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: June 9, 2014

Date of Earliest Event Reported: June 9, 2014

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 June 9, 2014, The Pep Boys — Manny, Moe & Jack issued a press release announcing its earnings for the fiscal quarter ended May 3, 2014.

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 June 9, 2014.

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: June 9, 2014

3

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

Pep Boys Reports First Quarter 2014 Results

— Operating Profit Increases by 72% —

PHILADELPHIA — June 9, 2014 — 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 weeks (first quarter) ended May 3, 2014.

Sales

Sales for the thirteen weeks ended May 3, 2014 increased by $2.6 million, or 0.5%, to $538.8 million from $536.2 million for the thirteen weeks ended May 4, 2013. Comparable sales decreased 1.4%, consisting of an increase of 3.2% in comparable service revenue and a decrease of 2.8% 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 1.0%, while comparable retail sales decreased 1.9%.

Earnings

Net earnings for the first quarter of fiscal 2014 were $1.6 million ($0.03 per share) as compared to net earnings of $3.9 million ($0.07 per share) recorded in the first quarter of fiscal 2013. Operating profit for the first quarter of fiscal 2014 increased to $6.0 million from $3.5 million recorded in the first quarter of fiscal 2013. The 2014 results included, on a pre-tax basis, a $1.2 million asset impairment charge and $4.0 million in litigation accruals. The 2013 results included, on a pre-tax basis, a $1.2 million asset impairment charge and a $3.8 million tax benefit.

Commentary

“Our first quarter operating profit improved significantly over the prior year driven primarily by higher gross margin,” said President and CEO, Mike Odell. “Our core service business remains solid and we expect tire sales trends to improve in the back half of the year. Through the first five weeks of the second quarter, we have seen our service business improve to a positive comp despite the continued pressure in tire pricing. Our service business footprint also continues its growth with 25 new Service & Tire Centers planned for 2014.”

Mike continued, “Our customer strategies are gaining traction and our target customer groups have been endorsing our improved customer experience with new and repeat business, but we need to get to critical mass to accelerate our performance. In May, June and July, we are grand re-opening in our Road Ahead format all of our stores in our San Francisco, Boston and Charlotte markets. By differentiating ourselves in a competitive landscape, we aim to grow market share with our target customer groups and, in turn, our sales and profits.”

“We also continued to see strong growth in pepboys.com digital operations, which includes on-line service appointments, tire sales that are made on-line and installed in our stores, ship-to-home sales and products that are ordered on-line and picked up in our stores. From a mix of business perspective, sales through digital operations accounted for 4.0% of our sales during the first quarter as compared to 2.3% for the prior year,” Mike added.

About Pep Boys

Since 1921, Pep Boys has been the nation’s leading automotive aftermarket chain. With over 7,500 service bays in over 800 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 first quarter will be broadcast live on Tuesday, June 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, June 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		Thirteen weeks ended
($ in thousands, except for eps)	May 3, 2014		May 4, 2013
Total revenues	$	538,821	$	536,173
Net earnings	$	1,608	$	3,863
Basic earnings per share:
Average shares	53,470		53,388
Basic earnings per share:	$	0.03	$	0.07
Diluted earnings per share:
Average shares	54,009		53,991
Diluted earnings per share:	$	0.03	$	0.07

EX-99.2

Exhibit 99.2

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

CONSOLIDATED BALANCE SHEETS

(dollar amounts in thousands)

