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: December 8, 2014

Date of Earliest Event Reported: December 8, 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 December 8, 2014, The Pep Boys — Manny, Moe & Jack issued a press release announcing its earnings for the fiscal quarter ended November 1, 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 December 8, 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: December 8, 2014

3

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

Pep Boys Reports Third Quarter 2014 Results

— Comparable Sales Trends Improve Across All Lines of Business —

— Comparable Service Center Revenue Increases 3.7% —

PHILADELPHIA — December 8, 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 (third quarter) and thirty-nine (nine months) weeks ended November 1, 2014.

Third Quarter

Sales

Sales for the thirteen weeks ended November 1, 2014 increased by $10.5 million, or 2.1%, to $517.6 million from $507.0 million for the thirteen weeks ended November 2, 2013. Comparable sales increased 1.2%, consisting of an increase of 6.1% in comparable service revenue and a decrease of 0.2% 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 increased 3.7%, while comparable retail sales decreased 1.8%.

Earnings

Net loss for the third quarter of fiscal 2014 was $2.0 million ($0.03 per share) as compared to net earnings of $1.0 million ($0.02 per share) recorded in the third quarter of fiscal 2013. The 2014 results included, on a pre-tax basis, a $1.4 million asset impairment charge and $1.4 million in severance charges. The 2013 results included, on a pre-tax basis, a $2.0 million asset impairment charge and $0.6 million in severance charges.

Nine Months

Sales

Sales for the thirty-nine weeks ended November 1, 2014 increased by $11.3 million, or 0.7%, to $1,582.2 million from $1,570.8 million for the thirty-nine weeks ended November 2, 2013. Comparable sales decreased 0.7%, consisting of a 4.9% comparable service revenue increase and a 2.3% comparable merchandise sales decrease. Re-categorizing sales (see above), comparable service center revenue increased 0.8%, while comparable retail sales decreased 2.4%.

Earnings

Net loss for the first nine months of 2014 was $0.6 million ($0.01 per share) as compared to net earnings of $10.2 million ($0.19 per share) for the first nine months of fiscal 2013. The 2014 results included, on a pre-tax basis, a $5.2 million asset impairment charge, a $4.0 million litigation charge and $2.4 million in severance charges. The 2013 results included, on a pre-tax basis, a

$4.9 million asset impairment charge and $0.6 million in severance charges. In addition, the 2014 results included a $0.9 million tax expense related to valuation allowances.

Commentary

“Our recent top-line growth has continued into the fourth quarter,” said interim CEO John Sweetwood. “Particular highlights are tires, commercial and eCommerce sales; however, this balance of business shift has continued to pressure gross margin rate.”

John continued, “Our Road Ahead stores continue to produce positive results. Cincinnati and Denver will be completed in the fourth quarter, with grand re-openings scheduled for the first quarter of 2015. Baltimore, which will serve as our first test of a reduced average per-store investment, will be grand re-opened in the second quarter of 2015.”

John concluded, “We have engaged Spencer Stuart to conduct our CEO search, which is progressing as planned.”

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 third quarter will be broadcast live on Tuesday, December 9 at 8:30 a.m. EST 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, December 9 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	November 1, 2014			November 2, 2013
Total revenues	$	517,584,000		$	507,042,000
Net (loss) earnings	$	(1,964,000	)	$	964,000
Basic (loss) earnings per share:
Average shares	53,590,000			53,315,000
Basic (loss) earnings per share:	$	(0.03	)	$	0.02
Diluted (loss) earnings per share:
Average shares	53,590,000			53,930,000
Diluted (loss) earnings per share:	$	(0.03	)	$	0.02

Thirty-nine weeks ended	November 1, 2014			November 2, 2013
Total revenues	$	1,582,179,000		$	1,570,835,000
Net (loss) earnings	$	(625,000	)	$	10,196,000
Basic (loss) earnings per share:
Average shares	53,533,000			53,363,000
Basic (loss) earnings per share:	$	(0.01	)	$	0.19
Diluted (loss) earnings per share:
Average shares	53,533,000			53,962,000
Diluted (loss) earnings per share:	$	(0.01	)	$	0.19

EX-99.2

Exhibit 99.2

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

CONSOLIDATED BALANCE SHEETS

(dollar amounts in thousands)

