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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended October 30, 2021
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________ to ___________.
Commission File No. 001-39589
aso-20211030_g1.jpg
Academy Sports and Outdoors, Inc.
(Exact name of registrant as specified in its charter)
Delaware85-1800912
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
1800 North Mason Road
Katy, Texas 77449
(Address of principal executive offices) (Zip Code)
(281) 646-5200
(Registrant’s Telephone Number, including Area Code)
Not applicable
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $0.01 per shareASOThe Nasdaq Stock Market LLC
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes ☑ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes ☑ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☐Accelerated filer ☐
Non-accelerated filer
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No ☑
As of December 3, 2021, Academy Sports and Outdoors, Inc. had 88,534,994 shares of common stock, par value $0.01 per share, outstanding.

1


ACADEMY SPORTS AND OUTDOORS, INC.
TABLE OF CONTENTS



2


PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ACADEMY SPORTS AND OUTDOORS, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollar amounts in thousands, except per share data)
October 30, 2021January 30, 2021October 31, 2020
ASSETS
CURRENT ASSETS:
Cash and cash equivalents$401,297 $377,604 $869,725 
Accounts receivable - less allowance for doubtful accounts of $1,139, $1,172 and $1,286, respectively
12,368 17,306 11,908 
Merchandise inventories, net1,325,979 990,034 1,082,907 
Prepaid expenses and other current assets44,491 28,313 25,789 
Assets held for sale1,763 1,763 1,763 
Total current assets1,785,898 1,415,020 1,992,092 
PROPERTY AND EQUIPMENT, NET358,110 378,260 382,620 
RIGHT-OF-USE ASSETS1,087,407 1,143,699 1,163,361 
TRADE NAME577,144 577,000 577,000 
GOODWILL861,920 861,920 861,920 
OTHER NONCURRENT ASSETS5,516 8,583 4,923 
Total assets$4,675,995 $4,384,482 $4,981,916 
LIABILITIES AND STOCKHOLDERS' / PARTNERS' EQUITY
CURRENT LIABILITIES:
Accounts payable$919,196 $791,404 $868,879 
Accrued expenses and other current liabilities304,488 291,351 274,612 
Current lease liabilities86,701 80,338 79,361 
Current maturities of long-term debt3,000 4,000 18,250 
Total current liabilities1,313,385 1,167,093 1,241,102 
LONG-TERM DEBT, NET683,845 781,489 1,408,885 
LONG-TERM LEASE LIABILITIES1,088,142 1,150,088 1,171,420 
DEFERRED TAX LIABILITIES, NET188,243 138,703 132,701 
OTHER LONG-TERM LIABILITIES26,386 35,126 43,244 
Total liabilities3,300,001 3,272,499 3,997,352 
COMMITMENTS AND CONTINGENCIES (NOTE 13)
REDEEMABLE MEMBERSHIP UNITS   
STOCKHOLDERS' / PARTNERS' EQUITY:
Preferred stock, $0.01 par value, authorized 50,000,000 shares; none issued and outstanding
   
Common stock, $0.01 par value, authorized 300,000,000 shares; 88,164,878; 91,114,475; and 88,103,975 issued and outstanding as of October 30, 2021, January 30, 2021, and October 31, 2020, respectively.
882 911 881 
Additional paid-in capital188,329 127,228 93,064 
Retained earnings1,188,271 987,168 895,646 
Accumulated other comprehensive loss(1,488)(3,324)(5,027)
Stockholders' / partners' equity1,375,994 1,111,983 984,564 
Total liabilities and stockholders' / partners' equity$4,675,995 $4,384,482 $4,981,916 

See Condensed Notes to Consolidated Financial Statements
3


ACADEMY SPORTS AND OUTDOORS, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(Amounts in thousands, except per share data)

Thirteen Weeks EndedThirty-Nine Weeks Ended
October 30, 2021October 31, 2020October 30, 2021October 31, 2020
NET SALES$1,592,795 $1,349,076 $4,964,658 $4,091,797 
COST OF GOODS SOLD1,031,957 908,565 3,197,623 2,856,840 
GROSS MARGIN560,838 440,511 1,767,035 1,234,957 
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES344,725 358,955 1,057,290 955,591 
OPERATING INCOME216,113 81,556 709,745 279,366 
INTEREST EXPENSE, NET11,424 22,399 38,130 70,487 
(GAIN) LOSS ON EARLY RETIREMENT OF DEBT, NET  2,239 (7,831)
OTHER (INCOME) EXPENSE, NET(614)764 (1,746)(857)
INCOME BEFORE INCOME TAXES205,303 58,393 671,122 217,567 
INCOME TAX (BENEFIT) EXPENSE43,998 (1,193)141,511 325 
NET INCOME$161,305 $59,586 $529,611 $217,242 
EARNINGS PER COMMON SHARE:
BASIC$1.77 $0.78 $5.76 $2.94 
DILUTED$1.72 $0.74 $5.55 $2.82 
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
BASIC91,140 76,771 91,951 73,908 
DILUTED93,844 80,714 95,504 77,171 



