EX-99.2 3 a09-22848_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

 

Twenty Six weeks ended

 

 

 

August 1, 2009

 

August 2, 2008

 

August 1, 2009

 

August 2, 2008

 

 

 

 

 

%

 

 

 

%

 

 

 

%

 

 

 

%

 

 

 

Amount

 

Sales

 

Amount

 

Sales

 

Amount

 

Sales

 

Amount

 

Sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Merchandise Sales

 

$

392,071

 

80.2

 

$

408,077

 

81.6

 

$

790,248

 

80.2

 

811,411

 

81.3

 

Service Revenue

 

96,840

 

19.8

 

91,966

 

18.4

 

195,151

 

19.8

 

186,675

 

18.7

 

Total Revenues

 

488,911

 

100.0

 

500,043

 

100.0

 

985,399

 

100.0

 

998,086

 

100.0

 

Costs of Merchandise Sales

 

275,790

 

70.3

 

284,416

 

69.7

 

556,825

 

70.5

 

570,339

 

70.3

 

Costs of Service Revenue

 

84,931

 

87.7

 

85,193

 

92.6

 

170,783

 

87.5

 

169,347

 

90.7

 

Total Costs of Revenues

 

360,721

 

73.8

 

369,609

 

73.9

 

727,608

 

73.8

 

739,686

 

74.1

 

Gross Profit from Merchandise Sales

 

116,281

 

29.7

 

123,661

 

30.3

 

233,423

 

29.5

 

241,072

 

29.7

 

Gross Profit from Service Revenue

 

11,909

 

12.3

 

6,773

 

7.4

 

24,368

 

12.5

 

17,328

 

9.3

 

Total Gross Profit

 

128,190

 

26.2

 

130,434

 

26.1

 

257,791

 

26.2

 

258,400

 

25.9

 

Selling, General and Administrative Expenses

 

109,482

 

22.4

 

122,603

 

24.5

 

217,535

 

22.1

 

241,618

 

24.2

 

Net (Loss) Gain from Dispositions of Assets

 

(16

)

 

4,077

 

0.8

 

(13

)

 

9,608

 

1.0

 

Operating Profit

 

18,692

 

3.8

 

11,908

 

2.4

 

40,243

 

4.1

 

26,390

 

2.6

 

Non-operating Income

 

539

 

0.1

 

1,162

 

0.2

 

942

 

0.1

 

1,492

 

0.1

 

Interest Expense

 

6,466

 

1.3

 

6,452

 

1.3

 

8,402

 

0.9

 

11,879

 

1.2

 

Earnings From Continuing Operations Before Income Taxes

 

12,765

 

2.6

 

6,618

 

1.3

 

32,783

 

3.3

 

16,003

 

1.6

 

Income Tax Expense

 

4,907

 

38.4

(1)

866

 

13.1

(1)

13,862

 

42.3

(1)

4,960

 

31.0

(1)

Net Earnings From Continuing Operations

 

7,858

 

1.6

 

5,752

 

1.2

 

18,921

 

1.9

 

11,043

 

1.1

 

Discontinued Operations, Net of Tax

 

(123

)

 

(304

)

(0.1

)

(277

)

 

(923

)

(0.1

)

Net Earnings

 

7,735

 

1.6

 

5,448

 

1.1

 

18,644

 

1.9

 

10,120

 

1.0

 

Retained Earnings, beginning of period

 

367,882

 

 

 

406,819

 

 

 

358,670

 

 

 

406,819

 

 

 

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

 

 

 

 

 

 

 

 

 

 

(1,165

)

 

 

Cash Dividends

 

(1,577

)

 

 

(3,533

)

 

 

(3,152

)

 

 

(7,028

)

 

 

Effect of Stock Options

 

(8

)

 

 

(25

)

 

 

(8

)

 

 

(37

)

 

 

Dividend Reinvestment Plan

 

(69

)

 

 

(358

)

 

 

(191

)

 

 

(358

)

 

 

Retained Earnings, end of period

 

$

373,963

 

 

 

$

408,351

 

 

 

$

373,963

 

 

 

$

408,351

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and Diluted Earnings per Share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Earnings From Continuing Operations

 

$

0.15

 

 

 

$

0.11

 

 

 

$

0.36

 

 

 

$

0.21

 

 

 

Discontinued Operations, Net of Tax

 

 

 

 

(0.01

)

 

 

 

 

 

(0.02

)

 

 

Earnings per Share

 

$

0.15

 

 

 

$

0.10

 

 

 

$

0.36

 

 

 

$

0.19

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash Dividends per Share

 

$

0.0300

 

 

 

$

0.0675

 

 

 

$

0.0600

 

 

 

$

0.1350

 

 

 

 


(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)

 

 

 

August 1, 2009

 

January 31, 2009

 

August 2, 2008

 

 

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

21,886

 

$

21,332

 

$

56,215

 

Accounts receivable, less allowance for uncollectible accounts of $1,799; $1,912 and $1,805

 

21,801

 

28,831

 

28,556

 

Merchandise inventories

 

548,763

 

564,931

 

560,209

 

Prepaid expenses

 

18,567

 

25,390

 

