Exhibit 99.2
Pep Boys Financial Highlights
Thirteen weeks ended |
| October 30, 2010 |
| October 31, 2009 |
| ||
|
|
|
|
|
| ||
Total revenues |
| $ | 496,364,000 |
| $ | 472,643,000 |
|
|
|
|
|
|
| ||
Net earnings |
| $ | 5,718,000 |
| $ | 2,124,000 |
|
|
|
|
|
|
| ||
Basic earnings per share: |
|
|
|
|
| ||
Average shares |
| 52,717,000 |
| 52,419,000 |
| ||
|
|
|
|
|
| ||
Basic earnings per share: |
| $ | 0.11 |
| $ | 0.04 |
|
|
|
|
|
|
| ||
Diluted earnings per share: |
|
|
|
|
| ||
Average shares |
| 53,164,000 |
| 52,786,000 |
| ||
|
|
|
|
|
| ||
Diluted earnings per share: |
| $ | 0.11 |
| $ | 0.04 |
|
Thirty-nine weeks ended |
| October 30, 2010 |
| October 31, 2009 |
| ||
|
|
|
|
|
| ||
Total revenues |
| $ | 1,511,252,000 |
| $ | 1,458,042,000 |
|
|
|
|
|
|
| ||
Net earnings |
| $ | 28,266,000 |
| $ | 20,768,000 |
|
|
|
|
|
|
| ||
Basic earnings per share: |
|
|
|
|
| ||
Average shares |
| 52,637,000 |
| 52,379,000 |
| ||
|
|
|
|
|
| ||
Basic earnings per share: |
| $ | 0.53 |
| $ | 0.40 |
|
|
|
|
|
|
| ||
Diluted earnings per share: |
|
|
|
|
| ||
Average shares |
| 53,071,000 |
| 52,621,000 |
| ||
|
|
|
|
|
| ||
Diluted earnings per share: |
| $ | 0.53 |
| $ | 0.40 |
|
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 |
| ||||||||||||||||
|
| October 30, 2010 |
| October 31, 2009 |
| October 30, 2010 |
| October 31, 2009 |
| ||||||||||||
|
|
|
| % |
|
|
| % |
|
|
| % |
|
|
| % |
| ||||
|
| Amount |
| Sales |
| Amount |
| Sales |
| Amount |
| Sales |
| Amount |
| Sales |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Merchandise sales |
| $ | 398,368 |
| 80.3 |
| $ | 378,860 |
| 80.2 |
| $ | 1,213,736 |
| 80.3 |
| $ | 1,169,108 |
| 80.2 |
|
Service revenue |
| 97,996 |
| 19.7 |
| 93,783 |
| 19.8 |
| 297,516 |
| 19.7 |
| 288,934 |
| 19.8 |
| ||||
Total revenues |
| 496,364 |
| 100.0 |
| 472,643 |
| 100.0 |
| 1,511,252 |
| 100.0 |
| 1,458,042 |
| 100.0 |
| ||||
Costs of merchandise sales |
| 279,690 |
| 70.2 |
| 269,604 |
| 71.2 |
| 845,848 |
| 69.7 |
| 826,429 |
| 70.7 |
| ||||
Costs of service revenue |
| 90,818 |
| 92.7 |
| 84,770 |
| 90.4 |
| 267,452 |
| 89.9 |
| 255,553 |
| 88.4 |
| ||||
Total costs of revenues |
| 370,508 |
| 74.6 |
| 354,374 |
| 75.0 |
| 1,113,300 |
| 73.7 |
| 1,081,982 |
| 74.2 |
| ||||
Gross profit from merchandise sales |
| 118,678 |
| 29.8 |
| 109,256 |
| 28.8 |
| 367,888 |
| 30.3 |
| 342,679 |
| 29.3 |
| ||||
Gross profit from service revenue |
| 7,178 |
| 7.3 |
| 9,013 |
| 9.6 |
| 30,064 |
| 10.1 |
| 33,381 |
| 11.6 |
| ||||
Total gross profit |
| 125,856 |
| 25.4 |
| 118,269 |
| 25.0 |
| 397,952 |
| 26.3 |
| 376,060 |
| 25.8 |
| ||||
Selling, general and administrative expenses |
| 110,840 |
| 22.3 |
| 109,545 |
| 23.2 |
| 335,580 |
| 22.2 |
| 327,080 |
| 22.4 |
| ||||
Net gain from dispositions of assets |
| 109 |
| — |
| 1,332 |
| 0.3 |
| 2,603 |
| 0.2 |
| 1,319 |
| 0.1 |
| ||||
Operating profit |
| 15,125 |
| 3.0 |
| 10,056 |
| 2.1 |
| 64,975 |
| 4.3 |
| 50,299 |
| 3.4 |
| ||||
Non-operating income |
| 650 |
| 0.1 |
| 724 |
| 0.2 |
| 1,855 |
| 0.1 |
| 1,666 |
| 0.1 |
| ||||
Interest expense |
| 6,630 |
| 1.3 |
| 6,922 |
| 1.5 |
| 19,881 |
| 1.3 |
| 15,324 |
| 1.1 |
| ||||
