Exhibit 99.2
THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES | (UNAUDITED) |
CONSOLIDATED BALANCE SHEETS
(dollar amounts in thousands)
|
| May 2, 2015 |
| January 31, 2015 |
| May 3, 2014 |
| |||
Assets |
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Current assets: |
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|
|
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Cash and cash equivalents |
| $ | 42,166 |
| $ | 38,044 |
| $ | 37,817 |
|
Accounts receivable, less allowance for uncollectible accounts of $1,680, $1,604 and $1,486 |
| 29,101 |
| 31,013 |
| 27,385 |
| |||
Merchandise inventories |
| 651,461 |
| 656,957 |
| 663,554 |
| |||
Prepaid expenses |
| 26,159 |
| 27,952 |
| 26,430 |
| |||
Other current assets |
| 52,450 |
| 55,986 |
| 60,047 |
| |||
Assets held for disposal |
| 2,377 |
| 2,648 |
| 2,013 |
| |||
Total current assets |
| 803,714 |
| 812,600 |
| 817,246 |
| |||
Property and equipment, net of accumulated depreciation of $1,264,412, $1,251,797 and $1,245,488 |
| 597,783 |
| 604,380 |
| 622,866 |
| |||
Goodwill |
| 32,869 |
| 32,869 |
| 56,794 |
| |||
Deferred income taxes |
| 51,666 |
| 56,571 |
| 57,068 |
| |||
Other long-term assets |
| 34,696 |
| 35,321 |
| 38,977 |
| |||
Total assets |
| $ | 1,520,728 |
| $ | 1,541,741 |
| $ | 1,592,951 |
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Liabilities and stockholders’ equity |
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Current liabilities: |
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Accounts payable |
| $ | 230,211 |
| $ | 227,132 |
| $ | 247,756 |
|
Trade payable program liability |
| 139,279 |
| 140,904 |
| 134,121 |
| |||
Accrued expenses |
| 208,794 |
| 226,176 |
| 226,667 |
| |||
Deferred income taxes |
| 64,357 |
| 61,216 |
| 69,498 |
| |||
Current maturities of long-term debt |
| 2,000 |
| 2,000 |
| 2,000 |
| |||
Total current liabilities |
| 644,641 |
| 657,428 |
| 680,042 |
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|
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Long-term debt less current maturities |
| 193,500 |
| 211,000 |
| 202,500 |
| |||
Other long-term liabilities |
| 44,128 |
| 45,567 |
| 48,186 |
| |||
Deferred gain from asset sales |
| 100,360 |
| 103,596 |
| 111,672 |
| |||
Commitments and contingencies |
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|
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Stockholders’ equity: |
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Common stock, par value $1 per share: |
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|
|
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Authorized 500,000,000 shares; issued 68,557,041 shares |
| 68,557 |
| 68,557 |
| 68,557 |
| |||
Additional paid-in capital |
| 297,563 |
| 298,299 |
| 297,002 |
| |||
Retained earnings |
| 404,465 |
| 397,890 |
| 433,673 |
| |||
Accumulated other comprehensive income (loss) |
| (245 | ) | (391 | ) | 341 |
| |||
Treasury stock, at cost - 14,693,191 shares; 14,988,205 shares and 15,314,768 shares |
| (232,241 | ) | (240,205 | ) | (249,022 | ) | |||
Total stockholders’ equity |
| 538,099 |
| 524,150 |
| 550,551 |
| |||
Total liabilities and stockholders’ equity |
| $ | 1,520,728 |
| $ | 1,541,741 |
| $ | 1,592,951 |
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Supplemental balance sheet information: |
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Working capital |
| $ | 159,073 |
| $ | 155,172 |
| $ | 137,204 |
|
Current ratio |
| 1.25 |
| 1.24 |
| 1.20 |
| |||
Accounts payable to inventory ratio |
| 56.7 | % | 56.0 | % | 57.6 | % | |||
Total debt as a percent of total capitalization |
| 26.6 | % | 28.9 | % | 27.1 | % | |||
Debt as a percent of total capitalization, net |
| 22.2 | % | 25.0 | % | 23.2 | % |
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 |
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|
| May 2, 2015 |
| May 3, 2014 |
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| % |
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| % |
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| Amount |
| Sales |
| Amount |
| Sales |
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Merchandise sales |
