Fourth Quarter Comparable Sales Increased 13.1%; FY 2021 Comparable Sales Increased 18.9%
Fourth Quarter Pre-tax Income Grew 55% to
Fourth Quarter and FY EPS of
Repurchased 10.6 million shares for
Fourth Quarter and Fiscal 2021 Results
"2021 was an extraordinary year for
For the fourth quarter, net sales increased 13.2% to a quarterly record of
For fiscal 2021, net sales increased 19.1% to a record
During the fourth quarter, e-commerce sales grew 22.7% compared to the prior year quarter and 97.2% compared to the fourth quarter of 2019. For the fiscal year, e-commerce sales increased 6.2% compared to 2020 and increased 153.1% compared to 2019.
For the fourth quarter, gross margin increased 17.0% to a record
For the fourth quarter, pre-tax income increased 55.0% to
For the fourth quarter, GAAP net income increased 54.9% to
For fiscal 2021, GAAP net income increased 117.4% to
Pro forma adjusted net income, which excludes the impact of certain non-cash and extraordinary items, increased 129.9% to
Balance Sheet and Capital Allocation Update
As of the end of fiscal 2021 (
During the fourth quarter, the Company made open market purchases of 1.6 million shares for
Subsequent to the end of fiscal 2021, on
2022 Outlook
Academy is providing the following initial guidance for fiscal 2022 (year ending
Fiscal 2019 is included in the table for context, and to illustrate the company's growth expectations post pandemic and relative to 2019.
Fiscal 2022 Guidance | % change (at midpoint) | |||||||||||
(in millions, except per share amounts) | Low end | High end | 2021 | 2019 | vs. 2021 | vs. 2019 | ||||||
Net sales | (1.6 | )% | 38.0 | % | ||||||||
Comparable sales | (4.0)% | (1.0)% | 18.9% | (0.7)% | ||||||||
Income before taxes | (5.5 | )% | 560.6 | % | ||||||||
Net income | (8.3 | )% | 412.5 | % | ||||||||
GAAP earnings per share-diluted | (4.1 | )% | 326.6 | % | ||||||||
Non-GAAP earnings per share-diluted | (8.2 | )% | 583.8 | % | ||||||||
Diluted weighted average shares outstanding | 90.5 | 90.5 | 94.3 | n/a | (4.0 | )% | ||||||
The earnings per share estimate reflects a tax rate of 24.0% and does not include any potential future share repurchases.
Conference Call Info
Academy will host a conference call today at
A telephonic replay of the conference call will be available for approximately 30 days, by dialing 1-844-512-2921 (
About
Academy is a leading full-line sporting goods and outdoor recreation retailer in
All references to "Academy," "
On the IPO pricing date, we completed a series of reorganization transactions (the "Reorganization Transactions") that resulted in NAHC being contributed to
Non-GAAP Measures
Adjusted EBITDA, Adjusted EBIT, Adjusted Net Income (Loss), Pro Forma Adjusted Net Income (Loss), Pro Forma Adjusted Earnings Per Share, Adjusted Selling, General and Administrative Expenses and Adjusted Free Cash Flow have been presented in this press release as supplemental measures of financial performance that are not required by, or presented in accordance with, generally accepted accounting principles (“GAAP”). These non-GAAP measures have limitations as analytical tools. For information on these limitations, as well as information on why management believes these non-GAAP measures are useful, please see our Annual Report for fiscal year 2020 filed on
We compensate for these limitations by primarily relying on our GAAP results in addition to using these non-GAAP measures supplementally.
See “Reconciliations of Non-GAAP to GAAP Financial Measures” below for reconciliations of non-GAAP financial measures used in this press release to their most directly comparable GAAP financial measures.