Earnings from continuing operations before income taxes |
| 9,145 |
| 1.8 |
| 3,858 |
| 0.8 |
| 46,949 |
| 3.1 |
| 36,641 |
| 2.5 |
| ||||
Income tax expense |
| 3,471 |
| 38.0 | (1) | 1,501 |
| 38.9 | (1) | 18,316 |
| 39.0 | (1) | 15,363 |
| 41.9 | (1) | ||||
Earnings from continuing operations |
| 5,674 |
| 1.1 |
| 2,357 |
| 0.5 |
| 28,633 |
| 1.9 |
| 21,278 |
| 1.5 |
| ||||
Income (loss) from discontinued operations, net of tax |
| 44 |
| — |
| (233 | ) | — |
| (367 | ) | — |
| (510 | ) | — |
| ||||
Net earnings |
| 5,718 |
| 1.2 |
| 2,124 |
| 0.4 |
| 28,266 |
| 1.9 |
| 20,768 |
| 1.4 |
| ||||
Retained earnings, beginning of period |
| 393,245 |
|
|
| 373,963 |
|
|
| 374,836 |
|
|
| 358,670 |
|
|
| ||||
Cash dividends |
| (1,581 | ) |
|
| (1,557 | ) |
|
| (4,741 | ) |
|
| (4,709 | ) |
|
| ||||
Shares issued and other |
| (282 | ) |
|
| (69 | ) |
|
| (1,261 | ) |
|
| (268 | ) |
|
| ||||
Retained earnings, end of period |
| $ | 397,100 |
|
|
| $ | 374,461 |
|
|
| $ | 397,100 |
|
|
| $ | 374,461 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Basic earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Earnings from continuing operations |
| $ | 0.11 |
|
|
| $ | 0.05 |
|
|
| $ | 0.54 |
|
|
| $ | 0.41 |
|
|
|
Discontinued operations, net of tax |
| — |
|
|
| (0.01 | ) |
|
| (0.01 | ) |
|
| (0.01 | ) |
|
| ||||
Basic earnings per share |
| $ | 0.11 |
|
|
| $ | 0.04 |
|
|
| $ | 0.53 |
|
|
| $ | 0.40 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Diluted earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Earnings from continuing operations |
| $ | 0.11 |
|
|
| $ | 0.04 |
|
|
| $ | 0.54 |
|
|
| $ | 0.40 |
|
|
|
Discontinued operations, net of tax |
| — |
|
|
| — |
|
|
| (0.01 | ) |
|
| — |
|
|
| ||||
Diluted earnings per share |
| $ | 0.11 |
|
|
| $ | 0.04 |
|
|
| $ | 0.53 |
|
|
| $ | 0.40 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Cash dividends per share |
| $ | 0.03 |
|
|
| $ | 0.03 |
|
|
| $ | 0.09 |
|
|
| $ | 0.09 |
|
|
|
(1) As a percentage of earnings from continuing operations before income taxes
THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES |
| (UNAUDITED) |
CONSOLIDATED BALANCE SHEETS
(dollar amounts in thousands)
|
| October 30, 2010 |
| January 30, 2010 |
| October 31, 2009 |
| |||
|
|
|
|
|
|
|
| |||
Assets |
|
|
|
|
|
|
| |||
Current assets: |
|
|
|
|
|
|
| |||
Cash and cash equivalents |
| $ | 107,253 |
| $ | 39,326 |
| $ | 40,843 |
|
Accounts receivable, less allowance for uncollectible accounts of $1,593; $1,488 and $1,853 |
| 20,469 |
| 22,983 |
| 20,461 |
| |||
Merchandise inventories |
| 568,592 |
| 559,118 |
| 571,789 |
| |||
Prepaid expenses |
| 16,647 |
| 24,784 |
| 14,946 |
| |||
Other current assets |
| 48,350 |
| 65,428 |
| 50,205 |
| |||
Assets held for disposal |
| 1,378 |
| 4,438 |
| 6,616 |
| |||
Total current assets |
| 762,689 |
| 716,077 |
| 704,860 |
| |||
Property and equipment - net |
| 691,833 |
| 706,450 |
| 708,972 |
| |||
Deferred income taxes |
| 54,461 |
| 58,171 |
| 72,970 |
| |||
Other long-term assets |
| 22,017 |
| 18,388 |
| 20,118 |
| |||
Total assets |
| $ | 1,531,000 |
| $ | 1,499,086 |
| $ | 1,506,920 |
|
|
|
|
|
|
|
|
| |||
Liabilities and stockholders’ equity |
|
|
|
|
|
|
| |||
