Exhibit 99.2
THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES |
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CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME |
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(dollar amounts in thousands, except per share amounts) |
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| Fourteen & thirteen weeks ended |
| Fifty three & fifty two weeks ended |
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| February 2, 2013 |
| January��28, 2012 |
| February 2, 2013 |
| January 28, 2012 |
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| Amount |
| Sales |
| Amount |
| Sales |
| Amount |
| Sales |
| Amount |
| Sales |
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Merchandise sales |
| $ | 417,090 |
| 78.6 |
| $ | 404,332 |
| 80.0 |
| $ | 1,643,948 |
| 78.6 |
| $ | 1,642,757 |
| 79.6 |
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Service revenue |
| 113,757 |
| 21.4 |
| 100,986 |
| 20.0 |
| 446,782 |
| 21.4 |
| 420,870 |
| 20.4 |
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Total revenues |
| 530,847 |
| 100.0 |
| 505,318 |
| 100.0 |
| 2,090,730 |
| 100.0 |
| 2,063,627 |
| 100.0 |
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Costs of merchandise sales |
| 296,462 |
| 71.1 |
| 288,875 |
| 71.5 |
| 1,159,994 |
| 70.6 |
| 1,154,322 |
| 70.3 |
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Costs of service revenue |
| 117,179 |
| 103.0 |
| 104,170 |
| 103.2 |
| 439,236 |
| 98.3 |
| 399,776 |
| 95.0 |
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Total costs of revenues |
| 413,641 |
| 77.9 |
| 393,045 |
| 77.8 |
| 1,599,230 |
| 76.5 |
| 1,554,098 |
| 75.3 |
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Gross profit from merchandise sales |
| 120,628 |
| 28.9 |
| 115,457 |
| 28.6 |
| 483,954 |
| 29.4 |
| 488,435 |
| 29.7 |
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Gross (loss) profit from service revenue |
| (3,422 | ) | (3.0 | ) | (3,184 | ) | (3.2 | ) | 7,546 |
| 1.7 |
| 21,094 |
| 5.0 |
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Total gross profit |
| 117,206 |
| 22.1 |
| 112,273 |
| 22.2 |
| 491,500 |
| 23.5 |
| 509,529 |
| 24.7 |
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Selling, general and administrative expenses |
| 117,401 |
| 22.1 |
| 112,268 |
| 22.2 |
| 463,416 |
| 22.2 |
| 443,986 |
| 21.5 |
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Pension settlement expense |
| 17,753 |
| 3.3 |
| — |
| — |
| 17,753 |
| 0.8 |
| — |
| — |
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Net gain (loss) from dispositions of assets |
| 1,554 |
| 0.3 |
| (34 | ) | — |
| 1,323 |
| 0.1 |
| 27 |
| — |
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Operating (loss) profit |
| (16,394 | ) | (3.1 | ) | (29 | ) | — |
| 11,654 |
| 0.6 |
| 65,570 |
| 3.2 |
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Merger termination fees, net |
| — |
| — |
| — |
| — |
| 42,816 |
| 2.0 |
| — |
| — |
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Other income |
| 366 |
| 0.1 |
| 541 |
| 0.1 |
| 2,012 |
| 0.1 |
| 2,324 |
| 0.1 |
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Interest expense |
| 3,982 |
| 0.8 |
| 6,475 |
| 1.3 |
| 33,982 |
| 1.6 |
| 26,306 |
| 1.3 |
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(Loss) earnings from continuing operations before income taxes and discontinued operations |
| (20,010 | ) | (3.8 | ) | (5,963 | ) | (1.2 | ) | 22,500 |
| 1.1 |
| 41,588 |
| 2.0 |
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Income tax (benefit) expense |
| (5,690 | ) | 28.4 | (1) | (1,772 | ) | 29.7 | (1) | 9,345 |
| 41.5 | (1) | 12,460 |
| 30.0 | (1) | ||||
(Loss) earnings from continuing operations before discontinued operations |
| (14,320 | ) | (2.7 | ) | (4,191 | ) | (0.8 | ) | 13,155 |
| 0.6 |
| 29,128 |
| 1.4 |
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(Loss) from discontinued operations, net of tax |
| (223 | ) | — |
| (229 | ) | — |
| (345 | ) | — |
| (225 | ) | — |
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Net (loss) income |
| (14,543 | ) | (2.7 | ) | (4,420 | ) | (0.9 | ) | 12,810 |
| 0.6 |
| 28,903 |
| 1.4 |
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Basic earnings per share: |
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(Loss) earnings from continuing operations before discontinued operations |
| $ | (0.27 | ) |
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| $ | (0.08 | ) |
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| $ | 0.25 |
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| $ | 0.55 |
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Discontinued operations, net of tax |
| — |
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| — |
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| (0.01 | ) |
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| (0.01 | ) |
