What changed in this filing

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Item 1. Financial Statements

2022-06-07 compared with 2021-12-10 · 110 added, 388 removed, 322 unchanged (61% of the section changed)

3 unchanged sentences

(Dollar amounts in thousands, except per share data)

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

April 30, 2022 January 29, 2022 May 1, 2021

CURRENT ASSETS:

12 unchanged sentences

Total assets $ 4,719,156 $ 4,584,940 $ 4,657,310

LIABILITIES AND STOCKHOLDERS' / PARTNERS' EQUITY

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:

10 unchanged sentences

COMMITMENTS AND CONTINGENCIES (NOTE 12)

REDEEMABLE MEMBERSHIP UNITS — — —

STOCKHOLDERS' / PARTNERS' EQUITY:

STOCKHOLDERS' EQUITY:

Preferred stock, $ 0.01 par value, authorized 50,000,000 shares;

1 unchanged sentence

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

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

87,079,394 and 93,887,109 issued and outstanding as of April 30, 2022, January 29, 2022 and May 1, 2021, respectively.

Additional paid-in capital 199,559 198,016 150,370

1 unchanged sentence

Accumulated other comprehensive loss — — ( 2,398 )

Stockholders' / partners' equity 1,375,994 1,111,983 984,564

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

Stockholders' equity 1,528,508 1,466,946 1,313,875

Total liabilities and stockholders' equity $ 4,719,156 $ 4,584,940 $ 4,657,310

See Condensed Notes to Consolidated Financial Statements

2 unchanged sentences

(Amounts in thousands, except per share data)

Thirteen Weeks Ended Thirty-Nine Weeks Ended

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

Thirteen Weeks Ended

April 30, 2022 May 1, 2021

NET SALES $ 1,467,730 $ 1,580,333

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INTEREST EXPENSE, NET 10,920 14,549

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

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

OTHER (INCOME), NET ( 697 ) ( 397 )

INCOME BEFORE INCOME TAXES 195,270 224,922

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

INCOME TAX EXPENSE 45,464 47,126

NET INCOME $ 149,806 $ 177,796

9 unchanged sentences

(Amounts in thousands)

Thirteen Weeks Ended Thirty-Nine Weeks Ended

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

Thirteen Weeks Ended

April 30, 2022 May 1, 2021

COMPREHENSIVE INCOME:

Net income $ 149,806 $ 177,796

Unrealized loss on interest rate swaps — ( 331 ) — ( 5,371 )

Recognized interest expense on interest rate swaps — 1,196

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

Tax expense — ( 270 )

2 unchanged sentences

ACADEMY SPORTS AND OUTDOORS, INC.

CONSOLIDATED STATEMENTS OF PARTNERS' / STOCKHOLDERS' EQUITY

(Amounts in thousands)

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

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

Partners' Equity Common Stock

Units Amount Units Amount Shares Amount Amount Amount Amount Amount Units / Shares

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(Amounts in thousands, except per share amounts)

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

Shares Amount

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

1 unchanged sentence

Equity compensation — — 3,499 — — 3,499

Settlement of vested Restricted Stock Units — — — — 87 1 ( 1 ) — — — 87

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

Stock option exercises — — — — 2,686 27 17,230 — — 17,257 2,686

Recognized interest expense on interest rate swaps (net of tax impact of $ 270 )

— — — — — — — — 926 926 —

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

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

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

Repurchase of common stock for retirement ( 2,272 ) ( 23 ) ( 5,247 ) ( 83,231 ) — ( 88,501 )

Settlement of vested Restricted Stock Units 63 1 ( 1 ) — — —

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

Stock option exercises 201 2 3,292 — — 3,294

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

Cash dividends declared, $ 0.075 per share

— — — ( 6,536 ) — ( 6,536 )

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

Balances as of April 30, 2022 85,071 $ 850 $ 199,559 $ 1,328,099 $ — $ 1,528,508

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

Shares Amount

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

Net income — — — 177,796 — 177,796

Equity compensation — — 5,874 — — 5,874

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

Settlement of vested Restricted Stock Units 87 1 ( 1 ) — — —

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

Stock option exercises 2,686 27 17,230 — — 17,257

1 unchanged sentence

— — — — 926 926

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

See Condensed Notes to Consolidated Financial Statements

ACADEMY SPORTS AND OUTDOORS, INC.