	November 1, 2014			February 1, 2014			November 2, 2013
Assets
Current assets:
Cash and cash equivalents	$	36,430		$	33,431		$	55,798
Accounts receivable, less allowance for uncollectible accounts of $1,616, $1,320 and $1,310	31,622			25,152			24,942
Merchandise inventories	667,438			672,354			664,901
Prepaid expenses	15,314			29,282			16,801
Other current assets	51,470			63,405			52,249
Assets held for disposal	4,636			2,013			500
Total current assets	806,910			825,637			815,191
Property and equipment, net of accumulated depreciation of $1,257,988 $1,227,121 and $1,214,802	614,326			625,525			631,639
Goodwill	56,794			56,794			56,841
Deferred income taxes	57,070			57,686			48,311
Other long-term assets	37,301			39,839			37,265
Total assets	$	1,572,401		$	1,605,481		$	1,589,247
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	217,066		$	256,031		$	253,818
Trade payable program liability	145,105			129,801			134,703
Accrued expenses	209,524			237,403			225,249
Deferred income taxes	68,556			69,373			59,455
Current maturities of long-term debt	2,000			2,000			2,000
Total current liabilities	642,251			694,608			675,225
Long-term debt less current maturities	229,500			199,500			196,500
Other long-term liabilities	45,843			48,485			49,618
Deferred gain from asset sales	105,370			114,823			117,974
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	297,313			297,009			296,578
Retained earnings	428,845			432,332			436,933
Accumulated other comprehensive income	43			379			339
Treasury stock, at cost - 15,177,705 shares; 15,358,872 shares and 15,442,779 shares	(245,321		)	(250,212		)	(252,477		)
Total stockholders’ equity	549,437			548,065			549,930
Total liabilities and stockholders’ equity	$	1,572,401		$	1,605,481		$	1,589,247
Supplemental balance sheet information:
Working capital	$	164,659		$	131,029		$	139,966
Current ratio	1.26			1.19			1.21
Accounts payable to inventory ratio	54.3		%	57.4		%	58.4		%
Total debt as a percent of total capitalization	29.6		%	26.9		%	26.5		%
Debt as a percent of total capitalization, net	26.2		%	23.5		%	20.6		%

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										Thirty-nine weeks ended
	November 1, 2014					November 2, 2013					November 1, 2014					November 2, 2013
				%					%					%					%
	Amount			Sales		Amount			Sales		Amount			Sales		Amount			Sales
Merchandise sales	$	395,941		76.5		$	394,346		77.8		$	1,208,778		76.4		$	1,223,813		77.9
Service revenue	121,643			23.5		112,696			22.2		373,401			23.6		347,022			22.1
Total revenues	517,584			100.0		507,042			100.0		1,582,179			100.0		1,570,835			100.0
Costs of merchandise sales	278,800			70.4		267,489			67.8		843,946			69.8		838,126			68.5
Costs of service revenue	120,450			99.0		116,741			103.6		362,473			97.1		349,348			100.7
Total costs of revenues	399,250			77.1		384,230			75.8		1,206,419			76.3		1,187,474			75.6
Gross profit from merchandise sales	117,141			29.6		126,857			32.2		364,832			30.2		385,687			31.5
Gross profit from service revenue	1,193			1.0		(4,045		)	(3.6	)	10,928			2.9		(2,326		)	(0.7	)
Total gross profit	118,334			22.9		122,812			24.2		375,760			23.8		383,361			24.4
Selling, general and administrative expenses	117,651			22.7		115,104			22.7		365,345			23.1		354,236			22.6
Net loss from dispositions of assets	(109		)	—		(67		)	—		(519		)	—		(213		)	—
Operating profit	574			0.1		7,641			1.5		9,896			0.6		28,912			1.8
Other income	418			0.1		524			0.1		1,175			0.1		1,367			0.1
Interest expense	3,485			0.7		3,643			0.7		10,269			0.7		10,885			0.7
(Loss) earnings from continuing operations before income taxes and discontinued operations	(2,493		)	(0.5	)	4,522			0.9		802			0.1		19,394			1.2
Income tax (benefit) expense	(723		)	29.0	(1)	3,509			77.6	(1)	1,108			138.2	(1)	9,074			46.8	(1)
(Loss) earnings from continuing operations before discontinued operations	(1,770		)	(0.3	)	1,013			0.2		(306		)	—		10,320			0.7
Loss from discontinued operations, net of tax	(194		)	—		(49		)	—		(319		)	—		(124		)	—
Net (loss) earnings	(1,964		)	(0.4	)	964			0.2		(625		)	(0.0	)	10,196			0.7
Basic (loss) earnings per share:
(Loss) earnings from continuing operations before discontinued operations	$	(0.03	)			$	0.02				$	—				$	0.19
(Loss) from discontinued operations, net of tax	—					—					(0.01		)			—
Basic (loss) earnings per share	$	(0.03	)			$	0.02				$	(0.01	)			$	0.19
Diluted (loss) earnings per share:
(Loss) earnings from continuing operations before discontinued operations	$	(0.03	)			$	0.02				$	—				$	0.19
(Loss) from discontinued operations, net of tax	—					—					(0.01		)			—
Diluted (loss) earnings per share	$	(0.03	)			$	0.02				$	(0.01	)			$	0.19
Other comprehensive (loss) income:
Derivative financial instruments adjustment, net of tax	(170		)			(372		)			(336		)			1,319
Other comprehensive (loss) income	(170		)			(372		)			(336		)			1,319
Comprehensive (loss) income	$	(2,134	)			$	592				$	(961	)			$	11,515