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Basic (loss) earnings per share |
| $ | (0.27 | ) |
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| $ | (0.08 | ) |
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| $ | 0.24 |
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| $ | 0.54 |
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Diluted earnings per share: |
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(Loss) earnings from continuing operations before discontinued operations |
| $ | (0.27 | ) |
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| $ | (0.08 | ) |
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| $ | 0.24 |
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| $ | 0.54 |
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Discontinued operations, net of tax |
| — |
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| — |
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| — |
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| — |
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Diluted (loss) earnings per share |
| $ | (0.27 | ) |
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| $ | (0.08 | ) |
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| $ | 0.24 |
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| $ | 0.54 |
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Other comprehensive income: |
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Defined benefit plan adjustment, net of tax |
| 8,634 |
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| (3,829 | ) |
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| 9,696 |
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| (3,120 | ) |
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Derivative financial instruments adjustment, net of tax |
| 436 |
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| 907 |
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| 6,973 |
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| 2,499 |
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Other comprehensive income |
| 9,070 |
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| (2,922 | ) |
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| 16,669 |
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| (621 | ) |
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Comprehensive income |
| (5,473 | ) |
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| (7,342 | ) |
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| 29,479 |
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| 28,282 |
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(1) As a percentage of earnings from continuing operations before income taxes and discontinued operations
CONSOLIDATED BALANCE SHEETS
(dollar amounts in thousands)
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| February 2, 2013 |
| January 28, 2012 |
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Assets |
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Current assets: |
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Cash and cash equivalents |
| $ | 59,186 |
| $ | 58,244 |
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Accounts receivable, less allowance for |
| 23,897 |
| 25,792 |
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Merchandise inventories |
| 641,208 |
| 614,136 |
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Prepaid expenses |
| 28,908 |
| 26,394 |
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Other current assets |
| 60,438 |
| 59,979 |
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Total current assets |
| 813,637 |
| 784,545 |
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Property and equipment - net |
| 657,270 |
| 696,339 |
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Goodwill |
| 46,917 |
| 46,917 |
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Deferred income taxes |
| 47,691 |
| 72,870 |
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Other long-term assets |
| 38,434 |
| 33,108 |
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Total assets |
| $ | 1,603,949 |
| $ | 1,633,779 |
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Liabilities and stockholders’ equity |
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Current liabilities: |
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Accounts payable |
| $ | 244,696 |
| $ | 243,712 |
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Trade payable program liability |
| 149,718 |
| 85,214 |
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Accrued expenses |
| 232,277 |
| 221,705 |
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Deferred income taxes |
| 58,441 |
| 66,208 |
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Current maturities of long-term debt |
| 2,000 |
| 1,079 |
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Total current liabilities |
| 687,132 |
| 617,918 |
