Exhibit 99.2
THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES |
| (UNAUDITED) |
CONSOLIDATED STATEMENTS OF OPERATIONS
(dollar amounts in thousands, except per share amounts)
|
| April 30, 2011 |
| May 1, 2010 |
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|
| % |
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| % |
| ||
Thirteen weeks ended |
| Amount |
| Sales |
| Amount |
| Sales |
| ||
|
|
|
|
|
|
|
|
|
| ||
Merchandise sales |
| $ | 408,627 |
| 79.6 |
| $ | 409,189 |
| 80.2 |
|
Service revenue |
| 104,913 |
| 20.4 |
| 100,844 |
| 19.8 |
| ||
Total revenues |
| 513,540 |
| 100.0 |
| 510,033 |
| 100.0 |
| ||
Costs of merchandise sales |
| 285,329 |
| 69.8 |
| 283,796 |
| 69.4 |
| ||
Costs of service revenue |
| 93,089 |
| 88.7 |
| 88,642 |
| 87.9 |
| ||
Total costs of revenues |
| 378,418 |
| 73.7 |
| 372,438 |
| 73.0 |
| ||
Gross profit from merchandise sales |
| 123,298 |
| 30.2 |
| 125,393 |
| 30.6 |
| ||
Gross profit from service revenue |
| 11,824 |
| 11.3 |
| 12,202 |
| 12.1 |
| ||
Total gross profit |
| 135,122 |
| 26.3 |
| 137,595 |
| 27.0 |
| ||
Selling, general and administrative expenses |
| 108,900 |
| 21.2 |
| 111,632 |
| 21.9 |
| ||
Net gain from dispositions of assets |
| 89 |
| — |
| 45 |
| — |
| ||
Operating profit |
| 26,311 |
| 5.1 |
| 26,008 |
| 5.1 |
| ||
Non-operating income |
| 587 |
| 0.1 |
| 584 |
| 0.1 |
| ||
Interest expense |
| 6,497 |
| 1.3 |
| 6,608 |
| 1.3 |
| ||
Earnings from continuing operations before income taxes |
| 20,401 |
| 4.0 |
| 19,984 |
| 3.9 |
| ||
Income tax expense |
| 7,996 |
| 39.2 | (1) | 7,824 |
| 39.2 | (1) | ||
Earnings from continuing operations |
| 12,405 |
| 2.4 |
| 12,160 |
| 2.4 |
| ||
Loss from discontinued operations, net of tax |
| (37 | ) | — |
| (210 | ) | — |
| ||
Net earnings |
| 12,368 |
| 2.4 |
| 11,950 |
| 2.3 |
| ||
Retained earnings, beginning of period |
| 402,600 |
|
|
| 374,836 |
|
|
| ||
Cash dividends |
| (1,585 | ) |
|
| (1,579 | ) |
|
| ||
Shares issued and other |
| (667 | ) |
|
| (756 | ) |
|
| ||
Retained earnings, end of period |
| $ | 412,716 |
|
|
| $ | 384,451 |
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Basic earnings per share: |
|
|
|
|
|
|
|
|
| ||
Earnings from continuing operations |
| $ | 0.23 |
|
|
| $ | 0.23 |
|
|
|
Discontinued operations, net of tax |
| — |
|
|
| — |
|
|
| ||
Basic earnings per share |
| $ | 0.23 |
|
|
| $ | 0.23 |
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Diluted earnings per share: |
|
|
|
|
|
|
|
|
| ||
Earnings from continuing operations |
| $ | 0.23 |
|
|
| $ | 0.23 |
|
|
|
Discontinued operations, net of tax |
| — |
|
|
| — |
|
|
| ||
Diluted earnings per share |
| $ | 0.23 |
|
|
| $ | 0.23 |
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Cash dividends per share |
| $ | 0.03 |
|
|
| $ | 0.03 |
|
|
|
(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)
|
| April 30, 2011 |
| January 29, 2011 |
| May 1, 2010 |
| |||
|
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|
|
|
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|
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Assets |
|
|
|
|
|
|
| |||
Current assets: |
|
|
|
|
|
|
| |||
Cash and cash equivalents |
| $ | 100,374 |
| $ | 90,240 |
| $ | 87,806 |
|
Accounts receivable, less allowance for uncollectible accounts of $1,385; $1,551 and $1,752 |
| 19,460 |
| 19,540 |
| 20,277 |
| |||
Merchandise inventories |
| 578,272 |
| 564,402 |
| 561,351 |
| |||
Prepaid expenses |
| 26,225 |
| 28,542 |
| 24,510 |
| |||
Other current assets |
| 56,598 |
| 60,812 |
| 61,277 |
| |||
Total current assets |
| 780,929 |
| 763,536 |
| 755,221 |
| |||
Property and equipment - net |
| 696,090 |
| 700,981 |
| 699,439 |
| |||
Deferred income taxes |
| 62,851 |
| 66,019 |
| 57,440 |
| |||
Other long-term assets |
| 32,642 |
| 26,136 |
| 17,541 |
| |||
Total assets |
| $ | 1,572,512 |
| $ | 1,556,672 |
| $ | 1,529,641 |
|
|
|
|
|
|
|
|
| |||
Liabilities and stockholders’ equity |
|
|
|
|
|
|
| |||
Current liabilities: |
|
|
|
|
|
|
| |||
Accounts payable |
| $ | 231,663 |
| $ | 210,440 |
| $ | 218,472 |
|
Trade payable program liability |
| 53,060 |
| 56,287 |
| 34,273 |
| |||
Accrued expenses |
| 225,891 |
| 236,028 |
| 245,242 |
| |||
Deferred income taxes |
