UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 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 July ~~31, 2021~~30, 2022

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 001-36401

SPORTSMAN’S WAREHOUSE HOLDINGS, INC.

(Exact Name of Registrant as Specified in its Charter)

Delaware		39-1975614
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

1475 West 9000 South, Suite A, West Jordan, Utah		84088
(Address of principal executive offices)		(Zip code)

Registrant’s telephone number, including area code: (801) 566-6681


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, $.01 par value	SPWH	The 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	☐	~~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 September ~~8, 2021,~~2, 2022, the registrant had ~~43,872,265~~38,868,040 shares of common stock, $0.01 par value per share, outstanding.

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SPORTSMAN’S WAREHOUSE HOLDINGS, INC.

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		Page

PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements (unaudited):	4

	Condensed Consolidated Balance Sheets	4

	Condensed Consolidated Statements of Operations	5

	Condensed Consolidated Statements of Stockholders’ Equity	6

	Condensed Consolidated Statements of Cash Flows	7

	Notes to Condensed Consolidated Financial Statements	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	28

Item 4.	Controls and Procedures	2928

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	3029

Item 1A.	Risk Factors	3029

Item 5.2.	~~Other Information~~Unregistered Sales of Equity Securities and Use of Proceeds	30

Item 6.	Exhibits	31

	Signatures	32

We operate on a fiscal calendar that, in a given fiscal year, consists of the 52- or 53-week period ending on the Saturday closest to January 31st. Our second fiscal ~~second~~ quarters ended July 30, 2022 and July 31, 2021 ~~and August 1, 2020~~ both consisted of 13 weeks and are referred to herein as the second quarter of fiscal year ~~2021~~2022 and the second quarter of fiscal year ~~2020,~~2021 respectively. Fiscal year ~~2021~~2022 contains 52 weeks of operations and will end on January ~~29, 2022.~~28, 2023. Fiscal year ~~2020~~2021 contained 52 weeks of operations and ended on January ~~30, 2021.~~29, 2022.

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References throughout this document to “Sportsman’s Warehouse,” “we,” “us,” and “our” refer to Sportsman’s Warehouse Holdings, Inc. and its subsidiaries, and references to “Holdings” refer to Sportsman’s Warehouse Holdings, Inc. excluding its subsidiaries.

STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (this “10-Q”) contains statements that constitute forward-looking statements as that term is defined by the Private Securities Litigation Reform Act of 1995. These statements concern our business, operations and financial performance and condition as well as our plans, objectives and expectations for our business operations and financial performance and condition, which are subject to risks and uncertainties. All statements other than statements of historical fact included in this 10-Q are forward-looking statements. These statements may include words such as “aim,” “anticipate,” “assume,” “believe,” “can have,” “could,” “due,” “estimate,” “expect,” “goal,” “intend,” “likely,” “may,” “objective,” “plan,” “positioned,” “potential,” “predict,” “should,” “target,” “will,” “would” and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events or trends. For example, all statements we make relating to our plans and objectives for future operations, growth or initiatives and strategies are forward-looking statements.~~The forward-looking statements also include assumptions about our proposed merger with Great Outdoors Group, LLC (“Great Outdoors Group”), a subsidiary of Great American Outdoors Group.~~

These forward-looking statements are based on current expectations, estimates, forecasts and projections about our business and the industry in which we operate and our management’s beliefs and assumptions. We derive many of our forward-looking statements from our own operating budgets and forecasts, which are based upon many detailed assumptions. While we believe that our assumptions are reasonable, we caution that predicting the impact of known factors is very difficult, and we cannot anticipate all factors that could affect our actual results.

All of our forward-looking statements are subject to risks and uncertainties that may cause our actual results to differ materially from our expectations. Important factors that could cause actual results to differ materially from our expectations include, but are not limited to:

●

the potential impact of, and any potential developments related to, the pending merger with Great Outdoors Group, including the risk that the conditions to the consummation of the merger are not satisfied or waived, litigation challenging the merger, the impact on our stock price, business, financial condition and results of operations if the merger is not consummated, and the potential negative impact to our business and employee relationships due to the merger;

●

current and future government regulations, in particular regulations relating to the sale of firearms and ammunition, which may impact the supply and demand for our products and our ability to conduct our business;

●

~~the impact of COVID-19 pandemic and measures intended to reduce its spread on our operations~~;

●

our retail-based business model which is impacted by general economic and market conditions and economic, market and financial uncertainties that may cause a decline in consumer spending;

●

our concentration of stores in the Western United States which makes us susceptible to adverse conditions in this region, and could affect our sales and cause our operating results to suffer;

●

the highly fragmented and competitive industry in which we operate and the potential for increased competition;

●

changes in consumer demands, including regional preferences, which we may not be able to identify and respond to in a timely manner; ~~and~~

●

our entrance into new markets or operations in existing markets, which may not be ~~successful.~~successful; and

●

the impact of COVID-19 pandemic on our operations.

The above is not a complete list of factors or events that could cause actual results to differ from our expectations, and we cannot predict all of them. All written and oral forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by the cautionary statements disclosed under “Part I. Item 1A. Risk Factors,” appearing in our Annual Report on Form 10-K for the fiscal year ended January ~~30, 2021~~29, 2022 and “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this 10-Q, as such disclosures may be amended, supplemented or superseded from time to time by other reports we file with the

~~Table of Contents~~

Securities and Exchange Commission, including subsequent Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, and public communications. You should evaluate all forward-looking statements made in this 10-Q and otherwise in the context of these risks and uncertainties.

Potential investors and other readers are urged to consider these factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on any forward-looking statements we make. These forward-looking statements speak only as of the date of this 10-Q and are not guarantees of future performance or developments

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and involve known and unknown risks, uncertainties and other factors that are in many cases beyond our control. Except as required by law, we undertake no obligation to update or revise any forward-looking statements publicly, whether as a result of new information, future developments or otherwise.

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

SPORTSMAN’S WAREHOUSE HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

Amounts in Thousands, Except Per Share Data

(unaudited)


	July 31,		January 30,		July 30,		January 29,
	2021		2021		2022		2022
Assets
Current assets:
Cash	$	2,620	$	65,525
Cash and cash equivalents					$	6,018	$	57,018
Accounts receivable, net		616		581		1,911		1,937
Merchandise inventories		378,353		243,434		437,382		386,560
Prepaid expenses and other		12,373		15,113		20,855		21,955
Total current assets		393,962		324,653		466,166		467,470
Operating lease right of use asset		251,684		235,262		250,936		243,047
Property and equipment, net		109,592		99,118		137,152		128,304
Goodwill		1,496		1,496		1,496		1,496
Definite lived intangibles, net		270		289		419		264
Total assets	$	757,004	$	660,818	$	856,169	$	840,581

Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	114,138	$	77,441	$	98,845	$	58,916
Accrued expenses		112,853		109,056		91,040		109,012
Income taxes payable		2,251		4,917		4,852		9,500
Operating lease liability, current		38,741		36,014		42,195		40,924
Revolving line of credit		20,191		—		90,780		66,054
Total current liabilities		288,174		227,428		327,712		284,406
Long-term liabilities:
Long-term debt, net of discount, debt issuance costs, and current portion		—		—
Deferred income taxes		196		434		5,009		5,779
Operating lease liability, noncurrent		236,027		228,296		243,596		236,227
Total long-term liabilities		236,223		228,730		248,605		242,006
Total liabilities		524,397		456,158		576,317		526,412

Commitments and contingencies
Stockholders' equity:
Preferred stock, $.01 par value; 20,000 shares authorized; 0 shares issued and outstanding		—		—		—		—
Common stock, $.01 par value; 100,000 shares authorized; 43,831 and 43,623 shares issued and outstanding, respectively		438		436
Common stock, $.01 par value; 100,000 shares authorized; 44,215 issued and 38,867 outstanding on July 30, 2022 and 43,880 shares issued and outstanding on January 29, 2022						442		439
Treasury stock, at cost; 5,348 and 0 shares, respectively						(52,057)		—
Additional paid-in capital		89,587		89,815		91,976		90,851
Accumulated earnings		142,582		114,409		239,491		222,879
Total stockholders' equity		232,607		204,660		279,852		314,169
Total liabilities and stockholders' equity	$	757,004	$	660,818	$	856,169	$	840,581

The accompanying notes are an integral part of these condensed consolidated financial statements.

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SPORTSMAN'S WAREHOUSE HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Amounts in Thousands Except Per Share Data

(unaudited)


	Thirteen Weeks Ended				Twenty-Six Weeks Ended				Thirteen Weeks Ended				Twenty-Six Weeks Ended
	July 31,		August 1,		July 31,		August 1,		July 30,		July 31,		July 30,		July 31,
	2021		2020		2021		2020		2022		2021		2022		2021
Net sales	$	361,778	$	380,989	$	688,770	$	627,824	$	351,021	$	361,778	$	660,526	$	688,770
Cost of goods sold		241,724		251,896		464,669		423,957		233,482		241,724		443,896		464,669
Gross profit		120,054		129,093		224,101		203,867		117,539		120,054		216,630		224,101

Selling, general, and administrative expenses		95,870		83,606		186,289		158,825		97,023		95,870		193,108		186,289
Income from operations		24,184		45,487		37,812		45,042		20,516		24,184		23,522		37,812
Interest expense		266		1,017		492		2,551		767		266		1,334		492
Income before income taxes		23,918		44,470		37,320		42,491		19,749		23,918		22,188		37,320
Income tax expense		6,195		12,009		9,147		11,160		5,135		6,195		5,576		9,147
Net income	$	17,723	$	32,461	$	28,173	$	31,331	$	14,614	$	17,723	$	16,612	$	28,173
Earnings per share:
Basic	$	0.40	$	0.75	$	0.64	$	0.72	$	0.35	$	0.40	$	0.39	$	0.64
Diluted	$	0.40	$	0.73	$	0.63	$	0.71	$	0.35	$	0.40	$	0.38	$	0.63
Weighted average shares outstanding:
Basic		43,860		43,537		43,775		43,430		41,962		43,860		42,950		43,775
Diluted		44,716		44,368		44,600		44,098		42,194		44,716		43,180		44,600

The accompanying notes are an integral part of these condensed consolidated financial statements.

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SPORTSMAN'S WAREHOUSE HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

Amounts in Thousands

(unaudited)

For the Thirteen Weeks Ended July 31, 2021 and August 1, 2020

Common Stock

Restricted nonvoting
Common Stock

Additional
paid-in-
capital

Accumulated
(deficit) earnings

Total
stockholders'
equity


Shares

Amount

Shares

Amount

Amount

Amount

Amount

Balance at May 2, 2020

43,551

$
436

—

$
—

$
86,850

$
21,899

$
109,185
Issuance of common stock for cash per employee stock purchase plan

40

—

—

—

273

—

273
Stock based compensation

—

—

—

—

818

—

818
Net loss

—

—

—

—

—

32,461

32,461
Balance at August 1, 2020

43,591

$
436

—

$
—

$
87,941

$
54,360

$
142,737

Balance at May 1, 2021

43,831

$
438

—

$
—

$
88,560

$
124,859

$
213,857
Stock based compensation

—

—

—

—

1,027

—

1,027
Net income

—

—

—

—

—

17,723

17,723
Balance at July 31, 2021

43,831

$
438

—

$
—

$
89,587

$
142,582

$
232,607

For the Twenty-Six Weeks Ended July 31, 2021 and August 1, 2020

Common Stock

Restricted nonvoting
common stock

Additional
paid-in-
capital

Accumulated
(deficit) earnings

Total
stockholders'
equity


Shares

Amount

Shares

Amount

Amount

Amount

Amount

Balance at February 1, 2020

43,296

$
433

—

$
—

$
86,806

$
23,029

$
110,268
Vesting of restricted stock units

255

3

—

—

(3)

—

—
Payment of withholdings on restricted stock units

—

—

—

—

(689)

—

(689)
Issuance of common stock for cash per employee stock purchase plan

40

—

—

—

273

—

273
Stock based compensation

—

—

—

—

1,554

—

1,554
Net income

—

—

—

—

—

31,331

31,331
Balance at August 1, 2020

43,591

$
436

—

$
—

$
87,941

$
54,360

$
142,737

Balance at January 30, 2021

43,623

$
436

—

$
—

$
89,815

$
114,409

$
204,660
Vesting of restricted stock units

208

2

—

—

(2)

—

—
Payment of withholdings on restricted stock units

—

—

—

—

(2,269)

—

(2,269)
Stock based compensation

—

—

—

—

2,043

—

2,043
Net income

—

—

—

—

—

28,173

28,173
Balance at July 31, 2021

43,831

$
438

—

$
—

$
89,587

$
142,582

$
232,607

The accompanying notes are an integral part of these condensed consolidated financial statements


For the Thirteen Weeks Ended July 30, 2022 and July 31, 2021
	Common Stock			Restricted nonvoting Common Stock			Treasury Stock			Additional paid-in- capital		Accumulated (deficit) earnings		Total stockholders' equity
	Shares	Amount		Shares	Amount		Shares	Amount		Amount		Amount		Amount

Balance at May 1, 2021	43,831	$	438	—	$	—	—	$	—	$	88,560	$	124,859	$	213,857
Stock based compensation	—		—	—		—	—		—		1,027		—		1,027
Net Income	—		—	—		—	—		—		—		17,723		17,723
Balance at July 31, 2021	43,831	$	438	—	$	—	—	$	—	$	89,587	$	142,582	$	232,607

Balance at April 30, 2022	44,121	$	441	—	$	—	—	$	—	$	90,362	$	224,877	$	315,680
Repurchase of treasury stock	—		—	—		—	5,348		(52,057)		—		—		(52,057)
Vesting of restricted stock units	30		—	—		—	—		—		—		—		—
Payment of withholdings on restricted stock units	—		—	—		—	—		—		(2)		—		(2)
Issuance of common stock for cash per employee stock purchase plan	64		1	—		—	—		—		525		—		526
Stock based compensation	—		—	—		—	—		—		1,091		—		1,091
Net income	—		—	—		—	—		—		—		14,614		14,614
Balance at July 30, 2022	44,215	$	442	—	$	—	5,348	$	(52,057)	$	91,976	$	239,491	$	279,852


For the Twenty-Six Weeks Ended July 30, 2022 and July 31, 2021
	Common Stock			Restricted nonvoting common stock			Treasury Stock			Additional paid-in- capital		Accumulated (deficit) earnings		Total stockholders' equity
	Shares	Amount		Shares	Amount		Shares	Amount		Amount		Amount		Amount