	May 3, 2014			February 1, 2014			May 4, 2013
Assets
Current assets:
Cash and cash equivalents	$	37,817		$	33,431		$	56,116
Accounts receivable, less allowance for uncollectible accounts of $1,486, $1,320 and $1,230	27,385			25,152			25,215
Merchandise inventories	663,554			672,354			648,148
Prepaid expenses	26,430			29,282			29,135
Other current assets	60,047			63,405			59,048
Assets held for disposal	2,013			2,013			—
Total current assets	817,246			825,637			817,662
Property and equipment, net of accumulated depreciation of $1,245,488, $1,227,121 and $1,182,713	622,866			625,525			647,636
Goodwill	56,794			56,794			46,917
Deferred income taxes	57,068			57,686			46,303
Other long-term assets	38,977			39,839			37,410
Total assets	$	1,592,951		$	1,605,481		$	1,595,928
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	247,756		$	256,031		$	245,193
Trade payable program liability	134,121			129,801			149,387
Accrued expenses	226,667			237,403			229,452
Deferred income taxes	69,498			69,373			53,481
Current maturities of long-term debt	2,000			2,000			2,000
Total current liabilities	680,042			694,608			679,513
Long-term debt less current maturities	202,500			199,500			197,500
Other long-term liabilities	48,186			48,485			52,202
Deferred gain from asset sales	111,672			114,823			124,276
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	297,002			297,009			295,059
Retained earnings	433,673			432,332			433,734
Accumulated other comprehensive income (loss)	341			379			(867		)
Treasury stock, at cost - 15,314,768 shares; 15,358,872 shares and 15,365,117 shares	(249,022		)	(250,212		)	(254,046		)
Total stockholders’ equity	550,551			548,065			542,437
Total liabilities and stockholders’ equity	$	1,592,951		$	1,605,481		$	1,595,928
Supplemental balance sheet information:
Working capital	$	137,204		$	131,029		$	138,149
Current ratio	1.20			1.19			1.20
Accounts payable to inventory ratio	57.6		%	57.4		%	60.9		%
Total debt as a percent of total capitalization	27.1		%	26.9		%	26.9		%
Debt as a percent of total capitalization, net	23.2		%	23.5		%	20.9		%

THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(dollar amounts in thousands, except per share amounts)

	Thirteen weeks ended
	May 3, 2014					May 4, 2013
				%					%
	Amount			Sales		Amount			Sales
Merchandise sales	$	411,906		76.4		$	417,150		77.8
Service revenue	126,915			23.6		119,023			22.2
Total revenues	538,821			100.0		536,173			100.0
Costs of merchandise sales	285,047			69.2		296,857			71.2
Costs of service revenue	120,648			95.1		117,476			98.7
Total costs of revenues	405,695			75.3		414,333			77.3
Gross profit from merchandise sales	126,859			30.8		120,293			28.8
Gross profit from service revenue	6,267			4.9		1,547			1.3
Total gross profit	133,126			24.7		121,840			22.7
Selling, general and administrative expenses	127,071			23.6		118,203			22.0
Net loss from dispositions of assets	(10		)	—		(116		)	—
Operating profit	6,045			1.1		3,521			0.7
Other income	441			0.1		378			0.1
Interest expense	3,782			0.7		3,679			0.7
Earnings from continuing operations before income taxes and discontinued operations	2,704			0.5		220			—
Income tax expense (benefit)	1,067			39.5	(1)	(3,708		)	N/M	(1)
Earnings from continuing operations before discontinued operations	1,637			0.3		3,928			0.7
Loss from discontinued operations, net of tax	(29		)	—		(65		)	—
Net earnings	1,608			0.3		3,863			0.7
Basic earnings per share:
Earnings from continuing operations before discontinued operations	$	0.03				$	0.07
Discontinued operations, net of tax	—					—
Basic earnings per share	$	0.03				$	0.07
Diluted earnings per share:
Earnings from continuing operations before discontinued operations	$	0.03				$	0.07
Discontinued operations, net of tax	—					—
Diluted earnings per share	$	0.03				$	0.07
Other comprehensive (loss) income:
Derivative financial instruments adjustment, net of tax	(38		)			113
Other comprehensive (loss) income	(38		)			113
Comprehensive income	$	1,570				$	3,976

(1) As a percentage of earnings from continuing operations before income taxes and discontinued operations.  The percentage for the first quarter of fiscal 2013 is not meaningful.

THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(dollar amounts in thousands)

