Sportsman's Warehouse (SPWH) 10-Q 19 May 17 2017 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Apr. 29, 2017	May 19, 2017
Document And Entity Information
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Apr. 29, 2017
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	Q1
Entity Registrant Name	SPORTSMAN'S WAREHOUSE HOLDINGS, INC.
Entity Central Index Key	1,132,105
Current Fiscal Year End Date	--02-03
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		42,528,480
Entity Current Reporting Status	Yes

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Apr. 29, 2017	Jan. 28, 2017
Current assets:
Cash and cash equivalents	$ 2,269	$ 1,911
Accounts receivable, net	382	411
Merchandise inventories	288,308	246,289
Prepaid expenses and other	11,494	7,313
Income taxes receivable	2,363
Total current assets	304,816	255,924
Property and equipment, net	94,940	83,109
Deferred income taxes	4,212	5,097
Definite lived intangibles, net	1,666	2,118
Total assets	405,634	346,248
Current liabilities:
Accounts payable	74,176	31,549
Accrued expenses	54,370	49,586
Income taxes payable		979
Revolving line of credit	78,067	60,972
Current portion of long-term debt, net of discount and debt issuance costs	983	983
Current portion of deferred rent	3,407	3,150
Total current liabilities	211,003	147,219
Long-term liabilities:
Long-term debt, net of discount, debt issuance costs, and current portion	133,455	133,721
Deferred rent, noncurrent	35,673	35,307
Total long-term liabilities	169,128	169,028
Total liabilities	380,131	316,247
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; 42,500 and 42,269 shares issued and outstanding, respectively	425	422
Additional paid-in capital	80,154	80,146
Accumulated deficit	(55,076)	(50,567)
Total stockholders' equity	25,503	30,001
Total liabilities and stockholders' equity	$ 405,634	$ 346,248

CONDENSED CONSOLIDATED BALANCE3

CONDENSED CONSOLIDATED BALANCE SHEETS - $ / shares shares in Thousands	Apr. 29, 2017	Jan. 28, 2017
CONDENSED CONSOLIDATED BALANCE SHEETS
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	20,000	20,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	100,000	100,000
Common stock, shares issued	42,500	42,269
Common stock, shares outstanding	42,500	42,269

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Apr. 29, 2017	Apr. 30, 2016
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Net sales	$ 156,898	$ 151,615
Cost of goods sold	108,283	103,143
Gross profit	48,615	48,472
Selling, general, and administrative expenses	52,382	46,116
Income (loss) from operations	(3,767)	2,356
Interest expense	(3,150)	(3,588)
Loss before income taxes	(6,917)	(1,232)
Income tax (benefit)	(2,410)	(1,543)
Net (loss) income	$ (4,507)	$ 311
Earnings (loss) per share:
Basic	$ (0.11)	$ 0.01
Diluted	$ (0.11)	$ 0.01
Weighted-average shares outstanding:
Basic	42,277	42,032
Diluted	42,277	42,334

CONDENSED CONSOLIDATED STATEME5

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Apr. 29, 2017	Apr. 30, 2016
Cash flows from operating activities:
Net (loss) income	$ (4,507)	$ 311
Adjustments to reconcile net (loss) income to net cash used in operating activities:
Depreciation of property and equipment	3,490	2,681
Amortization of discount on debt and deferred financing fees	173	355
Amortization of definite lived intangible	452	451
Change in deferred rent	624	1,906
Deferred income taxes	885	633
Excess tax benefits from stock-based compensation arrangements		(470)
Stock-based compensation	650	625
Change in operating assets and liabilities:
Accounts receivable, net	29	23
Merchandise inventories	(42,019)	(33,171)
Prepaid expenses and other	(4,221)	4,498
Accounts payable	42,049	11,913
Accrued expenses	(3,115)	(2,037)
Income taxes payable and receivable	(3,342)	(3,364)
Net cash used in operating activities	(8,852)	(15,646)
Cash flows from investing activities:
Purchase of property and equipment	(13,204)	(8,720)
Net cash used in investing activities	(13,204)	(8,720)
Cash flows from financing activities:
Net borrowings on line of credit	17,094	38,076
Increase (decrease) in book overdraft	6,359	7,887
Payment of withholdings on restricted stock units	(639)	(1,228)
Principal payments on long-term debt	(400)	(20,074)
Net cash provided by financing activities	22,414	24,661
Net change in cash and cash equivalents	358	295
Cash and cash equivalents at beginning of period	1,911	2,109
Cash and cash equivalents at end of period	2,269	2,404
Cash paid during the period for:
Interest, net of amounts capitalized	2,897	2,954
Income taxes		1,716
Supplemental schedule of noncash investing activities:
Purchases of property and equipment included in accounts payable and accrued expenses	$ 8,089	$ 2,637

Description of Business

Description of Business	3 Months Ended
	Apr. 29, 2017
Description of Business
Description of Business	(1) Description of Business Description of Business Sportsman’s Warehouse Holdings, Inc. (“Holdings”) and its subsidiaries (collectively, the “Company”) operate retail sporting goods stores. As of April 29, 2017, the Company operated 79 stores in 22 states. The Company’s stores are aggregated into one single 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 28, 2017 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 April 29, 2017 are not necessarily indicative of the results to be obtained for the year ending February 3, 2018. 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 28, 2017 filed with the SEC on March 24, 2017 (the “Fiscal 2016 Form 10-K”).