Balance at January 30, 2021	43,623	$	436	—	$	—	—	$	—	$	89,815	$	114,409	$	204,660
Vesting of restricted stock units	208		2	—		—	—		—		(2)		—		—
Payment of withholdings on restricted stock units	—		—	—		—	—		—		(2,269)		—		(2,269)
Stock based compensation	—		—	—		—	—		—		2,043		—		2,043
Net income	—		—	—		—	—		—		—		28,173		28,173
Balance at July 31, 2021	43,831	$	438	—	$	—	—	$	—	$	89,587	$	142,582	$	232,607

Balance at January 29, 2022	43,880	$	439	—	$	—	—	$	—	$	90,851	$	222,879	$	314,169
Repurchase of treasury stock	—		—	—		—	5,348		(52,057)		—		—		(52,057)
Vesting of restricted stock units	271		2	—		—	—		—		(2)		—		—
Payment of withholdings on restricted stock units	—		—	—		—	—		—		(1,847)		—		(1,847)
Issuance of common stock for cash per employee stock purchase plan	64		1	—		—	—		—		525		—		526
Stock based compensation	—		—	—		—	—		—		2,449		—		2,449
Net income	—		—	—		—	—		—		—		16,612		16,612
Balance at July 30, 2022	44,215	$	442	—	$	—	5,348	$	(52,057)	$	91,976	$	239,491	$	279,852
The accompanying notes are an integral part of these condensed consolidated financial statements

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SPORTSMAN'S WAREHOUSE HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Amounts in Thousands

(unaudited)


	Twenty-Six Weeks Ended				Twenty-Six Weeks Ended
	July 31,		August 1,		July 30,		July 31,
	2021		2020		2022		2021
Cash flows from operating activities:
Net income	$	28,173	$	31,331	$	16,612	$	28,173
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation of property and equipment		12,116		10,670		15,137		12,116
Amortization of deferred financing fees		126		311		108		126
Amortization of definite lived intangible		20		10		36		20
Loss on asset dispositions		—		803
Noncash lease expense		7,962		13,787		16,027		7,962
Deferred income taxes		(238)		2,908		(770)		(238)
Stock-based compensation		2,043		1,554		2,449		2,043
Change in operating assets and liabilities, net of amounts acquired:
Accounts receivable, net		(35)		353		26		(35)
Operating lease liabilities		(13,926)		(15,807)		(15,276)		(13,926)
Merchandise inventories		(134,919)		(16,943)		(50,822)		(134,919)
Prepaid expenses and other		2,614		(3,863)		1,500		2,614
Accounts payable		32,351		87,665		38,269		32,351
Accrued expenses		(1,403)		24,866		(10,681)		(1,403)
Income taxes payable and receivable		(2,666)		8,103		(4,648)		(2,666)
Net cash (used in) provided by operating activities		(67,782)		145,748
Net cash provided by (used in) operating activities						7,967		(67,782)
Cash flows from investing activities:
Purchase of property and equipment, net of amounts acquired		(17,936)		(8,579)		(22,588)		(17,936)
Acquisition of Field and Stream stores, net of cash acquired		—		(3,444)
Net cash used in investing activities		(17,936)		(12,023)		(22,588)		(17,936)
Cash flows from financing activities:
Net borrowings/ (payments) on line of credit		20,191		(113,220)
Increase in book overdraft, net		4,891		4,512
Net borrowings on line of credit						24,726		20,191
(Decrease) increase in book overdraft, net						(7,221)		4,891
Proceeds from issuance of common stock per employee stock purchase plan		—		273		525		—
Payments to acquire treasury stock						(52,057)		—
Payment of withholdings on restricted stock units		(2,269)		(687)		(1,844)		(2,269)
Principal payments on long-term debt		—		(14,000)
Net cash provided by (used in) financing activities		22,813		(123,122)
Net change in cash		(62,905)		10,603
Cash at beginning of period		65,525		1,685
Cash at end of period	$	2,620	$	12,288
Payment of deferred financing costs						(508)		—
Net cash (used in) provided by financing activities						(36,379)		22,813
Net change in cash and cash equivalents						(51,000)		(62,905)
Cash and cash equivalents at beginning of period						57,018		65,525
Cash and cash equivalents at end of period					$	6,018	$	2,620

Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest, net of amounts capitalized	$	492	$	2,535	$	1,220	$	492
Income taxes, net of refunds		12,051		149		10,993		12,051

Supplemental schedule of noncash activities:
Noncash change in operating lease right of use asset and operating lease liabilities from	$	24,443	$	11,773	$	23,972	$	24,443
remeasurement of existing leases and addition of new leases
Purchases of property and equipment included in accounts payable and accrued expenses	$	6,541	$	1,531	$	5,409	$	6,541
Payable to seller relating to acquisition of Field and Stream stores	$	—	$	1,077

The accompanying notes are an integral part of these condensed consolidated financial statements.

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SPORTSMAN’S WAREHOUSE HOLDINGS, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

Amounts reported in thousands, except per share data and store count data

(1) Description of Business and Basis of Presentation

Description of Business

Sportsman’s Warehouse Holdings, Inc., a Delaware corporation (“Holdings”), and its subsidiaries (collectively, the “Company”) operate retail sporting goods stores. As of July ~~31, 2021,~~30, 2022, the Company operated ~~114~~126 stores in 2829 states. The Company also operates an e-commerce platform at www.sportsmans.com. The Company’s stores and website are aggregated into 1one operating and reportable segment.

Basis of Presentation

The condensed consolidated financial statements included herein are unaudited and have been prepared by management of the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted pursuant to such rules and regulations. The Company’s condensed consolidated balance sheet as of January ~~30, 2021~~29, 2022 was derived from the Company’s audited consolidated balance sheet as of that date. All other condensed consolidated financial statements contained herein are unaudited and reflect all adjustments that are, in the opinion of management, necessary to summarize fairly our condensed consolidated financial statements for the periods presented. All of these adjustments are of a normal recurring nature. The results of the fiscal quarter ended July ~~31, 2021~~30, 2022 are not necessarily indicative of the results to be obtained for the year ending January ~~29, 2022.~~28, 2023. These condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended January ~~30, 2021~~29, 2022 filed with the SEC on ~~April 2, 2021~~March 30, 2022 (the “Fiscal ~~2020~~2021 Form 10-K”).

~~Impact of COVID-19 Pandemic~~

During March 2020, the World Health Organization declared the rapidly growing coronavirus outbreak to be a global pandemic. The COVID-19 pandemic has significantly impacted health and economic conditions throughout the United States. Beginning in March 2020, the Company reduced store hours to allow sufficient time to restock its shelves and perform additional cleaning, and the Company also limited the number of customers in its stores at any one time. During the second quarter of fiscal 2020, the Company returned to normal operating hours in each of its stores and continues to operate normally as of the end of the second quarter of fiscal 2021. The Company may again restrict the operations of its stores and its distribution facility if it deems this appropriate or if recommended or mandated by authorities.

(2) Summary of Significant Accounting Policies

The Company’s significant accounting policies are described in Note 2 to the Company’s Fiscal ~~2020~~2021 Form 10-K. Except for the changes below, the Company has consistently applied the accounting policies to all periods presented in these condensed consolidated financial statements.

Recently Issued Accounting Pronouncements

In March 2020, the ~~Financial Accounting Standards Board~~FASB issued ~~Accounting Standards Update (“ASU”)~~(ASU) 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. This ASU provides temporary optional expedients and exceptions to existing guidance on contract modifications and hedge accounting to facilitate the market transition from existing reference rates, such as the London

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Inter-Bank Offered Rate (“LIBOR”), certain tenors of which ~~are being~~were phased out in 2021, to alternate reference rates, such as the Secured Overnight Financing Rate.

The standard is currently effective and upon adoption may be applied prospectively to contract modifications made on or before December 31, 2022. The provisions have impact as contract modifications and other changes occur while LIBOR is phased out. The Company is in the process of evaluating the optional relief guidance provided within this ASU. Management will continue its assessment and monitor regulatory developments during the LIBOR transition period.

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(3) Revenue Recognition

Revenue recognition accounting policy

The Company operates solely as an outdoor retailer, which includes both retail stores and an e-commerce platform, that offers a broad range of products in the United States and online. Generally, all revenues are recognized when control of the promised goods is transferred to customers, in an amount that reflects the consideration in exchange for those goods. Accordingly, the Company implicitly enters into a contract with customers to deliver merchandise inventory at the point of sale. Collectability is reasonably assured since the Company only extends credit for immaterial purchases to certain municipalities.

Substantially all of the Company’s revenue is for single performance obligations for the following distinct items:

●

Retail store sales

●

E-commerce sales

●

Gift cards and loyalty ~~reward~~rewards program

For performance obligations related to retail store and e-commerce sales contracts, the Company typically transfers control, for retail stores, upon consummation of the sale when the product is paid for and taken by the customer and, for e-commerce sales, when the products are tendered for delivery to the common carrier.

The transaction price for each contract is the stated price on the product, reduced by any stated discounts at that point in time. The Company does not engage in sales of products that attach a future material right ~~and~~which could result in a separate performance obligation for the purchase of goods in the future at a material discount. The implicit point-of-sale contract with the customer, as reflected in the transaction receipt, states the final terms of the sale, including the description, quantity, and price of each product purchased. Payment for the Company’s contracts is due in full upon delivery. The customer agrees to a stated price implicit in the contract that does not vary over the contract.

The transaction price relative to sales subject to a right of return reflects the amount of estimated consideration to which the Company expects to be entitled. This amount of variable consideration included in the transaction price, and measurement of net sales, is included in net sales only to the extent that it is probable that there will be no significant reversal in a future period. Actual amounts of consideration ultimately received may differ from the Company’s estimates. The allowance for sales returns is estimated based upon historical experience and a provision for estimated returns is recorded as a reduction in sales in the relevant period. The estimated merchandise inventory cost related to the sales returns is recorded in prepaid expenses and other. The estimated refund liabilities are recorded in accrued expenses. If actual results in the future vary from the Company’s estimates, the Company adjusts these estimates, which would affect net sales and earnings in the period such variances become known.

Contract liabilities are recognized primarily for gift card sales and ~~our~~the Company’s loyalty reward program. Cash received from the sale of gift cards is recorded as a contract liability in accrued expenses, and the Company recognizes revenue upon the customer’s redemption of the gift card. Gift card breakage is recognized as revenue in proportion to the pattern of customer redemptions by applying a historical breakage rate of ~~3.5%~~4.0% when 0no escheat liability to relevant jurisdictions ~~exists.~~exist. Based upon historical experience, gift cards are predominantly redeemed in the first two years following their issuance date. The Company does not sell or provide gift cards that carry expiration dates.

Accounting Standards Codification (“ASC”) 606 requires the Company to allocate the transaction price between the goods and the loyalty reward points based on the relative ~~stand alone~~standalone selling price. The Company recognized revenue for

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the breakage of loyalty reward points as revenue in proportion to the pattern of customer redemption of the points by applying a historical breakage rate of ~~50% when 0 escheat liability to relevant jurisdictions exists.~~25%.

~~We offer~~As it relates to e-commerce sales, the Company accounts for shipping and handling as fulfillment activities, and not as separate performance obligation. Accordingly, the Company recognizes revenue for only one performance obligation, the sale of the product, at the shipping point (when the customer gains control). The costs associated with fulfillment are recorded in costs of goods sold.

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The Company offers promotional financing and credit cards issued by a third-party bank that manages and directly extends credit to ~~our~~the Company’s customers. ~~We provide~~The Company provides a license to ~~our~~its brand and marketing services, and ~~we facilitate~~the Company facilitates credit applications in ~~our~~its stores and online. The banks are the sole owners of the accounts receivable generated under the program and, accordingly, ~~we do~~the Company does not hold any customer receivables related to these programs and ~~act~~acts as an agent in the financing transactions with customers. ~~We are~~The Company is eligible to receive a profit share from certain of ~~our~~its banking partners based on the annual performance of their corresponding portfolio, and ~~we receive~~the Company receives monthly payments based on forecasts of full-year performance. This is a form of variable consideration. ~~We record~~The Company records such profit share as revenue over time using the most likely amount method, which reflects the amount earned each month when it is determined that the likelihood of a significant revenue reversal is not probable, which is typically monthly. Profit-share payments occur monthly, shortly after the end of each program month.

Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a customer, are excluded from revenue.

Sales returns

The Company allows customers to return items purchased within 30 days provided the merchandise is in resaleable condition with original packaging and the original sales/gift receipt is presented. The Company estimates a reserve for sales returns and records the respective reserve amounts, including a right to return asset when a product is expected to be returned and resold. Historical experience of actual returns and customer return rights are the key factors used in determining the estimated sales returns.

Contract balances

The following table provides information about right of return assets, contract liabilities, and sales return liabilities with customers as of July ~~31, 2021~~30, 2022 and January ~~30, 2021:~~29, 2022:


	July 31, 2021		January 30, 2021		July 30, 2022		January 29, 2022
Right of return assets, which are included in prepaid expenses and other	$	2,404	$	2,940	$	2,438	$	2,142
Estimated gift card contract liability, net of breakage		(16,201)		(22,069)		(20,551)		(23,128)
Estimated loyalty contract liability, net of breakage		(13,242)		(12,131)		(5,400)		(7,211)
Sales return liabilities, which are included in accrued expenses		(3,588)		(4,388)		(3,639)		(3,197)

For the 13 and 26 weeks ended July 30, 2022, the Company recognized approximately $351 and $785 in gift card breakage and approximately $991 and $1,595 in loyalty reward breakage. For the 13 and 26 weeks ended July 31, 2021, the Company recognized approximately $292 and $673 in gift card breakage respectively and approximately $1,446 and $2,621 in loyalty reward breakage, respectively. For the 13 and 26 weeks ended August 1, 2020, the Company recognized approximately $246 and $522 in gift card breakage, respectively and approximately $773 and $1,328 in loyalty reward ~~breakage, respectively.~~breakage. For the 13 and 26 weeks ended July ~~31, 2021,~~30, 2022, the Company recognized revenue of ~~$2,154~~$4,796 and ~~$9,876, respectively,~~$15,383 relating to contract liabilities that existed at January ~~30, 2021.~~29, 2022.

The current balance of the right of return assets is the expected amount of inventory to be returned that is expected to be resold. The current balance of the contract liabilities primarily relates to the gift card and loyalty reward program liabilities. The Company expects the revenue associated with these liabilities to be recognized in proportion to the pattern of customer redemptions over the next two years. The current balance of sales return liabilities is the expected amount of sales returns from sales that have occurred.

