vendor invoices.

• Compared the recorded balance to an expectation we developed for inventory in transit and capitalized overhead.

• Performed store and distribution center physical inventory counts.

/s/ Deloitte & Touche LLP

Houston, Texas

April 7, 2021

March 29, 2022

We have served as the Company's auditor since 1996.

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(Dollar amounts in thousands)

January 30, 2021 February 1, 2020

January 29, 2022 January 30, 2021

CURRENT ASSETS:

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none issued and outstanding

Partners' equity, membership units authorized, issued and outstanding were 72,468,164 as of February 1, 2020

Common stock, $ 0.01 par value, authorized 300,000,000 shares;

91,114,475 issued and outstanding as of January 30, 2021

87,079,394 and 91,114,475 issued and outstanding as of January 29, 2022 and January 30, 2021, respectively

Additional paid-in capital 198,016 127,228

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Total liabilities and stockholders' / partners' equity $ 4,584,940 $ 4,384,482

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

See Notes to Consolidated Financial Statements

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Fiscal Year Ended

January 30, 2021 February 1, 2020 February 2, 2019

January 29, 2022 January 30, 2021 February 1, 2020

NET SALES $ 6,773,128 $ 5,689,233 $ 4,829,897

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INTEREST EXPENSE, NET 48,989 86,514 101,307

GAIN ON EARLY RETIREMENT OF DEBT, NET ( 3,582 ) ( 42,265 ) —

(GAIN) LOSS ON EARLY RETIREMENT OF DEBT, NET 2,239 ( 3,582 ) ( 42,265 )

OTHER (INCOME), NET ( 2,821 ) ( 1,654 ) ( 2,481 )

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Fiscal Year Ended

January 30, 2021 February 1, 2020 February 2, 2019

January 29, 2022 January 30, 2021 February 1, 2020

COMPREHENSIVE INCOME:

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Loss on swaps from debt refinancing — 1,330 —

Tax expense ( 980 ) — —

Tax benefit (expense) 980 ( 980 ) —

Total comprehensive income $ 674,705 $ 313,506 $ 103,529

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(Amounts in thousands)

Redeemable Membership Units Stockholders' / Partner's Equity Total Membership Units / Common Stock

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

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

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

Amount Units (1)

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Adjustment to Redeemable Membership Units for contributions from Managers and settlement of vested Restricted Units 18 400 — ( 400 ) — — — — — ( 400 ) 18

Unrealized loss on interest rate swaps — — — — — — — — ( 2,625 ) ( 2,625 ) —

Recognized interest expense on interest rate swaps — — — — — — — — 1,106 1,106 —

Balances as of February 2, 2019 1,362 $ 17,885 71,111 $ 848,591 — $ — $ — $ — $ 8,448 $ 857,039 72,473

Net income — — — 120,043 — — — — — 120,043 —

Equity compensation — — — 7,881 — — — — — 7,881 —

Equity contributions from Managers 6 — — 100 — — — — — 100 6

Adjustment to Redeemable Membership Units for contributions from Managers and settlement of vested Restricted Units 18 400 — ( 400 ) — — — — — ( 400 ) 18

Adjustment to Redeemable Membership Units for repurchase of units from Managers ( 29 ) ( 538 ) 29 538 — — — — — 538 —

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— — — — — — — — 1,000 1,000 —

Recognized interest expense on interest rate swaps (net of tax impact of $ 1,000 )

Recognized interest expense on interest rate swaps (net of tax expense of $ 1,000 )

— — — — — — — — 10,045 10,045 —

Balances as of January 30, 2021 — $ — — $ — 91,114 $ 911 $ 127,228 $ 987,168 $ ( 3,324 ) $ 1,111,983 91,114

Net income — — — — — — — 671,381 — 671,381 —

Equity compensation — — — — — — 39,264 — — 39,264 —

Repurchase of common stock for retirement — — — — ( 10,567 ) ( 106 ) ( 20,814 ) ( 390,489 ) — ( 411,409 ) ( 10,567 )

Settlement of vested Restricted Stock Units — — — — 923 9 ( 9 ) — — — 923

Share-Based Award Payments adjustment for forfeitures — — — — — — 39 — — 39 —

Issuance of common stock under employee stock purchase plan — — — — 114 1 3,776 — — 3,777 114

Stock option exercises — — — — 5,495 55 48,532 — — 48,587 5,495

Recognized interest expense on interest rate swaps (net of tax benefit of $ 980 )

— — — — — — — — 3,324 3,324 —

Balances as of January 29, 2022 — $ — — $ — 87,079 $ 870 $ 198,016 $ 1,268,060 $ — $ 1,466,946 87,079

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

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Fiscal Year Ended

January 30, 2021 February 1, 2020 February 2, 2019

January 29, 2022 January 30, 2021 February 1, 2020

CASH FLOWS FROM OPERATING ACTIVITIES:

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Equity compensation 39,264 31,617 7,881

Amortization of deferred loan and other costs 5,516 3,717 4,163

Amortization of terminated interest rate swaps, deferred loan and other costs 5,524 5,516 3,717

Loss on swaps from debt refinancing — 1,330 —

Deferred income taxes 79,490 701 297

Non-cash gain on early retirement of debt, net ( 3,582 ) ( 42,265 ) —

Non-cash (gain) loss on early retirement of debt, net 2,239 ( 3,582 ) ( 42,265 )

Gain on disposal of property and equipment — — ( 23 )

Casualty loss — 194 569

Impairment of long-lived assets — — 1,408

Changes in assets and liabilities:

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Income taxes payable ( 14,129 ) 14,124 —

Deferred rent/tenant improvement allowances — — 2,833

Other long-term liabilities ( 1,984 ) 14,400 ( 1,029 )

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Capital expenditures ( 75,802 ) ( 41,269 ) ( 62,818 )

Proceeds from insurance claims — — 2,593

Purchases of intangible assets ( 215 ) — —

Proceeds from the sale of property and equipment — — 23

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Proceeds from issuance of common stock, net of Offering Costs — 206,970 —

Proceeds from issuance of common stock under employee stock purchase program 3,777 — —

Taxes paid related to net share settlement of equity awards ( 15,418 ) — —

Repurchase of common stock for retirement ( 411,409 ) — —

Repurchase of Redeemable Membership Units — ( 37 ) ( 473 )

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We conduct our operations primarily through our parent holding company's indirect subsidiary, Academy, Ltd., a Texas limited partnership doing business as "Academy Sports + Outdoors", or Academy, Ltd.

Our fiscal year represents the 52 or 53 weeks ending on the Saturday closest to January 31.

On August 3, 2011, an investment entity owned by investment funds and other entities affiliated with Kohlberg Kravis Roberts & Co.

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

Upon completion of our initial public offering (the "IPO"), the related over-allotment exercise (the "IPO Over-Allotment Exercise"), and the secondary offering on behalf of KKR (the "Secondary Offering") detailed below, affiliates of KKR held an 54.5 % ownership interest 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.

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The Company’s fiscal year represents the 52 or 53 weeks ending on the Saturday closest to January 31 each year.

References herein to 2020, 2019 and 2018 relate to the 52-week fiscal years ended January 30, 2021, February 1, 2020, and February 2, 2019, respectively.

References herein to 2021, 2020 and 2019 relate to the 52-week fiscal years ended January 29, 2022, January 30, 2021, and February 1, 2020, respectively.

Initial Public Offering and Reorganization Transactions

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issued and sold an additional 1,807,495 shares of the Company's common stock, par value $ 0.01 per share, for cash consideration of $ 12.22 per share (representing an initial public offering price of $ 13.00 per share, net of underwriting discounts) to the IPO underwriters, resulting in approximately $ 22.1 million in proceeds net of underwriting discounts, which included $ 0.3 million paid to KCM for underwriting services, pursuant to the partial exercise by the underwriters of their option to purchase up to 2,343,750 additional shares to cover over-allotments in connection with the IPO (the "IPO Over-Allotment Exercise").

The option has expired with respect to the remaining shares.

The option expired with respect to the remaining shares.

Secondary Offering

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

Morgan Securities LLC, as representatives of the several underwriters named therein (the “Underwriters”), relating to an underwritten offering (the “Secondary Offering”) of 12,000,000 shares of Common Stock, pursuant to the Company’s Registration Statement on Form S-1 (File No.

333-252390), filed on January 25, 2021 (the "Secondary Offering").

Morgan Securities LLC, as representatives of the several underwriters named therein (the “Underwriters”), relating to an underwritten offering of 12,000,000 shares of common stock (the “Secondary Offering”), pursuant to the Company’s Registration Statement on Form S-1 (File No.

