Pep Boys Manny Moe & Jack (PBY) 8-K/A Results of Operations and Financial Condition

Exhibit 99.1

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

	Thirteen weeks ended										Thirty-nine weeks ended
	November 3, 2007					October 28, 2006					November 3, 2007					October 28, 2006
				%					%					%						%
	Amount			Sales		Amount			Sales		Amount			Sales		Amount				Sales
Merchandise Sales	$	435,725		81.4		$	453,711		82.4		$	1,339,329		81.7		$	1,393,023			82.6
Service Revenue	99,651			18.6		97,138			17.6		300,949			18.3		292,992				17.4
Total Revenues	535,376			100.0		550,849			100.0		1,640,278			100.0		1,686,015				100.0
Costs of Merchandise Sales	350,398			80.4		323,025			71.2		985,508			73.6		995,447				71.5
Costs of Service Revenue	89,370			89.7		90,131			92.8		267,232			88.8		268,895				91.8
Total Costs of Revenues	439,768			82.1		413,156			75.0		1,252,740			75.7		1,264,342				75.0
Gross Profit from Merchandise Sales	85,327			19.6		130,686			28.8		353,821			26.4		397,576				28.5
Gross Profit from Service Revenue	10,281			10.3		7,007			7.2		33,717			11.2		24,097				8.2
Total Gross Profit	95,608			17.9		137,693			25.0		387,538			23.6		421,673				25.0
Selling, General and Administrative Expenses	134,542			25.1		139,255			25.3		395,459			24.1		410,020				24.3
Net (Loss) Gain from Dispositions of Assets	(515		)	(0.1	)	213			—		1,829			0.1		6,229				0.4
Operating (Loss) Profit	(39,449		)	(7.4	)	(1,349		)	(0.2	)	(6,092		)	(0.4	)	17,882				1.1
Non-operating Income	1,032			0.2		1,017			0.2		4,703			0.3		5,294				0.3
Interest Expense	11,501			2.1		15,581			2.8		36,488			2.2		37,886				2.2
Loss From Continuing Operations Before Income Taxes and Cumulative Effect of Change in Accounting Principle	(49,918		)	(9.3	)	(15,913		)	(2.9	)	(37,877		)	(2.3	)	(14,710			)	(0.9	)
Income Tax Benefit	(21,837		)	43.7	(1)	(5,200		)	32.7	(1)	(17,212		)	45.4	(1)	(4,600			)	49.9	(1)
Net Loss From Continuing Operations Before Cumulative Effect of Change in Accounting Principle	(28,081		)	(5.2	)	(10,713		)	(1.9	)	(20,665		)	(1.3	)	(10,110			)	(0.6	)
Discontinued Operations, Net of Tax	91			—		(205		)	—		29			—		(338			)	—
Cumulative Effect of Change in Accounting Principle, Net of Tax	—			—		4			—		—			—		183				—
Net Loss	(27,990		)	(5.2	)	(10,914		)	(2.0	)	(20,636		)	(1.3	)	(10,265			)	(0.6	)
Retained Earnings, beginning of period	462,615					474,858					463,797					481,926
Cumulative effect adjustment for adoption of FIN 48	—					—					(155		)			—
Cash Dividends	(3,510		)			(3,691		)			(10,630		)			(11,207			)
Effect of Stock Options	—					(209		)			(1,261		)			(285			)
Dividend Reinvestment Plan	(27		)			(31		)			(27		)			(156			)
Retained Earnings, end of period	$	431,088				$	460,013				$	431,088				$		460,013
Basic and Diluted Loss per Share:
Weighted Average Shares Outstanding	51,844					54,313					52,206					54,264
Net Loss From Continuing Operations Before Cumulative Effect of Change in Accounting Principle	$	(0.54	)			$	(0.20	)			$	(0.40	)			$		(0.19	)
Discontinued Operations, Net of Tax	—					—					—					—
Cumulative Effect of Change in Accounting Principle, Net of Tax	—					—					—					—
Loss per Share	$	(0.54	)			$	(0.20	)			$	(0.40	)			$		(0.19	)
Cash Dividends per Share	$	0.0675				$	0.0675				$	0.2025				$		0.2025

(1)  As a percentage of loss from continuing operations before income taxes and cumulative effect of change in accounting principle.