See Condensed Notes to Consolidated Financial Statements
4


ACADEMY SPORTS AND OUTDOORS, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
(Amounts in thousands)

Thirteen Weeks EndedThirty-Nine Weeks Ended
October 30, 2021October 31, 2020October 30, 2021October 31, 2020
COMPREHENSIVE INCOME:
Net income$161,305 $59,586 $529,611 $217,242 
Unrealized loss on interest rate swaps (331) (5,371)
Recognized interest expense on interest rate swaps489 2,811 2,384 7,578 
Loss on swaps from debt refinancing 1,330  1,330 
Tax expense(115)(498)(548)(498)
Total comprehensive income$161,679 $62,898 $531,447 $220,281 

See Condensed Notes to Consolidated Financial Statements

5



ACADEMY SPORTS AND OUTDOORS, INC.
CONSOLIDATED STATEMENTS OF PARTNERS' / STOCKHOLDERS' EQUITY
(Unaudited)
(Amounts in thousands)

Redeemable Membership UnitsPartners' / Stockholders' EquityTotal Membership Units / Common Stock
Additional Paid-In CapitalRetained EarningsAccumulated Other Comprehensive Income (Loss)Total Partners' /Stockholders' Equity
Partners' EquityCommon Stock
UnitsAmountUnitsAmountSharesAmountAmountAmountAmountAmountUnits / Shares
Balances as of January 30, 2021 $  $ 91,114 $911 $127,228 $987,168 $(3,324)$1,111,983 91,114 
Net income— — — — — — — 177,796 — 177,796 — 
Equity compensation— — — — — — 5,874 — — 5,874 — 
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— — — — (3,230)(32)(5,299)(94,669)— (100,000)(3,230)
Settlement of vested Restricted Stock Units— — — — 836 8 (8)— —  836 
Issuance of common stock under employee stock purchase plan— — — — 35 — 945 — — 945 35 
Stock option exercises— — — — 1,356 14 14,407 — — 14,421 1,356 
Recognized interest expense on interest rate swaps (net of tax impact of $163)
— — — — — — — — 536 536 — 
Balances as of July 31, 2021— $— — $— 92,884 $929 $187,746 $1,260,805 $(1,862)$1,447,618 92,884 
Net income       161,305  161,305  
Equity compensation      2,921   2,921  
Repurchase of common stock for retirement    (5,723)(57)(11,941)(233,839) (245,837)(5,723)
Stock option exercises    1,004 10 9,603   9,613 1,004 
Recognized interest expense on interest rate swaps (net of tax impact of $115)
        374 374  
Balances as of October 30, 2021— $— — $— 88,165 $882 $188,329 $1,188,271 $(1,488)$1,375,994 88,165 


See Condensed Notes to Consolidated Financial Statements
6



ACADEMY SPORTS AND OUTDOORS, INC.
CONSOLIDATED STATEMENTS OF PARTNERS' / STOCKHOLDERS' EQUITY
(Unaudited)
(Amounts in thousands)
Redeemable Membership UnitsPartners' / Stockholders' EquityTotal Membership Units / Common Stock
Additional Paid-In CapitalRetained EarningsAccumulated Other Comprehensive Income (Loss)Total Partners' / Stockholders' Equity
Partners' EquityCommon Stock
Units (1)
Amount
Units (1)
Amount
Shares (1)
AmountAmountAmountAmountAmount
Units / Shares (1)
Balances as of February 1, 2020162 $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 Units12 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 2, 2020172 $2,977 72,306 $988,178 — $— $— $— $(10,607)$977,571 72,478 
Net income— — — 167,676 — — — — — 167,676 — 
Equity compensation— — — 1,581 — — — — — 1,581 — 
Unrealized loss on interest rate swaps— — — — — — — — (606)(606)— 
Recognized interest expense on interest rate swaps— — — — — — — — 2,874 2,874 — 
Balances as of August 1, 2020172 $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
7