CONSOLIDATED STATEMENTS OF PARTNERS' / STOCKHOLDERS' EQUITY

(Amounts in thousands)

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

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

Partners' Equity Common Stock

Amount Units (1)

Amount Shares (1)

Amount Amount Amount Amount Amount Units / Shares (1)

Balances as of February 1, 2020 162 $ 2,818 72,306 $ 996,285 — $ — $ — $ — $ ( 8,066 ) $ 988,219 72,468

Net loss — — — ( 10,020 ) — — — — — ( 10,020 ) —

Equity compensation — — — 2,109 — — — — — 2,109 —

Adjustment to Redeemable Membership Units for settlement of vested Restricted Units 12 200 — ( 200 ) — — — — — ( 200 ) 12

Adjustment to Redeemable Membership Units for repurchase of units from Managers ( 2 ) ( 41 ) 2 41 — — — — — 41 —

Repurchase of Redeemable Membership Units — — ( 2 ) ( 37 ) — — — — — ( 37 ) ( 2 )

Unrealized loss on interest rate swaps — — — — — — — — ( 4,434 ) ( 4,434 ) —

Recognized interest expense on interest rate swaps — — — — — — — — 1,893 1,893 —

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

— — — — — — — — ( 278 ) ( 278 ) —

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

— — — — — — — — 2,590 2,590 —

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

— — — — — — — — 1,000 1,000 —

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

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

See Condensed Notes to Consolidated Financial Statements

2 unchanged sentences

(Amounts in thousands)

Thirty-Nine Weeks Ended

October 30, 2021 October 31, 2020

Thirteen Weeks Ended

April 30, 2022 May 1, 2021

CASH FLOWS FROM OPERATING ACTIVITIES:

5 unchanged sentences

Amortization of terminated interest rate swaps, deferred loan and other costs 777 2,030

Loss on swaps from debt refinancing — 1,330

Deferred income taxes 7,154 25,064

Non-cash (gain) loss on early retirement of debt, net 2,239 ( 7,831 )

Casualty loss — 114

Changes in assets and liabilities:

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Purchases of intangible assets ( 32 ) —

Notes receivable from member — 8,125

Net cash used in investing activities ( 17,312 ) ( 16,808 )

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from ABL Facility — 500,000

Repayment of ABL Facility — ( 500,000 )

Repayment of Term Loan ( 750 ) ( 1,000 )

Debt issuance fees ( 927 ) ( 556 )

Share-Based Award Payments — ( 2,993 )

Distribution — ( 257,000 )

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

Proceeds from exercise of stock options 3,294 17,257

Proceeds from issuance of common stock under employee stock purchase program 945 —

Taxes paid related to net share settlement of equity awards ( 895 ) —

Repurchase of common stock for retirement ( 88,501 ) —

Repurchase of Redeemable Membership Units — ( 37 )

Net cash used in financing activities ( 432,659 ) ( 123,088 )

NET INCREASE IN CASH AND CASH EQUIVALENTS 23,693 720,340

Dividends paid ( 6,536 ) —

Net cash provided by (used in) financing activities ( 93,388 ) 13,264

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS ( 13,603 ) 215,684

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 485,998 377,604

3 unchanged sentences

Cash paid for income taxes $ 260 $ 1,773

NON-CASH INVESTING AND FINANCING ACTIVITIES:

SUPPLEMENTAL DISCLOSURES OF NON-CASH ACTIVITIES:

Non-cash issuance of common shares $ — $ 501

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Nature of Operations

All references to "we", "us," "our" or the "Company" in the financial statements refer to, (1) prior to October 1, 2020, New Academy Holding Company, LLC, a Delaware limited liability company ("NAHC") and the prior parent holding company for our operations, and its consolidated subsidiaries;

and (2) on and after October 1, 2020, Academy Sports and Outdoors, Inc., a Delaware corporation ("ASO, Inc.") and the current parent holding company of our operations, and its consolidated subsidiaries.

All references to "we", "us," "our" or the "Company" in the financial statements refer to Academy Sports and Outdoors, Inc., a Delaware corporation ("ASO, Inc.") and the current parent holding company of our operations, and its consolidated subsidiaries.

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.

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(collectively, "KKR"), acquired a majority 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.

On October 6, 2020, ASO, Inc.

completed an initial public offering and as of September 17, 2021, KKR no longer held an ownership interest in the Company.

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

As of October 30, 2021, we operated 259 "Academy Sports + Outdoors" retail locations in 16 states and three distribution centers located in Katy, Texas, Twiggs County, Georgia and Cookeville, Tennessee.

