EX-99.2 3 a09-9200_2ex99d2.htm EX-99.2

Exhibit 99.2

 

THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES

(UNAUDITED)

 

 

CONSOLIDATED STATEMENTS OF OPERATIONS

(dollar amounts in thousands, except per share amounts)

 

 

 

Thirteen weeks ended

 

Fifty-two weeks ended

 

 

 

January 31, 2009

 

February 2, 2008

 

January 31, 2009

 

February 2, 2008

 

 

 

 

 

%

 

 

 

%

 

 

 

%

 

 

 

%

 

 

 

Amount

 

Sales

 

Amount

 

Sales

 

Amount

 

Sales

 

Amount

 

Sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Merchandise Sales

 

$

379,792

 

81.6

 

$

426,417

 

82.4

 

$

1,569,664

 

81.4

 

1,749,578

 

81.8

 

Service Revenue

 

85,744

 

18.4

 

91,222

 

17.6

 

358,124

 

18.6

 

388,497

 

18.2

 

Total Revenues

 

465,536

 

100.0

 

517,639

 

100.0

 

1,927,788

 

100.0

 

2,138,075

 

100.0

 

Costs of Merchandise Sales

 

290,588

 

76.5

 

334,594

 

78.5

 

1,129,162

 

71.9

 

1,305,952

 

74.6

 

Costs of Service Revenue

 

82,760

 

96.5

 

84,039

 

92.1

 

333,194

 

93.0

 

345,886

 

89.0

 

Total Costs of Revenues

 

373,348

 

80.2

 

418,633

 

80.9

 

1,462,356

 

75.9

 

1,651,838

 

77.3

 

Gross Profit from Merchandise Sales

 

89,204

 

23.5

 

91,823

 

21.5

 

440,502

 

28.1

 

443,626

 

25.4

 

Gross Profit from Service Revenue

 

2,984

 

3.5

 

7,183

 

7.9

 

24,930

 

7.0

 

42,611

 

11.0

 

Total Gross Profit

 

92,188

 

19.8

 

99,006

 

19.1

 

465,432

 

24.1

 

486,237

 

22.7

 

Selling, General and Administrative Expenses

 

123,599

 

26.5

 

125,872

 

24.3

 

485,044

 

25.2

 

518,373

 

24.2

 

Net Gain from Dispositions of Assets

 

161

 

 

13,322

 

2.6

 

9,716

 

0.5

 

15,151

 

0.7

 

Operating Loss

 

(31,250

)

(6.7

)

(13,544

)

(2.6

)

(9,896

)

(0.5

)

(16,985

)

(0.8

)

Non-operating Income

 

170

 

 

543

 

0.1

 

1,967

 

0.1

 

5,246

 

0.2

 

Interest Expense

 

8,071

 

1.7

 

14,805

 

2.9

 

27,048

 

1.4

 

51,293

 

2.4

 

Loss From Continuing Operations Before Income Taxes

 

(39,151

)

(8.4

)

(27,806

)

(5.4

)

(34,977

)

(1.8

)

(63,032

)

(2.9

)

Income Tax Benefit

 

(6,324

)

16.2

(1)

(9,301

)

33.4

(1)

(6,139

)

17.6

(1)

(25,594

)

40.6

(1)

Net Loss From Continuing Operations

 

(32,827

)

(7.1

)

(18,505

)

(3.6

)

(28,838

)

(1.5

)

(37,438

)

(1.8

)

Discontinued Operations, Net of Tax

 

(440

)

(0.1

)

(1,898

)

(0.4

)

(1,591

)

(0.1

)

(3,601

)

(0.2

)

Net Loss

 

(33,267

)

(7.1

)

(20,403

)

(3.9

)

(30,429

)

(1.6

)

(41,039

)

(1.9

)

Retained Earnings, beginning of period

 

396,697

 

 

 

431,088

 

 

 

406,819

 

 

 

463,797

 

 

 

Cumulative effect adjustment for adoption of EITF 06-10, net of tax

 

 

 

 

 

 

 

(1,165

)

 

 

 

 

 

Cumulative effect adjustment for adoption of FIN 48

 

 

 

 

 

 

 

 

 

 

(155

)

 

 

Cumulative adjustment for change in measurement date

 

 

 

 

 

(189

)

 

 

 

 

 

 

(189

)

 

 

Cash Dividends

 

(3,560

)

 

 

(3,547

)

 

 

(14,111

)

 

 

(14,177

)

 

 

Effect of Stock Options

 

 

 

 

(71

)

 

 

(37

)

 

 

(1,332

)

 

 

Dividend Reinvestment Plan

 

(1,200

)

 

 

(59

)

 

 

(2,407

)

 

 

(86

)

 

 

Retained Earnings, end of period

 

$

358,670

 

 

 

$

406,819

 