Forward Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are based on Academy's current expectations and are not guarantees of future performance. You can identify these forward-looking statements by the use of words such as "outlook," "guidance," "believes," "expects," "potential," "continues," "may," "will," "should," "could," "seeks," "projects," "predicts," "intends," "plans," "estimates," "anticipates" or the negative version of these words or other comparable words. The forward-looking statements include, among other things, statements regarding the payment of the dividend and declaration of future dividends, including the timing and amount thereof, the Company's expectations regarding its future performance, and the Company's future financial condition to support future dividend growth and are subject to various risks, uncertainties, assumptions, or changes in circumstances that are difficult to predict or quantify. Actual results may differ materially from these expectations due to changes in global, regional, or local economic, business, competitive, market, regulatory and other factors, many of which are beyond Academy's control. Important factors that could cause actual results to differ materially from those in the forward-looking statements are set forth in Academy's filings with the
Investor Contact | Media Contact | |
VP, Investor Relations | VP, Communications | |
281-646-5362 | 281-944-6041 | |
Matt.hodges@academy.com | Elise.hasbrook@academy.com | |
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(Amounts in thousands, except per share data)
Thirteen Weeks Ended | ||||||||||||||
Percentage of Sales (1) | Percentage of Sales (1) | |||||||||||||
Net sales | $ | 1,808,470 | 100.0 | % | $ | 1,597,436 | 100.0 | % | ||||||
Cost of goods sold | 1,224,410 | 67.7 | % | 1,098,348 | 68.8 | % | ||||||||
Gross margin | 584,060 | 32.3 | % | 499,088 | 31.2 | % | ||||||||
Selling, general and administrative expenses | 385,858 | 21.3 | % | 358,056 | 22.4 | % | ||||||||
Operating income | 198,202 | 11.0 | % | 141,032 | 8.8 | % | ||||||||
Interest expense, net | 10,859 | 0.6 | % | 16,027 | 1.0 | % | ||||||||
Loss on early retirement of debt, net | — | 0.0 | % | 4,249 | 0.3 | % | ||||||||
Other (income), net | (1,075 | ) | (0.1 | )% | (797 | ) | 0.0 | % | ||||||
Income before income taxes | 188,418 | 10.4 | % | 121,553 | 7.6 | % | ||||||||
Income tax expense | 46,648 | 2.6 | % | 30,031 | 1.9 | % | ||||||||
Net income | $ | 141,770 | 7.8 | % | $ | 91,522 | 5.7 | % | ||||||
Earnings Per Common Share: | ||||||||||||||
Basic | $ | 1.61 | $ | 1.01 | ||||||||||
Diluted | $ | 1.57 | $ | 0.97 | ||||||||||
Weighted Average Common Shares Outstanding: | ||||||||||||||
Basic | 87,970 | 90,253 | ||||||||||||
Diluted | 90,475 | 94,377 |
(1) Column may not add due to rounding
CONSOLIDATED STATEMENTS OF INCOME
(Amounts in thousands, except per share data)
Fiscal Year Ended | ||||||||||||||
Percentage of Sales (1) | Percentage of Sales (1) | |||||||||||||
Net sales | $ | 6,773,128 | 100.0 | % | $ | 5,689,233 | 100.0 | % | ||||||
Cost of goods sold | 4,422,033 | 65.3 | % | 3,955,188 | 69.5 | % | ||||||||
Gross margin | 2,351,095 | 34.7 | % | 1,734,045 | 30.5 | % | ||||||||
Selling, general and administrative expenses | 1,443,148 | 21.3 | % | 1,313,647 | 23.1 | % | ||||||||
Operating income | 907,947 | 13.4 | % | 420,398 | 7.4 | % | ||||||||
Interest expense, net | 48,989 | 0.7 | % | 86,514 | 1.5 | % | ||||||||
(Gain) loss on early retirement of debt, net | 2,239 | 0.0 | % | (3,582 | ) | (0.1 | )% | |||||||
Other (income), net | (2,821 | ) | (0.0 | )% | (1,654 | ) | 0.0 | % | ||||||
Income before income taxes | 859,540 | 12.7 | % | 339,120 | 6.0 | % | ||||||||
