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Acquisition of Field and Stream Stores | 12 Months Ended
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Jan. 28, 2023
Business Combinations [Abstract] |
Acquisition of Field and Stream Stores | (3) Acquisition of Field & Stream Stores 2020 Acquisitions On February 14, 2020, Sportsman’s Warehouse, Inc. (“SWI”), a wholly owned subsidiary of Holdings, entered into an Asset Purchase Agreement (the “2020-I Purchase Agreement”) with DICK’s Sporting Goods (“DICK’S”). Pursuant to the 2020-I Purchase Agreement, SWI agreed, subject to certain conditions, to acquire from DICK’S all cash, inventory, furniture, fixtures, and equipment, and certain other assets related to one Field & Stream store located in Kentucky and operated by DICK’S (the “2020-I Acquisition”). The acquisition of the 2020-I Acquisition closed on March 12, 2020 (the “2020-I Closing Date”). On the 2020-I Closing Date, SWI entered into a sublease with DICK’s with respect to the 2020-I Acquisition location. Pursuant to the 2020-I Purchase Agreement and in connection with closing of the acquisition, the parties also entered into a transition services agreement pursuant to which DICK’S provided transition services to the Company for a period of up to 120 days after the 2020-I Closing Date. The aggregate consideration paid to DICK’S under the 2020-I Purchase Agreement was $2,139 (the “2020-I Purchase Price”), subject to certain post-closing adjustments set forth in the 2020-I Purchase Agreement. On the 2020-I Closing Date, SWI drew $1,100 under the Revolving Line of Credit (as defined below) to fund a portion of the 2020-I Purchase Price. The remaining approximately $1,000 of consideration owed to DICK’S in connection with the 2020-I Acquisition was paid in June 2020. On March 6, 2020, SWI, entered into an Asset Purchase Agreement (the “2020-II Purchase Agreement”) with DICK’S. Pursuant to the 2020-II Purchase Agreement, SWI agreed, subject to certain conditions, to acquire from DICK’S all cash, inventory, furniture, fixtures, and equipment, and certain other assets related to one Field & Stream store located in Michigan and operated by DICK’S (the “2020-II Acquisition”). The 2020-II Acquisition closed on May 14, 2020 (the “2020-II Closing Date”). On the 2020-II Closing Date, SWI entered into a sublease with DICK’s with respect to the 2020-II Acquisition. Pursuant to the 2020-II Purchase Agreement and in connection with closing of the acquisition, the parties also entered into a transition services agreement related to the 2020-II Acquisition pursuant to which DICK’S provided transition services to the Company for a period of up to 120 days after the 2020-II Closing Date. The aggregate consideration paid to DICK’S under the 2020-II Purchase Agreement was $2,411 (the “2020-II Purchase Price”), subject to certain post-closing adjustments set forth in the 2020-II Purchase Agreement. On the 2020-II Closing Date, SWI drew $1,317 under the Revolving Line of Credit to fund a portion of the 2020-II Purchase Price. The remaining approximately $1,100 of consideration owed to DICK’S in connection with the 2020-II Acquisition was paid in August 2020. On September 16, 2020, SWI, entered into an Asset Purchase Agreement (the “2020-III Purchase Agreement”) with DICK’S. Pursuant to the 2020-III Purchase Agreement, SWI agreed, subject to certain conditions, to acquire from DICK’S all cash, inventory, furniture, fixtures, and equipment, and certain other assets related to two Field & Stream stores located in South Carolina and Pennsylvania and operated by DICK’S (the “2020-III Acquisition”). The 2020-III Acquisition closed on October 8, 2020 (the “2020-III Closing Date”). On the 2020-III Closing Date, SWI entered into a sublease with DICK’s with respect to the locations. Pursuant to the 2020-III Purchase Agreement and in connection with closing of the acquisition, the parties also entered into a transition services agreement pursuant to which DICK’S provided transition services to the Company for a period of up to 120 days after the 2020-III Closing Date. The aggregate consideration to be paid to DICK’S under the 2020-III Purchase Agreement is $2,001, net of rent concessions and deferrals of $2,597 (the “2020-III Purchase Price”), and subject to certain post-closing adjustments set forth in the 2020-III Purchase Agreement. On the 2020-III Closing Date, SWI drew $226 under the Revolving Line of Credit (as defined in Note 8) to fund a portion of the 2020-III Purchase Price. The remaining approximately $1,774 of consideration owed to DICK’S in connection with the 2020-III Acquisition was paid in cash in January 2021. As part of the acquisitions that closed in 2020, the Company incurred legal, accounting, and other due diligence fees that were expensed as incurred. Total fees incurred for the fiscal year 2020 were $237, which were included as a component of selling, general, and administrative expenses. The acquired locations were in line with the seller’s intention to reduce its footprint in the hunting and firearms business, which resulted in a below fair value purchase price consideration shown in the tables below. The following table summarizes the 2020-I Purchase Price consideration and related cash outflow at the 2020-I Closing Date:
|  | March 12, 2020 |
Cash paid to seller |  | $ | 1,075 |
Payable to seller |  |  | 1,064 |
Total purchase price |  | $ | 2,139 |
