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 9, 2013

Date of Earliest Event Reported: September 9, 2013

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):

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

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

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

o    Pre-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 9, 2013, The Pep Boys — Manny, Moe & Jack issued a press release announcing its earnings for the fiscal quarter ended August 3, 2013.

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 9, 2013.

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/ DAVID R. STERN
		David R. Stern
		Executive Vice President and Chief Financial Officer
		(Principal Financial Officer)
Date: September 9, 2013

3

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

Pep Boys Reports Second Quarter 2013 Results

-25% Increase in Adjusted Operating Profit Driven By Gross Profit Margin Improvement-

 -Acquires 17 Service & Tire Centers in Southern California-

PHILADELPHIA — September 9, 2013 — The Pep Boys — Manny, Moe & Jack (NYSE: “PBY”), the nation’s leading automotive aftermarket service and retail chain, announced the following results for the thirteen (second quarter) and twenty-six (six months) weeks ended August 3, 2013.

Second Quarter

Sales

Sales for the thirteen weeks ended August 3, 2013 increased by $1.9 million, or 0.4%, to $527.6 million from $525.7 million for the thirteen weeks ended July 28, 2012. Comparable sales decreased 1.3%, consisting of an increase of 0.2% in comparable service revenue and a decrease of 1.7% in comparable merchandise sales. 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 decreased 0.1%, while comparable retail sales decreased 2.6%.

Earnings

Adjusted operating profit for the second quarter of fiscal 2013 was $19.4 million as compared to $15.5 million for the second quarter of fiscal 2012. On a GAAP basis including a $1.7 million asset impairment charge in fiscal 2013, and a $0.7 severance charge and the reclassification of $1.5 million of merger related costs in fiscal 2012, operating profit for the second quarter of fiscal 2013 was $17.7 million as compared to $16.3 million for the second quarter of fiscal 2012.

Net earnings for the second quarter of fiscal 2013 were $5.4 million ($0.10 per share) as compared to $33.0 million ($0.61 per share) for the second quarter of fiscal 2012. In addition to the above-referenced items, the 2013 net earnings reflect a $2.5 million tax burden primarily due to state tax law changes, while the 2012 net earnings included, on a pre-tax basis, $43.0 million of merger termination fees, net of related expenses.

Six Months

Sales

Sales for the twenty-six weeks ended August 3, 2013 increased by $13.5 million, or 1.3%, to $1,063.8 million from $1,050.3 million for the twenty-six weeks ended July 28, 2012. Comparable sales decreased 0.2%, consisting of a 2.2% comparable service revenue increase and a 0.8% comparable merchandise sales decrease. Re-categorizing sales (see above), comparable service center revenue increased 1.9%, while comparable retail sales decreased 2.4%.

Earnings

Adjusted operating profit for the first six months of 2013 was $24.1 million as compared to $25.0 million for the first six months of fiscal 2012. On a GAAP basis including $2.8 million in asset impairment charges in fiscal 2013 and a $0.7 severance charge in fiscal 2012, operating profit for the first six months of fiscal 2013 was $21.3 million as compared to $24.3 million for the first six months of fiscal 2012.

Net earnings for the first six months of 2013 were $9.2 million ($0.17 per share) as compared to $34.1 million ($0.63 per share) for the first six months of fiscal 2012. In addition to the above-referenced items, the 2012 net earnings included, on a pre-tax basis, $43.0 million of merger termination fees, net of related expenses.

Commentary

“Improved product gross margins drove our 25% improvement in adjusted operating income during the quarter,” said President and CEO, Mike Odell. “Our strategically important maintenance and repair services remain steady and grew in customer count, sales and margin rate. Tire sales were down in dollars and units, but grew in gross margin dollars. While not yet realized, we continue to be cautiously optimistic that we will see improving demand for tires this year.”

Mike also commented, “The expansion of our Service & Tire Centers continues with the acquisition of 17 locations in Southern California in September, bringing our total to 211 including one Service & Tire Center opened subsequent to the second quarter. Each of these new locations will be converted to our new “Road Ahead” format designed with a more welcoming curb appeal and a comfortable and appealing customer lounge.”

About Pep Boys

Since 1921, Pep Boys has been the nation’s leading automotive aftermarket chain. With approximately 7,400 service bays in more than 750 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 www.pepboys.com.