Income tax expense | 188,159 | 2.8 | % | 30,356 | 0.5 | % | ||||||||
Net income | $ | 671,381 | 9.9 | % | $ | 308,764 | 5.4 | % | ||||||
Earnings Per Common Share: | ||||||||||||||
Basic | $ | 7.38 | $ | 3.96 | ||||||||||
Diluted | $ | 7.12 | $ | 3.79 | ||||||||||
Weighted Average Common Shares Outstanding: | ||||||||||||||
Basic | 90,956 | 77,994 | ||||||||||||
Diluted | 94,284 | 81,431 |
(1) Column may not add due to rounding
CONSOLIDATED BALANCE SHEETS
(Dollar amounts in thousands)
ASSETS | ||||||||
CURRENT ASSETS: | ||||||||
Cash and cash equivalents | $ | 485,998 | $ | 377,604 | ||||
Accounts receivable - less allowance for doubtful accounts of | 19,718 | 17,306 | ||||||
Merchandise inventories, net | 1,171,808 | 990,034 | ||||||
Prepaid expenses and other current assets | 36,460 | 28,313 | ||||||
Assets held for sale | 1,763 | 1,763 | ||||||
Total current assets | 1,715,747 | 1,415,020 | ||||||
PROPERTY AND EQUIPMENT, NET | 345,836 | 378,260 | ||||||
RIGHT-OF-USE ASSETS | 1,079,546 | 1,143,699 | ||||||
577,215 | 577,000 | |||||||
861,920 | 861,920 | |||||||
OTHER NONCURRENT ASSETS | 4,676 | 8,583 | ||||||
Total assets | $ | 4,584,940 | $ | 4,384,482 | ||||
LIABILITIES AND STOCKHOLDERS' / PARTNERS' EQUITY | ||||||||
CURRENT LIABILITIES: | ||||||||
Accounts payable | $ | 737,826 | $ | 791,404 | ||||
Accrued expenses and other current liabilities | 303,207 | 291,351 | ||||||
Current lease liabilities | 83,077 | 80,338 | ||||||
Current maturities of long-term debt | 3,000 | 4,000 | ||||||
Total current liabilities | 1,127,110 | 1,167,093 | ||||||
LONG-TERM DEBT, NET | 683,585 | 781,489 | ||||||
LONG-TERM LEASE LIABILITIES | 1,077,667 | 1,150,088 | ||||||
DEFERRED TAX LIABILITIES, NET | 217,212 | 138,703 | ||||||
OTHER LONG-TERM LIABILITIES | 12,420 | 35,126 | ||||||
Total liabilities | 3,117,994 | 3,272,499 | ||||||
COMMITMENTS AND CONTINGENCIES | ||||||||
STOCKHOLDERS' / PARTNERS' EQUITY: | ||||||||
Preferred stock, | — | — | ||||||
Common stock, | 870 | 911 | ||||||
Additional paid-in capital | 198,016 | 127,228 | ||||||
Retained earnings | 1,268,060 | 987,168 | ||||||
Accumulated other comprehensive loss | — | (3,324 | ) | |||||
Stockholders' / partners' equity | 1,466,946 | 1,111,983 | ||||||
Total liabilities and stockholders' / partners' equity | $ | 4,584,940 | $ | 4,384,482 |
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
Fiscal Year Ended | ||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||||
Net income | $ | 671,381 | $ | 308,764 | $ | 120,043 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||
Depreciation and amortization | 105,274 | 105,481 | 117,254 | |||||||||
Non-cash lease expense | (5,528 | ) | 13,880 | 3,965 | ||||||||
Equity compensation | 39,264 | 31,617 | 7,881 | |||||||||
Amortization of terminated interest rate swaps, deferred loan and other costs | 5,524 | 5,516 | 3,717 | |||||||||
Loss on swaps from debt refinancing | — | 1,330 | — | |||||||||
Deferred income taxes | 79,490 | 701 | 297 | |||||||||
Non-cash (gain) loss on early retirement of debt, net | 2,239 | (3,582 | ) | (42,265 | ) | |||||||
Gain on disposal of property and equipment | — | — | (23 | ) | ||||||||
Casualty loss | — | 194 | 569 | |||||||||
Changes in assets and liabilities: | ||||||||||||
Accounts receivable, net | (2,412 | ) | (2,981 | ) | 4,476 | |||||||
Merchandise inventories, net | (181,774 | ) | 109,520 | 34,407 | ||||||||
Prepaid expenses and other current assets | (8,147 | ) | (3,765 | ) | (3,732 | ) | ||||||
Other noncurrent assets | 2,759 | (2,496 | ) | 398 | ||||||||
Accounts payable | (50,627 | ) | 361,518 | (2,904 | ) | |||||||