333-252390), filed on January 25, 2021.

The Selling Stockholders granted the Underwriters the option to purchase, within 30 days from the date of the Underwriting Agreement, an additional 1,800,000 shares of common stock.

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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.

May 2021 Secondary Offering and Stock Repurchase

On May 5, 2021, ASO, Inc.

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 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 "Share Repurchases" in Note 2).

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, 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.

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 "Share Repurchases" in Note 2).

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

Critical Accounting Policies

Critical accounting policies are those that we believe are both most important to the portrayal of our financial condition and results of operations and require our most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain.

Judgments and uncertainties affecting the application of those policies may result in materially different amounts being reported under different conditions, using different assumptions or when actual results are known.

Our critical accounting policies, which are described below, are as follows:

• Merchandise Inventories, net;

• Impairment of Long-Lived Assets;

• Intangible Assets.

Basis of Presentation and Principles of Consolidation

These consolidated financial statements include the accounts of ASO, Inc.

and, its subsidiaries, ASO Co-Invest Blocker Sub, L.P., ASO Blocker Sub, L.P., NAHC, Academy Managing Co., LLC, Associated Investors, LLC, Academy, Ltd., the Company's operating company, and Academy International Limited.

ASO Co-Invest Blocker Sub, L.P., ASO Blocker Sub, L.P., NAHC, Academy Managing Co., LLC, and Associated Investors, LLC are intermediate holding companies.

and its subsidiaries, NAHC, Academy Managing Co., LLC, Associated Investors, LLC, Academy, Ltd., the Company's operating company, and Academy International Limited.

NAHC, Academy Managing Co., LLC, and Associated Investors, LLC are intermediate holding companies.

All intercompany balances and transactions have been eliminated in consolidation.

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and ASO Blocker Sub, L.P.

were dissolved on January 31, 2021.

were dissolved effective January 31, 2021.

Use of Estimates in the Preparation of Financial Statements

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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 are becoming 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 are becoming more challenging, and actual results could differ materially from our estimates.

Reclassifications

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As a result, we have reclassified sales between divisions for 2020 and 2019 for comparability purposes.

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

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

Retrospective Presentation of Ownership Exchange

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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 Stockholders’ / Partners’ Equity, Note 9.

Equity and Share-Based Compensation, Note 10.

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 Income, Statements of Stockholders’ / Partners’ Equity, Note 9.

Share-Based Compensation, Note 10.

Earnings per Common Share and Note 16.

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Financial Instruments

Financial instruments are comprised of cash and cash equivalents, accounts receivable, accounts payable, certain accrued liabilities, derivatives and debt.

Financial instruments are comprised of cash and cash equivalents, accounts receivable, accounts payable, certain accrued liabilities and debt.

The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities approximate their fair values due to the short-term nature of those instruments.

We enter into interest rate swaps to reduce the risk that our earnings and cash flows will be affected by changes in interest rates on our debt, and we do not hold any derivative financial instruments for trading or speculative purposes (see Note 4 and Note 5).

We have also historically entered into derivative interest rate swaps to reduce the risk that our earnings and cash flows will be affected by changes in interest rates on our debt.

The fair value of debt is influenced by fluctuations in market conditions for interest rates (see Note 6).

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Concentration of Risk

Financial instruments which subject us to potential credit risk consist of cash and cash equivalents and derivative financial instruments.

Financial instruments which subject us to potential credit risk consist of cash and cash equivalents.

We have established guidelines to limit our exposure to credit risk on cash and cash equivalents by placing investments with high credit quality financial institutions.

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however, these deposits typically are redeemable upon demand.

We use high credit quality counterparties to transact our derivative transactions.

Therefore, we believe that the financial risks associated with these financial instruments are minimal.

We believe that the financial risks associated with these financial instruments are minimal.

We purchase merchandise inventories from approximately 1,200 vendors.

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No other vendor in any of the aforementioned years exceeded 10% of our purchases.

We typically do not enter into long-term inventory purchase commitments and there were none as of January 30, 2021 or February 1, 2020.

We typically do not enter into long-term inventory purchase commitments and there were none as of January 29, 2022 or January 30, 2021.

A significant portion of our inventory purchases are manufactured outside of the United States, primarily in Asia.

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Merchandise inventories include the direct cost of merchandise and capitalized costs related to procurement, warehousing and distribution and are reflected net of shrinkage, vendor allowances and other valuation accounts.

We record an inventory reserve for the estimated shrinkage between physical inventories on a store-by-store basis.

We generally perform a full physical inventory count for each store at least once a year, throughout the year, after which our shrinkage accrual rate for each store is updated based on historical results.

For vendor allowances based on contractual provisions, we develop accrual rates as determined by the agreements, which are typically linked to purchase volumes.

Other non-contractual vendor allowances received are applied upon receipt.

We regularly review inventories and record a valuation adjustment when necessary such as for inventory that has a carrying value in excess of the net realizable value or for slow moving or obsolete inventory.

As of January 30, 2021 and February 1, 2020, merchandise inventories valued at LIFO, including necessary valuation adjustments, approximated the cost of such inventories using the weighted average inventory method.

The application of the LIFO inventory method did not result in any LIFO charges or credits affecting cost of sales in 2021, 2020 or 2019.

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Repair and maintenance costs are charged to expense as incurred and significant improvements that substantially enhance the useful life or enhance the functionality of an asset are capitalized and amortized.

In the normal course of business, we acquire land and construct new stores to be sold to and leased from third party landlords.

In the normal course of business, we may acquire land and construct new stores to be sold to and leased from third party landlords.

New stores completed but not yet sold to and leased from third parties are classified as assets held for sale and are expected to be sold within one year.

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Impairment of Long-Lived Assets

We review the carrying value of long-lived assets, including property and equipment and finite-lived intangible assets, for indicators of impairment whenever events and circumstances indicate that the carrying value of an asset may not be recoverable.

Recoverability of long-lived assets is measured by a comparison of the carrying amount of the assets to the estimated undiscounted future cash flows expected to be generated by the use of the assets.

If such assets are considered to be impaired, the impairment loss recognized is the amount by which the carrying amount of the assets exceeds its estimated fair value, which is typically calculated using discounted expected future cash flows.

As a result of our assessment, we did no t record an impairment of long-lived store assets in 2020 and 2019.

In 2018, we impaired $ 1.4 million of long-lived store assets.

These charges are included in selling, general and administrative expenses on the consolidated statements of income (see Note 6).

We review the carrying value of long-lived assets, including store assets, for indicators of impairment whenever events and circumstances indicate that the carrying value of an asset may not be recoverable.

Recoverability of long-lived assets is measured by a comparison of the carrying amount of the assets to the estimated undiscounted future cash flows expected to be generated by the use of the assets, which is generally based on historical results.

If such assets are considered to be impaired, the impairment loss recognized is the amount by which the carrying amount of the assets exceeds its estimated fair value, which is calculated using discounted expected future cash flows.

As a result of our assessment, we did no t record an impairment of long-lived assets in 2021, 2020 and 2019.

Goodwill represents the excess of the purchase price of an acquired business over the amounts assigned to assets acquired and liabilities assumed in a business combination.

Goodwill is tested for impairment annually at the last day of our eleventh fiscal month, or more frequently if events or circumstances indicate that the carrying value of goodwill may not be recoverable.

Goodwill is tested for impairment annually or more frequently if events or circumstances indicate that the carrying value of goodwill may not be recoverable.

We test for goodwill at the reporting unit level, which is the operating segment level.

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However, if the qualitative assessment leads to a determination that it is more likely than not that the fair value of a reporting unit is greater than its carrying amount, then no further assessments are required.

In 2020, we performed a qualitative assessment and determined a quantitative assessment was not necessary.

In 2021 and 2020, we performed a qualitative assessment and determined a quantitative assessment was not necessary.

Our quantitative assessment for determining the fair value of our reporting unit includes using an estimated discounted cash flow model (income approach) and market value approach.

The output of this assessment is an estimated fair value for our reporting unit that is compared to its carrying value to determine whether an impairment charge is necessary.

The income approach uses a discounted cash flow analysis of our projected future income, and the market value approach is based on earnings multiples for a comparable set of public companies.

These approaches use key input assumptions such as our projected future operating results, the discount rate, the weighting for each valuation approach and the comparable set of companies.

A history of declining trends in our operating results such as comparable sales, gross margin, net income and cash flow from operations could impact these assumptions and serve as indicators of future impairment.

There is significant judgment used in determining these assumptions and variability in the assumptions could cause us to reach a different conclusion on impairment.