| $ | 413,125 |
| 76.2 |
| $ | 411,906 |
| 76.4 |
|
Service revenue |
| 129,136 |
| 23.8 |
| 126,915 |
| 23.6 |
| ||
Total revenues |
| 542,261 |
| 100.0 |
| 538,821 |
| 100.0 |
| ||
Costs of merchandise sales |
| 286,243 |
| 69.3 |
| 285,047 |
| 69.2 |
| ||
Costs of service revenue |
| 122,251 |
| 94.7 |
| 120,648 |
| 95.1 |
| ||
Total costs of revenues |
| 408,494 |
| 75.3 |
| 405,695 |
| 75.3 |
| ||
Gross profit from merchandise sales |
| 126,882 |
| 30.7 |
| 126,859 |
| 30.8 |
| ||
Gross profit from service revenue |
| 6,885 |
| 5.3 |
| 6,267 |
| 4.9 |
| ||
Total gross profit |
| 133,767 |
| 24.7 |
| 133,126 |
| 24.7 |
| ||
Selling, general and administrative expenses |
| 120,847 |
| 22.3 |
| 127,071 |
| 23.6 |
| ||
Net gain (loss) from dispositions of assets |
| 218 |
| — |
| (10 | ) | — |
| ||
Gain on sale from leasehold interest |
| 10,000 |
| 1.8 |
| — |
| — |
| ||
Operating profit |
| 23,138 |
| 4.3 |
| 6,045 |
| 1.1 |
| ||
Other income |
| 372 |
| 0.1 |
| 441 |
| 0.1 |
| ||
Interest expense |
| (3,329 | ) | (0.6 | ) | (3,782 | ) | (0.7 | ) | ||
Earnings from continuing operations before income taxes and discontinued operations |
| 20,181 |
| 3.7 |
| 2,704 |
| 0.5 |
| ||
Income tax expense |
| (8,322 | ) | (41.2 | )(1) | (1,067 | ) | (39.5 | )(1) | ||
Earnings from continuing operations before discontinued operations |
| 11,859 |
| 2.2 |
| 1,637 |
| 0.3 |
| ||
Gain (loss) from discontinued operations, net of tax |
| 34 |
| — |
| (29 | ) | — |
| ||
Net earnings |
| 11,893 |
| 2.2 |
| 1,608 |
| 0.3 |
| ||
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Basic earnings per share: |
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Earnings from continuing operations before discontinued operations |
| $ | 0.22 |
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|
| $ | 0.03 |
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Discontinued operations, net of tax |
| — |
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|
| — |
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Basic earnings per share |
| $ | 0.22 |
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|
| $ | 0.03 |
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Diluted earnings per share: |
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Earnings from continuing operations before discontinued operations |
| $ | 0.22 |
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|
| $ | 0.03 |
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Discontinued operations, net of tax |
| — |
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|
| — |
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Diluted earnings per share |
| $ | 0.22 |
|
|
| $ | 0.03 |
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Other comprehensive income (loss): |
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Derivative financial instruments adjustment, net of tax |
| 146 |
|
|
| (38 | ) |
|
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Other comprehensive income (loss) |
| 146 |
|
|
| (38 | ) |
|
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Comprehensive income |
| $ | 12,039 |
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|
| $ | 1,570 |
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|
(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)
Thirteen weeks ended |
| May 2, 2015 |
| May 3, 2014 |
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Cash flows from operating activities: |
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Net earnings |
| $ | 11,893 |
| $ | 1,608 |
|
Adjustments to reconcile net earnings to net cash provided by continuing operations: |
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Net (earnings) loss from discontinued operations |
| (34 | ) | 29 |
| ||
Depreciation |
| 16,894 |
| 18,320 |
| ||
Amortization of deferred gain from asset sales |
| (3,236 | ) | (3,151 | ) | ||
Amortization of deferred financing costs |
| 626 |
| 664 |
| ||
Stock compensation expense |
| 1,017 |
| 826 |
| ||
Deferred income taxes |
| 7,927 |
| 743 |
| ||
Net (gain) loss from dispositions of assets |
| (218 | ) | 10 |
| ||
Loss from asset impairment |
| 798 |
| 1,172 |
| ||
Other |
| (473 | ) | (111 | ) | ||
