EX-99 3 exh9902.txt Exhibit 99.2 Unaudited Supplemental Financial Information
THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (dollar amounts in thousands, except per share amounts) UNAUDITED Thirteen weeks ended Thirty-nine weeks Ended ---------------------------------------- ------------------------------------------- October 30, 2004 November 1, 2003 October 30, 2004 November 1, 2003 ------------------ ------------------ ------------------- -------------------- Amount % Sales Amount % Sales Amount % Sales Amount % Sales ----------------------------------------------------------------------------------------------------------------------------------- Merchandise Sales $ 456,814 81.7 $ 435,055 80.9 $ 1,406,411 81.8 $ 1,297,472 80.9 Service Revenue 102,384 18.3 102,636 19.1 312,346 18.2 307,159 19.1 ----------------------------------------------------------------------------------------------------------------------------------- Total Revenues 559,198 100.0 537,691 100.0 1,718,757 100.0 1,604,631 100.0 ----------------------------------------------------------------------------------------------------------------------------------- Costs of Merchandise Sales 328,088 71.8 301,871 69.4 998,036 71.0 937,114 72.2 Costs of Service Revenue 79,109 77.3 76,333 74.4 237,476 76.0 231,986 75.5 ----------------------------------------------------------------------------------------------------------------------------------- Total Costs of Revenues 407,197 72.8 378,204 70.3 1,235,512 71.9 1,169,100 72.9 ----------------------------------------------------------------------------------------------------------------------------------- Gross Profit from Merchandise Sales 128,726 28.2 133,184 30.6 408,375 29.0 360,358 27.8 Gross Profit from Service Revenue 23,275 22.7 26,303 25.6 74,870 24.0 75,173 24.5 ----------------------------------------------------------------------------------------------------------------------------------- Total Gross Profit 152,001 27.2 159,487 29.7 483,245 28.1 435,531 27.1 ----------------------------------------------------------------------------------------------------------------------------------- Selling, General and Administrative Expenses 132,524 23.7 130,034 24.2 398,780 23.2 420,860 26.2 ----------------------------------------------------------------------------------------------------------------------------------- Operating Profit 19,477 3.5 29,453 5.5 84,465 4.9 14,671 0.9 Non-operating Income 1,089 0.1 786 0.1 2,151 0.2 2,687 0.2 Interest Expense 8,056 1.4 8,959 1.6 25,154 1.5 29,263 1.8 ----------------------------------------------------------------------------------------------------------------------------------- Earnings (Loss) from Continuing Operations Before Income Taxes and Cumulative Effect of Change in Accounting Principle 12,510 2.2 21,280 4.0 61,462 3.6 (11,905) (0.7) Income Tax Expense (Benefit) 4,629 37.0 7,874 37.0 22,741 37.0 (4,405) 37.0 ----------------------------------------------------------------------------------------------------------------------------------- Net Earnings (Loss) from Continuing Operations Before Cumulative Effect of Change in Accounting Principle 7,881 1.4 13,406 2.5 38,721 2.3 (7,500) (0.5) Discontinued Operations, Net of Tax (236) (0.0) 1,294 0.2 (1,619) (0.1) (20,914) (1.3) Cumulative Effect of Change in Accounting Principle, Net of Tax - 0.0 - 0.0 - 0.0 (2,484) (0.1) ----------------------------------------------------------------------------------------------------------------------------------- Net Earnings (Loss) 7,645 1.4 14,700 2.7 37,102 2.2 (30,898) (1.9) Retained Earnings, beginning of period 597,236 571,403 577,793 630,847 Cash Dividends (3,925) (3,550) (11,738) (10,528) Effect of Stock Options (461) (2,035) (2,662) (8,583) Dividend Reinvestment Plan - - - (320) ----------------------------------------------------------------------------------------------------------------------------------- Retained Earnings, end of period $ 600,495 $ 580,518 $ 600,495 $ 580,518 ----------------------------------------------------------------------------------------------------------------------------------- Basic Earnings (Loss) Per Share: Net Earnings (Loss) From Continuing Operations Before Cumulative Effect of Change in Accounting Principle $ 0.14 $ 0.26 $ 0.68 $ (0.14) Discontinued Operations,Net of Tax (0.01) 0.02 (0.03) (0.40) Cumulative Effect of Change in Accounting Principle, Net of Tax - - - (0.05) ----------------------------------------------------------------------------------------------------------------------------------- Basic Earnings (Loss) Per Share $ 0.13 $ 0.28 $ 0.65 $ (0.59) ----------------------------------------------------------------------------------------------------------------------------------- Diluted Earnings (Loss) Per Share: Net Earnings (Loss) From Continuing