PEP BOYS - MANNY MOE & JACK Sales for the thirteen weeks ended January 31, 2015 increased by $6.7 million, or 1.3%, to
$502.4 million from $495.7 million for the thirteen weeks ended February 1, 2014. Comparable sales increased 1.3%, consisting of a 5.1% comparable service revenue increase and a 0.2% comparable merchandise sales increase. 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 increased 3.2%, while comparable retail sales decreased 1.0%.
EarningsNet loss for the fourth quarter of fiscal 2014 was $26.7 million ($0.50 per share) as compared to a net loss of $3.3 million ($0.06 per share) for the fourth quarter of fiscal 2013. On a pre-tax basis, the 2014 results included, a net charge of $12.4 million comprised of a $23.9 million goodwill impairment charge, a $2.3 million asset impairment charge and $0.5 million in severance, partially offset by a $14.3 million gain from the disposition of certain properties. The
2013 results included a $2.8 million asset impairment charge and $0.4 million of debt refinancing expense.
Fiscal Year SalesSales for fiscal year 2014 increased by $18.0 million, or 0.9%, to $2,084.6 million from $2,066.6 million for fiscal year 2013. Comparable sales remained relatively flat, consisting of a 4.9%
comparable service revenue increase and a 1.6% comparable merchandise sales decrease. Re- categorizing sales (see above), comparable service center revenue increased 1.4%, while comparable retail sales decreased 1.9%.
EarningsNet loss for fiscal year 2014 was $27.3 million ($0.51 per share) as compared to earnings of $6.9 million ($0.13 per share) for fiscal year 2013. On a pre-tax basis, the 2014 results included, a net charge of $24.6 million comprised of a $23.9 million goodwill impairment charge, a $7.5 million asset impairment charge, $4.0 million in litigation expense and $2.9 million in severance, partially offset by a $13.8 million gain from the disposition of certain properties. The fiscal year
2013 results included, on a pre-tax basis, a net charge of $8.7 million comprised of a $7.7 million asset impairment charge, $0.6 million in severance and $0.4 million of debt refinancing expense.
Commentary"The fourth quarter was a time of transition for the Company," said interim CEO John Sweetwood. "We continued to increase our sales in the growing service segment. Our investments in the high-growth areas of our business - commercial, tires, fleet and digital - increased revenue, but temporarily depressed margins. To date in the first quarter, we have generated higher sales and experienced recovering margins."
John continued, "With only three weeks to go in the first quarter of 2015, we are seeing a turn around in the business. At this point comparable store sales are up with double-digit growth in commercial, fleet and digital. With margins recovering, combined with improved expense and inventory management, to date we are seeing an improvement in operating profit and cash flow."
About Pep Boys
Since 1921, Pep Boys has been the nation's leading automotive aftermarket chain. With over 7,500 service bays in 806 locations
in 35 states and Puerto Rico, Pep Boys offers name-brand tires; automotive maintenance and repair; parts and expert advice for the Do-It-Yourselfer; commercial auto parts delivery; and fleet maintenance and repair. Customers can find the nearest location by calling 1-800-PEP-BOYS (1-800-737-2697) or by visiting www.pepboys.com.
Certain statements contained herein constitute "forward-looking statements" within the meaning of The Private Securities Litigation Reform Act of 1995. The words "guidance," "expect," "anticipate," "estimates," "targets," "forecasts" and similar expressions are intended to identify such forward-looking statements. Forward-looking statements include management's expectations regarding implementation of its long-term strategic plan, future financial performance, automotive aftermarket trends, levels of competition, business development activities, future capital expenditures, financing sources and availability and the effects of regulation and litigation. Although the Company believes that the expectations reflected in such forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be achieved. The Company's actual results may differ materially from the results discussed in the forward-looking statements due to factors beyond the control of the Company, including the strength of the national and regional economies, retail and commercial consumers' ability to
spend, the health of the various sectors of the automotive aftermarket, the weather in geographical regions with a high concentration of the Company's stores, competitive pricing, the location and number of competitors' stores, product and labor costs and the additional factors described in the Company's filings with the SEC. The Company assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.
Investors have an opportunity to listen to the Company's quarterly conference calls discussing its results and related matters. The call for the fourth quarter will be broadcast live on Tuesday, April 14 at 8:30 a.m. EDT over the Internet at the Vcall website, located at www.investorcalendar.com. To listen to the call live, please go to the website at least 15 minutes early to register, download and install any necessary audio software. For those who cannot listen to the live broadcast, a replay will be available shortly after the call. Supplemental financial information will be available the morning of Tuesday, April 14 on Pep Boys' website at www.pepboys.com. In addition, Pep Boys' investor presentation, also available at www.pepboys.com, will be updated to reflect the Company's year-to-date results.