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

	November 3, 2007			February 3, 2007			October 28, 2006
Assets
Current Assets:
Cash and cash equivalents	$	26,200		$	21,884		$	22,492
Accounts receivable, net	28,325			29,582			29,488
Merchandise inventories	589,916			607,042			645,394
Prepaid expenses	27,894			39,264			25,151
Deferred income taxes	28,669			—			—
Other	65,751			70,368			59,001
Total Current Assets	766,755			768,140			781,526
Property and Equipment - at cost:
Land	251,705			251,705			256,865
Buildings and improvements	927,134			929,225			919,543
Furniture, fixtures and equipment	697,660			684,042			667,101
Construction in progress	5,894			3,464			17,896
	1,882,393			1,868,436			1,861,405
Less accumulated depreciation and amortization	1,019,633			962,189			952,867
Property and Equipment - net	862,760			906,247			908,538
Deferred income taxes	—			24,828			9,576
Other	23,472			67,984			69,971
Total Assets	$	1,652,987		$	1,767,199		$	1,769,611
Liabilities and Stockholders’ Equity
Current Liabilities:
Accounts payable	$	226,535		$	265,489		$	308,683
Trade payable program liability	21,596			13,990			13,284
Accrued expenses	276,429			292,280			267,218
Deferred income taxes	—			28,931			18,909
Current maturities of long-term debt and obligations under capital leases	3,445			3,490			2,686
Total Current Liabilities	528,005			604,180			610,780
Long-term debt and obligations under capital leases, less current maturities	549,751			535,031			524,426
Other long-term liabilities	78,930			60,233			58,762
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	294,911			289,384			289,718
Retained earnings	431,088			463,797			460,013
Accumulated other comprehensive loss	(11,299		)	(9,380		)	(4,209		)
Less cost of shares in treasury - 14,633,938 shares, 12,427,687 shares and 12,015,192 shares	227,692			185,339			179,172
Less cost of shares in benefits trust - 2,195,270 shares	59,264			59,264			59,264
Total Stockholders’ Equity	496,301			567,755			575,643
Total Liabilities and Stockholders’ Equity	$	1,652,987		$	1,767,199		$	1,769,611

THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES	(UNAUDITED)
CONSOLIDATED STATEMENTS OF CASH FLOWS	(dollar amounts in thousands)

Thirty-nine weeks ended	November 3, 2007			October 28, 2006
				(as restated)
Cash Flows from Operating Activities:
Net Loss	$	(20,636	)	$	(10,265	)
Adjustments to reconcile net loss to net cash provided by continuing operations:
Net (earnings) loss from discontinued operations	(29		)	338
Depreciation and amortization	62,416			62,546
Inventory impairment	32,803			—
Cumulative effect of change in accounting principle, net of tax	—			(183		)
Accretion of asset disposal obligation	194			203
Loss on defeasance of convertible debt	—			755
Stock compensation expense	8,529			2,611
Cancellation of vested stock options	—			(1,056		)
Deferred income taxes	(11,812		)	(7,366		)
Gain from dispositions of assets & insurance recoveries	(1,829		)	(6,229		)
Change in fair value of derivatives	3,665			—
Loss from asset impairment	10,963			550
Excess tax benefits from stock based awards	(687		)	(37		)
Increase in cash surrender value of life insurance policies	(5,423		)	(1,593		)
Changes in Operating Assets and Liabilities:
Decrease in accounts receivable, prepaid expenses and other	32,004			50,150
Increase in merchandise inventories	(15,677		)	(29,102		)
(Decrease) increase in accounts payable	(38,954		)	46,743
Decrease in accrued expenses	(5,911		)	(24,998		)
Increase in other long-term liabilities	682			1,281
Net cash provided by continuing operations	50,298			84,348
Net cash provided by (used in) discontinued operations	25			(367		)
Net Cash Provided by Operating Activities	50,323			83,981
Cash Flows from Investing Activities:
Cash paid for property and equipment	(33,506		)	(25,092		)
Proceeds from dispositions of assets	2,376			1,598
Proceeds from sales of assets held for disposal	—			6,981
Proceeds (payments) on life insurance policies	26,714			(24,669		)
Net Cash Used in Investing Activities	(4,416		)	(41,182		)
Cash Flows from Financing Activities:
Borrowings under line of credit agreement	436,584			434,020
Payments under line of credit agreement	(419,267		)	(494,062		)
Excess tax benefits from stock based awards	687			37
Borrowings on trade payable program liability	87,578			54,083
Payments on trade payable program liability	(79,972		)	(51,955		)
Proceeds from term loan	—			121,000
Reduction of long-term debt	(2,432		)	(2,259		)
Defeasance of convertible debt	—			(119,000		)
Payments on capital lease obligations	(210		)	(167		)
Dividends paid	(10,630		)	(11,207		)
Repurchase of common stock	(58,152		)	—
Proceeds from exercise of stock options	3,632			242
Proceeds from dividend reinvestment plan	591			680
Net Cash Used in Financing Activities	(41,591		)	(68,588		)
Net Increase (Decrease) in Cash and Cash Equivalents	4,316			(25,789		)
Cash and Cash Equivalents at Beginning of Period	21,884			48,281
Cash and Cash Equivalents at End of Period	$	26,200		$	22,492
Supplemental Disclosure of Cash Flow Information:
Cash paid for interest, net of amounts capitalized	$	30,100		$	34,246
Cash paid for income taxes	$	214		$	730
Non-cash investing activities:
Accrued purchases of property and equipment	$	258		$	757
Non-cash financing activities:
Equipment capital leases	$	—		$	84

THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES	(UNAUDITED)
ADDITIONAL INFORMATION	(dollar amounts in thousands)

	Thirteen weeks ended						Thirty-nine weeks ended
	November 3, 2007			October 28, 2006			November  3, 2007			October 28, 2006
Capital expenditures	$	11,728		$	9,726		$	30,073		$	25,849
Depreciation and amortization	$	20,727		$	21,127		$	62,416		$	62,546
Non-operating income:
Net rental revenue	$	724		$	580		$	1,849		$	1,750
Investment income	322			471			2,899			3,750
Other income (expense)	(14		)	(34		)	(45		)	(206		)
Total	$	1,032		$	1,017		$	4,703		$	5,294
Comparable sales percentages:
Merchandise	-4.1		%	0.2		%	-4.1		%	-0.1		%
Service	2.6		%	3.9		%	2.6		%	1.0		%
Total	-2.9		%	0.8		%	-2.9		%	0.1		%
Total square feet of retail space (including service centers)							12,142,100			12,167,089
Total Store Count							592			593
Sales and Gross Profit by Line of Business (A):
Retail Sales	$	297,681		$	323,522		$	934,849		$	1,005,033
Service Center Revenue	237,695			227,327			705,429			680,982
Total Revenues	$	535,376		$	550,849		$	1,640,278		$	1,686,015
Gross Profit from Retail Sales	$	41,645		$	93,554		$	224,529		$	283,322
Gross Profit from Service Center Revenue	53,963			44,139			163,009			138,351
Total Gross Profit	$	95,608		$	137,693		$	387,538		$	421,673
Comparable Sales Percentages (A):
Retail Sales	-8.1		%	-1.8		%	-7.3		%	-1.7		%
Service Center Revenue	4.5		%	4.8		%	3.4		%	2.9		%
Total Revenues	-2.9		%	0.8		%	-2.9		%	0.1		%
Gross Profit Percentage by Line of Business (A):
Gross Profit Percentage from Retail Sales	14.0		%	28.9		%	24.0		%	28.2		%
Gross Profit Percentage from Service Center Revenue	22.7		%	19.4		%	23.1		%	20.3		%
Total Gross Profit Percentage	17.9		%	25.0		%	23.6		%	25.0		%

(A)  Retail Sales include DIY and Commercial sales. Service Center Revenue includes revenue from labor and installed parts and tires.

THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES	(UNAUDITED)
ADDITIONAL INFORMATION CONTINUED	(dollar amounts in thousands)

Adjustments

During the thirteen weeks ended November 3, 2007 and October 28, 2006, the Company’s operating performance was impacted by certain events.  The Company believes that the adjustment of certain  of its financial statement line items to eliminate the impact of such events provides a useful indicator of the Company’s operating performance.  Such adjusted line items are not a measurement of operating performance under generally accepted accounting principles (GAAP) and cannot be compared to similarly captioned information reported by other companies.