Operations Before Cumulative Effect of Change in Accounting Principle $ 0.14 $ 0.24 $ 0.64 $ (0.14) Discontinued Operations, Net of Tax (0.01) 0.02 (0.02) (0.40) Cumulative Effect of Change in Accounting Principle, Net of Tax - - - (0.05) ----------------------------------------------------------------------------------------------------------------------------------- Diluted Earnings (Loss) per Share $ 0.13 $ 0.26 $ 0.62 $ (0.59) ----------------------------------------------------------------------------------------------------------------------------------- Cash Dividends per Share $ 0.0675 $ 0.0675 $ 0.2025 $ 0.2025 -----------------------------------------------------------------------------------------------------------------------------------
THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (dollar amounts in thousands, except per share amounts) UNAUDITED Oct.30, 2004 Jan. 31, 2004* Nov. 1, 2003 ------------------------------------------------------------------------------------------------------------------------- ASSETS Current Assets: Cash and cash equivalents $ 35,185 $ 60,984 $ 33,837 Accounts receivable, net 40,827 30,562 28,734 Merchandise inventories 611,645 553,562 532,876 Prepaid expenses 25,049 39,480 21,474 Deferred income taxes - 20,826 31,659 Other 116,342 81,096 48,985 Assets held for disposal 2,185 16,929 26,949 ------------------------------------------------------------------------------------------------------------------------ Total Current Assets 831,233 803,439 724,514 ------------------------------------------------------------------------------------------------------------------------ Property and Equipment-at cost: Land 263,201 263,907 264,121 Buildings and improvements 909,752 899,114 896,337 Furniture, fixtures and equipment 606,183 586,607 593,199 Construction in progress 31,101 12,800 24,858 ------------------------------------------------------------------------------------------------------------------------ 1,810,237 1,762,428 1,778,515 Less accumulated depreciation and amortization 823,017 776,242 772,123 ------------------------------------------------------------------------------------------------------------------------ Property and Equipment - Net 987,220 986,186 1,006,392 ------------------------------------------------------------------------------------------------------------------------ Other 51,769 51,398 52,310 ------------------------------------------------------------------------------------------------------------------------ Total Assets $1,870,222 $1,841,023 $1,783,216 ------------------------------------------------------------------------------------------------------------------------ LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Accounts payable $ 307,921 $ 342,584 $ 298,438 Accrued expenses 246,707 267,565 254,910 Current deferred taxes 20,164 - - Current maturities of long-term debt and obligations under capital leases 147,171 117,063 72,185 ------------------------------------------------------------------------------------------------------------------------ Total Current Liabilities 721,963 727,212 625,533 ------------------------------------------------------------------------------------------------------------------------ Long-term debt and obligations under capital leases, less current maturities 180,253 258,016 311,906 Convertible long-term debt, less current maturities 150,000 150,000 150,000 Other long-term liabilities 28,321 28,802 28,902 Deferred income taxes 68,488 57,492 43,801 Deferred gain on sale leaseback 53 3,907 4,300 Commitments and Contingencies Stockholders' Equity: Common Stock, par value $1 per share: Authorized 500,000,000 shares; Issued 68,557,041, 63,910,577 and 63,910,577 shares 68,557 63,911 63,911 Additional paid-in capital 284,660 177,317 177,244 Retained earnings 600,495 577,793 580,518 Common stock subscriptions receivable (82) - - Accumulated other comprehensive (loss) income (284) (15) 2,139 ------------------------------------------------------------------------------------------------------------------------ 953,346 819,006 823,812 Less cost of shares in treasury - 11,319,985 shares, 8,928,159 shares and 9,028,897 shares 172,938 144,148 145,774 Less cost of shares in benefits trust - 2,195,270 shares 59,264 59,264 59,264 ------------------------------------------------------------------------------------------------------------------------ Total Stockholders' Equity 721,144 615,594 618,774 ------------------------------------------------------------------------------------------------------------------------ Total Liabilities and Stockholders' Equity $1,870,222 $1,841,023 $1,783,216 ------------------------------------------------------------------------------------------------------------------------ * Taken from the audited financial statements at January 31, 2004.
THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (dollar amounts in thousands) UNAUDITED Thirty-nine Weeks Ended Oct.30, 2004 Nov.1, 2003 ---------------------------------------------------------------------------------------------------------------- Cash Flows from Operating Activities: Net earnings (loss) $ 37,102 $ (30,898) Net loss from discontinued operations (1,619) (20,914) ---------------------------------------------------------------------------------------------------------------- Net earnings (loss) from continuing operations $ 38,721 $ (9,984) Adjustments to Reconcile Net Earnings (Loss) from Continuing Operations to Net Cash Provided by Continuing Operations: Cumulative effect of change in accounting principle, net of tax - 2,484 Depreciation and amortization 50,366 52,558 Accretion of asset disposal obligation 105 140 Stock compensation expense 996 - Deferred income taxes 52,572 (36,144) Deferred gain on sale lease back (125) (32) Loss on asset impairment - 2,121 Loss from sales of assets 384 633 Changes in Operating Assets and Liabilities: (Increase) decrease in accounts receivable, prepaid expenses and other (29,143) 17,485 Increase in merchandise inventories (58,083) (43,994) (Decrease) increase in accounts payable (27,447) 98,385 (Decrease) increase in accrued expenses (21,347) 28,965 (Decrease) increase in other long-term liabilities (481) 3,746 ---------------------------------------------------------------------------------------------------------------- Net cash provided by continuing operations 6,518 116,363 Net cash used in discontinued operations (2,242) (1) ---------------------------------------------------------------------------------------------------------------- Net Cash Provided by Operating Activities 4,276 116,362 ---------------------------------------------------------------------------------------------------------------- Cash Flows from Investing Activities: Capital expenditures (52,631) (32,679) Proceeds from sales of assets 1,472 3,362 Proceeds from sales of assets held for disposal 11,859 - ---------------------------------------------------------------------------------------------------------------- Net Cash Used in Investing Activities (39,300) (29,317) ---------------------------------------------------------------------------------------------------------------- Cash Flows from Financing Activities: Net borrowings under line of credit agreements 35,669 140 Payments on short-term borrowings (7,216) - Reduction of long-term debt (84,431) (92,930) Other (306) (578) Dividends paid (11,738) (10,528) Repurchase of common stock (38,900) - Proceeds from issuance of common stock 108,854 - Proceeds from exercise of stock options 6,384 7,011 Proceeds from dividend reinvestment plan 909 907 ---------------------------------------------------------------------------------------------------------------- Net Cash Provided by (Used in) Financing Activities 9,225 (95,978) ---------------------------------------------------------------------------------------------------------------- Net Decrease in Cash (25,799) (8,933) ---------------------------------------------------------------------------------------------------------------- Cash and Cash Equivalents at Beginning of Period 60,984 42,770 ---------------------------------------------------------------------------------------------------------------- Cash and Cash Equivalents at End of Period $ 35,185 $ 33,837 ---------------------------------------------------------------------------------------------------------------- Non-cash financing activities: Equipment Capital Leases $ 1,413 $ - ----------------------------------------------------------------------------------------------------------------
THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES COMPUTATION OF BASIC AND DILUTED EARNINGS PER SHARE (in thousands, except per share data) UNAUDITED Thirteen weeks ended Thirty-nine weeks ended ----------------------------------- ---------------------------------- Oct. 30, 2004 Nov. 1, 2003 Oct. 30, 2004 Nov. 1, 2003 -------------- --------------- -------------- -------------- (a) Net earnings (loss) from continuing operations before cumulative effect of change in accounting principle $ 7,881 $ 13,406 $ 38,721 $ (7,500) Adjustment for interest on convertible senior notes, net of income tax effect - 1,001 3,004 - --------------------------------------------------------------------------------------------------------------------------------- (b) Adjusted net earnings (loss) from continuing operations before cumulative effect of change in accounting principle $ 7,881 $ 14,407 $ 41,725 $ (7,500) --------------------------------------------------------------------------------------------------------------------------------- (c) Average number of common shares outstanding during period 57,574 52,537 56,798 52,002 Common shares assumed issued upon conversion of convertible senior notes 6,697 6,697 - - Common shares assumed issued upon exercise of dilutive stock options, net of assumed repurchase, at the average market price 752 1,176 1,482 - --------------------------------------------------------------------------------------------------------------------------------- (d) Average number of common shares assumed outstanding during period 58,326 60,410 64,977 52,002 --------------------------------------------------------------------------------------------------------------------------------- Basic Earnings (Loss) per Share: Net Earnings (Loss) From Continuing Operations Before Cumulative Effect of Change in Accounting Principle (a/c) $ 0.14 $ 0.26 $ 0.68 $ (0.14) Discontinued Operations, Net of Tax (0.01) 0.02 (0.03) (0.40) Cumulative Effect of Change in Accounting Principle, Net of Tax - - - (0.05) --------------------------------------------------------------------------------------------------------------------------------- Basic Earnings (Loss) Per Share $ 0.13 $ 0.28 $ 0.65 $ (0.59) --------------------------------------------------------------------------------------------------------------------------------- Diluted Earnings (Loss) Per Share: Net Earnings (Loss) from Continuing Operations Before Cumulative Effect of Change in Accounting Principle (b/d) $ 0.14 $ 0.24 $ 0.64 $ (0.14) Discontinued Operations, Net of Tax (0.01) 0.02 (0.02) (0.40) Cumulative Effect of Change in Accounting Principle, Net of Tax - - - (0.05) --------------------------------------------------------------------------------------------------------------------------------- Diluted Earnings (Loss) Per Share $ 0.13 $ 0.26 $ 0.62 $ (0.59) ---------------------------------------------------------------------------------------------------------------------------------
THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES ADDITIONAL INFORMATION (dollar amounts in thousands) UNAUDITED Thirteen weeks ended Thirty-nine weeks ended -------------------------------------- -------------------------------------- Oct. 30, 2004 Nov. 1, 2003 Oct. 30, 2004 Nov. 1, 2003 ----------------- ----------------- ----------------- ----------------- Capital expenditures $ 23,801 $ 11,259 $ 52,631 $ 32,679 Depreciation and amortization $ 16,654 $ 17,287 $ 50,366 $ 52,558 Non-operating income: Net rental revenue $ 1,007 $ 627 $ 1,855 $ 2,177 Investment income 127 122 475 385 Other (expense) income (45) 37 (179) 125 ---------------- ---------------- ---------------- ----------------- Total $ 1,089 $ 786 $ 2,151 $ 2,687 ================ ================ ================ ================= Comparable store sales percentages: Merchandise 5.1 % 2.4 % 8.5 % -2.2 % Service -0.2 1.2 1.8 0.2 Total 4.1 2.2 7.2 -1.7 Total square feet of retail space (including service centers) 12,206,785 12,206,785 Total Store Count 595 595 Sales and Gross Profit by Line of Business (A): Retail Sales $ 323,903 $ 293,938 $ 1,020,564 $ 888,245 Service Center Revenue 235,295 243,753 698,193 716,386 -------------- ------------- -------------- --------------- Total Revenues $ 559,198 $ 537,691 $ 1,718,757 $ 1,604,631 ============== ============= ============== =============== Gross Profit from Retail Sales $ 86,796 $ 82,158 $ 286,258 $ 223,924 Gross Profit from Service Center Revenue 65,205 77,329 196,987 211,607 -------------- ------------- -------------- --------------- Total Gross Profit $ 152,001 $ 159,487 $ 483,245 $ 435,531 ============== ============= ============== =============== Comparable Sales Percentages (A): Retail Sales 10.3 % 2.5 % 15.0 % -2.0 % Service Center Revenue -3.4 1.7 -2.5 -1.4 Total Revenues 4.1 2.2 7.2 -1.7 Gross Profit Percentage by Line of Business (A): Gross Profit Percentage from Retail Sales 26.8 % 28.0 % 28.0 % 25.2 % Gross Profit Percentage from Service Center Revenue 27.7 % 31.7 % 28.2 % 29.5 % ---------- ---------- ----------- ----------- Total Gross Profit Percentage 27.2 % 29.7 % 28.1 % 27.1 % ========== ========== =========== =========== (A) Retail Sales include DIY and Commercial sales. Service Center Revenue includes revenue from labor and installed parts and tires.