Current liabilities: |
|
| �� |
|
|
|
| |||
Accounts payable |
| $ | 207,838 |
| $ | 202,974 |
| $ | 219,205 |
|
Trade payable program liability |
| 57,017 |
| 34,099 |
| 26,459 |
| |||
Accrued expenses |
| 224,262 |
| 242,416 |
| 231,468 |
| |||
Deferred income taxes |
| 37,461 |
| 29,984 |
| 39,170 |
| |||
Current maturities of long-term debt |
| 1,079 |
| 1,079 |
| 1,079 |
| |||
Total current liabilities |
| 527,657 |
| 510,552 |
| 517,381 |
| |||
|
|
|
|
|
|
|
| |||
Long-term debt less current maturities |
| 305,392 |
| 306,201 |
| 306,471 |
| |||
Other long-term liabilities |
| 73,127 |
| 73,933 |
| 72,164 |
| |||
Deferred gain from asset sales |
| 156,026 |
| 165,105 |
| 168,243 |
| |||
|
|
|
|
|
|
|
| |||
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 |
| 294,781 |
| 293,810 |
| 293,330 |
| |||
Retained earnings |
| 397,100 |
| 374,836 |
| 374,461 |
| |||
Accumulated other comprehensive loss |
| (18,720 | ) | (17,691 | ) | (16,739 | ) | |||
Less cost of shares in treasury - 16,041,930 shares, 16,164,074 shares and 14,014,018 shares |
| 272,920 |
| 276,217 |
| 217,684 |
| |||
Less cost of shares in benefits trust - 2,195,270 shares |
| — |
| — |
| 59,264 |
| |||
Total stockholders’ equity |
| 468,798 |
| 443,295 |
| 442,661 |
| |||
Total liabilities and stockholders’ equity |
| $ | 1,531,000 |
| $ | 1,499,086 |
| $ | 1,506,920 |
|
THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES |
| (UNAUDITED) |
CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollar amounts in thousands)
Thirty-nine weeks ended |
| October 30, 2010 |
| October 31, 2009 |
| ||
Cash flows from operating activities: |
|
|
|
|
| ||
Net earnings |
| $ | 28,266 |
| $ | 20,768 |
|
Adjustments to reconcile net earnings to net cash provided by continuing operations: |
|
|
|
|
| ||
Loss from discontinued operations, net of tax |
| 367 |
| 510 |
| ||
Depreciation and amortization |
| 55,260 |
| 53,248 |
| ||
Amortization of deferred gain from asset sales |
| (9,451 | ) | (9,186 | ) | ||
Stock compensation expense |
| 2,748 |
| 1,930 |
| ||
Gain on debt retirement |
| — |
| (6,248 | ) | ||
Deferred income taxes |
| 11,795 |
| 7,270 |
| ||
Net gain from disposition of assets |
| (2,603 | ) | (1,319 | ) | ||
Loss from asset impairment |
| 970 |
| 3,117 |
| ||
Other |
| 52 |
| 267 |
| ||
Changes in operating assets and liabilities: |
|
|
|
|
| ||
Decrease in accounts receivable, prepaid expenses and other |
| 29,382 |
| 33,241 |
| ||
Increase in merchandise inventories |
| (9,474 | ) | (5,806 | ) | ||
Increase in accounts payable |
| 4,864 |
| 6,455 |
| ||
Decrease in accrued expenses |
| (17,993 | ) | (23,922 | ) | ||
(Decrease) increase in other long-term liabilities |
| (2,122 | ) | 2,230 |
| ||
Net cash provided by continuing operations |
| 92,061 |
| 82,555 |
| ||
Net cash used in discontinued operations |
| (1,263 | ) | (594 | ) | ||
Net cash provided by operating activities |
| 90,798 |
| 81,961 |
| ||
|
|
|
|
|
| ||
Cash flows from investing activities: |
|
|
|
|
| ||
Cash paid for property and equipment |
| (42,976 | ) | (27,775 | ) | ||
Proceeds from dispositions of assets |
| 6,713 |
| 12,093 |
| ||
Acquisition of Florida Tire, Inc. |
| (144 | ) | (2,610 | ) | ||