Accrued expenses and other current liabilities | 31,935 | 57,376 | 20,615 | |||||||||
Income taxes payable | (14,129 | ) | 14,124 | — | ||||||||
Other long-term liabilities | (1,984 | ) | 14,400 | (1,029 | ) | |||||||
Net cash provided by operating activities | 673,265 | 1,011,597 | 263,669 | |||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||||
Capital expenditures | (75,802 | ) | (41,269 | ) | (62,818 | ) | ||||||
Purchases of intangible assets | (215 | ) | — | — | ||||||||
Proceeds from the sale of property and equipment | — | — | 23 | |||||||||
Note receivable from member | — | 8,125 | (3,988 | ) | ||||||||
Net cash used in investing activities | (76,017 | ) | (33,144 | ) | (66,783 | ) | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||
Proceeds from ABL Facility | — | 500,000 | 502,500 | |||||||||
Repayment of ABL Facility | — | (500,000 | ) | (502,500 | ) | |||||||
Proceeds from Term Loan, net of discount | — | 396,000 | — | |||||||||
Repayment of Term Loan | (102,250 | ) | (1,461,072 | ) | (122,819 | ) | ||||||
Proceeds from Notes | — | 400,000 | — | |||||||||
Debt issuance fees | (927 | ) | (14,147 | ) | — | |||||||
Share-Based Award Payments | (11,214 | ) | (20,970 | ) | — | |||||||
Distribution | — | (257,000 | ) | — | ||||||||
Equity contributions from Managers | — | — | 100 | |||||||||
Proceeds from exercise of stock options | 48,587 | 22 | — | |||||||||
Proceeds from issuance of common stock, net of Offering Costs | — | 206,970 | — | |||||||||
Proceeds from issuance of common stock under employee stock purchase program | 3,777 | — | — | |||||||||
Taxes paid related to net share settlement of equity awards | (15,418 | ) | — | — | ||||||||
Repurchase of common stock for retirement | (411,409 | ) | — | — | ||||||||
Repurchase of Redeemable Membership Units | — | (37 | ) | (473 | ) | |||||||
Net cash used in financing activities | (488,854 | ) | (750,234 | ) | (123,192 | ) | ||||||
NET INCREASE IN CASH AND CASH EQUIVALENTS | 108,394 | 228,219 | 73,694 | |||||||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 377,604 | 149,385 | 75,691 | |||||||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ | 485,998 | $ | 377,604 | $ | 149,385 | ||||||
RECONCILIATIONS OF NON-GAAP TO GAAP FINANCIAL MEASURES
(Unaudited)
(Dollar amounts in thousands)
Adjusted EBITDA and Adjusted EBIT
We define “Adjusted EBITDA” as net income (loss) before interest expense, net, income tax expense and depreciation, and amortization, and impairment, further adjusted to exclude consulting fees, private equity sponsor monitoring fees, equity compensation expense, (gain) loss on early retirement of debt, net, severance and executive transition costs, costs related to the COVID-19 pandemic, payroll taxes associated with a vesting event, as a result of a secondary offering, of certain time and performance-based equity awards, both of which occurred in
Thirteen Weeks Ended | Fiscal Year Ended | |||||||||||||||
Net income | $ | 141,770 | $ | 91,522 | $ | 671,381 | $ | 308,764 | ||||||||
Interest expense, net | 10,859 | 16,027 | 48,989 | 86,514 | ||||||||||||
Income tax expense | 46,648 | 30,031 | 188,159 | 30,356 | ||||||||||||
Depreciation and amortization | 27,507 | 25,763 | 105,274 | 105,481 | ||||||||||||
Consulting fees (a) | — | 91 | — | 285 | ||||||||||||
Private equity sponsor monitoring fee (b) | — | — | — | 14,793 | ||||||||||||
Equity compensation (c) | 3,138 | 4,568 | 39,264 | 31,617 | ||||||||||||
(Gain) loss on early retirement of debt, net | — | 4,249 | 2,239 | (3,582 | ) | |||||||||||
Severance and executive transition costs (d) | — | 2,434 | — | 6,571 | ||||||||||||
Costs related to the COVID-19 pandemic (e) | — | — | — | 17,632 | ||||||||||||
