The Pep Boys – Manny, Moe & Jack (NYSE: PBY), the nation's
leading automotive aftermarket service and retail chain, today
announced results for the thirteen (fourth quarter) and fifty-two
weeks (fiscal year) ended January 30, 2010.
Operating Results
Fourth Quarter
Sales
Sales for the thirteen weeks ended January 30, 2010 decreased by
$12.6 million, or 2.7%, to $452.9 million from $465.5 million for
the thirteen weeks ended January 31, 2009. Comparable sales
decreased 3.9% due to a 4.9% comparable merchandise sales decrease
partially offset by a 0.7% comparable service revenue 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 (labor plus installed
merchandise and tires) decreased 2.4%, while comparable Retail
Sales (DIY and Commercial) decreased 5.1%.
Earnings
Net Earnings for the fourth quarter of fiscal 2009 increased to
$2.3 million ($0.04 per share) from a loss of $33.3 million
(($0.63) per share) recorded in the same period last year. The 2009
results include a $1.2 million tax benefit due to a change in the
Company’s tax planning strategies. The fourth quarter 2008 results
included, on a pre-tax basis, a net charge of $14.2 million
consisting of an $8.0 million increase in legal and
inventory-related accruals, $4.4 million of asset impairments, $1.2
million in debt pre-payment costs and a $0.6 million charge for
costs associated with cost-cutting initiatives. The 2008 results
also included approximately $7.0 million in reduction of the
Company’s tax benefit due to changes in the Company’s effective tax
rate.
Fiscal Year
Sales
Sales for the fiscal year ended January 30, 2010 decreased by
$16.9 million, or 0.9%, to $1,910.9 million from $1,927.8 million
for the fiscal year ended January 31, 2009. Comparable sales
decreased 1.2% due to a 2.6% comparable merchandise sales decrease
partially offset by a 4.7% comparable service revenue increase.
Re-categorizing Sales (see above), comparable Service Center
Revenue increased 2.5%, while comparable Retail Sales decreased
4.3%.
Earnings
Net Earnings for fiscal 2009 increased to $23.0 million ($0.44
per share) from a loss of $30.4 million (($0.58) per share)
recorded in the same period last year. The 2009 results include, on
a pre-tax basis, a net benefit of $7.0 million, consisting of a
$6.2 million gain from bond repurchases, a $1.2 million gain from
sale leaseback transactions, a $2.0 million reduction in
inventory-related accruals and a $0.7 million gain from an
insurance settlement partially offset by a $3.1 million asset
impairment charge. The 2009 results also include a $1.2 million tax
benefit due to a change in the Company’s tax planning strategies.
The 2008 results included, on a pre-tax basis, a net charge of $2.0
million consisting of an $8.0 million increase in legal and
inventory-related accruals, $5.4 million of asset impairments, $1.2
million in debt pre-payment costs and a $0.6 million charge for
costs associated with cost-cutting initiatives largely offset by a
$3.5 million gain resulting from bond repurchases and a $9.7
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 that we met our 2009 ‘Back in Black’
commitment – to return to profitability – for both the full year
and each quarter,” said CEO Mike Odell. “The foundation of our
turnaround has been our commitment to our customers and our focus
on core automotive products and services. While we did not enjoy a
comparable store sales increase in the fourth quarter, as we did in
the third quarter, we did achieve customer count increases in both
service and commercial. Two years into our three-year turnaround
plan, our improved disciplines in category management, expense
controls and margin controls resulted in our fourth quarter
profitability despite the soft holiday season.”
Mike continued, “Our commitment for 2010 is to ‘Get to Great’ as
we focus on growing sales and continue to improve our execution,
disciplines and profitability. First quarter 2010 sales have
rebounded across all lines of business and, quarter to date, we are
running a 3% comparable store sales increase.”
“Our expectation is to run a single-digit total sales increase
this year. A portion of that sales increase will come from our
growth strategy of opening new Service & Tire Centers,” Mike
added. “During the fourth quarter, we opened five more Service
& Tire Centers, bringing our 2009 openings to 24. We also added
one new Supercenter in the fourth quarter.”
“At year end, we had approximately $39.3 million in cash on hand
and no borrowings on our revolving credit line,” remarked CFO Ray
Arthur. “We continue to be well positioned to fund our store
growth.”
Pep Boys has over 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 fourth quarter will be broadcast live on
Thursday, April 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 April 8 on Pep Boys'
Web site at www.pepboys.com.
Pep Boys Financial Highlights
Thirteen Weeks Ended
January 30, 2010
January 31, 2009
Total revenues $ 452,896,000 $ 465,536,000 Net
earnings (loss) $ 2,268,000 $ (33,267,000) Basic earnings
per share: Average shares 52,452,000 52,223,000 Basic
earnings (loss) per share $ 0.04 $ (0.63) Diluted earnings
per share: Average shares 52,808,000 52,223,000 Diluted
earnings (loss) per share $ 0.04 $ (0.63)
Fifty-Two Weeks Ended
January 30, 2010
January 31, 2009
Total revenues $ 1,910,938,000 $ 1,927,788,000 Net
earnings (loss) $ 23,036,000 $ (30,429,000) Basic earnings
per share: Average shares 52,397,000 52,136,000 Basic
earnings (loss) per share $ 0.44 $ (0.58) Diluted earnings
per share: Average shares 52,667,000 52,136,000 Diluted
earnings (loss) per share $ 0.44 $ (0.58)
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