Pep Boys Manny Moe & Jack (PBY) 8-K Pep Boys Reports Second Quarter 2014 Results

Exhibit 99.2

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

	August 2, 2014			February 1, 2014			August 3, 2013
Assets
Current assets:
Cash and cash equivalents	$	38,423		$	33,431		$	64,885
Accounts receivable, less allowance for uncollectible accounts of $2,102, $1,320 and $1,211	27,908			25,152			25,386
Merchandise inventories	659,547			672,354			649,832
Prepaid expenses	21,314			29,282			21,696
Other current assets	56,172			63,405			56,199
Assets held for disposal	2,647			2,013			—
Total current assets	806,011			825,637			817,998
Property and equipment, net of accumulated depreciation of $1,254,126, $1,227,121 and $1,197,253	623,285			625,525			638,727
Goodwill	56,794			56,794			46,917
Deferred income taxes	56,406			57,686			41,447
Other long-term assets	38,236			39,839			38,240
Total assets	$	1,580,732		$	1,605,481		$	1,583,329
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	219,423		$	256,031		$	226,684
Trade payable program liability	137,214			129,801			149,357
Accrued expenses	224,399			237,403			231,580
Deferred income taxes	70,785			69,373			55,236
Current maturities of long-term debt	2,000			2,000			2,000
Total current liabilities	653,821			694,608			664,857
Long-term debt less current maturities	220,000			199,500			197,000
Other long-term liabilities	46,899			48,485			50,960
Deferred gain from asset sales	108,521			114,823			121,125
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	297,924			297,009			295,882
Retained earnings	432,476			432,332			438,035
Accumulated other comprehensive income	213			379			711
Treasury stock, at cost - 15,265,028 shares; 15,358,872 shares and 15,417,020 shares	(247,679		)	(250,212		)	(253,798		)
Total stockholders’ equity	551,491			548,065			549,387
Total liabilities and stockholders’ equity	$	1,580,732		$	1,605,481		$	1,583,329
Supplemental balance sheet information:
Working capital	$	152,190		$	131,029		$	153,141
Current ratio	1.23			1.19			1.23
Accounts payable to inventory ratio	54.1		%	57.4		%	57.9		%
Total debt as a percent of total capitalization	28.7		%	26.9		%	26.6		%
Debt as a percent of total capitalization, net	25.0		%	23.5		%	19.6		%

THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(dollar amounts in thousands, except per share amounts)

	Thirteen weeks ended										Twenty-six weeks ended
	August 2, 2014					August 3, 2013					August 2, 2014					August 3, 2013
				%					%					%					%
	Amount			Sales		Amount			Sales		Amount			Sales		Amount			Sales
Merchandise sales	$	400,931		76.3		$	412,317		78.1		$	812,837		76.4		$	829,467		78.0
Service revenue	124,842			23.7		115,302			21.9		251,758			23.6		234,325			22.0
Total revenues	525,773			100.0		527,619			100.0		1,064,595			100.0		1,063,792			100.0
Costs of merchandise sales	280,100			69.9		273,764			66.4		565,147			69.5		570,638			68.8
Costs of service revenue	121,376			97.2		115,147			99.9		242,024			96.1		232,605			99.3
Total costs of revenues	401,476			76.4		388,911			73.7		807,171			75.8		803,243			75.5
Gross profit from merchandise sales	120,831			30.1		138,553			33.6		247,690			30.5		258,829			31.2
Gross profit from service revenue	3,466			2.8		155			0.1		9,734			3.9		1,720			0.7
Total gross profit	124,297			23.6		138,708			26.3		257,424			24.2		260,549			24.5
Selling, general and administrative expenses	120,624			22.9		120,929			22.9		247,694			23.3		239,133			22.5
Net gain (loss) from dispositions of assets	(400		)	(0.1	)	(31		)	—		(410		)	—		(147		)	—
Operating profit	3,273			0.6		17,748			3.4		9,320			0.9		21,269			2.0
Other income	316			0.1		466			0.1		758			0.1		844			0.1
Interest expense	3,002			0.6		3,562			0.7		6,784			0.6		7,242			0.7
Earnings from continuing operations before income taxes and discontinued operations	587			0.1		14,652			2.8		3,294			0.3		14,871			1.4
Income tax expense	764			130.1	(1)	9,273			63.3	(1)	1,831			55.6	(1)	5,565			37.4	(1)
(Loss) earnings from continuing operations before discontinued operations	(177		)	—		5,379			1.0		1,463			0.1		9,306			0.9
Loss from discontinued operations, net of tax	(96		)	—		(11		)	—		(125		)	—		(75		)	—
Net (loss) earnings	(273		)	(0.1	)	5,368			1.0		1,338			0.1		9,231			0.9
Basic earnings per share:
Earnings from continuing operations before discontinued operations	$	—				$	0.10				$	0.03				$	0.17
Discontinued operations, net of tax	—					—					—					—
Basic earnings per share	$	—				$	0.10				$	0.03				$	0.17
Diluted earnings per share:
Earnings from continuing operations before discontinued operations	$	—				$	0.10				$	0.03				$	0.17
Discontinued operations, net of tax	—					—					—					—
Diluted earnings per share	$	—				$	0.10				$	0.03				$	0.17
Other comprehensive (loss) income:
Derivative financial instruments adjustment, net of tax	(128		)			1,578					(166		)			1,691
Other comprehensive (loss) income	(128		)			1,578					(166		)			1,691
Comprehensive (loss) income	$	(401	)			$	6,946				$	1,172				$	10,922