Changes in assets and liabilities, net of the effects of acquisitions: |
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|
|
|
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Decrease in accounts receivable, prepaid expenses and other |
| 7,347 |
| 4,174 |
| ||
Decrease in merchandise inventories |
| 5,496 |
| 8,800 |
| ||
Increase (decrease) in accounts payable |
| 4,735 |
| (8,903 | ) | ||
Decrease in accrued expenses |
| (17,829 | ) | (12,467 | ) | ||
Decrease in other long-term liabilities |
| (859 | ) | (231 | ) | ||
Net cash provided by continuing operations |
| 34,084 |
| 11,483 |
| ||
Net cash used in discontinued operations |
| (255 | ) | (29 | ) | ||
Net cash provided by operating activities |
| 33,829 |
| 11,454 |
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Cash flows from investing activities: |
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Capital expenditures |
| (12,267 | ) | (14,565 | ) | ||
Proceeds from dispositions of assets |
| 515 |
| — |
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Net cash used in investing activities |
| (11,752 | ) | (14,565 | ) | ||
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Cash flows from financing activities: |
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Borrowings under line of credit agreements |
| 95,155 |
| 164,206 |
| ||
Payments under line of credit agreements |
| (112,155 | ) | (160,706 | ) | ||
Borrowings on trade payable program liability |
| 40,872 |
| 49,708 |
| ||
Payments on trade payable program liability |
| (42,497 | ) | (45,388 | ) | ||
Debt payments |
| (500 | ) | (500 | ) | ||
Proceeds from stock issuance |
| 1,170 |
| 177 |
| ||
Net cash (used in) provided by financing activities |
| (17,955 | ) | 7,497 |
| ||
Net increase in cash and cash equivalents |
| 4,122 |
| 4,386 |
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Cash and cash equivalents at beginning of period |
| 38,044 |
| 33,431 |
| ||
Cash and cash equivalents at end of period |
| $ | 42,166 |
| $ | 37,817 |
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Supplemental cash flow information: |
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Accrued purchases of property and equipment |
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Cash paid for income taxes |
| $ | 42 |
| $ | — |
|
Cash received from income tax refunds |
| $ | — |
| $ | 174 |
|
Cash paid for interest |
| $ | 2,674 |
| $ | 2,659 |
|
Accrued purchases of property and equipment |
| $ | 2,247 |
| $ | 5,748 |
|
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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| Thirteen weeks ended |
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| May 2, 2015 |
| May 3, 2014 |
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(a) |
| Earnings from continuing operations before discontinued operations |
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| $ | 11,859 |
| $ | 1,637 |
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| Gain (loss) from discontinued operations, net of tax |
|
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| 34 |
| (29 | ) | ||
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| Net earnings |
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| $ | 11,893 |
| $ | 1,608 |
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(b) |
| Basic average number of common shares outstanding during period |
|
|
| 54,094 |
| 53,470 |
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| Common shares assumed issued upon exercise of dilutive stock options, net of assumed repurchase, at the average market price |
|
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| 90 |
| 539 |
| ||
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(c) |
| Diluted average number of common shares assumed outstanding during period |
|
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| 54,184 |
| 54,009 |
| ||
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| Basic earnings per share: |
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| Earnings from continuing operations before discontinued operations |
| (a) / (b) |
| $ | 0.22 |
| $ | 0.03 |
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| Discontinued operations, net of tax |