36,245

 

Other

 

53,151

 

62,421

 

47,907

 

Assets held for disposal

 

9,912

 

12,653

 

20,695

 

Total Current Assets

 

674,080

 

715,558

 

749,827

 

Property and Equipment - net

 

719,008

 

740,331

 

759,408

 

Deferred income taxes

 

77,578

 

77,708

 

41,328

 

Other

 

18,092

 

18,792

 

30,011

 

Total Assets

 

$

1,488,758

 

$

1,552,389

 

$

1,580,574

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

 

Accounts payable

 

$

222,974

 

$

212,340

 

$

228,723

 

Trade payable program liability

 

2,614

 

31,930

 

28,212

 

Accrued expenses

 

236,144

 

254,754

 

257,547

 

Deferred income taxes

 

41,118

 

35,848

 

9,453

 

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

 

1,079

 

1,453

 

2,304

 

Total Current Liabilities

 

503,929

 

536,325

 

526,239

 

 

 

 

 

 

 

 

 

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

 

308,335

 

352,382

 

335,576

 

Other long-term liabilities

 

69,872

 

70,322

 

66,838

 

Deferred gain from asset sales

 

164,947

 

170,204

 

173,732

 

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

 

293,037

 

292,728

 

297,125

 

Retained earnings

 

373,963

 

358,670

 

408,351

 

Accumulated other comprehensive loss

 

(16,477

)

(18,075

)

(10,636

)

Less cost of shares in treasury - 14,042,311 shares, 14,124,021 shares and 14,525,633 shares

 

218,141

 

219,460

 

225,944

 

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

 

59,264

 

59,264

 

59,264

 

Total Stockholders’ Equity

 

441,675

 

423,156

 

478,189

 

Total Liabilities and Stockholders’ Equity

 

$

1,488,758

 

$

1,552,389

 

$

1,580,574

 

 



 

THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES

 

(UNAUDITED)

 

 

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

(dollar amounts in thousands)

 

Twenty Six weeks ended

 

August 1, 2009

 

August 2, 2008

 

 

 

 

 

 

 

Cash Flows from Operating Activities:

 

 

 

 

 

Net Earnings

 

$

18,644

 

$

10,120

 

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

 

 

 

 

 

Discontinued operations

 

277

 

923

 

Depreciation and amortization

 

35,338

 

36,928

 

Amortization of deferred gain from asset sales

 

(6,086

)

(4,297

)

Stock compensation expense

 

1,284

 

1,872

 

Gain on debt retirement

 

(6,248

)

(3,460

)

Deferred income taxes

 

4,455

 

(670

)

Loss (gain) from dispositions of assets

 

13

 

(9,608

)

Other

 

235

 

478

 

Changes in Operating Assets and Liabilities:

 

 

 

 

 

Decrease in accounts receivable, prepaid expenses and other

 

24,143

 

26,024

 

Decrease in merchandise inventories

 

16,168

 

943

 

Increase (decrease) in accounts payable

 

10,634

 

(16,700

)

Decrease in accrued expenses

 

(18,658

)

(34,449

)

Increase (decrease) in other long-term liabilities

 

1,972

 

(475

)

Net cash provided by continuing operations

 

82,171

 

7,629

 

Net cash used in discontinued operations

 

(543

)

(415

)

Net Cash Provided by Operating Activities

 

81,628

 

7,214

 

 

 

 

 

 

 

Cash Flows from Investing Activities:

 

 

 

 

 

Cash paid for master lease properties

 

 

(117,121

)

Cash paid for property and equipment

 

(17,481

)

(13,989

)

Proceeds from dispositions of assets

 

1,098

 

208,211

 

Other

 

(500

)

 

Net cash (used in) provided by continuing operations

 

(16,883

)

77,101

 

Net cash provided by discontinued operations

 

1,758

 

 

Net Cash (Used in) Provided by Investing Activities

 

(15,125

)

77,101

 

 

 

 

 

 

 

Cash Flows from Financing Activities:

 

 

 

 

 

Borrowings under line of credit agreements

 

222,017

 

98,504

 

Payments under line of credit agreements

 

(244,284

)

(140,019

)

Borrowings on trade payable program liability

 

35,300

 

85,408

 

Payments on trade payable program liability

 

(64,616

)

(71,450

)

Payment for finance issuance cost

 

 

(182

)

Proceeds from lease financing

 

 

8,661

 

Long-term debt and capital lease obligations payments

 

(11,451

)

(23,339

)

Dividends paid

 

(3,152

)

(7,028

)

Other

 

237

 

419

 

Net Cash Used in Financing Activities

 

(65,949

)

(49,026

)

Net Increase in Cash and Cash Equivalents

 

554

 

35,289

 

Cash and Cash Equivalents at Beginning of Period

 

21,332

 

20,926

 

Cash and Cash Equivalents at End of Period

 

$

21,886

 

$

56,215

 

 

 

 

 

 

 

Supplemental Disclosure of Cash Flow Information:

 

 

 

 

 

Cash paid for income taxes

 

$

2,585

 

$

558

 

Cash paid for interest

 

$

12,366

 

$

13,859

 

