Pep Boys Manny Moe & Jack (PBY) 8-K Pep Boys Reports Third Quarter 2010 Results

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, 2010		October 31, 2009			October 30, 2010			October 31, 2009
(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
Sales and gross profit by line of business (A):
Retail sales	$	256,862		$	246,275		$	795,373		770,121
Service center revenue	239,502			226,368			715,879			687,921
Total revenues	$	496,364		$	472,643		$	1,511,252		$	1,458,042
Gross profit from retail sales	$	73,954		$	65,846		$	232,538		210,147
Gross profit from service center revenue	51,902			52,423			165,414			165,913
Total gross profit	$	125,856		$	118,269		$	397,952		$	376,060
Comparable sales percentages (A):
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		%
Gross profit percentage by line of business (A):
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.