8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

Current Report

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report: September 6, 2011

Date of Earliest Event Reported: September 6, 2011

The Pep Boys - Manny, Moe & Jack

(Exact name of registrant as specified in charter)

Pennsylvania	1-3381	23-0962915
(State or other jurisdiction of	(Commission	(I.R.S. Employer ID number)
incorporation or organization)	File No.)

3111 W. Allegheny Ave. Philadelphia, PA	19132
(Address of principal executive offices)	(Zip code)

215-430-9000

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed from last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

oWritten communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

oSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

oPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02  Results of Operations and Financial Condition

On September 6, 2011, The Pep Boys — Manny, Moe & Jack issued a press release announcing its earnings for the fiscal quarter ended July 30, 2011.

The information in Items 2.02 and 9.01 (including the Exhibits filed herewith) of this Current Report is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. The information in Items 2.02 and 9.01 (including the Exhibits filed herewith) of this Current Report shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended.

Item 9.01  Financial Statements and Exhibits

(d) Exhibits. The following exhibits are filed with this report:

Exhibit No. 99.1   Press release dated September 6, 2011.

Exhibit No. 99.2   Unaudited supplemental financial data.

2

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	THE PEP BOYS - MANNY, MOE & JACK
	By:	/s/ Raymond L. Arthur
		Raymond L. Arthur
		Executive Vice President and
		Chief Financial Officer
Date: September 6, 2011

3

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

Pep Boys Reports Second Quarter 2011 Results

- Net Earnings Increase to $0.26 per Share -

PHILADELPHIA — September 6, 2011 — The Pep Boys — Manny, Moe & Jack (NYSE: “PBY”), the nation’s leading automotive aftermarket service and retail chain, today announced results for the thirteen (second quarter) and twenty-six (first half) weeks ended July 30, 2011.

Second Quarter

Sales

Sales for the thirteen weeks ended July 30, 2011 increased by $17.7 million, or 3.5%, to $522.6 million from $504.9 million for the thirteen weeks ended July 31, 2010. Comparable sales decreased 2.0%, including a 0.3% comparable service revenue increase and a 2.5% comparable merchandise sales decrease. In accordance with GAAP, service revenue is limited to labor sales, while merchandise sales include merchandise sold through both our service center and retail lines of business. Re-categorizing sales into the respective lines of business from which they are generated, comparable service center revenue (labor plus installed merchandise and tires) decreased 0.7%, while comparable retail sales (DIY and Commercial) decreased 3.1%.

Earnings

Net earnings for the second quarter of fiscal 2011 increased to $13.9 million ($0.26 per share) from $10.6 million ($0.20 per share) recorded in the same period last year.  The 2011 results include, on a pre-tax basis, a $0.4 million asset impairment charge and $1.0 million of acquisition related expenses and benefitted from the release of $3.4 million of state tax valuation allowances. The 2010 results included, on a pre-tax basis, a $2.4 million gain from the disposition of assets and a $1.0 million reversal of an inventory related accrual, partially offset by a $1.0 million asset impairment charge.

First Half

Sales

Sales for the twenty-six weeks ended July 30, 2011 increased by $21.2 million, or 2.1%, to $1,036.1 million from $1,014.9 million for the twenty-six weeks ended July 31, 2010. Comparable sales decreased 1.3%, consisting of a 0.9% comparable service revenue increase and a 1.8% comparable merchandise sales decrease. Re-categorizing sales (see above), comparable service center revenue decreased 0.2%, while comparable retail sales decreased 2.3%.

Earnings

Net earnings for the first half of 2011 increased to $26.3 million ($0.49 per share) from the $22.5 million ($0.43 per share) recorded in the same period last year. The 2011 results include, on a pre-tax basis, a $0.4 million asset impairment charge and $1.3 million of acquisition related expenses and benefitted from the release of $3.4 million of state tax valuation allowances. The 2010 results included, on a pre-tax basis, a $2.5 million gain from the disposition of assets and a $1.0 million reversal of an inventory related accrual, partially offset by a $1.0 million asset impairment charge.

