Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
May 04, 2019 | May 31, 2019 | |
Document And Entity Information | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | May 4, 2019 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | SPWH | |
Entity Registrant Name | SPORTSMAN'S WAREHOUSE HOLDINGS, INC. | |
Entity Central Index Key | 0001132105 | |
Current Fiscal Year End Date | --02-01 | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | true | |
Entity Common Stock, Shares Outstanding | 43,099,213 | |
Entity Current Reporting Status | Yes |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | May 04, 2019 | Feb. 02, 2019 |
Current assets: | ||
Cash | $ 1,715 | $ 1,547 |
Accounts receivable, net | 289 | 249 |
Merchandise inventories | 291,462 | 276,600 |
Income tax receivable | 597 | |
Prepaid expenses and other | 9,566 | 15,174 |
Total current assets | 303,629 | 293,570 |
Operating lease right of use asset | 189,431 | |
Property and equipment, net | 91,049 | 92,084 |
Deferred income taxes | 2,997 | |
Definite lived intangibles, net | 239 | 246 |
Total assets | 584,348 | 388,897 |
Current liabilities: | ||
Accounts payable | 49,982 | 24,953 |
Accrued expenses | 56,528 | 56,384 |
Income taxes payable | 1,838 | |
Operating lease liability, current | 31,967 | |
Revolving line of credit | 141,572 | 144,306 |
Current portion of long-term debt, net of discount and debt issuance costs | 7,915 | 7,915 |
Current portion of deferred rent | 5,270 | |
Total current liabilities | 287,964 | 240,666 |
Long-term liabilities: | ||
Long-term debt, net of discount, debt issuance costs, and current portion | 25,739 | 27,717 |
Deferred income taxes | 535 | |
Deferred rent, noncurrent | 41,854 | |
Operating lease liability, noncurrent | 187,570 | |
Total long-term liabilities | 213,844 | 69,571 |
Total liabilities | 501,808 | 310,237 |
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; 43,174 and 42,978 shares issued and outstanding, respectively | 432 | 430 |
Additional paid-in capital | 84,753 | 84,671 |
Accumulated deficit | (2,645) | (6,441) |
Total stockholders' equity | 82,540 | 78,660 |
Total liabilities and stockholders' equity | $ 584,348 | $ 388,897 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares shares in Thousands | May 04, 2019 | Feb. 02, 2019 |
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 | 43,174 | 42,978 |
Common stock, shares outstanding | 43,174 | 42,978 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
May 04, 2019 | May 05, 2018 | |
CONSOLIDATED STATEMENTS OF INCOME | ||
Net sales | $ 174,017 | $ 180,059 |
Cost of goods sold | 119,844 | 124,493 |
Gross profit | 54,173 | 55,566 |
Selling, general, and administrative expenses | 59,530 | 59,216 |
Loss from operations | (5,357) | (3,650) |
Interest expense | (2,105) | (3,557) |
Loss before income taxes | (7,462) | (7,207) |
Income tax benefit | (2,003) | (1,379) |
Net loss | $ (5,459) | $ (5,828) |
Loss per share: | ||
Basic | $ (0.13) | $ (0.14) |
Diluted | $ (0.13) | $ (0.14) |
Weighted average shares outstanding: | ||
Basic | 43,003 | 42,727 |
Diluted | 43,003 | 42,727 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT) - USD ($) shares in Thousands, $ in Thousands | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Total |
Balance, shares at Feb. 03, 2018 | 42,617 | |||
Balance at Feb. 03, 2018 | $ 426 | $ 82,197 | $ (32,825) | $ 49,798 |
Vesting of restricted stock units (in shares) | 216 | |||
Vesting of restricted stock units | $ 2 | (2) | ||
Payment of withholdings on restricted stock units | (699) | (699) | ||
Stock based compensation | 1,572 | 1,572 | ||
Net income (loss) | (5,828) | (5,828) | ||
Balance, shares at May. 05, 2018 | 42,833 | |||
Balance at May. 05, 2018 | $ 428 | 83,068 | (36,019) | 47,477 |
Impact of change for ASC 606 adoption | 2,634 | $ 2,634 | ||
Balance, shares at Feb. 02, 2019 | 42,978 | 42,978 | ||
Balance at Feb. 02, 2019 | $ 430 | 84,671 | (6,441) | $ 78,660 |
Vesting of restricted stock units (in shares) | 196 | |||
Vesting of restricted stock units | $ 2 | (2) | ||
Payment of withholdings on restricted stock units | (369) | (369) | ||
Stock based compensation | 453 | 453 | ||
Net income (loss) | (5,459) | $ (5,459) | ||
Balance, shares at May. 04, 2019 | 43,174 | 43,174 | ||
Balance at May. 04, 2019 | $ 432 | $ 84,753 | (2,645) | $ 82,540 |
Impact of change for ASC 606 adoption | $ 9,255 | $ 9,255 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
May 04, 2019 | May 05, 2018 | |
Cash flows from operating activities: | ||
Net loss | $ (5,459) | $ (5,828) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Depreciation of property and equipment | 4,606 | 4,387 |
Amortization and write-off of discount on debt and deferred financing fees | 84 | 192 |
Amortization of definite lived intangible | 7 | 276 |
Change in deferred rent | (649) | |
Gain on asset dispositions | (311) | |
Noncash lease expense | 7,610 | |
Deferred income taxes | 431 | 237 |
Stock-based compensation | 453 | 1,572 |
Change in operating assets and liabilities: | ||
Accounts receivable, net | (40) | (63) |
Operating lease liabilities | (8,513) | |
Merchandise inventories | (14,862) | (35,607) |
Prepaid expenses and other | 1,786 | (78) |
Accounts payable | 25,340 | 27,501 |
Accrued expenses | (5,254) | 630 |
Income taxes payable and receivable | (2,435) | (1,619) |
Net cash provided by (used in) operating activities | 3,443 | (9,049) |
Cash flows from investing activities: | ||
Purchase of property and equipment | (3,402) | (4,474) |
Proceeds from sale of property and equipment | 311 | |
Net cash used in investing activities | (3,091) | (4,474) |
Cash flows from financing activities: | ||
Net (payments) borrowings on line of credit | (2,734) | 6,874 |
Increase in book overdraft | 4,919 | 8,358 |
Payment of withholdings on restricted stock units | (369) | (699) |
Principal payments on long-term debt | (2,000) | (400) |
Net cash (used in) provided by financing activities | (184) | 14,133 |
Net change in cash | 168 | 610 |
Cash at beginning of period | 1,547 | 1,769 |
Cash at end of period | 1,715 | 2,379 |
Cash paid during the period for: | ||
Interest, net of amounts capitalized | 2,021 | 3,137 |
Supplemental schedule of noncash investing and financing activities: | ||
Noncash change in lease asset and operating liabilities from remeasurement of existing leases and addition of new leases | 13,149 | |
Purchases of property and equipment included in accounts payable and accrued expenses | $ 1,356 | $ 1,829 |
Description of Business and Bas
Description of Business and Basis of Presentation | 3 Months Ended |
May 04, 2019 | |
Description of Business and Basis of Presentation | |
Description of Business and Basis of Presentation | (1) Description of Business and Basis of Presentation Description of Business Sportsman’s Warehouse Holdings, Inc. (“Holdings”) and its subsidiaries (collectively, the “Company”) operate retail sporting goods stores. As of May 4, 2019, the Company operated 92 stores in 23 states. The Company also operates an e-commerce platform at www.sportsmans.com. The Company’s stores and website 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 February 2, 2019 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 May 4, 2019 are not necessarily indicative of the results to be obtained for the year ending February 1, 2020. 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 February 2, 2019 filed with the SEC on March 29, 2019 (the “Fiscal 2018 Form 10-K”). |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
