EX-99.2 3 a09-15094_1ex99d2.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)

 

 

 

May 2, 2009

 

May 3, 2008

 

 

 

 

 

%

 

 

 

%

 

Thirteen weeks ended

 

Amount

 

Sales

 

Amount

 

Sales

 

 

 

 

 

 

 

 

 

 

 

Merchandise Sales

 

$

398,177

 

80.2

 

$

403,334

 

81.0

 

Service Revenue

 

98,311

 

19.8

 

94,709

 

19.0

 

Total Revenues

 

496,488

 

100.0

 

498,043

 

100.0

 

Costs of Merchandise Sales

 

281,035

 

70.6

 

285,923

 

70.9

 

Costs of Service Revenue

 

85,852

 

87.3

 

84,154

 

88.9

 

Total Costs of Revenues

 

366,887

 

73.9

 

370,077

 

74.3

 

Gross Profit from Merchandise Sales

 

117,142

 

29.4

 

117,411

 

29.1

 

Gross Profit from Service Revenue

 

12,459

 

12.7

 

10,555

 

11.1

 

Total Gross Profit

 

129,601

 

26.1

 

127,966

 

25.7

 

Selling, General and Administrative Expenses

 

108,053

 

21.8

 

119,015

 

23.9

 

Net Gain from Dispositions of Assets

 

3

 

 

5,531

 

1.1

 

Operating Profit

 

21,551

 

4.3

 

14,482

 

2.9

 

Non-operating Income

 

403

 

0.1

 

330

 

0.1

 

Interest Expense

 

1,936

 

0.4

 

5,427

 

1.1

 

Earnings From Continuing Operations Before Income Taxes

 

20,018

 

4.0

 

9,385

 

1.9

 

Income Tax Expense

 

8,955

 

44.7

(1)

4,094

 

43.6

(1)

Net Earnings From Continuing Operations

 

11,063

 

2.2

 

5,291

 

1.1

 

Discontinued Operations, Net of Tax

 

(154

)

 

(619

)

(0.1

)

Net Earnings

 

10,909

 

2.2

 

4,672

 

0.9

 

Retained Earnings, beginning of period

 

358,670

 

 

 

406,819

 

 

 

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

 

 

 

 

(1,165

)

 

 

Cash Dividends

 

(1,575

)

 

 

(3,495

)

 

 

Effect of Stock Options

 

 

 

 

(12

)

 

 

Dividend Reinvestment Plan

 

(122

)

 

 

 

 

 

Retained Earnings, end of period

 

$

367,882

 

 

 

$

406,819

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and Diluted Earnings per Share:

 

 

 

 

 

 

 

 

 

Net Earnings From Continuing Operations

 

$

0.21

 

 

 

$

0.10

 

 

 

Discontinued Operations, Net of Tax

 

 

 

 

(0.01

)

 

 

Earnings per Share

 

$

0.21

 

 

 

$

0.09

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash Dividends per Share

 

$

0.0300

 

 

 

$

0.0675

 

 

 

 


(1)

As a percentage of earnings from continuing operations before income taxes and cumulative effect of change in accounting principle.

 



 

THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES

 (UNAUDITED)

 

 

CONSOLIDATED BALANCE SHEETS

(dollar amounts in thousands, except per share amounts)

 

 

 

May 2, 2009

 

January 31, 2009

 

May 3, 2008

 

 

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

21,313

 

$

21,332

 

$

87,277

 

Accounts receivable, less allowance for uncollectible accounts of $1,701; $1,912 and $2,299

 

22,680

 

28,831

 

30,726

 

Merchandise inventories

 

556,564

 

564,931

 

561,439

 

Prepaid expenses

 

21,661

 

25,390

 

39,601

 

Other

 

58,757

 

62,421

 

65,411

 

Assets held for disposal

 

11,004

 

12,653

 

16,592

 

Total Current Assets

 

691,979

 

715,558

 

801,046

 

Property and Equipment - net

 

724,698

 

740,331

 

705,557

 

Deferred income taxes

 

77,606

 

77,708

 

27,332

 

Other

 

17,477

 

18,792

 

30,756

 

Total Assets

 

$

1,511,760

 

$

1,552,389

 

$

1,564,691

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

 