Commentary

“Our profitability continues to improve as we weather the challenging macroeconomic environment of high gas prices and depressed consumer confidence,” commented President & CEO Mike Odell. “Our maintenance and repair services remain stable, allowing us to mostly offset soft tire sales.  Our experience has taught us that customers can only defer their tire purchases for so long, so we have continued our aggressive ‘surround sound’ promotional activity to ensure that Pep Boys remains top of mind for tire customers.”

“Our strategic Service & Tire Center acquisitions are also helping the bottom line,” Mike continued.   “In their first full quarter of operations under Pep Boys, the 85 Big 10 stores were accretive to earnings.  And our organic Service & Tire Center sales continue to ramp up along their three-year maturity curve.  As they achieve this maturity, they will also begin to contribute to earnings.”

“In the second quarter, we amended and restated our revolving credit agreement to reduce its interest rate by 75 basis points and to extend its maturity to July 2016. Coupled with greater operating cash flow achieved through ever-improving vendor payables leverage, we remain well positioned to pursue our growth strategy,” added CFO Ray Arthur.

Since 1921, Pep Boys has been the nation’s leading automotive aftermarket chain. With more than 7,000 service bays in more than 700 locations in 35 states and Puerto Rico, Pep Boys offers name-brand tires; automotive maintenance and repair; parts and expert advice for the Do-It-Yourselfer; commercial auto parts delivery; and fleet maintenance and repair. Customers can find the nearest location by calling 1-800-PEP-BOYS (1-800-737-2697) or by visiting http://www.pepboys.com.

Certain statements contained herein constitute “forward-looking statements” within the meaning of The Private Securities Litigation Reform Act of 1995. The word “guidance,” “expect,” “anticipate,” “estimates,” “forecasts” and similar expressions are intended to identify such forward-looking statements. Forward-looking statements include management’s expectations regarding implementation of its long-term strategic plan, future financial performance, automotive aftermarket trends, levels of competition, business development activities, future capital expenditures, financing sources and availability and the effects of regulation and litigation. Although the Company believes that the expectations reflected in such forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be achieved. The Company’s actual results may differ materially from the results discussed in the forward-looking statements due to factors beyond the control of the Company, including the strength of the national and regional economies, retail and commercial consumers’ ability to spend, the health of the various sectors of the automotive aftermarket, the weather in geographical regions with a high concentration of the Company’s stores, competitive pricing, the location and number of competitors’ stores, product and labor costs and the additional factors described in the Company’s filings with the SEC. The Company assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.

Investors have an opportunity to listen to the Company’s quarterly conference calls discussing its results and related matters. The call for the second quarter will be broadcast live on Wednesday, September 7 at 8:30 a.m. ET over the Internet at the Vcall website, located at http://www.investorcalendar.com. To listen to the call live, please go to the website at least 15 minutes early to register, download and install any necessary audio software. For those who cannot listen to the live broadcast, a replay will be available shortly after the call. Supplemental financial information will be available the morning of September 7 on Pep Boys’ website at http://www.pepboys.com. In addition, Pep Boys’ investor presentation, also available at http://www.pepboys.com, has been updated to reflect the Company’s year-to-date results.