May 04, 2019 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | (2) Summary of Significant Accounting Policies The Company’s significant accounting policies are described in Note 1 to the Company’s Fiscal 2018 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. Leases In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842), which requires lessees to recognize on the balance sheet assets and liabilities for leases with lease terms of more than 12 months. Consistent with prior GAAP, the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee will depend primarily on its classification as a finance or operating lease. However, unlike prior GAAP—which required only finance (formerly capital) leases to be recognized on the balance sheet—the new ASU requires both types of leases to be recognized on the balance sheet. The ASU took effect for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. This standard can be applied at the beginning of the earliest period presented using the modified retrospective approach, which includes certain practical expedients that an entity may elect to apply, including an election to use certain transition relief. In July 2018, the FASB issued ASU No. 2018-10, Codification Improvements to Topic 842, Leases and ASU No. 2018-11, Leases (Topic 842): Targeted Improvements, which make improvements to Accounting Standards Codification (“ASC”) 842 and allow entities to not restate comparative periods in transition to ASC 842 and instead report the comparative periods under ASC 840 . The Company adopted ASC 842 using the modified retrospective approach at the beginning of the first quarter of fiscal 2019, coinciding with the standard’s effective date. In accordance with ASC 842, the Company did not restate comparative periods in transition to ASC 842 and instead reported comparative periods under ASC 840. Adoption of the standard resulted in the initial recognition of operating lease right-of-use (“ROU”) assets of $183,000 and operating lease liabilities of $214,000 as of February 3, 2019. These amounts are based on the present value of such commitments using the Company’s incremental borrowing rate (“IBR”), which was determined through use of the Company’s credit rating to develop a rate curve that approximates the Company’s market risk profile. The adoption of this standard had a material impact on the Company’s consolidated statement of income, stockholders’ equity(deficit) and cash flows, with a $9,300 net adjustment recorded to beginning retained earnings on February 3, 2019 due to the acceleration of recognition of a deferred gain and derecognition of related deferred tax asset the Company was amortizing relating to the historical sale of owned properties. In addition, the Company completed its evaluation of the practical expedients offered and enhanced disclosures required in ASC 842, as well as identified arrangements that contain embedded leases, among other activities, to account for the adoption of this standard. The Company elected the following practical expedients: · A package of practical expedients allowing the Company to: 1. Carry forward its historical lease classification (i.e. it was not necessary to reclassify any existing leases at the adoption date of ASC 842), 2. Avoid reassessing whether any expired or existing contracts are or contain leases, and 3. Avoid reassessing initial indirect costs for any existing lease. · A practical expedient allowing the Company to not separate lease components (e.g. fixed payments including, rent, real estate taxes, and insurance costs) from nonlease components (e.g. common area maintenance costs), primarily impacting the Company’s real estate leases. The election of this practical expedient eliminates the burden of separately estimating the real estate lease and nonlease costs on a relative stand-alone basis. · A practical expedient related to land easements, allowing the Company to carry forward the accounting treatment for land easements on existing agreements and eliminated the need to reassess existing lease contracts to determine if land easements are separate leases under ASC 842. The Company did not elect a practical expedient which would allow the Company to use hindsight in determining the lease term (that is, when considering lessee options to extend or terminate the lease and to purchase the underlying asset) and to assess impairment of the entity’s ROU assets, since election of this expedient could make adoption more complex give that re-evaluation of the lease term and impairment consideration affect other aspects of lease accounting. In accordance with ASC 842, the Company determines if an arrangement is a lease at inception. The Company has operating leases for the Company’s retail stores, distribution center, and corporate office. Operating leases are included in operating lease ROU assets and operating lease liabilities, current and noncurrent, on the interim unaudited condensed consolidated balance sheet. Lease liabilities are calculated using the effective interest method. Operating lease classification results in a straight-line expense recognition pattern over the lease term and recognized lease expense as a single expense component, which results in amortization of the ROU asset that equals the difference between lease expense and interest expense. Operating leases are included in selling, general and administrative expense, based on the use of the leased asset, on the interim unaudited condensed consolidated statement of operations. Leases with an initial term of 12 months of less are not recorded on the balance sheet and are not material; the Company recognizes lease expense for these leases on a straight-line basis over the remaining lease term. ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the reasonably certain lease term. As the Company’s leases generally do not provide an implicit rental rate, the Company uses an IBR to determine the present value of future rental payments. The IBR is based on the Company’s credit rating to develop a yield curve that approximates the Company’s market risk profile. The operating lease ROU asset also includes any prepaid lease payments made by the tenant and is reduced by lease incentives such as tenant improvement allowances. The operating lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense is recognized on a straight-line basis over the lease term. For fiscal 2018, the Company evaluated and classified its leases as operating leases for financial reporting purposes, in accordance with ASC 840. In accordance with ASC 840, deferred rent represents the difference between rent paid and amounts expensed for operating leases. Certain leases have scheduled rent increases, and certain leases include an initial period of free or reduced rent as an inducement to enter into the lease agreement (“rent holidays”). The Company recognized rent expense for rent increases and rent holidays on a straight-line basis over the term of the underlying leases, without regard to when rent payments are made. The calculation of straight-line rent begins on the possession date and extends through the “reasonably assured” lease term as defined in ASC 840. Additionally, in accordance with ASC 840, landlord allowances for tenant improvements, or lease incentives, were recorded as deferred rent and amortized on a straight-line basis over the “reasonably assured” lease term as a component of rent expense. See Note 5 for a further discussion on leases. Recently Issued Accounting Pronouncements In August 2018, the FASB issued ASU No. 