The net 2020-I Purchase Price of $2,139 has been allocated to identifiable assets acquired based on their respective estimated fair values. No liabilities were assumed as part of the acquisition of the 2020-I Acquired Stores other than the lease obligation. The excess of the fair value over the 2020-I Purchase price of the tangible and intangible assets acquired is recorded as a bargain purchase. The following table summarizes the estimated fair value of the identifiable assets acquired and assumed liabilities as of the 2020-I Closing Date:
|  | 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 |
The following table summarizes the 2020-II Purchase Price consideration and related cash outflow at the 2020-II Closing Date:
|  | May 14, 2020 |
Cash paid to seller |  | $ | 1,317 |
Payable to seller |  |  | 1,094 |
Total purchase price |  | $ | 2,411 |
The net 2020-II Purchase Price of $2,411 has been allocated to identifiable assets acquired based on their respective estimated fair values. No liabilities were assumed as part of the acquisition of the 2020-II Acquired Stores other than the lease obligation. The excess of the fair value over the 2020-II Purchase Price of the tangible and intangible assets acquired is recorded as a bargain purchase. The following table summarizes the estimated fair value of the identifiable assets acquired and assumed liabilities as of the 2020-II Closing Date:
|  | May 14, 2020 |
Cash |  | $ | 18 |
Inventory |  |  | 2,218 |
Property, plant, and equipment |  |  | 375 |
Operating lease right of use asset |  |  | 5,605 |
Operating lease right of use liability |  |  | (5,605 | )
Deferred tax liability |  |  | (53 | )
Bargain purchase |  |  | (147 | )
Total |  | $ | 2,411 |
The following table summarizes the 2020-III Purchase Price consideration and related cash outflow at the 2020-III Closing Date:
|  | October 8, 2020 |
Cash paid to seller |  | $ | 227 |
Payable to seller |  |  | 1,774 |
Total purchase price |  | $ | 2,001 |
The net 2020-III Purchase Price of $2,001 has been allocated to identifiable assets acquired based on their respective estimated fair values. No liabilities were assumed as part of the acquisition of the 2020-III Acquired Stores other than the lease obligation. The excess of the fair value over the 2020-III Purchase Price of the tangible and intangible assets acquired is recorded as a bargain purchase. The following table summarizes the estimated fair value of the identifiable assets acquired and assumed liabilities as of the 2020-III Closing Date:
|  | October 8, 2020 |
Cash |  | $ | 50 |
Inventory |  |  | 3,515 |
Property, plant, and equipment |  |  | 1,046 |
Operating lease right of use asset |  |  | 9,534 |
Operating lease right of use liability |  |  | (10,508 | )
Deferred tax liability |  |  | (423 | )
Bargain purchase |  |  | (1,213 | )
Total |  | $ | 2,001 |
As of January 30, 2021, all purchase price allocations of 2020 acquisitions were finalized and the Company does not expect any further adjustments to the allocation in future periods. Right of Use Asset and Liability for 2020 Acquisition The right of use asset and liability were determined by taking the present value of the future minimum lease payments associated with the Acquired stores. The Company utilized discount rates for the leases similar to the rates used to present value its other leases. The difference between the asset and the liability noted above for the 2020 acquisitions is attributable to net unfavorable lease rates in the acquired store leases. Results of Operations for 2020 Acquisition The results of operations of the stores acquired in 2020 were included in the Company’s results of operations beginning on the respective dates of acquisition noted above. From the respective dates of acquisition, the stores acquired in 2020 generated net sales of $34,555 and net income of approximately $4,659. Pro Forma Results for 2020 Acquisitions (unaudited) The following pro forma results are based on the individual historical results of the 2020 acquired stores with adjustments to give effect to the combined operations as if the acquisitions had been consummated at the beginning of fiscal year 2019. The pro forma results are intended for informational purposes only and do not purport to represent what the combined results of operations would actually have been had the acquisitions in fact occurred at the beginning of the earliest period presented. The pro forma information includes the following adjustments (i) depreciation based on the fair value of acquired property, plant, and equipment; (ii) cost of goods sold based on the step-up in fair value of the acquired inventory; (iii) interest expense incurred in connection with the borrowings on the Revolving Line of Credit used to finance the acquisitions; and (iv) elimination of acquisition expenses.
|  | Fifty-Two Weeks Ended |
|  | January 30, |  |  | February 1, |
|  | 2021 |  |  | 2020 |
Net sales |  |  | 1,464,406 |  |  |  | 909,113 |
Net income |  |  | 91,475 |  |  |  | 19,775 |
Earnings per share: |  |  |  |  |  |
Basic |  |  | 2.10 |  |  |  | 0.46 |
Diluted |  |  | 2.07 |  |  |  | 0.45 |

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- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI https://asc.fasb.org/topic&trid=2303972 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 5 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=128092470&loc=d3e4946-128472 + Details
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