Sportsman's Warehouse Holdings, Inc 10-Q for FY2022 Q3

Sportsman's Warehouse Holdings, Inc. (SPWH)

10-Q 2021-12-08 For: 2021-10-30

Added on April 12, 2026

About this 10-Q

Sportsman's Warehouse Holdings, Inc filed this 10-Q on December 8, 2021, covering the quarter ended October 30, 2021 (FY2022 Q3).

Headline figures

Quarter ended October 30, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $401.01M; up 4.0% from $385.75M a year earlier
Net income: $21.86M; down 28.3% from net income of $30.48M a year earlier
Diluted EPS: $0.49; down 27.9% from $0.68 a year earlier

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

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


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, $.01 par value	SPWH	The Nasdaq Stock Market LLC


Large accelerated filer	☐	Accelerated filer	☒

Non-accelerated filer	☐	Smaller reporting company	☐

Emerging growth company	☐

		Page

PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements (unaudited):	4

	Condensed Consolidated Balance Sheets	4

	Condensed Consolidated Statements of Operations	5

	Condensed Consolidated Statements of Stockholders’ Equity	6

	Condensed Consolidated Statements of Cash Flows	7

	Notes to Condensed Consolidated Financial Statements	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	30

Item 4.	Controls and Procedures	30

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	32

Item 1A.	Risk Factors	32

Item 5.	Exhibits	33

	Signatures	34


	October 30,		January 30,
	2021		2021
Assets
Current assets:
Cash	$	2,532	$	65,525
Accounts receivable, net		684		581
Merchandise inventories		428,497		243,434
Prepaid expenses and other		15,706		15,113
Total current assets		447,419		324,653
Operating lease right of use asset		241,951		235,262
Property and equipment, net		123,457		99,118
Deferred income taxes		124		—
Goodwill		1,496		1,496
Definite lived intangibles, net		267		289
Total assets	$	814,714	$	660,818

Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	123,510	$	77,441
Accrued expenses		105,289		109,056
Income taxes payable		2,500		4,917
Operating lease liability, current		39,790		36,014
Revolving line of credit		57,551		—
Total current liabilities		328,640		227,428
Long-term liabilities:
Deferred income taxes		—		434
Operating lease liability, noncurrent		231,498		228,296
Total long-term liabilities		231,498		228,730
Total liabilities		560,138		456,158

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; 43,879 and 43,623 shares issued and outstanding, respectively		438		436
Additional paid-in capital		89,693		89,815
Accumulated earnings		164,445		114,409
Total stockholders' equity		254,576		204,660
Total liabilities and stockholders' equity	$	814,714	$	660,818


	Thirteen Weeks Ended				Thirty-Nine Weeks Ended
	October 30,		October 31,		October 30,		October 31,
	2021		2020		2021		2020
Net sales	$	401,014	$	385,748	$	1,089,784	$	1,013,572
Cost of goods sold		271,392		255,166		736,061		679,122
Gross profit		129,622		130,582		353,723		334,450

Selling, general, and administrative expenses		99,974		92,252		286,263		251,077
Income from operations		29,648		38,330		67,460		83,373
Bargain purchase gain		—		(2,218)		—		(2,218)
Interest expense		413		536		905		3,088
Income before income taxes		29,235		40,012		66,555		82,503
Income tax expense		7,372		9,530		16,519		20,690
Net income	$	21,863	$	30,482	$	50,036	$	61,813
Earnings per share:
Basic	$	0.50	$	0.70	$	1.14	$	1.42
Diluted	$	0.49	$	0.68	$	1.13	$	1.40
Weighted average shares outstanding:
Basic		43,878		43,609		43,809		43,490
Diluted		44,582		44,510		44,471		44,260


For the Thirteen Weeks Ended October 30, 2021 and October 31, 2020
	Common Stock			Restricted nonvoting Common Stock			Additional paid-in- capital		Accumulated (deficit) earnings		Total stockholders' equity
	Shares	Amount		Shares	Amount		Amount		Amount		Amount

Balance at August 1, 2020	43,591	$	436	—	$	—	$	87,941	$	54,360	$	142,737
Stock based compensation	—		—	—		—		882		—		882
Net Income	—		—	—		—		—		30,482		30,482
Balance at October 31, 2020	43,591	$	436	—	$	—	$	88,823	$	84,842	$	174,101