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Disaggregation of revenue from contracts with customers

In the following table, revenue from contracts with customers is disaggregated by department. The percentage of net sales related to the Company’s departments for the 13 and 26 weeks ended July 30, 2022 and July 31, 2021, ~~and August 1, 2020,~~ was approximately:


		Thirteen Weeks Ended		Twenty-Six Weeks Ended			Thirteen Weeks Ended		Twenty-Six Weeks Ended
		July 31,	August 1,	July 31,	August 1,		July 30,	July 31,	July 30,	July 31,
Department	Product Offerings	2021	2020	2021	2020	Product Offerings	2022	2021	2022	2021
Camping	Backpacks, camp essentials, canoes and kayaks, coolers, outdoor cooking equipment, sleeping bags, tents and tools	17.8%	17.1%	14.7%	14.4%	Backpacks, camp essentials, canoes and kayaks, coolers, outdoor cooking equipment, sleeping bags, tents and tools	16.9%	17.8%	14.0%	14.7%
Apparel	Camouflage, jackets, hats, outerwear, sportswear, technical gear and work wear	6.6%	5.6%	6.5%	5.1%	Camouflage, jackets, hats, outerwear, sportswear, technical gear and work wear	7.1%	6.6%	7.0%	6.5%
Fishing	Bait, electronics, fishing rods, flotation items, fly fishing, lines, lures, reels, tackle and small boats	15.1%	15.9%	13.4%	13.7%	Bait, electronics, fishing rods, flotation items, fly fishing, lines, lures, reels, tackle and small boats	13.4%	15.1%	12.0%	13.4%
Footwear	Hiking boots, socks, sport sandals, technical footwear, trail shoes, casual shoes, waders and work boots	6.6%	5.7%	6.4%	5.2%	Hiking boots, socks, sport sandals, technical footwear, trail shoes, casual shoes, waders and work boots	6.7%	6.6%	6.5%	6.4%
Hunting and Shooting	Ammunition, archery items, ATV accessories, blinds and tree stands, decoys, firearms, reloading equipment and shooting gear	48.1%	49.1%	53.1%	55.6%	Ammunition, archery items, ATV accessories, blinds and tree stands, decoys, firearms, reloading equipment and shooting gear	50.5%	48.1%	55.1%	53.1%
Optics, Electronics, Accessories, and Other	Gift items, GPS devices, knives, lighting, optics, two-way radios, and other license revenue, net of revenue discounts	5.8%	6.6%	5.9%	6.0%	Gift items, GPS devices, knives, lighting, optics, two-way radios, and other license revenue, net of revenue discounts	5.4%	5.8%	5.4%	5.9%
Total		100.0%	100.0%	100.0%	100.0%		100.0%	100.0%	100.0%	100.0%

(4) Property and Equipment

Property and equipment as of July ~~31, 2021~~30, 2022 and January ~~30, 2021~~29, 2022 were as follows:


	July 31,		January 30,		July 30,		January 29,
	2021		2021		2022		2022
Furniture, fixtures, and equipment	$	103,846	$	96,085	$	122,815	$	115,597
Leasehold improvements		116,647		112,338		150,385		143,064
Construction in progress		11,412		2,614		14,131		5,007
Total property and equipment, gross		231,905		211,037		287,331		263,668
Less accumulated depreciation and amortization		(122,313)		(111,919)		(150,179)		(135,364)
Total property and equipment, net	$	109,592	$	99,118	$	137,152	$	128,304

(5) Accrued Expenses

Accrued expenses consisted of the following as of July ~~31, 2021~~30, 2022 and January ~~30, 2021:~~29, 2022:


	July 31,		January 30,		July 30,		January 29,
	2021		2021		2022		2022
Book overdraft	$	18,337	$	13,445	$	9,031	$	16,252
Unearned revenue		36,109		38,454		37,902		42,058
Accrued payroll and related expenses		23,696		28,453		18,135		26,309
Sales and use tax payable		7,715		7,317		7,058		8,788
Accrued construction costs		647		339		344		416
Other		26,349		21,048		18,570		15,189
Total accrued expenses	$	112,853	$	109,056	$	91,040	$	109,012

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(6) Leases

At the inception of the lease, the Company’s operating leases have remaining certain lease terms of up to 1315 years, which typically includes multiple options for the Company to extend the lease which are not reasonably ~~certain and as such are excluded from the measurement of the right of use asset and liability.~~certain.

The Company determines whether a contract is or contains a lease at contract inception. As the rate implicit in the lease is not readily determinable in most of the Company’s leases, itthe Company uses its incremental borrowing rate based on the information available at commencement date to determine the present value of lease payments. The Company's incremental borrowing rate for a lease is the rate of interest it would have to pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms. The operating lease asset also includes any fixed lease payments made and includes lease incentives and incurred initial direct costs. Operating lease expense for fixed lease payments is recognized on a straight-line basis over the lease term. The Company’s lease terms may include options to extend or terminate the lease. Additionally, the Company’s leases do not contain any material residual guarantees or material restrictive covenants.

In the 13 and 26 weeks ended July ~~31, 2021,~~30, 2022, the Company recorded a non-cash increase of ~~$18,884~~$17,594 and ~~$24,443~~$23,972~~, respectively,~~ to the right of use assets and operating lease liabilities resulting from lease remeasurements from the exercise of lease extension options, acquired leases, and new leases added.

The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

In accordance with ASC 842, total lease expense ~~including common area maintenance (“CAM”), recorded during~~was comprised of the 13 and 26 weeks ended July 31, 2021 was $18,342 and $36,739, respectively. In accordance with ASC 842, total lease expense, including CAM, recorded during the 13 and 26 weeks ended August 1, 2020 was $16,655 and $33,202, respectively.following:



	Thirteen Weeks Ended				Twenty-Six Weeks Ended
	July 30,		July 31,		July 30,		July 31,
	2022		2021		2022		2021
Operating lease expense	$	14,550	$	13,836	$	28,945	$	27,702
Variable lease expense		4,760		4,282		9,062		8,557
Short-term lease expense		314		223		584		480
Total lease expense	$	19,624	$	18,341	$	38,591	$	36,739

In accordance with ASC 842, other information related to leases was as follows:


	Twenty-Six Weeks Ended				Twenty-Six Weeks Ended
	July 31,		August 1,		July 30,		July 31,
	2021		2020		2022		2021
Operating cash flows from operating leases	$	(29,209)	$	(27,313)	$	(31,351)	$	(29,209)
Cash paid for amounts included in the measurement of lease liabilities - operating leases		(29,209)		(27,313)
Cash paid for lease liabilities - operating leases						(31,351)		(29,209)

	As of July 31,		As of August 1,		As of July 30,		As of July 31,
	2021		2020		2022		2021

Right-of-use assets obtained in exchange for new or remeasured operating lease liabilities	$	24,443	$	13,062	$	23,972	$	24,443
Terminated right-of-use assets and liabilities		—		(3,202)		—		—
Weighted-average remaining lease term - operating leases		6		6.02		5.75		6
Weighted-average discount rate - operating leases		8.33%		8.09%		8.16%		8.33%

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In accordance with ASC 842, maturities of operating lease liabilities as of July ~~31, 2021~~30, 2022 were as follows:


		Operating			Operating
Year Endings:	Year Endings:	Leases		Year Endings:	Leases
2021 (remainder)		$	30,381
2022			61,187
2022 (remainder)						32,389
2023			56,003			62,579
2024			47,582			54,350
2025			41,021			47,790
2026						42,625
Thereafter			162,381			151,658
Undiscounted cash flows		$	398,555		$	391,391
Reconciliation of lease liabilities:
Present values		$	274,768		$	285,791
Lease liabilities - current			38,741			42,195
Lease liabilities - noncurrent			236,027			243,596
Lease liabilities - total		$	274,768		$	285,791
Difference between undiscounted and discounted cash flows		$	123,787		$	105,600

The Company has excluded in the table above approximately $29.1 million of leases (undiscounted basis) that were entered into as of September 2, 2022. These leases will commence in 2022 and 2023 with lease terms of 10 years.

(7) Revolving Line of Credit

On May ~~23, 2018,~~27, 2022, Sportsman’s Warehouse, Inc. (“SWI”), a wholly owned subsidiary of ~~the Company,~~Holdings, as lead borrower, Holdings and other subsidiaries of the Company, each as borrowers or guarantors, and Wells Fargo Bank, National Association (“Wells Fargo”), with a consortium of banks led by Wells Fargo, entered into an Amended and Restated Credit Agreement (as amended, restated, supplemented or otherwise modified, the ~~“Amended Credit~~“Credit Agreement”). The ~~Amended~~ Credit Agreement governs the Company’s senior secured revolving credit facility (“Revolving Line of Credit”) ~~and a $40,000 term loan (the “Term Loan”)~~. The Revolving Line of Credit provides borrowing capacity of up to ~~$250,000,~~$350,000, subject to a borrowing base calculation. ~~The Term Loan was repaid in full during the twenty-six week period ended August 1, 2020.~~

In conjunction with the ~~Amended~~ Credit Agreement, the Company incurred ~~$1,331~~$508 of fees paid to various parties which were capitalized. Fees associated with the Revolving Line of Credit were recorded in prepaid expenses and other assets.

~~Amounts~~As of July 30, 2022 and January 29, 2022, the Company had $105,719 and $76,976, in outstanding revolving loans under the Revolving Line of Credit and the Company’s previous revolving line of credit, respectively. Amounts outstanding are offset on the condensed consolidated balance sheets by amounts in depository accounts under lock-box ~~or similar~~type arrangements, which were ~~$16,878~~$14,939 and ~~$13,553~~$10,923 as of July ~~31, 2021~~30, 2022 and January ~~30, 2021, respectively. As of both July 31, 2021 and January 30, 2021 borrowings outstanding under the Revolving Line of Credit were $37,069 and $0,~~29, 2022, respectively. As of July ~~31, 2021,~~30, 2022, the Company had stand-by commercial letters of credit of ~~$1,955~~$1,967 under the terms of the Revolving Line of Credit.

Borrowings under the Revolving Line of Credit bear interest based on either the base rate or Term SOFR, at the Company’s option, in each case plus an applicable margin. The base rate is the greatest of (1) the floor rate (as defined in the credit agreement as a rate of interest equal to 0.0%) (2) Wells Fargo’s prime rate, (3) the federal funds rate (as defined in the Amended Credit Agreement) plus 0.50% or (4) the one-month Term SOFR (as defined in the Amended Credit Agreement) plus 1.00%. The applicable margin for loans under the revolving credit facility, which varies based on the average daily availability, ranges from 0.25% to 0.50% per year for base rate loans and from 1.35% to 1.60% per year for Term SOFR loans. The Company is required to pay a commitment fee for the unused portion of the revolving credit facility, which will range from 0.20% to 0.225% per annum, depending on the average daily availability under the Revolving Line of Credit.

The Company may be required to make mandatory prepayments under the Revolving Line of Credit in the event of a disposition of certain property or assets, in the event of receipt of certain insurance or condemnation proceeds, upon the issuance of certain debt or equity securities, upon the incurrence of certain indebtedness for borrowed money or upon the receipt of certain payments not received in the ordinary course of business.

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The Credit Agreement contains customary affirmative and negative covenants, including covenants that limit the Company’s ability to incur, create or assume certain indebtedness, to create, incur or assume certain liens, to make certain investments, to make sales, transfers and dispositions of certain property and to undergo certain fundamental changes, including certain mergers, liquidations and consolidations. The ~~Amended~~ Credit Agreement also requires the Company to maintain a minimum availability at all times of not less than 10% of the gross borrowing ~~base. The Amended Credit Agreement~~base and contains customary events of default. The Revolving Line of Credit matures on May ~~23, 2023~~27, 2027.

Each of the subsidiaries of Holdings is a borrower under the Revolving Line of Credit, and all obligations under the Revolving Line of Credit are guaranteed by Holdings. All of the obligations under the Revolving Line of Credit are secured by a lien on substantially all of Holdings’ tangible and intangible working capital assets and the tangible and intangible working capital assets of all of Holdings’ subsidiaries, including a pledge of all capital stock of each of Holdings’ subsidiaries. The lien securing the obligations under the Revolving Line of Credit is a first priority lien as to certain liquid assets, including cash, accounts receivable, deposit accounts and inventory.

As of July ~~31, 2021,~~30, 2022 and January 29, 2022, the ~~Revolving Line of~~ Credit Agreement and the Company’s prior credit agreement had ~~$458 in deferred financing fees~~$733 and ~~as of January 30, 2021, the Revolving Line of Credit had $583~~$333, respectively, in deferred financing fees. During the 13 and 26 weeks ended July ~~31, 2021,~~30, 2022, the Company recognized ~~$63~~$46 and ~~$126, respectively,~~$108 of non-cash interest expense with respect to the amortization of deferred financing fees. During the 13 and 26 weeks ended ~~August 1, 2020,~~July 31, 2021, the Company recognized ~~$62~~$63 and ~~$125, respectively,~~$126 of non-cash interest expense with respect to the amortization of deferred financing fees.

For the 13 and 26 weeks ended July 30, 2022, gross borrowings under the Revolving Line of Credit and the Company’s prior revolving line of credit were $379,778 and $752,494, respectively. For the 13 and 26 weeks ended July 31, 2021 gross ~~borrowings~~borrowing under the ~~Revolving Line~~Company’s prior revolving line of ~~Credit~~credit were $434,702 and $792,180, respectively. For the 13 and 26 weeks ended ~~August 1, 2020~~July 30, 2022, gross ~~borrowing~~paydowns under the Revolving Line of Credit and the Company’s prior revolving line of credit were ~~$305,658~~$387,886 and ~~$580,617,~~$725,525, respectively. For the 13 and 26 weeks ended July 31, 2021, gross paydowns under

~~Table~~ the Company’s prior revolving line of ~~Contents~~

~~the Revolving Line of Credit~~credit were $397,830 and $755,470, respectively. ~~For the 13 and 26 weeks ended August 1, 2020, gross paydowns under the Revolving Line of Credit were $419,134 and $685,932, respectively.~~

Restricted Net Assets

The provisions of the Revolving Line of Credit restrict all of the net assets of the Company’s consolidated subsidiaries, which constitute all of the net assets on the Company’s condensed consolidated balance sheet as of July ~~31, 2021,~~30, 2022, from being used to pay any dividends without prior written consent from the financial institutions party to the Company’s Revolving Line of Credit.

(8) Income Taxes

The Company recognized an income tax expense of ~~$6,195~~$5,135 and ~~$12,009,~~$6,195, respectively, in the 13 weeks ended July 30, 2022 and July 31, ~~2021 and August 1, 2020.~~2021. The Company’s effective tax rate for the 13 weeks ended July 30, 2022 and July 31, 2021 was 26.0% and ~~August 1, 2020 was~~ 25.9% ~~and 27.0%~~, respectively. The Company recognized an income tax expense of ~~$9,147~~$5,576 and ~~$11,160,~~$9,147, respectively, ~~for~~in the 26 weeks ended July 30, 2022 and July 31, ~~2021 and August 1, 2020.~~2021. The Company’s effective tax rate for the 26 weeks ended July 30, 2022 and July 31, 2021 was 25.1% and ~~August 1, 2020 was~~ 24.5% ~~and 26.3%~~, respectively. The Company’s effective tax rate will generally differ from the U.S. Federal statutory rate of 21.0%, due to state taxes, permanent items, and discrete items relating to stock award deductions.