| 58,066 |
| 56,335 |
| 33,082 |
| |||
Current maturities of long-term debt |
| 1,079 |
| 1,079 |
| 1,079 |
| |||
Total current liabilities |
| 569,759 |
| 560,169 |
| 532,148 |
| |||
|
|
|
|
|
|
|
| |||
Long-term debt less current maturities |
| 294,852 |
| 295,122 |
| 305,931 |
| |||
Other long-term liabilities |
| 67,338 |
| 70,046 |
| 74,250 |
| |||
Deferred gain from asset sales |
| 149,732 |
| 152,875 |
| 162,328 |
| |||
|
|
|
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|
|
|
| |||
Stockholders’ equity: |
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|
|
|
|
|
| |||
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 |
| 294,984 |
| 295,361 |
| 293,363 |
| |||
Retained earnings |
| 412,716 |
| 402,600 |
| 384,451 |
| |||
Accumulated other comprehensive loss |
| (16,293 | ) | (17,028 | ) | (17,223 | ) | |||
Treasury stock, at cost - 15,901,648 shares and 15,971,910 shares and 16,088,014 shares |
| (269,133 | ) | (271,030 | ) | (274,164 | ) | |||
Total stockholders’ equity |
| 490,831 |
| 478,460 |
| 454,984 |
| |||
Total liabilities and stockholders’ equity |
| $ | 1,572,512 |
| $ | 1,556,672 |
| $ | 1,529,641 |
|
THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES |
| (UNAUDITED) |
CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollar amounts in thousands)
Thirteen weeks ended |
| April 30, 2011 |
| May 1, 2010 |
| ||
|
|
|
|
|
| ||
Cash flows from operating activities: |
|
|
|
|
| ||
Net earnings |
| $ | 12,368 |
| $ | 11,950 |
|
Adjustments to reconcile net earnings to net cash provided by continuing operations: |
|
|
|
|
| ||
Loss from discontinued operations, net of tax |
| 37 |
| 210 |
| ||
Depreciation and amortization |
| 19,884 |
| 18,214 |
| ||
Amortization of deferred gain from asset sales |
| (3,143 | ) | (3,148 | ) | ||
Stock compensation expense |
| 638 |
| 737 |
| ||
Deferred income taxes |
| 4,458 |
| 3,552 |
| ||
Net gain from disposition of assets |
| (89 | ) | (45 | ) | ||
Other |
| (63 | ) | (72 | ) | ||
Changes in assets and liabilities, net of the effects of acquisitions: |
|
|
|
|
| ||
Decrease in accounts receivable, prepaid expenses and other |
| 7,406 |
| 10,581 |
| ||
Increase in merchandise inventories |
| (13,323 | ) | (2,233 | ) | ||
Increase in accounts payable |
| 21,223 |
| 15,498 |
| ||
(Decrease) increase in accrued expenses |
| (8,242 | ) | 3,231 |
| ||
(Decrease) increase in other long-term liabilities |
| (2,458 | ) | 603 |
| ||
Net cash provided by continuing operations |
| 38,696 |
| 59,078 |
| ||
Net cash used in discontinued operations |
| (66 | ) | (324 | ) | ||
Net cash provided by operating activities |
| 38,630 |
| 58,754 |
| ||
|
|
|
|
|
| ||
Cash flows from investing activities: |
|
|
|
|
| ||
Capital expenditures |
| (18,123 | ) | (12,511 | ) | ||
Proceeds from dispositions of assets |
| 89 |
| 3,143 |
| ||
Premiums paid on life insurance policies |
| (741 | ) | (500 | ) | ||
Collateral investment |
| (4,763 | ) | 500 |
| ||
Other |
| (144 | ) | (144 | ) | ||
Net cash used in continuing operations |
| (23,682 | ) | (9,512 | ) | ||
Net cash provided by discontinued operations |
| — |
| 569 |
| ||
Net cash used in investing activities |
| (23,682 | ) | (8,943 | ) | ||
|
|
|
|
|
| ||
Cash flows from financing activities: |
|
|
|
|
| ||
Borrowings under line of credit agreements |
| 1,067 |
| 1,029 |
| ||
Payments under line of credit agreements |
| (1,067 | ) | (1,029 | ) | ||
Borrowings on trade payable program liability |
| 24,589 |
| 23,027 |
| ||
Payments on trade payable program liability |
| (27,816 | ) | (22,853 | ) | ||
Debt payments |
| (270 | ) | (270 | ) | ||
Dividends paid |
| (1,585 | ) | (1,579 | ) | ||
Other |
| 268 |
| 344 |
| ||
Net cash used in financing activities |
| (4,814 | ) | (1,331 | ) | ||
Net increase in cash and cash equivalents |
| 10,134 |
| 48,480 |
| ||
Cash and cash equivalents at beginning of period |
| 90,240 |
| 39,326 |
| ||
Cash and cash equivalents at end of period |
| $ | 100,374 |
| $ | 87,806 |
|
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|
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Supplemental cash flow information: |
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|
|
|
| ||
Cash paid for income taxes |
| $ | 57 |
| $ | 70 |