Certain statements contained herein constitute “forward-looking statements” within the meaning of The Private Securities Litigation Reform Act of 1995. The words “guidance,” “expect,” “anticipate,” “estimates,” “targets”, “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 Tuesday, September 10 at 8:30 a.m. EDT over the Internet at the Vcall website, located at 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 Tuesday, September 10 on Pep Boys’ website at www.pepboys.com. In addition, Pep Boys’ investor presentation, also available at www.pepboys.com, will be updated to reflect the Company’s year-to-date results.

###

Investor Contact:

Sanjay Sood

(215) 430-9105

Email: investorrelations@pepboys.com

Pep Boys Financial Highlights

Thirteen weeks ended	August 3, 2013		July 28, 2012
Total revenues	$	527,619,000	$	525,671,000
Net earnings	$	5,368,000	$	33,048,000
Basic earnings per share:
Average shares	53,392,000		53,146,000
Basic earnings per share:	$	0.10	$	0.62
Diluted earnings per share:
Average shares	53,970,000		53,797,000
Diluted earnings per share:	$	0.10	$	0.61

Twenty-six weeks ended	August 3, 2013		July 28, 2012
Total revenues	$	1,063,792,000	$	1,050,275,000
Net earnings	$	9,231,000	$	34,110,000
Basic earnings per share:
Average shares	53,388,000		53,110,000
Basic earnings per share:	$	0.17	$	0.64
Diluted earnings per share:
Average shares	53,979,000		53,875,000
Diluted earnings per share:	$	0.17	$	0.63

EX-99.2

Exhibit 99.2

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

	August 3, 2013			February 2, 2013			July 28, 2012
Assets
Current assets:
Cash and cash equivalents	$	64,885		$	59,186		$	150,833
Accounts receivable, less allowance for uncollectible accounts of $1,211; $1,302; and $1,247	25,386			23,897			27,962
Merchandise inventories	649,832			641,208			626,555
Prepaid expenses	21,696			28,908			21,021
Other current assets	56,199			60,438			53,083
Total current assets	817,998			813,637			879,454
Property and equipment, net of accumulated depreciation of $1,197,253; $1,162,909; and $1,149,556	638,727			657,270			682,619
Goodwill	46,917			46,917			46,917
Deferred income taxes	41,447			47,691			45,825
Other long-term assets	38,240			38,434			31,660
Total assets	$	1,583,329		$	1,603,949		$	1,686,475
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	226,684		$	244,696		$	246,522
Trade payable program liability	149,357			149,718			115,746
Accrued expenses	231,580			232,277			218,548
Deferred income taxes	55,236			58,441			61,231
Current maturities of long-term debt	2,000			2,000			1,254
Total current liabilities	664,857			687,132			643,301
Long-term debt less current maturities	197,000			198,000			293,504
Other long-term liabilities	50,960			53,818			72,290
Deferred gain from asset sales	121,125			127,427			133,971
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	295,882			295,679			295,536
Retained earnings	438,035			430,148			454,343
Accumulated other comprehensive income (loss)	711			(980		)	(15,011		)
Treasury stock, at cost - 15,417,020 shares; 15,431,298 shares; and 15,563,931 shares	(253,798		)	(255,832		)	(260,016		)
Total stockholders’ equity	549,387			537,572			543,409
Total liabilities and stockholders’ equity	$	1,583,329		$	1,603,949		$	1,686,475
Supplemental balance sheet information:
Working capital	$	153,141		$	126,505		$	236,153
Current ratio	1.23			1.18			1.37
Accounts payable to inventory ratio	57.9		%	61.5		%	57.8		%
Total debt as a percent of total capitalization	26.6		%	27.1		%	35.2		%
Debt as a percent of total capitalization, net	19.6		%	20.8		%	20.9		%

THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES	(UNAUDITED)
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(dollar amounts in thousands, except per share amounts)