Thirteen weeks ended	May 3, 2014			May 4, 2013
Cash flows from operating activities:
Net earnings	$	1,608		$	3,863
Adjustments to reconcile net earnings to net cash provided by continuing operations:
Net loss from discontinued operations	29			65
Depreciation	18,320			20,852
Amortization of deferred gain from asset sales	(3,151		)	(3,151		)
Amortization of deferred financing costs	664			650
Stock compensation expense	826			869
Deferred income taxes	743			(3,872		)
Net loss from dispositions of assets	10			116
Loss from asset impairment	1,172			1,183
Other	(111		)	(126		)
Changes in assets and liabilities, net of the effects of acquisitions:
Decrease (increase) in accounts receivable, prepaid expenses and other	4,174			(699		)
Decrease (increase) in merchandise inventories	8,800			(6,940		)
(Decrease) increase in accounts payable	(8,903		)	262
Decrease in accrued expenses	(12,467		)	(2,211		)
Decrease in other long-term liabilities	(231		)	(1,338		)
Net cash provided by continuing operations	11,483			9,523
Net cash used in discontinued operations	(29		)	(88		)
Net cash provided by operating activities	11,454			9,435
Cash flows from investing activities:
Capital expenditures	(14,565		)	(12,840		)
Proceeds from dispositions of assets	—			2
Release of collateral investment	—			1,000
Net cash used in investing activities	(14,565		)	(11,838		)
Cash flows from financing activities:
Borrowings under line of credit agreements	164,206			590
Payments under line of credit agreements	(160,706		)	(590		)
Borrowings on trade payable program liability	49,708			46,181
Payments on trade payable program liability	(45,388		)	(46,512		)
Debt payments	(500		)	(500		)
Proceeds from stock issuance	177			164
Net cash provided by (used in) financing activities	7,497			(667		)
Net increase (decrease) in cash and cash equivalents	4,386			(3,070		)
Cash and cash equivalents at beginning of period	33,431			59,186
Cash and cash equivalents at end of period	$	37,817		$	56,116
Supplemental cash flow information:
Cash paid for income taxes	$	—		$	1,430
Cash received from income tax refunds	$	174		$	51
Cash paid for interest	$	2,659		$	2,987
Accrued purchases of property and equipment	$	5,748		$	1,055

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
		May 3, 2014			May 4, 2013
(a)Earnings from continuing operations before discontinued operations		$	1,637		$	3,928
Loss from discontinued operations, net of tax		(29		)	(65		)
Net earnings		$	1,608		$	3,863
(b)Basic average number of common shares outstanding during period		53,470			53,388
Common shares assumed issued upon exercise of dilutive stock options, net of assumed repurchase, at the average market price		539			603
(c)Diluted average number of common shares assumed outstanding during period		54,009			53,991
Basic earnings per share:
Earnings from continuing operations before discontinued operations	(a) / (b)	$	0.03		$	0.07
Discontinued operations, net of tax		—			—
Basic earnings per share		$	0.03		$	0.07
Diluted earnings per share:
Earnings from continuing operations before discontinued operations	(a) / (c)	$	0.03		$	0.07
Discontinued operations, net of tax		—			—
Diluted earnings per share		$	0.03		$	0.07

THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES

ADDITIONAL INFORMATION (dollar amounts in thousands)

	Thirteen weeks ended
	May 3, 2014			May 4, 2013
Capital expenditures	$	14,565		$	12,840
Depreciation	$	18,320		$	20,852
Non-operating income:
Net rental revenue	$	399		$	250
Investment income	47			49
Other income	(5		)	79
Total	$	441		$	378
Comparable sales percentages:
Service	3.2		%	4.2		%
Merchandise	-2.8		%	0.1		%
Total	-1.4		%	1.0		%
Total square feet of retail space (including service centers)	12,845,000			12,815,000
Store count
Supercenter	567			569
Service & Tire Center	225			188
Retail Only	6			6
Total	798			763
Sales and gross profit by line of business (A):
Service center revenue	$	293,913		286,978
Retail sales	244,908			249,195
Total revenues	$	538,821		$	536,173
Gross profit from service center revenue, prior to impairment charge	$	64,735		53,012
Service center revenue impairment charge	(956		)	(1,017		)
Gross profit from service center revenue	$	63,779		$	51,995
Gross profit from retail sales, prior to impairment charge	$	69,562		70,011
Retail sales impairment charge	(215		)	(166		)
Gross profit from retail sales	$	69,347		$	69,845
Total gross profit	$	133,126		$	121,840
Comparable sales percentages by line of business (A):
Service center revenue	-1.0		%	3.9		%
Retail sales	-1.9		%	-2.1		%
Total revenues	-1.4		%	1.0		%
Gross profit percentage by line of business (A):
Gross profit percentage from service center revenue, prior to impairment charge	22.0		%	18.5		%
Impairment charge	(0.3		)	(0.4		)
Gross profit percentage from service center revenue	21.7		%	18.1		%
Gross profit percentage from retail sales, prior to impairment charge	28.4		%	28.1		%
Impairment charge	(0.1		)	(0.1		)
Gross profit percentage from retail sales	28.3		%	28.0		%
Total gross profit percentage	24.7		%	22.7		%

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