ACADEMY SPORTS AND OUTDOORS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Amounts in thousands)
Thirty-Nine Weeks Ended
October 30, 2021October 31, 2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income$529,611 $217,242 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization77,767 79,718 
Non-cash lease expense708 14,870 
Equity compensation36,126 27,049 
Amortization of terminated interest rate swaps, deferred loan and other costs4,787 2,734 
Loss on swaps from debt refinancing 1,330 
Deferred income taxes48,991 (11,739)
Non-cash (gain) loss on early retirement of debt, net2,239 (7,831)
Casualty loss 114 
Changes in assets and liabilities:
Accounts receivable, net4,938 2,121 
Merchandise inventories, net(335,945)16,727 
Prepaid expenses and other current assets(16,177)(1,151)
Other noncurrent assets2,207 245 
Accounts payable128,743 439,682 
Accrued expenses and other current liabilities34,683 44,733 
Income taxes payable(1,830)9,590 
Other long-term liabilities(1,785)21,784 
Net cash provided by operating activities515,063 857,218 
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures(58,567)(21,915)
Purchases of intangible assets(144) 
Notes receivable from member 8,125 
Net cash used in investing activities(58,711)(13,790)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from ABL Facility 500,000 
Repayment of ABL Facility (500,000)
Repayment of Term Loan(101,500)(29,653)
Debt issuance fees(927)(556)
Share-Based Award Payments(11,214)(20,724)
Distribution (257,000)
Proceeds from issuance of common stock, net of Offering Costs 184,882 
Proceeds from exercise of stock options41,292  
Proceeds from issuance of common stock under employee stock purchase program945  
Taxes paid related to net share settlement of equity awards(15,418) 
Repurchase of common stock for retirement(345,837) 
Repurchase of Redeemable Membership Units (37)
Net cash used in financing activities(432,659)(123,088)
NET INCREASE IN CASH AND CASH EQUIVALENTS23,693 720,340 
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD377,604 149,385 
CASH AND CASH EQUIVALENTS AT END OF PERIOD$401,297 $869,725 
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for interest$28,481 $68,759 
Cash paid for income taxes$95,799 $2,461 
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Non-cash issuance of common shares$501 $132 
Change in capital expenditures in accounts payable and accrued liabilities$950 $985 
Right-of-use assets obtained in exchange for new operating leases$10,924 $84,595 
See Condensed Notes to Consolidated Financial Statements
8


ACADEMY SPORTS AND OUTDOORS, INC.
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)


1. Nature of Operations

The Company
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. 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. L.P. (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.
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. 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; and
one share of common stock of ASO, Inc. issued to then-existing members of NAHC for every 3.15 membership units of NAHC contributed to ASO, Inc.
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.
9


Secondary Offering
On January 27, 2021, ASO, Inc. 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 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. On January 29, 2021, the Underwriters exercised in full their option to purchase the additional shares. 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 approximately $20.69 per share. The Company did not 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 not 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 not receive any proceeds from the September 2021 Secondary Offering.

10



2. Summary of Significant Accounting Policies
The accompanying unaudited financial statements of the Company have been prepared as though they were required to be in accordance with Rule 10-01 of Regulation S-X for interim financial statements, however, they do not include all information and footnotes required by United States generally accepted accounting principles ("GAAP") for complete financial statements. Certain information and footnote disclosures normally included in our annual consolidated financial statements prepared in accordance with GAAP have been condensed or omitted. 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"). 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 balance sheet as of January 30, 2021 has been derived from our audited financial statements as of that date. For further information, refer to our audited financial statements and notes thereto included in the Annual Report.

Basis of Presentation and Principles of Consolidation
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. 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
The preparation of financial statements in conformity with GAAP requires our management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Our management bases its estimates on historical experience and other assumptions it believes to be reasonable under the circumstances. Actual results could differ significantly from those estimates. 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 the possibility of additional unforeseen effects from the COVID-19 pandemic, these estimates remain challenging, and actual results could differ materially from our estimates.
Reclassifications
Within the merchandise division sales table presented in Note 3, certain products and categories were recategorized amongst various categories and divisions, respectively, to better align with our current merchandising strategy and view of the business. As a result, we have reclassified sales between divisions in the thirteen and thirty-nine weeks ended October 31, 2020 for comparability purposes. This reclassification is in divisional presentation only and did not impact the overall net sales balances previously disclosed.
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.
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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.
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.
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3. Net Sales
Revenue from merchandise sales is recognized, net of sales tax, when the Company’s performance obligation to the customer is met, which is when the Company transfers control of the merchandise to the customer. Store merchandise sales are recognized at the point of sale and e-commerce sales are recognized upon delivery to the customer.
The following table sets forth the approximate amount of sales by merchandise divisions for the periods presented (amounts in thousands):
Thirteen Weeks EndedThirty-Nine Weeks Ended
October 30, 2021October 31, 2020October 30, 2021October 31, 2020
Merchandise division sales (1)
Outdoors$578,987 $487,401 $1,604,045 $1,448,987 
Sports and recreation285,614 262,979 1,098,621 917,656 
Apparel399,852