###
Investor Contact:Sanjay Sood
(215) 430-9105
Email: investorrelations@pepboys.com
Pep Boys Financial Highlights
Thirteen weeks ended | January 31, 2015 | February 1, 2014 |
Total revenues | $ 502,423,000 | $ 495,733,000 |
Net loss | $ (26,666,000) | $ (3,331,000) |
Basic loss per share: | ||
Average shares | 53,816,000 | 53,422,000 |
Basic loss per share: | $ (0.50) | $ (0.06) |
Diluted loss per share: Average shares | 53,816,000 | 53,968,000 |
Diluted loss per share: | $ (0.50) | $ (0.06) |
Fifty-two weeks ended January 31, 2015 February 1, 2014
Total revenues $ 2,084,603,000 $ 2,066,568,000
Net (loss) earnings $ (27,293,000) $ 6,865,000
Basic (loss) earnings per share:
Average shares 53,608,000 53,378,000
Basic (loss) earnings per share: $ (0.51) $ 0.13
Diluted (loss) earnings per share:
Average shares 53,608,000 53,963,000
Diluted (loss) earnings per share: $ (0.51) $ 0.13
THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS
(dollar amounts in thousands)
Assets
Current assets:
January 31, 2015 February 1, 2014
Cash and cash equivalents
Accounts receivable, less allowance for
$ 38,044 $
33,431
uncollectible accounts of $1,604 and $1,320 31,013 25,152
Merchandise inventories 656,957 672,354
Prepaid expenses 27,952 29,282
Other current assets 55,986 63,405
Assets held for disposal 2,648 2,013
Total current assets 812,600 825,637
Property and equipment, net of accumulated depreciation
of $1,251,797 and $1,227,121 604,380 625,525
Goodwill 32,869 56,794
Deferred income taxes 56,571 57,686
Other long-term assets 35,321 39,839
Total assets
$ 1,541,741 $
1,605,481
Liabilities and stockholders' equity
Current liabilities: Accounts payable
$ 227,132 $
256,031
Trade payable program liability 140,904 129,801
Accrued expenses 226,176 237,403
Deferred income taxes 61,216 69,373
Current maturities of long-term debt 2,000 2,000
Total current liabilities 657,428 694,608
Long-term debt less current maturities 211,000 199,500
Other long-term liabilities 45,567 48,485
Deferred gain from asset sales 103,596 114,823
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
Additional paid-in capital 298,299 297,009
Retained earnings 397,890 432,332
Accumulated other comprehensive income (391) 379
Treasury stock, at cost - 14,988,205 shares
and 15,358,872 shares (240,205) (250,212) Total stockholders' equity 524,150 548,065
Total liabilities and stockholders' equity
$ 1,541,741 $
1,605,481
Supplemental balance sheet information:
Working capital | $ 155,172 | $ 131,029 |
Current ratio | 1.24 | 1.19 |
Accounts payable to inventory ratio | 56.0% | 57.4% |
Total debt as a percent of total capitalization | 28.9% | 26.9% |
Debt as a percent of total capitalization, net | 25.0% | 23.5% |
THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME
(dollar amounts in thousands, except per share amounts)
Thirteen weeks ended
January 31, 2015 February 1, 2014
Fifty-two weeks ended
January 31, 2015 February 1, 2014
% % % %
Amount Sales Amount Sales Amount Sales Amount Sales
Merchandise sales | $ 385,105 | 76.6 | $ 384,884 | 77.6 | $ 1,593,883 | 76.5 | $ 1,608,697 | 77.8 |
Service revenue | 117,318 | 23.4 | 110,849 | 22.4 | 490,720 | 23.5 | 457,871 | 22.2 |
Total revenues | 502,423 | 100.0 | 495,733 | 100.0 | 2,084,603 | 100.0 | 2,066,568 | 100.0 |
Costs of merchandise sales | 280,807 | 72.9 | 270,233 | 70.2 | 1,124,755 | 70.6 | 1,108,359 | 68.9 |
Costs of service revenue | 121,931 | 103.9 | 121,484 | 109.6 | 484,404 | 98.7 | 470,832 | 102.8 |
Total costs of revenues | 402,738 | 80.2 | 391,717 | 79.0 | 1,609,159 | 77.2 | 1,579,191 | 76.4 |
Gross profit from merchandise sales | 104,298 | 27.1 | 114,651 | 29.8 | 469,128 | 29.4 | 500,338 | 31.1 |
Gross (loss) profit from service revenue | (4,613) | (3.9) | (10,635) | (9.6) | 6,316 | 1.3 | (12,961) | (2.8) |
Total gross profit | 99,685 | 19.8 | 104,016 | 21.0 | 475,444 | 22.8 | 487,377 | 23.6 |