|
Cash paid for interest |
| $ | 2,885 |
| $ | 2,616 |
|
Accrued purchases of property and equipment |
| $ | 993 |
| $ | 1,302 |
|
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 |
| April 30, 2011 |
| May 1, 2010 |
| |||
|
|
|
|
|
| |||
(a) | Earnings from continuing operations |
| $ | 12,405 |
| $ | 12,160 |
|
| Loss from discontinued operations, net of tax |
| (37 | ) | (210 | ) | ||
|
|
|
|
|
|
| ||
| Net earnings |
| $ | 12,368 |
| $ | 11,950 |
|
|
|
|
|
|
|
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(b) | Basic average number of common shares outstanding during period |
| 52,881 |
| 52,526 |
| ||
|
|
|
|
|
|
| ||
| Common shares assumed issued upon exercise of dilutive stock options, net of assumed repurchase, at the average market price |
| 685 |
| 407 |
| ||
|
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(c) | Diluted average number of common shares assumed outstanding during period |
| 53,566 |
| 52,933 |
| ||
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|
|
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| Basic earnings per share: |
|
|
|
|
| ||
| Earnings from continuing operations | (a) / (b) | $ | 0.23 |
| $ | 0.23 |
|
| Discontinued operations, net of tax |
| — |
| — |
| ||
| Basic earnings per share |
| $ | 0.23 |
| $ | 0.23 |
|
|
|
|
|
|
|
| ||
| Diluted earnings per share: |
|
|
|
|
| ||
| Earnings from continuing operations | (a) / (c) | $ | 0.23 |
| $ | 0.23 |
|
| Discontinued operations, net of tax |
| — |
| — |
| ||
| Diluted earnings per share |
| $ | 0.23 |
| $ | 0.23 |
|
THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES
ADDITIONAL INFORMATION |
| (dollar amounts in thousands) |
|
| April 30, 2011 |
| May 1, 2010 |
| ||
|
|
|
|
|
| ||
Capital expenditures |
| $ | 18,123 |
| $ | 12,511 |
|
|
|
|
|
|
| ||
Depreciation and amortization |
| $ | 19,884 |
| $ | 18,214 |
|
|
|
|
|
|
| ||
Non-operating income: |
|
|
|
|
| ||
Net rental revenue |
| $ | 494 |
| $ | 517 |
|
Investment income |
| 82 |
| 66 |
| ||
Other income |
| 11 |
| 1 |
| ||
|
|
|
|
|
| ||
Total |
| $ | 587 |
| $ | 584 |
|
|
|
|
|
|
| ||
Comparable sales percentages: |
|
|
|
|
| ||
Service |
| 1.6 | % | 0.1 | % | ||
Merchandise |
| -1.2 | % | 1.7 | % | ||
Total |
| -0.6 | % | 1.4 | % | ||
|
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|
|
| ||
Total square feet of retail space (including service centers) |
| 12,007,220 |
| 11,710,000 |
| ||
|
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| ||
Store count |
|
|
|
|
| ||
Supercenter |
| 560 |
| 554 |
| ||
Service & Tire Center |
| 62 |
| 27 |
| ||
Retail Only |
| 8 |
| 9 |
| ||
Total |
| 630 |
| 590 |
| ||
|
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|
|
|
| ||
Sales and gross profit by line of business (A): |
|
|
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|
| ||
|
|
|
|
|
| ||
Service center revenue |
| $ | 247,330 |
| 240,326 |
| |
Retail sales |
| 266,210 |
| 269,707 |
| ||
Total revenues |
| $ | 513,540 |
| $ | 510,033 |
|
|
|
|
|
|
| ||
Gross profit from service center revenue |
| $ | 58,962 |
| 57,841 |
| |
Gross profit from retail sales |
| 76,160 |
| 79,754 |
| ||
Total gross profit |
| $ | 135,122 |
| $ | 137,595 |
|
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|
|
|
|
| ||
Comparable sales percentages by line of business (A): |
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| ||
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|
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|
| ||
Service center revenue |
| 0.3 | % | 0.9 | % | ||
Retail sales |
| -1.5 | % | 1.8 | % | ||
Total revenues |
| -0.6 | % | 1.4 | % | ||
|
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| ||
Gross profit percentage by line of business (A): |
|
|
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| ||
|
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|
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| ||
Gross profit percentage from service center revenue |
| 23.8 | % | 24.1 | % | ||
Gross profit percentage from retail sales |
| 28.6 | % | 29.6 | % | ||
Total gross profit percentage |
| 26.3 | % | 27.0 | % |
(A) Retail sales include DIY and commercial sales. Service center revenue includes revenue from labor and installed parts and tires.