(1) As a percentage of earnings from continuing operations before income taxes and discontinued operations.

THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(dollar amounts in thousands)

Twenty-six weeks ended	August 2, 2014			August 3, 2013
Cash flows from operating activities:
Net earnings	$	1,338		$	9,231
Adjustments to reconcile net earnings to net cash provided by continuing operations:
Net loss from discontinued operations	125			75
Depreciation	36,346			40,185
Amortization of deferred gain from asset sales	(6,302		)	(6,302		)
Amortization of deferred financing costs	1,311			1,302
Stock compensation expense	1,799			1,660
Deferred income taxes	2,727			1,825
Net loss from dispositions of assets	410			147
Loss from asset impairment	3,839			2,849
Other	(79		)	(269		)
Changes in assets and liabilities, net of the effects of acquisitions:
Decrease in accounts receivable, prepaid expenses and other	12,572			9,647
Decrease (increase) in merchandise inventories	12,807			(8,624		)
Decrease in accounts payable	(34,591		)	(18,611		)
Decrease in accrued expenses	(15,167		)	(696		)
Decrease in other long-term liabilities	(1,277		)	(1,100		)
Net cash provided by continuing operations	15,858			31,319
Net cash used in discontinued operations	(300		)	(121		)
Net cash provided by operating activities	15,558			31,198
Cash flows from investing activities:
Capital expenditures	(39,010		)	(24,502		)
Proceeds from dispositions of assets	35			18
Release of collateral investment	—			1,000
Net cash used in investing activities	(38,975		)	(23,484		)
Cash flows from financing activities:
Borrowings under line of credit agreements	339,179			1,354
Payments under line of credit agreements	(317,679		)	(1,354		)
Borrowings on trade payable program liability	94,353			80,690
Payments on trade payable program liability	(86,940		)	(81,051		)
Debt payments	(1,000		)	(1,000		)
Proceeds from stock issuance	496			592
Repurchase of common stock	—			(1,246		)
Net cash provided by (used in) financing activities	28,409			(2,015		)
Net increase in cash and cash equivalents	4,992			5,699
Cash and cash equivalents at beginning of period	33,431			59,186
Cash and cash equivalents at end of period	$	38,423		$	64,885
Supplemental cash flow information:
Cash paid for income taxes	$	660		$	3,288
Cash received from income tax refunds	$	244		$	51
Cash paid for interest	$	5,584		$	6,108
Accrued purchases of property and equipment	$	3,537		$	2,031