|
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| — |
| — |
| ||
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| Basic earnings per share |
|
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| $ | 0.22 |
| $ | 0.03 |
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| Diluted earnings per share: |
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| Earnings from continuing operations before discontinued operations |
| (a) / (c) |
| $ | 0.22 |
| $ | 0.03 |
|
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| Discontinued operations, net of tax |
|
|
| — |
| — |
| ||
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| Diluted earnings per share |
|
|
| $ | 0.22 |
| $ | 0.03 |
|
THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES |
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ADDITIONAL INFORMATION | (dollar amounts in thousands) |
|
| Thirteen weeks ended |
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|
| May 2, 2015 |
| May 3, 2014 |
| ||
|
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Capital expenditures |
| $ | 12,267 |
| $ | 14,565 |
|
Depreciation |
| $ | 16,894 |
| $ | 18,320 |
|
Non-operating income: |
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|
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Net rental revenue |
| $ | 304 |
| $ | 399 |
|
Investment income |
| 60 |
| 47 |
| ||
Other income |
| 8 |
| (5 | ) | ||
Total |
| $ | 372 |
| $ | 441 |
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Comparable sales percentages: |
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Service |
| 1.3 | % | 3.2 | % | ||
Merchandise |
| 0.6 | % | -2.8 | % | ||
Total |
| 0.8 | % | -1.4 | % | ||
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Total square feet of retail space (including service centers) |
| 12,912,000 |
| 12,845,000 |
| ||
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Store count |
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Supercenter |
| 562 |
| 567 |
| ||
Service & Tire Center |
| 235 |
| 225 |
| ||
Retail Only |
| 6 |
| 6 |
| ||
Total |
| 803 |
| 798 |
| ||
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Sales and gross profit by line of business (A): |
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Service center revenue |
| $ | 300,883 |
| $ | 293,913 |
|
Retail sales |
| 241,378 |
| 244,908 |
| ||
Total revenues |
| $ | 542,261 |
| $ | 538,821 |
|
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Gross profit from service center revenue, prior to impairment charge |
| $ | 67,652 |
| 64,735 |
| |
Service center revenue impairment charge |
| (753 | ) | (956 | ) | ||
Gross profit from service center revenue |
| $ | 66,899 |
| $ | 63,779 |
|
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Gross profit from retail sales, prior to impairment charge |
| $ | 66,913 |
| 69,562 |
| |
Retail sales impairment charge |
| (45 | ) | (215 | ) | ||
Gross profit from retail sales |
| $ | 66,868 |
| $ | 69,347 |
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Total gross profit |
| $ | 133,767 |
| $ | 133,126 |
|
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Comparable sales percentages by line of business (A): |
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Service center revenue |
| 1.9 | % | -1.0 | % | ||
Retail sales |
| -0.5 | % | -1.9 | % | ||
Total revenues |
| 0.8 | % | -1.4 | % | ||
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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 |
| 22.5 | % | 22.0 | % | ||
Impairment charge |
| (0.3 | ) | (0.3 | ) | ||
Gross profit percentage from service center revenue |
| 22.2 | % | 21.7 | % | ||
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Gross profit percentage from retail sales, prior to impairment charge |
| 27.7 | % | 28.4 | % | ||
Impairment charge |
| (0.0 | ) | (0.1 | ) | ||
Gross profit percentage from retail sales |
| 27.7 | % | 28.3 | % | ||
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Total gross profit percentage |
| 24.7 | % | 24.7 | % |
(A) Retail sales include DIY and commercial sales. Service center revenue includes revenue from labor and installed parts and tires.