Summary of Significant Accounti

Summary of Significant Accounting Policies	3 Months Ended
	Apr. 29, 2017
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies	(2) Summary of Significant Accounting Policies Principles of Consolidation The accompanying condensed consolidated financial statements include the accounts of Holdings and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. Reporting Periods The Company operates 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. The fiscal first quarters ended April 29, 2017 and April 30, 2016 both consisted of 13 weeks and are referred to herein as the first quarter of fiscal year 2017 and first quarter of fiscal year 2016, respectively. Fiscal year 2016 contained 52 weeks of operations ended January 28, 2017. Fiscal year 2017 will contain 53 weeks of operations and will end on February 3, 2018. Seasonality The Company’s business is generally seasonal, with a significant portion of total sales occurring during the third and fourth quarters of the fiscal year. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Certain costs are estimated for the full year and allocated to interim periods based on estimates of time expired, benefit received, or activity associated with the interim period. Segment Reporting The Company operates solely as a sporting goods retailer whose Chief Operating Decision Maker (“CODM”) is the Chief Executive Officer. The CODM reviews financial information presented on a consolidated and individual store and cost center basis, for purposes of allocating resources and evaluating financial performance. The Company’s stores offer essentially the same general product mix, and the core customer demographic remains similar chain-wide, as does the Company’s process for the procurement and marketing of its product mix. Furthermore, the Company distributes its product mix chain-wide from a single distribution center. Given that the stores have the same economic characteristics, the individual stores are aggregated into one single operating and reportable segment. Comprehensive Income The Company has no components of net income that would require classification as other comprehensive income for the 13 week periods ended April 29, 2017 and April 30, 2016. Recent Accounting Pronouncements Revenue from Contracts with Customers In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09 “Revenue from Contracts with Customers” (Topic 606) (“ASU 2014-09”). ASU 2014-09 is a comprehensive new revenue recognition model requiring a company to recognize revenue to depict the transfer of goods or services to a customer at an amount reflecting the consideration it expects to receive in exchange for those goods or services. In August 2015, the FASB issued ASU 2015-14, “Deferral of the Effective Date” (“ASU 2015-14”). ASU 2015-14 simply formalized a one year deferral of the effective date of ASU 2014-09. In March 2016, the FASB issued ASU 2016-08 “Principal versus Agent Considerations – Reporting Revenue Gross versus Net”, amending the principal-versus-agent implementation guidance set forth in ASU 2014-09. In April 2016, the FASB issued ASU 2016-10 “Identifying Performance Obligations and Licensing”, which amends certain aspects of the guidance set forth in the FASB’s new revenue standard related to identifying performance obligations and licensing implementation. As a result of these four standards updates, the Company expects that it will apply the new revenue standard to annual and interim reporting periods beginning after December 15, 2017. In adopting these standard updates, companies may use either a full retrospective or a modified retrospective approach. Management is evaluating the provisions of these standard updates and has determined that the Company will adopt this standard using a modified retrospective approach. Management has not yet determined what impact the adoption of these standard updates will have on the Company's financial position or results of operations. Simplifying the Measurement of Inventory In July 2015, the FASB issued ASU 2015-11, “Simplifying the Measurement of Inventory” (“ASU 2015-11”). Under ASU 2015-11, inventory will be measured at the “lower of cost and net realizable value” and options that currently exist for “market value” will be eliminated. ASU 2015-11 defines net realizable value as the “estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation.” No other changes were made to the current guidance on inventory measurement. ASU 2015-11 is effective for interim and annual periods beginning after December 15, 2016. The Company adopted ASU 2015-11 in the first quarter of fiscal year 2017 and has measured its inventory at the lower of cost or net realizable value. This adoption had no impact on the value of inventory presented on the condensed consolidated balance sheet for the fiscal quarter ended April 29, 2017. Lease Accounting In February 2016, the FASB issued ASU 2016-02, “Leases” (“ASU 2016-02”). The standard amends the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor accounting. ASU 2016-02 will be effective beginning in the first quarter of 2019. Early adoption of ASU 2016-02 is permitted. The new leases standard requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. Management is currently evaluating the impact of adopting ASU 2016-02 on the Company’s consolidated financial statements, including whether to elect the practical expedients outlined in the new standard. The Company does expect the new standard to have a material impact on its consolidated financial statements once adopted. Recognition of Breakage for Certain Prepaid Stored-Value Products In March 2016, the FASB issued ASU 2016-04, “Recognition of Breakage for Certain Prepaid Stored-Value Products” (“ASU 2016-04”). ASU 2016-04 entitles a company to derecognize amounts related to expected breakage in proportion to the pattern of rights expected to be exercised by the product holder to the extent that it is probable a significant reversal of the recognized breakage amount will not subsequently occur. ASU 2016-04 is effective for reporting periods beginning after December 15, 2017 and is to be applied retrospectively. Early adoption is permitted. Management believes ASU 2016-02 will have no impact on the Company’s consolidated financial statements. Classification of Certain Cash Receipts and Cash Payments In August 2016, the FASB issued ASU 2016-15, “Classification of Certain Cash Receipts and Cash Payments” (“ASU 2016-15”). The update amends the guidance in Accounting Standard Codification 230, Statement of Cash Flows , and clarifies how entities should classify certain cash receipts and cash payments on the statement of cash flows with the objective of reducing the existing diversity in practices related to eight specific cash flow issues. The amendments in this update are effective for annual periods beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted. Management has determined this will have no impact on the Company’s consolidated financial statements.