Accounts payable

 

$

193,894

 

$

212,340

 

$

230,185

 

Trade payable program liability

 

28,464

 

31,930

 

19,020

 

Accrued expenses

 

244,764

 

254,754

 

282,322

 

Deferred income taxes

 

38,540

 

35,848

 

 

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

 

1,150

 

1,453

 

2,278

 

Total Current Liabilities

 

506,812

 

536,325

 

533,805

 

 

 

 

 

 

 

 

 

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

 

332,848

 

352,382

 

341,317

 

Other long-term liabilities

 

70,745

 

70,322

 

70,032

 

Deferred gain from asset sales

 

167,984

 

170,204

 

146,062

 

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

 

68,557

 

Additional paid-in capital

 

292,434

 

292,728

 

296,715

 

Retained earnings

 

367,882

 

358,670

 

406,819

 

Accumulated other comprehensive loss

 

(17,823

)

(18,075

)

(12,486

)

Less cost of shares in treasury – 14,059,333 shares, 14,124,021 shares and 14,582,741 shares

 

218,415

 

219,460

 

226,866

 

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

 

59,264

 

59,264

 

59,264

 

Total Stockholders’ Equity

 

433,371

 

423,156

 

473,475

 

Total Liabilities and Stockholders’ Equity

 

$

1,511,760

 

$

1,552,389

 

$

1,564,691

 

 



 

THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES

 (UNAUDITED)

 

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

 (dollar amounts in thousands)

 

Thirteen weeks ended

 

May 2, 2009

 

May 3, 2008

 

 

 

 

 

 

 

Cash Flows from Operating Activities:

 

 

 

 

 

Net Earnings

 

$

10,909

 

$

4,672

 

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

 

 

 

 

 

Discontinued operations

 

154

 

619

 

Depreciation and amortization

 

17,373

 

19,019

 

Amortization of deferred gain from asset sales

 

(3,049

)

(1,825

)

Deferred income taxes

 

2,646

 

1,437

 

Stock compensation expense

 

568

 

1,322

 

Gain from debt retirement

 

(6,248

)

(2,883

)

Gain from dispositions of assets

 

(3

)

(5,531

)

Other

 

181

 

1,511

 

Changes in Operating Assets and Liabilities:

 

 

 

 

 

Decrease in accounts receivable, prepaid expenses and other

 

14,603

 

7,586

 

Decrease (increase) in merchandise inventories

 

8,366

 

(287

)

Decrease in accounts payable

 

(18,446

)

(15,238

)

Decrease in accrued expenses

 

(9,442

)

(12,281

)

Increase (decrease) in other long-term liabilities

 

683

 

(2,394

)

Net cash provided by (used in) continuing operations

 

18,295

 

(4,273

)

Net cash used in discontinued operations

 

(318

)

(58

)

Net Cash Provided by (Used in) Operating Activities

 

17,977

 

(4,331

)

 

 

 

 

 

 

Cash Flows from Investing Activities:

 

 

 

 

 

Cash paid for property and equipment

 

(5,718

)

(6,942

)

Proceeds from dispositions of assets

 

10

 

132,090

 

Net cash (used in) provided by continuing operations

 

(5,708

)

125,148

 

Net cash provided by discontinued operations

 

1,758

 

 

Net Cash (Used in) Provided by Investing Activities

 

(3,950

)

125,148

 

 

 

 

 

 

 

Cash Flows from Financing Activities:

 

 

 

 

 

Borrowings under line of credit agreements

 

160,498

 

97,909

 

Payments under line of credit agreements

 

(158,522

)

(139,332

)

Borrowings on trade payable program liability

 

33,871

 

27,222

 

Payments on trade payable program liability

 

(37,337

)

(22,456

)

Payment for finance issuance cost

 

 

(93

)

Proceeds from lease financing

 

 

4,676

 

Long-term debt and capital lease obligations payments

 

(11,110

)

(18,905

)

Dividends paid

 

(1,575

)

(3,495

)

Other

 

129

 

8

 

Net Cash Used in Financing Activities

 

(14,046

)

(54,466

)

Net (Decrease) increase in Cash and Cash Equivalents

 

(19

)

66,351

 

Cash and Cash Equivalents at Beginning of Period

 