	Thirteen weeks ended										Twenty-six weeks ended
	August 3, 2013					July 28, 2012					August 3, 2013					July 28, 2012
				%					%					%					%
	Amount			Sales		Amount			Sales		Amount			Sales		Amount			Sales
Merchandise sales	$	412,317		78.1		$	413,380		78.6		$	829,467		78.0		$	825,712		78.6
Service revenue	115,302			21.9		112,291			21.4		234,325			22.0		224,563			21.4
Total revenues	527,619			100.0		525,671			100.0		1,063,792			100.0		1,050,275			100.0
Costs of merchandise sales	273,764			66.4		288,051			69.7		570,638			68.8		578,907			70.1
Costs of service revenue	115,147			99.9		107,019			95.3		232,605			99.3		213,115			94.9
Total costs of revenues	388,911			73.7		395,070			75.2		803,243			75.5		792,022			75.4
Gross profit from merchandise sales	138,553			33.6		125,329			30.3		258,829			31.2		246,805			29.9
Gross profit from service revenue	155			0.1		5,272			4.8		1,720			0.7		11,448			5.1
Total gross profit	138,708			26.3		130,601			24.8		260,549			24.5		258,253			24.6
Selling, general and administrative expenses	120,929			22.9		114,277			21.7		239,133			22.5		233,987			22.3
Net loss from dispositions of assets	(31		)	—		(9		)	—		(147		)	—		(11		)	—
Operating profit	17,748			3.4		16,315			3.1		21,269			2.0		24,255			2.3
Merger termination fees, net	—			—		42,955			8.2		—			—		42,955			4.1
Other income	466			0.1		521			0.1		844			0.1		991			0.1
Interest expense	3,562			0.7		6,427			1.2		7,242			0.7		12,943			1.2
Earnings from continuing operations before income taxes and discontinued operations	14,652			2.8		53,364			10.2		14,871			1.4		55,258			5.3
Income tax expense	9,273			63.3	(1)	20,330			38.1	(1)	5,565			37.4	(1)	21,090			38.2	(1)
Earnings from continuing operations before discontinued operations	5,379			1.0		33,034			6.3		9,306			0.9		34,168			3.3
(Loss) gain from discontinued operations, net of tax	(11		)	—		14			—		(75		)	—		(58		)	—
Net earnings	5,368			1.0		33,048			6.3		9,231			0.9		34,110			3.2
Basic earnings per share:
Earnings from continuing operations before discontinued operations	$	0.10				$	0.62				$	0.17				$	0.64
Discontinued operations, net of tax	—					—					—					—
Basic earnings per share	$	0.10				$	0.62				$	0.17				$	0.64
Diluted earnings per share:
Earnings from continuing operations before discontinued operations	$	0.10				$	0.61				$	0.17				$	0.63
Discontinued operations, net of tax	—					—					—					—
Diluted earnings per share	$	0.10				$	0.61				$	0.17				$	0.63
Other comprehensive income:
Defined benefit plan adjustment, net of tax	—					354					—					708
Derivative financial instruments adjustment, net of tax	1,578					910					1,691					1,930
Other comprehensive income	1,578					1,264					1,691					2,638
Comprehensive income	$	6,946				$	34,312				$	10,922				$	36,748

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

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

CONSOLIDATED STATEMENTS OF CASH FLOWS

(dollar amounts in thousands)

Twenty-six weeks ended	August 3, 2013			July 28, 2012
Cash flows from operating activities:
Net earnings	$	9,231		$	34,110
Adjustments to reconcile net earnings to net cash provided by continuing operations:
Net loss from discontinued operations	75			58
Depreciation	40,185			39,309
Amortization of deferred gain from asset sales	(6,302		)	(6,302		)
Amortization of deferred financing costs	1,302			1,268
Stock compensation expense	1,660			1,043
Deferred income taxes	1,825			20,485
Net loss from disposition of assets	147			11
Loss from asset impairment	2,849			—
Other	(269		)	(8		)
Changes in assets and liabilities:
Decrease in accounts receivable, prepaid expenses and other	9,647			10,180
Increase in merchandise inventories	(8,624		)	(12,419		)
(Decrease) increase in accounts payable	(18,611		)	2,810
Decrease in accrued expenses	(696		)	(2,451		)
Decrease in other long-term liabilities	(1,100		)	(552		)
Net cash provided by continuing operations	31,319			87,542
Net cash used in discontinued operations	(121		)	(92		)
Net cash provided by operating activities	31,198			87,450
Cash flows from investing activities:
Capital expenditures	(24,502		)	(26,347		)
Proceeds from dispositions of assets	18			—
Release of collateral investment	1,000			—
Net cash used in investing activities	(23,484		)	(26,347		)
Cash flows from financing activities:
Borrowings under line of credit agreements	1,354			1,106
Payments under line of credit agreements	(1,354		)	(931		)
Borrowings on trade payable program liability	80,690			80,836
Payments on trade payable program liability	(81,051		)	(50,304		)
Debt payments	(1,000		)	(539		)
Proceeds from stock issuance	592			1,318
Repurchase of common stock	(1,246		)	—
Net cash (used in) provided by financing activities	(2,015		)	31,486
Net increase in cash and cash equivalents	5,699			92,589
Cash and cash equivalents at beginning of period	59,186			58,244
Cash and cash equivalents at end of period	$	64,885		$	150,833
Supplemental cash flow information:
Cash paid for income taxes	$	3,288		$	1,705
Cash received from income tax refunds	$	51		$	—
Cash paid for interest	$	6,108		$	11,449
Accrued purchases of property and equipment	$	2,031		$	632