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Long-term debt less current maturities |
| 198,000 |
| 294,043 |
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Other long-term liabilities |
| 53,818 |
| 77,216 |
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Deferred gain from asset sales |
| 127,427 |
| 140,273 |
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Stockholders’ equity: |
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Common stock, par value $1 per share: |
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Authorized 500,000,000 shares; issued 68,557,041 shares |
| 68,557 |
| 68,557 |
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Additional paid-in capital |
| 295,679 |
| 296,462 |
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Retained earnings |
| 430,148 |
| 423,437 |
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Accumulated other comprehensive loss |
| (980 | ) | (17,649 | ) | ||
Treasury stock, at cost - 15,431,298 shares and 15,803,322 shares |
| (255,832 | ) | (266,478 | ) | ||
Total stockholders’ equity |
| 537,572 |
| 504,329 |
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Total liabilities and stockholders’ equity |
| $ | 1,603,949 |
| $ | 1,633,779 |
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Supplemental Balance Sheet Information: |
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Working capital |
| $ | 126,505 |
| $ | 166,627 |
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Current Ratio |
| 1.18 |
| 1.27 |
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Accounts payable to inventory ratio |
| 61.5 | % | 53.6 | % | ||
Total debt as a percent of total capitalization |
| 27.1 | % | 36.9 | % | ||
Net debt as a percent of total capitalization, net |
| 20.8 | % | 32.0 | % |
THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES |
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CONSOLIDATED STATEMENTS OF CASH FLOWS |
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(dollar amounts in thousands) |
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Fifty three & fifty two weeks ended |
| February 2, 2013 |
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Cash flows from operating activities: |
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Net earnings |
| $ | 12,810 |
| $ | 28,903 |
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Adjustments to reconcile net earnings to net cash provided by continuing operations: |
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Net loss from discontinued operations |
| 345 |
| 225 |
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Depreciation and amortization |
| 78,805 |
| 79,390 |
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Amortization of deferred gain from asset sales |
| (12,846 | ) | (12,602 | ) | ||
Stock compensation expense |
| 1,299 |
| 3,237 |
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Deferred income taxes |
| 7,576 |
| 10,301 |
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Net (gain) from disposition of assets |
| (1,323 | ) | (27 | ) | ||
Loss from asset impairment |
| 10,555 |
| 1,619 |
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Other |
| 30 |
| (421 | ) | ||
Changes in assets and liabilities, net of the effects of acquisitions: |
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Decrease in accounts receivable, prepaid expenses and other |
| 3,829 |
| 2,391 |
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Increase in merchandise inventories |
| (27,074 | ) | (42,756 | ) | ||
Increase in accounts payable |
| 984 |
| 24,871 |
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Increase (decrease) in accrued expenses |
| 10,481 |
| (18,745 | ) | ||
Increase (decrease) in other long-term liabilities |
| 3,487 |
| (2,463 | ) | ||
Net cash provided by continuing operations |
| 88,958 |
| 73,923 |
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Net cash used in discontinued operations |
| (467 | ) | (273 | ) | ||
Net cash provided by operating activities |
| 88,491 |
| 73,650 |
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Cash flows from investing activities: |
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Capital expenditures |
| (54,696 | ) | (74,746 | ) | ||
Proceeds from dispositions of assets |
| 5,588 |
| 515 |
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Premiums paid on life insurance policies |
| — |
| (837 | ) | ||
Acquisitions, net of cash acquired |
| — |
| (42,901 | ) | ||
Collateral investment |
| (3,654 | ) | (7,638 | ) | ||
Net cash used in continuing operations |
| (52,762 | ) | (125,607 | ) | ||
Net cash provided by discontinued operations |
| — |
| — |
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Net cash used in investing activities |
| (52,762 | ) | (125,607 | ) | ||
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Cash flows from financing activities: |
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Borrowings under line of credit agreements |