Selling, general and administrative expenses | 118,837 | 23.7 | 110,617 | 22.3 | 484,182 | 23.2 | 464,852 | 22.5 |
Goodwill impairment | 23,925 | 4.8 | 0 | - | 23,925 | 1.1 | - | - |
Net (gain) loss from dispositions of assets | (14,325) | (2.9) | 13 | - | (13,806) | (0.7) | 227 | - |
Operating (loss) profit | (28,752) | (5.7) | (6,614) | (1.3) | (18,857) | (0.9) | 22,298 | 1.1 |
Other income | 13 | - | 422 | 0.1 | 1,188 | 0.1 | 1,789 | 0.1 |
I(ntere)st expengse g p operations operations | (3,604) (32,343) | (0.7) (6.4) | (3,912) (10,104) | (0.8) (2.0) | (13,873) (31,542) | (0.7) (1.5) | (14,797) 9,290 | (0.7) 0.5 |
Income tax (benefit) expense | (5,690) | 17.6 (1) | (6,837) | 67.7 (1) | (4,581) | (14.5) (1) | 2,237 | 24.1 (1) |
(Loss) earnings from continuing operations before discontinued operations | (26,653) | (5.3) | (3,267) | (0.7) | (26,961) | (1.3) | 7,053 | 0.3 |
Loss from discontinued operations, net of tax | (13) | - | (64) | - | (332) | - | (188) | - |
Net (loss) earnings | (26,666) | (5.3) | (3,331) | (0.7) | (27,293) | (1.3) | 6,865 | 0.3 |
Basic (loss) earnings per share: | ||||||||
(Loss) earnings from continuing operations before discontinued operations | $ (0.50) | $ (0.06) | $ (0.50) | $ 0.13 | ||||
(Loss) from discontinued operations, net of tax | - | - | (0.01) | - | ||||
Basic (loss) earnings per share | $ (0.50) | $ (0.06) | $ (0.51) | $ 0.13 |
Diluted (loss) earnings per share:
(Loss) earnings from continuing operations before discontinued operations
$ (0.50) $ (0.06) $ (0.50) $ 0.13
(Loss) from discontinued operations, net of tax - - (0.01) - Diluted (loss) earnings per share $ (0.50) $ (0.06) $ (0.51) $ 0.13
Other comprehensive (loss) income:
Derivative financial instruments adjustment, net of tax | (434) | 40 | (770) | 1,359 |
Other comprehensive (loss) income | (434) | 40 | (770) | 1,359 |
Comprehensive (loss) income | $ (27,100) | $ (3,291) | $ (28,063) | $ 8,224 |
(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)
Fifty-two weeks ended January 31, 2015 February 1, 2014
Cash flows from operating activities: Net (loss) earnings
Adjustments to reconcile net (loss) earnings to net cash provided by continuing operations:
$ (27,293) $
6,865
Net loss from discontinued operations 332 188
Depreciation 75,099 78,439
Amortization of deferred gain from asset sales (13,389) (12,604) Amortization of deferred financing costs 2,563 2,993
Stock compensation expense 2,257 2,992
Deferred income taxes (6,588) (79) Net (gain) loss from dispositions of assets (13,806) 227
Asset impairment 7,535 7,659
Goodwill impairment 23,925 - Other (139) (493)
Changes in assets and liabilities, net of the effects of acquisitions:
Decrease (increase) in accounts receivable, prepaid expenses and other 4,366 (6,511) Decrease (increase) in merchandise inventories 15,397 (31,146) (Decrease) increase in accounts payable (27,963) 8,378 (Decrease) increase in accrued expenses (11,853) 6,115
Decrease in other long-term liabilities (2,391) (3,345) Net cash provided by continuing operations 28,052 59,678
Net cash used in discontinued operations (608) (274) Net cash provided by operating activities 27,444 59,404
Cash flows from investing activities:
Net cas
Cash flows from financing activities:
Borrowings under line of credit agreements 598,495 40,745
Payments under line of credit agreements (584,995) (37,245) Borrowings on trade payable program liability 182,462 154,985
Payments on trade payable program liability (171,359) (174,902) Payment for finance issuance cost - (770) Debt payments (2,000) (2,000) Proceeds from stock issuance 1,608 2,095
Repurchase of common stock - (2,750) Net cash provided by (used in) financing activities 24,211 (19,842) Net increase (decrease) in cash and cash equivalents 4,613 (25,755)
Cash and cash equivalents at beginning of period 33,431 59,186
Cash and cash equivalents at end of period
$ 38,044 $
33,431
Supplemental cash flow information: A
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 Fifty-two weeks ended
