Pep Boys Manny Moe & Jack (PBY) 8-K Pep Boys Reports Second Quarter 2015 Results

Exhibit 99.2

THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES (UNAUDITED)

CONSOLIDATED BALANCE SHEETS

(dollar amounts in thousands)

	August 1, 2015			January 31, 2015			August 2, 2014
Assets
Current assets:
Cash and cash equivalents	$	62,408		$	38,044		$	38,423
Accounts receivable, less allowance for uncollectible accounts of $1,719, $1,604 and $2,102	29,762			31,013			27,908
Merchandise inventories	636,692			656,957			659,547
Prepaid expenses	20,831			27,952			21,314
Other current assets	50,866			55,986			56,172
Assets held for disposal	2,466			2,648			2,647
Total current assets	803,025			812,600			806,011
Property and equipment, net of accumulated depreciation of $1,276,588, $1,251,797 and $1,254,126	587,805			604,380			623,285
Goodwill	32,869			32,869			56,794
Deferred income taxes	49,136			56,571			56,406
Other long-term assets	34,345			35,321			38,236
Total assets	$	1,507,180		$	1,541,741		$	1,580,732
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	216,826		$	227,132		$	219,423
Trade payable program liability	134,356			140,904			137,214
Accrued expenses	210,689			226,176			224,399
Deferred income taxes	65,542			61,216			70,785
Current maturities of long-term debt	2,000			2,000			2,000
Total current liabilities	629,413			657,428			653,821
Long-term debt less current maturities	193,000			211,000			220,000
Other long-term liabilities	43,154			45,567			46,899
Deferred gain from asset sales	97,125			103,596			108,521
Commitments and contingencies
Stockholders’ equity:
Common stock, par value $1 per share:
Authorized 500,000,000 shares; issued 68,557,046 shares	68,557			68,557			68,557
Additional paid-in capital	296,750			298,299			297,924
Retained earnings	408,565			397,890			432,476
Accumulated other comprehensive income	(294		)	(391		)	213
Treasury stock, at cost - 14,576,481 shares; 14,988,205 shares and 15,265,028 shares	(229,090		)	(240,205		)	(247,679		)
Total stockholders’ equity	544,488			524,150			551,491
Total liabilities and stockholders’ equity	$	1,507,180		$	1,541,741		$	1,580,732
Supplemental balance sheet information:
Working capital	$	173,612		$	155,172		$	152,190
Current ratio	1.28			1.24			1.23
Accounts payable to inventory ratio	55.2		%	56.0		%	54.1		%
Total debt as a percent of total capitalization	26.4		%	28.9		%	28.7		%
Debt as a percent of total capitalization, net	19.6		%	25.0		%	25.0		%

THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(dollar amounts in thousands, except per share amounts)