Payroll taxes associated with the 2021 Vesting Event (f) | — | — | 15,418 | — | ||||||||||||
Other (g) | 1,809 | 3,698 | 3,118 | 8,592 | ||||||||||||
Adjusted EBITDA | $ | 231,731 | $ | 178,383 | $ | 1,073,842 | $ | 607,023 | ||||||||
Less: Depreciation and amortization | (27,507 | ) | (25,763 | ) | (105,274 | ) | (105,481 | ) | ||||||||
Adjusted EBIT | $ | 204,224 | $ | 152,620 | $ | 968,568 | $ | 501,542 |
(a) | Represents outside consulting fees associated with our strategic cost savings and business optimization initiatives. | ||||||||||||||||
(b) | Represents our contractual payments under a monitoring agreement ("Monitoring Agreement") with our former private equity sponsor | ||||||||||||||||
(c) | Represents non-cash charges related to equity-based compensation, which vary from period to period depending on certain factors such as the 2021 Vesting Event, timing and valuation of awards, achievement of performance targets and equity award forfeitures. | ||||||||||||||||
(d) | Represents severance costs associated with executive leadership changes and enterprise-wide organizational changes. | ||||||||||||||||
(e) | Represents costs incurred during the first half of 2020 as a result of the COVID-19 pandemic, including temporary wage premiums, additional sick time, costs of additional cleaning supplies and third party cleaning services for the stores, corporate office and distribution centers, accelerated freight costs associated with shifting our inventory purchase earlier in the year to maintain stock, and legal fees associated with consulting in local jurisdictions. These costs were no longer added back beginning in the third quarter of 2020. | ||||||||||||||||
(f) | Represents cash expenses related to taxes on equity-based compensation resulting from the 2021 Vesting Event. | ||||||||||||||||
(g) | Other adjustments include (representing deductions or additions to Adjusted EBITDA and Adjusted EBIT) amounts that management believes are not representative of our operating performance, including investment income, installation costs for energy savings associated with our profitability initiatives, legal fees associated with a distribution to NAHC's members and our omnibus incentive plan, store exit costs and other costs associated with strategic cost savings and business optimization initiatives. | ||||||||||||||||
Adjusted Net Income, Pro Forma Adjusted Net Income and Pro Forma Adjusted Earnings Per Share
We define “Adjusted Net Income (Loss)” as net income (loss), plus consulting fees, private equity sponsor monitoring fees, equity compensation expense, (gain) loss on early retirement of debt, net, severance and executive transition costs, costs related to the COVID-19 pandemic, payroll taxes associated with the 2021 Vesting Event and other adjustments, less the tax effect of these adjustments. We define “Pro Forma Adjusted Net Income (Loss)” as Adjusted Net Income (Loss) less the retrospective tax effect of Adjusted Net Income at our estimated effective tax rate of approximately 25% for periods prior to
Thirteen Weeks Ended | Fiscal Year Ended | |||||||||||||||
Net income | $ | 141,770 | $ | 91,522 | $ | 671,381 | $ | 308,764 | ||||||||
Consulting fees (a) | — | 91 | — | 285 | ||||||||||||
Private equity sponsor monitoring fee (b) | — | — | — | 14,793 | ||||||||||||
Equity compensation (c) | 3,138 | 4,568 | 39,264 | 31,617 | ||||||||||||
(Gain) loss on early retirement of debt, net | — | 4,249 | 2,239 | (3,582 | ) | |||||||||||
Severance and executive transition costs (d) | — | 2,434 | — | 6,571 | ||||||||||||
Costs related to the COVID-19 pandemic (e) | — | — | — | 17,632 | ||||||||||||