In 2019 and 2018, we performed a quantitative assessment for the determination of impairment.

The income approach uses a discounted cash flow analysis of our projected long-term future company income, and the market value approach is based on earnings multiples for a comparable set of public companies.

In 2019, we performed a quantitative assessment for the determination of impairment.

No impairment of goodwill existed for 2021, 2020 or 2019.

Intangible Assets

Intangible assets consist of the trade name of "Academy Sports + Outdoors" (the "Trade Name") and our favorable leases.

The favorable leases are accounted for as finite-lived assets and are amortized over their estimated useful economic lives.

With the adoption of the New Lease Standard on February 3, 2019, the balance of the favorable lease rights, net was netted into the right-of-use assets on the balance sheet (see Note 12).

Amortization expense on favorable lease rights was $ 3.5 million in 2018.

Intangible assets primarily consists of the trade name "Academy Sports + Outdoors" (the "Trade Name").

The Trade Name is expected to generate cash flows indefinitely and, therefore, is accounted for as an indefinite-lived asset not subject to amortization.

The Trade Name is tested for impairment annually at the last day of our eleventh fiscal month, or whenever events or circumstances indicate that the carrying amount of the Trade Name may not be recoverable.

The Trade Name is tested for impairment annually or whenever events or circumstances indicate that the carrying amount of the Trade Name may not be recoverable.

The annual Trade Name impairment test provides for the option of first performing a qualitative assessment to evaluate the existence of events and circumstances that would lead to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount.

If such a conclusion is reached, we would then be required to perform a quantitative impairment assessment for the Trade Name.

Impairment is calculated as the excess of the Trade Name’s carrying value over its fair value.

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This method assumes that, in lieu of ownership, a third party would be willing to pay a royalty in order to exploit the related benefits of these types of assets.

Once a supportable royalty rate is determined, the rate is then applied to the projected revenues over the expected remaining life of the intangible assets to estimate the royalty savings.

This approach is dependent on a number of factors, including estimates of future growth and trends, royalty rates, discount rates and other variables.

The results of the 2020, 2019 and 2018 annual impairment tests indicated that the fair value of the Trade Name was in excess of its carrying value and no impairments existed.

Once a supportable royalty rate is determined, the rate is then applied to the projected long-term sales over the expected remaining life of the intangible assets to estimate the royalty savings.

This approach is dependent on a number of factors, including projections of long-term sales, royalty rates, discount rates and other variables.

Deferred Loan Costs

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If it is determined that a derivative is not highly effective as a hedge or ceases to be highly effective, we discontinue hedge accounting prospectively.

Derivative financial instruments are recognized at fair value in the consolidated balance sheets (see Note 5 and Note 6).

Derivative financial instruments are recognized at fair value in the consolidated balance sheets (see Note 5).

The changes in the fair value of derivative instruments designated as cash flow hedges are recorded in accumulated other comprehensive income ("AOCI"), net of tax effects, and are subsequently reclassified to earnings when the hedged transaction affects earnings.

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Substantially all of our leases contain landlord incentives and escalation clauses.

With the adoption of the New Lease Standard on February 3, 2019, the deferred rent balances were netted into the right-of-use assets on the balance sheet (see Note 12), which are amortized ratably over the remaining terms of the corresponding leases.

With the adoption of the New Lease Standard on February 3, 2019, the deferred rent balances were netted into the right-of-use assets on the balance sheet, which are amortized ratably over the remaining terms of the corresponding leases.

In certain store construction cases, we may be deemed the owner of the property during construction, after which we then sell the property to a landlord and concurrently enter into a lease of the property to operate the store (“sale-leaseback”).

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Non-capital expenditures associated with opening new stores and distribution centers, which consist primarily of occupancy costs, marketing, payroll and recruiting costs, are expensed as incurred.

There were no pre-opening expenses in 2020.

Pre-opening expenses for our new stores were $ 0.2 million and $ 3.2 million in 2021 and 2019, respectively.

There were no pre-opening expenses in 2020.

Equity Compensation

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We have elected to recognize forfeitures as they occur.

Share Repurchases

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.

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.

In 2021, we repurchased and concurrently retired 10,566,796 shares of ASO, Inc.

common stock for an aggregate amount of $ 411.4 million, which includes purchases that were made pursuant to the Share Repurchase Program and those that were made prior to the Share Repurchase Program.

As of January 29, 2022, approximately $ 188.6 million remained available for share repurchases pursuant to our 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.

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 Company is subject to U.S.

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Substantially all of the Company’s identifiable assets are located in the United States.

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

Recent Accounting Pronouncements

ASU 2019-12 Income Taxes (Topic 740)

In December 2019, the FASB issued ASU 2019-12, "Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes".

ASU 2019-12 is effective for fiscal years and interim periods beginning after December 15, 2020.

This update simplifies the accounting for income taxes by removing certain exceptions and amends existing guidance to improve consistent application.

The Company adopted ASU 2019-12 on January 31, 2021 and it did not have a material impact on our financial position, results of operations or cash flows.

Reference Rate Reform

In March 2020, the FASB issued ASU 2020-04, "Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting." This pronouncement provides temporary optional expedients and exceptions to the current guidance on contract modifications and hedge accounting to ease the financial reporting burden related to the expected market transition from the London Interbank Offered Rate ("LIBOR") and other interbank offered rates to alternative reference rates.

The adoption of this guidance is effective for all entities as of March 12, 2020 through December 31, 2022.

The Company is currently evaluating the expedients and exceptions provided by this amendment as it relates to our transition from LIBOR to another reference rate to determine the impact.

The following table sets forth the approximate amount of sales (all of which are based in the U.S.) by merchandise divisions for the periods presented (amounts in thousands):

Fiscal Year Ended

January 30, 2021 February 1, 2020 February 2, 2019

January 29, 2022 January 30, 2021 February 1, 2020

Merchandise division sales (1)

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As a result, we have reclassified sales between divisions for 2020 and 2019 for comparability purposes.

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

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

(2) E-commerce sales consisted of 9.3 %, 10.4 % and 5.1 % of merchandise sales for 2021, 2020 and 2019, respectively.

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Fiscal Year Ended

January 30, 2021 February 1, 2020 February 2, 2019

January 29, 2022 January 30, 2021 February 1, 2020

Gift card liability, beginning balance $ 74,253 $ 67,993 $ 66,153

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

January 30, 2021 February 1, 2020

January 29, 2022 January 30, 2021

ABL Facility, due November 2025 $ — $ —

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

As of January 30, 2021 and February 1, 2020, the balance in deferred loan costs related to the ABL Facility (as defined below) was approximately $ 5.5 million and $ 3.4 million, respectively, and was included in other noncurrent assets on our consolidated balance sheets.

As of January 29, 2022 and January 30, 2021, the balance in deferred loan costs related to the ABL Facility (as defined below) was approximately $ 4.3 million and $ 5.5 million, respectively, and was included in other noncurrent assets on our consolidated balance sheets.

Total amortization of deferred loan costs was $ 2.7 million, $ 2.6 million and $ 2.6 million in 2021, 2020 and 2019, respectively.

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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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Quarterly principal payments of approximately $ 4.6 million were required through June 30, 2022, with the balance due in full on the maturity date of July 2, 2022.

On November 6, 2020, Academy, Ltd., as borrower, and the Guarantors, as guarantors, entered into the Second Amended and Restated Credit Agreement (the "2020 Term Loan Agreement"), with Credit Suisse AG, Cayman Island Branch ("Credit Suisse"), as the administrative agent and collateral agent (the "Term Loan Agent"), the several lenders from time to time parties thereto and the several other parties named therein, which established a new $ 400.0 million first lien term loan (the "2020 Term Loan").

On November 6, 2020, Academy, Ltd.

entered into a seven-year $ 400.0 million senior secured term loan (the "2020 Term Loan") with Credit Suisse AG, Cayman Island Branch ("Credit Suisse"), as the administrative agent and collateral agent and the several other lenders and parties.

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.

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 January 29, 2022, the weighted average interest rate was 4.50 %, 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.

The 2020 Term Loan Agreement contains customary events of default including, but not limited to, failure to pay principal or interest, breaches of representations and warranties, violations of affirmative or negative covenants, cross-defaults to other material indebtedness, a bankruptcy or similar proceeding, rendering of certain monetary judgments, invalidity of collateral documents and changes of control.

The terms and conditions of the Amendment also require that the outstanding balance under the Term 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.