Secondary Offering

Secondary Offering	3 Months Ended
	Apr. 29, 2017
Secondary Offering
Secondary Offering	(3) Secondary Offering On April 18, 2016, 6,000 shares of common stock were sold in a secondary offering by Seidler Equity Partners III, L.P. On April 22, 2016, the underwriters of the secondary offering fully exercised the option granted at the time of the secondary offering to purchase an additional 900 shares of common stock at the secondary offering price of $11.25 per share, less underwriting discounts and commissions, which consisted solely of shares sold by affiliates of Seidler Equity Partners III, L.P. The Company received no proceeds from the secondary offering or full exercise of the option. Total expenses incurred related to the secondary offering and the exercise of the option were $143 and are recorded in selling, general, and administrative expenses in the accompanying Statements of Operations.

Property and Equipment

Property and Equipment	3 Months Ended
	Apr. 29, 2017
Property and Equipment.
Property and Equipment	(4) Property and Equipment Property and equipment as of April 29, 2017 and January 28, 2017 were as follows: April 29, January 28, 2017 2017 Furniture, fixtures, and equipment $ 56,370 $ 52,719 Leasehold improvements 72,102 61,986 Construction in progress 12,300 10,746 Total property and equipment, gross 140,772 125,451 Less accumulated depreciation and amortization (45,832) (42,342) Total property and equipment, net $ 94,940 $ 83,109

Accrued Expenses

Accrued Expenses	3 Months Ended
	Apr. 29, 2017
Accrued Expenses
Accrued Expenses	(5) Accrued Expenses Accrued expenses consisted of the following as of April 29, 2017 and January 28, 2017: April 29, January 28, 2017 2017 Book overdraft $ 11,714 $ 5,355 Unearned revenue 17,556 18,019 Accrued payroll and related expenses 7,157 9,430 Sales and use tax payable 3,392 4,802 Accrued construction costs 4,677 3,138 Other 9,874 8,842 $ 54,370 $ 49,586

Revolving Line of Credit

Revolving Line of Credit	3 Months Ended
	Apr. 29, 2017
Revolving Line of Credit
Revolving Line of Credit	(6) Revolving Line of Credit The Company has a senior secured revolving credit facility (“Revolving Line of Credit”) with Wells Fargo Bank, National Association (“Wells Fargo”) that provides for borrowings in the aggregate amount of up to $135,000, subject to a borrowing base calculation. As of April 29, 2017 and January 28, 2017, the Company had $87,287 and $67,110, respectively, in outstanding revolving loans under the Revolving Line of Credit. Amounts outstanding are offset on the condensed consolidated balance sheets by amounts in depository accounts under lock-box arrangements, which were $9,220 and $6,138 as of April 29, 2017 and January 28, 2017, respectively. As of April 29, 2017, the Company had stand-by commercial letters of credit of $1,200 under the terms of the Revolving Line of Credit. The Revolving Line of Credit 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 Revolving Line of Credit also requires us to maintain a minimum availability at all times of not less than 10% of the gross borrowing base, and in any event, not less than $5,000. The Revolving Line of Credit also contains customary events of default. The Revolving Line of Credit matures on December 3, 2019. As of April 29, 2017 and January 28, 2017, the Revolving Line of Credit had $255 and $295, respectively in outstanding deferred financing fees. During the 13 weeks ended April 29, 2017, the Company recognized $40 of non-cash interest expense with respect to the amortization of deferred financing fees. During the 13 weeks ended April 30, 2016, the Company recognized $39, of non-cash interest expense with respect to the amortization of deferred financing fees.

Long-Term Debt

Long-Term Debt	3 Months Ended
	Apr. 29, 2017
Long-Term Debt
Long-Term Debt	(7) Long-Term Debt Long-term debt consisted of the following as of April 29, 2017 and January 28, 2017: April 29, January 28, 2017 2017 Term loan $ 136,327 $ 136,727 Less discount (819) (877) Less debt issuance costs (1,070) (1,146) 134,438 134,704 Less current portion, net of discount and debt issuance costs (983) (983) Long-term portion $ 133,455 $ 133,721 Term Loan The Company has a $160,000 senior secured term loan facility (“Term Loan”) with a financial institution. The Term Loan was issued at a price of 99% of the aggregate principal amount and has a maturity date of December 3, 2020. As of April 29, 2017 and January 28, 2017, the Term Loan had an outstanding balance of $136,327 and $136,727, respectively. The outstanding amounts as of April 29, 2017 and January 28, 2017 are offset on the condensed consolidated balance sheets by an unamortized discount of $819 and $877, respectively, and debt issuance costs of $1,070 and $1,146, respectively. During the 13 weeks ended April 29, 2017, the Company recognized $58 of non-cash interest expense with respect to the amortization of the discount. During the 13 weeks ended April 29, 2017, the Company recognized $76, of non-cash interest expense with respect to the amortization of the debt issuance costs. During the 13 weeks ended April 30, 2016, the Company recognized $228 of non-cash interest expense with respect to the amortization of the discount. During the 13 weeks ended April 30, 2016, the Company recognized $88 of non-cash interest expense with respect to the amortization of the debt issuance costs. As part of the Term Loan agreement, there are a number of financial and non-financial debt covenants. The financial covenants include a net leverage ratio and an interest coverage ratio to be measured on a trailing twelve month basis. During the 13 weeks ended April 29, 2017, the Company made a required quarterly payment on the Term Loan of $400. Restricted Net Assets The provisions of the Term Loan and 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 April 29, 2017, from being used to pay any dividends without prior written consent from the financial institutions party to the Company’s Term Loan and Revolving Line of Credit.

