Net Sales Increased 11.5%; 44.8% Growth over Two Years
Pre-Tax Income Grew 42.8% to
Company Announces New
Second Quarter 2021 Results
Net sales increased 11.5% to an all-time quarterly high of
Gross margin increased 29.4% to
Selling, general and administrative ("SG&A") expenses were 21.7% of sales, a 220 basis point increase. The change was a result of higher advertising and payroll expenses that had been pared back last year due to the pandemic as well as non-recurring stock compensation and payroll expenses associated with accelerated share vesting. Excluding the non-recurring expenses, SG&A expenses would have been 19.2% of sales.
Pre-tax income increased by 42.8% to
Net income was
"
Year-to-Date 2021 Results
Net sales increased 22.9% to
Gross margin increased 51.8% to
The growth in gross profit, coupled with 70 basis points of selling, general & administrative expense leverage, resulted in a 192.6% increase in pre-tax income to
Net income increased 133.6% to
Balance Sheet Update
The company also took steps to enhance its balance sheet. As of the end of the second quarter, the Company’s cash and cash equivalents totaled
As previously reported, Academy's largest shareholder (KKR) completed two transactions, reducing their ownership to approximately 20% of the Company as of the end of the quarter. As part of one of these events, Academy purchased and retired 3.2 million shares for approximately
Capital Allocation
On
2021 Outlook
This forecast accounts for various market scenarios due to the uncertainty from the impact of COVID-19 on the economy and consumer. The new guidance is as follows:
% change (at mid-point) | ||||||
Updated Fiscal 2021(e) Guidance | 2020 | 2019 | vs. 2020 | vs. 2019 | ||
(in millions, except per share amounts) | Low end | High end | ||||
15% | 35% | |||||
Comparable sales | 14.0% | 17.0% | 16.1% | (0.7)% | ||
Income before taxes | 104% | 463% | ||||
Net income | 76% | 352% | ||||
Earnings per share-diluted | 48% | 252% | ||||
Diluted weighted average shares outstanding | 96,500 | 96,500 | 81,431 | 74,795 |
The EPS estimate reflects a tax rate of 22.0% 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, 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 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 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 (2) | Percentage of Sales (2) | |||||||||||||||
Net sales | $ | 1,791,530 | 100.0 | % | $ | 1,606,420 | 100.0 | % | ||||||||
Cost of goods sold | 1,149,034 | 64.1 | % | 1,109,919 | 69.1 | % | ||||||||||
Gross margin | 642,496 | 35.9 | % | 496,501 | 30.9 | % | ||||||||||
Selling, general and administrative expenses | 387,938 | 21.7 | % | 312,713 | 19.5 | % | ||||||||||
Operating income | 254,558 | 14.2 | % | 183,788 | 11.4 | % | ||||||||||
Interest expense, net | 12,157 | 0.7 | % | 23,566 | 1.5 | % | ||||||||||
(Gain) loss on early extinguishment of debt, net | 2,239 | 0.1 | % | (7,831 | ) | (0.5 | ) | % | ||||||||
Other (income), net | (735 | ) | 0.0 | % | (628 | ) | 0.0 | % | ||||||||
Income before income taxes | 240,897 | 13.4 | % | 168,681 | 10.5 | % | ||||||||||
Income tax expense | 50,387 | 2.8 | % | 1,005 | 0.1 | % | ||||||||||
Net income | $ | 190,510 | 10.6 | % | $ | 167,676 | 10.4 | % | ||||||||
Earnings Per Common Share: | ||||||||||||||||
Basic (1) | $ | 2.06 | $ | 2.31 | ||||||||||||
Diluted (1) | $ | 1.99 | $ | 2.25 | ||||||||||||
Weighted Average Common Shares Outstanding: | ||||||||||||||||
Basic (1) | 92,627 | 72,478 | ||||||||||||||
Diluted (1) | 95,891 | 74,439 |
(1) After effect of the retrospective presentation of the Reorganization Transactions and Contribution Ratio
(2) Column may not add due to rounding