The Amended Credit Agreement contains customary events of default such as failure to pay principal or interest, breaches of representations and warranties, violations of affirmative or negative covenants, cross-defaults to other material indebtedness, a bankruptcy or similar proceeding, rendering of certain monetary judgments, invalidity of collateral documents and changes of control.

As of January 29, 2022, no prepayment was due under the terms and conditions of the Term Loan.

Prior to the Refinancing Transactions in 2020 and 2019, we repurchased principal on our Term Loan.

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

Prior to the Refinancing Transactions in 2020, we repurchased principal on our Term Loan.

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

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Net gain recognized $ 7.8 $ 42.3

In connection with the Refinancing Transactions, the Company recognized a non-cash loss on early retirement of debt of $ 4.2 million from the write-off of deferred loan costs and expense related to the original issuance discount associated with our 2015 Term Loan.

In connection with the Refinancing Transactions in 2020, the Company recognized a non-cash loss on early retirement of debt of $ 4.2 million from the write-off of deferred loan costs and expense related to the original issuance discount associated with our 2015 Term Loan.

On November 6, 2020, Academy, Ltd.

issued $ 400.0 million of 6.00 % senior secured notes which are due November 15, 2027 (the "Notes"), pursuant to an indenture, dated as of November 6, 2020 (the "Indenture"), by and among Academy, Ltd.

issued $ 400.0 million of 6.00 % senior secured notes which are due November 15, 2027 (the "Notes"), pursuant to an indenture, dated as of November 6, 2020 (the "Indenture"), with Academy, Ltd.

the Guarantors (as defined below) and The Bank of New York Mellon Trust Company, N.A., as trustee and collateral agent (in such capacity, the "Notes Collateral Agent").

The Notes will pay interest semi-annually in arrears in cash on May 15 and November 15 of each year at a rate of 6.00 % per year, commencing on May 15, 2021.

The Notes were sold in the United States to persons reasonably believed to be "qualified institutional buyers" pursuant to Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"), and outside the United States to non-U.S.

persons pursuant to Regulation S under the Securities Act.

In connection with issuance of the Notes, the Company capitalized related professional fees of $ 5.2 million as deferred loan costs.

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On May 22, 2018, the Company amended the agreement governing the 2015 ABL Facility, to increase the commitment on the facility from $ 650 million to $ 1 billion.

In connection with the amendment to the 2015 ABL Facility, the Company capitalized related professional fees of $ 2.8 million as deferred loan costs and wrote of $ 0.1 million in previously capitalized deferred loan costs.

The 2015 ABL Facility was scheduled to mature on May 22, 2023, subject to a springing maturity clause which could have been triggered 91 days before the July 2, 2022 maturity of the 2015 Term Loan Facility.

In connection with the amendment to the 2015 ABL Facility, the Company capitalized related professional fees of $ 2.8 million as deferred loan costs and wrote off $ 0.1 million in previously capitalized deferred loan costs.

The 2015 ABL Facility was scheduled to mature on May 22, 2023.

On November 6, 2020, Academy, Ltd., as borrower, and the Guarantors, as guarantors, amended the 2015 ABL Facility by entering into an amendment to the First Amended and Restated ABL Credit Agreement, dated as of July 2, 2015, with JPMorgan Chase Bank, N.A.

as the administrative agent and collateral agent, letter of credit issuer and swingline lender (the "ABL Agent") and the several lenders party thereto, which ABL Amendment, among other things, extended the maturity of Academy, Ltd.’s asset-based revolving credit facility thereunder to November 6, 2025 (the "2020 ABL Facility").

as the administrative agent and collateral agent, letter of credit issuer and swingline lender (the "ABL Agent") and the several lenders party thereto, which ABL amendment (the "2020 ABL Facility"), among other things, extended the maturity of Academy, Ltd.’s asset-based revolving credit facility thereunder to November 6, 2025.

In connection with the 2020 ABL Facility, the Company capitalized related professional fees of $ 3.1 million as deferred loan costs.

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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 refinancing transactions (see Note 4).

As a result, we reclassified approximately $ 1.3 million of losses from accumulated other comprehensive loss ("AOCI") to other (income) expense, net in the third quarter of 2020 related to the portion of the forecasted transaction no longer considered probable of occurring.

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 January 30, 2021, we do not have any derivative financial instruments outstanding.

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

January 30, 2021 February 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 — 6,130

Amounts included in other long-term liabilities — 1,976

Total derivatives designated as hedging instruments net liabilities $ — $ ( 8,106 )

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):

We do not have any derivative financial instruments outstanding as of January 29, 2022 and January 30, 2021, respectively .

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

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

Fiscal Year Ended

January 30, 2021 February 1, 2020 February 2, 2019

January 29, 2022 January 30, 2021 February 1, 2020

Accumulated Other Comprehensive Income (Loss), beginning $ ( 3,324 ) $ ( 8,066 ) $ 8,448

Loss deferred into AOCI (net of tax impact of $ 350 )

Loss deferred into AOCI (net of tax impact of $ 0 , $ 350 , and $ 0 for the years ended January 29, 2022, January 30, 2021 and February 1, 2020, respectively)

— ( 6,303 ) ( 16,096 )

Increase (decrease) to interest expense (net of tax impact of $ 1,000 )

Increase (decrease) to interest expense (net of tax benefit (expense) of $ 980 , $( 1,000 ), and $ 0 for the years ended January 29, 2022, January 30, 2021 and February 1, 2020, respectively)

3,324 10,045 ( 418 )

Loss on swaps from debt refinancing in other (income) expense, net (net of tax impact of $ 330 )

Accumulated Other Comprehensive Income (Loss), ending $ ( 3,324 ) $ ( 8,066 ) $ 8,448

Loss on swaps from debt refinancing in other (income) expense, net (net of tax impact of $ 0 , $ 330 , and $ 0 for the years ended January 29, 2022, January 30, 2021 and February 1, 2020, respectively)

Accumulated Other Comprehensive Loss, ending $ — $ ( 3,324 ) $ ( 8,066 )

Fair Value Measurements

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There were no transfers made into or out of the Level 1, 2 or 3 categories during any period presented.

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

Fair Value Hierarchy January 30, 2021 February 1, 2020

Interest rate swap Level 2 $ — $ —

Interest rate swap Level 2 $ — $ 8,106

We value our derivative financial instruments using a discounted cash flow analysis based on the expected cash flows of each derivative.

This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market based inputs including interest rates and implied volatilities.

Our valuations also consider both our own and the respective counterparty’s non-performance risk.

We have considered unobservable market factors such as the likelihood of default by us and our counterparty, our net exposures, credit enhancements, and remaining maturities in determining a credit valuation adjustment to include as part of the fair value of our derivative financial instruments.

To date, the credit valuation adjustment did not comprise a material portion of the fair value of the derivative financial instruments.

Therefore, we consider our derivative financial instruments to fall within Level 2 of the fair value hierarchy.

Non-Financial Assets Measured on a Non-Recurring Basis

Certain non-financial assets are subject to periodic impairment tests and are not measured to fair value on a recurring basis.

These assets include property and equipment, goodwill and our Trade Name.

During 2018, we recorded full property and equipment impairment charges of $ 1.4 million on one project and one store that we continue to operate.

The related charges are included in selling, general and administrative expenses in the consolidated statement of income.

The fair value for each store was determined by using a discounted cash flow model of projected store income, which we have classified as Level 3 of the fair value hierarchy.

Other Financial Instruments

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

We held investments in money market funds of $ 284.0 million and $ 113.3 million as of January 30, 2021 and February 1, 2020, respectively.

The fair value of the Term Loan 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 January 30, 2021 and February 1, 2020, the estimated fair value of the Term Loan was $ 0.8 billion and $ 1.2 billion, respectively.

We held investments in money market funds of $ 401.0 million and $ 284.0 million as of January 29, 2022 and January 30, 2021, 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 January 29, 2022 and January 30, 2021, the estimated fair value of the Term Loan and Notes was $ 0.7 billion and $ 0.8 billion, respectively.

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

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

January 30, 2021 February 1, 2020

January 29, 2022 January 30, 2021

Leasehold improvements $ 456,918 $ 438,287

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Property and equipment, net $ 345,836 $ 378,260

Depreciation expense was $ 105.5 million, $ 117.3 million and $ 130.4 million in 2020, 2019 and 2018, respectively.

Depreciation expense was $ 105.3 million, $ 105.5 million and $ 117.3 million in 2021, 2020 and 2019, 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:

January 30, 2021 February 1, 2020

January 29, 2022 January 30, 2021

Accrued interest $ 6,583 $ 7,684

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Income taxes payable 9,602 23,730

Interest rate swaps — 6,129

Property taxes 17,747 16,978

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Accrued expenses and other current liabilities $ 303,207 $ 291,351

Equity and Share-Based Compensation

Share-Based Compensation

On September 29, 2020, the ASO, Inc.