 

 

$

358,670

 

 

 

$

406,819

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and Diluted Loss per Share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Loss From Continuing Operations

 

$

(0.63

)

 

 

$

(0.36

)

 

 

$

(0.55

)

 

 

$

(0.72

)

 

 

Discontinued Operations, Net of Tax

 

 

 

 

(0.03

)

 

 

(0.03

)

 

 

(0.07

)

 

 

Loss per Share

 

$

(0.63

)

 

 

$

(0.39

)

 

 

$

(0.58

)

 

 

$

(0.79

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash Dividends per Share

 

$

0.0675

 

 

 

$

0.0675

 

 

 

$

0.2700

 

 

 

$

0.2700

 

 

 

 


(1)

As a percentage of loss from continuing operations before income taxes.

 



 

THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES

(UNAUDITED)

 

 

CONSOLIDATED BALANCE SHEETS

(dollar amounts in thousands, except per share amounts)

 

 

 

January 31, 2009

 

February 2, 2008

 

 

 

 

 

 

 

Assets

 

 

 

 

 

Current Assets:

 

 

 

 

 

Cash and cash equivalents

 

$

21,332

 

$

20,926

 

Accounts receivable, less allowance for uncollectible accounts of $1,912 and $1,937

 

28,831

 

29,450

 

Merchandise inventories

 

564,931

 

561,152

 

Prepaid expenses

 

25,390

 

43,842

 

Other

 

62,421

 

77,469

 

Assets held for disposal

 

12,653

 

16,918

 

Total Current Assets

 

715,558

 

749,757

 

Property and Equipment - net

 

740,331

 

780,779

 

Deferred income taxes

 

77,708

 

20,775

 

Other

 

18,792

 

32,609

 

Total Assets

 

$

1,552,389

 

$

1,583,920

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

Accounts payable

 

$

212,340

 

$

245,423

 

Trade payable program liability

 

31,930

 

14,254

 

Accrued expenses

 

254,754

 

292,623

 

Deferred income taxes

 

35,848

 

 

Current maturities of long-term debt and obligations under capital leases

 

1,453

 

2,114

 

Total Current Liabilities

 

536,325

 

554,414

 

 

 

 

 

 

 

Long-term debt and obligations under capital leases, less current maturities

 

352,382

 

400,016

 

Other long-term liabilities

 

70,322

 

72,183

 

Deferred gain from asset sales

 

170,204

 

86,595

 

Commitments and Contingencies

 

 

 

 

 

Stockholders’ Equity:

 

 

 

 

 

Common Stock, par value $1 per share:

 

 

 

 

 

Authorized 500,000,000 shares; Issued 68,557,041 shares

 

68,557

 

68,557

 

Additional paid-in capital

 

292,728

 

296,074

 

Retained earnings

 

358,670

 

406,819

 

Accumulated other comprehensive loss

 

(18,075

)

(14,183

)

Less cost of shares in treasury - 14,124,021 shares and 14,609,094 shares

 

219,460

 

227,291

 

Less cost of shares in benefits trust - 2,195,270 shares

 

59,264

 

59,264

 

Total Stockholders’ Equity

 

423,156

 

470,712

 

Total Liabilities and Stockholders’ Equity

 

$

1,552,389

 

$

1,583,920

 

 



 

THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES

(UNAUDITED)

 

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

(dollar amounts in thousands)

 

Fifty-two weeks ended

 

January 31, 2009

 

February 2, 2008

 

 

 

 

 

 

 

Cash Flows from Operating Activities:

 

 

 

 

 

Net Loss

 

$

(30,429

)

$

(41,039

)

Adjustments to reconcile net earnings to net cash provided by continuing operations:

 

 

 

 

 

Discontinued operations

 

1,591

 

3,601

 

Depreciation and amortization

 

73,207

 

81,036

 

Inventory Impairment

 

 

32,803

 

Amortization of deferred gain from asset sales

 

(10,285

)

(1,030

)

Accretion of asset disposal obligation

 

263

 

276

 

Stock compensation expense

 

2,743

 

9,756

 

Gain from debt retirement

 

(3,460

)

 

Deferred income taxes

 

(6,258

)

(28,187

)

Gain from dispositions of assets

 

(9,716

)

(15,151

)

Change in fair value of derivative

 

177

 

9,268

 

Loss from asset impairment

 

3,427

 

7,199

 

Excess tax benefits from stock based awards

 

(3

)

(1,104

)

Change in cash surrender value of life insurance policies

 

100

 

(4,928

)

Changes in Operating Assets and Liabilities:

 

 

 

 

 

Decrease (increase) in accounts receivable, prepaid expenses and other

 

23,904

 

(1,579

)

(Increase) decrease in merchandise inventories

 

(3,779

)

13,087

 