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(Amounts in thousands, except per share data)
Twenty-Six Weeks Ended | ||||||||||||||||
Percentage of Sales (2) | Percentage of Sales (2) | |||||||||||||||
Net sales | $ | 3,371,863 | 100.0 | % | $ | 2,742,721 | 100.0 | % | ||||||||
Cost of goods sold | 2,165,666 | 64.2 | % | 1,948,275 | 71.0 | % | ||||||||||
Gross margin | 1,206,197 | 35.8 | % | 794,446 | 29.0 | % | ||||||||||
Selling, general and administrative expenses | 712,565 | 21.1 | % | 596,636 | 21.8 | % | ||||||||||
Operating income | 493,632 | 14.6 | % | 197,810 | 7.2 | % | ||||||||||
Interest expense, net | 26,706 | 0.8 | % | 48,088 | 1.8 | % | ||||||||||
(Gain) loss on early extinguishment of debt, net | 2,239 | 0.1 | % | (7,831 | ) | (0.3 | ) | % | ||||||||
Other (income), net | (1,132 | ) | 0.0 | % | (1,621 | ) | (0.1 | ) | % | |||||||
Income before income taxes | 465,819 | 13.8 | % | 159,174 | 5.8 | % | ||||||||||
Income tax expense | 97,513 | 2.9 | % | 1,518 | 0.1 | % | ||||||||||
Net income | $ | 368,306 | 10.9 | % | $ | 157,656 | 5.7 | % | ||||||||
Earnings Per Common Share: | ||||||||||||||||
Basic (1) | $ | 3.99 | $ | 2.18 | ||||||||||||
Diluted (1) | $ | 3.82 | $ | 2.12 | ||||||||||||
Weighted Average Common Shares Outstanding: | ||||||||||||||||
Basic (1) | 92,357 | 72,476 | ||||||||||||||
Diluted (1) | 96,391 | 74,487 |
(1) After effect of retrospective presentation of the Reorganization Transactions and Contribution Ratio
(2) Column may not add due to rounding
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollar amounts in thousands, except per share data)
ASSETS | |||||||||||||||
CURRENT ASSETS: | |||||||||||||||
Cash and cash equivalents | $ | 553,825 | $ | 377,604 | $ | 884,029 | |||||||||
Accounts receivable - less allowance for doubtful accounts of | 10,791 | 17,306 | 9,181 | ||||||||||||
Merchandise inventories, net | 1,115,020 | 990,034 | 899,086 | ||||||||||||
Prepaid expenses and other current assets | 39,050 | 28,313 | 30,495 | ||||||||||||
Assets held for sale | 1,763 | 1,763 | 1,763 | ||||||||||||
Total current assets | 1,720,449 | 1,415,020 | 1,824,554 | ||||||||||||
PROPERTY AND EQUIPMENT, NET | 362,784 | 378,260 | 396,559 | ||||||||||||
RIGHT-OF-USE ASSETS | 1,105,272 | 1,143,699 | 1,171,736 | ||||||||||||
577,000 | 577,000 | 577,000 | |||||||||||||
861,920 | 861,920 | 861,920 | |||||||||||||
OTHER NONCURRENT ASSETS | 6,602 | 8,583 | 11,079 | ||||||||||||
Total assets | $ | 4,634,027 | $ | 4,384,482 | $ | 4,842,848 | |||||||||
LIABILITIES AND STOCKHOLDERS' / PARTNERS' EQUITY | |||||||||||||||
CURRENT LIABILITIES: | |||||||||||||||
Accounts payable | $ | 816,427 | $ | 791,404 | $ | 726,666 | |||||||||
Accrued expenses and other current liabilities | 277,157 | 291,351 | 245,072 | ||||||||||||
Current lease liabilities | 84,981 | 80,338 | 76,485 | ||||||||||||
Current maturities of long-term debt | 3,000 | 4,000 | 18,250 | ||||||||||||
Total current liabilities | 1,181,565 | 1,167,093 | 1,066,473 | ||||||||||||
LONG-TERM DEBT, NET | 684,103 | 781,489 | 1,412,800 | ||||||||||||
LONG-TERM LEASE LIABILITIES | 1,107,709 | 1,150,088 | 1,181,819 | ||||||||||||
DEFERRED TAX LIABILITIES, NET | 185,765 | 138,703 | — | ||||||||||||
OTHER LONG-TERM LIABILITIES | 27,267 | 35,126 | 29,683 | ||||||||||||
Total liabilities | 3,186,409 | 3,272,499 | 3,690,775 | ||||||||||||
COMMITMENTS AND CONTINGENCIES | |||||||||||||||
REDEEMABLE MEMBERSHIP UNITS | — | — | 2,977 | ||||||||||||
STOCKHOLDERS' / PARTNERS' EQUITY (1): | |||||||||||||||
Preferred stock, | — | — | — | ||||||||||||
Partners' equity, membership units authorized, issued and outstanding were 72,478,106 as of | — | — | 1,157,435 | ||||||||||||
Common stock, | 929 | 911 | — | ||||||||||||