Income Taxes

Income Taxes	3 Months Ended
	Apr. 29, 2017
Income Taxes
Income Taxes	(8) Income Taxes The Company recognized an income tax benefit of $2,410 and $1,543 in the 13 weeks ended April 29, 2017 and April 30, 2016, respectively. Before discrete items, the 2017 estimated annual effective tax rate is expected to be 38.8%, which is comparable to 37.3% for the full year 2016.

Earnings (Loss) Per Share

Earnings (Loss) Per Share	3 Months Ended
	Apr. 29, 2017
Earnings (Loss) Per Share
Earnings (Loss) Per Share	(9) Earnings (Loss) 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 earnings (loss) per common share: Thirteen Weeks Ended April 29, April 30, 2017 2016 Net income (loss) $ (4,507) $ 311 Weighted-average shares of common stock outstanding: Basic 42,277 42,032 Dilutive effect of common stock equivalents — 302 Diluted 42,277 42,334 Basic Earnings (loss) per share $ (0.11) $ 0.01 Diluted Earnings (loss) per share $ (0.11) $ 0.01 Restricted stock units considered anti-dilutive and excluded in the calculation 171 —

Stock-Based Compensation

Stock-Based Compensation	3 Months Ended
	Apr. 29, 2017
Stock-Based Compensation
Stock-Based Compensation	(10) Stock-Based Compensation Stock-Based Compensation During the 13 weeks ended April 29, 2017 and April 30, 2016, the Company recognized total stock-based compensation expense of $650 and $625, respectively. During these same periods, the Company recognized a net tax benefit related to stock-based compensation expense of $253 and $233, 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 April 29, 2017, the number of shares available for awards under the 2013 Performance Incentive Plan (the “2013 Plan”) was 1,475. As of April 29, 2017, there were 410 awards outstanding under the 2013 Plan. Employee Stock Purchase Plan The Company also has an Employee Stock Purchase Plan (“ESPP”) that was approved by shareholders in fiscal year 2015, under which 800 shares of common stock have been authorized. Shares are issued under the ESPP twice yearly at the end of each offering period. For the period ended April 29, 2017, no shares were issued under this plan. Nonvested Restricted Stock Awards During the 13 weeks ended April 29, 2017, the Company did not issue any nonvested restricted stock awards to employees. During the 13 weeks ended April 30, 2016, the Company issued 162 nonvested stock awards to employees at a weighted average grant date fair value of $11.25 per share. The nonvested stock awards issued to employees vest over three years, with one third vesting on each grant date anniversary. The following table sets forth the rollforward of outstanding nonvested stock awards (per share amounts are not in thousands): Weighted average grant-date Shares fair value Balance at January 28, 2017 162 $ 11.25 Grants — — Forfeitures — — Vested 54 11.25 Balance at April 29, 2017 108 $ 11.25 Weighted average grant-date Shares fair value Balance at January 30, 2016 — — Grants 162 11.25 Forfeitures — — Vested — — Balance at April 30, 2016 162 $ 11.25 Nonvested Performance-Based Stock Awards During the 13 weeks ended April 29, 2017, the Company did not issue any nonvested performance-based stock awards to employees. During the 13 weeks ended April 30, 2016, the Company issued 159 nonvested performance-based stock awards to employees at a weighted average grant date fair value of $11.25 per share. The nonvested performance-based stock awards issued to employees vest over three years with one third vesting on each grant date anniversary. The number of shares issued was contingent on management achieving a fiscal year 2016 performance target for same store sales and return on invested capital for new stores. Based on the performance conditions met for 2016, the finalized granted awards was 73. 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 28, 2017 73 $ 11.25 Grants — — Forfeitures — — Vested 24 11.25 Balance at April 29, 2017 49 $ 11.25 Nonvested Stock Unit Awards During the 13 weeks ended April 29, 2017, the Company issued 172 nonvested stock units to employees of the Company at a value of $4.62 per share. These nonvested stock units vest over a three year period with one third of the shares vesting on each grant date anniversary. During the 13 weeks ended April 30, 2016, the Company issued no nonvested stock units to employees. The Company had no net share settlements in the 13 weeks ended April 29, 2017 and April 30, 2016. 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 28, 2017 301 $ 7.17 Grants 172 4.62 Forfeitures 1 7.06 Vested 295 7.13 Balance at April 29, 2017 177 $ 4.74 Weighted average grant-date Shares fair value Balance at January 30, 2016 599 $ 7.15 Grants — — Forfeitures — — Vested 298 7.16 Balance at April 30, 2016 301 $ 7.14