Payroll taxes associated with the 2021 Vesting Event (f) | — | — | 15,418 | — | ||||||||||||
Other (g) | 1,809 | 3,698 | 3,118 | 8,592 | ||||||||||||
Tax effects of these adjustments (h) | (1,397 | ) | (27 | ) | (14,884 | ) | (136 | ) | ||||||||
Adjusted Net Income | 145,320 | 106,535 | 716,536 | 384,536 | ||||||||||||
Estimated tax effect of change to C-Corporation status (i) | — | (3,434 | ) | — | (72,844 | ) | ||||||||||
Pro Forma Adjusted Net Income | $ | 145,320 | $ | 103,101 | $ | 716,536 | $ | 311,692 | ||||||||
Pro Forma Adjusted Earnings per Share | ||||||||||||||||
Basic | $ | 1.65 | $ | 1.14 | $ | 7.88 | $ | 4.00 | ||||||||
Diluted | $ | 1.61 | $ | 1.09 | $ | 7.60 | $ | 3.83 | ||||||||
Weighted average common shares outstanding | ||||||||||||||||
Basic | 87,970 | 90,253 | 90,956 | 77,994 | ||||||||||||
Diluted | 90,475 | 94,377 | 94,284 | 81,431 |
(a) | Represents outside consulting fees associated with our strategic cost savings and business optimization initiatives. | ||||||||||||||||
(b) | Represents our contractual payments under our Monitoring Agreement with our former private equity sponsor | ||||||||||||||||
(c) | Represents non-cash charges related to equity-based compensation, which vary from period to period depending on certain factors such as the 2021 Vesting Event, timing and valuation of awards, achievement of performance targets and equity award forfeitures. | ||||||||||||||||
(d) | Represents severance costs associated with executive leadership changes and enterprise-wide organizational changes. | ||||||||||||||||
(e) | Represents costs incurred during the first half of 2020 as a result of the COVID-19 pandemic, including temporary wage premiums, additional sick time, costs of additional cleaning supplies and third party cleaning services for the stores, corporate office and distribution centers, accelerated freight costs associated with shifting our inventory purchase earlier in the year to maintain stock, and legal fees associated with consulting in local jurisdictions. These costs were no longer added back beginning in the third quarter of 2020. | ||||||||||||||||
(f) | Represents cash expenses related to taxes on equity-based compensation resulting from the 2021 Vesting Event. | ||||||||||||||||
(g) | Other adjustments include (representing deductions or additions to Adjusted Net Income) amounts that management believes are not representative of our operating performance, including investment income, installation costs for energy savings associated with our profitability initiatives, legal fees associated with a distribution to NAHC's members and our omnibus incentive plan, store exit costs and other costs associated with strategic cost savings and business optimization initiatives. | ||||||||||||||||
(h) | Represents the tax effect of the total adjustments made to arrive at Adjusted Net Income at our historical tax rate. | ||||||||||||||||
(i) | Represents the retrospective tax effect of Adjusted Net Income at our estimated effective tax rate of approximately 25% for periods prior to | ||||||||||||||||
Adjusted Selling, General and Administrative Expenses
We define “Adjusted Selling, General and Administrative Expenses” as selling, general and administrative expenses, less consulting fees, private equity sponsor monitoring fees, equity compensation expense, severance and executive transition costs, costs related to the COVID-19 pandemic, payroll taxes associated with the 2021 Vesting Event and other adjustments. We describe these adjustments reconciling selling, general and administrative expenses to Adjusted Selling, General and Administrative Expenses in the following table.