Collateral investment |
| (5,000 | ) | — |
| ||
Other |
| — |
| (500 | ) | ||
Net cash used in continuing operations |
| (41,407 | ) | (18,792 | ) | ||
Net cash provided by discontinued operations |
| 569 |
| 1,762 |
| ||
Net cash used in investing activities |
| (40,838 | ) | (17,030 | ) | ||
|
|
|
|
|
| ||
Cash flows from financing activities: |
|
|
|
|
| ||
Borrowings under line of credit agreements |
| 20,482 |
| 244,011 |
| ||
Payments under line of credit agreements |
| (20,482 | ) | (267,873 | ) | ||
Borrowings on trade payable program liability |
| 247,346 |
| 122,914 |
| ||
Payments on trade payable program liability |
| (224,428 | ) | (128,385 | ) | ||
Debt payments |
| (809 | ) | (11,720 | ) | ||
Dividends paid |
| (4,741 | ) | (4,709 | ) | ||
Other |
| 599 |
| 342 |
| ||
Net cash provided by (used in) financing activities |
| 17,967 |
| (45,420 | ) | ||
Net increase in cash and cash equivalents |
| 67,927 |
| 19,511 |
| ||
Cash and cash equivalents at beginning of period |
| 39,326 |
| 21,332 |
| ||
Cash and cash equivalents at end of period |
| $ | 107,253 |
| $ | 40,843 |
|
|
|
|
|
|
| ||
Supplemental cash flow information: |
|
|
|
|
| ||
Cash paid for income taxes |
| $ | 882 |
| $ | 4,046 |
|
Cash paid for interest |
| $ | 14,412 |
| $ | 15,492 |
|
Accrued purchases of property and equipment |
| $ | 1,280 |
| $ | 1,575 |
|
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 |
| ||||||||
|
|
|
|
| October 30, |
| October 31, |
| October 30, |
| October 31, |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
(a) | Earnings from continuing operations |
|
|
| $ | 5,674 |
| $ | 2,357 |
| $ | 28,633 |
| $ | 21,278 |
|
| Income (loss) from discontinued operations, net of tax |
|
|
| 44 |
| (233 | ) | (367 | ) | (510 | ) | ||||
| Net earnings |
|
|
| $ | 5,718 |
| $ | 2,124 |
| $ | 28,266 |
| $ | 20,768 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
(b) | Basic average number of common shares outstanding during period |
|
|
| 52,717 |
| 52,419 |
| 52,637 |
| 52,379 |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
| Common shares assumed issued upon exercise of dilutive stock options, net of assumed repurchase, at the average market price |
|
|
| 447 |
| 367 |
| 434 |
| 242 |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
(c) | Diluted average number of common shares assumed outstanding during period |
|
|
| 53,164 |
| 52,786 |
| 53,071 |
| 52,621 |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
| Basic earnings per share: |
|
|
|
|
|
|
|
|
|
|
| ||||
| Earnings from continuing operations |
| (a) / (b) |
| $ | 0.11 |
| $ | 0.05 |
| $ | 0.54 |
| $ | 0.41 |
|
| Discontinued operations, net of tax |
|
|
| — |
| (0.01 | ) | (0.01 | ) | (0.01 | ) | ||||
| Basic earnings per share |
|
|
| $ | 0.11 |
| $ | 0.04 |
| $ | 0.53 |
| $ | 0.40 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
| Diluted earnings per share: |
|
|
|
|
|
|
|
|
|
|
| ||||
| Earnings from continuing operations |
| (a) / (c) |
| $ | 0.11 |
| $ | 0.04 |
| $ | 0.54 |
| $ | 0.40 |
|
| Discontinued operations, net of tax |
|
|
| — |
| — |
| (0.01 | ) | — |
| ||||
| Diluted earnings per share |
|
|
| $ | 0.11 |
| $ | 0.04 |
| $ | 0.53 |
| $ | 0.40 |
|
THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES
ADDITIONAL INFORMATION |
| (dollar amounts in thousands) |
|
| Thirteen weeks ended |
| Thirty-nine weeks ended |
| ||||||||
|
| October 30, 2010 |
| October 31, 2009 |
| October 30, 2010 |
| October 31, 2009 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Capital expenditures |
| $ | 15,152 |
| $ | 10,294 |
| $ | 42,976 |
| $ | 27,775 |
|
|
|
|
|
|
|
|
|
|
| ||||
Depreciation and amortization |
| $ | 18,604 |
| $ | 17,910 |
| $ | 55,260 |
| $ | 53,248 |
|
|
|
|
|
|
|
|
|
|
| ||||
Non-operating income: |
|
|
|
|
|
|
|
|
| ||||
Net rental revenue |
| $ | 563 |
| $ | 463 |
| $ | 1,649 |
| $ | 1,252 |
|
Investment income |
| 51 |
| 47 |
| 163 |
| 173 |
| ||||
Other income |
| 36 |
| 214 |
| 43 |
| 241 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Total |
| $ | 650 |
| $ | 724 |
| $ | 1,855 |
| $ | 1,666 |
|
|
|
|
|
|
|
|
|
|
| ||||
Comparable sales percentages: |
|
|
|
|
|
|
|
|
| ||||
Merchandise |
| 3.9 | % | -0.1 | % | 2.7 | % | -1.8 | % | ||||
Service |
| 1.9 | % | 8.9 | % | 0.4 | % | 5.9 | % | ||||
Total |
| 3.5 | % | 1.6 | % | 2.2 | % | -0.4 | % | ||||
|
|
|
|
|
|
|
|
|
| ||||
Total square feet of retail space (including service centers) |
|
|
|
|
| 11,812,000 |
| 11,639,000 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Total store count |
|
|
|
|
| 602 |
| 581 |
| ||||
|
|
|
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Sales and gross profit by line of business (A): |
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Retail sales |
| $ | 256,862 |
| $ | 246,275 |
| $ | 795,373 |
| 770,121 |
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Service center revenue |
| 239,502 |
| 226,368 |
| 715,879 |
| 687,921 |
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Total revenues |
| $ | 496,364 |
| $ | 472,643 |
| $ | 1,511,252 |
| $ | 1,458,042 |
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Gross profit from retail sales |
| $ | 73,954 |
| $ | 65,846 |
| $ | 232,538 |
| 210,147 |
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Gross profit from service center revenue |
| 51,902 |
| 52,423 |
| 165,414 |
| 165,913 |
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Total gross profit |
| $ | 125,856 |
| $ | 118,269 |
| $ | 397,952 |
| $ | 376,060 |
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Comparable sales percentages (A): |
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Retail sales |
| 4.0 | % | -2.9 | % | 3.0 | % | -4.1 | % | ||||
Service center revenue |
| 3.0 | % | 7.0 | % | 1.3 | % | 4.1 | % | ||||
Total revenues |
| 3.5 | % | 1.6 | % | 2.2 | % | -0.4 | % | ||||
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Gross profit percentage by line of business (A): |
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Gross profit percentage from retail sales |
| 28.8 | % | 26.7 | % | 29.2 | % | 27.3 | % | ||||
Gross profit percentage from service center revenue |
| 21.7 | % | 23.2 | % | 23.1 | % | 24.1 | % | ||||
Total gross profit percentage |
| 25.4 | % | 25.0 | % | 26.3 | % | 25.8 | % |
(A) Retail sales include DIY and commercial sales. Service center revenue includes revenue from labor and installed parts and tires.