(9) Stockholder’s Equity

Earnings ~~Per~~per Share

Basic earnings per share is calculated by dividing net income by the weighted-average number of shares of common stock outstanding, reduced by the number of shares repurchased and held in treasury, during the period. Diluted earnings per share represents basic earnings per share adjusted to include the potentially dilutive effect of outstanding share option awards, nonvested share awards and nonvested share unit awards.

~~The following table sets forth the computation of basic and diluted income per common share:~~

Thirteen Weeks Ended

Twenty-Six Weeks Ended

July 31,

August 1,

July 31,

August 1,



2021


2020


2021


2020

Net income

$
17,723

$
32,461

$
28,173

$
31,331

Weighted-average shares of common stock outstanding:

Basic

43,860

43,537

43,775

43,430

Dilutive effect of common stock equivalents

856

831

825

668

Diluted

44,716

44,368

44,600

44,098

Basic earnings per share

$
0.40

$
0.75

$
0.64

$
0.72

Diluted earnings per share

$
0.40

$
0.73

$
0.63

$
0.71

Restricted stock units considered anti-dilutive and excluded in the calculation

2

7

5

33

~~(10) Stock-Based Compensation~~

~~Stock-Based Compensation~~

During the 13 and 26 weeks ended July 31, 2021 the Company recognized total stock-based compensation expense of $1,027 and $2,043, respectively. During the 13 and 26 weeks ended August 1, 2020 the Company recognized total stock-based compensation expense of $818 and $1,554, respectively. Compensation expense related to the Company's stock-based payment awards is recognized in selling, general, and administrative expenses in the condensed consolidated statements of operations.

~~Employee Stock Plans~~

As of July 31, 2021, the number of shares available for awards under the 2019 Performance Incentive Plan (the “2019 Plan”) was 2,194. As of July 31, 2021, there were 1,253 unvested stock awards outstanding under the 2019 Plan.

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The following table sets forth the computation of basic and diluted earnings per common share:


	Thirteen Weeks Ended				Twenty-Six Weeks Ended
		July 30,		July 31,		July 30,		July 31,
		2022		2021		2022		2021
Net income	$	14,614	$	17,723	$	16,612	$	28,173
Weighted-average shares of common stock outstanding:
Basic		41,962		43,860		42,950		43,775
Dilutive effect of common stock equivalents		232		856		230		825
Diluted		42,194		44,716		43,180		44,600
Basic earnings per share	$	0.35	$	0.40	$	0.39	$	0.64
Diluted earnings per share	$	0.35	$	0.40	$	0.38	$	0.63
Restricted stock units considered anti-dilutive and excluded in the calculation		166		2		150		5

Treasury Stock

On March 24, 2022 the Company announced that its Board of Directors authorized a share repurchase program (the “Repurchase Program”) to allow for the repurchase of up to $75.0 million outstanding shares of the Company’s common stock, $.01 par value per share commencing on March 31, 2022 (the “Commencement Date”). The Repurchase Program will terminate on the first anniversary of the Commencement Date. During the 13 weeks ended July 30, 2022 the Company repurchased approximately 5.3 million shares of its common stock for $52.1 million, utilizing cash on hand.

(10) Stock-Based Compensation

Stock-Based Compensation

During the 13 and 26 weeks ended July 30, 2022 the Company recognized total stock-based compensation expense of $1,091 and $2,449. During the 13 and 26 weeks ended July 31, 2021, the Company recognized total stock-based compensation expense of $1,027 and $2,043. Compensation expense related to the Company's stock-based payment awards is recognized in selling, general, and administrative expenses in the condensed consolidated statements of operations.

Employee Stock Plans

As of July 30, 2022, the number of shares available for awards under the 2019 Performance Incentive Plan (the “2019 Plan”) was 1,637. As of July 30, 2022, there were 1,366 unvested stock awards outstanding under the 2019 Plan.

Employee Stock Purchase Plan

The Company also ~~had~~has an Employee Stock Purchase Plan (“ESPP”) that was approved by shareholders in fiscal year 2015, under which 800 shares of common stock were authorized. For the 13 ~~and 26~~ weeks ended July ~~31, 2021, 0~~30, 2022, 64 shares were issued under the ESPP and, as of July ~~31, 2021,~~30, 2022, the number of shares available for issuance was ~~374.~~ ~~As of January 30, 2021, due to the pending merger with the Great Outdoors Group (as defined below), the Company discontinued its ESPP in accordance with the plan document~~310.

Nonvested Performance-Based Stock Awards

During the 13 ~~and 26~~ weeks ended July ~~31, 2021, the Company did 0t issue any nonvested performance-based stock awards.~~

~~During the 13 weeks ended August 1, 2020, the Company did 0t issue any nonvested performance-based stock awards. During the 26 weeks ended August 1, 2020,~~30, 2022, the Company issued ~~206~~47 nonvested performance-based stock awards to employees at a weighted average grant date fair value of ~~$5.95~~$9.65 per share. During the 26 weeks ended July 30, 2022, the Company issued 188 nonvested performance-based stock awards to employees at a weighted average grant date fair value of $10.88 per share. The nonvested performance-based stock awards issued to employees vest in full on the third anniversary of the grant date. The number of shares ~~issuable~~issued is contingent on management achieving fiscal year ~~2020, 2021,~~2022, 2023, and ~~2022~~2024 performance targets for total revenue growth and adjusted EPS. If minimum threshold performance targets are not achieved, no shares will vest. ~~Based on the performance conditions met for fiscal year 2020, 412~~ ~~shares were issued, which was the~~The maximum number of shares subject to the ~~award. Vesting~~award is 376, and the “target” number of ~~the~~ shares ~~issued is~~ subject to the ~~employees’~~award is 188 as reported below. Following the end of the performance period (fiscal years 2022, 2023, and 2024), the number of shares eligible to vest, based on actual performance, will be fixed and vesting will then be subject to each employee’s continued employment ~~with~~over the ~~Company.~~

~~The following table sets forth the rollforward of outstanding nonvested performance-based stock awards (per share amounts are not in thousands):~~

Weighted

average

grant-date


Shares

fair value

Balance at January 30, 2021

624

$
5.13

Grants

—

—

Forfeitures

(13)

5.63

Vested

(22)

4.91

Balance at July 31, 2021

589

$
5.13

Weighted

average

grant-date

Shares

fair value

Balance at February 1, 2020

250

$
3.66

Grants

206

5.95

Forfeitures

(38)

4.33

Vested

—

—

Balance at August 1, 2020

418

$
4.73

~~Nonvested Stock Unit Awards~~

During the 13 weeks ended July 31, 2021, the Company issued 28 nonvested stock units to Directors of the Company at an average value of $17.77 per share. The shares issued to Directors of the Company vest over a 12 month period with ~~one twelfth~~ ~~of the shares vesting each month.~~

During the 26 weeks ended July 31, 2021, the Company issued 249 nonvested stock units to employees and Directors of the Company at an average value of $17.33 per share. The shares issued to employees of the Company vest over a ~~three year period with~~ ~~one third~~ ~~of the shares vesting on each grant date anniversary. The shares issued to Directors of the Company vest over a 12 month period with~~ ~~one twelfth~~ ~~of the shares vesting each month.~~remaining service period.

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During the 13 weeks ended July 31, 2021, the Company did not issue any nonvested performance-based stock awards.

The following table sets forth the rollforward of outstanding nonvested performance-based stock awards (per share amounts are not in thousands):


		Weighted
		average
		grant-date
	Shares	fair value
Balance at January 29, 2022	487	$	5.13
Grants	188		10.88
Forfeitures	(89)		5.47
Vested	(168)		3.49
Balance at July 30, 2022	418	$	8.31

		Weighted
		average
		grant-date
	Shares	fair value
Balance at January 30, 2021	624	$	5.13
Grants	—		—
Forfeitures	(13)		5.63
Vested	(22)		4.91
Balance at July 31, 2021	589	$	5.13

Nonvested Stock Unit Awards

During the 13 and 26 weeks ended ~~August 1, 2020,~~July 30, 2022, the Company issued 44110 and ~~426,~~418 nonvested stock units, respectively, to employees and ~~Directors~~directors of the Company at an average value of ~~$6.30~~$9.51 and $10.82 per share, respectively. The shares issued to employees of the Company vest over a three-year period with one third of the shares vesting on each grant date anniversary.The shares issued to directors of the Company vest over a 12 month period with one twelfth of the shares vesting each month.

During the 13 weeks ended July 31, 2021, the Company issued 28 nonvested stock units to directors of the Company at an average value of $17.77 per share. The shares issued to directors of the Company vest over a 12 month period with one twelfth of the shares vesting each month.

During the 26 weeks ended July 31, 2021, the Company issued 249 nonvested stock units to employees and directors of the Company at an average value of $17.33 per share. The shares issued to employees of the Company vest over a three year period with one third of the shares vesting on each grant date anniversary. The shares issued to directors of the Company vest over a 12 month period with one twelfth of the shares vesting each month.

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The following table sets forth the rollforward of outstanding nonvested stock units (per share amounts are not in thousands):


		Weighted
		average
		grant-date
	Shares	fair value
Balance at January 29, 2022	929	$	11.56
Grants	418		10.82
Forfeitures	(139)		11.41
Vested	(260)		8.19
Balance at July 30, 2022	948	$	12.18

		Weighted
		average
		grant-date
	Shares	fair value
Balance at January 30, 2021	779	$	5.19
Grants	249		17.33
Forfeitures	(38)		8.02
Vested	(325)		5.45
Balance at July 31, 2021	665	$	9.45

Weighted

average

grant-date


Shares

fair value

Balance at January 30, 2021

779

$
5.19

Grants

249

17.33

Forfeitures

(38)

8.02

Vested

(325)

5.45

Balance at July 31, 2021

665

$
9.45

Weighted

average

grant-date


Shares

fair value

Balance at February 1, 2020

744

$
4.32

Grants

426

6.30

Forfeitures

(40)

4.31

Vested

(298)

4.39

Balance at August 1, 2020

832

$
5.31

(11) Fair Value Measurements

Fair value measurements are reported based upon three categories, with the lowest level of measurement available applied. The levels of fair value measurement are as follows: Level 1 - quoted prices on active markets; Level 2 - observable market inputs other than quoted prices on active markets; Level 3 - unobservable data requiring the Company to develop its own approach that cannot be corroborated by market data.

The following table shows the fair value measurements of the Company on a recurring basis:


			Fair Value as of		Fair Value as of
Asset	Type	Measurement Level	July 30, 2022		January 29, 2022
Short-term Investments (1)	Cash and Cash Equivalents (2)	Level 1	$	-	$	55,000

(1)

Fair value approximates carrying value because maturities are less than three months.

(2)

Cash equivalents are money market funds held by the Company.

~~(11)~~(12) Commitments and Contingencies

Legal Matters

The Company is involved in various legal matters generally incidental to its business. After discussion with legal counsel, management is not aware of any matters for which the likelihood of a loss is probable and reasonably estimable and which could have a material impact on its consolidated financial condition, liquidity, or results of operations.

~~Parsons v. Colt’s Manufacturing Company~~, ~~2:19-cv-01189-APG-EJY –~~ On July 2, 2019 the estate and family of a victim of the Route 91 Harvest Festival shooting filed litigation against 16 defendants, 1 of which being a subsidiary of Sportsman’s Warehouse Holdings, Inc., for wrongful death and negligence. The Company believes the plaintiffs’ attempts to re-interpret the federal National Firearms Act and Gun Control Act are improper and intend to vigorously defend ourselves in the matter. NaN reasonable estimate of the amount of any potential losses or range of potential losses relating to this matter can be determined at this time.

TMS McCarthy, LP, Etc., Pltf. v. Sportsman’s Warehouse Southwest, Inc. Etc. Et Al., Dfts.- On June 23, 2020 TMS McCarthy, LP filed a complaint in the Superior Court of CA, County of Santa Clara against Sportsman’s Warehouse Southwest, Inc., a wholly owned subsidiary of Sportsman’s Warehouse Holdings Inc., claiming the Company wrongfully terminated the lease relating to one of its stores. The Company believes the plaintiffs’ complaint is without merit based on the plain language of the lease at issue and on August 14, 2020 filed a counterclaim for declaratory relief. ~~NaN~~No reasonable estimate of the amount of any potential losses or range of potential losses relating to this matter can be determined at this time.

~~(12) Merger with Great Outdoors Group~~

On December 21, 2020, Sportsman’s Warehouse entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Great Outdoors Group, LLC, (“Great Outdoors Group”) and Phoenix Merger Sub I. Inc., (“Merger Subsidiary”). Pursuant to the terms and conditions set forth in the Merger Agreement, Merger Subsidiary will be merged with and into Sportsman’s Warehouse (the “Merger”), with Sportsman’s Warehouse continuing as the surviving

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corporation in the Merger and a wholly-owned subsidiary of Great Outdoors Group. Subject to the terms and conditions set forth in the Merger Agreement, at the effective time of the Merger (the “Effective Time”), each share of Sportsman’s Warehouse common stock, par value $0.01 per share (the “Shares”) outstanding immediately prior to the Effective Time (other than such Shares held by (i) Great Outdoors Group, Merger Subsidiary, or any other subsidiary of Great Outdoors Group, (ii) Sportsman’s Warehouse or its subsidiaries, as treasury stock or (iii) stockholders of Sportsman’s Warehouse who properly exercised their appraisal rights for such Shares under the Delaware General Corporation Law) will automatically be cancelled and converted into the right to receive $18.00 per Share in cash, without interest and less any applicable withholding taxes.

The Merger Agreement has been unanimously adopted by the board of directors of Sportsman’s Warehouse, and the stockholders of Sportsman’s Warehouse approved the Merger at the special stockholders meeting held on March 23, 2021. Completion of the Merger is subject to the satisfaction of several conditions, including: (i) the expiration or termination of any applicable waiting period (and any extensions thereof) relating to the Merger under the Hart-Scott Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”); (ii) the absence of any order, injunction, or other judgment by any governmental authority of competent jurisdiction that enjoins or otherwise prohibits the consummation of the Merger; (iii) the accuracy of each party’s representations and warranties (subject to certain qualifications); (iv) each party’s performance in all material respects of its obligations contained in the Merger Agreement; and (v) the absence of a material adverse effect on Sportsman’s Warehouse.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The discussion below contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those which are discussed in “Part I. Item 1A. Risk Factors” in our Fiscal ~~2020~~2021 Form 10-K. Also see “Statement Regarding Forward-Looking Statements” preceding Part I in this 10-Q.

The following discussion and analysis should be read in conjunction with the unaudited condensed consolidated financial statements and the notes thereto included in this 10-Q.