Decrease in accounts payable

 

(33,083

)

(20,066

)

(Decrease) increase in accrued expenses

 

(34,993

)

10,083

 

Decrease in other long-term liabilities

 

(11,992

)

(3,224

)

Net cash (used in) provided by continuing operations

 

(38,586

)

50,801

 

Net cash (used in) provided by discontinued operations

 

(921

)

1,983

 

Net Cash (Used in) Provided by Operating Activities

 

(39,507

)

52,784

 

 

 

 

 

 

 

Cash Flows from Investing Activities:

 

 

 

 

 

Cash paid for master lease properties

 

(117,121

)

 

Cash paid for property and equipment

 

(34,762

)

(43,116

)

Proceeds from dispositions of assets

 

210,635

 

162,712

 

Life insurance proceeds received

 

15,588

 

30,045

 

Net cash provided by continuing operations

 

74,340

 

149,641

 

Net cash provided by (used in) discontinued operations

 

4,386

 

(379

)

Net Cash Provided by Investing Activities

 

78,726

 

149,262

 

 

 

 

 

 

 

Cash Flows from Financing Activities:

 

 

 

 

 

Borrowings under line of credit agreements

 

205,162

 

570,094

 

Payments under line of credit agreements

 

(223,345

)

(545,617

)

Excess tax benefits from stock based awards

 

3

 

1,104

 

Borrowings on trade payable program liability

 

196,680

 

142,884

 

Payments on trade payable program liability

 

(179,004

)

(142,620

)

Payment for finance issuance cost

 

(6,936

)

(85

)

Proceeds from lease financing

 

8,661

 

4,827

 

Reduction of long-term debt

 

(26,528

)

(165,409

)

Payments on capital lease obligations

 

(270

)

(286

)

Dividends paid

 

(14,111

)

(14,177

)

Repurchase of common stock

 

 

(58,152

)

Proceeds from exercise of stock options

 

23

 

3,652

 

Proceeds from dividend reinvestment plan

 

852

 

781

 

Net Cash Used in Financing Activities

 

(38,813

)

(203,004

)

Net Increase (Decrease) in Cash and Cash Equivalents

 

406

 

(958

)

Cash and Cash Equivalents at Beginning of Period

 

20,926

 

21,884

 

Cash and Cash Equivalents at End of Period

 

$

21,332

 

$

20,926

 

 

 

 

 

 

 

Supplemental Disclosure of Cash Flow Information:

 

 

 

 

 

Cash paid for income taxes

 

$

1,330

 

$

3,147

 

Cash paid for interest

 

$

23,088

 

$

44,129

 

Accrued purchases of property and equipment

 

$

1,214

 

$

1,985

 

 



 

THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES

(UNAUDITED)

 

 

COMPUTATION OF BASIC AND DILUTED LOSS PER SHARE

(in thousands, except per share data)

 

 

 

Thirteen weeks ended

 

Fifty-two weeks ended

 

 

 

January 31,
2009

 

February 2,
2008

 

January 31,
2009

 

February 2,
2008

 

 

 

 

 

 

 

 

 

 

 

(a)

Net Loss From Continuing Operations

 

$

(32,827

)

$

(18,505

)

$

(28,838

)

$

(37,438

)

 

Discontinued Operations, Net of Tax

 

(440

)

(1,898

)

(1,591

)

(3,601

)

 

 

 

 

 

 

 

 

 

 

 

 

Net Loss

 

$

(33,267

)

$

(20,403

)

$

(30,429

)

$

(41,039

)

 

 

 

 

 

 

 

 

 

 

 

(b)

Basic average number of common shares outstanding during period

 

52,223

 

51,903

 

52,136

 

52,130

 

 

 

 

 

 

 

 

 

 

 

 

 

Common shares assumed issued upon exercise of dilutive stock options, net of assumed repurchase, at the average market price

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(c)

Diluted average number of common shares assumed outstanding during period

 

52,223

 

51,903

 

52,136

 

52,130

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic Loss per Share:

 

 

 

 

 

 

 

 

 

 

Net Loss From Continuing Operations (a) /(b)

 

$

(0.63

)

$

(0.36

)

$

(0.55

)

$

(0.72

)

 

 Discontinued Operations, Net of Tax

 

 

(0.03

)

(0.03

)

(0.07

)

 

Basic Loss per Share

 

$

(0.63

)

$

(0.39

)

$

(0.58

)

$

(0.79

)

 

Diluted Loss per Share:

 

 

 

 

 

 

 

 

 

 

Net Loss From Continuing Operations  (a) /(c)

 

$

(0.63

)

$

(0.36

)

$

(0.55

)

$

(0.72

)

 

 Discontinued Operations, Net of Tax

 

 

(0.03

)

(0.03

)

$

(0.07

)

 

