EX-99.2 3 a11-9746_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)

 

 

 

Thirteen weeks ended

 

Fifty-two weeks ended

 

 

 

January 29, 2011

 

January 30, 2010

 

January 29, 2011

 

January 30, 2010

 

 

 

 

 

%

 

 

 

%

 

 

 

%

 

 

 

%

 

 

 

Amount

 

Sales

 

Amount

 

Sales

 

Amount

 

Sales

 

Amount

 

Sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Merchandise sales

 

$

384,432

 

80.5

 

$

364,511

 

80.5

 

$

1,598,168

 

80.4

 

$

1,533,619

 

80.3

 

Service revenue

 

92,957

 

19.5

 

88,385

 

19.5

 

390,473

 

19.6

 

377,319

 

19.7

 

Total revenues

 

477,389

 

100.0

 

452,896

 

100.0

 

1,988,641

 

100.0

 

1,910,938

 

100.0

 

Costs of merchandise sales

 

264,532

 

68.8

 

258,375

 

70.9

 

1,110,380

 

69.5

 

1,084,804

 

70.7

 

Costs of service revenue

 

88,457

 

95.2

 

84,474

 

95.6

 

355,909

 

91.1

 

340,027

 

90.1

 

Total costs of revenues

 

352,989

 

73.9

 

342,849

 

75.7

 

1,466,289

 

73.7

 

1,424,831

 

74.6

 

Gross profit from merchandise sales

 

119,900

 

31.2

 

106,136

 

29.1

 

487,788

 

30.5

 

448,815

 

29.3

 

Gross profit from service revenue

 

4,500

 

4.8

 

3,911

 

4.4

 

34,564

 

8.9

 

37,292

 

9.9

 

Total gross profit

 

124,400

 

26.1

 

110,047

 

24.3

 

522,352

 

26.3

 

486,107

 

25.4

 

Selling, general and administrative expenses

 

106,659

 

22.3

 

103,181

 

22.8

 

442,239

 

22.2

 

430,261

 

22.5

 

Net (loss) gain from dispositions of assets

 

(136

)

—

 

(106

)

—

 

2,467

 

0.1

 

1,213

 

0.1

 

Operating profit

 

17,605

 

3.7

 

6,760

 

1.5

 

82,580

 

4.2

 

57,059

 

3.0

 

Non-operating income

 

754

 

0.2

 

595

 

0.1

 

2,609

 

0.1

 

2,261

 

0.1

 

Interest expense

 

6,864

 

1.4

 

6,380

 

1.4

 

26,745

 

1.3

 

21,704

 

1.1

 

Earnings from continuing operations before income taxes

 

11,495

 

2.4

 

975

 

0.2

 

58,444

 

2.9

 

37,616

 

2.0

 

Income tax expense (benefit)

 

2,957

 

25.7

(1)

(1,860

)

(190.8

)(1)

21,273

 

36.4

(1)

13,503

 

35.9

(1)

Earnings from continuing operations

 

8,538

 

1.8

 

2,835

 

0.6

 

37,171

 

1.9

 

24,113

 

1.3

 

Loss from discontinued operations, net of tax

 

(173

)

—

 

(567

)

(0.1

)

(540

)

—

 

(1,077

)

(0.1

)

Net earnings

 

8,365

 

1.8

 

2,268

 

0.5

 

36,631

 

1.8

 

23,036

 

1.2

 

Retained earnings, beginning of period

 

397,100

 

 

 

374,461

 

 

 

374,836

 

 

 

358,670

 

 

 

Cash dividends

 

(1,582

)

 

 

(1,577

)

 

 

(6,323

)

 

 

(6,286

)

 

 

Shares issued and other

 

(1,283

)

 

 

(316

)

 

 

(2,544

)

 

 

(584

)

 

 

Retained earnings, end of period

 

$

402,600

 

 

 

$

374,836

 

 

 

$

402,600

 

 

 

$

374,836

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings from continuing operations

 

$

0.16

 

 

 

$

0.05

 

 

 

$

0.71

 

 

 

$

0.46

 

 

 

Discontinued operations, net of tax

 

—

 

 

 

(0.01

)

 

 

(0.01

)

 

 

(0.02

)

 

 

Basic earnings per share

 

$

0.16

 

 

 

$

0.04

 

 

 

$

0.70

 

 

 

$

0.44

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings from continuing operations

 

$

0.16

 

 

 

$

0.06

 

 

 

$

0.70

 

 

 

$

0.46

 

 

 

Discontinued operations, net of tax

 

—

 

 

 

(0.02

)

 

 

(0.01

)

 

 

(0.02

)

 

 

Diluted earnings per share

 

$

0.16

 

 

 

$

0.04

 

 

 

$

0.69

 

 

 

$

0.44

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash dividends per share

 

$

0.03

 

 

 

$

0.03

 

 

 

$

0.12

 

 

 

$

0.12

 

 

 

 

(1) As a percentage of earnings from continuing operations before income taxes

 


 

THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES

 

CONSOLIDATED BALANCE SHEETS

(dollar amounts in thousands)

 

 

 

January 29, 2011

 