Board of Directors adopted the 2020 Omnibus Incentive Plan (the "2020 Omnibus Incentive Plan"), which became effective on October 1, 2020.

The plan reserves a total of 5,150,000 shares of common stock for issuance.

The plan reserved a total of 5,150,000 shares of common stock for issuance.

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 January 29, 2022, there were 3,523,690 shares that were authorized and available for grant under the 2020 Omnibus Incentive Plan.

On September 29, 2020, the ASO, Inc.

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 January 29, 2022, there were 1,885,546 shares authorized and available for future issuance under the ESPP.

Equity compensation expense was $ 39.3 million in 2021, 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 $ 31.6 million in 2020, including approximately $ 19.9 million of equity compensation expense associated with the expensing of certain outstanding restricted stock units as a result of the liquidity condition being achieved upon completion of our IPO.

Equity compensation expense was $ 7.9 million in 2019.

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

As of January 29, 2022, unrecognized compensation cost related to Unit Options and Restricted Units of $ 22.1 million is expected to be recognized over a weighted average life of 3.0 years.

The grant date fair value of Restricted Units vested was $ 24.4 million, $ 14.4 million and $ 0.3 million for 2021, 2020 and 2019, respectively.

2011 Unit Incentive Plan

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In each case, vesting of the Company’s outstanding and unvested Stock Options and Restricted Stock Units is contingent upon the holder’s continued service through the date of each applicable vesting event.

Our ESPP allows eligible employees to contribute up to 15 % of their eligible earnings toward the semi-annual purchase of the Company's shares of common stock at a discount of 15 % of the closing stock price on the first or last day of the six-month offering period, whichever is lower.

The number of shares reserved for issuance under the ESPP will be increased automatically on the first day of each fiscal year, beginning in fiscal year 2021, by a number equal to the lesser of (1) 1,000,000 shares of common stock, (2) 2.0 % of the total number of all classes of the company's common stock outstanding on the last day of the immediately preceding fiscal year, or (3) a lower number of shares determined by the ASO, Inc.

Board of Directors.

On August 28, 2020, NAHC paid a $ 257.0 million, or $ 1.1257 per unit (or $ 3.5460 as converted using the Contribution Ratio), distribution to its members of record as of August 25, 2020.

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 $ 21.0 million were paid through January 30, 2021.

Share-Based Award Payments payable as of January 30, 2021 for unvested awards is $ 11.2 million, which is reflected within accrued expenses and other current liabilities and other long-term liabilities on the Company's consolidated balance sheets.

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

On June 22, 2018, the Company reduced the exercise price on vested and unvested options to fair market value for current employees holding options with exercise prices greater than fair market value.

The repricing affected 184 employees and 6,909,475 options.

Equity compensation expense incurred at the time of the repricing was $ 0.7 million.

Equity compensation expense was $ 31.6 million in 2020, which includes approximately $ 19.9 million of equity compensation expense associated with the expensing of certain outstanding restricted stock units as a result of the liquidity condition being achieved upon completion of our IPO.

Equity compensation expense was $ 7.9 million and $ 4.6 million in 2019 and 2018, respectively.

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

As of January 30, 2021, unrecognized compensation cost related to Unit Options and Restricted Units of $ 31.5 million is expected to be recognized over a weighted average life of 2.2 years.

The total fair value of Restricted Units vested was $ 14.4 million, $ 0.3 million and $ 0.2 million for 2020, 2019 and 2018, respectively.

• 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 January 29, 2022.

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

Service Option and Performance Option Fair Value Assumptions

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The assumptions used to calculate the fair value of Unit Options 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 2020, 2019 and 2018:

The following table presents the assumptions and grant date fair values for Service and Performance Options granted in 2021, 2020 and 2019:

Fiscal Year Ended

January 30, 2021 February 1, 2020 February 2, 2019

January 29, 2022 January 30, 2021 February 1, 2020

Expected life in years 6.2 6.2 6.2

Expected volatility 42 % to 44 %

52 % 50 % to 55 %

Weighted-average volatility 43.7 % 53.1 % 52.0 %

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In the event of certain Company change of control transactions, the Company’s then-outstanding and unvested Service Options will become fully vested and exercisable.

The Company’s outstanding and unvested Performance Options typically vest ratably over a four-year period, after the conclusion of each fiscal year and upon our board of managers’ determination that the Company has achieved certain pre-determined annual earnings before interest, taxes, depreciation and amortization ("EBITDA") targets for such fiscal year.

The Company’s outstanding and unvested Performance Options may, on a case-by-case basis, also grant certain additional vesting rights, whereby any Performance Options that do not vest due to missed annual EBITDA targets may nevertheless partially or fully vest as a result of certain alternative events, including, as examples, the Company achieving a pre-determined cumulative EBITDA target for a set of fiscal years, or the Company achieving a pre-determined ASO, Inc.

stock price target on a specified date, or the Company completing a change in control.

There have been no Performance Options granted under the 2020 Omnibus Incentive Plan to date.

Prior to the 2021 Vesting Event, the Company’s outstanding Performance Options typically vested ratably over a four-year period, after the conclusion of each fiscal year and upon our board of managers’ determination that the Company had achieved certain pre-determined annual earnings before interest, taxes, depreciation and amortization ("EBITDA") targets for such fiscal year.

Unit Option activity is as follows:

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Exercised ( 423,696 ) 5.03 $ 6,066

Outstanding as of February 1, 2020 5,790,308 $ 12.76 5.5 $ 28,855

Outstanding as of January 30, 2021 6,282,782 $ 13.53 5.5 $ 50,055

Granted or modified 915,017 27.41

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Exercisable as of January 29, 2022 2,935,237 $ 16.99 6.8 $ 60,672

(1) The fair value of a membership unit (2) as of each period end was $ 13.86 , $ 18.62 , $ 17.61 and $ 21.50 for the fiscal years 2017, 2018, 2019 and 2020.

(1) The fair value of a membership unit (2) as of each period end was $ 18.62 , $ 17.61 , $ 21.50 and $ 37.66 for the fiscal years 2018, 2019, 2020 and 2021, respectively.

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

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Exercised ( 115,184 ) 4.65 $ 1,928

Outstanding as of February 1, 2020 3,246,849 $ 9.51 3.6 $ 26,838

Outstanding as of January 30, 2021 2,948,621 $ 8.81 2.5 $ 37,422

Granted or modified — —

5 unchanged sentences

Exercisable as of January 29, 2022 396,909 $ 16.48 5.8 $ 8,406

(1) The fair value of a membership unit (2) as of each period end was $ 13.86 , $ 18.62 , $ 17.61 and $ 21.50 for the fiscal years 2017, 2018, 2019 and 2020.

(1) The fair value of a membership unit (2) as of each period end was $ 18.62 , $ 17.61 , $ 21.50 and $ 37.66 for the fiscal years 2018, 2019, and 2020 and 2021, respectively.

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

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Forfeited — — ( 88,459 ) 17.37 — —

Non-vested as of February 1, 2020 12,071 $ 16.57 1,044,813 $ 17.36 — $ —

Non-vested as of January 30, 2021 32,049 $ 17.01 1,339,330 $ 17.74 16,328 $ 13.87

Granted 358,960 36.64 — — 196,056 27.41

3 unchanged sentences

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

The Company’s outstanding and unvested Service Restricted Units typically vest 100 % on the six-month or one-year anniversary of their grant date.

In the event of certain Company change of control transactions, the Company’s then-outstanding and unvested Service Restricted Units will become fully vested and exercisable.

The Company’s outstanding and unvested Liquidity Event Restricted Units typically vest either (i) over a four-year period at rates of 30 %, 30 %, 20 % and 20 % per anniversary of the Liquidity Event Restricted Unit holder’s employment start date, so long as the Company completes an initial public offering prior to the fifth anniversary of their grant date, or (ii) immediately at a rate of 100 %, upon the completion of certain Company change of control transactions, so long as the Company completes such change of control transaction prior to the fifth anniversary of their grant date.

The Company’s outstanding and unvested Service Restricted Units typically vest either (i) 100 % on the first anniversary of the grant date, or, if earlier, the business day immediately preceding the following annual meeting of stockholders, or (ii) over a four-year period at rates of 25 %, 25 %, 25 % and 25 % on the anniversary of their grant date.

