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 27, 2012.
SECOND QUARTERSALES
Sales for the thirteen weeks ended October 27, 2012 decreased by $12.6 million, or 2.4%, to $509.6 million from $522.2 million for the thirteen weeks ended October 29, 2011. Comparable sales decreased by 2.7% consisting of a 0.2% comparable service revenue increase and a 3.5% comparable merchandise sales decrease. 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) were relatively flat, while comparable retail sales (DIY and Commercial) decreased 5.4%.
NET (LOSS) EARNINGSNet loss for the third quarter of fiscal 2012 was $6.8 million ($0.13 per share) as compared to net earnings of $7.0 million ($0.13 per share) recorded in the same period last year. The 2012 results include, on a pre-tax basis, debt refinancing expense of $11.2 million and an asset impairment charge of $8.8 million.
NINE MONTHS SALESSales for the thirty-nine weeks ended October 27, 2012 increased by $1.6 million, or 0.1%, to $1,559.9 million from $1,558.3 million for the thirty-nine weeks ended October 29, 2011. Comparable sales decreased 1.8%, consisting of a 0.7% comparable service revenue increase and a 2.5% comparable merchandise sales decrease. Re-categorizing sales (see above), comparable service center revenue increased 1.0%, while comparable retail sales decreased 4.6%.
NET EARNINGSNet earnings for the first nine months of 2012 decreased to $27.4 million ($0.51 per share) from the $33.3 million ($0.62 per share) recorded in the same period last year. The 2012 results include, on a pre-tax basis, merger termination fees, net of related expenses, of $42.8 million, debt refinancing expense of $11.2 million, an asset impairment charge of $8.8 million and severance expense of $0.7 million. The 2011 results included a tax benefit of $3.6 million and, on a pre-tax basis, an asset impairment charge of $0.4 million and acquisition related expenses of $1.5 million.
COMMENTARY'Positives for the quarter include a 3.4% increase in comparable service customer transactions and recovering tire margins,” said President and Chief Executive Officer Mike Odell. “The service customer increase was again driven by maintenance and repair services. Tire margins had declined significantly over the previous 19 months, but have now been recovering for the past three months.'
'Mike continued, 'We also reached our next eCommerce milestone with the launch of Buy Staged, Ship to Home. This complements our previously launched Staged capabilities of service appointment scheduling, TreadSmart (tires from information to installation) and Buy Staged, Pick Up In Store. We are continuing to further integrate our complete automotive service offerings and automotive superstore with our emerging digital capabilities.'
Executive Vice President and Chief Financial Officer David Stern added, “During the quarter, we refinanced our debt, reducing the principal by approximately $95 million and extending the maturity to 2018. While this refinancing activity resulted in a one-time charge to interest expense of $11.2 million, it also reduces our annual interest expense by approximately $11 million.”
About Pep Boys
Pep Boys has over 560 retail stores and approximately 6,000 service bays 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. ; S&S Service in Hamburg, NY ; Jack's Service Center in Miami, Florida ; Blanchette's Auto Center in Dracut, Massachusetts ; Quality Automotive in Napa, California ; Honest Auto Service in Seattle, Washington ; two WS Haynes Tire & Service locations in Memphis, Tennessee ; RL&F Auto Inc. in Morrisville, NC ; and Plainfield Tire Center in Plainfield, Indiana.