January 30, 2010

 

 

 

 

 

 

 

Assets

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

90,240

 

$

39,326

 

Accounts receivable, less allowance for uncollectible accounts of $1,551 and $1,488

 

19,540

 

22,983

 

Merchandise inventories

 

564,402

 

559,118

 

Prepaid expenses

 

28,542

 

24,784

 

Other current assets

 

60,337

 

65,428

 

Assets held for disposal

 

475

 

4,438

 

Total current assets

 

763,536

 

716,077

 

Property and equipment - net

 

700,981

 

706,450

 

Deferred income taxes

 

66,019

 

58,171

 

Other long-term assets

 

26,136

 

18,388

 

Total assets

 

$

1,556,672

 

$

1,499,086

 

 

 

 

 

 

 

Liabilities and stockholders’ equity

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable

 

$

210,440

 

$

202,974

 

Trade payable program liability

 

56,287

 

34,099

 

Accrued expenses

 

236,028

 

242,416

 

Deferred income taxes

 

56,335

 

29,984

 

Current maturities of long-term debt

 

1,079

 

1,079

 

Total current liabilities

 

560,169

 

510,552

 

 

 

 

 

 

 

Long-term debt less current maturities

 

295,122

 

306,201

 

Other long-term liabilities

 

70,046

 

73,933

 

Deferred gain from asset sales

 

152,875

 

165,105

 

 

 

 

 

 

 

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

 

295,361

 

293,810

 

Retained earnings

 

402,600

 

374,836

 

Accumulated other comprehensive loss

 

(17,028

)

(17,691

)

Treasury stock, at cost - 15,971,910 shares and 16,164,074 shares

 

(271,030

)

(276,217

)

Total stockholders’ equity

 

478,460

 

443,295

 

Total liabilities and stockholders’ equity

 

$

1,556,672

 

$

1,499,086

 

 


 

THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES

 

(UNAUDITED)

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

(dollar amounts in thousands)

 

Fifty-two weeks ended

 

January 29, 2011

 

January 30, 2010

 

 

 

 

 

 

 

Cash flows from operating activities:

 

 

 

 

 

Net earnings

 

$

36,631

 

$

23,036

 

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

 

 

 

 

 

Loss from discontinued operations, net of tax

 

540

 

1,077

 

Depreciation and amortization

 

74,151

 

70,529

 

Amortization of deferred gain from asset sales

 

(12,602

)

(12,325

)

Stock compensation expense

 

3,497

 

2,575

 

Loss (gain) on debt retirement

 

200

 

(6,248

)

Deferred income taxes

 

18,572

 

13,446

 

Net gain from disposition of assets

 

(2,467

)

(1,213

)

Loss from asset impairment

 

970

 

2,884

 

Other

 

(479

)

345

 

Changes in operating assets and liabilities:

 

 

 

 

 

Decrease in accounts receivable, prepaid expenses and other

 

7,060

 

7,175

 

(Increase) decrease in merchandise inventories

 

(5,284

)

7,039

 

Increase (decrease) in accounts payable

 

7,466

 

(9,640

)

Decrease in accrued expenses

 

(8,394

)

(13,238

)

(Decrease) increase in other long-term liabilities

 

(1,200

)

2,384

 

Net cash provided by continuing operations

 

118,661

 

87,826

 

Net cash used in discontinued operations

 

(1,466

)

(603

)

Net cash provided by operating activities

 

117,195

 

87,223

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

Cash paid for property and equipment

 

(70,252

)

(43,214

)

Proceeds from dispositions of assets

 

7,515

 

14,776

 

Acquisition of Florida Tire, Inc.

 

(288

)

(2,695

)

Collateral investment and other

 

(9,638

)

(500

)

Net cash used in continuing operations

 

(72,663

)

(31,633

)

Net cash provided by discontinued operations

 

569

 

1,762

 

Net cash used in investing activities

 

(72,094

)

(29,871

)

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

Borrowings under line of credit agreements

 

21,795

 

249,704

 

Payments under line of credit agreements

 

(21,795

)

(273,566

)

Borrowings on trade payable program liability

 

347,068

 

192,324

 

Payments on trade payable program liability

 

(324,880

)

(190,155

)

Debt payments

 

(11,279

)

(11,990

)

Dividends paid

 

(6,323

)

(6,286

)

Other

 

1,227

 

611

 

Net cash provided by (used in) financing activities

 

5,813

 

(39,358

)

Net increase in cash and cash equivalents

 

50,914

 

17,994

 

Cash and cash equivalents at beginning of period

 

39,326

 

21,332

 

Cash and cash equivalents at end of period

 

$

90,240

 

$

39,326

 

 

 

 

 

 

 

Supplemental cash flow information:

 

 

 

 

 

Cash paid for income taxes

 

$

890

 

$

4,768

 

Cash received from income tax refunds

 

$

195

 

$

921

 

Cash paid for interest

 

$

23,098

 

$

24,509

 

Accrued purchases of property and equipment

 

$

2,926

 

$

1,738

 

 


 

THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES

 

COMPUTATION OF BASIC AND DILUTED EARNINGS PER SHARE

 

