Exhibit 99.2 Unaudited Supplemental Financial Information
THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(dollar amounts in thousands, except per share amounts)
UNAUDITED
Thirteen weeks ended Twenty-six weeks Ended
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July 31, 2004 August 2, 2003 July 31, 2004 August 2, 2003
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Amount % Sales Amount % Sales Amount % Sales Amount % Sales
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Merchandise Sales $ 488,716 82.4 $ 451,285 81.2 $ 949,597 81.9 $ 862,417 80.8
Service Revenue 104,710 17.6 104,745 18.8 209,962 18.1 204,523 19.2
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Total Revenues 593,426 100.0 556,030 100.0 1,159,559 100.0 1,066,940 100.0
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Costs of Merchandise Sales 345,894 70.8 344,903 76.4 669,948 70.6 635,243 73.7
Costs of Service Revenue 80,256 76.6 80,881 77.2 158,367 75.4 155,653 76.1
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Total Costs of Revenues 426,150 71.8 425,784 76.6 828,315 71.4 790,896 74.1
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Gross Profit from Merchandise Sales 142,822 29.2 106,382 23.6 279,649 29.4 227,174 26.3
Gross Profit from Service Revenue 24,454 23.4 23,864 22.8 51,595 24.6 48,870 23.9
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Total Gross Profit 167,276 28.2 130,246 23.4 331,244 28.6 276,044 25.9
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Selling, General and
Administrative Expenses 136,694 23.0 143,049 25.7 266,256 23.0 290,826 27.3
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Operating Profit (Loss) 30,582 5.2 (12,803) (2.3) 64,988 5.6 (14,782) (1.4)
Non-operating Income 470 0.0 851 0.1 1,062 0.1 1,901 0.2
Interest Expense 7,800 1.3 9,603 1.7 17,098 1.5 20,304 1.9
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Earnings (Loss) from Continuing Operations
Before Income Taxes and Cumulative Effect
of Change in Accounting Principle 23,252 3.9 (21,555) (3.9) 48,952 4.2 (33,185) (3.1)
Income Tax Expense (Benefit) 8,603 37.0 (7,976) 37.0 18,112 37.0 (12,279) 37.0
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Net Earnings (Loss) from Continuing
Operations Before Cumulative Effect of
Change in Accounting Principle 14,649 2.5 (13,579) (2.4) 30,840 2.6 (20,906) (2.0)
Discontinued Operations, Net of Tax (852) (0.2) (22,802) (4.1) (1,383) (0.1) (22,208) (2.1)
Cumulative Effect of Change in
Accounting Principle, Net of Tax - 0.0 - 0.0 - 0.0 (2,484) (0.2)
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Net Earnings (Loss) 13,797 2.3 (36,381) (6.5) 29,457 2.5 (45,598) (4.3)
Retained Earnings, beginning of period 588,172 617,798 577,793 630,847
Cash Dividends (3,915) (3,491) (7,813) (6,978)
Effect of Stock Options (818) (6,477) (2,201) (6,548)
Dividend Reinvestment Plan - (46) - (320)
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Retained Earnings, end of period $ 597,236 $ 571,403 $ 597,236 $ 571,403
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Basic Earnings (Loss) Per Share:
Net Earnings (Loss) From Continuing
Operations Before Cumulative Effect
of Change in Accounting Principle $ 0.25 $ (0.26) $ 0.55 $ (0.40)
Discontinued Operations,Net of Tax (0.01) (0.44) (0.03) (0.43)
Cumulative Effect of Change in
Accounting Principle, Net of Tax - - - (0.05)
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Basic Earnings (Loss) Per Share $ 0.24 $ (0.70) $ 0.52 $ (0.88)
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Diluted Earnings (Loss) Per Share:
Net Earnings (Loss) From Continuing Operations