###

Investor Contact:

Mike Melia

(215) 430-9459

Email: investorrelations@pepboys.com

Media Contact:

Regina M. Tracy

(215) 430-9081

Email: mediarelations@pepboys.com

Pep Boys Financial Highlights

Thirteen Weeks Ended	July 30, 2011		July 31, 2010
Total revenues	$	522,594,000	$	504,855,000
Net earnings	$	13,943,000	$	10,598,000
Basic earnings per share:
Average shares	52,952,000		52,682,000
Basic earnings per share:	$	0.26	$	0.20
Diluted earnings per share:
Average shares	53,649,000		53,129,000
Diluted earnings per share:	$	0.26	$	0.20

Twenty-Six weeks ended	July 30, 2011		July 31, 2010
Total revenues	$	1,036,134,000	$	1,014,888,000
Net earnings	$	26,311,000	$	22,548,000
Basic earnings per share:
Average shares	52,901,000		52,609,000
Basic earnings per share:	$	0.49	$	0.43
Diluted earnings per share:
Average shares	53,592,000		53,035,000
Diluted earnings per share:	$	0.49	$	0.43

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
	July 30, 2011					July 31, 2010					July 30, 2011					July 31, 2010
				%					%					%					%
	Amount			Sales		Amount			Sales		Amount			Sales		Amount			Sales
Merchandise sales	$	415,267		79.5		$	406,179		80.5		$	823,894		79.5		$	815,368		80.3
Service revenue	107,327			20.5		98,676			19.5		212,240			20.5		199,520			19.7
Total revenues	522,594			100.0		504,855			100.0		1,036,134			100.0		1,014,888			100.0
Costs of merchandise sales	287,721			69.3		282,362			69.5		573,050			69.6		566,158			69.4
Costs of service revenue	99,663			92.9		87,992			89.2		192,752			90.8		176,634			88.5
Total costs of revenues	387,384			74.1		370,354			73.4		765,802			73.9		742,792			73.2
Gross profit from merchandise sales	127,546			30.7		123,817			30.5		250,844			30.5		249,210			30.6
Gross profit from service revenue	7,664			7.1		10,684			10.8		19,488			9.2		22,886			11.5
Total gross profit	135,210			25.9		134,501			26.6		270,332			26.1		272,096			26.8
Selling, general and administrative expenses	113,268			21.7		113,108			22.4		222,168			21.4		224,740			22.1
Net (loss) gain from dispositions of assets	(3		)	—		2,449			0.5		86			—		2,494			0.2
Operating profit	21,939			4.2		23,842			4.7		48,250			4.7		49,850			4.9
Non-operating income	569			0.1		621			0.1		1,156			0.1		1,205			0.1
Interest expense	6,444			1.2		6,643			1.3		12,941			1.3		13,251			1.3
Earnings from continuing operations before income taxes	16,064			3.1		17,820			3.5		36,465			3.5		37,804			3.7
Income tax expense	2,173			13.5	(1)	7,021			39.4	(1)	10,169			27.9	(1)	14,845			39.3	(1)
Earnings from continuing operations	13,891			2.7		10,799			2.1		26,296			2.5		22,959			2.3
Income (loss) from discontinued operations, net of tax	52			—		(201		)	—		15			—		(411		)	—
Net earnings	13,943			2.7		10,598			2.1		26,311			2.5		22,548			2.2
Retained earnings, beginning of period	412,716					384,451					402,600					374,836
Cash dividends	(1,586		)			(1,581		)			(3,171		)			(3,160		)
Shares issued and other	(150		)			(223		)			(817		)			(979		)
Retained earnings, end of period	$	424,923				$	393,245				$	424,923				$	393,245
Basic earnings per share:
Earnings from continuing operations	$	0.26				$	0.21				$	0.49				$	0.44
Discontinued operations, net of tax	—					(0.01		)			—					(0.01		)
Basic earnings per share	$	0.26				$	0.20				$	0.49				$	0.43
Diluted earnings per share:
Earnings from continuing operations	$	0.26				$	0.20				$	0.49				$	0.43
Discontinued operations, net of tax	—					—					—					—
Diluted earnings per share	$	0.26				$	0.20				$	0.49				$	0.43
Cash dividends per share	$	0.03				$	0.03				$	0.06				$	0.06

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

THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES	(UNAUDITED)
CONSOLIDATED BALANCE SHEETS
(dollar amounts in thousands)