Commitments and Contingencies

Commitments and Contingencies	3 Months Ended
	Apr. 29, 2017
Commitments and Contingencies.
Commitments and Contingencies	(11) Commitments and Contingencies Operating Leases The Company leases its retail store, office space and warehouse locations under non-cancelable operating leases. Rent expense under these leases totaled $11,599 and $10,650 for the 13 weeks ended April 29, 2017 and April 30, 2016, respectively. 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. On March 12, 2014, the Company was added as a defendant to a pending consolidated action filed in the United States District Court, Western District of Washington, captioned as Lacey Market Place Associates II, LLC, et al. v. United Farmers of Alberta Co-Operative Limited, et al., Case No. 2:13-cv-00383-JLR against United Farmers of Alberta Co-Operative Limited (the seller of Wholesale Sports), Wholesale Sports, Alamo Group, LLC and Donald F. Gaube and spouse. The amended complaint was filed by the landlords of two stores that the Company did not assume in the Company’s purchase of assets from Wholesale Sports. Such stores were formerly operated by Wholesale Sports in Skagit and Thurston Counties in Washington. The amended complaint alleged breach of lease, breach of collateral assignment, misrepresentation, intentional interference with contract, piercing the corporate veil and violation of Washington’s Fraudulent Transfer Act. The Company was named as a co-defendant with respect to the intentional interference with contract and fraudulent conveyance claims. The amended complaint sought against the Company and all defendants unspecified money damages, declaratory relief and attorneys’ fees and costs. On January 28, 2015, the court in the Lacey Marketplace action granted in part and denied in part the Company’s motion for summary judgment and dismissed the intentional interference claim against the Company, but declined to dismiss the fraudulent transfer claim. Trial in the Lacey Marketplace action began March 2, 2015 and concluded March 6, 2015. On March 9, 2015, the jury in the trial assessed $11,887 against the defendants to the action, including the Company. The Company reviewed the decision and accrued $4,000 in its results for the fiscal year ended January 31, 2015 related to this matter. The Company strongly disagreed with the jury’s verdict and filed post-trial motions seeking to have the verdict set aside. On July 30, 2015, the court granted the Company’s motion for judgment as a matter of law. Both United Farmers of Alberta Co-Operative Limited, a co-defendant, and the plaintiff have appealed the court’s summary judgment ruling against the tortious interference claim, and the July 30, 2015 ruling setting aside the jury verdict, to the appellate court and the appeal is currently in process. Based on the court’s most recent judgment in favor of the Company, the Company determined that the likelihood of loss in this case is not probable, and, as such, the Company reversed the previous accrual of $4,000 in its results for the fiscal year ended January 30, 2016.

Subsequent Events

Subsequent Events	3 Months Ended
	Apr. 29, 2017
Subsequent Events
Subsequent Events	(12) Subsequent Events On May 17, 2017 (“Closing Date”), the Company’s wholly owned subsidiary, Sportsman’s Warehouse, Inc., amended the financial covenants to its existing Term Loan entered into on December 3, 2014. The amendment increased the maximum leverage ratio in each of the remaining quarters by amounts ranging from 0.2x to 1.3x with an average quarterly increase of 0.75x. As a result of the amendment, the interest rate on the Company’s term loan increased by 25 basis points to LIBOR plus 6.25% with a 1.25% LIBOR floor, up from LIBOR plus 6.0% with a 1.25% LIBOR floor previously.

Summary of Significant Accoun18

Summary of Significant Accounting Policies (Policies)	3 Months Ended
	Apr. 29, 2017
Summary of Significant Accounting Policies
Principles of Consolidation	Principles of Consolidation The accompanying condensed consolidated financial statements include the accounts of Holdings and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.
Reporting Periods	Reporting Periods The Company operates 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. The fiscal first quarters ended April 29, 2017 and April 30, 2016 both consisted of 13 weeks and are referred to herein as the first quarter of fiscal year 2017 and first quarter of fiscal year 2016, respectively. Fiscal year 2016 contained 52 weeks of operations ended January 28, 2017. Fiscal year 2017 will contain 53 weeks of operations and will end on February 3, 2018.
Seasonality	Seasonality The Company’s business is generally seasonal, with a significant portion of total sales occurring during the third and fourth quarters of the fiscal year.
Use of Estimates	Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Certain costs are estimated for the full year and allocated to interim periods based on estimates of time expired, benefit received, or activity associated with the interim period.
Segment Reporting	Segment Reporting The Company operates solely as a sporting goods retailer whose Chief Operating Decision Maker (“CODM”) is the Chief Executive Officer. The CODM reviews financial information presented on a consolidated and individual store and cost center basis, for purposes of allocating resources and evaluating financial performance. The Company’s stores offer essentially the same general product mix, and the core customer demographic remains similar chain-wide, as does the Company’s process for the procurement and marketing of its product mix. Furthermore, the Company distributes its product mix chain-wide from a single distribution center. Given that the stores have the same economic characteristics, the individual stores are aggregated into one single operating and reportable segment.
Comprehensive Income	Comprehensive Income The Company has no components of net income that would require classification as other comprehensive income for the 13 week periods ended April 29, 2017 and April 30, 2016.
Recent Accounting Pronouncements	Recent Accounting Pronouncements Revenue from Contracts with Customers In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09 “Revenue from Contracts with Customers” (Topic 606) (“ASU 2014-09”). ASU 2014-09 is a comprehensive new revenue recognition model requiring a company to recognize revenue to depict the transfer of goods or services to a customer at an amount reflecting the consideration it expects to receive in exchange for those goods or services. In August 2015, the FASB issued ASU 2015-14, “Deferral of the Effective Date” (“ASU 2015-14”). ASU 2015-14 simply formalized a one year deferral of the effective date of ASU 2014-09. In March 2016, the FASB issued ASU 2016-08 “Principal versus Agent Considerations – Reporting Revenue Gross versus Net”, amending the principal-versus-agent implementation guidance set forth in ASU 2014-09. In April 2016, the FASB issued ASU 2016-10 “Identifying Performance Obligations and Licensing”, which amends certain aspects of the guidance set forth in the FASB’s new revenue standard related to identifying performance obligations and licensing implementation. As a result of these four standards updates, the Company expects that it will apply the new revenue standard to annual and interim reporting periods beginning after December 15, 2017. In adopting these standard updates, companies may use either a full retrospective or a modified retrospective approach. Management is evaluating the provisions of these standard updates and has determined that the Company will adopt this standard using a modified retrospective approach. Management has not yet determined what impact the adoption of these standard updates will have on the Company's financial position or results of operations. Simplifying the Measurement of Inventory In July 2015, the FASB issued ASU 2015-11, “Simplifying the Measurement of Inventory” (“ASU 2015-11”). Under ASU 2015-11, inventory will be measured at the “lower of cost and net realizable value” and options that currently exist for “market value” will be eliminated. ASU 2015-11 defines net realizable value as the “estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation.” No other changes were made to the current guidance on inventory measurement. ASU 2015-11 is effective for interim and annual periods beginning after December 15, 2016. The Company adopted ASU 2015-11 in the first quarter of fiscal year 2017 and has measured its inventory at the lower of cost or net realizable value. This adoption had no impact on the value of inventory presented on the condensed consolidated balance sheet for the fiscal quarter ended April 29, 2017. Lease Accounting In February 2016, the FASB issued ASU 2016-02, “Leases” (“ASU 2016-02”). The standard amends the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor accounting. ASU 2016-02 will be effective beginning in the first quarter of 2019. Early adoption of ASU 2016-02 is permitted. The new leases standard requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. Management is currently evaluating the impact of adopting ASU 2016-02 on the Company’s consolidated financial statements, including whether to elect the practical expedients outlined in the new standard. The Company does expect the new standard to have a material impact on its consolidated financial statements once adopted. Recognition of Breakage for Certain Prepaid Stored-Value Products In March 2016, the FASB issued ASU 2016-04, “Recognition of Breakage for Certain Prepaid Stored-Value Products” (“ASU 2016-04”). ASU 2016-04 entitles a company to derecognize amounts related to expected breakage in proportion to the pattern of rights expected to be exercised by the product holder to the extent that it is probable a significant reversal of the recognized breakage amount will not subsequently occur. ASU 2016-04 is effective for reporting periods beginning after December 15, 2017 and is to be applied retrospectively. Early adoption is permitted. Management believes ASU 2016-02 will have no impact on the Company’s consolidated financial statements. Classification of Certain Cash Receipts and Cash Payments In August 2016, the FASB issued ASU 2016-15, “Classification of Certain Cash Receipts and Cash Payments” (“ASU 2016-15”). The update amends the guidance in Accounting Standard Codification 230, Statement of Cash Flows , and clarifies how entities should classify certain cash receipts and cash payments on the statement of cash flows with the objective of reducing the existing diversity in practices related to eight specific cash flow issues. The amendments in this update are effective for annual periods beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted. Management has determined this will have no impact on the Company’s consolidated financial statements.