Diluted Loss per Share

 

$

(0.63

)

$

(0.39

)

$

(0.58

)

$

(0.79

)

 



 

THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES

(UNAUDITED)

 

 

ADDITIONAL INFORMATION

(dollar amounts in thousands)

 

 

 

Thirteen weeks ended

 

Fifty-two weeks ended

 

 

 

January 31, 2009

 

February 2, 2008

 

January 31, 2009

 

February 2, 2008

 

 

 

 

 

 

 

 

 

 

 

Capital Expenditures (A)

 

$

11,889

 

$

12,423

 

$

151,113

 

$

42,496

 

 

 

 

 

 

 

 

 

 

 

Depreciation and Amortization

 

$

18,097

 

$

19,312

 

$

73,206

 

$

81,036

 

 

 

 

 

 

 

 

 

 

 

Non-operating Income:

 

 

 

 

 

 

 

 

 

Net Rental Revenue

 

$

123

 

$

439

 

$

1,193

 

$

2,288

 

Investment Income

 

35

 

112

 

780

 

3,011

 

Other (Expense) Income

 

12

 

(8

)

(6

)

(53

)

 

 

 

 

 

 

 

 

 

 

Total

 

$

170

 

$

543

 

$

1,967

 

$

5,246

 

 

 

 

 

 

 

 

 

 

 

Comparable Sales Percentages:

 

 

 

 

 

 

 

 

 

Merchandise

 

-9.1

%

-4.4

%

-8.4

%

-4.2

%

Service

 

-5.5

%

1.0

%

-6.2

%

1.8

%

Total

 

-8.5

%

-3.8

%

-8.0

%

-3.1

%

 

 

 

 

 

 

 

 

 

 

Total Square Feet of Retail Space (including service centers)

 

 

 

 

 

11,514,000

 

11,514,000

 

 

 

 

 

 

 

 

 

 

 

Total Store Count

 

 

 

 

 

562

 

562

 

 

 

 

 

 

 

 

 

 

 

Sales and Gross Profit by Line of Business (B):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retail Sales

 

$

255,314

 

$

302,132

 

$

1,058,021

 

1,226,175

 

Service Center Revenue

 

210,222

 

215,507

 

869,767

 

911,900

 

Total Revenues

 

$

465,536

 

$

517,639

 

$

1,927,788

 

$

2,138,075

 

 

 

 

 

 

 

 

 

 

 

Gross Profit from Retail Sales

 

$

53,123

 

$

55,906

 

$

273,262

 

280,606

 

Gross Profit from Service Center Revenue

 

39,065

 

43,100

 

192,170

 

205,631

 

Total Gross Profit

 

$

92,188

 

$

99,006

 

$

465,432

 

$

486,237

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Comparable Sales Percentages (B):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retail Sales

 

-13.2

%

-7.0

%

-11.8

%

-7.2

%

Service Center Revenue

 

-1.9

%

0.9

%

-2.9

%

2.8

%

Total Revenues

 

-8.5

%

-3.8

%

-8.0

%

-3.1

%

 

 

 

 

 

 

 

 

 

 

Gross Profit Percentage by Line of Business (B):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Profit Percentage from Retail Sales

 

20.8

%

18.5

%

25.8

%

22.9

%

Gross Profit Percentage from Service Center Revenue

 

18.6

%

20.0

%

22.1

%

22.5

%

Total Gross Profit Percentage

 

19.8

%

19.1

%

24.1

%

22.7

%

 


(A) Capital expenditures includes $117.1 million for the purchase of master lease properties.

 

(B) Retail Sales include DIY and Commercial sales.  Service Center Revenue includes revenue from labor and installed parts and tires.

 



 

THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES

 

(UNAUDITED)

 

ADDITIONAL INFORMATION

 

(dollar amounts in thousands)

 

 

 

First Quarter-to-Date (A)

 

 

 

April 7, 2009

 

April 8, 2008

 

 

 

 

 

 

 

Comparable Sales Percentages:

 

 

 

 

 

 

 

 

 

 

 

Merchandise

 

-1.3

%

-6.0

%

Service

 

3.5

%

-3.1

%

Total

 

-0.4

%

-5.5

%

 

 

 

 

 

 

Comparable Sales Percentages (B):

 

 

 

 

 

 

 

 

 

 

 

Retail Sales

 

-3.0

%

-9.9

%

Service Center Revenue

 

2.7

%

0.4

%

Total Revenues

 

-0.4

%

-5.5

%

 


(A) The first quarter-to-date for the current year covers the period from February 1, 2009 to April 7, 2009 and the first quarter-to-date for the prior year covers the corresponding period from February 3, 2008 to April 8, 2008.

 

(B) Retail Sales include DIY and Commercial sales. Service Center Revenue includes revenue from labor and installed parts and tires.