	July 30, 2011			January 29, 2011			July 31, 2010
Assets
Current assets:
Cash and cash equivalents	$	61,977		$	90,240		$	92,363
Accounts receivable, less allowance for uncollectible accounts of $1,191; $1,551 and $1,703	21,731			19,540			24,204
Merchandise inventories	584,297			564,402			558,932
Prepaid expenses	19,694			28,542			20,816
Other current assets	50,891			60,812			53,376
Total current assets	738,590			763,536			749,691
Property and equipment - net	693,742			700,981			694,262
Goodwill	48,584			2,549			2,549
Deferred income taxes	67,988			66,019			58,968
Other long-term assets	31,700			23,587			14,815
Total assets	$	1,580,604		$	1,556,672		$	1,520,285
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	230,884		$	210,440		$	196,676
Trade payable program liability	61,440			56,287			55,280
Accrued expenses	206,627			236,028			226,505
Deferred income taxes	58,825			56,335			35,750
Current maturities of long-term debt	1,079			1,079			1,079
Total current liabilities	558,855			560,169			515,290
Long-term debt less current maturities	294,583			295,122			305,661
Other long-term liabilities	75,688			70,046			76,325
Deferred gain from asset sales	146,573			152,875			159,177
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	295,934			295,361			294,535
Retained earnings	424,923			402,600			393,245
Accumulated other comprehensive loss	(15,870		)	(17,028		)	(18,758		)
Treasury stock, at cost - 15,883,352 shares and 15,971,910 shares and 16,072,557 shares	(268,639		)	(271,030		)	(273,747		)
Total stockholders’ equity	504,905			478,460			463,832
Total liabilities and stockholders’ equity	$	1,580,604		$	1,556,672		$	1,520,285

THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES (UNAUDITED)

CONSOLIDATED STATEMENTS OF CASH FLOWS

(dollar amounts in thousands)

Twenty-Six weeks ended	July 30, 2011			July 31, 2010
Cash flows from operating activities:
Net earnings	$	26,311		$	22,548
Adjustments to reconcile net earnings to net cash provided by continuing operations:
(Income) loss from discontinued operations, net of tax	(15		)	411
Depreciation and amortization	39,654			36,656
Amortization of deferred gain from asset sales	(6,302		)	(6,299		)
Stock compensation expense	1,908			1,998
Deferred income taxes	4,238			5,600
Net gain from disposition of assets	(86		)	(2,494		)
Loss from asset impairment	389			970
Other	272			179
Changes in assets and liabilities, net of the effects of acquisitions:
Decrease in accounts receivable, prepaid expenses and other	21,816			19,673
(Increase) decrease in merchandise inventories	(12,917		)	186
Increase (decrease) in accounts payable	12,043			(6,298		)
Decrease in accrued expenses	(33,202		)	(14,917		)
(Decrease) increase in other long-term liabilities	(2,831		)	911
Net cash provided by continuing operations	51,278			59,124
Net cash used in discontinued operations	(44		)	(1,249		)
Net cash provided by operating activities	51,234			57,875
Cash flows from investing activities:
Capital expenditures	(30,636		)	(27,284		)
Proceeds from dispositions of assets	89			4,077
Premiums paid on life insurance policies	(795		)	(500		)
Acquisitions, net of cash acquired	(42,757		)	(144		)
Collateral investment	(4,763		)	500
Net cash used in continuing operations	(78,862		)	(23,351		)
Net cash provided by discontinued operations	—			569
Net cash used in investing activities	(78,862		)	(22,782		)
Cash flows from financing activities:
Borrowings under line of credit agreements	5,045			16,290
Payments under line of credit agreements	(5,045		)	(16,290		)
Borrowings on trade payable program liability	59,097			63,808
Payments on trade payable program liability	(53,944		)	(42,627		)
Payment for finance issuance cost	(2,441		)	—
Debt payments	(539		)	(540		)
Dividends paid	(3,171		)	(3,160		)
Other	363			463
Net cash (used in) provided by financing activities	(635		)	17,944
Net (decrease) increase in cash and cash equivalents	(28,263		)	53,037
Cash and cash equivalents at beginning of period	90,240			39,326
Cash and cash equivalents at end of period	$	61,977		$	92,363
Supplemental cash flow information:
Cash paid for income taxes	$	629		$	810
Cash paid for interest	$	11,523		$	11,452
Accrued purchases of property and equipment	$	1,416		$	662