In the event of certain Company change of control transactions, the Company’s then-outstanding and unvested Service Restricted Units will become fully vested.

The Company’s outstanding and unvested Liquidity Event Restricted Units began being expensed on October 6, 2020, concurrent with the completion of the IPO and the performance objective was met in accordance with ASC 718.

Additionally, in connection with the completion of the IPO, the Company issued performance restricted units to key team members which will vest 25 % on the first anniversary of the grant date and 75 % on the second anniversary of the grant date.

The Company’s outstanding and unvested Performance Restricted Units typically vest either (i) over a four-year period at rates of 25 %, 25 %, 25 % and 25 % per anniversary of the Performance Restricted Unit holder’s grant date, so long as the Company achieves the performance metric for the grant year, (ii) achieves a stated target share price, or (iii) a change of control occurring during the grant year the company offering prior to the fifth anniversary of their grant date, or (ii) immediately at a rate of 100 %, upon the completion of certain Company change of control transactions, so long as during the twenty-four month period following such change of control the unit holder's service is terminated without cause or they submit their resignation for good reason, as defined in the award agreement.

The Company’s outstanding and unvested Performance Restricted Units typically vest either (i) over a four-year period at rates of 25 %, 25 %, 25 % and 25 % per anniversary of the Performance Restricted Unit holder’s vesting commencement date, so long as the Company achieves (a) the performance metric for the grant year, (b) achieves a stated target share price, or (c) a change of control occurring during the grant year, or (ii) immediately at a rate of 100 %, upon the completion of certain Company change of control transactions, so long as during the twenty-four month period following such change of control the unit holder's service is terminated without cause or they submit their resignation for good reason, as defined in the award agreement.

Earnings per Common Share

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Anti-dilutive stock-based awards do not include awards which have a performance or liquidity event target which has yet to be achieved.

Basic and dilutive shares outstanding are calculated as follows (amounts in thousands):

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

Fiscal Year Ended

January 30, 2021 February 1, 2020 February 2, 2019

January 29, 2022 January 30, 2021 February 1, 2020

Net income $ 671,381 $ 308,764 $ 120,043

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Dilutive effect of Service Restricted Units and Service Restricted Stock Units (1)

Dilutive effect of Liquidity Event Restricted Units and Performance Restricted Stock Units (1)

Dilutive effect of Performance Restricted Stock Units and Liquidity Event Restricted Units (1)

Dilutive effect of Service Options (1)

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637 1,433 1,391

Dilutive effect of ESPP Shares 8 — —

Weighted average common shares outstanding - diluted (1)

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

349 582 2,377

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

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Our tax rate prior to October 1, 2020 was almost entirely the result of state income taxes.

In connection with our IPO, as a result of the Reorganization Transactions (see Note 1) completed on October 1, 2020, as described further in the Prospectus, on and after October 1, 2020, the Company is treated as a U.S.

In connection with our IPO, as a result of the Reorganization Transactions completed on October 1, 2020, as described further in the Prospectus, on and after October 1, 2020, the Company is treated as a U.S.

corporation for U.S.

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Additionally, $ 4.6 million in current tax liability was assumed by the Company as part of the Reorganization Transactions.

The combined entry was recorded as a

cumulative adjustment to additional paid-in capital for the year equal to $ 141.9 million, as reflected in the statement of stockholders' equity.

The combined entry was recorded as a cumulative adjustment to additional paid-in capital for 2020 equal to $ 141.9 million, as reflected in the statement of stockholders' equity.

Effective January 31, 2021, NAHC discontinued partnership treatment for tax purposes.

As a result, our deferred tax liability was no longer measured by reference to membership units in NAHC and instead was measured by reference to the underlying assets and liabilities of our operations.

No change in the total reported deferred tax liability occurred as a result of the change in tax structure.

The Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") was enacted in the U.S.

on March 27, 2020, and the Consolidated Appropriations Act of 2021 was enacted on December 27, 2020.

These legislative actions did not significantly impact our full year effective tax rate in fiscal 2020.

on March 27, 2020, the Consolidated Appropriations Act of 2021 was enacted on December 27, 2020 and the American Rescue Plan Act of 2021 was enacted on March 11, 2021.

These legislative actions did not significantly impact our full year effective tax rate in fiscal 2020 or 2021.

The income tax provision consists of the following (amounts in thousands) as of:

Fiscal Year Ended

January 30, 2021 February 1, 2020 February 2, 2019

January 29, 2022 January 30, 2021 February 1, 2020

Current expense:

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Foreign ( 2 ) 2 ( 21 )

Total deferred expense (benefit) 701 297 ( 494 )

Total deferred expense 79,490 701 297

Income tax expense $ 188,159 $ 30,356 $ 2,817

2 unchanged sentences

Fiscal Year Ended

January 30, 2021 February 1, 2020 February 2, 2019

January 29, 2022 January 30, 2021 February 1, 2020

Federal income tax at the statutory rate 21.0 % 21.0 % 21.0 %

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Effect of pre-IPO pass-through income allocated to our members — ( 13.7 ) ( 21.4 )

Effect of permanent items 0.0 0.4 2.8

Other, including foreign 0.0 0.0 0.2

Nondeductible excess compensation 1.3 — —

Excess tax benefit for share-based compensation ( 2.6 ) 0.0 0.4

Effect of other permanent items ( 0.4 ) 0.0 0.0

Effective income tax rate 21.9 % 9.0 % 2.3 %

The effective tax rate for the periods reflected is less than the U.S.

The effective tax rate for periods ending January 30, 2021 and February 1, 2020 is less than the U.S.

federal tax rate on corporations primarily as a result of the Company’s status as a flow-through entity prior to October 1, 2020.

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federal and state income tax in addition to the historically reported Texas franchise tax as a result of the Reorganization Transactions.

For complete annual periods on and after October 1, 2020, no portion of the Company’s income remains flow-through to the prior members of NAHC and our estimated effective tax rate is between 24 % and 25 % for the full year.

For complete annual periods on and after October 1, 2020, no portion of the Company’s income remains flow-through to the prior members of NAHC.

NAHC continued to operate as a tax partnership through January 30, 2021.

Effective January 31, 2021, NAHC discontinued partnership treatment for tax purposes.

No change in the total reported deferred tax liability occurred as a result of the change in tax structure.

Components of deferred tax assets and liabilities consist of the following (amounts in thousands) as of:

January 30, 2021 February 1, 2020

January 29, 2022 January 30, 2021

Deferred tax assets:

Other $ — $ 220

Accounts receivable $ 274 $ —

Accrued liabilities and reserves 24,227 —

Equity compensation 8,848 —

Total deferred tax assets 33,349 —

Deferred tax liabilities:

Inventory ( 36,108 ) —

Prepaid items ( 7,505 ) —

Property and equipment ( 25,720 ) —

Intangible assets ( 180,891 ) —

Other ( 337 ) ( 345 )

1 unchanged sentence

Total deferred tax liabilities ( 250,561 ) ( 138,703 )

Net deferred tax asset (liability) $ ( 138,703 ) $ 220

The Reorganization Transactions (see Note 1) resulted in ASO, Inc.'s ownership of 100 % of NAHC which operated as a tax partnership through the fiscal year ended January 30, 2021.

The deferred tax liability as of January 30, 2021 reflects the excess of financial statement carrying value over our tax basis in NAHC membership units measured using the federal income tax rate of 21% and our weighted average state income tax rate equal to approximately 2.4 % net of federal tax benefit.

For the year ended February 1, 2020, the net deferred tax asset is included in other noncurrent assets.

Net deferred tax liability $ ( 217,212 ) $ ( 138,703 )

Management evaluates the realizability of the deferred tax assets and the need for additional valuation allowances annually.

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Additionally, during the year ended January 30, 2021, the Company signed 46 lease extensions requiring lease modification accounting treatment.

There were no lease expense credits or extensions requiring lease modification accounting treatment related to COVID-19 during the year ended January 29, 2022.

The components of lease expense and sublease income included in selling, general and administrative ("SG&A") expenses on our statement of income is as follows (amounts in thousands):

Fiscal Year Ended

January 30, 2021 February 1, 2020

January 29, 2022 January 30, 2021

Operating lease expense $ 197,321 $ 196,794

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Fiscal Year Ended

January 30, 2021 February 1, 2020

January 29, 2022 January 30, 2021

Right-of-use assets obtained in exchange for new operating lease liabilities $ 26,253 $ 86,782

Cash paid for amounts included in the measurement of lease liabilities $ 179,723 $ 192,849

January 30, 2021 February 1, 2020

Cash paid for amounts included in the measurement of operating lease liabilities $ 203,554 $ 179,723

January 29, 2022 January 30, 2021

Weighted-average remaining lease term in years 10.2 11.0

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On August 3, 2011 (the "Effective Date"), we entered into a monitoring agreement (the "Monitoring Agreement"), with Kohlberg Kravis Roberts & Co.

