Pep Boys Reports [%] Comp Sales Increase


FOR IMMEDIATE RELEASE


Pep Boys Reports Third Quarter 2015 Results


PHILADELPHIA - December 7, 2015 - The Pep Boys - Manny, Moe & Jack (NYSE: 'PBY'), the nation's leading automotive aftermarket service and retail chain, announced the following results for the thirteen (third quarter) and thirty-nine (nine months) weeks ended October 31, 2015.


Third Quarter Sales

Sales for the thirteen weeks ended October 31, 2015 decreased by $9.4 million, or 1.8%, to

$508.1 million from $517.6 million for the thirteen weeks ended November 1, 2014. Comparable sales decreased 1.8%, consisting of a decrease of 2.5% in comparable service revenue and a decrease of 1.6% in comparable merchandise sales. In accordance with GAAP, service revenue is limited to labor sales, while merchandise sales include merchandise sold through both our service center and retail lines of business. Re-categorizing sales into the respective lines of business from which they are generated, comparable service center revenue decreased 1.5%, while comparable retail sales decreased 2.2%.


Earnings

Net earnings for the third quarter of fiscal 2015 were $1.3 million or $0.02 per share as compared to a net loss of $2.0 million or ($0.03 per share) recorded in the third quarter of fiscal 2014. The 2015 results included, on a pre-tax basis, a $6.0 million gain from the sale of two locations offset by a $0.8 million asset impairment charge, $2.9 million in merger and acquisition expense, $1.0 million in legal expense and $0.9 million in severance charges. The 2014 results included, on a pre-tax basis, a $1.4 million asset impairment charge and $1.4 million in severance charges.


Nine Months Sales

Sales for the thirty-nine weeks ended October 31, 2015 decreased by $5.2 million, or 0.3%, to

$1,576.9 million from $1,582.2 million for the thirty-nine weeks ended November 1, 2014. Comparable sales decreased 0.2%, consisting of a 0.5% comparable service revenue decrease and a 0.1% comparable merchandise sales decrease. Re-categorizing sales (see above), comparable service center revenue increased 0.3%, while comparable retail sales decreased 0.9%.


Earnings

Net earnings for the first nine months of 2015 were $18.0 million or $0.33 per share as compared to net a loss of $0.6 million or ($0.01 per share) for the first nine months of fiscal 2014. The

2015 results included, on a pre-tax basis, a $10.0 million sale of a leasehold interest and a gain of

$6.5 million from the sale of five locations offset by a $3.3 million asset impairment charge, $3.4 million in expenses related to our annual meeting and strategic alternatives review and a $1.7 million severance charge. The 2014 results included, on a pre-tax basis, a $5.2 million asset impairment charge, a $4.0 million litigation charge and $2.4 million in severance charges. In addition, the 2014 results included a $0.9 million tax expense related to valuation allowances.


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Investor Contact:

David Stern (215) 430-9727

Email: investorrelations@pepboys.com


Pep Boys Financial Highlights

Thirteen weeks ended

October 31, 2015

November 1, 2014

Total revenues

$

508,136,000

$

517,584,000

Net earnings (loss)

$

1,266,000

$

(1,964,000)

Basic earnings (loss) per share:

Average shares

54,326,000

53,590,000

Basic earnings (loss) per share:

$

0.02

$

(0.03)

Diluted earnings (loss) per share:

Average shares

54,605,000

53,590,000

Diluted earnings (loss) per share:

$

0.02

$

(0.03)


Thirty-nine weeks ended


October 31, 2015


November 1, 2014

Total revenues

$

1,576,943,000

$

1,582,179,000

Net earnings (loss)

$

17,970,000

$

(625,000)

Basic earnings (loss) per share:

Average shares

54,214,000

53,533,000

Basic earnings (loss) per share:

$

0.33

$

(0.01)

Diluted earnings (loss) per share:

Average shares

54,401,000

53,533,000

Diluted earnings (loss) per share:

$

0.33

$

(0.01)


THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES

(UNAUDITED)


CONSOLIDATED BALANCE SHEETS

(dollar amounts in thousands)


October 31, 2015


January 31, 2015


November 1, 2014

Assets

Current assets:

Cash and cash equivalents

$ 71,332

$ 38,044

$ 36,430

Accounts receivable, less allowance for

uncollectible accounts of $1887, $1,604 and $1,616

31,743

31,013

31,622

Merchandise inventories

630,608

656,957

667,438

Prepaid expenses

15,079

27,952

15,314

Other current assets

48,219

55,986

51,470

Assets held for disposal

500

2,648

4,636

Total current assets

797,481

812,600

806,910

Property and equipment, net of accumulated depreciation

of $1,287,150, $1,251,797 and $1,257,988

579,300

604,380

614,326

Goodwill

32,869

32,869

56,794

Deferred income taxes

49,103

56,571

57,070

Other long-term assets

33,602

35,321

37,301

Total assets

$ 1,492,355

$ 1,541,741

$ 1,572,401


Liabilities and stockholders' equity

Current liabilities:


Accounts payable

$ 219,903

$ 227,132

$ 217,066

Trade payable program liability

127,765

140,904

145,105

Accrued expenses

198,535

226,176

209,524

Deferred income taxes

65,615

61,216

68,556

Current maturities of long-term debt

2,000

2,000

2,000

Total current liabilities

613,818

657,428

642,251


Long-term debt less current maturities


192,500


211,000


229,500

Other long-term liabilities

42,047

45,567

45,843

Deferred gain from asset sales

96,298

103,596

105,370

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

297,560

298,299

297,313

Retained earnings

407,854

397,890

428,845

Accumulated other comprehensive income

(519)

(391)

43

Treasury stock, at cost - 14,453,129 shares; 14,988,205 shares and

15,177,705 shares

(225,760)

(240,205)

(245,321)

Total stockholders' equity

547,692

524,150

549,437

Total liabilities and stockholders' equity

$ 1,492,355

$ 1,541,741

$ 1,572,401


Supplemental balance sheet information:


Working capital

$ 183,663

$ 155,172

$ 164,659

Current ratio

1.30

1.24

1.26

Accounts payable to inventory ratio

55.1%

56.0%

54.3%

Total debt as a percent of total capitalization

26.2%

28.9%

29.6%

Debt as a percent of total capitalization, net

18.4%

25.0%

26.2%

distributed by