As of April 30, 2022, we operated 260 "Academy Sports + Outdoors" retail locations in 16 states and three distribution centers located in Katy, Texas, Twiggs County, Georgia and Cookeville, Tennessee.

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

Initial Public Offering and Reorganization Transactions

On October 6, 2020, ASO, Inc.

completed an initial public offering (the "IPO") in which we issued and sold 15,625,000 shares of common stock, $ 0.01 par value for cash consideration of $ 12.22 per share (representing an initial public offering price of $ 13.00 per share, net of underwriting discounts) to a syndicate of underwriters led by Credit Suisse Securities (USA) LLC and J.P.

Morgan Securities LLC, as representatives, resulting in net proceeds of approximately $ 184.9 million after deducting underwriting discounts, which included approximately $ 2.7 million paid to KKR Capital Markets LLC ("KCM"), an affiliate of KKR, for underwriting services in connection with the IPO, and $ 6.1 million in costs directly associated with the IPO ("Offering Costs"), such as legal and accounting fees.

The shares sold in the offering were registered under the Securities Act of 1933, as amended (the "Securities Act"), pursuant to our registration statement on Form S-1 (File No.

333-248683) (the "Registration Statement"), which was declared effective by the Securities and Exchange Commission (the "SEC") on October 1, 2020.

In connection with our IPO, we completed a series of reorganization transactions (the "Reorganization Transactions") that resulted in:

• NAHC, the previous parent holding company for the Company, being contributed to ASO, Inc.

by its members and becoming a wholly-owned subsidiary of ASO, Inc., which thereupon became our parent holding company;

• one share of common stock of ASO, Inc.

issued to then-existing members of NAHC for every 3.15 membership units of NAHC contributed to ASO, Inc.

IPO Over-Allotment Exercise

On November 3, 2020, ASO, Inc.

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 expired with respect to the remaining shares.

Secondary Offering

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

May 2021 Secondary Offering and Stock Repurchase

On May 5, 2021, ASO, Inc.

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 Note 9).

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

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

The 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 Note 9).

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

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

Summary of Significant Accounting Policies

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However, we believe that the disclosures included herein are adequate to make the information presented not misleading.

These condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements and the notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended January 30, 2021, as filed with the Securities and Exchange Commission on April 7, 2021 (the "Annual Report").

These condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements and the notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended January 29, 2022, as filed with the Securities and Exchange Commission on March 29, 2022 (the "Annual Report").

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

The results of operations for the thirteen and thirty-nine weeks ended October 30, 2021 are not necessarily indicative of the results that will be realized for the fiscal year ending January 29, 2022 or any other period.

The results of operations for the thirteen weeks ended April 30, 2022 are not necessarily indicative of the results that will be realized for the fiscal year ending January 28, 2023 or any other period.

The balance sheet as of January 29, 2022 has been derived from our audited financial statements as of that date.

2 unchanged sentences

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

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

and its subsidiaries, New Academy Holding Company, LLC ("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.

ASO Co-Invest Blocker Sub, L.P.

and ASO Blocker Sub, L.P.

were dissolved effective January 31, 2021.

Use of Estimates in the Preparation of Financial Statements

6 unchanged sentences

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

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

As a result, we have reclassified sales between divisions in the thirteen weeks ended May 1, 2021 for comparability purposes.

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

Retrospective Presentation of Ownership Exchange

Prior to the IPO, ASO, Inc.

was a wholly-owned subsidiary of NAHC.

On the IPO pricing date (October 1, 2020), the then-existing members of NAHC contributed all of their membership units of NAHC to ASO, Inc.

and, in exchange, received one share of common stock of ASO, Inc.

for every 3.15 membership units of NAHC contributed to ASO, Inc.

(such 3.15 :1 contribution and exchange ratio, the "Contribution Ratio").

As a result of such contributions and exchanges, upon the IPO, NAHC became a wholly-owned subsidiary of ASO, Inc., which became our parent holding company.

The par value and authorized shares of the common stock of ASO, Inc.

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 Statements of Partners’ / Stockholders’ Equity and in Note 9.

Equity and Share-Based Compensation.

Redeemable Membership Units

Prior to October 1, 2020, Allstar Managers LLC, a Delaware limited liability company ("Managers"), owned membership units in NAHC (each, a "NAHC Membership Unit").