(in thousands, except per share data)

 

 

 

 

 

Thirteen weeks ended

 

Fifty-two weeks ended

 

 

 

 

 

January 29,
2011

 

January 30,
2010

 

January 29,
2011

 

January 30,
2010

 

 

 

 

 

 

 

 

 

 

 

 

 

(a)

Earnings from continuing operations

 

 

 

$

8,538

 

$

2,835

 

$

37,171

 

$

24,113

 

 

Loss from discontinued operations, net of tax

 

 

 

(173

)

(567

)

(540

)

(1,077

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings

 

 

 

$

8,365

 

$

2,268

 

$

36,631

 

$

23,036

 

 

 

 

 

 

 

 

 

 

 

 

 

(b)

Basic average number of common shares outstanding during period

 

 

 

52,778

 

52,452

 

52,677

 

52,397

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

638

 

356

 

485

 

270

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(c)

Diluted average number of common shares assumed outstanding during period

 

 

 

53,416

 

52,808

 

53,162

 

52,667

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

Earnings from continuing operations

 

(a) / (b)

 

$

0.16

 

$

0.05

 

$

0.71

 

$

0.46

 

 

Discontinued operations, net of tax

 

 

 

—

 

(0.01

)

(0.01

)

(0.02

)

 

Basic earnings per share

 

 

 

$

0.16

 

$

0.04

 

$

0.70

 

$

0.44

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

Earnings from continuing operations

 

(a) / (c)

 

$

0.16

 

$

0.06

 

$

0.70

 

$

0.46

 

 

Discontinued operations, net of tax

 

 

 

—

 

(0.02

)

(0.01

)

(0.02

)

 

Diluted earnings per share

 

 

 

$

0.16

 

$

0.04

 

$

0.69

 

$

0.44

 

 


 

THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES

 

ADDITIONAL INFORMATION

 

(dollar amounts in thousands)

 

 

 

Thirteen weeks ended

 

Fifty-two weeks ended

 

 

 

January 29, 2011

 

January 30, 2010

 

January 29, 2011

 

January 30, 2010

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures

 

$

27,276

 

$

15,439

 

$

70,252

 

$

43,214

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

$

18,891

 

$

17,281

 

$

74,151

 

$

70,529

 

 

 

 

 

 

 

 

 

 

 

Non-operating income:

 

 

 

 

 

 

 

 

 

Net rental revenue

 

$

569

 

$

522

 

$

2,218

 

$

1,774

 

Investment income

 

133

 

46

 

296

 

219

 

Other income

 

52

 

27

 

95

 

268

 

 

 

 

 

 

 

 

 

 

 

Total

 

$

754

 

$

595

 

$

2,609

 

$

2,261

 

 

 

 

 

 

 

 

 

 

 

Comparable sales percentages:

 

 

 

 

 

 

 

 

 

Merchandise

 

4.6

%

-4.9

%

3.1

%

-2.6

%

Service

 

3.4

%

0.7

%

1.1

%

4.7

%

Total

 

4.3

%

-3.9

%

2.7

%

-1.2

%

 

 

 

 

 

 

 

 

 

 

Total square feet of retail space (including service centers)

 

 

 

 

 

11,932,000

 

11,687,000

 

 

 

 

 

 

 

 

 

 

 

Store count

 

 

 

 

 

 

 

 

 

Supercenter

 

 

 

 

 

560

 

553

 

Service & Tire Center

 

 

 

 

 

53

 

25

 

Retail Only

 

 

 

 

 

8

 

9

 

Total

 

 

 

 

 

621

 

587

 

 

 

 

 

 

 

 

 

 

 

Sales and gross profit by line of business (A):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retail sales

 

$

251,399

 

$

243,187

 

$

1,046,772

 

1,013,308

 

Service center revenue

 

225,990

 

209,709

 

941,869

 

897,630

 

Total revenues

 

$

477,389

 

$

452,896

 

$

1,988,641

 

$

1,910,938

 

 

 

 

 

 

 

 

 

 

 

Gross profit from retail sales

 

$

73,638

 

$

64,904

 

$

306,176

 

275,051

 

Gross profit from service center revenue

 

50,762

 

45,143

 

216,176

 

211,056

 

Total gross profit

 

$

124,400

 

$

110,047

 

$

522,352

 

$

486,107

 

 

 

 

 

 

 

 

 

 

 

Comparable sales percentages (A):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retail sales

 

3.1

%

-5.1

%

3.0

%

-4.3

%

Service center revenue

 

5.8

%

-2.4

%

2.4

%

2.5

%

Total revenues

 

4.3

%

-3.9

%

2.7

%

-1.2

%

 

 

 

 

 

 

 

 

 

 

Gross profit percentage by line of business (A):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit percentage from retail sales

 

29.3

%

26.7

%

29.2

%

27.1

%

Gross profit percentage from service center revenue

 

22.5

%

21.5

%

23.0

%

23.5

%

Total gross profit percentage

 

26.1

%

24.3

%

26.3

%

25.4

%

 

(A) Retail sales include DIY and commercial sales. Service center revenue includes revenue from labor and installed parts and tires.