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
		August 3, 2013			July 28, 2012		August 3, 2013			July 28, 2012
(a)  Earnings from continuing operations before discontinued operations		$	5,379		$	33,034	$	9,306		$	34,168
(Loss) gain from discontinued operations, net of tax		(11		)	14		(75		)	(58		)
Net earnings		$	5,368		$	33,048	$	9,231		$	34,110
(b)  Basic average number of common shares outstanding during period		53,392			53,146		53,388			53,110
Common shares assumed issued upon exercise of dilutive stock options, net of assumed repurchase, at the average market price		578			651		591			765
(c)  Diluted average number of common shares assumed outstanding during period		53,970			53,797		53,979			53,875
Basic earnings per share:
Earnings from continuing operations before discontinued operations	(a) / (b)	$	0.10		$	0.62	$	0.17		$	0.64
Discontinued operations, net of tax		—			—		—			—
Basic earnings per share		$	0.10		$	0.62	$	0.17		$	0.64
Diluted earnings per share:
Earnings from continuing operations before discontinued operations	(a) / (c)	$	0.10		$	0.61	$	0.17		$	0.63
Discontinued operations, net of tax		—			—		—			—
Diluted earnings per share		$	0.10		$	0.61	$	0.17		$	0.63

THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES

ADDITIONAL INFORMATION (dollar amounts in thousands)

	Thirteen weeks ended						Twenty-six weeks ended
	August 3, 2013			July 28, 2012			August 3, 2013			July 28, 2012
Capital expenditures	$	11,662		$	14,407		$	24,502		$	26,347
Depreciation	$	19,328		$	19,371		$	40,185		$	39,309
Non-operating income:
Net rental revenue	$	350		$	429		$	600		$	814
Investment income	42			46			91			94
Merger termination fees, net	—			42,955			—			42,955
Other income	74			46			153			83
Total	$	466		$	43,476		$	844		$	43,946
Comparable sales percentages:
Service	0.2		%	3.1		%	2.2		%	1.0		%
Merchandise	-1.7		%	-0.9		%	-0.8		%	-2.0		%
Total	-1.3		%	0.0		%	-0.2		%	-1.4		%
Total square feet of retail space (including service centers)							12,830,000			12,660,000
Store count
Supercenter							570			562
Service & Tire Center							193			173
Retail Only							6			7
Total							769			742
Sales and gross profit by line of business (A):
Service center revenue	$	280,905		$	274,257		$	567,882		$	545,346
Retail sales	246,714			251,414			495,910			504,929
Total revenues	$	527,619		$	525,671		$	1,063,792		$	1,050,275
Gross profit from service center revenue, prior to impairment charge	$	62,916		$	55,868		$	116,072		$	109,756
Service center revenue impairment charge	(1,323		)	—			(2,339		)	—
Gross profit from service center revenue	$	61,593		$	55,868		$	113,733		$	109,756
Gross profit from retail sales, prior to impairment charge	$	77,459		$	74,733		$	147,326		$	148,497
Retail sales impairment charge	(344		)	—			(510		)	—
Gross profit from retail sales	$	77,115		$	74,733		$	146,816		$	148,497
Total gross profit	$	138,708		$	130,601		$	260,549		$	258,253
Comparable sales percentages by line of business (A):
Service center revenue	-0.1		%	3.8		%	1.9		%	1.6		%
Retail sales	-2.6		%	-3.8		%	-2.4		%	-4.2		%
Total revenues	-1.3		%	0.0		%	-0.2		%	-1.4		%
Gross profit percentage by line of business (A):
Gross profit percentage from service center revenue, prior to impairment charge	22.4		%	20.4		%	20.4		%	20.1		%
Impairment charge	(0.5		)	—			(0.4		)	—
Gross profit percentage from service center revenue	21.9		%	20.4		%	20.0		%	20.1		%
Gross profit percentage from retail sales, prior to impairment charge	31.4		%	29.7		%	29.7		%	29.4		%
Impairment charge	(0.1		)	—			(0.1		)	—
Gross profit percentage from retail sales	31.3		%	29.7		%	29.6		%	29.4		%
Total gross profit percentage	26.3		%	24.8		%	24.5		%	24.6		%

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