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract . This standard aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). The Company’s accounting for the service element of a hosting arrangement that is a service contract is not affected by the proposed amendments and will continue to be expensed as incurred in accordance with existing guidance. This standard does not expand on existing disclosure requirements except to require a description of the nature of hosting arrangements that are service contracts. This standard is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted, including adoption in any interim period for which financial statements have not been issued. Entities can choose to adopt the new guidance prospectively or retrospectively. The Company plans to adopt the updated disclosure requirements of ASU No. 2018-15 prospectively in the first quarter of fiscal 2020, coinciding with the standard’s effective date, and expects the impact from this standard to be immaterial. |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
May 04, 2019 | |
Revenue Recognition | |
Revenue Recognition | (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 immaterial credit 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 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 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 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 3.0% when no escheat liability to relevant jurisdictions exists. 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. ASC 606 requires the Company to allocate the transaction price between the goods and the loyalty reward points based on the relative stand alone selling price. The Company recognized revenue for 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 25% when no escheat liability to relevant jurisdictions exists. 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 estimates a reserve for sales returns and records the respective reserve amounts, including a right of 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 May 4, 2019: May 4, 2019 February 2, 2019 Right of return assets, which are included in prepaid expenses and other $ 1,051 $ 1,496 Estimated contract liabilities, net of breakage (19,239) (20,298) Sales return liabilities, which are included in accrued expenses 1,569 2,233 For the 13 weeks ended May 4, 2019 the Company recognized approximately $290 in gift card breakage and approximately $310 in loyalty reward breakage. Gift card and loyalty reward breakage revenue for the 13 weeks ended May 5, 2018 were $319 and $265, respectively. 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. 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 weeks ended May 4, 2019 and May 5, 2018, was approximately: Thirteen Weeks Ended May 4, May 5, Department Product Offerings 2019 2018 Camping Backpacks, camp essentials, canoes and kayaks, coolers, outdoor cooking equipment, sleeping bags, tents and tools Clothing Camouflage, jackets, hats, outerwear, sportswear, technical gear and work wear Fishing Bait, electronics, fishing rods, flotation items, fly fishing, lines, lures, reels, tackle and small boats Footwear Hiking boots, socks, sport sandals, technical footwear, trail shoes, casual shoes, waders and work boots Hunting and Shooting Ammunition, archery items, ATV accessories, blinds and tree stands, decoys, firearms, reloading equipment and shooting gear Optics, Electronics, Accessories, and Other Gift items, GPS devices, knives, lighting, optics (e.g. binoculars), two-way radios, and other license revenue, net of revenue discounts Total |
Property and Equipment
Property and Equipment | 3 Months Ended |
May 04, 2019 | |
Property and Equipment. | |
Property and Equipment | (4) Property and Equipment Property and equipment as of May 4, 2019 and February 2, 2019 were as follows: May 4, February 2, 2019 2019 Furniture, fixtures, and equipment $ 72,184 $ 71,820 Leasehold improvements 95,011 94,573 Construction in progress 4,494 1,743 Total property and equipment, gross 171,689 168,136 Less accumulated depreciation and amortization (80,640) (76,052) Total property and equipment, net $ 91,049 $ 92,084 |
Accrued Expenses
Accrued Expenses | 3 Months Ended |
May 04, 2019 | |
Accrued Expenses | |
Accrued Expenses | (5) Accrued Expenses Accrued expenses consisted of the following as of May 4, 2019 and February 2, 2019: May 4, February 2, 2019 2019 Book overdraft $ 15,216 $ 10,297 Unearned revenue 20,616 21,836 Accrued payroll and related expenses 8,472 11,590 Sales and use tax payable 4,054 4,250 Accrued construction costs 1,239 760 Other 6,931 7,651 Total Accrued Expenses $ 56,528 $ 56,384 |
Leases
Leases | 3 Months Ended |
May 04, 2019 | |
Leases | |
Leases | (6) Leases At the inception of the lease, the Company’s operating leases have remaining certain lease terms of up to 10 years, which typically includes multiple options for the Company to extend the lease which are not reasonably certain. The adoption of ASC 842 resulted in recording a non-cash transitional adjustment to ROU assets and operating lease liabilities of $183,000 and $214,000, respectively, as of February 3, 2019. The difference between the ROU assets and operating lease liabilities at transition primarily represented existing deferred rent, tenant improvement allowances and prepaid rent of $14,200, $20,600 and $3,800, respectively, which were recorded as a component of the ROU asset in connection with the non-cash transitional adjustment. As a result of the adoption of ASC 842, the Company also recorded an increase to retained earnings of $9,300, net of tax, as of February 3, 2019, in relation to the accelerated recognition of a deferred gain, and derecognition of the related deferred tax asset, which the Company was amortizing relating to the historical sales of owned properties it currently leases. As of May 4, 2019, ROU assets recorded for operating leases were $189,400 and accumulated amortization associated with operating leases was $7,600. In the first quarter of fiscal 2019, the Company recorded a non-cash increase of $13,100 to ROU assets and operating lease liabilities resulting from lease remeasurements from the exercise of lease extension options 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 recorded during the 13 weeks ended May 4, 2019 was $14,384. In accordance with ASC 842, other information related to leases was as follows: 13 Weeks Ended May 4, 2019 Operating cash flows from operating leases $ (11,868) Cash paid for amounts included in the measurement of lease liabilities - operating leases (11,868) As of May 4, 2019 Right-of-use assets obtained in exchange for new or remeasured operating lease liabilities $ 13,149 Weighted-average remaining lease term - operating leases 6.11 years Weighted-average discount rate - operating leases In accordance with ASC 842, maturities of operating lease liabilities as of May 4, 2019 were as follows: Operating Year Endings: Leases (in thousands) 2019 $ 36,127 2020 47,939 2021 44,185 2022 40,003 2023 34,787 Thereafter 83,076 Undiscounted cash flows $ 286,117 Reconciliation of lease liabilities: Present values $ 219,537 Lease liabilities - current 31,967 Lease liabilities - noncurrent 187,570 Lease liabilities - total $ 219,537 Difference between undiscounted and discounted cash flows $ 66,580 In accordance with ASC 840, rent expense for operating leases consisted of the following: 13 Weeks Ended May 5, 2018 Operating lease expense $ 13,138 Total lease expense 13,138 In accordance with ASC 840, future minimum lease payments under non-cancelable leases as of February 2, 2019 were as follows: Operating Year Endings: Leases (in thousands) 2019 $ 47,551 2020 46,824 2021 43,070 2022 38,160 2023 33,246 Thereafter 74,821 Total minimum lease payments $ 283,672 |