Property and Equipment (Tables)

Property and Equipment (Tables)	3 Months Ended
	Apr. 29, 2017
Property and Equipment.
Schedule of Property and Equipment	Property and equipment as of April 29, 2017 and January 28, 2017 were as follows: April 29, January 28, 2017 2017 Furniture, fixtures, and equipment $ 56,370 $ 52,719 Leasehold improvements 72,102 61,986 Construction in progress 12,300 10,746 Total property and equipment, gross 140,772 125,451 Less accumulated depreciation and amortization (45,832) (42,342) Total property and equipment, net $ 94,940 $ 83,109

Accrued Expenses (Tables)

Accrued Expenses (Tables)	3 Months Ended
	Apr. 29, 2017
Accrued Expenses
Components Accrued Expenses	Accrued expenses consisted of the following as of April 29, 2017 and January 28, 2017: April 29, January 28, 2017 2017 Book overdraft $ 11,714 $ 5,355 Unearned revenue 17,556 18,019 Accrued payroll and related expenses 7,157 9,430 Sales and use tax payable 3,392 4,802 Accrued construction costs 4,677 3,138 Other 9,874 8,842 $ 54,370 $ 49,586

Long-Term Debt (Tables)

Long-Term Debt (Tables)	3 Months Ended
	Apr. 29, 2017
Long-Term Debt
Summary of Long-Term Debt	Long-term debt consisted of the following as of April 29, 2017 and January 28, 2017: April 29, January 28, 2017 2017 Term loan $ 136,327 $ 136,727 Less discount (819) (877) Less debt issuance costs (1,070) (1,146) 134,438 134,704 Less current portion, net of discount and debt issuance costs (983) (983) Long-term portion $ 133,455 $ 133,721

Earnings (Loss) Per Share (Tabl

Earnings (Loss) Per Share (Tables)	3 Months Ended
	Apr. 29, 2017
Earnings (Loss) Per Share
Computation of Basic and Diluted Earnings (Loss) Per Common Share	The following table sets forth the computation of basic and diluted earnings (loss) per common share: Thirteen Weeks Ended April 29, April 30, 2017 2016 Net income (loss) $ (4,507) $ 311 Weighted-average shares of common stock outstanding: Basic 42,277 42,032 Dilutive effect of common stock equivalents — 302 Diluted 42,277 42,334 Basic Earnings (loss) per share $ (0.11) $ 0.01 Diluted Earnings (loss) per share $ (0.11) $ 0.01 Restricted stock units considered anti-dilutive and excluded in the calculation 171 —