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

THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(dollar amounts in thousands)

Thirty-nine weeks ended	November 1, 2014			November 2, 2013
Cash flows from operating activities:
Net (loss) earnings	$	(625	)	$	10,196
Adjustments to reconcile net (loss) earnings to net cash provided by continuing operations:
Net loss from discontinued operations	319			124
Depreciation	55,518			59,941
Amortization of deferred gain from asset sales	(9,453		)	(9,453		)
Amortization of deferred financing costs	1,937			1,952
Stock compensation expense	1,533			2,451
Deferred income taxes	(66		)	(478		)
Net loss from dispositions of assets	519			213
Loss from asset impairment	5,243			4,882
Other	(238		)	(322		)
Changes in assets and liabilities, net of the effects of acquisitions:
Decrease in accounts receivable, prepaid expenses and other	19,644			18,431
Decrease (increase) in merchandise inventories	4,916			(23,693		)
(Decrease) increase in accounts payable	(36,494		)	7,746
Decrease in accrued expenses	(28,363		)	(6,589		)
Decrease in other long-term liabilities	(2,182		)	(2,354		)
Net cash provided by continuing operations	12,208			63,047
Net cash used in discontinued operations	(583		)	(193		)
Net cash provided by operating activities	11,625			62,854
Cash flows from investing activities:
Capital expenditures	(54,975		)	(38,334		)
Proceeds from dispositions of assets	56			19
Acquisitions, net of cash acquired	—			(10,741		)
Release of collateral investment	—			1,000
Net cash used in investing activities	(54,919		)	(48,056		)
Cash flows from financing activities:
Borrowings under line of credit agreements	479,438			1,926
Payments under line of credit agreements	(447,938		)	(1,926		)
Borrowings on trade payable program liability	143,614			114,804
Payments on trade payable program liability	(128,310		)	(129,819		)
Debt payments	(1,500		)	(1,500		)
Proceeds from stock issuance	989			1,079
Repurchase of common stock	—			(2,750		)
Net cash provided by (used in) financing activities	46,293			(18,186		)
Net increase (decrease) in cash and cash equivalents	2,999			(3,388		)
Cash and cash equivalents at beginning of period	33,431			59,186
Cash and cash equivalents at end of period	$	36,430		$	55,798
Supplemental cash flow information:
Cash paid for income taxes	$	845		$	4,322
Cash received from income tax refunds	$	244		$	51
Cash paid for interest	$	8,482		$	9,149
Accrued purchases of property and equipment	$	1,350		$	2,369