January 31, 2015 February 1, 2014 January 31, 2015 February 1, 2014
(a) (Loss) earnings from continuing operations before discontinued operations
$ (26,653) $
(3,267) $
(26,961) $
7,053
Loss from discontinued operations, net of tax (13) (64) (332) (188)
Net (loss) earnings
$ (26,666) $
(3,331) $
(27,293) $
6,865
(b) Basic average number of common shares outstanding during period 53,816 53,422 53,608 53,378
Common shares assumed issued upon exercise of dilutive stock options,
net of assumed repurchase, at the average market price - 546 - 585
(c) Diluted average number of common shares assumed outstanding during period 53,816 53,968 53,608 53,963
Basic (loss) earnings per share:
(Loss) earnings from continuing operations before discontinued operations (a) / (b) $
(0.50) $
(0.06) $
(0.50) $
0.13
(Loss) from discontinued operations, net of tax - - (0.01) -
Basic (loss) earnings per share
$ (0.50) $
(0.06) $
(0.51) $
0.13
Diluted (loss) earnings per share:
(Loss) earnings from continuing operations before discontinued operations (a) / (c) $
(0.50) $
(0.06) $
(0.50) $
0.13
(Loss) from discontinued operations, net of tax - - (0.01) -
Diluted (loss) earnings per share
$ (0.50) $
(0.06) $
(0.51) $
0.13
THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES
ADDITIONAL INFORMATION (dollar amounts in thousands)
Thirteen weeks ended
Fifty-two weeks ended
January 31, 2015 February 1, 2014 January 31, 2015 February 1, 2014
Capital expenditures | $ 12,294 | $ 15,648 | $ 67,269 | $ 53,982 |
Depreciation | $ 19,581 | $ 18,948 | $ 75,099 | $ 78,439 |
Non-operating income: | ||||
Net rental revenue | $ (30) | $ 377 | $ 1,009 | $ 1,409 |
Investment income | 35 | 43 | 187 | 175 |
Other income | 8 | 2 | (8) | 205 |
Total | $ 13 | $ 422 | $ 1,188 | $ 1,789 |
Comparable sales percentages:
Service 5.1 % 1.4 % 4.9 % 1.6 % Merchandise -0.2 % -3.4 % -1.6 % -2.1 % Total 1.3 % -2.4 % -0.1 % -1.3 %
Total square feet of retail space (including service centers) | 12,942,000 | 12,907,000 |
Store count Supercenter | 563 | 568 |
Service & Tire Center | 237 | 225 |
Retail Only | 6 | 6 |
Total 806 799
Sales and gross profit by line of business (A):
Service center revenue | $ 279,985 | $ 269,131 | $ 1,151,575 | 1,110,958 |
Retail sales | 222,438 | 226,602 | 933,028 | 955,610 |
Total revenues | $ 502,423 | $ 495,733 | $ 2,084,603 | $ 2,066,568 |
Gross profit from service center revenue, prior to impairment charge | $ 49,554 | $ 43,942 | $ 235,169 | 215,181 |
Service center revenue impairment charge | (1,560) | (1,836) | (5,039) | (5,328) |
Gross profit from service center revenue | $ 47,994 | $ 42,106 | $ 230,130 | $ 209,853 |
Gross profit from retail sales, prior to impairment charge | $ 52,422 | $ 62,851 | $ 247,809 | 279,855 |
Retail sales impairment charge | (731) | (941) | (2,495) | (2,331) |
Gross profit from retail sales | $ 51,691 | $ 61,910 | $ 245,314 | $ 277,524 |
Total gross profit $ 99,685
$ 104,016
$ 475,444
$ 487,377
Comparable sales percentages by line of business (A):
Service center revenue | 3.2 % | -0.3 % | 1.4 % | 0.2 % |
Retail sales | -1.0 % | -4.6 % | -1.9 % | -3.1 % |
Total revenues | 1.3 % | -2.4 % | -0.1 % | -1.3 % |
Gross profit percentage by line of business (A):
Gross profit percentage from service center revenue, prior to impairment charge | 17.7 % | 16.3 % | 20.4 % | 19.4 % |
Impairment charge | (0.6) | (0.7) | (0.4) | (0.5) |
Gross profit percentage from service center revenue | 17.1 % | 15.6 % | 20.0 % | 18.9 % |
Gross profit percentage from retail sales, prior to impairment charge | 23.6 % | 27.7 % | 26.6 % | 29.3 % |
Impairment charge | (0.3) | (0.4) | (0.3) | (0.2) |
Gross profit percentage from retail sales | 23.2 % | 27.3 % | 26.3 % | 29.0 % |
Total gross profit percentage 19.8 % 21.0 % 22.8 % 23.6 % (A) Retail sales include DIY and commercial sales. Service center revenue includes revenue from labor and installed parts and tires.
|
distributed by
|