Thirteen Weeks Ended | Fiscal Year Ended | |||||||||||||||
Selling, General and Administrative Expenses | $ | 385,858 | $ | 358,056 | $ | 1,443,148 | $ | 1,313,647 | ||||||||
Less: | ||||||||||||||||
Consulting fees (a) | — | (91 | ) | — | (285 | ) | ||||||||||
Private equity sponsor monitoring fee (b) | — | — | — | (14,793 | ) | |||||||||||
Equity compensation (c) | (3,138 | ) | (4,568 | ) | (39,264 | ) | (31,617 | ) | ||||||||
Severance and executive transition costs (d) | — | (2,434 | ) | — | (6,571 | ) | ||||||||||
Costs related to the COVID-19 pandemic (e) | — | — | — | (17,632 | ) | |||||||||||
Payroll taxes associated with the 2021 Vesting Event (f) | — | — | (15,418 | ) | — | |||||||||||
Other (g) | (1,809 | ) | (3,698 | ) | (3,118 | ) | (8,592 | ) | ||||||||
Adjusted Selling, General and Administrative Expenses | $ | 380,911 | $ | 347,265 | $ | 1,385,348 | $ | 1,234,157 | ||||||||
Adjusted Selling, General and Administrative Expense as a percentage of | 21.1 | % | 21.7 | % | 20.5 | % | 21.7 | % |
(a) | Represents outside consulting fees associated with our strategic cost savings and business optimization initiatives. | ||||||||||||||||
(b) | Represents our contractual payments under our Monitoring Agreement with our former private equity sponsor | ||||||||||||||||
(c) | Represents non-cash charges related to equity-based compensation, which vary from period to period depending on certain factors such as the 2021 Vesting Event, timing and valuation of awards, achievement of performance targets and equity award forfeitures. | ||||||||||||||||
(d) | Represents severance costs associated with executive leadership changes and enterprise-wide organizational changes. | ||||||||||||||||
(e) | Represents costs incurred during the first half of 2020 as a result of the COVID-19 pandemic, including temporary wage premiums, additional sick time, costs of additional cleaning supplies and third party cleaning services for the stores, corporate office and distribution centers, accelerated freight costs associated with shifting our inventory purchase earlier in the year to maintain stock, and legal fees associated with consulting in local jurisdictions. These costs were no longer added back beginning in the third quarter of 2020. | ||||||||||||||||
(f) | Represents cash expenses related to taxes on equity-based compensation resulting from the 2021 Vesting Event. | ||||||||||||||||
(g) | Other adjustments include (representing deductions or additions to Adjusted Net Income) amounts that management believes are not representative of our operating performance, including investment income, installation costs for energy savings associated with our profitability initiatives, legal fees associated with a distribution to NAHC's members and our omnibus incentive plan, store exit costs and other costs associated with strategic cost savings and business optimization initiatives. |
Adjusted Free Cash Flow
We define “Adjusted Free Cash Flow” as net cash provided by (used in) operating activities less net cash provided by (used in) investing activities. We describe these adjustments reconciling net cash provided by operating activities to Adjusted Free Cash Flow in the following table.
Thirteen Weeks Ended | Fiscal Year Ended | |||||||||||||||
Net cash provided by operating activities | $ | 158,202 | $ | 154,379 | $ | 673,265 | $ | 1,011,597 | ||||||||
Net cash used in investing activities | (17,306 | ) | (19,354 | ) | (76,017 | ) | (33,144 | ) | ||||||||
Adjusted Free Cash Flow | $ | 140,896 | $ | 135,025 | $ | 597,248 | $ | 978,453 |
Source:
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