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

Managers was 100% owned by certain current and former executives and directors of the Company and was formed to facilitate the purchase of indirect contingently redeemable ownership interests in NAHC.

Prior to October 1, 2020, certain executives and directors could acquire contingently redeemable membership units in Managers (the "Redeemable Membership Units"), either by (1) purchasing the Redeemable Membership Units with cash consideration, which was subsequently contributed to NAHC by Managers in exchange for a number of NAHC Membership Units equal to the number of Redeemable Membership Units purchased, or (2) by receiving the Redeemable Membership Units in settlement of vested restricted units awarded to the executive or director under the Company's 2011 Unit Incentive Plan (see Note 9).

Each outstanding Redeemable Membership Unit in Managers corresponded to an outstanding NAHC Membership Unit, on a unit-for-unit basis.

On October 1, 2020, Managers received one share of ASO, Inc.

common stock in exchange for every 3.15 membership units in NAHC that Managers contributed to ASO, Inc., and the Redeemable Membership Units in Managers that were held by its owners were reduced proportionately by the Contribution Ratio, so that the outstanding number of Redeemable Membership Units in Managers equal the number of shares of ASO, Inc.

common stock held by Managers on a 1:1 basis.

NAHC was the sole managing member of Managers with a controlling voting interest, but no economic interest, in Managers.

As the sole managing member of Managers, NAHC operated and controlled all business affairs of Managers.

The terms and conditions of the agreements governing the Redeemable Membership Units included provisions by which the holder, or its heirs, had the right to require Managers or NAHC to purchase the holder's Redeemable Membership Units upon the holder’s termination of employment due to death or disability for cash at fair value.

The carrying value of the Redeemable Membership Units was classified as temporary equity, initially at fair value, as redemption was an event that was not solely within our control.

If redemption became probable, we were required to re-measure the Redeemable Membership Units to fair value.

Periodically, these rights lapsed due to contractual expiration or a holder's termination of employment for reasons other than death or disability.

Share Repurchases

On September 2, 2021, the Board of Directors of the Company authorized a share repurchase program (the "2021 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 2021 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 under the 2021 Share Repurchase Program will be determined by the Company in its discretion and will depend on a variety of factors, including legal requirements, price and economic and market conditions.

The 2021 Share Repurchase Program does not obligate the Company to acquire any particular number of common shares, and the program may be suspended, extended, modified or discontinued at any time.

During the thirteen weeks ended April 30, 2022, we repurchased and concurrently retired 2,272,349 shares of ASO, Inc.

common stock for an aggregate amount of $ 88.5 million pursuant to the 2021 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.

As of April 30, 2022, approximately $ 100.2 million remained available for share repurchases pursuant to our 2021 Share Repurchase Program (see Note 13).

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

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

Thirteen Weeks Ended Thirty-Nine Weeks Ended

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

Thirteen Weeks Ended

April 30, 2022 May 1, 2021

Merchandise division sales (1)

6 unchanged sentences

Other sales (3)

8,223 6,812 25,047 21,549

Net Sales $ 1,467,730 $ 1,580,333

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

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

As a result, we have reclassified sales between divisions in the thirteen weeks ended May 1, 2021 for comparability purposes.

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

(2) E-commerce sales consisted of 8.0 % of merchandise sales for the thirteen and thirty-nine weeks ended October 30, 2021, and 7.5 % and 9.8 % for the thirteen and thirty-nine weeks ended October 31, 2020, respectively.

(2) E-commerce sales consisted of 9.5 % and 7.4 % of merchandise sales for the thirteen weeks ended April 30, 2022 and May 1, 2021, respectively.

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

2 unchanged sentences

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

Thirteen Weeks Ended Thirty-Nine Weeks Ended

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

Thirteen Weeks Ended

April 30, 2022 May 1, 2021

Gift card liability, beginning balance $ 86,568 $ 74,253

5 unchanged sentences

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

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

April 30, 2022 January 29, 2022 May 1, 2021

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

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

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

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

Total expenses related to accretion of original issuance discount were $ 0.1 million and $ 0.4 million for the thirteen and thirty-nine weeks ended October 30, 2021, respectively, and $ 0.3 million and $ 0.8 million for the thirteen and thirty-nine weeks ended October 31, 2020, respectively.

As of April 30, 2022, January 29, 2022 and May 1, 2021, the balance in deferred loan costs related to the ABL Facility (as defined below) was approximately $ 4.0 million, $ 4.3 million and $ 5.2 million, respectively, and was included in other noncurrent assets on our consolidated balance sheets.