Additional paid-in capital | 187,746 | 127,228 | — | ||||||||||||
Retained earnings | 1,260,805 | 987,168 | — | ||||||||||||
Accumulated other comprehensive loss | (1,862 | ) | (3,324 | ) | (8,339 | ) | |||||||||
Stockholders' / partners' equity | 1,447,618 | 1,111,983 | 1,149,096 | ||||||||||||
Total liabilities and stockholders' / partners' equity | $ | 4,634,027 | $ | 4,384,482 | $ | 4,842,848 |
(1) After effect of retrospective presentation of the Reorganization Transactions and Contribution Ratio
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Amounts in thousands)
Twenty-Six Weeks Ended | ||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||
Net income | $ | 368,306 | $ | 157,656 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||
Depreciation and amortization | 51,308 | 54,151 | ||||||||
Non-cash lease expense | 691 | 14,049 | ||||||||
Equity compensation | 33,205 | 3,690 | ||||||||
Amortization of terminated interest rate swaps, deferred loan and other costs | 3,521 | 1,827 | ||||||||
Deferred income taxes | 46,628 | — | ||||||||
Non-cash (gain) loss on early retirement of debt, net | 2,239 | (7,831 | ) | |||||||
Casualty loss | — | 16 | ||||||||
Changes in assets and liabilities: | ||||||||||
Accounts receivable, net | 6,515 | 4,819 | ||||||||
Merchandise inventories, net | (124,986 | ) | 200,647 | |||||||
Prepaid expenses and other current assets | (10,737 | ) | (1,623 | ) | ||||||
Other noncurrent assets | 1,408 | (74 | ) | |||||||
Accounts payable | 22,958 | 302,391 | ||||||||
Accrued expenses and other current liabilities | 18,517 | 32,335 | ||||||||
Income taxes payable | (12,996 | ) | — | |||||||
Other long-term liabilities | (903 | ) | 11,568 | |||||||
Net cash provided by operating activities | 405,674 | 773,621 | ||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||
Capital expenditures | (33,767 | ) | (13,850 | ) | ||||||
Net cash used in investing activities | (33,767 | ) | (13,850 | ) | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||
Proceeds from ABL Facility | — | 500,000 | ||||||||
Repayment of ABL Facility | — | (500,000 | ) | |||||||
Repayment of Term Loan | (100,750 | ) | (25,090 | ) | ||||||
Debt issuance fees | (927 | ) | — | |||||||
Share-Based Award Payments | (11,214 | ) | — | |||||||
Proceeds from exercise of stock options | 31,678 | — | ||||||||
Proceeds from issuance of common stock under employee stock purchase program | 945 | — | ||||||||
Taxes paid related to net share settlement of equity awards | (15,418 | ) | — | |||||||
Repurchase of common stock for retirement | (100,000 | ) | — | |||||||
Repurchase of Redeemable Membership Units | — | (37 | ) | |||||||
Net cash used in financing activities | (195,686 | ) | (25,127 | ) | ||||||
NET INCREASE IN CASH AND CASH EQUIVALENTS | 176,221 | 734,644 | ||||||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 377,604 | 149,385 | ||||||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ | 553,825 | $ | 884,029 |
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, amortization and impairment, further adjusted to exclude consulting fees, private equity sponsor monitoring fees, equity compensation expense, (gain) loss on early extinguishment 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. We define “Adjusted EBIT” as net income (loss) before interest expense, net, and income tax expense, further adjusted to exclude consulting fees, private equity sponsor monitoring fees, equity compensation expense, (gain) loss on early extinguishment 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. We describe these adjustments reconciling net income (loss) to Adjusted EBITDA and Adjusted EBIT in the following table.