Revolving Line of Credit
Revolving Line of Credit | 3 Months Ended |
May 04, 2019 | |
Revolving Line of Credit | |
Revolving Line of Credit | (7) Revolving Line of Credit On May 23, 2018, Sportsman’s Warehouse, Inc. (“SWI”), a wholly owned subsidiary of the Company, as borrower, 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 Agreement”). The Amended Credit Agreement amended and restated in its entirety that certain Credit Agreement, dated as of May 28, 2010, by and among SWI, as borrower, and Wells Fargo, as lender, and the other parties listed on the signature pages thereto. The Amended Credit Agreement increased the amount available to borrow under the Company’s senior secured revolving credit facility (“Revolving Line of Credit”) from $150,000 to $250,000, subject to a borrowing base calculation, and provided for a new $40,000 term loan (the “Term Loan”). In conjunction with the Amended Credit Agreement, the Company incurred $1,331 of fees paid to various parties which were capitalized. Fees associated with the Revolving Line of Credit were recorded in prepaid and other assets. Fees associated with the Term Loan offset the loan balance on the condensed consolidated balance sheet of the Company. As of May 4, 2019 and February 2, 2019, the Company had $150,016 and $151,341 in outstanding revolving loans under the 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 arrangements, which were $8,444 and $7,035 as of May 4, 2019 and February 2, 2019, respectively. As of May 4, 2019, the Company had stand-by commercial letters of credit of $1,705 under the terms of the Revolving Line of Credit. The Amended 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 contains customary events of default. The Revolving Line of Credit matures on May 23, 2023 . As of May 4, 2019, the Revolving Line of Credit had $1,022 in deferred financing fees and as of February 2, 2019, the Revolving Line of Credit had $1,085 in deferred financing fees. During the 13 weeks ended May 4, 2019, the Company recognized $63 of non-cash interest expense with respect to the amortization of these deferred financing fees. During the 13 weeks ended May 5, 2018, the Company recognized $22 of non-cash interest expense with respect to the amortization of deferred financing fees. For the 13 weeks ended May 4, 2019, and May 5, 2018, gross borrowings under the Revolving Line of Credit were $185,616 and $206,533 respectively. For the 13 weeks ended May 4, 2019, and May 5, 2018 gross paydowns under the Revolving Line of Credit were $189,280 and $197,467 respectively. |
Long-Term Debt
Long-Term Debt | 3 Months Ended |
May 04, 2019 | |
Long-Term Debt | |
Long-Term Debt | (8) Long-Term Debt Long-term debt consisted of the following as of May 4, 2019 and February 2, 2019: May 4, February 2, 2019 2019 Term loan 34,000 36,000 Less debt issuance costs (346) (368) 33,654 35,632 Less current portion, net of discount and debt issuance costs (7,915) (7,915) Long-term portion $ 25,739 $ 27,717 Term Loan On May 23, 2018, the Company entered into the Term Loan, which was issued at a price of 100% of the aggregate principal amount of $40,000 and has a maturity date of May 23, 2023. Also on May 23, 2018, the Company borrowed $135,400 under the Revolving Line of Credit and used the proceeds from the New Term Loan and the Revolving Line of Credit to repay the Company’s prior term loan with a financial institution that had an outstanding principal balance of $134,700 and was scheduled to mature on December 3, 2020 (the”Prior Term Loan”). The Term Loan bears interest at a rate of LIBOR plus 5.75%. As of May 4, 2019, and February 2, 2019, the Term Loan had an outstanding balance of $34,000 and $36,000, respectively. The outstanding amounts under the Term Loan as of May 4, 2019 and February 2, 2019 are offset on the condensed consolidated balance sheets by an unamortized debt issuance costs of $346 and $368, respectively. During the 13 weeks ended May 4, 2019 and May 5, 2018, the Company recognized $22 and $113, respectively, of non-cash interest expense with respect to the amortization of the debt issuance costs. During the 13 weeks ended May 5, 2018, the Company recognized $58, of non-cash interest expense with respect to the amortization of the discount related to the Prior Term Loan. During the 13 weeks ended May 4, 2019, the Company made the required quarterly payment on the New Term Loan of $2,000. 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 May 4, 2019, 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 |
May 04, 2019 | |
Income Taxes | |
Income Taxes | (9) Income Taxes The Company recognized an income tax benefit of $2,003 and $1,379 in the 13 weeks ended May 4, 2019 and May 5, 2018, respectively. The Company’s effective tax rate for the 13 weeks ended May 4, 2019 and May 5, 2018 was 26.8% and 19.1%, 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. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
May 04, 2019 | |
Earnings Per Share | |
Earnings Per Share | (10) Earnings 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 May 4, May 5, 2019 2018 Net loss $ (5,459) $ (5,828) Weighted-average shares of common stock outstanding: Basic 43,003 42,727 Dilutive effect of common stock equivalents — — Diluted 43,003 42,727 Basic loss per share $ (0.13) $ (0.14) Diluted loss per share $ (0.13) $ (0.14) Restricted stock units considered anti-dilutive and excluded in the calculation 155 331 |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
May 04, 2019 | |
Stock-Based Compensation | |
Stock-Based Compensation | (11) Stock-Based Compensation Stock-Based Compensation During the 13 weeks ended May 4, 2019 and May 5, 2018, the Company recognized total stock-based compensation expense of $453 and $1,572, 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 May 4, 2019, the number of shares available for awards under the 2013 Performance Incentive Plan (the “2013 Plan”) was 276. As of May 4, 2019, there were 432 unvested stock 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 13 weeks ended May 4, 2019, no shares were issued under the ESPP and the number of shares available for issuance was 566. Nonvested Restricted Stock Awards During the 13 weeks ended May 4, 2019 and May 5, 2018, the Company did not issue any nonvested restricted stock awards to employees. 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 February 2, 2019 26 $ 11.25 Grants — — Forfeitures — — Vested (26) 11.25 Balance at May 4, 2019 — $ — Weighted average grant-date Shares fair value Balance at February 3, 2018 108 $ 11.25 Grants — — Forfeitures — — Vested (80) 11.25 Balance at May 5, 2018 28 $ 11.25 Nonvested Performance-Based Stock Awards During the 13 weeks ended May 4, 2019, the Company did not issue any performance-based stock awards. During the 13 weeks ended May 5, 2018, the Company issued 163 nonvested performance-based stock awards to employees at a weighted average grant date fair value of $4.91 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 fiscal year 2018 performance targets for same store sales and gross margin. If minimum threshold performance targets are not achieved, no shares will vest. The maximum number of shares subject to the award is 326, and the “target” number of shares subject to the award is 163 as reported below. Following the end of the performance period (fiscal year 2018), 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 over the remaining service period. The issued shares estimate the most likely outcome of the performance conditions to be achieved for the performance period. Based on the fiscal year 2018 results, the number of shares issued in relation to these grants was 34. 