	Thirteen weeks ended										Twenty-six weeks ended
	August 1, 2015					August 2, 2014					August 1, 2015					August 2, 2014
				%					%					%					%
	Amount			Sales		Amount			Sales		Amount			Sales		Amount			Sales
Merchandise sales	$	401,880		76.3		$	400,931		76.3		$	815,005		76.3		$	812,837		76.4
Service revenue	124,666			23.7		124,842			23.7		253,802			23.7		251,758			23.6
Total revenues	526,546			100.0		525,773			100.0		1,068,807			100.0		1,064,595			100.0
Costs of merchandise sales	279,707			69.6		280,100			69.9		565,950			69.4		565,147			69.5
Costs of service revenue	119,267			95.7		121,376			97.2		241,518			95.2		242,024			96.1
Total costs of revenues	398,974			75.8		401,476			76.4		807,468			75.5		807,171			75.8
Gross profit from merchandise sales	122,173			30.4		120,831			30.1		249,055			30.6		247,690			30.5
Gross profit from service revenue	5,399			4.3		3,466			2.8		12,284			4.8		9,734			3.9
Total gross profit	127,572			24.2		124,297			23.6		261,339			24.5		257,424			24.2
Selling, general and administrative expenses	117,272			22.3		120,624			22.9		238,118			22.3		247,694			23.3
Net gain (loss) from dispositions of assets	267			0.1		(400		)	(0.1	)	485			—		(410		)	—
Gain on sale from leasehold interest	—			—		—			—		10,000			0.9		—			—
Operating profit	10,567			2.0		3,273			0.6		33,706			3.2		9,320			0.9
Other income	334			0.1		316			0.1		706			0.1		758			0.1
Interest expense	(3,262		)	(0.6	)	(3,002		)	(0.6	)	(6,591		)	(0.6	)	(6,784		)	(0.6	)
Earnings from continuing operations before income taxes and discontinued operations	7,639			1.5		587			0.1		27,821			2.6		3,294			0.3
Income tax expense	(2,903		)	(38.0	)(1)	(764		)	(130.1	)(1)	(11,225		)	(40.3	)(1)	(1,831		)	(55.6	)(1)
Earnings (loss) from continuing operations before discontinued operations	4,736			0.9		(177		)	—		16,596			1.6		1,463			0.1
Earnings (loss) from discontinued operations, net of tax	74			—		(96		)	—		108			—		(125		)	—
Net earnings (loss)	4,810			0.9		(273		)	(0.1	)	16,704			1.6		1,338			0.1
Basic earnings per share:
Earnings from continuing operations before discontinued operations	$	0.09				$	—				$	0.31				$	0.03
Discontinued operations, net of tax	—					—					—					—
Basic earnings per share	$	0.09				$	—				$	0.31				$	0.03
Diluted earnings per share:
Earnings from continuing operations before discontinued operations	$	0.09				$	—				$	0.31				$	0.03
Discontinued operations, net of tax	—					—					—					—
Diluted earnings per share	$	0.09				$	—				$	0.31				$	0.03
Other comprehensive (loss) income:
Derivative financial instruments adjustment, net of tax	(49		)			(128		)			97					(166		)
Other comprehensive (loss) income	(49		)			(128		)			97					(166		)
Comprehensive income (loss)	$	4,761				$	(401	)			$	16,801				$	1,172

(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 1, 2015			August 2, 2014
Cash flows from operating activities:
Net earnings	$	16,704		$	1,338
Adjustments to reconcile net earnings to net cash provided by continuing operations:
Net (earnings) loss from discontinued operations	(108		)	125
Depreciation	33,195			36,346
Amortization of deferred gain from asset sales	(6,471		)	(6,302		)
Amortization of deferred financing costs	1,252			1,311
Stock compensation expense	2,267			1,799
Deferred income taxes	10,261			2,727
Net (gain) loss from dispositions of assets	(485		)	410
Loss from asset impairment	2,476			3,839
Other	(554		)	(79		)
Changes in assets and liabilities, net of the effects of acquisitions:
Decrease in accounts receivable, prepaid expenses and other	14,675			12,572
Decrease in merchandise inventories	20,265			12,807
Decrease in accounts payable	(9,022		)	(34,591		)
Decrease in accrued expenses	(15,147		)	(15,167		)
Decrease in other long-term liabilities	(1,839		)	(1,277		)
Net cash provided by continuing operations	67,469			15,858
Net cash used in discontinued operations	(194		)	(300		)
Net cash provided by operating activities	67,275			15,558
Cash flows from investing activities:
Capital expenditures	(22,102		)	(39,010		)
Proceeds from dispositions of assets	2,066			35
Net cash used in investing activities	(20,036		)	(38,975		)
Cash flows from financing activities:
Borrowings under line of credit agreements	112,193			339,179
Payments under line of credit agreements	(129,193		)	(317,679		)
Borrowings on trade payable program liability	80,890			94,353
Payments on trade payable program liability	(87,438		)	(86,940		)
Debt payments	(1,000		)	(1,000		)
Proceeds from stock issuance	1,673			496
Net cash (used in) provided by financing activities	(22,875		)	28,409
Net increase in cash and cash equivalents	24,364			4,992
Cash and cash equivalents at beginning of period	38,044			33,431
Cash and cash equivalents at end of period	$	62,408		$	38,423
Supplemental cash flow information:
Cash paid for income taxes	$	940		$	660
Cash received from income tax refunds	$	—		$	244
Cash paid for interest	$	5,257		$	5,584
Accrued purchases of property and equipment	$	2,110		$	3,537