Total amortization of deferred loan costs was $ 0.7 million and $ 0.7 million for the thirteen weeks ended April 30, 2022 and May 1, 2021, respectively.

Total expenses related to accretion of original issuance discount were $ 0.1 million and $ 0.1 million for the thirteen weeks ended April 30, 2022 and May 1, 2021, respectively.

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

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

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

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.

entered into a seven-year $ 1.8 billion senior secured term loan facility (the "2015 Term Loan") with Morgan Stanley Senior Funding, Inc., as the administrative and collateral agent, and other lenders, and a five-year $ 650 million secured asset-based revolving credit facility (the "2015 ABL Facility") with JPMorgan Chase Bank, N.A., as administrative agent, and other lenders.

Academy, Ltd.

received proceeds from the 2015 Term Loan of $ 1.8 billion, which was net of discount of $ 9.1 million.

The 2015 Term Loan bore interest at our election, at either (1) LIBOR rate with a floor of 1.00 %, plus a margin of 4.00 %, or (2) a base rate equal to the highest of (a) the federal funds rate plus 0.50 %, (b) Morgan Stanley Senior Funding, Inc.'s "prime rate," or (c) the one-month LIBOR rate plus 1.00 %, plus a margin of 3.00 %.

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.

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

On November 6, 2020, Academy, Ltd.

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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 October 30, 2021, the weighted average interest rate was 4.50 %, with interest payable monthly.

As of April 30, 2022, the weighted average interest rate was 4.50 %, with interest payable monthly.

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

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

As of October 30, 2021, no prepayment was due under the terms and conditions of the Term Loan.

In connection with the Amendment, the Company recognized a non-cash loss on early retirement of debt of $ 2.2 million in the thirty-nine weeks ended October 30, 2021 from the write-off of deferred loan costs and expense related to the original issuance discount associated with our 2020 Term Loan.

During the thirty-nine weeks ended October 31, 2020, we repurchased principal on our 2015 Term Loan, which was trading at a discount, in open market transactions.

The following table provides further detail regarding the repurchase (amounts in millions):

Thirty-Nine Weeks Ended

October 31, 2020

Gross principal repurchased $ 23.9

Reacquisition price of debt $ 16.0

Net gain recognized $ 7.8

As of April 30, 2022, no prepayment was due under the terms and conditions of the 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") with The Bank of New York Mellon Trust Company, N.A., as trustee and 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.

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

On or after November 15, 2023, Academy, Ltd.

may, at its option and on one or more occasions, redeem all or a part of the Notes at the redemption prices set forth in the Indenture, plus accrued and unpaid interest, if any, to, but excluding, the applicable redemption date.

At any time prior to November 15, 2023, Academy, Ltd.

may, at its option and on one or more occasions, redeem all or part of the Notes at a redemption price equal to 100 % of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the applicable redemption date, plus a "make-whole" premium as described in the Indenture.

In addition, at any time prior to November 15, 2023, Academy, Ltd.

may, at its option and on one or more occasions, redeem up to 40 % of the aggregate principal amount of the Notes at a redemption price equal to 106.00 % of the aggregate principal amount thereof, with an amount equal to or less than the net cash proceeds from one or more equity offerings to the extent such net cash proceeds are received by or contributed to Academy, Ltd., plus accrued and unpaid interest, if any, to, but excluding, the applicable redemption date.

We refer to the 2015 ABL Facility and the 2020 ABL Facility collectively as the "ABL Facility".

On July 2, 2015, Academy, Ltd.

entered into a five-year $ 650 million secured asset-based revolving credit facility (the "2015 ABL Facility").

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 off $ 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.

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").

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

The Notes require cash interest payments semi-annually in arrears on May 15 and November 15 of each year at a rate of 6.00 % per year.

On November 6, 2020, Academy, Ltd., as borrower, and the guarantors, amended the previously existing secured asset-based revolving credit 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 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 "ABL Facility").

The ABL Facility is used to provide financing for working capital and other general corporate purposes, as well as to support certain letters of credit requirements, and availability is subject to customary borrowing base and availability provisions.

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

As of October 30, 2021, we had outstanding letters of credit of approximately $ 20.5 million, of which $ 17.8 million were issued under the ABL Facility, and we had no borrowings outstanding under the ABL Facility, leaving the available borrowing capacity under the ABL Facility of $ 982.2 million.