Overview

We are an outdoor sporting goods retailer focused on meeting the everyday needs of the seasoned outdoor veteran, the first-time participant and everyone in between. Our mission is to provide outstanding gear and exceptional service to inspire outdoor memories.

Our business was founded in 1986 as a single retail store in Midvale, Utah. Today, we operate ~~114~~127 stores in 2829 states, totaling approximately ~~4.5~~4.8 million gross square feet. We list the locations of our stores on our website, www.sportsmans.com. We also operate an e-commerce platform at www.sportsmans.com.

Our stores and our e-commerce platform are aggregated into one operating and reportable segment.

~~Proposed Merger with Great Outdoors Group, Inc.~~

On December 21, 2020, Sportsman’s Warehouse entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Great Outdoors Group and Phoenix Merger Sub I, Inc., a Delaware corporation and a wholly owned subsidiary of Great Outdoors Group (“Merger Subsidiary”). Pursuant to the terms and conditions set forth in the Merger Agreement, Merger Subsidiary will be merged with and into Sportsman’s Warehouse, with Sportsman’s Warehouse continuing as the surviving corporation in the Merger and a wholly-owned subsidiary of Great Outdoors Group. Subject to the terms and conditions set forth in the Merger Agreement, at the effective time of the Merger (the “Effective Time”), each share of Sportsman’s Warehouse common stock, par value $0.01 per share (the “Shares”) outstanding immediately prior to the Effective Time (other than such Shares held by (i) Great Outdoors Group, Merger Subsidiary, or any other subsidiary of Great Outdoors Group, (ii) Sportsman’s Warehouse or its subsidiaries, as treasury stock or (iii) stockholders of Sportsman’s Warehouse who properly exercised their appraisal rights for such Shares under the Delaware General Corporation Law) will automatically be cancelled and converted into the right to receive $18.00 per Share in cash, without interest and less any applicable withholding taxes.

The Merger Agreement has been unanimously adopted by the board of directors of Sportsman’s Warehouse, and the stockholders of Sportsman’s Warehouse approved the Merger at the special stockholders meeting held on March 23, 2021. Completion of the Merger is subject to the satisfaction of several conditions, including: (i) the expiration or termination of any applicable waiting period (and any extensions thereof) relating to the Merger under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”); (ii) the absence of any order, injunction, or other judgment by any governmental authority of competent jurisdiction that enjoins or otherwise prohibits the consummation of the Merger; (iii) the accuracy of each party’s representations and warranties (subject to certain qualifications); (iv) each party’s performance in all material respects of its obligations contained in the Merger Agreement; and (v) the absence of a material adverse effect on Sportsman’s Warehouse.

Assuming receipt of required clearance pursuant to the HSR Act and timely satisfaction of other conditions to closing, we currently expect the closing of the Merger to occur in the second half of calendar year 2021. For more information on the Merger, see ~~“Part I. Item 1. Business—Proposed Merger with Great Outdoor Groups, Inc.”~~ ~~and~~ ~~“Part I. Item 1A. Risk Factors—Risks Related to the Proposed Merger” in the Fiscal 2020 Form 10-K~~

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~~Update on Impact of~~ COVID-19 Pandemic

Since the beginning of the COVID-19 pandemic in mid-March of 2020 ~~through the end of~~and continuing into the second quarter ~~2021, the Company has~~of 2022, we experienced a significant increase in sales ~~as compared to historical sales levels.~~from pre-pandemic sales. A larger than normal portion of those sales ~~has come~~came from certain product categories, particularly firearms and ammunition.

~~The increased demand we have experienced since mid-March 2020 resulted in our net sales increasing by 9.7% to $688.8 million during the first half of 2021 compared to the first half of 2020. Further,~~ While our same store sales ~~increased 3.4%~~decreased by 9.4% during ~~the first half of 2021 compared to the corresponding period of fiscal 2020. While we have experienced strong sales growth throughout the pandemic, our net sales for~~ the second quarter of ~~fiscal 2021 decreased~~2022 compared to the second quarter of ~~fiscal year 2020 because we began recognizing strong demand during~~2021, when compared to the second quarter of ~~fiscal 2020 due to social unrest at that time, which significantly drove up demand for firearms and ammunition. We expect that our net~~2019, same store sales will continue to stabilize or decrease for the remainder of fiscal 2021 compared to the same period last year. As of the filing of this 10-Q, all of our 114 stores are open with no significant restrictions or limitations on their operations.increased by 31.7%.

In addition, ~~with respect to our supply chain,~~ we continue to see some interruption with various vendors as a result of restrictions or limitations on their operations, including labor shortages, due to the pandemic. While our increase in sales shows a significant demand for firearms and ammunition during the pandemic that we believe is outpacing supply, we do not believe supply chain disruptions resulting from restrictions and limitations on supplier operations caused by the pandemic are resulting in significantly less supply and we areWe have been working closely with our vendors to limit such ~~disruption.~~

~~While~~disruption and we have ~~experienced increased sales, especially~~been successful in building up our ~~hunting~~inventory in recent months. The pandemic and ~~shooting category, since the beginning~~current economic conditions have also resulted in a short supply of ~~the COVID-19 pandemic, we~~qualified employees.

We cannot predict the future impact on us of the COVID-19 outbreak.

~~For more detailed information on the potential~~ The future impact of the COVID-19 pandemic will depend on a number of future developments, which are highly uncertain and cannot be predicted, including, but not limited to the duration, spread and severity of the COVID-19 outbreak, any resurgence of COVID-19, the effects of the outbreak on our ~~business,~~customers and vendors and the remedial actions and stimulus measures adopted by local and federal governments. Further, we ~~refer you to Item 1A, Risk Factors,~~ ~~“The novel coronavirus (COVID-19) pandemic, efforts to mitigate or disrupt~~may experience a decrease in sales if the increased demand we experienced during the pandemic and the related weak, or weakening of, economic or other negative conditions, have impacted our business, and could result in a material adverse effect on our operations, liquidity, financial condition and financial results.”~~in our Fiscal 2020 Form 10-K.~~

subsides.

How We Assess the Performance of Our Business

In assessing the performance of our business, we consider a variety of performance and financial measures. The key measures for determining how our business is performing are net sales, same store sales, gross margin, selling, general, and administrative expenses, income from operations and adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted ~~EBITDA.~~EBITDA”).

Net Sales and Same Store Sales

Our net sales are primarily received from revenue generated in our stores and also include sales generated through our e-commerce platform. When measuring revenue generated from our stores, we review our same store sales as well as the performance of our stores that have not operated for a sufficient amount of time to be included in same store sales. We include net sales from a store in same store sales on the first day of the 13th full fiscal month following the store’s

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opening or acquisition by us. We exclude sales from stores that were closed during the period from our same store sales calculation. We include net sales from e-commerce in our calculation of same store sales. For fiscal years consisting of 53 weeks, we exclude net sales during the 53^rd week from our calculation of same store sales. Some of our competitors and other retailers may calculate same store sales differently than we do. As a result, data regarding our same store sales may not be comparable to similar data made available by other retailers.

Measuring the change in year-over-year same store sales allows us to evaluate how our retail store base is performing. Various factors affect same store sales, including:

●

the impact of the COVID-19 pandemic;

●

changes or anticipated changes to regulations related to some of the products we sell;

●

consumer preferences, buying trends and overall economic trends;

●

our ability to identify and respond effectively to local and regional trends and customer preferences;

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●

our ability to provide quality customer service that will increase our conversion of shoppers into paying customers;

●

the success of our omni-channel strategy and our e-commerce platform;

●

competition in the regional market of a store;

●

atypical weather;

●

new product introductions and changes in our product mix; and

●

changes in pricing and average ticket sales.

Opening new stores and acquiring store locations is also an important part of our growth strategy. While our target is to grow square footage at a rate of ~~greater than 8%~~5%-10% annually, we may deviate from this target if attractive opportunities are presented to open stores or acquire new store locations outside of our target growth rate.

We also have been scaling our e-commerce platform and increasing sales through our website, www.sportsmans.com.

We believe the key drivers to increasing our total net sales include:

●

increasing our total gross square footage by opening new stores ~~or acquiring new store locations;~~and through strategic acquisitions;

●

continuing to increase and improve same store sales in our existing markets;

●

increasing customer visits to our stores and improving our conversion rate through focused marketing efforts and continually high standards of customer service;

●

~~increasing the average ticket sale per customer;~~growing our loyalty and credit card programs; and

●

expanding our ~~omni-channel capabilities.~~omni channel capabilities through larger assortment and inventory, expanded content and expertise and better user experience.

Gross Margin

Gross profit is our net sales less cost of goods sold. Gross margin measures our gross profit as a percentage of net sales. Our cost of goods sold primarily consists of merchandise acquisition costs, including freight-in costs, shipping costs, payment term discounts received from the vendor and vendor allowances and rebates associated directly with merchandise and shipping costs related to e-commerce sales.

We believe the key drivers to improving our gross margin are increasing the product mix to higher margin products, particularly apparel and footwear, increasing foot traffic within our stores and traffic to our website, improving buying opportunities with our vendor partners and coordinating pricing strategies among our stores and our merchandise group. Our ability to properly manage our inventory can also impact our gross margin. Successful inventory management ensures we have sufficient high margin products in stock at all times to meet customer demand, while overstocking of items could lead to markdowns in order to help a product sell. We believe that the overall growth of our business will

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allow us to generally maintain or increase our gross margins, because increased merchandise volumes will enable us to maintain our strong relationships with our vendors.

Selling, General, and Administrative Expenses

We closely manage our selling, general, and administrative expenses. Our selling, general, and administrative expenses are comprised of payroll, rent and occupancy, depreciation and amortization, acquisition expenses, pre-opening expenses and other operating expenses, including stock-based compensation expense. Pre-opening expenses include expenses incurred in the preparation and opening of a new store location, such as payroll, travel and supplies, but do not include the cost of the initial inventory or capital expenditures required to open a location.

Our selling, general, and administrative expenses are primarily influenced by the volume of net sales of our locations, except for our corporate payroll, rent and occupancy and depreciation and amortization, which are generally fixed in nature. We control our selling, general, and administrative expenses through a budgeting and reporting process that allows our personnel to adjust our expenses as trends in net sales activity are identified.

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We expect that our selling, general, and administrative expenses will increase in future periods due to our continuing growth. ~~Furthermore, 12 of our current stores are being impacted by~~In addition, we have experienced increased payroll expenses due to increased minimum ~~wage increases in fiscal year 2021 that have~~wages and ~~will continue~~generally increasing salaries and wages due to ~~drive up our selling, general,~~a competitive labor market and ~~administrative costs during fiscal year 2021.~~inflation.

Income from Operations

Income from operations is gross profit less selling, general, and administrative expenses. We use income from operations as an indicator of the productivity of our business and our ability to manage selling, general, and administrative expenses.

Adjusted EBITDA

We define Adjusted EBITDA as net income plus interest expense, income tax expense, depreciation and amortization, stock-based compensation expense, pre-opening expenses, and other gains, losses and expenses that we do not believe are indicative of our ongoing expenses. In evaluating our business, we use Adjusted EBITDA and Adjusted EBITDA margin as an additional measurement tool for purposes of business decision-making, including evaluating store performance, developing budgets and managing expenditures. See “—Non-GAAP Measures.”

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Results of Operations

The following table summarizes key components of our results of operations as a percentage of net sales for the periods indicated:


	Thirteen Weeks Ended		Twenty-Six Weeks Ended		Thirteen Weeks Ended		Twenty-Six Weeks Ended
	July 31,	August 1,	July 31,	August 1,	July 30,	July 31,	July 30,	July 31,
	2021	2020	2021	2020	2022	2021	2022	2021
Percentage of net sales:
Net sales	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%
Cost of goods sold	66.8	66.1	67.5	67.5	66.5	66.8	67.2	67.5
Gross profit	33.2	33.9	32.5	32.5	33.5	33.2	32.8	32.5
Selling, general, and administrative expenses	26.5	21.9	27.0	25.3	27.6	26.5	29.2	27.0
Income from operations	6.7	12.0	5.5	7.2	5.9	6.7	3.6	5.5
Interest expense	0.1	0.3	0.1	0.4	0.2	0.1	0.2	0.1
Income before income taxes	6.6	11.7	5.4	6.8	5.7	6.6	3.4	5.4
Income tax expense	1.7	3.2	1.3	1.8	1.5	1.7	0.8	1.3
Net income	4.9%	8.5%	4.1%	5.0%	4.2%	4.9%	2.6%	4.1%
Adjusted EBITDA	9.7%	14.1%	8.5%	9.8%	8.7%	9.7%	6.6%	8.5%

The following table shows our sales during the periods presented by department:


		Thirteen Weeks Ended		Twenty-Six Weeks Ended			Thirteen Weeks Ended		Twenty-Six Weeks Ended
		July 31,	August 1,	July 31,	August 1,		July 30,	July 31,	July 30,	July 31,
Department	Product Offerings	2021	2020	2021	2020	Product Offerings	2022	2021	2022	2021
Camping	Backpacks, camp essentials, canoes and kayaks, coolers, outdoor cooking equipment, sleeping bags, tents and tools	17.8%	17.1%	14.7%	14.4%	Backpacks, camp essentials, canoes and kayaks, coolers, outdoor cooking equipment, sleeping bags, tents and tools	16.9%	17.8%	14.0%	14.7%
Apparel	Camouflage, jackets, hats, outerwear, sportswear, technical gear and work wear	6.6%	5.6%	6.5%	5.1%	Camouflage, jackets, hats, outerwear, sportswear, technical gear and work wear	7.1%	6.6%	7.0%	6.5%
Fishing	Bait, electronics, fishing rods, flotation items, fly fishing, lines, lures, reels, tackle and small boats	15.1%	15.9%	13.4%	13.7%	Bait, electronics, fishing rods, flotation items, fly fishing, lines, lures, reels, tackle and small boats	13.4%	15.1%	12.0%	13.4%
Footwear	Hiking boots, socks, sport sandals, technical footwear, trail shoes, casual shoes, waders and work boots	6.6%	5.7%	6.4%	5.2%	Hiking boots, socks, sport sandals, technical footwear, trail shoes, casual shoes, waders and work boots	6.7%	6.6%	6.5%	6.4%
Hunting and Shooting	Ammunition, archery items, ATV accessories, blinds and tree stands, decoys, firearms, reloading equipment and shooting gear	48.1%	49.1%	53.1%	55.6%	Ammunition, archery items, ATV accessories, blinds and tree stands, decoys, firearms, reloading equipment and shooting gear	50.5%	48.1%	55.1%	53.1%
Optics, Electronics, Accessories, and Other	Gift items, GPS devices, knives, lighting, optics, two-way radios, and other license revenue, net of revenue discounts	5.8%	6.6%	5.9%	6.0%	Gift items, GPS devices, knives, lighting, optics, two-way radios, and other license revenue, net of revenue discounts	5.4%	5.8%	5.4%	5.9%
Total		100.0%	100.0%	100.0%	100.0%		100.0%	100.0%	100.0%	100.0%

Thirteen Weeks Ended July ~~31, 2021~~30, 2022 Compared to Thirteen Weeks Ended ~~August 1, 2020~~July 31, 2021

Net Sales. Net sales decreased by ~~$19.2~~$10.8 million, or ~~5.0%~~3.0%, to ~~$361.8~~$351.0 million during the 13 weeks ended July ~~31, 2021~~30, 2022 compared to ~~$381.0~~$361.8 million in the corresponding period of fiscal year ~~2020.~~2021. Our net sales decreased primarily ~~decreased~~ due to lower demand ~~compared to the same period of the prior year~~across most product categories as we ~~anniversaried~~began to see the ~~social unrest that occurred in 2020 which significantly drove up demand for firearms~~impact of consumer inflationary pressures and ~~ammunition during the prior year period.~~recessionary concerns, partially offset by our opening of 12 new stores since July 31, 2021. Stores that have been open for less than 12 months and were, therefore, not included in our same store sales, contributed ~~$22.2~~$25.1 million to net sales. Same store sales decreased by ~~9.9%~~9.4% for the 13 weeks ended July ~~31, 2021~~30, 2022 compared to the comparable ~~13 week~~13-week period of fiscal year ~~2020,~~2021, primarily driven by ~~decreases~~a decrease in ~~our~~demand across most product categories due to consumer inflationary pressures and recessionary concerns.