(the "Adviser") pursuant to which the Adviser provides advisory, consulting and financial services to us.

In accordance with the terms of the Monitoring Agreement, we paid an aggregate annual advisory fee which increases by 5.0 % annually on each anniversary of the Effective Date.

(the "Adviser") pursuant to which the Adviser provided advisory, consulting and financial services to us.

In accordance with the terms of the Monitoring Agreement, we paid an aggregate annual advisory fee which increased by 5.0 % annually on each anniversary of the Effective Date.

The Adviser also charged us a customary fee for services rendered in connection with securing, structuring and negotiating equity and debt financings by us.

2 unchanged sentences

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

The termination fee is 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 $ 14.8 million, $ 3.6 million and $ 3.5 million in 2020, 2019 and 2018, respectively.

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 $ 14.8 million and $ 3.6 million in 2020 and 2019, respectively.

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

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The Company paid $ 0.3 million in fees to KCM for underwriting services in connection with the IPO Over-Allotment Exercise.

On November 6, 2020, the Company issued the Notes, entered into the 2020 Term Loan Facility, and entered into the 2020 ABL Amendment.

On November 6, 2020, the Company issued the Notes, entered into the 2020 Term Loan, and entered into the 2020 ABL Facility.

The Company paid $ 2.5 million in fees to KCM in connection with the Refinancing Transactions.

1 unchanged sentence

Other Related Party Transactions

On January 27, 2021, in connection with the Secondary Offering, the Company entered into an Underwriting Agreement with affiliates of KKR (as selling stockholders), the several other selling stockholders named therein, and the several underwriters named therein, including KCM (as underwriter).

The Secondary Offering was completed on February 1, 2021.

The Company did not pay KCM any fees in connection with the Secondary Offering.

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.

On January 27, 2021, May 5, 2021, and September 14, 2021, in connection with the Secondary Offering, the May 2021 Secondary Offering, and the September 2021 Secondary Offering, respectively, the Company entered into Underwriting Agreements with affiliates of KKR (as selling stockholders), the several other selling stockholders named therein, and the several underwriters named therein, including KCM (as underwriter).

The Secondary Offering, May 2021 Secondary Offering, and September 2021 Secondary Offering were completed on February 1, 2021, May 10, 2021, and September 17, 2021, respectively.

The Company did not pay KCM any fees in connection with these secondary offerings.

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).

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 are material to our business.

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

Fidelity Investments Institutional Operations Company, LLC ("Fidelity") provides the Company with plan administration services on its 401(k) Plan and stock compensation programs (including the Company's Employee Stock Purchase Program).

The Company incurred expenses of approximately $ 0.2 million from Fidelity during the fiscal year ended January 29, 2022, which are included in selling, general and administrative expenses in the consolidated statements of income.

Fidelity is an affiliate of FMR LLC, which reported beneficial ownership of shares representing approximately 12.9 % of the Company's common stock as of January 29, 2022.

Investments in Managers

For the fiscal years ended February 1, 2020 and February 2, 2019, executives and directors of the Company made cash purchases of Redeemable Membership Units in Managers for approximately $ 0.1 million and $ 1.3 million, respectively.

For the fiscal year ended February 1, 2020, executives and directors of the Company made cash purchases of Redeemable Membership Units in Managers for approximately $ 0.1 million.

The cash consideration paid for the Redeemable Membership Units was concurrently contributed to NAHC by Managers in exchange for a number of NAHC Membership Units equal to the number of Redeemable Membership Units purchased.

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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.

Managers was dissolved and its assets were distributed to its members on December 23, 2020.

Note Receivable from Member and Distribution

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.

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

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.

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.

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 January 30, 2021, we have obligations under technology related contractual commitments as well as other commitments, such as construction commitments, in the amount of $ 10.8 million.

As of January 29, 2022, we have obligations under technology-related, construction and other contractual commitments in the amount of $ 22.6 million.

Of such commitments, approximately $ 14.3 million is payable in the next 12 months.

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No individual case, or group of cases presenting substantially similar issues of law or fact, is expected to have a material effect on the manner in which we conduct our business or on our consolidated results of operations, financial position or liquidity.

The majority of these cases are alleging product, premises, employment and/or general liability.

The majority of these cases are alleging product, premises, employment and/or commercial liability.

Reserves have been established that we believe to be adequate based on our current evaluations and experience in these types of claim situations.

However, the ultimate outcome of these cases cannot be determined at this time.

We believe, taking into consideration our indemnities, defenses, insurance and reserves, the ultimate resolution of these matters will not have a material impact on our financial position, results of operations or cash flows.

We believe, taking into consideration our indemnities, insurance and reserves, the ultimate resolution of these matters will not have a material impact on our financial position, results of operations or cash flows.

Sponsorship Agreement and Intellectual Property Commitments

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Operating income 239,074 254,558 216,113 198,202

(Gain) loss on early retirement of debt, net — ( 7,831 ) — 4,249

Net income (loss) $ ( 10,020 ) $ 167,676 $ 59,586 $ 91,522

Loss on early retirement of debt, net — 2,239 — —

Net income $ 177,796 $ 190,510 $ 161,305 $ 141,770

Earnings (loss) per common share:

$ ( 0.14 ) $ 2.31 $ 0.78 $ 1.01

$ ( 0.14 ) $ 2.25 $ 0.74 $ 0.97

Basic $ 1.93 $ 2.06 $ 1.77 $ 1.61

Diluted $ 1.84 $ 1.99 $ 1.72 $ 1.57

Weighted average common shares outstanding:

72,474 72,478 76,771 90,253

72,474 74,439 80,714 94,377

Basic 92,088 92,627 91,140 87,970

Diluted 96,472 95,891 93,844 90,475

Net sales $ 1,136,301 $ 1,606,420 $ 1,349,076 $ 1,597,436

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Operating income 14,022 183,788 81,556 141,032

Gain on early retirement of debt, net ( 41,138 ) ( 1,127 ) — —

Net income $ 25,406 $ 48,347 $ 28,552 $ 17,738

(Gain) loss on early retirement of debt, net — ( 7,831 ) — 4,249

Net income (loss) $ ( 10,020 ) $ 167,676 $ 59,586 $ 91,522

Earnings (loss) per common share:

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

Subsequent Events

Our management evaluated events or transactions that occurred after January 29, 2022 through March 29, 2022 the issuance date of the consolidated financial statements, and identified the following matter to report:

On March 3, 2022, the Company's Board of Directors declared a quarterly cash dividend in the amount of $ 0.075 per share on the Company's common stock, payable on April 14, 2022 to stockholders of record as of the close of business on March 17, 2022.

Form 10–K Summary

Not applicable.

Index to Exhibits

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Amended and Restated Bylaws of the Registrant (incorporated by reference to Exhibit 3.2 to the Registrant’s Current Report on Form 8-K filed on October 6, 2020).

Amendment to the Registration Rights Agreement, dated as of October 6, 2020, by and among the Registrant, Allstar LLC and New Academy Holding Company, LLC (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed on October 6, 2020).

Indenture, dated as of November 6, 2020, by and among Academy, Ltd., as issuer, the guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as trustee and notes collateral agent (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed on November 6, 2020).

Description of Securities Registered Under Section 12 of the Exchange Act.

(incorporated by reference to Exhibit 4.3 to the Registrant’s Annual Report on Form 10-K filed on April 7, 2021).

Second Amended and Restated Credit Agreement, dated as of November 6, 2020, among Academy, Ltd., as Borrower, New Academy Holding Company, LLC, as Holdings, Associated Investors L.L.C.

and Academy Managing Co., L.L.C., as Texas Intermediate Holdcos, the several lenders from time to time party thereto, Credit Suisse AG, Cayman Islands Branch, as the administrative agent and collateral agent and the several other parties named therein (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on November 6, 2020).

Amendment No.

4, dated May 25, 2021, to the Second Amended and Restated Credit Agreement 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 (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on May 25, 2021).

Amended and Restated Term Loan Security Agreement, dated as of July 2, 2015, among Academy, Ltd., as Borrower, each of the subsidiaries listed on the signature pages thereto, and Morgan Stanley Senior Funding, Inc., as collateral agent for the benefit of the secured parties (incorporated by reference to Exhibit 10.2 to the Registrant’s Registration Statement on Form S-1 filed on September 23, 2020).