Balance at July 31, 2021	43,831	$	438	—	$	—	$	89,587	$	142,582	$	232,607
Payment of withholdings on restricted stock units	—		—	—		—		(88)		—		(88)
Stock based compensation	48		—	—		—		194		—		194
Net income	—		—	—		—		—		21,863		21,863
Balance at October 30, 2021	43,879	$	438	—	$	—	$	89,693	$	164,445	$	254,576




For the Thirty-Nine Weeks Ended October 30, 2021 and October 31, 2020
	Common Stock			Restricted nonvoting common stock			Additional paid-in- capital		Accumulated (deficit) earnings		Total stockholders' equity
	Shares	Amount		Shares	Amount		Amount		Amount		Amount

Balance at February 1, 2020	43,296	$	433	—	$	—	$	86,806	$	23,029	$	110,268
Vesting of restricted stock units	255		3	—		—		(3)		—		—
Payment of withholdings on restricted stock units	—		—	—		—		(689)		—		(689)
Issuance of common stock for cash per employee stock purchase plan	40		—	—		—		273		—		273
Stock based compensation	—		—	—		—		2,436		—		2,436
Net income	—		—	—		—		—		61,813		61,813
Balance at October 31, 2020	43,591	$	436	—	$	—	$	88,823	$	84,842	$	174,101

Balance at January 30, 2021	43,623	$	436	—	$	—	$	89,815	$	114,409	$	204,660
Vesting of restricted stock units	256		2	—		—		(2)		—		—
Payment of withholdings on restricted stock units	—		—	—		—		(2,356)		—		(2,356)
Stock based compensation	—		—	—		—		2,236		—		2,236
Net income	—		—	—		—		—		50,036		50,036
Balance at October 30, 2021	43,879	$	438	—	$	—	$	89,693	$	164,445	$	254,576
The accompanying notes are an integral part of these condensed consolidated financial statements


	October 30, 2021		January 30, 2021
Right of return assets, which are included in prepaid expenses and other	$	2,552	$	2,940
Estimated gift card contract liability, net of breakage		(15,257)		(22,069)
Estimated loyalty contract liability, net of breakage		(13,525)		(12,131)
Sales return liabilities, which are included in accrued expenses		(3,809)		(4,388)


	Operating
Year Endings:	Leases
2021 (remainder)	$	15,408
2022		62,128
2023		57,161
2024		48,485
2025		41,925
Thereafter		164,227
Undiscounted cash flows	$	389,334
Reconciliation of lease liabilities:
Present values	$	271,288
Lease liabilities - current		39,790
Lease liabilities - noncurrent		231,498
Lease liabilities - total	$	271,288
Difference between undiscounted and discounted cash flows	$	118,046


		Weighted
		average
		grant-date
	Shares	fair value
Balance at January 30, 2021	624	$	5.13
Grants	—		—
Forfeitures	(111)		5.14
Vested	(22)		4.91
Balance at October 30, 2021	491	$	5.13

		Weighted
		average
		grant-date
	Shares	fair value
Balance at February 1, 2020	250	$	3.66
Grants	206		5.95
Forfeitures	(38)		4.33
Vested	—		—
Balance at October 31, 2020	418	$	4.73


		March 12, 2020
Cash paid to seller	$	1,075
Payable to seller		1,064
Total purchase price	$	2,139


		March 12, 2020
Cash	$	10
Inventory		2,133
Property, plant, and equipment		892
Operating lease right of use asset		2,070
Operating lease right of use liability		(1,794)
Deferred tax liability		(314)
Bargain purchase		(858)
Total	$	2,139


		May 14, 2020
Cash paid to seller	$	1,317
Payable to seller		1,094
Total purchase price	$	2,411


		October 8, 2020
Cash paid to seller	$	227
Payable to seller		1,774
Total purchase price	$	2,001


	Payments Due by Period
	Total	Less than 1 year	1-3 years	3-5 years	More than 5 years
Operating lease obligations (1)	389,334	15,408	119,289	90,410	164,227
Standby letters of credit	1,955	1,955	-	-	-
Purchase/construction obligations (2)	-	-	-	-	-
Revolving line of credit (3)	73,763	73,763	-	-	-