Accrued purchases of property and equipment

 

$

1,170

 

$

1,075

 

 



 

THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES

 

COMPUTATION OF BASIC AND DILUTED EARNINGS (LOSS) PER SHARE

 

(in thousands, except per share data)

 

 

 

 

Thirteen Weeks Ended

 

Twenty Six weeks ended

 

 

 

 

August 1,
2009

 

August 2,
2008

 

August 1,
2009

 

August 2,
2008

 

 

 

 

 

 

 

 

 

 

 

 

(a)

Net Earnings From Continuing Operations

 

$

7,858

 

$

5,752

 

$

18,921

 

$

11,043

 

 

Discontinued Operations, Net of Tax

 

(123

)

(304

)

(277

)

(923

)

 

 

 

 

 

 

 

 

 

 

 

 

Net Earnings

 

$

7,735

 

$

5,448

 

$

18,644

 

$

10,120

 

 

 

 

 

 

 

 

 

 

 

 

(b)

Basic average number of common shares outstanding during period

 

52,384

 

52,153

 

52,359

 

52,109

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

315

 

83

 

179

 

95

 

 

 

 

 

 

 

 

 

 

 

 

(c)

Diluted average number of common shares assumed outstanding during period

 

52,699

 

52,236

 

52,538

 

52,204

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic Earnings per Share:

 

 

 

 

 

 

 

 

 

 

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

 

$

0.15

 

$

0.11

 

$

0.36

 

$

0.21

 

 

Discontinued Operations, Net of Tax

 

 

(0.01

)

 

(0.02

)

 

Basic Earnings per Share

 

$

0.15

 

$

0.10

 

$

0.36

 

$

0.19

 

 

Diluted Earnings per Share:

 

 

 

 

 

 

 

 

 

 

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

 

$

0.15

 

$

0.11

 

$

0.36

 

$

0.21

 

 

Discontinued Operations, Net of Tax

 

 

(0.01

)

 

$

(0.02

)

 

Diluted Earnings per Share

 

$

0.15

 

$

0.10

 

$

0.36

 

$

0.19

 

 



 

THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES

 

ADDITIONAL INFORMATION

 

(dollar amounts in thousands)

 

 

 

Thirteen Weeks Ended

 

Twenty Six weeks ended

 

 

 

August 1, 2009

 

August 2, 2008

 

August 1, 2009

 

August 2, 2008

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures (A)

 

$

11,763

 

$

121,769

 

$

17,481

 

$

130,290

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

$

17,965

 

$

17,909

 

$

35,338

 

$

36,928

 

 

 

 

 

 

 

 

 

 

 

Non-operating income:

 

 

 

 

 

 

 

 

 

Net rental revenue

 

$

487

 

$

782

 

$

789

 

$

954

 

Investment income

 

56

 

400

 

126

 

567

 

Other (expense) income

 

(4

)

(20

)

27

 

(29

)

 

 

 

 

 

 

 

 

 

 

Total

 

$

539

 

$

1,162

 

$

942

 

$

1,492

 

 

 

 

 

 

 

 

 

 

 

Comparable sales percentages:

 

 

 

 

 

 

 

 

 

Merchandise

 

-4.0

%

-8.0

%

-2.6

%

-7.1

%

Service

 

5.2

%

-5.2

%

4.5

%

-4.0

%

Total

 

-2.3

%

-7.5

%

-1.3

%

-6.6

%

 

 

 

 

 

 

 

 

 

 

Total square feet of retail space (including service centers)

 

 

 

 

 

11,534,000

 

11,514,000

 

 

 

 

 

 

 

 

 

 

 

Total Store Count

 

 

 

 

 

566

 

562

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retail Sales

 

$

259,435

 

$

275,890

 

$

523,846

 

549,215

 

Service Center Revenue

 

229,476

 

224,153

 

461,553

 

448,871

 

Total Revenues

 

$

488,911

 

$

500,043

 

$

985,399

 

$

998,086

 

 

 

 

 

 

 

 

 

 

 

Gross Profit from Retail Sales

 

$

70,746

 

$

78,375

 

$

144,301

 

151,779

 

Gross Profit from Service Center Revenue

 

57,444

 

52,059

 

113,490

 

106,621

 

Total Gross Profit

 

$

128,190

 

$

130,434

 

$

257,791

 

$

258,400

 

 

 

 

 

 

 

 

 

 

 

Comparable Sales Percentages (B):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retail Sales

 

-6.0

%

-11.6

%

-4.6

%

-10.9

%

Service Center Revenue

 

2.3

%

-1.9

%

2.8

%

-0.6

%

Total Revenues

 

-2.3

%

-7.5

%

-1.3

%

-6.6

%

 

 

 

 

 

 

 

 

 

 

Gross Profit Percentage by Line of Business (B):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Profit Percentage from Retail Sales

 

27.3

%

28.4

%

27.5

%

27.6

%

Gross Profit Percentage from Service Center Revenue

 

25.0

%

23.2

%

24.6

%

23.8

%

Total Gross Profit Percentage

 

26.2

%

26.1

%

26.2

%

25.9

%

 


(A) 2008 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.