Stock-Based Compensation (Table

Stock-Based Compensation (Tables)	3 Months Ended
	Apr. 29, 2017
Stock-Based Compensation
Rollforward of Outstanding Nonvested Stock Awards	The following table sets forth the rollforward of outstanding nonvested stock awards (per share amounts are not in thousands): Weighted average grant-date Shares fair value Balance at January 28, 2017 162 $ 11.25 Grants — — Forfeitures — — Vested 54 11.25 Balance at April 29, 2017 108 $ 11.25 Weighted average grant-date Shares fair value Balance at January 30, 2016 — — Grants 162 11.25 Forfeitures — — Vested — — Balance at April 30, 2016 162 $ 11.25
Rollforward of Outstanding 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 28, 2017 73 $ 11.25 Grants — — Forfeitures — — Vested 24 11.25 Balance at April 29, 2017 49 $ 11.25
Rollforward of Outstanding Nonvested Stock Units	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 28, 2017 301 $ 7.17 Grants 172 4.62 Forfeitures 1 7.06 Vested 295 7.13 Balance at April 29, 2017 177 $ 4.74 Weighted average grant-date Shares fair value Balance at January 30, 2016 599 $ 7.15 Grants — — Forfeitures — — Vested 298 7.16 Balance at April 30, 2016 301 $ 7.14

Description of Business (Detail

Description of Business (Details)	3 Months Ended
	Apr. 29, 2017storestatesegment
Description of Business
Number of stores | store	79
Number of states | state	22
Number of reportable segments | segment	1

Summary of Significant Accoun25

Summary of Significant Accounting Policies - Additional Information (Details) - segment	3 Months Ended	12 Months Ended
	Apr. 29, 2017	Jan. 28, 2017
Summary of Significant Accounting Policies
Fiscal period duration	371 days	364 days
Number of reportable segments	1

Secondary Offering (Details)

Secondary Offering (Details) - Seidler Equity Partners III L.P. - Secondary Offering - USD ($) $ / shares in Units, shares in Thousands	Apr. 22, 2016	Apr. 18, 2016
Subsidiary Or Equity Method Investee [Line Items]
Issuance of common shares (in shares)	900	6,000
Common stock shares issued, price per share	$ 11.25
Issuance of common stock, net	$ 0	$ 0
Selling, General and Administrative Expenses
Subsidiary Or Equity Method Investee [Line Items]
Offering expenses	$ 143,000

Property and Equipment (Details

Property and Equipment (Details) - USD ($) $ in Thousands	Apr. 29, 2017	Jan. 28, 2017
Property Plant And Equipment [Line Items]
Total property and equipment, gross	$ 140,772	$ 125,451
Less accumulated depreciation and amortization	(45,832)	(42,342)
Total property and equipment, net	94,940	83,109
Furniture, fixtures, and equipment
Property Plant And Equipment [Line Items]
Total property and equipment, gross	56,370	52,719
Leasehold improvements
Property Plant And Equipment [Line Items]
Total property and equipment, gross	72,102	61,986
Construction in progress
Property Plant And Equipment [Line Items]
Total property and equipment, gross	$ 12,300	$ 10,746

Accrued Expenses (Details)

Accrued Expenses (Details) - USD ($) $ in Thousands	Apr. 29, 2017	Jan. 28, 2017
Accrued Expenses
Book overdraft	$ 11,714	$ 5,355
Unearned revenue	17,556	18,019
Accrued payroll and related expenses	7,157	9,430
Sales and use tax payable	3,392	4,802
Accrued construction costs	4,677	3,138
Other	9,874	8,842
Accrued expenses	$ 54,370	$ 49,586

Revolving Line Of Credit (Detai

Revolving Line Of Credit (Details) - USD ($) $ in Thousands	3 Months Ended
	Apr. 29, 2017	Apr. 30, 2016	Jan. 28, 2017
Wells Fargo Senior Secured Revolving Credit Facility
Line Of Credit Facility [Line Items]
Line of credit facility, maximum borrowing capacity	$ 135,000
Line of credit facility, amount outstanding	87,287		$ 67,110
Amounts in depository under lock-box arrangements	$ 9,220		6,138
Line of credit , maturity date	Dec. 3, 2019
Deferred financing fees outstanding	$ 255		$ 295
Amortization of deferred financing fees	$ 40	$ 39
Revolving credit facility, covenant term	The Revolving Line of Credit also requires us to maintain a minimum availability at all times of not less than 10% of the gross borrowing base, and in any event, not less than $5,000
Wells Fargo Senior Secured Revolving Credit Facility | Minimum
Line Of Credit Facility [Line Items]
Line of credit facility gross borrowing base percentage	10.00%
Line of credit facility available borrowing capacity	$ 5,000
Wells Fargo Stand-by Commercial Letters of Credit
Line Of Credit Facility [Line Items]
Net borrowing available under revolving line of credit	$ 1,200

Long-Term Debt (Details)

Long-Term Debt (Details) - USD ($) $ in Thousands	Apr. 29, 2017	Jan. 28, 2017
Long-Term Debt
Term loan	$ 136,327	$ 136,727
Less discount	(819)	(877)
Less debt issuance costs	(1,070)	(1,146)
Long-term debt	134,438	134,704
Less current portion, net of discount and debt issuance costs	(983)	(983)
Long-term portion	$ 133,455	$ 133,721

Long-Term Debt - Additional Inf

Long-Term Debt - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Apr. 29, 2017	Apr. 30, 2016	Jan. 28, 2017
Debt Instrument [Line Items]
Term loan	$ 136,327		$ 136,727
Debt instrument discount at issuance	819		877
Debt issuance costs	1,070		1,146
Term Loan
Debt Instrument [Line Items]
Senior secured loan facility	$ 160,000
Debt instrument issuance price, percentage of aggregate principal amount	99.00%
Line of credit , maturity date	Dec. 3, 2020
Term loan	$ 136,327		136,727
Debt instrument discount at issuance	819		877
Debt issuance costs	1,070		$ 1,146
Amortization of discount	58	$ 228
Amortization of debt issuance costs	76	$ 88
Quarterly loan payment	$ 400