Our hunting and shooting and ~~fishing departments.~~

~~Our~~ apparel ~~footwear and optics, electronics, and accessories departments~~categories saw increases of ~~$2.4 million, $2.3~~$3.3 million and ~~$1.0~~$1.2 million, respectively, in the second quarter of fiscal year ~~2021~~2022 compared to the comparable 13-week period of fiscal year 2021 due to the opening of

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~~fiscal year 2020 due to increased demand in these~~12 new stores since July 31, 2021. Our fishing, camping, optics, electronics and accessories and footwear categories ~~as a result of increased demand in these products as consumer spending increased. Our hunting and shooting, fishing, and camping departments~~ saw decreases of ~~$11.5~~$7.7 million, ~~$6.1~~$5.1 million, $4.2 million and ~~$1.1~~$0.6 million, respectively, in the second quarter of fiscal year ~~2021~~2022 compared to the comparable 13-week period of fiscal year ~~2020.~~2021. Within the hunting and shooting department, our firearm ~~and ammunition categories~~category saw ~~decreases~~a decrease of ~~$11.2~~$3.0 million or ~~13.3% and $1.4~~4.2%, while our ammunition category saw an increase of $2.9 million or ~~2.6%, respectively,~~5.6% in the second quarter of fiscal year ~~2021~~2022 compared to the comparable 13-week period of fiscal year ~~2020.~~2021. The decrease seen in ~~these categories~~the firearm category is primarily due to the impact of consumer inflationary pressures and recessionary concerns, partially offset by the opening of 12 new stores since July 31, 2021. The increase in the ammunition category is due to ~~lower demand~~a decrease in supply chain disruptions in this category as ~~we anniversaried~~well as the ~~social unrest and pending presidential election~~opening of ~~the prior year period.~~12 new stores since July 31, 2021.

With respect to same store sales, during the 13 weeks ended July ~~31, 2021,~~30, 2022, our ~~footwear, clothing, and~~fishing, optics, electronics and accessories, ~~departments had increases of 7.1%, 6.7%, and 0.6%, respectively, for the second quarter of fiscal year 2021 compared to the comparable 13-week period of fiscal year 2020. Our fishing,~~camping, footwear, hunting and ~~camping~~shooting and apparel departments saw decreases of ~~14.1%~~18.5%, ~~11.7%~~18.1%, 13.5%, 7.1%, 6.1% and ~~5.5%~~1.4%, respectively, as we ~~anniversaried~~began to see the ~~demand driven in the prior year by the COVID-19 pandemic, social unrest,~~impact of consumer inflationary pressures and ~~the pending political process.~~recessionary concerns. As of July ~~31, 2021,~~30, 2022, we had ~~107~~114 stores included in our same store sales calculation.

Gross Profit. Gross profit decreased to ~~$120.1~~$117.5 million during the 13 weeks ended July ~~31, 2021~~30, 2022 compared to ~~$129.1~~$120.1 million for the corresponding period of fiscal year ~~2020 primarily as a result of decreased sales.~~2021. As a percentage of net sales, gross profit ~~decreased~~increased to ~~33.2%~~33.5% for the 13 weeks ended July ~~31, 2021,~~30, 2022, compared to ~~33.9%~~33.2% for the corresponding period of fiscal year ~~2020 due~~2021 primarily driven by increased product margins and favorable shipping, freight and logistical expenses during the period compared to ~~higher freight costs. The higher freight costs~~the prior year as we slowed inventory receipts in response to consumer demand. These increases were partially offset by ~~an increase in~~unfavorable product ~~margins across all categories and increased vendor incentives. We expect higher transportation costs to continue to impact the business during the remainder of fiscal 2021.~~mix.

Selling, General, and Administrative Expenses. Selling, general, and administrative expenses increased by ~~$12.3~~$1.2 million, or ~~14.7%~~1.2%, to ~~$95.9~~$97.0 million during the 13 weeks ended July ~~31, 2021~~30, 2022 from ~~$83.6~~$95.9 million for the comparable 13-week period of fiscal year ~~2020.~~2021. This increase was primarily due to an increase in ~~our payroll expense~~other selling, general and administrative expenses of ~~$4.4~~$2.5 million, which was largely the result of a return to pre-pandemic levels of marketing activities compared to the comparable 13-week period of fiscal 2021. We also saw increases in depreciation, rent and management recruiting expenses of $1.4 million, $1.3 million, and $0.7 million, respectively, during the 13 weeks ended July 30, 2022 primarily related to the opening 8of 12 new stores since July 31, 2021 and the ~~end~~recruiting and hiring of ~~the second quarter of fiscal year 2020, and minimum wage~~key senior managers. These increases ~~impacting 12 of our stores in fiscal year 2021. We also had an increase~~were offset by a decrease in acquisition costs of $2.5 million due to ~~costs relating to~~ the ~~pending~~terminated merger with Great Outdoors Group, ~~as well as increases~~a decrease in ~~other selling, general and administrative costs, rent, depreciation, and pre-opening~~payroll expense of ~~$2.0 million,~~ $1.7 million ~~$1.0~~primarily due to store operational efficiencies and by pre-opening expenses of $0.6 million ~~and $0.8 million, respectively, during the 13 weeks ended July 31, 2021 primarily related~~due to the timing of opening ~~of 8~~ new ~~stores since August 1, 2020.~~stores. As a percentage of net sales, selling, general, and administrative expenses increased to 27.6% of net sales in the second quarter of fiscal year 2022, compared to 26.5% of net sales in the second quarter of fiscal year 2021, ~~compared to 21.9% of net sales in the second quarter of fiscal year 2020, as a result of the decrease in net sales we experienced in the second quarter of fiscal year 2021 compared~~due to the ~~second quarter of fiscal year 2020 and~~same reasons disclosed for the increase in ~~expenses noted in second quarter of fiscal year 2021 compared to the second quarter of fiscal year 2020.~~selling, general, and administrative expenses.

Interest Expense. Interest expense ~~decreased~~increased by ~~$0.7~~$0.5 million, or ~~73.8%~~166.7%, to ~~$0.3~~$0.8 million during the 13 weeks ended July ~~31, 2021~~30, 2022 from ~~$1.0~~$0.3 million for the comparable 13-week period of fiscal year ~~2020.~~2021. Interest expense ~~decreased~~increased primarily as a result of ~~decreased~~increased borrowings and higher interest rates on our revolving ~~line of~~ credit facility during the second quarter of fiscal year ~~2021~~2022 compared to the second quarter of fiscal year ~~2020.~~2021.

Income Taxes. We recognized income tax expense of ~~$6.2~~$5.1 million during the 13 weeks ended July 30, 2022 compared to an income tax expense of ~~$12.0~~$6.2 million during the ~~13 weeks ended July 31, 2021 and August 1, 2020, respectively.~~comparable 13-week period of fiscal year 2021. Our effective tax ~~rate~~rates for the 13 weeks ended July 30, 2022 and July 31, 2021 were 26.0% and ~~August 1, 2020 was~~ 25.9% ~~and 27.0%~~, respectively. Our effective tax rate will generally differ from the U.S. Federal statutory rate of 21.0%, due to state taxes, permanent items, and discrete items relating to stock award deductions.

Twenty-Six Weeks Ended July ~~31, 2021~~30, 2022 Compared to Twenty-Six Weeks Ended ~~August 1, 2020~~July 31, 2021

Net Sales. Net sales ~~increased~~decreased by ~~$60.9~~$28.3 million, or ~~9.7%~~4.1%, to ~~$688.8~~$660.5 million during the 26 weeks ended July ~~31, 2021~~30, 2022 compared to ~~$627.8~~$688.8 million in the corresponding period of fiscal year ~~2020.~~ 2021. Our net sales ~~increased~~decreased primarily due to a variety of reasons including: increased participation in outdoor activities, increased demand through our e-commerce platform, and demand driven by the change in consumer behavior associated with the COVID-19 pandemic, partially offset by lower demand ~~during the second quarter of fiscal 2021 compare to the same period last year in certain~~across most product categories as we anniversaried the increased demand ~~driven in~~during the ~~prior year~~first half of fiscal 2021 driven by the COVID-19 ~~pandemic,~~economic stimulus package (the American Rescue Plan) and social unrest and the ~~pending presidential election.~~impact of current year consumer inflationary pressures and recessionary concerns. These headwinds were partially offset by our opening of 12 new stores since July 31, 2021. Stores that have been open for less than 12 months and were, therefore, not included in our same store sales, contributed ~~$46.3~~$45.1 million to net sales. Same store sales ~~increased~~decreased by ~~3.4%~~10.4% for the ~~26 weeks ended July 31,~~

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~~2021 compared to the comparable 26 week period of fiscal year 2020, primarily driven by increases in all of our departments.~~

~~All of our departments had increases in net sales for the~~ 26 weeks ended July 31, 2021 compared to the corresponding period in fiscal year 2020, led by our hunting and shooting department with an increase in net sales of $18.0 million, or 5.2%. Our apparel, footwear, camping, optics, electronics, and accessories and fishing departments saw increases of $12.7 million, $11.3 million, $10.5 million, $7.7 million and $6.3 million, respectively, in the first half of fiscal year 202130, 2022 compared to the comparable 26-week period of fiscal year ~~2020 due to increased traffic within~~2021, primarily driven by decreases in most of our ~~stores and online. Within hunting, our firearm~~categories.

Our apparel category saw an increase of ~~$8.4~~$1.5 million ~~or 5.5% and our ammunition category saw a decrease of $5.2 million or 4.6%, in~~during the ~~first half of fiscal year 2021~~26 weeks ended July 30, 2022 compared to the comparable 26-week period of fiscal year ~~2020. The decrease seen in the ammunition category is~~2021 primarily due to the ~~lack~~opening of ~~supply in the market as a result of supply chain disruptions caused by the COVID-19 pandemic~~12 new stores since July 31, 2021. Our fishing, camping, optics, electronics and ~~demand that is outpacing manufacturing capacity.~~

~~In regards to same store sales, each of our departments except our~~accessories, hunting and shooting ~~department, had increases for~~and footwear categories saw decreases of $13.1 million, $8.5 million, $7.0 million, $1.9 million and $0.9 million, respectively, during the 26 weeks ended July 31, 2021. Our clothing, footwear, optics, electronics, and accessories, camping, and fishing departments had increases of 33.1%, 29.1%, 16.2%, 6.9%, and 1.8%, respectively, for the first half of fiscal year 202130, 2022 compared to the comparable 26-week period of fiscal year ~~2020. We saw a substantial increase in same store sales for our clothing and footwear departments as we saw consumer spending return to a more normalized pattern during~~2021. Within the ~~first half of 2021 compared to the first half of 2020. Our~~ hunting and shooting department, ~~had~~our firearm category saw a decrease of ~~1.8%~~$11.9 million or 7.3%, ~~with~~while our ~~firearm and~~ ammunition ~~categories having decreases~~category saw an increase of ~~2.4% and 11.0%, respectively, for~~$8.5 million or 8.0% during the ~~first half of fiscal year 2021~~26 weeks ended July 30, 2022 compared to the comparable 26-week period of fiscal year ~~2020. Our~~2021. The decrease seen in the firearm category is primarily due to lower demand across most product categories as we anniversaried the increased demand during the first half of fiscal 2021 driven by the COVID-19 economic stimulus package (the American Rescue Plan) and social unrest and the impact of current year consumer inflationary pressures and recessionary concerns. These headwinds were partially offset by the opening of 12 new stores since July 31, 2021. The increase in the ammunition category is due to a decrease in supply chain disruptions in this category as well as the opening of 12 new stores since July 31, 2021.

With respect to same store sales, during the 26 weeks ended July 30, 2022, our fishing, optics, electronics and accessories, camping, hunting and shooting, ~~department~~footwear and ~~firearm~~apparel departments saw decreases of 18.9%, 17.1%, 14.0%, 8.1%, 7.0% and ~~ammunition~~2.8%, respectively, primarily due to lower demand across most product categories ~~saw a year-over-year decline because~~as we ~~began recognizing strong~~anniversaried the increased demand ~~for these products~~ during the ~~second quarter~~first half of fiscal ~~2020 due to~~2021 driven by the COVID-19 economic stimulus package (the American Rescue Plan) and social unrest ~~at that time.~~and the impact of current year consumer inflationary pressures and recessionary concerns. As of July ~~31, 2021,~~30, 2022, we had ~~107~~114 stores included in our same store sales calculation.

Gross Profit. Gross profit ~~increased~~decreased to ~~$224.1~~$216.6 million during the 26 weeks ended July ~~31, 2021~~30, 2022 compared to ~~$203.9~~$224.1 million for the corresponding period of fiscal year ~~2020~~2021 primarily ~~as a result of increased~~due to lower net sales. As a percentage of net sales, gross profit ~~was flat at 32.5%~~increased to 32.8% for the 26 weeks ended July ~~31,~~30, 2022, compared to 32.5% for the corresponding period of fiscal year 2021 ~~and the 26 weeks ended August 1, 2020. Within gross margin we experienced increased freight costs that were offset~~primarily driven by increased ~~volume incentives,~~product margins across most departments and ~~other adjustments. We expect higher transportation costs to continue to impact the business~~decreased shipping, freight and logistical expenses during the ~~remainder of fiscal 2021.~~period compared to the prior year as we slowed inventory receipts in response to consumer demand.