Before Cumulative Effect of Change
in Accounting Principle $ 0.23 $ (0.26) $ 0.50 $ (0.40)
Discontinued Operations, Net of Tax (0.01) (0.44) (0.02) (0.43)
Cumulative Effect of Change in
Accounting Principle, Net of Tax - - - (0.05)
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Diluted Earnings (Loss) per Share $ 0.22 $ (0.70) $ 0.48 $ (0.88)
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Cash Dividends per Share $ 0.0675 $ 0.0675 $ 0.1350 $ 0.1350
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THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(dollar amounts in thousands, except per share amounts)
UNAUDITED
July 31, 2004 Jan. 31, 2004* Aug. 2, 2003
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ASSETS
Current Assets:
Cash and cash equivalents $ 83,893 $ 60,984 $ 68,095
Accounts receivable, net 40,355 30,562 24,405
Merchandise inventories 596,451 553,562 506,510
Prepaid expenses 32,714 39,480 29,430
Deferred income taxes 10,645 20,826 32,623
Other 76,113 81,096 51,505
Assets held for disposal 3,118 16,929 21,900
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Total Current Assets 843,289 803,439 734,468
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Property and Equipment-at cost:
Land 263,199 263,907 264,121
Buildings and improvements 908,139 899,114 892,927
Furniture, fixtures and equipment 596,497 586,607 592,213
Construction in progress 19,255 12,800 26,886
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1,787,090 1,762,428 1,776,147
Less accumulated depreciation and amortization 806,867 776,242 761,687
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Property and Equipment - Net 980,223 986,186 1,014,460
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Other 52,526 51,398 56,913
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Total Assets $1,876,038 $1,841,023 $1,805,841
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 335,890 $ 342,584 $ 319,223
Accrued expenses 244,831 267,565 267,356
Current maturities of long-term debt and obligations
under capital leases 147,258 117,063 72,362
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Total Current Liabilities 727,979 727,212 658,941
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Long-term debt and obligations under capital leases,
less current maturities 144,727 258,016 314,711
Convertible long-term debt, less current maturities 150,000 150,000 150,000
Other long-term liabilities 28,492 28,802 28,924
Deferred income taxes 68,013 57,492 42,894
Deferred gain on sale leaseback 59 3,907 4,324
Commitments and Contingencies
Stockholders' Equity:
Common Stock, par value $1 per share:
Authorized 500,000,000 shares; Issued 68,557,041,
Issued 63,910,577 and Issued 63,910,577 shares 68,557 63,911 63,911
Additional paid-in capital 284,465 177,317 177,244
Retained earnings 597,236 577,793 571,403
Common stock subscriptions receivable (144) - -
Accumulated other comprehensive income (loss) 1,098 (15) 3,749
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951,212 819,006 816,307
Less cost of shares in treasury - 8,372,727 shares,
8,928,159 shares and 9,352,311 shares 135,180 144,148 150,996
Less cost of shares in benefits trust - 2,195,270 shares 59,264 59,264 59,264
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Total Stockholders' Equity 756,768 615,594 606,047
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Total Liabilities and Stockholders' Equity $1,876,038 $1,841,023 $1,805,841
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* Taken from the audited financial statements at January 31, 2004.
THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollar amounts in thousands)
UNAUDITED
Twenty-six Weeks Ended July 31, 2004 August, 2, 2003
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Cash Flows from Operating Activities:
Net earnings (loss) $ 29,457 $ (45,598)
Net loss from discontinued operations (1,383) (22,208)
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Net earnings (loss) from continuing operations 30,840 (23,390)
Adjustments to Reconcile Net Earnings (Loss) from Continuing
Operations to Net Cash Provided by Continuing Operations:
Cumulative effect of change in accounting principle, net of tax - 2,484
Depreciation and amortization 33,712 35,271
Accretion of asset disposal obligation 71 90
Stock compensation expense 847 -
Deferred income taxes 20,553 (38,959)
Deferred gain on sale lease back (119) (8)
Loss on asset impairment - 2,121
Loss from sales of assets 386 34
Changes in Operating Assets and Liabilities:
Decrease in accounts receivable, prepaid expenses and other 5,028 9,289
Increase in merchandise inventories (42,889) (17,628)
(Decrease) increase in accounts payable (3,493) 119,170
(Decrease) increase in accrued expenses (22,554) 40,593
(Decrease) increase in other long-term liabilities (310) 3,768
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Net cash provided by continuing operations 22,072 132,835
Net cash (used in) provided by discontinued operations (1,728) 4,591
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Net Cash Provided by Operating Activities 20,344 137,426
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Cash Flows from Investing Activities:
Capital expenditures (28,830) (21,420)
Proceeds from sales of assets 1,453 806
Proceeds from sales of assets held for disposal 10,532 1,146
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Net Cash Used in Investing Activities (16,845) (19,468)
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Cash Flows from Financing Activities:
Net borrowings under line of credit agreements 137 1,441
Repayments of short-term borrowings (7,216) -
Reduction of long-term debt (84,425) (91,427)
Other 3,283 (400)
Dividends paid (7,813) (6,978)
Proceeds from issuance of common stock 108,854 -
Proceeds from exercise of stock options 6,049 4,085
Proceeds from dividend reinvestment plan 541 646
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Net Cash Provided by (Used in) Financing Activities 19,410 (92,633)
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Net Increase in Cash 22,909 25,325
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Cash and Cash Equivalents at Beginning of Period 60,984 42,770
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Cash and Cash Equivalents at End of Period $ 83,893 $ 68,095
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Non-cash financing activities:
Equipment Capital Leases $ 1,413 $ -
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THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES
COMPUTATION OF BASIC AND DILUTED EARNINGS PER SHARE
(in thousands, except per share data)
UNAUDITED
Thirteen weeks ended Twenty-six weeks ended
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July 31, 2004 August 2, 2003 July 31, 2004 August 2, 2003
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(a) Net earnings (loss) from continuing operations
before cumulative effect of change in
accounting principle $ 14,649 $ (13,579) $ 30,840 $ (20,906)
Adjustment for interest on convertible senior
notes, net of income tax effect 1,001 - 2,003 -
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(b) Adjusted net earnings (loss) from continuing
operations before cumulative effect
of change in accounting principle $ 15,650 $ (13,579) $ 32,843 $ (20,906)
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(c) Average number of common shares outstanding
during period 57,875 51,816 56,410 51,733
Common shares assumed issued upon conversion of
convertible senior notes - 6,697 -
6,697
Common shares assumed issued upon exercise
of dilutive stock options, net of assumed
repurchase, at the average market price 1,749 - 1,847 -
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(d) Average number of common shares assumed
outstanding during period 66,321 51,816 64,954 51,733
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Basic Earnings (Loss) per Share:
Net Earnings (Loss) From Continuing Operations
Before Cumulative Effect of Change in
Accounting Principle (a/c) $ 0.25 $ (0.26) $ 0.55 $ (0.40)
Discontinued Operations, Net of Tax (0.01) (0.44) (0.03) (0.43)
Cumulative Effect of Change in
Accounting Principle, Net of Tax - - - (0.05)
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Basic Earnings (Loss) Per Share $ 0.24 $ (0.70) $ 0.52 $ (0.88)
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Diluted Earnings (Loss) Per Share:
Net Earnings (Loss) from Continuing Operations
Before Cumulative Effect of Change in
Accounting Principle (b/d) $ 0.23 $ (0.26) $ 0.50 $ (0.40)
Discontinued Operations, Net of Tax (0.01) (0.44) (0.02) (0.43)
Cumulative Effect of Change in
Accounting Principle, Net of Tax - - - (0.05)
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Diluted Earnings (Loss) Per Share $ 0.22 $ (0.70) $ 0.48 $ (0.88)