	Thirty-Nine Weeks Ended
	October 30,		October 31,
	2021		2020
Cash flows from operating activities:
Net income	$	50,036	$	61,813
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Depreciation of property and equipment		18,778		15,992
Amortization of deferred financing fees		188		422
Amortization of definite lived intangible		23		21
Loss on asset dispositions		—		937
Gain on bargain purchase		—		(2,218)
Noncash lease expense		21,204		17,760
Deferred income taxes		(558)		2,801
Stock-based compensation		2,236		2,436
Change in operating assets and liabilities, net of amounts acquired:
Accounts receivable, net		(103)		442
Operating lease liabilities		(20,915)		(20,781)
Merchandise inventories		(185,063)		(38,887)
Prepaid expenses and other		(781)		(2,021)
Accounts payable		41,723		94,900
Accrued expenses		(2,694)		31,992
Income taxes payable and receivable		(2,417)		6,127
Net cash (used in) provided by operating activities		(78,343)		171,736
Cash flows from investing activities:
Purchase of property and equipment, net of amounts acquired		(38,463)		(15,394)
Acquisition of Field and Stream stores, net of cash acquired		—		(4,778)
Net cash used in investing activities		(38,463)		(20,172)
Cash flows from financing activities:
Net borrowings/ (payments) on line of credit		57,551		(116,078)
Increase in book overdraft, net		(1,382)		4,559
Proceeds from issuance of common stock per employee stock purchase plan		—		273
Payment of withholdings on restricted stock units		(2,356)		(689)
Principal payments on long-term debt		—		(22,000)
Net cash provided by (used in) financing activities		53,813		(133,935)
Net change in cash		(62,993)		17,629
Cash at beginning of period		65,525		1,685
Cash at end of period	$	2,532	$	19,314

Supplemental disclosures of cash flow information:


		Thirteen Weeks Ended		Thirty-Nine Weeks Ended
		October 30,	October 31,	October 30,	October 31,
Department	Product Offerings	2021	2020	2021	2020
Camping	Backpacks, camp essentials, canoes and kayaks, coolers, outdoor cooking equipment, sleeping bags, tents and tools	12.6%	12.9%	13.9%	13.8%
Apparel	Camouflage, jackets, hats, outerwear, sportswear, technical gear and work wear	9.1%	8.6%	7.4%	6.5%
Fishing	Bait, electronics, fishing rods, flotation items, fly fishing, lines, lures, reels, tackle and small boats	7.7%	7.8%	11.3%	11.5%
Footwear	Hiking boots, socks, sport sandals, technical footwear, trail shoes, casual shoes, waders and work boots	6.4%	5.6%	6.3%	5.3%
Hunting and Shooting	Ammunition, archery items, ATV accessories, blinds and tree stands, decoys, firearms, reloading equipment and shooting gear	55.4%	57.4%	53.7%	56.3%
Optics, Electronics, Accessories, and Other	Gift items, GPS devices, knives, lighting, optics, two-way radios, and other license revenue, net of revenue discounts	8.8%	7.7%	7.4%	6.6%
Total		100.0%	100.0%	100.0%	100.0%


	October 30,		January 30,
	2021		2021
Furniture, fixtures, and equipment	$	109,375	$	96,085
Leasehold improvements		125,061		112,338
Construction in progress		16,956		2,614
Total property and equipment, gross		251,392		211,037
Less accumulated depreciation and amortization		(127,935)		(111,919)
Total property and equipment, net	$	123,457	$	99,118


	October 30,		January 30,
	2021		2021
Book overdraft	$	12,064	$	13,445
Unearned revenue		41,413		38,454
Accrued payroll and related expenses		24,128		28,453
Sales and use tax payable		8,087		7,317
Accrued construction costs		411		339
Other		19,186		21,048
Total accrued expenses	$	105,289	$	109,056


Exhibit Number		Description

10.1		Severance Agreement, dated September 26, 2021, between Sportsman’s Warehouse Holdings, Inc. and Jeff White (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed with the SEC on September 28, 2021)

10.2		Termination Agreement, dated December 2, 2021, among Sportsman’s Warehouse Holdings, Inc., Great Outdoors Group, LLC and Phoenix Merger Sub I, Inc. (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed with the SEC on December 2, 2021).

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

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

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

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

101.SCH*		XBRL Taxonomy Extension Schema Document.

101.CAL*		XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF*		XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB*		XBRL Taxonomy Extension Label Linkbase Document.

101.PRE*		XBRL Taxonomy Extension Presentation Linkbase Document.

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


	SPORTSMAN’S WAREHOUSE HOLDINGS, INC.

Date: December 8, 2021	By:	/s/ Jon Barker
		Jon Barker
		President and Chief Executive Officer
		(Principal Executive Officer)

Date: December 8, 2021	By:	/s/ Jeff White
		Jeff White
		Interim Chief Financial Officer
		(Principal Financial and Accounting Officer)