Thirteen Weeks Ended | Twenty-Six Weeks Ended | |||||||||||||||||||
Net income | $ | 190,510 | $ | 167,676 | $ | 368,306 | $ | 157,656 | ||||||||||||
Interest expense, net | 12,157 | 23,566 | 26,706 | 48,088 | ||||||||||||||||
Income tax expense | 50,387 | 1,005 | 97,513 | 1,518 | ||||||||||||||||
Depreciation and amortization | 26,010 | 26,704 | 51,308 | 54,151 | ||||||||||||||||
Consulting fees (a) | — | 36 | — | 92 | ||||||||||||||||
Private equity sponsor monitoring fee (b) | — | 920 | — | 1,840 | ||||||||||||||||
Equity compensation (c) | 27,331 | 1,581 | 33,205 | 3,690 | ||||||||||||||||
(Gain) Loss on early extinguishment of debt, net | 2,239 | (7,831 | ) | 2,239 | (7,831 | ) | ||||||||||||||
Severance and executive transition costs (d) | — | 3,909 | — | 4,137 | ||||||||||||||||
Costs related to the COVID-19 pandemic (e) | — | 10,987 | — | 17,632 | ||||||||||||||||
Payroll taxes associated with the 2021 Vesting Event (f) | 15,418 | — | 15,418 | — | ||||||||||||||||
Other (g) | 364 | 1,092 | 714 | 1,929 | ||||||||||||||||
Adjusted EBITDA | $ | 324,416 | $ | 229,645 | $ | 595,409 | $ | 282,902 | ||||||||||||
Less: Depreciation and amortization | (26,010 | ) | (26,704 | ) | (51,308 | ) | (54,151 | ) | ||||||||||||
Adjusted EBIT | $ | 298,406 | $ | 202,941 | $ | 544,101 | $ | 228,751 |
(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 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 thirteen and twenty-six weeks ended | ||||||||||||||||||||
(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 our distribution and the 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 extinguishment 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 retroactive tax effect of Adjusted Net Income at our estimated effective tax rate of approximately 25% for periods prior to
Thirteen Weeks Ended | Twenty-Six Weeks Ended | |||||||||||||||||||
Net income | $ | 190,510 | $ | 167,676 | $ | 368,306 | $ | 157,656 | ||||||||||||
Consulting fees (a) | — | 36 | — | 92 | ||||||||||||||||
Private equity sponsor monitoring fee (b) | — | 920 | — | 1,840 | ||||||||||||||||
Equity compensation (c) | 27,331 | 1,581 | 33,205 | 3,690 | ||||||||||||||||
(Gain) loss on early extinguishment of debt, net | 2,239 | (7,831 | ) | 2,239 | (7,831 | ) | ||||||||||||||
Severance and executive transition costs (d) | — | 3,909 | — | 4,137 | ||||||||||||||||
Costs related to the COVID-19 pandemic (e) | — | 10,987 | — | 17,632 | ||||||||||||||||
Payroll taxes associated with the 2021 Vesting Event (f) | 15,418 | — | 15,418 | — | ||||||||||||||||
Other (g) | 364 | 1,092 | 714 | 1,929 | ||||||||||||||||
Tax effects of these adjustments (h) | (11,312 | ) | (19 | ) | (12,801 | ) | (39 | ) | ||||||||||||
Adjusted Net Income | 224,550 | 178,351 | 407,081 | 179,106 | ||||||||||||||||
Estimated tax effect of change to C-Corporation status (i) | — | (43,947 | ) | — | (44,262 | ) | ||||||||||||||
Pro Forma Adjusted Net Income | $ | 224,550 | $ | 134,404 | $ | 407,081 | $ | 134,844 | ||||||||||||
Pro Forma Adjusted Earnings per Share | ||||||||||||||||||||
Basic | $ | 2.42 | $ | 1.85 | $ | 4.41 | $ | 1.86 | ||||||||||||
Diluted | $ | 2.34 | $ | 1.81 | $ | 4.22 | $ | 1.81 | ||||||||||||
Weighted average common shares outstanding | ||||||||||||||||||||
Basic (1) | 92,627 | 72,478 | 92,357 | 72,476 | ||||||||||||||||
Diluted (1) | 95,891 | 74,439 | 96,391 | 74,487 |
(1) | After effect of retrospective presentation of the Reorganization Transactions and Contribution Ratio | ||||||||||||||||||||
(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 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 thirteen and twenty-six weeks ended | ||||||||||||||||||||
(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) | For the thirteen and twenty-six weeks ended | ||||||||||||||||||||
(i) | Represents the retrospective tax effect of Adjusted Net Income at our estimated effective tax rate of approximately 25% for periods prior to | ||||||||||||||||||||
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 | Twenty-Six Weeks Ended | |||||||||||||||||||
Net cash provided by operating activities | $ | 186,446 | $ | 682,865 | $ | 405,674 | $ | 773,621 | ||||||||||||
Net cash used in investing activities | (16,959 | ) | (3,924 | ) | (33,767 | ) | (13,850 | ) | ||||||||||||
Adjusted Free Cash Flow | $ | 169,487 | $ | 678,941 | $ | 371,907 | $ | 759,771 |
Source:
2021 GlobeNewswire, Inc., source