As of April 30, 2022, we had outstanding letters of credit of approximately $ 21.4 million, of which $ 17.8 million were issued under the ABL Facility, and we had no borrowings outstanding under the ABL Facility, leaving the available borrowing capacity under the ABL Facility of $ 982.2 million.

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

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

As of October 30, 2021, no future prepayments of outstanding loans have been triggered under the terms and conditions of the ABL Facility.

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

As of April 30, 2022, no future prepayments of outstanding loans have been triggered under the terms and conditions of the ABL Facility.

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

Additionally, at certain times, the ABL Facility is subject to a minimum adjusted fixed charge coverage ratio.

These covenants are subject to certain qualifications and limitations.

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

Capitalized Interest.

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

We were in compliance with these covenants as of April 30, 2022.

Derivative Financial Instruments

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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 planned Refinancing Transactions.

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

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

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

the original maturity of the de-designated swaps.

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

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

As of October 30, 2021, we do not have any derivative financial instruments outstanding.

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

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

Derivatives designated as hedging instruments

Amounts included in accrued expenses and other current liabilities $ — $ — $ 1,198

Amounts included in other long-term liabilities — — 136

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

Derivatives not designated as hedging instruments

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

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

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

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

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

Thirteen Weeks Ended Thirty-Nine Weeks Ended

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

As of April 30, 2022, we do not have any derivative financial instruments outstanding.

For derivatives which were designated as hedging instruments, amounts included in Accumulated Other Comprehensive Income (Loss) ("AOCI") were reclassified to interest expense in the same period during which the hedged transaction affected earnings, which was 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 are as follows (amounts in thousands):

Thirteen Weeks Ended

April 30, 2022 May 1, 2021

Accumulated Other Comprehensive Loss, beginning $ — $ ( 3,324 )

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

— ( 278 ) — ( 5,318 )

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

374 2,590 1,836 7,357

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

— 1,000 — 1,000

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

Accumulated Other Comprehensive Loss, ending $ — $ ( 2,398 )

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

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

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.

Other Financial Instruments

Periodically we make cash investments in money market funds comprised of U.S.

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

As of October 30, 2021, January 30, 2021 and October 31, 2020, we held $ 294.0 million, $ 284.0 million and $ 767.0 million in money market funds, respectively.

As of April 30, 2022, January 29, 2022 and May 1, 2021, we held $ 357.1 million, $ 401.0 million and $ 476.0 million in money market funds, respectively.

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

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

As of October 31, 2020, the estimated fair value of the Term Loan was $ 1.4 billion.

As of April 30, 2022, January 29, 2022, and May 1, 2021 the estimated fair value of the Term Loan and Notes was $ 0.7 billion, $ 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:

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

April 30, 2022 January 29, 2022 May 1, 2021

Leasehold improvements $ 458,752 $ 456,918 $ 443,513

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Property and equipment, net $ 339,529 $ 345,836 $ 366,005

Depreciation expense was $ 26.5 million and $ 77.8 million, respectively, in the thirteen and thirty-nine weeks ended October 30, 2021, and $ 25.5 million and $ 79.7 million in the thirteen and thirty-nine weeks ended October 31, 2020, respectively, and is included in selling, general and administrative expenses on the consolidated statements of income.

Depreciation expense was $ 25.6 million and $ 25.3 million in the thirteen weeks ended April 30, 2022 and May 1, 2021, 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:

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

April 30, 2022 January 29, 2022 May 1, 2021

Accrued interest $ 12,804 $ 6,583 $ 14,003

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Income taxes payable 48,163 9,602 45,087

Interest rate swaps — — 5,746

Property taxes 25,684 17,747 24,798

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Accrued expenses and other current liabilities $ 274,399 $ 303,207 $ 287,592

Equity and Share-Based Compensation

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

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

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

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

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

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

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

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

Share-Based Compensation

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

The 2020 Omnibus Incentive plan provides for the grant of certain equity incentive awards (each, an "Award"), such as options to purchase ASO, Inc.

common stock (each, a "Stock Option") and restricted units that may settle in ASO, Inc.

common stock (each, a "Restricted Stock Unit") to our directors, executives and eligible employees of the Company.