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 1, 2015		August 2, 2014			August 1, 2015		August 2, 2014
(a)	Earnings (loss) from continuing operations before discontinued operations		$	4,736	$	(177	)	$	16,596	$	1,463
	Earnings (loss) from discontinued operations, net of tax		74		(96		)	108		(125		)
	Net earnings (loss)		$	4,810	$	(273	)	$	16,704	$	1,338
(b)	Basic average number of common shares outstanding during period		54,239		53,528			54,167		53,499
	Common shares assumed issued upon exercise of dilutive stock options, net of assumed repurchase, at the average market price		192		—			141		526
(c)	Diluted average number of common shares assumed outstanding during period		54,431		53,528			54,308		54,025
	Basic earnings per share:
	Earnings from continuing operations before discontinued operations	(a) / (b)	$	0.09	$	—		$	0.31	$	0.03
	Discontinued operations, net of tax		—		—			—		—
	Basic earnings per share		$	0.09	$	—		$	0.31	$	0.03
	Diluted earnings per share:
	Earnings from continuing operations before discontinued operations	(a) / (c)	$	0.09	$	—		$	0.31	$	0.03
	Discontinued operations, net of tax		—		—			—		—
	Diluted earnings per share		$	0.09	$	—		$	0.31	$	0.03

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

	Thirteen weeks ended						Twenty-six weeks ended
	August 1, 2015			August 2, 2014			August 1, 2015			August 2, 2014
Capital expenditures	$	9,835		$	24,445		$	22,102		$	39,010
Depreciation	$	16,301		$	18,026		$	33,195		$	36,346
Non-operating income:
Net rental revenue	$	277		$	284		$	581		$	683
Investment income	52			46			112			93
Other income	5			(14		)	13			(18		)
Total	$	334		$	316		$	706		$	758
Comparable sales percentages:
Service	-0.4		%	5.4		%	0.5		%	4.3		%
Merchandise	0.5		%	-3.8		%	0.6		%	-3.3		%
Total	0.3		%	-1.8		%	0.6		%	-1.6		%
Total square feet of retail space (including service centers)							12,885,000			12,807,000
Store count
Supercenter							562			565
Service & Tire Center							234			228
Retail Only							5			6
Total							801			799
Sales and gross profit by line of business (A):
Service center revenue	$	290,806		$	288,302		$	591,689		582,215
Retail sales	235,740			237,471			477,118			482,380
Total revenues	$	526,546		$	525,773		$	1,068,807		$	1,064,595
Gross profit from service center revenue, prior to impairment charge	$	64,316		$	62,063		$	131,966		126,798
Service center revenue impairment charge	(605		)	(1,379		)	(1,356		)	(2,335		)
Gross profit from service center revenue	$	63,711		$	60,684		$	130,610		$	124,463
Gross profit from retail sales, prior to impairment charge	$	64,934		$	64,901		$	131,847		134,464
Retail sales impairment charge	(1,073		)	(1,288		)	(1,118		)	(1,503		)
Gross profit from retail sales	$	63,861		$	63,613		$	130,729		$	132,961
Total gross profit	$	127,572		$	124,297		$	261,339		$	257,424
Comparable sales percentages by line of business (A):
Service center revenue	0.6		%	-0.2		%	1.2		%	-0.6		%
Retail sales	0.0		%	-3.6		%	-0.2		%	-2.7		%
Total revenues	0.3		%	-1.8		%	0.6		%	-1.6		%
Gross profit percentage by line of business (A):
Gross profit percentage from service center revenue, prior to impairment charge	22.1		%	21.5		%	22.3		%	21.8		%
Impairment charge	(0.2		)	(0.5		)	(0.2		)	(0.4		)
Gross profit percentage from service center revenue	21.9		%	21.0		%	22.1		%	21.4		%
Gross profit percentage from retail sales, prior to impairment charge	27.5		%	27.3		%	27.6		%	27.9		%
Impairment charge	(0.5		)	(0.5		)	(0.2		)	(0.3		)
Gross profit percentage from retail sales	27.1		%	26.8		%	27.4		%	27.6		%
Total gross profit percentage	24.2		%	23.6		%	24.5		%	24.2		%

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