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					Twenty-Six weeks ended
			July 30, 2011		July 31, 2010			July 30, 2011		July 31, 2010
(a)	Earnings from continuing operations		$	13,891	$	10,799		$	26,296	$	22,959
	Income (loss) from discontinued operations, net of tax		52		(201		)	15		(411		)
	Net earnings		$	13,943	$	10,598		$	26,311	$	22,548
(b)	Basic average number of common shares outstanding during period		52,952		52,682			52,901		52,609
	Common shares assumed issued upon exercise of dilutive stock options, net of assumed repurchase, at the average market price		697		447			691		426
(c)	Diluted average number of common shares assumed outstanding during period		53,649		53,129			53,592		53,035
	Basic earnings per share:
	Earnings from continuing operations	(a) / (b)	$	0.26	$	0.21		$	0.49	$	0.44
	Discontinued operations, net of tax		—		(0.01		)	—		(0.01		)
	Basic earnings per share		$	0.26	$	0.20		$	0.49	$	0.43
	Diluted earnings per share:
	Earnings from continuing operations	(a) / (c)	$	0.26	$	0.20		$	0.49	$	0.43
	Discontinued operations, net of tax		—		—			—		—
	Diluted earnings per share		$	0.26	$	0.20		$	0.49	$	0.43

THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES

ADDITIONAL INFORMATION (dollar amounts in thousands)

	Thirteen Weeks Ended						Twenty-Six weeks ended
	July 30, 2011			July 31, 2010			July 30, 2011			July 31, 2010
Capital expenditures	$	12,513		$	14,773		$	30,636		$	27,284
Depreciation and amortization	$	19,770		$	18,442		$	39,654		$	36,656
Non-operating income:
Net rental revenue	$	523		$	570		$	1,017		$	1,087
Investment income	40			45			122			111
Other income	6			6			17			7
Total	$	569		$	621		$	1,156		$	1,205
Comparable sales percentages:
Service	0.3		%	-0.7		%	0.9		%	-0.3		%
Merchandise	-2.5		%	2.5		%	-1.8		%	2.1		%
Total	-2.0		%	1.8		%	-1.3		%	1.6		%
Total square feet of retail space (including service centers)							12,563,000			11,749,000
Store count
Supercenter							561			555
Service & Tire Center							156			30
Retail Only							8			9
Total							725			594
Sales and gross profit by line of business (A):
Service center revenue	$	260,835		$	236,051		$	508,165		476,377
Retail sales	261,759			268,804			527,969			538,511
Total revenues	$	522,594		$	504,855		$	1,036,134		$	1,014,888
Gross profit from service center revenue	$	60,669		$	55,671		$	119,631		113,512
Gross profit from retail sales	74,541			78,830			150,701			158,584
Total gross profit	$	135,210		$	134,501		$	270,332		$	272,096
Comparable sales percentages by line of business (A):
Service center revenue	-0.7		%	0.1		%	-0.2		%	0.5		%
Retail sales	-3.1		%	3.4		%	-2.3		%	2.6		%
Total revenues	-2.0		%	1.8		%	-1.3		%	1.6		%
Gross profit percentage by line of business (A):
Gross profit percentage from service center revenue	23.3		%	23.6		%	23.5		%	23.8		%
Gross profit percentage from retail sales	28.5		%	29.3		%	28.5		%	29.4		%
Total gross profit percentage	25.9		%	26.6		%	26.1		%	26.8		%

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