Awards granted under the 2020 Omnibus Incentive Plan consist of Stock Options that vest upon the satisfaction of time-based requirements (each, a "Service Option"), Restricted Stock Units that vest upon the satisfaction of time-based requirements (each, a "Service Restricted Stock Unit") and Restricted Stock Units that vest upon the satisfaction of time and performance and/or market based requirements (each, a "Performance Restricted Stock Unit").

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 October 30, 2021, there were 3,539,843 shares that were authorized and available for grant under the 2020 Omnibus Incentive Plan.

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

As of April 30, 2022, there were 2,445,685 shares that were authorized and available for future issuance 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 October 30, 2021, there were 1,964,614 shares authorized and available for future issuance under the ESPP.

Equity compensation expense was $ 2.9 million and $ 36.1 million for the thirteen and thirty-nine weeks ended October 30, 2021, respectively, which includes approximately $ 24.9 million in non-cash expenses related to the 2021 Vesting Event which occurred during the 2021 second quarter.

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

We have reserved a total of 2,000,000 shares under the ESPP and as of April 30, 2022, there were 1,885,546 shares authorized and available for future issuance under the ESPP.

Equity compensation expense was $ 3.5 million and $ 5.9 million for the thirteen weeks ended April 30, 2022 and May 1, 2021, respectively.

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

2011 Unit Incentive Plan

The 2011 Unit Incentive Plan provides for the grant of certain equity incentive awards (each, an "Award"), such as options to purchase ASO, Inc.

common stock (each, a "Unit Option") and restricted units that may settle in ASO, Inc.

common stock (each, a "Restricted Unit") to our directors, executives, and eligible employees of the Company.

Unit Options granted under the 2011 Unit Incentive Plan consist of Unit Options that vest upon the satisfaction of time-based requirements (each, a "Service Unit Option") and Unit Options that vest upon the satisfaction of both time-based requirements and Company performance-based requirements (each, a "Performance Unit Option").

Restricted Units granted under the 2011 Unit Incentive Plan consist of Restricted Units that vest upon the satisfaction of time-based requirements (each, a "Service Restricted Unit") and Restricted Units that vest upon the satisfaction of a liquidity event-based requirement together with a time-based requirement and/or a performance-based requirement (each, a "Liquidity Event Restricted Unit").

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

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

2020 Omnibus Incentive Plan

The 2020 Omnibus Incentive plan provides for the grant of Awards such as options to purchase ASO, Inc.

common stock (each, a "Stock Option") and restricted stock units which may settle in ASO, Inc.

common stock (each, a "Restricted Stock Unit") to our directors, executives, and eligible employees of the Company.

Stock Options granted under the 2020 Omnibus Incentive Plan consist of Stock Options that vest upon the satisfaction of time-based requirements (each, a "Service Stock Option" and Service Unit Options and Service Stock Options together are "Service Options").

Restricted Stock Units granted under the 2020 Omnibus Incentive Plan consist of Restricted Stock Units that vest upon the satisfaction of time-based requirements (each, a "Service Restricted Stock Unit") and Restricted Stock Units that vest upon the satisfaction of a time-based requirement and performance-based requirement (each, a "Performance Restricted Stock Unit").

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 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):

• Exercise price reductions of $ 0.28 for 9,788,000 Unit Options (or $ 0.89 for 3,107,301 Stock Options, as converted);

• Exercise price reductions of $ 1.12 for 1,746,594 Unit Options (or $ 3.53 for 554,474 Stock Options, as converted);

• 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 $ 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 October 30, 2021.

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

On August 28, 2020, New Academy Holding Company, LLC, the parent holding company for our operations prior to our initial public offering, paid a $ 257.0 million distribution to its members of record as of August 25, 2020.

Cash payments ("Share-Based Award Payments") of $ 32.2 million for unvested Awards were paid upon vesting of such Awards, which was completed and paid in-full as of July 31, 2021.

No further Share-Based Award Payments relative to the distribution are payable as of April 30, 2022.

Service Option Fair Value Assumptions

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Treasury rate over the expected life.

The dividend yield was based on the expectation that no dividends will be paid.

The dividend yield was calculated based on the most recent annualized quarterly dividend and the valuation date closing stock price.