| 2,319 |
| 5,721 |
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Payments under line of credit agreements |
| (2,319 | ) | (5,721 | ) | ||
Borrowings on trade payable program liability |
| 179,751 |
| 144,180 |
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Payments on trade payable program liability |
| (115,247 | ) | (115,253 | ) | ||
Payment for finance issuance cost |
| (6,520 | ) | (2,441 | ) | ||
Borrowings under new debt |
| 200,000 |
| — |
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Debt payments |
| (295,122 | ) | (1,079 | ) | ||
Dividends paid |
| — |
| (6,344 | ) | ||
Repurchase of common stock |
| (342 | ) | — |
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Proceeds from stock issuance |
| 2,693 |
| 898 |
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Net cash (used in) provided by financing activities |
| (34,787 | ) | 19,961 |
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Net increase (decrease) in cash and cash equivalents |
| 942 |
| (31,996 | ) | ||
Cash and cash equivalents at beginning of period |
| 58,244 |
| 90,240 |
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Cash and cash equivalents at end of period |
| $ | 59,186 |
| $ | 58,244 |
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Supplemental cash flow information: |
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Cash paid for interest, net of amounts capitalized |
| $ | 31,290 |
| $ | 23,097 |
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Cash received from income tax refunds |
| $ | 108 |
| $ | 479 |
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Cash paid for income taxes |
| $ | 2,826 |
| $ | 1,150 |
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Accrued purchases of property and equipment |
| $ | 1,371 |
| $ | 1,400 |
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THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES |
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COMPUTATION OF BASIC AND DILUTED EARNINGS PER SHARE |
| (in thousands, except per share data) |
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| Fourteen & thirteen weeks ended |
| Fifty three & fifty two weeks ended |
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| February 2, 2013 |
| January 28, 2012 |
| February 2, 2013 |
| January 28, 2012 |
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(a) (Loss) earnings from continuing operations before discontinued operations |
| $ | (14,320 | ) | $ | (4,191 | ) | $ | 13,155 |
| $ | 29,128 |
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(Loss) from discontinued operations, net of tax |
| (223 | ) | (229 | ) | (345 | ) | (225 | ) | ||||
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Net (loss) income |
| $ | (14,543 | ) | $ | (4,420 | ) | $ | 12,810 |
| $ | 28,903 |
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(b) Basic average number of common shares outstanding during period |
| 53,364 |
| 53,032 |
| 53,225 |
| 52,958 |
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Common shares assumed issued upon exercise of dilutive stock options, net of assumed repurchase, at the average market price |
| 611 |
| 711 |
| 729 |
| 673 |
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(c) Diluted average number of common shares assumed outstanding during period |
| 53,975 |
| 53,743 |
| 53,954 |
| 53,631 |
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Basic earnings per share: |
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(Loss) earnings from continuing operations before discontinued operations (a) / (b) |
| $ | (0.27 | ) | $ | (0.08 | ) | $ | 0.25 |
| $ | 0.55 |
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Discontinued operations, net of tax |
| — |
| — |
| (0.01 | ) | (0.01 | ) | ||||
Basic (loss) earnings per share |
| $ | (0.27 | ) | $ | (0.08 | ) | $ | 0.24 |
| $ | 0.54 |
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Diluted earnings per share: |
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(Loss) earnings from continuing operations before discontinued operations (a) / (c) |
| $ | (0.27 | ) | $ | (0.08 | ) | $ | 0.24 |
| $ | 0.54 |
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Discontinued operations, net of tax |
| — |
| — |
| — |
| — |
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Diluted (loss) earnings per share |
| $ | (0.27 | ) | $ | (0.08 | ) | $ | 0.24 |
| $ | 0.54 |
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THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES |
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ADDITIONAL INFORMATION |
| (dollar amounts in thousands) |
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| Fourteen & thirteen weeks ended |
| Fifty three & fifty two weeks ended |
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| February 02, 2013 |
| January 28, 2012 |
| February 02, 2013 |
| January 28, 2012 |