Selling, General, and Administrative Expenses. Selling, general, and administrative expenses increased by ~~$27.5~~$6.8 million, or ~~17.3%~~3.7%, to ~~$186.3~~$193.1 million during the 26 weeks ended July ~~31, 2021~~30, 2022 from ~~$158.8~~$186.3 million for the comparable ~~26-week~~13-week period of fiscal year ~~2020.~~2021. This increase was primarily due to an increase in ~~our payroll expense~~other selling, general and administrative expenses of ~~$14.5~~$7.1 million, which was largely the result of ~~opening 8 new stores since~~a return to pre-pandemic levels of marketing and travel activities compared to the ~~end~~comparable 26-week period of ~~the second quarter of~~ fiscal ~~year 2020, and minimum wage increases impacting 12 of our stores in fiscal year~~ 2021. We also had increased pre-opening expenses of $0.1 million due to the timing of opening new stores, as well as increases in depreciation, rent and management recruiting expenses of $3.0 million, $1.9 million, and $0.9 million, respectively, during the 26 weeks ended July 30, 2022 primarily related to the opening of 12 new stores since July 31, 2021 and the recruiting and hiring of key senior managers. These increases were offset by a decrease in acquisition costs of $5.3 million due to ~~costs relating to~~ the ~~pending~~terminated merger with Great Outdoors Group ~~as well as increases~~and a decrease in ~~rent, other selling, general and administrative costs, depreciation, and pre-opening expenses~~payroll expense of ~~$3.5~~$0.9 million ~~$2.9 million, $0.7 million and $0.6 million. respectively, during the 26 weeks ended July 31, 2021~~ primarily ~~related~~due to ~~the opening of 8 new stores since August 1, 2020.~~store operational efficiencies. As a percentage of net sales, selling, general, and administrative expenses increased to 29.2% of net sales in the first 26 weeks of fiscal year 2022, compared to 27.0% of net sales in the first ~~half~~26 weeks of fiscal year 2021, ~~compared~~due to ~~25.3% of net sales~~the same reasons disclosed for the increase in ~~the first half of fiscal year 2020, primarily as a result of opening 8 new stores since August 1, 2020~~selling, general, and ~~costs associated with the pending merger with Great Outdoors Group.~~administrative expenses.

Interest Expense. Interest expense ~~decreased~~increased by ~~$2.1~~$0.8 million, or ~~80.7%~~160.0%, to ~~$0.5~~$1.3 million during the 26 weeks ended July ~~31, 2021~~30, 2022 from ~~$2.6~~$0.5 million for the comparable 26-week period of fiscal year ~~2020.~~2021. Interest expense ~~decreased~~increased primarily as a result of ~~decreased~~increased borrowings and higher interest rates on our revolving ~~line of~~ credit facility during the first ~~half~~26 weeks of fiscal year ~~2021~~2022 compared to the first ~~half~~26 weeks of fiscal year ~~2020.~~2021.

Income Taxes. We recognized income tax expense of ~~$9.1~~$5.6 million compared to an income tax expense of ~~$11.2~~$9.1 million during the 26 weeks ended July 30, 2022 and July 31, 2021, ~~and August 1, 2020,~~ respectively. Our effective tax rate for the 26 weeks ended July 30, 2022 and July 31, 2021 was 25.1% and ~~August 1, 2020 was~~ 24.5% ~~and 26.3%~~, respectively. Our effective tax rate will generally differ from the U.S. Federal statutory rate of 21.0%, due to state taxes, permanent items, and discrete items relating to stock award deductions.

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Seasonality

Due to the openings of hunting season across the country and consumers’ holiday buying patterns, net sales are typically higher in the third and fourth fiscal quarters than in the first and second fiscal quarters. We also incur additional expenses in the third and fourth fiscal quarters due to higher sales volume and increased staffing in our stores. ~~While we typically would expect~~We anticipate that our net sales towill continue to reflect this seasonal pattern, we may not recognize higher sales volume in the third and fourth fiscal quarters of fiscal year 2021 because of the significant spike in sales as a result of the increased demand during the COVID-19 pandemic and other factors noted above.pattern.

The timing of our new retail store openings also may have an impact on our quarterly results. First, we incur certain non-recurring expenses related to opening each new retail store, which are expensed as they are incurred. Second, most store expenses generally vary proportionately with net sales, but there is also a fixed cost component, which includes occupancy costs. These fixed costs typically result in lower store profitability during the initial period after a new retail store opens. Due to both of these factors, new retail store openings may result in a temporary decline in operating profit, in dollars and/or as a percentage of net sales.

Weather conditions affect outdoor activities and the demand for related apparel and equipment. Customers’ demand for our products, and, therefore, our net sales, can be significantly impacted by weather patterns on a local, regional and national basis.

Liquidity and Capital Resources

Overview; Sources and Uses of Cash

Our primary ~~capital~~cash requirements are for seasonal working capital needs and capital expenditures related to opening and acquiring new store locations. ~~Our~~For both the short-term and the long-term, our sources of liquidity to meet these needs have primarily been borrowings under our revolving credit facility, operating cash flows and short and long-term debt financings from banks and financial institutions. We believe that our cash on hand, cash generated by operating activities and funds available under our revolving credit facility will be sufficient to finance our operating activities for at least the next twelve ~~months.~~months and beyond. In addition, on December 2, 2021, we received a $55.0 million cash payment from Great Outdoors Group, LLC (“Great Outdoors Group”) in connection with the termination of our previously pending merger with a subsidiary of Great Outdoors Group.

Material Cash Requirements

Our material cash requirements are primarily for opening and acquiring new store locations, along with our general operating expenses and other expenses discussed below.

Capital Expenditures.For the 26 weeks ended July ~~31, 2021,~~30, 2022, we incurred approximately ~~$17.9~~$22.6 million in capital expenditures primarily related to the construction of new stores and the refurbishment of existing stores during the period. We expect ~~total net~~ capital expenditures between ~~$42.0~~$48 million and ~~$52.0~~$55 million for fiscal year ~~2021~~2022 primarily to refurbish ~~many~~some of our existing stores and to open ~~eight~~up to ~~twelve~~10 new stores in fiscal year ~~2021.~~2022. We intend to fund ~~our~~these capital expenditures with our operating cash flows, cash on hand and funds available under our revolving credit facility. Other investment opportunities, such as potential strategic acquisitions or store expansion rates in excess of those presently planned, may require additional funding.

Principal and Interest Payments. We maintain a $350.0 million revolving credit facility. As of July 30, 2022, $105.7 million was outstanding under the revolving credit facility. Assuming no additional repayments or borrowings on our revolving credit facility after July 30, 2022 our interest payments would be approximately $3.5 million for fiscal year 2022 based on the interest rate at July 30, 2022. See below under “Indebtedness” for additional information regarding our revolving credit facility, including the interest rate applicable to any borrowing under such facility.

Operating Lease Obligations. Lease commitments consist principally of leases for our retail stores, corporate office and distribution center. Our leases often include options which allow us to extend the terms beyond the initial lease term. For the remainder of 2022, our expected operating lease payments will be $32.4 million and our total committed lease payments are $391.4 million as of July 30, 2022. Other operating lease obligations consist of distribution center equipment. Additional information regarding our operating leases is available in our Fiscal 2021 Form 10-K.

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Purchase Obligations. In the ordinary course of business, we enter into arrangements with vendors to purchase merchandise in advance of expected delivery. We or the vendor can generally terminate the purchase orders at any time. These purchase orders do not contain any termination payments or other penalties if cancelled.

Share Repurchase Authorization.Our board authorized a share repurchase program to allow for the repurchase of up to $75.0 million of outstanding shares of our common stock for the period from March 31, 2022 to March 31, 2023. We may repurchase shares of our common stock at any time or from time to time, without prior notice, subject to market conditions and other considerations. Our repurchases may be made through Rule 10b5-1 plans, accelerated share repurchase transactions, open market purchases, privately negotiated transactions, tender offers, block purchases or other transactions. We intend to fund repurchases under the repurchase program using cash on hand or available borrowings under our revolving credit facility. We have no obligation to repurchase any shares of our common stock under the share repurchase program and we may modify, suspend or discontinue it at any time. As of July 30, 2022, we had repurchased 5,348,000 shares of our common stock for $52.1 million, utilizing cash on hand.

Cash Flows

Cash flows from operating, investing and financing activities are shown in the following table:


	Twenty-Six Weeks Ended				Twenty-Six Weeks Ended
	July 31,		August 1,		July 30,		July 31,
	2021		2020		2022		2021

	(in thousands)				(in thousands)
Cash flows (used in) provided by operating activities	$	(67,782)	$	145,748
Cash flows provided by (used in) operating activities					$	7,967	$	(67,782)
Cash flows used in investing activities		(17,936)		(12,023)		(22,588)		(17,936)
Cash provided by (used in) financing activities		22,813		(123,122)
Cash (used in) provided by financing activities						(36,379)		22,813
Cash at end of period		2,620		12,288		6,018		2,620

Net cash ~~used in~~provided by operating activities was ~~$67.8~~$8.0 million for the 26 weeks ended July ~~31, 2021,~~30, 2022, compared to cash ~~provided by~~used in operating activities of ~~$145.8~~$67.8 million for the corresponding period of fiscal year ~~2020,~~2021, a change of approximately ~~$213.6~~$75.8 million. The ~~decrease~~increase in our cash flows from operating activities was primarily the result of a normalization of our ~~buildup of~~inventory levels in fiscal year 2022 compared to a focus on building up inventory during the first ~~half~~26 weeks of fiscal 2021.We focused on rebuilding our inventory during the first half of fiscal 2021 after experiencing strong demand throughout the pandemic while also encountering supply chain disruptions at the same time.2021.

Net cash used in investing activities was ~~$17.9~~$22.6 million for the 26 weeks ended July ~~31, 2021~~30, 2022 compared to ~~$12.0~~$17.9 million for the corresponding period of fiscal year ~~2020.~~2021. For the 26 weeks ended July ~~31, 2021,~~30, 2022, we incurred capital expenditures related to the construction of new stores and the refurbishment of existing stores.

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Net cash ~~provided by~~used in financing activities was ~~$22.8~~$36.4 million for the 26 weeks ended July ~~31, 2021,~~30, 2022, compared to net cash ~~used~~provided in financing activities of ~~$123.1~~$22.8 million for the corresponding period of fiscal year ~~2020. During the 26 weeks ended July 31,~~ 2021, ~~we had an~~a change of approximately $59.2 million. The increase in ~~borrowings under~~cash used in financing activities was primarily the result of our ~~revolving line~~use of ~~credit. During the 26 weeks ended August 1, 2020, we repaid $14.0~~$52.1 million ~~principal outstanding on~~to repurchase our ~~term loan and $113.2 million on our revolving line of credit.~~common stock.

Indebtedness

As of July ~~31, 2021, $37.1 million was outstanding under the revolving credit facility. We maintain~~30, 2022, we maintained a ~~$250.0~~$350.0 million revolving credit ~~facility.~~facility, with $105.7 million outstanding. Borrowings under our revolving credit facility are subject to a borrowing base calculation. Our revolving credit facility is governed by an amended and restated credit agreement with a consortium of banks led by Wells Fargo Bank, National Association. ~~The revolving credit facility matures on May 23, 2023.~~ As of July ~~31, 2021,~~30, 2022, we had ~~$186.0~~$203.2 million available for borrowing, subject to certain borrowing base restrictions, and ~~$1.9~~$2.0 million in stand-by commercial letters of credit.

Borrowings under ~~our~~the revolving credit facility bear interest based on either ~~at our option,~~ the base rate or ~~LIBOR,~~Term SOFR, at our option, in each case plus an applicable margin. The base rate is the ~~higher~~greatest of (1) the floor rate (as defined in the credit agreement as a rate of interest equal to 0.0%) (2) Wells Fargo’s prime rate, ~~(2)~~(3) the federal funds rate (as defined in the credit agreement) plus 0.50% ~~and (3)~~or (4) the one-month ~~LIBOR~~Term SOFR (as defined in the credit agreement) plus 1.00%. The applicable margin for loans under the revolving credit facility, which varies based on the average daily availability, ranges from 0.25% to ~~0.75%~~0.50% per year for base rate loans and from ~~1.25%~~1.35% to ~~1.75%~~1.60% per year for ~~LIBOR~~Term SOFR loans. We

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~~Interest on base rate loans is payable monthly in arrears and interest on LIBOR loans is payable based on~~are required to pay a commitment fee for the ~~LIBOR interest period selected by us, which can be 7, 30, 60 or 90 days. All amounts that are not paid when due under our~~unused portion of the revolving credit facility, which will ~~accrue interest at~~range from 0.20% to 0.225% per annum, depending on the ~~rate otherwise applicable plus 2.00% until such amounts are paid in full.~~average daily availability under the revolving credit facility.

Each of the subsidiaries of ~~Sportsman’s Warehouse~~ Holdings ~~Inc. (“Holdings”)~~ is a borrower under the revolving credit facility, and ~~Holdings guarantees~~ all obligations under the revolving credit ~~facility.~~facility are guaranteed by Holdings. All of the obligations under the revolving credit facility are secured by a lien on substantially all of Holdings’ tangible and intangible working capital assets and the tangible and intangible working capital assets of all of Holdings’ subsidiaries, including a pledge of all capital stock of each of ~~the~~ Holdings’ subsidiaries. The lien securing the obligations under the revolving credit facility is a first priority lien as to certain liquid assets, including cash, accounts receivable, deposit accounts and inventory. ~~In addition, our credit agreement contains provisions that enable Wells Fargo to require us to maintain a lock-box, or similar arrangement, for the collection of all receipts.~~

We may be required to make mandatory prepayments under the revolving credit facility in the event of a disposition of certain property or assets, in the event of receipt of certain insurance or condemnation proceeds, upon the issuance of certain debt or equity securities, upon the incurrence of certain indebtedness for borrowed money or upon the receipt of certain payments not received in the ordinary course of business.

Our revolving credit facility requires us to maintain a minimum availability at all times of not less than 10% of the gross borrowing base. In addition, the credit agreement governing our revolving credit facility contains customary affirmative and negative covenants, including covenants that limit our ability to incur, create or assume certain indebtedness, to create, incur or assume certain liens, to make certain investments, to make sales, transfers and dispositions of certain property and to undergo certain fundamental changes, including certain mergers, liquidations and consolidations. ~~Our~~The credit agreement also contains customary events of default. As of July ~~31, 2021,~~30, 2022, we were in compliance with all covenants under the credit agreement governing our revolving credit facility.