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						Thirty-nine weeks ended
			November 1, 2014			November 2, 2013			November 1, 2014			November 2, 2013
(a)	(Loss) earnings from continuing operations before discontinued operations		$	(1,770	)	$	1,013		$	(306	)	$	10,320
	Loss from discontinued operations, net of tax		(194		)	(49		)	(319		)	(124		)
	Net (loss) earnings		$	(1,964	)	$	964		$	(625	)	$	10,196
(b)	Basic average number of common shares outstanding during period		53,590			53,315			53,533			53,363
	Common shares assumed issued upon exercise of dilutive stock options, net of assumed repurchase, at the average market price		—			615			—			599
(c)	Diluted average number of common shares assumed outstanding during period		53,590			53,930			53,533			53,962
	Basic (loss) earnings per share:
	(Loss) earnings from continuing operations before discontinued operations	(a) / (b)	$	(0.03	)	$	0.02		$	—		$	0.19
	(Loss) from discontinued operations, net of tax		—			—			(0.01		)	—
	Basic (loss) earnings per share		$	(0.03	)	$	0.02		$	(0.01	)	$	0.19
	Diluted (loss) earnings per share:
	(Loss) earnings from continuing operations before discontinued operations	(a) / (c)	$	(0.03	)	$	0.02		$	—		$	0.19
	(Loss) from discontinued operations, net of tax		—			—			(0.01		)	—
	Diluted (loss) earnings per share		$	(0.03	)	$	0.02		$	(0.01	)	$	0.19

THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES

ADDITIONAL INFORMATION (dollar amounts in thousands)

	Thirteen weeks ended						Thirty-nine weeks ended
	November 1, 2014			November 2, 2013			November 1, 2014			November 2, 2013
Capital expenditures	$	15,965		$	13,832		$	54,975		$	38,334
Depreciation	$	19,172		$	19,756		$	55,518		$	59,941
Non-operating income:
Net rental revenue	$	358		$	432		$	1,040		$	1,032
Investment income	59			42			152			132
Other income	1			50			(17		)	203
Total	$	418		$	524		$	1,175		$	1,367
Comparable sales percentages:
Service	6.1		%	0.5		%	4.9		%	1.6		%
Merchandise	-0.2		%	-3.6		%	-2.3		%	-1.7		%
Total	1.2		%	-2.8		%	-0.7		%	-1.0		%
Total square feet of retail space (including service centers)							12,922,000			12,924,000
Store count
Supercenter							563			572
Service & Tire Center							233			215
Retail Only							6			6
Total							802			793
Sales and gross profit by line of business (A):
Service center revenue	$	289,375		$	273,944		$	871,590		841,827
Retail sales	228,209			233,098			710,589			729,008
Total revenues	$	517,584		$	507,042		$	1,582,179		$	1,570,835
Gross profit from service center revenue, prior to impairment charge	$	58,817		$	55,169		$	185,616		171,244
Service center revenue impairment charge	(1,144		)	(1,153		)	(3,479		)	(3,493		)
Gross profit from service center revenue	$	57,673		$	54,016		$	182,137		$	167,751
Gross profit from retail sales, prior to impairment charge	$	60,922		$	69,676		$	195,387		217,000
Retail sales impairment charge	(261		)	(880		)	(1,764		)	(1,390		)
Gross profit from retail sales	$	60,661		$	68,796		$	193,623		$	215,610
Total gross profit	$	118,334		$	122,812		$	375,760		$	383,361
Comparable sales percentages by line of business (A):
Service center revenue	3.7		%	-2.5		%	0.8		%	0.4		%
Retail sales	-1.8		%	-3.1		%	-2.4		%	-2.6		%
Total revenues	1.2		%	-2.8		%	-0.7		%	-1.0		%
Gross profit percentage by line of business (A):
Gross profit percentage from service center revenue, prior to impairment charge	20.3		%	20.1		%	21.3		%	20.3		%
Impairment charge	(0.4		)	(0.4		)	(0.4		)	(0.4		)
Gross profit percentage from service center revenue	19.9		%	19.7		%	20.9		%	19.9		%
Gross profit percentage from retail sales, prior to impairment charge	26.7		%	29.9		%	27.5		%	29.8		%
Impairment charge	(0.1		)	(0.4		)	(0.2		)	(0.2		)
Gross profit percentage from retail sales	26.6		%	29.5		%	27.2		%	29.6		%
Total gross profit percentage	22.9		%	24.2		%	23.7		%	24.4		%

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