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Capital expenditures |
| $ | 17,936 |
| $ | 23,827 |
| $ | 54,696 |
| $ | 74,746 |
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Depreciation and amortization |
| $ | 19,749 |
| $ | 19,611 |
| $ | 78,805 |
| $ | 79,390 |
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Non-operating income: |
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Net rental revenue |
| $ | 344 |
| $ | 479 |
| $ | 1,645 |
| $ | 2,071 |
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Investment income |
| 48 |
| 51 |
| 181 |
| 219 |
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Merger termination fees, net |
| — |
| — |
| 42,816 |
| — |
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Other income |
| (26 | ) | 11 |
| 186 |
| 34 |
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Total |
| $ | 366 |
| $ | 541 |
| $ | 44,828 |
| $ | 2,324 |
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Comparable sales percentages: |
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Service |
| 3.2 | % | -0.1 | % | 1.3 | % | 0.6 | % | ||||
Merchandise |
| -4.1 | % | 1.0 | % | -2.9 | % | -0.9 | % | ||||
Total |
| -2.6 | % | 0.8 | % | -2.0 | % | -0.6 | % | ||||
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Total square feet of retail space (including service centers) |
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| 12,777,000 |
| 12,643,000 |
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Store count |
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Supercenter |
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| 567 |
| 562 |
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Service & Tire Center |
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| 185 |
| 169 |
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Retail Only |
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| 6 |
| 7 |
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Total |
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| 758 |
| 738 |
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Sales and gross profit by line of business (A): |
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Service center revenue |
| $ | 278,554 |
| $ | 260,823 |
| $ | 1,095,284 |
| $ | 1,038,714 |
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Retail sales |
| 252,293 |
| 244,495 |
| 995,446 |
| 1,024,913 |
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Total revenues |
| $ | 530,847 |
| $ | 505,318 |
| $ | 2,090,730 |
| $ | 2,063,627 |
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Gross profit from service center revenue, prior to impairment charge |
| $ | 47,881 |
| $ | 46,019 |
| $ | 214,240 |
| $ | 221,333 |
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Service center revenue impairment charge |
| (827 | ) | (737 | ) | (5,445 | ) | (1,018 | ) | ||||
Gross profit from service center revenue |
| $ | 47,054 |
| $ | 45,282 |
| $ | 208,795 |
| $ | 220,315 |
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Gross profit from retail sales, prior to impairment charge |
| $ | 71,078 |
| $ | 67,484 |
| $ | 287,815 |
| $ | 289,815 |
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Retail sales impairment charge |
| (926 | ) | (493 | ) | (5,110 | ) | (601 | ) | ||||
Gross profit from retail sales |
| $ | 70,152 |
| $ | 66,991 |
| $ | 282,705 |
| $ | 289,214 |
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Total gross profit |
| $ | 117,206 |
| $ | 112,273 |
| $ | 491,500 |
| $ | 509,529 |
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Comparable sales percentages by line of business (A): |
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Service center revenue |
| -1.6 | % | 4.6 | % | 0.3 | % | 1.3 | % | ||||
Retail sales |
| -3.6 | % | -2.7 | % | -4.4 | % | -2.3 | % | ||||
Total revenues |
| -2.6 | % | 0.8 | % | -2.0 | % | -0.6 | % | ||||
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Gross profit percentage by line of business (A): |
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Gross profit percentage from service center revenue, prior to impairment charge |
| 17.2 | % | 17.7 | % | 19.6 | % | 21.3 | % | ||||
Impairment charge |
| (0.3 | ) | (0.3 | ) | (0.5 | ) | (0.1 | ) | ||||
Gross profit percentage from service center revenue |
| 16.9 | % | 17.4 | % | 19.1 | % | 21.2 | % | ||||
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Gross profit percentage from retail sales, prior to impairment charge |
| 28.2 | % | 27.6 | % | 28.9 | % | 28.3 | % | ||||
Impairment charge |
| (0.4 | ) | (0.2 | ) | (0.5 | ) | (0.1 | ) | ||||
Gross profit percentage from retail sales |
| 27.7 | % | 27.4 | % | 28.4 | % | 28.2 | % | ||||
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Total gross profit percentage |
| 22.1 | % | 22.2 | % | 23.5 | % | 24.7 | % |
(A) Retail sales include DIY and commercial sales. Service center revenue includes revenue from labor and installed parts and tires.