Critical Accounting Policies and Estimates

Our financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). In connection with the preparation of the financial statements, we are required to make assumptions, make estimates and apply judgment that affect the reported amounts of assets, liabilities, revenue, expenses and the related disclosures. We base our assumptions, estimates and judgments on historical experience, current trends and other factors that we believe to be relevant at the time the condensed consolidated financial statements are prepared. On a regular basis, we review the accounting policies, assumptions, estimates and judgments to ensure that our financial statements are presented fairly and in accordance with GAAP. However, because future events and their effects cannot be determined with certainty, actual results could differ from our assumptions and estimates, and such differences could be material.

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There have been no significant changes to our critical accounting policies as described in our Fiscal ~~2020~~2021 Form 10-K.

Off Balance Sheet Arrangements

We are not party to any off balance sheet arrangements.

~~Contractual Obligations~~

~~The following table summarizes our contractual obligations as of July 31, 2021 and the effect such obligations are expected to have on our liquidity and cash flows in future periods.~~

Payments Due by Period

Total
Less than 1 year
1-3 years
3-5 years
More than 5 years

Long-term debt obligations (1)
$ -
$ -
$ -
$ -
$ -

Operating lease obligations (2)
398,555
30,381
117,190
88,603
162,381

Standby letters of credit
1,955
1,955
-
-
-

Purchase/construction obligations (3)
-
-
-
-
-

~~(1)~~

Long-term debt obligations do not reflect outstanding amounts under our revolving credit facility, because those amounts are considered current liabilities. As of July 31, 2021, $37.1 million was outstanding on our revolving credit facility.

~~(2)~~

Operating lease obligations in the table above do not include additional payments associated with common area maintenance, real estate, taxes and insurance. Such payments were $13.2 million, $11.2 million, and $10.1 million in fiscal years 2020, 2019, and 2018, respectively.

~~(3)~~

In the ordinary course of business, we enter into arrangements with vendors to purchase merchandise in advance of expected delivery. Because these purchase orders do not contain any termination payments or other penalties if cancelled, they are not included in this table of contractual obligations. In accordance with GAAP, these obligations are not recorded in our financial statements.

Non-GAAP Measures

In evaluating our business, we use Adjusted EBITDA and Adjusted EBITDA margin as supplemental measures of our operating performance. We define Adjusted EBITDA as net income plus interest expense, income tax expense, depreciation and amortization, stock-based compensation expense, pre-opening expenses, and other gains, losses and expenses that we do not believe are indicative of our ongoing expenses. ~~In addition,~~ Adjusted EBITDA excludes pre-opening expenses because we do not believe these expenses are indicative of the underlying operating performance of our stores. The amount and timing of pre-opening expenses are dependent on, among other things, the size of new stores opened and the number of new stores opened during any given period. Adjusted EBITDA margin means, for any period, the Adjusted EBITDA for that period divided by the net sales for that period. We consider Adjusted EBITDA and Adjusted EBITDA margin important supplemental measures of our operating performance and believe they are frequently used by analysts, investors and other interested parties in the evaluation of companies in our industry. Other companies in our industry, however, may calculate Adjusted EBITDA and Adjusted EBITDA margin differently than we do. Management also uses Adjusted EBITDA and Adjusted EBITDA margin as additional measurement tools for purposes of business decision-making, including evaluating store performance, developing budgets and managing expenditures. Management believes Adjusted EBITDA and Adjusted EBITDA margin allow investors to evaluate our operating performance and

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compare our results of operations from period to period on a consistent basis by excluding items that management does not believe are indicative of our core operating performance.

Adjusted EBITDA is not defined under GAAP and is not a measure of operating income, operating performance or liquidity presented in accordance with GAAP. Adjusted EBITDA has limitations as an analytical tool, and when assessing our operating performance, you should not consider Adjusted EBITDA in isolation or as a substitute for net

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income or other condensed consolidated statement of operations data prepared in accordance with GAAP. Some of these limitations include, but are not limited to:

●

Adjusted EBITDA does not reflect our cash expenditures or future requirements for capital expenditures or contractual commitments;

●

Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs;

●

Adjusted EBITDA may be defined differently by other companies, and, therefore, it may not be directly comparable to the results of other companies in our industry;

●

Adjusted EBITDA does not reflect the interest expense, or the cash requirements necessary to service interest or principal payments, on our debt; and

●

Adjusted EBITDA does not reflect income taxes or the cash requirements for any tax payments.

The following table presents a reconciliation of net income, the most directly comparable financial measure presented in accordance with GAAP, to Adjusted EBITDA for the 13 and 26 weeks ended July 30, 2022 and July 31, ~~2021 and August 1, 2020.~~2021.


	Thirteen Weeks Ended				Twenty-Six Weeks Ended				Thirteen Weeks Ended				Twenty-Six Weeks Ended
	July 31,		August 1,		July 31,		August 1,		July 30,		July 31,		July 30,		July 31,
	2021		2020		2021		2020		2022		2021		2022		2021

	(dollars in thousands)								(dollars in thousands)
Net income (loss)	$	17,723	$	32,461	$	28,173	$	31,331	$	14,614	$	17,723	$	16,612	$	28,173
Interest expense		266		1,017		492		2,551		767		266		1,334		492
Income tax expense (benefit)		6,195		12,009		9,147		11,160		5,135		6,195		5,576		9,147
Depreciation and amortization		6,360		5,318		12,136		10,681		7,762		6,360		15,173		12,136
Stock-based compensation expense (1)		1,027		818		2,043		1,554		1,091		1,027		2,449		2,043
Pre-opening expenses (2)		1,183		431		1,378		819		553		1,183		1,504		1,378
Hazard pay (3)		—		1,500		—		2,600
Acquisition costs (4)		2,461		6		5,306		35
Store closure (5)		—		—		—		1,039
Acquisition costs (3)										—		2,461		—		5,306
Executive transition costs (4)										704		—		925		—
Adjusted EBITDA	$	35,215	$	53,560	$	58,675	$	61,770	$	30,626	$	35,215	$	43,573	$	58,675

Net sales	$	361,778	$	380,989		688,770		627,824	$	351,021	$	361,778	$	660,526	$	688,770
Net income margin		4.9%		8.5%		4.1%		5.0%		4.2%		4.9%		2.5%		4.1%
Adjusted EBITDA margin (6)		9.7%		14.1%		8.5%		9.8%
Adjusted EBITDA margin (5)										8.7%		9.7%		6.6%		8.5%

(1)	Stock-based compensation expense represents non-cash expenses related to equity instruments granted to employees under our 2019 Performance Incentive Plan and Employee Stock Purchase Plan.

(2)	Pre-opening expenses include expenses incurred in the preparation and opening of a new store location, such as payroll, travel and supplies, but do not include the cost of the initial inventory or capital expenditures required to open a location.

(3)	~~Expense relating to bonuses and increased wages paid to front-line and back office associates due to the COVID-19 pandemic.~~

~~(4)~~

~~For the~~The 13 and 26 weeks ended July 31, 2021, ~~includes~~included $2.5 and $5.3 million of expenses incurred relating to the ~~pending~~terminated merger with Great Outdoors ~~Group.~~ Group~~For the 13 and 26 weeks ended August 1, 2020 includes expenses~~.

(4)

Expenses incurred relating to the ~~acquisition~~recruitment and hiring of ~~cash, inventory, furniture, fixtures, and equipment, and certain other assets related~~various key members of our senior management team. These events are not expected to ~~Field & Stream stores operated by DICK’S in fiscal year 2020.~~be recurring.

(5)

~~Costs~~We calculate net income margin as net income divided by net sales and impairments recorded relating to the closure of one store during the first quarter of 2020. These costs were recorded as a component of selling, general, and administration expenses on the condensed consolidated statement of operations.

~~(6)~~

Wewe define Adjusted EBITDA margin as Adjusted EBITDA divided by net sales.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our principal exposure to market risk relates to changes in interest rates. Our revolving credit facility and term loan carry floating interest rates that are tied to LIBOR, the federal funds rate and the prime rate, and, therefore, our income

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and cash flows will be exposed to changes in interest rates to the extent that we do not have effective hedging arrangements in place. We historically have not used interest rate swap agreements to hedge the variable cash flows associated with the interest on our credit facilities. Based on a sensitivity analysis at July ~~31, 2021,~~30, 2022, assuming the amount outstanding under our revolving credit facility would be outstanding for a full year, a 100 basis point increase in interest rates would ~~not~~ have increased our interest expense ~~significantly.~~by $1.1 million. We do not expect that the change in interest rates as a result of the amendment to our credit agreement entered into after July 30, 2022 will materially increase our interest rates. We do not use derivative financial instruments for speculative or trading purposes. However, this does not preclude our adoption of specific hedging strategies in the future.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) are designed to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms and to ensure that information required to be disclosed is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosures. Our management has evaluated, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act), as of the end of the period covered by this Report. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective as of July ~~31, 2021.~~30, 2022.

Inherent Limitations in Effectiveness of Controls

Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures, or our internal controls, will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the company have been detected. These inherent limitations include the realities that judgments in decision making can be faulty, and that breakdowns can occur because of simple error or mistake or fraud. Additionally, controls can be circumvented by individuals or groups of persons or by an unauthorized override of the controls. Accordingly, because of the inherent limitations in our control system, misstatements in our public reports due to error or fraud may occur and not be detected.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting during the 13 weeks ended July ~~31, 2021~~30, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

2928

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PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

See Note ~~11,~~12, “Commitments and Contingencies” to our condensed consolidated financial statements for additional information, which is incorporated herein by reference.

ITEM 1A. RISK FACTORS

Our business faces significant risks and uncertainties. Certain important factors may have a material adverse effect on our business prospects, financial condition and results of operations, and you should carefully consider them. There have been no material changes in our assessment of our risk factors from those set forth in our Fiscal ~~2020~~2021 Form 10-K.

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ITEM ~~5. OTHER INFORMATION~~2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

~~None~~The following table sets forth certain information relating to the purchases of our common stock by us and any affiliated purchasers within the meaning of Rule 10b-18(a)(3) under the Exchange Act during the 26 weeks ended July 30, 2022 (dollars in thousands, except share and per share data):


Period	Total # of Shares Purchased	Average Price Paid per Share	Total # of Shares Purchased as Part of a Publicly Announced Program	Maximum Dollar Value of Shares that May yet Be Purchased Under the Program
May 1, 2022 to May 30, 2022	-	N/A	-	$ 75,000
May 31, 2022 to June 29, 2022	4,131,100	$ 9.69	4,131,100	$ 34,964
June 30, 2022 to July 30, 2022	1,216,900	$ 9.88	1,216,900	$ 22,943
Total	5,348,000	$ 9.73	5,348,000	$ 22,943

On March 24, 2022 the Company announced that its Board of Directors authorized a share repurchase program (the “Repurchase Program”) to allow for the repurchase of up to $75.0 million outstanding shares of the Company’s common stock, $.01 par value per share commencing on March 31, 2022 (the “Commencement Date”). The Repurchase Program will terminate on the first anniversary of the Commencement Date. During the fiscal quarter ended July 30, 2022 the Company repurchased a total of 5,348,000 shares of its common stock for $52.1 million, utilizing cash on hand.

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ITEM 6. EXHIBITS


Exhibit Number		Description

31.1*		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1**		Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002.

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

101.SCH*		XBRL Taxonomy Extension Schema Document.

101.CAL*		XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF*		XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB*		XBRL Taxonomy Extension Label Linkbase Document.

101.PRE*		XBRL Taxonomy Extension Presentation Linkbase Document.

104		Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

*	Filed herewith.
**	Furnished herewith

+ Management contract or compensatory plan or arrangement

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


	SPORTSMAN’S WAREHOUSE HOLDINGS, INC.

Date: September ~~8, 2021~~2, 2022	By:	/s/ Jon Barker
		Jon Barker
		President and Chief Executive Officer
		(Principal Executive Officer)

Date: September ~~8, 2021~~2, 2022	By:	/s/ ~~Robert K. Julian~~Jeff White
		~~Robert K. Julian~~Jeff White
		Chief Financial Officer
		(Principal Financial and Accounting Officer)


For the Thirteen Weeks Ended July 31, 2021 and August 1, 2020
	Common Stock			Restricted nonvoting Common Stock			Additional paid-in- capital		Accumulated (deficit) earnings		Total stockholders' equity
	Shares	Amount		Shares	Amount		Amount		Amount		Amount

Balance at May 2, 2020	43,551	$	436	—	$	—	$	86,850	$	21,899	$	109,185
Issuance of common stock for cash per employee stock purchase plan	40		—	—		—		273		—		273
Stock based compensation	—		—	—		—		818		—		818
Net loss	—		—	—		—		—		32,461		32,461
Balance at August 1, 2020	43,591	$	436	—	$	—	$	87,941	$	54,360	$	142,737

Balance at May 1, 2021	43,831	$	438	—	$	—	$	88,560	$	124,859	$	213,857
Stock based compensation	—		—	—		—		1,027		—		1,027
Net income	—		—	—		—		—		17,723		17,723
Balance at July 31, 2021	43,831	$	438	—	$	—	$	89,587	$	142,582	$	232,607




For the Twenty-Six Weeks Ended July 31, 2021 and August 1, 2020
	Common Stock			Restricted nonvoting common stock			Additional paid-in- capital		Accumulated (deficit) earnings		Total stockholders' equity
	Shares	Amount		Shares	Amount		Amount		Amount		Amount

Balance at February 1, 2020	43,296	$	433	—	$	—	$	86,806	$	23,029	$	110,268
Vesting of restricted stock units	255		3	—		—		(3)		—		—
Payment of withholdings on restricted stock units	—		—	—		—		(689)		—		(689)
Issuance of common stock for cash per employee stock purchase plan	40		—	—		—		273		—		273
Stock based compensation	—		—	—		—		1,554		—		1,554
Net income	—		—	—		—		—		31,331		31,331
Balance at August 1, 2020	43,591	$	436	—	$	—	$	87,941	$	54,360	$	142,737

Balance at January 30, 2021	43,623	$	436	—	$	—	$	89,815	$	114,409	$	204,660
Vesting of restricted stock units	208		2	—		—		(2)		—		—
Payment of withholdings on restricted stock units	—		—	—		—		(2,269)		—		(2,269)
Stock based compensation	—		—	—		—		2,043		—		2,043
Net income	—		—	—		—		—		28,173		28,173
Balance at July 31, 2021	43,831	$	438	—	$	—	$	89,587	$	142,582	$	232,607
The accompanying notes are an integral part of these condensed consolidated financial statements


	Payments Due by Period
	Total	Less than 1 year	1-3 years	3-5 years	More than 5 years
Long-term debt obligations (1)	$ -	$ -	$ -	$ -	$ -
Operating lease obligations (2)	398,555	30,381	117,190	88,603	162,381
Standby letters of credit	1,955	1,955	-	-	-
Purchase/construction obligations (3)	-	-	-	-	-