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THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES
ADDITIONAL INFORMATION
(dollar amounts in thousands)
UNAUDITED
Thirteen weeks ended Twenty-six weeks ended
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July 31, 2004 August 2, 2003 July 31, 2004 August 2, 2003
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Capital expenditures $ 21,147 $ 12,855 $ 28,830 $ 21,420
Depreciation and amortization $ 16,937 $ 17,433 $ 33,712 $ 35,271
Non-operating income:
Net rental revenue $ 474 $ 678 $ 848 $ 1,550
Investment income 111 125 348 263
Other (loss) income (115) 48 (134) 88
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Total $ 470 $ 851 $ 1,062 $ 1,901
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Comparable store sales percentages:
Merchandise 8.4 % -2.1 % 10.3 % -4.2 %
Service 0.0 0.8 2.8 -0.4
Total 6.9 -1.6 8.8 -3.5
Total square feet of retail space (including service centers) 12,206,785 12,217,210
Total Store Count 595 596
Charges relating to Corporate Restructuring
are included in:
Costs of Merchandise Sales $ 468 $ 26,605
Costs of Service Revenue 156 625
Selling, General & Administrative Expenses - 5,974
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Total pretax charges 624 33,204
Income tax (benefit) expense (231) (12,285)
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Subtotal charges, net of tax $ 393 $ 20,919
Discontinued operations, net of tax 852 22,802
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Total charges, net of tax $ 1,245 $ 43,721
=============== ==============
Charges relating to other charges
are included in:
Costs of Merchandise Sales $ - $ 2,947
Costs of Service Revenue 1,053 2,455
Selling, General & Administrative Expenses 3,545 9,175
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Total pretax charges 4,598 14,577
Income tax expense 1,701 5,393
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Total charges, net of tax $ 2,897 $ 9,184
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Selected Financial Data
(adjusted for charges above):
Gross Profit from Merchandise Sales $ 143,290 $ 135,934
Gross Profit from Service Revenue $ 25,663 $ 26,944
Selling, General & Administrative Expenses $ 133,149 $ 127,900
Selected Percentage to Sale
(adjusted for charges above):
Gross Profit from Merchandise Sales 29.32 % 30.12 %
Gross Profit from Service Revenue 24.51 % 25.72 %
Selling, General & Administrative Expenses 22.44 % 23.00 %
THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES
ADDITIONAL INFORMATION
(dollar amounts in thousands)
UNAUDITED
Thirteen weeks ended Twenty-six weeks ended
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July 31, 2004 August 2, 2003 July 31, 2004 August 2, 2003
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Revenues and Gross Profit by Line of Business(A):
Retail Revenues $ 359,613 $ 307,955 $ 696,662 $ 594,308
Service Center Revenues 233,813 248,075 462,898 472,632
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Total Revenues $ 593,426 $ 556,030 $ 1,159,560 $ 1,066,940
=============== =============== ================ =================
Gross Profit from Retail Revenues $ 100,962 $ 64,458 $ 199,462 $ 141,766
Gross Profit from Service Center Revenues 66,314 65,788 131,782 134,278
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Total Gross profit $ 167,276 $ 130,246 331,244 $ 276,044
=============== =============== =============== =================
Charges relating to Corporate Restructuring
are included in:
Costs from Retail Revenues $ 468 $ 18,691
Costs from Service Center Revenues 156 8,539
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Total Cost of Revenues $ 624 $ 27,230
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Charges relating to other charges
are included in:
Costs from Retail Revenues $ - $ 2,947
Costs from Service Center Revenues 1,053 2,455
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Total Cost of Revenues $ 1,053 $ 5,402
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Revenues and Gross Profit by Line of Business Adjusted for Charges above (A):
Retail Revenues $ 359,613 $ 307,955
Service Center Revenues 233,813 248,075
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Total Revenues $ 593,426 $ 556,030
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Gross Profit from Retail Revenues $ 101,430 $ 86,096
Gross Profit from Service Center Revenues 67,523 76,782
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Total Gross Profit $ 168,953 $ 162,878
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Comparable Sales Percentages (A):
Retail Revenues 16.7 %
Service Center Revenues -5.3
Total Revenues 6.9
Gross Profit Percentage by Line of Business Adjusted for Charges above (A):
Gross Profit Percentage from Retail Revenues 28.2 % 28.0 %
Gross Profit Percentage from Service Center Revenues 28.9 % 31.0 %
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Total Gross Profit Percentage 28.5 % 29.3 %
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(A) Retail Revenues include revenues from DIY and Commercial sales. Service Center Revenues include revenues from labor
and installed parts and tires.