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 February 2, 2019 34 $ 6.07 Grants — — Forfeitures — — Vested (6) 11.25 Balance at May 4, 2019 28 $ 4.91 Weighted average grant-date Shares fair value Balance at February 3, 2018 49 $ 11.25 Grants 163 4.91 Forfeitures — — Vested (46) 11.25 Balance at May 5, 2018 166 $ 5.17 Nonvested Stock Unit Awards During the 13 weeks ended May 4, 2019, the Company issued 157 nonvested stock units to employees of the Company at an average value of $4.89 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. During the 13 weeks ended May 5, 2018, the Company issued 250 nonvested stock units to employees of the Company at an average value of $4.91 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 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 February 2, 2019 441 $ 4.92 Grants 157 4.89 Forfeitures (9) 4.91 Vested (185) 4.75 Balance at May 4, 2019 404 $ 4.91 Weighted average grant-date Shares fair value Balance at February 3, 2018 419 $ 5.15 Grants 250 4.91 Forfeitures (1) 4.91 Vested (248) 4.74 Balance at May 5, 2018 420 $ 4.91 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
May 04, 2019 | |
Commitments and Contingencies. | |
Commitments and Contingencies | (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. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
May 04, 2019 | |
Summary of Significant Accounting Policies | |
Leases | Leases In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842), which requires lessees to recognize on the balance sheet assets and liabilities for leases with lease terms of more than 12 months. Consistent with prior GAAP, the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee will depend primarily on its classification as a finance or operating lease. However, unlike prior GAAP—which required only finance (formerly capital) leases to be recognized on the balance sheet—the new ASU requires both types of leases to be recognized on the balance sheet. The ASU took effect for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. This standard can be applied at the beginning of the earliest period presented using the modified retrospective approach, which includes certain practical expedients that an entity may elect to apply, including an election to use certain transition relief. In July 2018, the FASB issued ASU No. 2018-10, Codification Improvements to Topic 842, Leases and ASU No. 2018-11, Leases (Topic 842): Targeted Improvements, which make improvements to Accounting Standards Codification (“ASC”) 842 and allow entities to not restate comparative periods in transition to ASC 842 and instead report the comparative periods under ASC 840 . The Company adopted ASC 842 using the modified retrospective approach at the beginning of the first quarter of fiscal 2019, coinciding with the standard’s effective date. In accordance with ASC 842, the Company did not restate comparative periods in transition to ASC 842 and instead reported comparative periods under ASC 840. Adoption of the standard resulted in the initial recognition of operating lease right-of-use (“ROU”) assets of $183,000 and operating lease liabilities of $214,000 as of February 3, 2019. These amounts are based on the present value of such commitments using the Company’s incremental borrowing rate (“IBR”), which was determined through use of the Company’s credit rating to develop a rate curve that approximates the Company’s market risk profile. The adoption of this standard had a material impact on the Company’s consolidated statement of income, stockholders’ equity(deficit) and cash flows, with a $9,300 net adjustment recorded to beginning retained earnings on February 3, 2019 due to the acceleration of recognition of a deferred gain and derecognition of related deferred tax asset the Company was amortizing relating to the historical sale of owned properties. In addition, the Company completed its evaluation of the practical expedients offered and enhanced disclosures required in ASC 842, as well as identified arrangements that contain embedded leases, among other activities, to account for the adoption of this standard. The Company elected the following practical expedients: · A package of practical expedients allowing the Company to: 1. Carry forward its historical lease classification (i.e. it was not necessary to reclassify any existing leases at the adoption date of ASC 842), 2. Avoid reassessing whether any expired or existing contracts are or contain leases, and 3. Avoid reassessing initial indirect costs for any existing lease. · A practical expedient allowing the Company to not separate lease components (e.g. fixed payments including, rent, real estate taxes, and insurance costs) from nonlease components (e.g. common area maintenance costs), primarily impacting the Company’s real estate leases. The election of this practical expedient eliminates the burden of separately estimating the real estate lease and nonlease costs on a relative stand-alone basis. · A practical expedient related to land easements, allowing the Company to carry forward the accounting treatment for land easements on existing agreements and eliminated the need to reassess existing lease contracts to determine if land easements are separate leases under ASC 842. The Company did not elect a practical expedient which would allow the Company to use hindsight in determining the lease term (that is, when considering lessee options to extend or terminate the lease and to purchase the underlying asset) and to assess impairment of the entity’s ROU assets, since election of this expedient could make adoption more complex give that re-evaluation of the lease term and impairment consideration affect other aspects of lease accounting. In accordance with ASC 842, the Company determines if an arrangement is a lease at inception. The Company has operating leases for the Company’s retail stores, distribution center, and corporate office. Operating leases are included in operating lease ROU assets and operating lease liabilities, current and noncurrent, on the interim unaudited condensed consolidated balance sheet. Lease liabilities are calculated using the effective interest method. Operating lease classification results in a straight-line expense recognition pattern over the lease term and recognized lease expense as a single expense component, which results in amortization of the ROU asset that equals the difference between lease expense and interest expense. Operating leases are included in selling, general and administrative expense, based on the use of the leased asset, on the interim unaudited condensed consolidated statement of operations. Leases with an initial term of 12 months of less are not recorded on the balance sheet and are not material; the Company recognizes lease expense for these leases on a straight-line basis over the remaining lease term. ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the reasonably certain lease term. As the Company’s leases generally do not provide an implicit rental rate, the Company uses an IBR to determine the present value of future rental payments. The IBR is based on the Company’s credit rating to develop a yield curve that approximates the Company’s market risk profile. The operating lease ROU asset also includes any prepaid lease payments made by the tenant and is reduced by lease incentives such as tenant improvement allowances. The operating lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense is recognized on a straight-line basis over the lease term. For fiscal 2018, the Company evaluated and classified its leases as operating leases for financial reporting purposes, in accordance with ASC 840. In accordance with ASC 840, deferred rent represents the difference between rent paid and amounts expensed for operating leases. Certain leases have scheduled rent increases, and certain leases include an initial period of free or reduced rent as an inducement to enter into the lease agreement (“rent holidays”). The Company recognized rent expense for rent increases and rent holidays on a straight-line basis over the term of the underlying leases, without regard to when rent payments are made. The calculation of straight-line rent begins on the possession date and extends through the “reasonably assured” lease term as defined in ASC 840. Additionally, in accordance with ASC 840, landlord allowances for tenant improvements, or lease incentives, were recorded as deferred rent and amortized on a straight-line basis over the “reasonably assured” lease term as a component of rent expense. See Note 5 for a further discussion on leases. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In August 2018, the FASB issued ASU No. 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract . This standard aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). The Company’s accounting for the service element of a hosting arrangement that is a service contract is not affected by the proposed amendments and will continue to be expensed as incurred in accordance with existing guidance. This standard does not expand on existing disclosure requirements except to require a description of the nature of hosting arrangements that are service contracts. This standard is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted, including adoption in any interim period for which financial statements have not been issued. Entities can choose to adopt the new guidance prospectively or retrospectively. The Company plans to adopt the updated disclosure requirements of ASU No. 2018-15 prospectively in the first quarter of fiscal 2020, coinciding with the standard’s effective date, and expects the impact from this standard to be immaterial. |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 3 Months Ended |
May 04, 2019 | |
Revenue Recognition | |
Schedule of right of return assets, contract liabilities, and sales return liabilities with customers | May 4, 2019 February 2, 2019 Right of return assets, which are included in prepaid expenses and other $ 1,051 $ 1,496 Estimated contract liabilities, net of breakage (19,239) (20,298) Sales return liabilities, which are included in accrued expenses 1,569 2,233 |
Schedule of Revenue by Departments | Thirteen Weeks Ended May 4, May 5, Department Product Offerings 2019 2018 Camping Backpacks, camp essentials, canoes and kayaks, coolers, outdoor cooking equipment, sleeping bags, tents and tools Clothing Camouflage, jackets, hats, outerwear, sportswear, technical gear and work wear Fishing Bait, electronics, fishing rods, flotation items, fly fishing, lines, lures, reels, tackle and small boats Footwear Hiking boots, socks, sport sandals, technical footwear, trail shoes, casual shoes, waders and work boots Hunting and Shooting Ammunition, archery items, ATV accessories, blinds and tree stands, decoys, firearms, reloading equipment and shooting gear Optics, Electronics, Accessories, and Other Gift items, GPS devices, knives, lighting, optics (e.g. binoculars), two-way radios, and other license revenue, net of revenue discounts Total |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended |
May 04, 2019 | |
Property and Equipment. | |
Schedule of Property and Equipment | May 4, February 2, 2019 2019 Furniture, fixtures, and equipment $ 72,184 $ 71,820 Leasehold improvements 95,011 94,573 Construction in progress 4,494 1,743 Total property and equipment, gross 171,689 168,136 Less accumulated depreciation and amortization (80,640) (76,052) Total property and equipment, net $ 91,049 $ 92,084 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 3 Months Ended |
May 04, 2019 | |
Accrued Expenses | |
Components Accrued Expenses | May 4, February 2, 2019 2019 Book overdraft $ 15,216 $ 10,297 Unearned revenue 20,616 21,836 Accrued payroll and related expenses 8,472 11,590 Sales and use tax payable 4,054 4,250 Accrued construction costs 1,239 760 Other 6,931 7,651 Total Accrued Expenses $ 56,528 $ 56,384 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
May 04, 2019 | |
Leases | |
Schedule of other information | 13 Weeks Ended May 4, 2019 Operating cash flows from operating leases $ (11,868) Cash paid for amounts included in the measurement of lease liabilities - operating leases (11,868) As of May 4, 2019 Right-of-use assets obtained in exchange for new or remeasured operating lease liabilities $ 13,149 Weighted-average remaining lease term - operating leases 6.11 years Weighted-average discount rate - operating leases |
Schedule of maturities of operating lease liabilities | Operating Year Endings: Leases (in thousands) 2019 $ 36,127 2020 47,939 2021 44,185 2022 40,003 2023 34,787 Thereafter 83,076 Undiscounted cash flows $ 286,117 Reconciliation of lease liabilities: Present values $ 219,537 Lease liabilities - current 31,967 Lease liabilities - noncurrent 187,570 Lease liabilities - total $ 219,537 Difference between undiscounted and discounted cash flows $ 66,580 |
Schedule of rent expense for operating leases in accordance with ASC 840 | 13 Weeks Ended May 5, 2018 Operating lease expense $ 13,138 Total lease expense 13,138 |
Schedule of future minimum lease payments under non-cancelable leases in accordance with ASC 840 | Operating Year Endings: Leases (in thousands) 2019 $ 47,551 2020 46,824 2021 43,070 2022 38,160 2023 33,246 Thereafter 74,821 Total minimum lease payments $ 283,672 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 3 Months Ended |
May 04, 2019 | |
Long-Term Debt | |
Summary of Long-Term Debt | May 4, February 2, 2019 2019 Term loan 34,000 36,000 Less debt issuance costs (346) (368) 33,654 35,632 Less current portion, net of discount and debt issuance costs (7,915) (7,915) Long-term portion $ 25,739 $ 27,717 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
May 04, 2019 | |
Earnings Per Share | |
Computation of Basic and Diluted Earnings Per Common Share | Thirteen Weeks Ended May 4, May 5, 2019 2018 Net loss $ (5,459) $ (5,828) Weighted-average shares of common stock outstanding: Basic 43,003 42,727 Dilutive effect of common stock equivalents — — Diluted 43,003 42,727 Basic loss per share $ (0.13) $ (0.14) Diluted loss per share $ (0.13) $ (0.14) Restricted stock units considered anti-dilutive and excluded in the calculation 155 331 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
May 04, 2019 | |