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First Lien Intercreditor Agreement, dated November 6, 2020, among Credit Suisse AG, Cayman Islands Branch, as First Lien Collateral Agent and Authorized Representative for the Credit Agreement Secured Parties referred to therein, The Bank of New York Mellon Trust (incorporated by reference to Exhibit 10.7 to the Registrant’s Registration Statement on Form S-1 filed on January 25, 2021).

Exhibit Number Description of Exhibit

First Amended and Restated ABL Credit Agreement, dated July 2, 2015, among Academy, Ltd., as Borrower, New Academy Holding Company, LLC, as Holdings, Associated Investors L.L.C.

and Academy Managing Co., L.L.C, as Texas Intermediate Holdcos, the lending institutions from time to time party thereto and JPMorgan Chase Bank, N.A., as the Administrative Agent, the Collateral Agent, the Letter of Credit Issuer and the Swingline Lender (incorporated by reference to Exhibit 10.5 to the Registrant’s Registration Statement on Form S-1 filed on September 23, 2020).

Exhibit Number Description of Exhibit

Amendment No.

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Notes Pledge Agreement, dated as of November 6, 2020, among Academy, Ltd., as Issuer, each of the guarantors listed on the signature pages thereto, and The Bank of New York Mellon Trust Company, N.A., as collateral agent for the benefit of the Secured Parties referred to therein (incorporated by reference to Exhibit 10.14 to the Registrant’s Registration Statement on Form S-1 filed on January 25, 2021).

Form of 2021 RSU Executive Retention Award Agreement (incorporated by reference to Exhibit 10.01 to the Registrant's Quarterly Report on From 10-Q filed on December 10, 2021).

2020 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q filed on December 10, 2020).

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2021 Form of Performance-Based Restricted Stock Unit Agreement under the 2020 Omnibus Incentive Plan.

Plan (incorporated by reference to Exhibit 10.19 to the Registrant’s Annual Report on Form 10-K filed on April 7, 2021).

Exhibit Number Description of Exhibit

2011 Unit Incentive Plan (incorporated by reference to Exhibit 10.13 to the Registrant’s Registration Statement on Form S-1 filed on September 23, 2020).

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Form of 2019 Executive Option Agreement under 2011 Unit Incentive Plan (incorporated by reference to Exhibit 10.17 to the Registrant’s Registration Statement on Form S-1 filed on September 23, 2020).

Exhibit Number Description of Exhibit

Form of 2018 CEO Option Agreement under 2011 Unit Incentive Plan (incorporated by reference to Exhibit 10.18 to the Registrant’s Registration Statement on Form S-1 filed on September 23, 2020).

Form of 2018 Executive Option Agreement under 2011 Unit Incentive Plan (incorporated by reference to Exhibit 10.19 to the Registrant’s Registration Statement on Form S-1 filed on September 23, 2020).

Form of 2018 Non Executive Option Agreement under 2011 Unit Incentive Plan.

Form of 2018 Non Executive Option Agreement under 2011 Unit Incentive Plan (incorporated by reference to Exhibit 10.27 to the Registrant’s Annual Report on Form 10-K filed on April 7, 2021).

Form of 2017 Executive Option Agreement under 2011 Unit Incentive Plan (incorporated by reference to Exhibit 10.20 to the Registrant’s Registration Statement on Form S-1 filed on September 23, 2020).

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Lawrence Employment Agreement, dated January 29, 2019 (incorporated by reference to Exhibit 10.31 to the Registrant’s Registration Statement on Form S-1 filed on September 23, 2020).

Exhibit Number Description of Exhibit

Samuel (Sam) J.

Johnson Employment Agreement, dated April 17, 2017 (incorporated by reference to Exhibit 10.32 to the Registrant’s Registration Statement on Form S-1 filed on September 23, 2020).

Jamey Rutherford Traywick Employment Agreement, dated October 1, 2018.

Jamey Traywick Rutherford Employment Agreement, dated October 1, 2018 (incorporated by reference to Exhibit 10.41 to the Registrant’s Annual Report on Form 10-K filed on April 7, 2021).

Form of 2020 Employee Stock Purchase Plan (incorporated by reference to Exhibit 10.34 to Amendment No.

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and Allstar Co-Invest Blocker L.P.

(incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the Commission on October 6, 2020).

(incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on October 6, 2020).

Form of Director and Officer Indemnification Agreement (incorporated by reference to Exhibit 10.37 to Amendment No.

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Subsidiaries of the Registrant.

Exhibit Number Description of Exhibit

Consent of Deloitte & Touche LLP (with respect to the financial statements of Academy Sports and Outdoors, Inc.).

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101.INS XBRL Instance Document - The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH XBRL Taxonomy Extension Schema Document

101.CAL XBRL Taxonomy Calculation Linkbase Document

101.DEF XBRL Taxonomy Definition Linkbase Document

101.LAB XBRL Taxonomy Label Linkbase Document

101.PRE XBRL Taxonomy Presentation Linkbase Document

101.SCH Inline XBRL Taxonomy Extension Schema Document

101.CAL Inline XBRL Taxonomy Calculation Linkbase Document

101.DEF Inline XBRL Taxonomy Definition Linkbase Document

101.LAB Inline XBRL Taxonomy Label Linkbase Document

101.PRE Inline XBRL Taxonomy Presentation Linkbase Document

104 The cover page for the Company’s Annual Report on Form 10-K for the fiscal year ended January 29, 2022 has been formatted in Inline XBRL.

* Filed herewith

** This certification accompanies each report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

† Compensatory arrangements for director(s) and/or executive officer(s).

The agreements and other documents filed as exhibits to this report are not intended to provide factual information or other disclosure other than with respect to the terms of the agreements or other documents themselves, and you should not rely on them for that purpose.

† Management contract or compensatory plan or arrangement

The agreements and other documents filed as exhibits to this Annual Report are not intended to provide factual information or other disclosure other than with respect to the terms of the agreements or other documents themselves, and you should not rely on them for that purpose.

In particular, any representations and warranties made by us in these agreements or other documents were made solely within the specific context of the relevant agreement or document and may not describe the actual state of affairs as of the date they were made or at any other time.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Annual Report on Form 10-K to be signed on April 7, 2021 on its behalf by the undersigned, thereto duly authorized.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Annual Report on Form 10-K to be signed on March 29, 2022 on its behalf by the undersigned, thereto duly authorized.

ACADEMY SPORTS AND OUTDOORS, INC.

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Signature Title Date

HICKS Chairman, President and Chief Executive Officer April 7, 2021

HICKS Chairman, President and Chief Executive Officer March 29, 2022

Hicks (principal executive officer)

/s/ MICHAEL P.

MULLICAN Executive Vice President and Chief Financial Officer April 7, 2021

MULLICAN Executive Vice President and Chief Financial Officer March 29, 2022

Mullican (principal financial officer)

/s/ HEATHER A.

DAVIS Senior Vice President of Accounting, Treasury and Tax April 7, 2021

DAVIS Senior Vice President of Accounting, Treasury and Tax March 29, 2022

Davis (principal accounting officer)

MARLEY Director April 7, 2021

/s/ VISHAL V.

PATEL Director April 7, 2021

QUESTROM Director April 7, 2021

/s/ WILLIAM S.

SIMON Director April 7, 2021

/s/ NATHANIEL H.

TAYLOR Director April 7, 2021

/s/ JEFFERY C.

TWEEDY Director April 7, 2021

/s/ AILEEN X.

YAN Director April 7, 2021

BECK Director April 7, 2021

NEALON Director April 7, 2021

BECK Director March 29, 2022

MARLEY Director March 29, 2022

NEALON Director March 29, 2022

QUESTROM Director March 29, 2022

RAFF Director March 29, 2022

TAYLOR Director March 29, 2022

TURNER Director March 29, 2022

/s/ SHAREN J.

TURNEY Director March 29, 2022

TWEEDY Director March 29, 2022

ACADEMY SPORTS AND OUTDOORS, INC.

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(in thousands)

(amounts in thousands) Balance at beginning of period Charged to costs and expenses Deductions Balance at end of period

Balance at beginning of period Charged to costs and expenses Deductions Balance at end of period

January 29, 2022:

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Self-insurance reserves 22,065 72,313 ( 69,869 ) (4) 24,509

February 1, 2020:

January 30, 2021:

Allowance for doubtful accounts $ 3,275 $ ( 205 ) $ ( 1,898 ) (1) $ 1,172

13 unchanged sentences

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-K

Item 9A. Controls and Procedures