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 29, 2011.
Fourth Quarter
Sales
Sales for the fourth quarter of fiscal 2010 increased by $24.5
million, or 5.4%, to $477.4 million from $452.9 million for the
fourth quarter of fiscal 2009. Comparable store sales
increased 4.3%, consisting of a 3.4% comparable store service
revenue increase and a 4.6% comparable store 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 store service center revenue
(labor plus installed merchandise and tires) increased 5.8%, while
comparable store retail sales (DIY and commercial) increased
3.1%.
Earnings
Net earnings for the fourth quarter of fiscal 2010 more than
tripled to $8.4 million ($0.16 per share) from the $2.3 million
($0.04 per share) recorded in the same period last year. Net
earnings for the fourth quarter of fiscal 2010 include a $1.0
million tax benefit, while the same period last year included a
$1.2 million tax benefit. Earnings from continuing operations
before taxes for the fourth quarter of fiscal 2010 increased to
$11.5 million from the $1.0 million recorded in the same period
last year. The 2010 fourth quarter results include a $4.6 million
reduction in the reserve for excess inventory, while the 2009
fourth quarter results included a $1.0 million reduction in
inventory-related accruals.
Fiscal Year
Sales
Sales for fiscal year 2010 were $1,988.6 million, as compared to
$1,910.9 million for fiscal 2009. Fiscal year 2010 comparable store
sales increased 2.7%, consisting of increases of 1.1% in comparable
store service revenue and 3.1% in comparable store merchandise
sales. Re-categorizing sales (see above), comparable service center
revenue increased 2.4%, while comparable retail sales increased
3.0%.
Earnings
Net earnings for fiscal year 2010 increased to $36.6 million
($0.69 per share) from the $23.0 million ($0.44 per share) recorded
in fiscal year 2009. The 2010 results included a $2.1 million tax
benefit, while the 2009 results included a $1.2 million tax
benefit. Earnings from continuing operations before taxes for
fiscal year 2010 increased 55% to $58.4 million from the $37.6
million recorded in the prior year. The fiscal 2010 results include
a net benefit of $8.4 million comprised of a $5.9 million reduction
in the reserve for excess inventory, a $2.5 million gain from the
disposition of assets and a $1.0 million reversal of an inventory
related accrual, partially offset by a $1.0 million asset
impairment charge. The fiscal 2009 results included 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.
Commentary
“For the past three years, we have focused on earning the trust
of our customers, becoming the preferred employer in the automotive
aftermarket and building a profitable and sustainable business
model,” said President & CEO Mike Odell. “This fourth quarter
caps off a successful 2010, as evidenced by our comparable store
sales growth, expanding operating margins and new store growth. We
expect to continue this trend in 2011, despite the uncertain
macro-environment. Every day we wake up charged to execute our
vision to be the automotive solutions provider of choice for the
value-oriented customer.”
“We opened 35 new locations in 2010 – 28 Service & Tire
Centers and seven Supercenters,” Mike continued. “That’s on top of
25 new stores in 2009. Our growth will continue to accelerate in
2011, as we have targeted opening 50 new Service & Tire Centers
and five Supercenters.”
“We continued to build cash in 2010, ending the year with over
$90 million, which is $50 million more than last year,” added CFO
Ray Arthur. “Our greatly improved operating results are providing
the funding for our growth strategy.”
Pep Boys has more than 6,200 service bays within over 620 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 (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 7 at 8:30 a.m. ET over the Internet at
the Vcall website, located at http://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 April 7 on
Pep Boys’ website at www.pepboys.com.
Pep Boys Financial Highlights
Thirteen weeks
ended
January 29,
2011
January 30,
2010
Total revenues: $ 477,389,000 $ 452,896,000 Net
earnings: $ 8,365,000 $ 2,268,000 Basic earnings per share:
Average shares 52,778,000 52,452,000 Basic earnings per
share: $ 0.16 $ 0.04 Diluted earnings per share: Average
shares 53,416,000 52,808,000 Diluted earnings per share: $
0.16 $ 0.04
Fifty-two weeks
ended
January 29,
2011
January 30,
2010
Total revenues: $ 1,988,641,000 $ 1,910,938,000 Net
earnings: $ 36,631,000 $ 23,036,000 Basic earnings per
share: Average shares 52,677,000 52,397,000 Basic earnings
per share: $ 0.70 $ 0.44 Diluted earnings per share: Average
shares 53,162,000 52,667,000 Diluted earnings per share: $
0.69 $ 0.44
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