The adjustments for the thirteen weeks ended November 3, 2007 exclude the (A) $32.8 million inventory impairment, (B) $6.2 million of legal settlements and reserves, (C) $3.1 million for executive severance, (D) a $3.8 million benefit payment from a company owned life insurance policy on a former executive and (E) a $10.9 million asset impairment for store closures.  The adjustment for the thirteen weeks ended October 28, 2006 excludes a $4.6 million legal settlement.

The table below illustrates the effect of the above adjustments on the thirteen week periods ended November 3, 2007 and October 28, 2006 (presented in GAAP and Line of Business format).

STATEMENTS OF OPERATIONS

GAAP Format

	Thirteen weeks ended										Thirteen weeks ended
	November 3, 2007										November 3, 2007
	ACTUAL					ADJUSTMENTS					AS ADJUSTED
				%					%					%
	Amount			Sales		Amount			Sales		Amount			Sales
Gross Profit from Merchandise Sales	$	85,327		19.6		$	40,672		9.3		$	125,999		28.9
Gross Profit from Service Revenue	10,281			10.3		1,147			1.2		11,428			11.5
Total Gross Profit	95,608			17.9		41,819			7.8		137,427			25.7
Selling, General and Administrative Expenses	134,542			25.1		(7,472		)	(1.4	)	127,070			23.7
Net (Loss) Gain from Dispositions of Assets	(515		)	(0.1	)	—			—		(515		)	(0.1	)
Operating (Loss) Income	$	(39,449	)	(7.3	)	$	49,291		9.1		$	9,842		1.8

	Thirteen weeks ended										Thirteen weeks ended
	October 28, 2006										October 28, 2006
	ACTUAL					ADJUSTMENTS					AS ADJUSTED
				%					%				%
	Amount			Sales		Amount			Sales		Amount		Sales
Gross Profit from Merchandise Sales	$	130,686		28.8		$	—		—		$	130,686	28.8
Gross Profit from Service Revenue	7,007			7.2		—			—		7,007		7.2
Total Gross Profit	137,693			25.0		—			—		137,693		25.0
Selling, General and Administrative Expenses	139,255			25.3		(4,550		)	(0.8	)	134,705		24.5
Net Gain from Dispositions of Assets	213			—		—			—		213		—
Operating (Loss) Income	$	(1,349	)	(0.2	)	$	4,550		0.8		$	3,201	0.6

Line of Business Format

	Thirteen weeks ended										Thirteen weeks ended
	November 3, 2007										November 3, 2007
	ACTUAL					ADJUSTMENTS					AS ADJUSTED
				%					%					%
	Amount			Sales		Amount			Sales		Amount			Sales
Gross Profit from Retail Sales	$	41,645		14.0		$	40,672		13.7		$	82,317		27.7
Gross Profit from Service Center Revenue	53,963			22.7		1,147			0.5		55,110			23.2
Total Gross Profit	95,608			17.9		41,819			7.8		137,427			25.7
Selling, General and Administrative Expenses	134,542			25.1		(7,472		)	(1.4	)	127,070			23.7
Net (Loss) Gain from Dispositions of Assets	(515		)	(0.1	)	—			—		(515		)	(0.1	)
Operating (Loss) Income	$	(39,449	)	(7.3	)	$	49,291		9.1		$	9,842		1.8

	Thirteen weeks ended										Thirteen weeks ended
	October 28, 2006										October 28, 2006
	ACTUAL					ADJUSTMENTS					AS ADJUSTED
				%					%				%
	Amount			Sales		Amount			Sales		Amount		Sales
Gross Profit from Retail Sales	$	93,554		28.9		$	—		—		$	93,554	28.9
Gross Profit from Service Center Revenue	44,139			19.4		—			—		44,139		19.4
Total Gross Profit	137,693			25.0		—			—		137,693		25.0
Selling, General and Administrative Expenses	139,255			25.3		(4,550		)	(0.8	)	134,705		24.5
Net Gain from Dispositions of Assets	213			—		—			—		213		—
Operating (Loss) Income	$	(1,349	)	(0.2	)	$	4,550		0.8		$	3,201	0.6