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 February 2, 2019 26 $ 11.25 Grants — — Forfeitures — — Vested (26) 11.25 Balance at May 4, 2019 — $ — Weighted average grant-date Shares fair value Balance at February 3, 2018 108 $ 11.25 Grants — — Forfeitures — — Vested (80) 11.25 Balance at May 5, 2018 28 $ 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 February 2, 2019 34 $ 6.07 Grants — — Forfeitures — — Vested (6) 11.25 Balance at May 4, 2019 28 $ 4.91 Weighted average grant-date Shares fair value Balance at February 3, 2018 49 $ 11.25 Grants 163 4.91 Forfeitures — — Vested (46) 11.25 Balance at May 5, 2018 166 $ 5.17 |
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 February 2, 2019 441 $ 4.92 Grants 157 4.89 Forfeitures (9) 4.91 Vested (185) 4.75 Balance at May 4, 2019 404 $ 4.91 Weighted average grant-date Shares fair value Balance at February 3, 2018 419 $ 5.15 Grants 250 4.91 Forfeitures (1) 4.91 Vested (248) 4.74 Balance at May 5, 2018 420 $ 4.91 |
Description of Business and B_2
Description of Business and Basis of Presentation (Details) | 3 Months Ended |
May 04, 2019storestatesegment | |
Description of Business and Basis of Presentation | |
Number of stores | store | 92 |
Number of states | state | 23 |
Number of reportable segments | segment | 1 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Leases (Details) - USD ($) $ in Thousands | May 04, 2019 | Feb. 03, 2019 | Feb. 02, 2019 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Right-of-use assets | $ 189,431 | ||
Lease liabilities | 219,537 | ||
Retained earnings | $ (2,645) | $ (6,441) | |
ASU 2016-02 | Restatement | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Right-of-use assets | $ 183,000 | ||
Lease liabilities | 214,000 | ||
Retained earnings | $ 9,300 |
Revenue Recognition (Details)
Revenue Recognition (Details) $ in Thousands | 3 Months Ended |
May 04, 2019USD ($) | |
Revenue Recognition | |
Gift card historical breakage (as a percent) | 3.00% |
Gift card escheat liability | $ 0 |
Redemption period | 2 years |
Breakage of loyalty reward (as a percent) | 25.00% |
Loyalty reward escheat liability | $ 0 |
Revenue Recognition - Contract
Revenue Recognition - Contract balances (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
May 04, 2019 | May 05, 2018 | Feb. 02, 2019 | |
Revenue Recognition | |||
Right of return assets, which are included in prepaid expenses and other | $ 1,051 | $ 1,496 | |
Estimated contract liabilities, net of breakage | (19,239) | (20,298) | |
Sales return liabilities, which are included in accrued expenses | 1,569 | $ 2,233 | |
Gift breakage income | 290 | $ 319 | |
Recognized customer loyalty program breakage income | $ 310 | $ 265 | |
Revenue from contract with customer liability recognition period | 2 years |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregation of revenue from contracts with customers (Details) | 3 Months Ended | |
May 04, 2019 | May 05, 2018 | |
Disaggregation of Revenue [Line Items] | ||
Net sales (as a percent) | 100.00% | 100.00% |
Camping | ||
Disaggregation of Revenue [Line Items] | ||
Net sales (as a percent) | 11.90% | 11.50% |
Clothing | ||
Disaggregation of Revenue [Line Items] | ||
Net sales (as a percent) | 8.00% | 7.30% |
Fishing | ||
Disaggregation of Revenue [Line Items] | ||
Net sales (as a percent) | 12.10% | 11.60% |
Footwear | ||
Disaggregation of Revenue [Line Items] | ||
Net sales (as a percent) | 7.40% | 6.40% |
Hunting and Shooting | ||
Disaggregation of Revenue [Line Items] | ||
Net sales (as a percent) | 53.60% | 56.20% |
Optics, Electronics, Accessories, and Other | ||
Disaggregation of Revenue [Line Items] | ||
Net sales (as a percent) | 7.00% | 7.00% |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | May 04, 2019 | Feb. 02, 2019 |
Property Plant And Equipment [Line Items] | ||
Total property and equipment, gross | $ 171,689 | $ 168,136 |
Less accumulated depreciation and amortization | (80,640) | (76,052) |
Total property and equipment, net | 91,049 | 92,084 |
Furniture, fixtures, and equipment | ||
Property Plant And Equipment [Line Items] | ||
Total property and equipment, gross | 72,184 | 71,820 |
Leasehold improvements | ||
Property Plant And Equipment [Line Items] | ||
Total property and equipment, gross | 95,011 | 94,573 |
Construction in progress | ||
Property Plant And Equipment [Line Items] | ||
Total property and equipment, gross | $ 4,494 | $ 1,743 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) $ in Thousands | May 04, 2019 | Feb. 02, 2019 |
Accrued Expenses | ||
Book overdraft | $ 15,216 | $ 10,297 |
Unearned revenue | 20,616 | 21,836 |
Accrued payroll and related expenses | 8,472 | 11,590 |
Sales and use tax payable | 4,054 | 4,250 |
Accrued construction costs | 1,239 | 760 |
Other | 6,931 | 7,651 |
Total Accrued Expenses | $ 56,528 | $ 56,384 |
Leases (Details)
Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
May 04, 2019 | Feb. 03, 2019 | Feb. 02, 2019 | |
Lessee, Lease, Description [Line Items] | |||
Options to extend | true | ||
Operating lease right of use asset | $ 189,431 | ||
Operating lease liabilities | 219,537 | ||
Deferred rent | $ 41,854 | ||
Retained earnings | (2,645) | $ (6,441) | |
Accumulated amortization | 7,600 | ||
Increase in ROU assets and operating lease liabilities | 13,100 | ||
ASU 2016-02 | Restatement | |||
Lessee, Lease, Description [Line Items] | |||
Operating lease right of use asset | $ 183,000 | ||
Operating lease liabilities | 214,000 | ||
Deferred rent | 14,200 | ||
Tenant improvement allowances | 20,600 | ||
Prepaid rent | $ 3,800 | ||
Retained earnings | $ 9,300 | ||
Maximum | |||
Lessee, Lease, Description [Line Items] | |||
Remaining lease terms | 10 years |
Leases - Other Information (Det
Leases - Other Information (Details) $ in Thousands | 3 Months Ended |
May 04, 2019USD ($) | |
Leases | |
Lease expense | $ 14,384 |
Operating cash flows from operating leases - Cash paid for amounts included in the measurement of lease liabilities | (11,868) |
Right-of-use assets obtained in exchange for new or remeasured operating lease liabilities | $ 13,149 |
Weighted-average remaining lease term - operating leases | 6 years 1 month 10 days |
Weighted-average discount rate - operating leases | 7.80% |
Leases - ASC 842 Maturities (De
Leases - ASC 842 Maturities (Details) $ in Thousands | May 04, 2019USD ($) |
Maturities: | |
2019 | $ 36,127 |
2020 | 47,939 |
2021 | 44,185 |
2022 | 40,003 |
2023 | 34,787 |
Thereafter | 83,076 |
Undiscounted cash flows | 286,117 |
Reconciliation of lease liabilities: | |
Lease liabilities - current | 31,967 |
Lease liabilities - noncurrent | 187,570 |
Lease liabilities - total | 219,537 |
Difference between undiscounted and discounted cash flows | $ 66,580 |
Leases - ASC 840 Rent Expenses
Leases - ASC 840 Rent Expenses (Details) $ in Thousands | 3 Months Ended |
May 05, 2018USD ($) | |
Leases | |
Operating lease expense | $ 13,138 |
Total lease expense | $ 13,138 |
Leases - ASC 840 Maturities (De
Leases - ASC 840 Maturities (Details) $ in Thousands | Feb. 02, 2019USD ($) |
Maturities: | |
2019 | $ 47,551 |
2020 | 46,824 |
2021 | 43,070 |
2022 | 38,160 |
2023 | 33,246 |
Thereafter | 74,821 |
Total minimum lease payments | $ 283,672 |
Revolving Line Of Credit (Detai
Revolving Line Of Credit (Details) - USD ($) $ in Thousands | May 23, 2018 | May 04, 2019 | May 05, 2018 | Feb. 02, 2019 | May 22, 2018 |
Line Of Credit Facility [Line Items] | |||||
Capitalization of fees paid | $ 1,331 | ||||
Line of credit facility, amount outstanding | 135,400 | ||||