Income Taxes (Details)

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Apr. 29, 2017	Apr. 30, 2016	Jan. 28, 2017
Income Taxes
Income tax benefit	$ 2,410	$ 1,543
Estimated annual effective tax rate	38.80%		37.30%

Earnings (Loss) Per Share (Deta

Earnings (Loss) Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Apr. 29, 2017	Apr. 30, 2016
Earnings (Loss) Per Share
Net income (loss)	$ (4,507)	$ 311
Weighted-average shares outstanding:
Basic	42,277	42,032
Dilutive effect of common stock equivalents		302
Diluted	42,277	42,334
Basic Earnings (loss) per share	$ (0.11)	$ 0.01
Diluted Earnings (loss) per share	$ (0.11)	$ 0.01
Restricted stock units considered anti-dilutive and excluded in the calculation	171

Stock-Based Compensation (Detai

Stock-Based Compensation (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		12 Months Ended
	Apr. 29, 2017	Apr. 30, 2016	Jan. 28, 2017	Jan. 30, 2016
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation	$ 650	$ 625
Nonvested Restricted Stock Awards
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Issuance of nonvested stock units		162,000
Nonvested stock issued, weighted average grant date fair value per share		$ 11.25
Vesting period		3 years
Vesting percentage		0.33%
Nonvested stock units outstanding, weighted average grant date fair value per share	$ 11.25	$ 11.25	$ 11.25
Nonvested Performance-Based Stock Awards
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Issuance of nonvested stock units		159
Nonvested stock issued, weighted average grant date fair value per share		$ 11.25
Nonvested stock units outstanding, weighted average grant date fair value per share	$ 11.25		$ 11.25
Target number of shares subject to award			73
Restricted Stock Units (RSUs)
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Issuance of nonvested stock units	172,000	0
Nonvested stock issued, weighted average grant date fair value per share	$ 4.62
Nonvested stock units outstanding, weighted average grant date fair value per share	$ 4.74	$ 7.14	$ 7.17	$ 7.15
Employee Stock Plans
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares issued under ESPP	0
Employee Stock Plans | 2013 Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of shares available for awards	1,475,000
Number of awards outstanding	410,000
Employee Stock Purchase Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Maximum number of shares subject to award				800,000
Selling, General and Administrative Expenses
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation	$ 650	$ 625
Net tax benefit related to stock-based compensation expense	$ 253	$ 233

Stock-Based Compensation - Roll

Stock-Based Compensation - Rollforward of Outstanding Nonvested Stock Units (Details) - $ / shares	3 Months Ended
	Apr. 29, 2017	Apr. 30, 2016
Restricted Stock Units (RSUs)
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Beginning balance, Shares	301,000	599,000
Grants, Shares	172,000	0
Forfeitures, Shares	1,000
Vested, Shares	295,000	298,000
Ending balance, Shares	177,000	301,000
Beginning balance, Weighted average grant-date fair value	$ 7.17	$ 7.15
Grants, Weighted average grant-date fair value	4.62
Forfeitures, Weighted average grant-date fair value	7.06
Vested, Weighted average grant-date fair value	7.13	7.16
Ending balance, Weighted average grant-date fair value	$ 4.74	$ 7.14
Nonvested Restricted Stock Awards
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Beginning balance, Shares	162,000
Grants, Shares		162,000
Vested, Shares	54,000
Ending balance, Shares	108,000	162,000
Beginning balance, Weighted average grant-date fair value	$ 11.25
Grants, Weighted average grant-date fair value		$ 11.25
Vested, Weighted average grant-date fair value	11.25
Ending balance, Weighted average grant-date fair value	$ 11.25	$ 11.25
Nonvested Performance-Based Stock Awards
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Beginning balance, Shares	73,000
Grants, Shares		159
Vested, Shares	24,000
Ending balance, Shares	49,000
Beginning balance, Weighted average grant-date fair value	$ 11.25
Grants, Weighted average grant-date fair value		$ 11.25
Vested, Weighted average grant-date fair value	11.25
Ending balance, Weighted average grant-date fair value	$ 11.25

Commitments and Contingencies (

Commitments and Contingencies (Details) - USD ($) $ in Thousands	Mar. 09, 2015	Apr. 29, 2017	Apr. 30, 2016	Jan. 31, 2015
Operating Leases
Rent expense		$ 11,599	$ 10,650
Loss contingency trial start date		Mar. 2, 2015
Loss contingency trial end date		Mar. 6, 2015
Trial award against defendants to the action	$ 11,887
Accrued amount of litigation				$ 4,000

Subsequent Events (Details)

Subsequent Events (Details) - Term Loan - Subsequent Event	May 17, 2017	May 16, 2017
Subsequent Event [Line Items]
Average quarterly increase	0.75
Minimum
Subsequent Event [Line Items]
Leverage ratio in each of the remaining quarters	0.2
Maximum
Subsequent Event [Line Items]
Leverage ratio in each of the remaining quarters	1.3
LIBOR
Subsequent Event [Line Items]
Increase in basis points	0.0025%
Debt instrument applicable margin	6.25%	6.00%
LIBOR floor	1.25%	1.25%