21,332

 

20,926

 

Cash and Cash Equivalents at End of Period

 

$

21,313

 

$

87,277

 

 

 

 

 

 

 

Supplemental Disclosure of Cash Flow Information:

 

 

 

 

 

Cash paid for income taxes

 

$

831

 

$

 

Cash paid for interest

 

$

3,830

 

$

3,994

 

Accrued purchases of property and equipment

 

$

599

 

$

3,689

 

 



 

THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES

 

(UNAUDITED)

 

 

 

COMPUTATION OF BASIC AND DILUTED EARNINGS PER SHARE

 

(in thousands, except per share data)

 

 

 

 

Thirteen weeks ended

 

 

 

 

May 2, 2009

 

May 3, 2008

 

(a)

 

 

 

 

 

 

 

Net Earnings From Continuing Operations

 

$

11,063

 

$

5,291

 

 

Discontinued Operations, Net of Tax

 

(154

)

(619

)

 

Net Earnings

 

$

10,909

 

$

4,672

 

 

 

 

 

 

 

 

(b)

Average number of common shares outstanding during period

 

52,333

 

52,063

 

 

 

 

 

 

 

 

 

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

 

43

 

107

 

 

 

 

 

 

 

 

(c)

Average number of common shares assumed outstanding during period

 

52,376

 

52,170

 

 

 

 

 

 

 

 

 

Basic Earnings per Share:

 

 

 

 

 

 

Net Earnings From Continuing Operations

 

$

0.21

 

$

0.10

 

 

Discontinued Operations, Net of Tax

 

 

(0.01

)

 

Basic Earnings per Share

 

$

0.21

 

$

0.09

 

 

Diluted Earnings per Share:

 

 

 

 

 

 

Net Earnings From Continuing Operations

 

$

0.21

 

$

0.10

 

 

Discontinued Operations, Net of Tax

 

 

(0.01

)

 

Diluted Earnings per Share

 

$

0.21

 

$

0.09

 

 



 

THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES

 

(UNAUDITED)

 

 

 

ADDITIONAL INFORMATION

 

(dollar amounts in thousands)

 

 

 

Thirteen weeks ended

 

 

 

May 2, 2009

 

May 3, 2008

 

 

 

 

 

 

 

Capital expenditures

 

$

5,103

 

$

8,646

 

 

 

 

 

 

 

Depreciation and amortization

 

$

17,373

 

$

19,019

 

 

 

 

 

 

 

Non-operating income:

 

 

 

 

 

Net rental revenue

 

$

302

 

$

173

 

Investment income

 

70

 

167

 

Other (expense) income

 

31

 

(10

)

Total

 

$

403

 

$

330

 

 

 

 

 

 

 

Comparable sales percentages:

 

 

 

 

 

Merchandise

 

-1.3

%

-6.2

%

Service

 

3.8

%

-2.9

%

Total

 

-0.3

%

-5.6

%

 

 

 

 

 

 

Total square feet of retail space (including service centers)

 

11,520,000

 

11,514,000

 

 

 

 

 

 

 

Total Store Count

 

563

 

562

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

Retail Sales

 

$

264,411

 

$

273,325

 

Service Center Revenue

 

232,077

 

224,718

 

Total Revenues

 

$

496,488

 

$

498,043

 

 

 

 

 

 

 

Gross Profit from Retail Sales

 

$

73,555

 

$

73,404

 

Gross Profit from Service Center Revenue

 

56,046

 

54,562

 

Total Gross Profit

 

$

129,601

 

$

127,966

 

 

 

 

 

 

 

Comparable Sales Percentages (A):

 

 

 

 

 

 

 

 

 

 

 

Retail Sales

 

-3.3

%

-10.2

%

Service Center Revenue

 

3.3

%

0.6

%

Total Revenues

 

-0.3

%

-5.6

%

 

 

 

 

 

 

Gross Profit Percentage by Line of Business (A):

 

 

 

 

 

 

 

 

 

 

 

Gross Profit Percentage from Retail Sales

 

27.8

%

26.9

%

Gross Profit Percentage from Service Center Revenue

 

24.1

%

24.3

%

Total Gross Profit Percentage

 

26.1

%

25.7

%

 


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