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						Twenty-six weeks ended
		August 2, 2014			August 3, 2013			August 2, 2014			August 3, 2013
(a)  (Loss) earnings from continuing operations before discontinued operations		$	(177	)	$	5,379		$	1,463		$	9,306
Loss from discontinued operations, net of tax		(96		)	(11		)	(125		)	(75		)
Net (loss) earnings		$	(273	)	$	5,368		$	1,338		$	9,231
(b)  Basic average number of common shares outstanding during period		53,528			53,392			53,499			53,388
Common shares assumed issued upon exercise of dilutive stock options, net of assumed repurchase, at the average market price		—			578			526			591
(c)  Diluted average number of common shares assumed outstanding during period		53,528			53,970			54,025			53,979
Basic earnings per share:
Earnings from continuing operations before discontinued operations	(a) / (b)	$	—		$	0.10		$	0.03		$	0.17
Discontinued operations, net of tax		—			—			—			—
Basic earnings per share		$	—		$	0.10		$	0.03		$	0.17
Diluted earnings per share:
Earnings from continuing operations before discontinued operations	(a) / (c)	$	—		$	0.10		$	0.03		$	0.17
Discontinued operations, net of tax		—			—			—			—
Diluted earnings per share		$	—		$	0.10		$	0.03		$	0.17

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

	Thirteen weeks ended						Twenty-six weeks ended
	August 2, 2014			August 3, 2013			August 2, 2014			August 3, 2013
Capital expenditures	$	24,445		$	11,662		$	39,010		$	24,502
Depreciation	$	18,026		$	19,328		$	36,346		$	40,185
Non-operating income:
Net rental revenue	$	284		$	350		$	683		$	600
Investment income	46			42			93			91
Other income	(13		)	74			(18		)	153
Total	$	317		$	466		$	758		$	844
Comparable sales percentages:
Service	5.4		%	0.2		%	4.3		%	2.2		%
Merchandise	-3.8		%	-1.7		%	-3.3		%	-0.8		%
Total	-1.8		%	-1.3		%	-1.6		%	-0.2		%
Total square feet of retail space (including service centers)							12,807,000			12,830,000
Store count
Supercenter							565			570
Service & Tire Center							228			193
Retail Only							6			6
Total							799			769
Sales and gross profit by line of business (A):
Service center revenue	$	288,302		$	280,905		$	582,215		567,882
Retail sales	237,471			246,714			482,380			495,910
Total revenues	$	525,773		$	527,619		$	1,064,595		$	1,063,792
Gross profit from service center revenue, prior to impairment charge	$	62,063		$	62,916		$	126,798		116,072
Service center revenue impairment charge	(1,379		)	(1,323		)	(2,335		)	(2,339		)
Gross profit from service center revenue	$	60,684		$	61,593		$	124,463		$	113,733
Gross profit from retail sales, prior to impairment charge	$	64,901		$	77,459		$	134,464		147,326
Retail sales impairment charge	(1,288		)	(344		)	(1,503		)	(510		)
Gross profit from retail sales	$	63,613		$	77,115		$	132,961		$	146,816
Total gross profit	$	124,297		$	138,708		$	257,424		$	260,549
Comparable sales percentages by line of business (A):
Service center revenue	-0.2		%	-0.1		%	-0.6		%	1.9		%
Retail sales	-3.6		%	-2.6		%	-2.7		%	-2.4		%
Total revenues	-1.8		%	-1.3		%	-1.6		%	-0.2		%
Gross profit percentage by line of business (A):
Gross profit percentage from service center revenue, prior to impairment charge	21.5		%	22.4		%	21.8		%	20.4		%
Impairment charge	(0.5		)	(0.5		)	(0.4		)	(0.4		)
Gross profit percentage from service center revenue	21.0		%	21.9		%	21.4		%	20.0		%
Gross profit percentage from retail sales, prior to impairment charge	27.3		%	31.4		%	27.9		%	29.7		%
Impairment charge	(0.5		)	(0.1		)	(0.3		)	(0.1		)
Gross profit percentage from retail sales	26.8		%	31.3		%	27.6		%	29.6		%
Total gross profit percentage	23.6		%	26.3		%	24.2		%	24.5		%

(A) Retail sales include DIY and commercial sales. Service center revenue includes revenue from labor and installed parts and tires.