The Pep Boys – Manny, Moe & Jack (NYSE: PBY), the nation's
leading automotive aftermarket service and retail chain, today
announced results for the thirteen (third quarter) and thirty-nine
(nine months) weeks ended October 31, 2009.
Operating Results
Third Quarter
Sales
Sales for the thirteen weeks ended October 31, 2009 increased by
$8.4 million, or 1.8%, to $472.6 million from $464.2 million for
the thirteen weeks ended November 1, 2008. Comparable sales
increased 1.6%, consisting of an 8.9% comparable service revenue
increase and a 0.1% comparable merchandise sales decrease. In
accordance with GAAP, service revenue is limited to labor sales
while merchandise sales includes 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 (labor plus installed
merchandise and tires) increased 7.0%, while comparable Retail
Sales (DIY and Commercial) decreased 2.9%.
Earnings
Net Earnings for the third quarter of fiscal 2009 increased to
$2.1 million ($0.04 per share) from the $7.3 million loss ($0.14
per share) recorded in the same period last year. The 2009 results
include, on pre-tax basis, a net charge of $0.3 million, consisting
of a $3.3 million asset impairment charge offset by a $1.3 million
gain from sale leaseback transactions, a $1.0 million reduction in
inventory-related accruals and a $0.7 million gain from an
insurance settlement.
Nine Months
Sales
Sales for the thirty-nine weeks ended October 31, 2009 decreased
by $4.3 million, or 0.3%, to $1,458.0 million from $1,462.3 million
for the thirty-nine weeks ended November 1, 2008. Comparable sales
decreased 0.4%, consisting of a 5.9% comparable service revenue
increase and a 1.8% comparable merchandise sales decrease.
Re-categorizing Sales (see above), comparable Service Center
Revenue increased 4.1%, while comparable Retail Sales decreased
4.1%.
Earnings
Net Earnings for the first nine months of fiscal 2009 increased
to $20.8 million ($0.40 per share) from the $2.8 million ($0.05 per
share) recorded in the same period last year. The 2009 results
include, on a pre-tax basis, a net benefit of $5.9 million,
consisting of a $6.2 million gain resulting from bond repurchases,
a $1.3 million gain from sale leaseback transactions, a $1.0
million reduction in inventory-related accruals and a $0.7 million
gain from an insurance settlement partially offset by a $3.3
million asset impairment charge. The 2008 results included, on a
pre-tax basis, a net benefit of $13.1 million, consisting of a $3.5
million gain resulting from bond repurchases and a $9.6 million
gain from asset dispositions (primarily sale leaseback
transactions). The 2008 results also included a one-time tax
benefit of $2.2 million resulting from the recording of a deferred
tax asset.
Commentary
“We are pleased to report our first comparable store revenue
increase since the fourth quarter of 2006, as well as our first
increase in overall customer count since the first quarter of
2004,” said CEO Mike Odell. “We are also excited about the
acceleration of our strategy to add Service & Tire Centers
surrounding our existing Supercenters. During the third quarter, we
acquired 10 Florida Tire locations to increase our total presence
in the Orlando market to 16 stores. We also opened four other
Service & Tire Centers, two in Southern California and two in
Chicago, bringing our year-to-date openings to 20 as we pursue our
strategic growth plan.”
Mike continued, “We are three-quarters of the way towards
achieving our 2009 ‘Back in Black’ commitment, with another
profitable quarter on the books. Our results through the third
quarter of this year show significant improvement over the prior
year, especially when considering the one-time benefits included in
2008. While we are pleased with our strong revenue growth in our
service and commercial businesses, as well as the stability in our
DIY core product categories, discretionary spending still remains a
challenge to our accessories and complementary product categories,
and is expected to continue through the fourth quarter’s holiday
season.”
“The cash flows generated from our positive sales trend, coupled
with opportunistic single-store sale leaseback transactions, have
allowed us to fund our Service & Tire Center acquisitions
without using our revolving line of credit, which carried a zero
balance at quarter end,” added CFO Ray Arthur.
Pep Boys has approximately 6,000 service bays within over 580
stores located in 35 states and Puerto Rico. Along with its
full-service vehicle maintenance and repair capabilities, the
Company also serves the commercial auto parts delivery market and
is one of the leading sellers of replacement tires in the United
States. Customers can find the nearest location by calling
1-800-PEP-BOYS 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 word "guidance," "expect," "anticipate,"
"estimates," "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 third quarter will be broadcast live on
Tuesday, December 8 at 8:30 a.m. ET over the Internet at the Vcall
Web site, located at http://www.investorcalendar.com. To listen to
the call live, please go to the Web site 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 December 8 on Pep
Boys' Web site at www.pepboys.com.
Pep Boys Financial Highlights
Thirteen Weeks Ended
October 31, 2009 November 1,
2008 Total Revenues $ 472,643,000 $ 464,166,000
Net Earnings $ 2,124,000 $ (7,282,000 ) Basic
Earnings Per Share: Average Shares 52,419,000 52,099,000 Net
Earnings Per Share $ 0.04 $ (0.14 ) Diluted Earnings Per
Share: Average Shares 52,786,000 52,099,000 Net Earnings Per
Share $ 0.04 $ (0.14 )
Thirty-Nine Weeks Ended
October 31, 2009 November 1,
2008 Total Revenues $ 1,458,042,000 $
1,462,252,000 Net Earnings $ 20,768,000 $ 2,838,000
Basic Earnings Per Share: Average Shares 52,379,000 52,106,000
Net Earnings Per Share $ 0.40 $ 0.05 Diluted Earnings
Per Share: Average Shares 52,621,000 52,189,000 Net Earnings
Per Share $ 0.40 $ 0.05
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