Amortization of deferred financing fees | $ 22 | $ 113 | |||
Gross borrowings under revolving line of credit | 185,616 | 206,533 | |||
Gross paydowns under revolving line of credit | 189,280 | 197,467 | |||
Wells Fargo Senior Secured Revolving Credit Facility | |||||
Line Of Credit Facility [Line Items] | |||||
Line of credit facility, maximum borrowing capacity | 250,000 | $ 150,000 | |||
Line of credit facility, amount outstanding | 150,016 | $ 151,341 | |||
Amounts in depository under lock-box arrangements | $ 8,444 | 7,035 | |||
Line Of Credit Facility Covenant Terms | 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 | ||||
Line of credit , maturity date | May 23, 2023 | ||||
Deferred financing fees outstanding | $ 1,022 | $ 1,085 | |||
Amortization of deferred financing fees | $ 63 | $ 22 | |||
Wells Fargo Senior Secured Revolving Credit Facility | Minimum | |||||
Line Of Credit Facility [Line Items] | |||||
Line of credit facility gross borrowing base percentage | 10.00% | ||||
New Term Loan | |||||
Line Of Credit Facility [Line Items] | |||||
New term loan | $ 40,000 | ||||
Wells Fargo Stand-by Commercial Letters of Credit | |||||
Line Of Credit Facility [Line Items] | |||||
Net borrowing available under revolving line of credit | $ 1,705 |
Long-Term Debt (Details)
Long-Term Debt (Details) - USD ($) $ in Thousands | May 04, 2019 | Feb. 02, 2019 |
Less current portion, net of discount and debt issuance costs | $ (7,915) | $ (7,915) |
Long-term portion | 25,739 | 27,717 |
Prior Term Loan | ||
Term loan | 36,000 | |
Less debt issuance costs | (368) | |
Long-term debt | 35,632 | |
Less current portion, net of discount and debt issuance costs | (7,915) | |
Long-term portion | $ 27,717 | |
New Term Loan | ||
Term loan | 34,000 | |
Less debt issuance costs | (346) | |
Long-term debt | 33,654 | |
Less current portion, net of discount and debt issuance costs | (7,915) | |
Long-term portion | $ 25,739 |
Long-Term Debt - Additional Inf
Long-Term Debt - Additional Information (Details) - USD ($) $ in Thousands | May 23, 2018 | May 04, 2019 | May 05, 2018 | Feb. 02, 2019 |
Debt Instrument [Line Items] | ||||
Line of credit facility, amount outstanding | $ 135,400 | |||
Repayment of term loan | $ 2,000 | $ 400 | ||
Amortization of deferred financing fees | 22 | 113 | ||
New Term Loan | ||||
Debt Instrument [Line Items] | ||||
Debt instrument issuance price, percentage of aggregate principal amount | 100.00% | |||
New term loan | $ 40,000 | |||
Line of credit , maturity date | May 23, 2023 | |||
Quarterly loan payment | 2,000 | |||
Term loan | 34,000 | |||
Unamortized debt issuance costs | $ 346 | |||
Amortization of discount | $ 58 | |||
Prior Term Loan | ||||
Debt Instrument [Line Items] | ||||
Repayment of term loan | $ 134,700 | |||
Term loan | $ 36,000 | |||
Unamortized debt issuance costs | $ 368 | |||
LIBOR | New Term Loan | ||||
Debt Instrument [Line Items] | ||||
Term loan interest rate (as a percent) | 5.75% |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | |
May 04, 2019 | May 05, 2018 | |
Income Taxes | ||
Income tax benefit | $ 2,003 | $ 1,379 |
Estimated annual effective tax rate | 26.80% | 19.10% |
Federal statutory rate | 21.00% |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
May 04, 2019 | May 05, 2018 | |
Earnings Per Share | ||
Net loss | $ (5,459) | $ (5,828) |
Weighted-average shares of common stock outstanding: | ||
Basic | 43,003 | 42,727 |
Diluted | 43,003 | 42,727 |
Basic loss per share | $ (0.13) | $ (0.14) |
Diluted loss per share | $ (0.13) | $ (0.14) |
Restricted stock units considered anti-dilutive and excluded in the calculation | 155 | 331 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | ||
May 04, 2019 | May 05, 2018 | Feb. 02, 2019 | Jan. 30, 2016 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Stock-based compensation | $ 453 | $ 1,572 | ||
Nonvested Restricted Stock Awards | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Issuance of nonvested stock units | 0 | 0 | ||
Nonvested Performance-Based Stock Awards | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Maximum number of shares subject to award | 326 | |||
Target number of shares subject to award | 163 | |||
Issuance of nonvested stock units | 163 | |||
Nonvested stock issued, weighted average grant date fair value per share | $ 4.91 | |||
Nonvested Stock Unit Awards | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Issuance of nonvested stock units | 157 | 250 | ||
Nonvested stock issued, weighted average grant date fair value per share | $ 4.89 | $ 4.91 | ||
Employees | Nonvested Performance-Based Stock Awards | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Issuance of nonvested stock units | 0 | 163 | 34 | |
Nonvested stock issued, weighted average grant date fair value per share | $ 4.91 | |||
Nonvested stock awards vested over grant date | 3 years | |||
Issuance of nonvested stock units available | 0 | |||
Employees | Nonvested Stock Unit Awards | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Issuance of nonvested stock units | 157 | 250 | ||
Nonvested stock issued, weighted average grant date fair value per share | $ 4.89 | $ 4.91 | ||
Nonvested stock awards vested over grant date | 3 years | 3 years | ||
Employee Stock Plans | 2013 Plan | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Number of shares available for awards | 276 | |||
Number of awards outstanding | 432 | |||
Employee Stock Purchase Plan | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Number of shares available for awards | 566 | |||
Maximum number of shares subject to award | 800 | |||
Stock Issued During Period Shares Employee Stock Purchase Plans | 0 | |||
Selling, General and Administrative Expenses | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Stock-based compensation | $ 453 | $ 1,572 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Details) - $ / shares shares in Thousands | 3 Months Ended | 12 Months Ended | |
May 04, 2019 | May 05, 2018 | Feb. 02, 2019 | |
Nonvested Restricted Stock Awards | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Beginning balance, Shares | 26 | 108 | 108 |
Grants, Shares | 0 | 0 | |
Vested, Shares | (26) | (80) | |
Ending balance, Shares | 28 | 26 | |
Beginning balance, Weighted average grant-date fair value | $ 11.25 | $ 11.25 | $ 11.25 |
Vested, Weighted average grant-date fair value | $ 11.25 | 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 | 34 | 49 | 49 |
Grants, Shares | 163 | ||
Vested, Shares | (6) | (46) | |
Ending balance, Shares | 28 | 166 | 34 |
Beginning balance, Weighted average grant-date fair value | $ 6.07 | $ 11.25 | $ 11.25 |
Grants, Weighted average grant-date fair value | 4.91 | ||
Vested, Weighted average grant-date fair value | 11.25 | 11.25 | |
Ending balance, Weighted average grant-date fair value | $ 4.91 | $ 5.17 | $ 6.07 |
Nonvested Stock Unit Awards | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Beginning balance, Shares | 441 | 419 | 419 |
Grants, Shares | 157 | 250 | |
Forfeitures, Shares | (9) | (1) | |
Vested, Shares | (185) | (248) | |
Ending balance, Shares | 404 | 420 | 441 |
Beginning balance, Weighted average grant-date fair value | $ 4.92 | $ 5.15 | $ 5.15 |
Grants, Weighted average grant-date fair value | 4.89 | 4.91 | |
Forfeitures, Weighted average grant-date fair value | 4.91 | 4.91 | |
Vested, Weighted average grant-date fair value | 4.75 | 4.74 | |
Ending balance, Weighted average grant-date fair value | $ 4.91 | $ 4.91 | $ 4.92 |