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

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

The following table presents the assumptions and grant date fair values for Service Options granted in the thirteen weeks ended April 30, 2022:

Expected life in years 6.2

Expected volatility 42 % to 44 %

Expected volatility 43 %

Weighted-average volatility 43.0 %

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Dividend yield 0.8 %

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

The following table presents the Award grants during the thirteen weeks ended April 30, 2022:

Service Options Service Restricted Stock Units Performance Restricted Stock Units

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Weighted average exercise price per Award $ 39.18 N/A N/A

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

The following table presents the unrecognized compensation cost as of April 30, 2022:

Service Options Service Restricted Stock Units Performance Restricted Stock Units

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

Thirteen Weeks Ended Thirty-Nine Weeks Ended

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

Thirteen Weeks Ended

April 30, 2022 May 1, 2021

Net income $ 149,806 $ 177,796

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Anti-dilutive stock-based awards excluded from diluted calculation 311 303

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

federal income tax purposes and thus no federal income tax expense was recorded in our statements of income for periods prior to October 1, 2020.

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 completed on October 1, 2020, on and after October 1, 2020, the Company is treated as a U.S.

corporation for U.S.

federal, state, and local income tax purposes and accordingly, a provision for income taxes has been recorded for the anticipated tax consequences of our reported results of operations for federal, state and local income taxes since October 1, 2020.

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

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 table below reflects the allocation of the deferred tax liability previously reflected for “Investment in NAHC” to the underlying assets and liabilities of the business based on the estimated fair value as of January 31, 2021 (amounts in thousands):

January 30, 2021 Effect of Change January 31, 2021

Deferred tax assets:

Accounts receivable $ — $ 274 $ 274

Accrued liabilities and reserves — 37,760 37,760

Equity compensation — 22,854 22,854

Total deferred tax assets — 60,888 60,888

Deferred tax liabilities:

Investment in NAHC ( 138,358 ) 138,358 —

Inventory — ( 17,387 ) ( 17,387 )

Prepaid items — ( 4,124 ) ( 4,124 )

Property and equipment — ( 11,531 ) ( 11,531 )

Intangible assets — ( 166,204 ) ( 166,204 )

Other ( 345 ) — ( 345 )

Total deferred tax liabilities ( 138,703 ) ( 60,888 ) ( 199,591 )

Total net deferred tax liabilities $ ( 138,703 ) $ — $ ( 138,703 )

The Company determines its income tax expense by applying an estimated annual effective tax rate to its income before income taxes for the interim period.

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

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

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

Related Party Transactions

Monitoring Agreement

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 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.

Additionally, we were required to reimburse the Adviser for any out-of-pocket expenses in connection with these services.

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

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

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

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

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

Other Related Party Transactions

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

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

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

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

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

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

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

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

Investments in Managers

During the thirty-nine weeks ended October 31, 2020, Managers repurchased at fair market value approximately $ 37.0 thousand of Redeemable Membership Units from a director of the Company for cash.

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

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 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 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 NAHC.

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 this secondary offering.

Commitments and Contingencies

Technology Related Commitments and Other

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

Freight, Technology Related and Other Commitments

As of April 30, 2022, we have obligations under freight, technology-related, construction and other contractual commitments in the amount of $ 73.9 million.

Of such commitments, approximately $ 45.4 million is payable in the next 12 months.

14 unchanged sentences

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

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

As of April 30, 2022, we have $ 19.5 million in related commitments through 2027, of which $ 6.8 million is payable in the next 12 months.

Subsequent Events

Our management evaluated events or transactions that occurred after April 30, 2022 through June 7, 2022, the issuance date of the consolidated financial statements, and identified the following matters to report:

On June 2, 2022, the Company's Board of Directors declared a quarterly cash dividend with respect to the fiscal quarter ended April 30, 2022, of $ 0.075 per share of the Company's common stock, payable on July 14, 2022, to stockholders of record as of the close of business on June 16, 2022.

On June 2, 2022, the Company's Board of Directors authorized a new share repurchase program under which the Company may purchase up to $ 600 million of its outstanding shares during the three-year period ending June 2, 2025 (the "2022 Share Repurchase Program").

Under the 2022 Share Repurchase Program repurchases can be made using a variety of methods, which may include open market purchases, block trades, accelerated share repurchase programs, 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 under the 2022 Share Repurchase Program will be determined by the Company in its discretion and will depend on a variety of factors, including legal requirements, price and economic and market conditions.

The 2022 Share Repurchase Program does not obligate the Company to acquire any particular number of common shares, and the program may be suspended, extended, modified or discontinued at any time.

The total availability under the 2022 Share Repurchase Program and the 2021 Share Repurchase Program is approximately $ 700.2 million.

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

What changed 10-Q

Item 1. Financial Statements