Back to GetFilings.com
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
- -------------------------------------------------------------------------------
FORM 10-K
(Mark One)
(x) Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 (FEE REQUIRED)
For the fiscal year ended January 28, 1995
or
( ) Transition Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 (NO FEE REQUIRED)
For the transition period from to .
----- -----
Commission file number 1-3381
The Pep Boys - Manny, Moe & Jack
----------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Pennsylvania 23-0962915
------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. employer identification no.)
incorporation or organization)
3111 West Allegheny Avenue, Philadelphia, PA 19132
-------------------------------------------- ------------
(Address of principal executive office) (Zip code)
Registrant's telephone number, including area code 215-229-9000
------------
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
- ----------------------------- -----------------------------------------
Common Stock, $1.00 par value New York Stock Exchange
4% Convertible Subordinated
Notes due September 1, 1999 New York Stock Exchange
Common Stock Purchase Rights New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No ______
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. ( )
As of the close of business on April 7, 1995, the aggregate market value of the
voting stock held by nonaffiliates of the registrant was not less than
$1,649,063,360.
As of April 7, 1995 there were 61,554,346 shares of the registrant's common
stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
PART III Portions of the registrant's definitive proxy statement,
which will be filed with the commission pursuant to
Regulation 14A not later than 120 days after the end of the
Company's fiscal year, for the Company's Annual Meeting of
Shareholders presently scheduled to be held on May 31,
1995.
This Annual Report on Form 10-K for the year ended January 28, 1995, at
the time of filing with the Securities and Exchange Commission, modifies and
supersedes all prior documents filed pursuant to Sections 13, 14 and 15(d) of
the Securities Exchange Act of 1934 for purposes of any offers or sales of any
securities on or after the date of such filing, pursuant to any Registration
Statement or Prospectus filed pursuant to the Securities Act of 1933 which
incorporates by reference this Annual Report.
PART I
ITEM I BUSINESS
GENERAL
The Company is engaged principally in the retail sale of automotive parts and
accessories, automotive maintenance and service and the installation of parts
sold by it through its chain of 435 Pep Boys stores (as of January 28, 1995),
having an aggregate of 4,166 service bays. The Company operates approximately
8,900,000 gross square feet of retail space for an average of approximately
20,500 gross square feet per store.
The following table indicates by state the number of stores of the Company in operation at the end of fiscal 1991, 1992, 1993 and
1994 and the number of stores opened and closed by the Company during each of the last three fiscal years:
NUMBER OF STORES AT END OF FISCAL YEARS 1991 THROUGH 1994
1992 1993 1994
1991 -------------------------- -------------------------- --------------------------
State YEAR END Opened Closed Year End Opened Closed Year End Opened Closed Year End
- -------------------- -------- ------ ------ -------- ------ ------ -------- ------ ------ --------
Alabama - 1 - 1 - - 1 - - 1
Arizona 25 - 1 24 - - 24 - - 24
Arkansas - - - - 1 - 1 - - 1
California 94 4 6 92 8 7* 93 11* 2 102
Colorado - - - - - - - 5 - 5
Delaware 5 - - 5 - - 5 - - 5
Florida 20 7 - 27 6 - 33 1 - 34
Georgia 20 - - 20 - - 20 - - 20
Illinois - - - - 3 - 3 10 - 13
Indiana - - - - 1 - 1 - - 1
Kansas - - - - 1 - 1 1 - 2
Kentucky - - - - 1 - 1 2 - 3
Louisiana 7 2 - 9 3 - 12 - - 12
Maryland 14 1 - 15 1 - 16 - - 16
Massachusetts - - - - 2 - 2 1 - 3
Michigan - - - - - - - 1 - 1
Missouri - - - - 1 - 1 - - 1
Nevada 8 - - 8 - - 8 - - 8
New Hampshire - - - - - - - 1 - 1
New Jersey 13 - - 13 1 - 14 2 1 15
New Mexico 8 - - 8 - - 8 - - 8
New York - 7 - 7 2 - 9 2 - 11
North Carolina 11 - - 11 - - 11 - - 11
Ohio - - - - - - - 9 - 9
Oklahoma 6 - - 6 - - 6 - - 6
Pennsylvania 30 1 1 30 2 1 31 3 - 34
Rhode Island - - - - 1 - 1 - - 1
South Carolina 5 1 - 6 - - 6 - - 6
Tennessee 7 - - 7 - - 7 - - 7
Texas 47 2 - 49 3 - 52 3 - 55
Utah 5 1 - 6 - - 6 - - 6
Virginia 12 2 1 13 - - 13 - - 13
--- --- --- --- --- --- --- --- --- ---
Total 337 29 9 357 37 8 386 52 3 435
=== === === === === === === === === ===
* Included in this number is the Company's Santa Monica store which was temporarily closed in fiscal 1993 and re-opened in fiscal
1994.
/TABLE
NEW STORES AND EXPANSION STRATEGY
The most important factors considered by the Company when deciding to
open new stores are the population density of the target area and the
automotive traffic count at the site of the proposed store. The most
important factors considered by the Company when deciding whether to close a
store are profitability and whether the store is outmoded by virtue of store
size, location and surroundings, number of service bays, number of other
stores within the same market area and the cost/benefit of establishing a
replacement store rather than expanding or otherwise upgrading an older
store.
The Company introduced a new supplemental store format in fiscal 1994,
which operates under the name Pep Boys - "PARTS USA". These new format
stores will generally be between approximately 10,000 - 13,000 square feet
and stock approximately 22,000 stock-keeping-units but will not carry tires or
have service bays. The Company believes the utilization of this secondary format
will enable it to grow at a faster rate and achieve greater economies of scale
by providing more retail outlets as well as increase its market penetration
and share.
The Company currently plans to open as many as 50 new automotive
"SUPERCENTERS" with service bays and 25 of its new format "PARTS USA" stores
in fiscal 1995. Included in this expansion will be the Company's initial
entry into Puerto Rico - its first units outside of the continental United
States. If the Company opens stores in all 75 locations, it anticipates
spending approximately $160,000,000 in addition to the $8,755,000 it had
already spent as of January 28, 1995 in connection with certain of these
locations. Funds required to finance this expansion are expected to come
primarily from operating activities with the remainder provided by unused
lines of credit or from accessing traditional lending sources which may
include the public capital markets.
During fiscal 1994 the Company opened 51 new stores which includes its
first "PARTS USA" store. All 50 of the automotive "SUPERCENTERS" opened
during fiscal 1994 were in the "warehouse" format, which was introduced in
fiscal 1991. The Company had 121 warehouse format stores as of January 28,
1995. In addition to lower capital costs and a shorter construction
schedule, the warehouse format stores provide a more convenient shopping
environment to customers. During 1994 the Company introduced the first of
its new prototype "SUPERCENTER". This new prototype features a number of
enhancements to the current warehouse format including a parts counter that
runs along the center aisle of the store. The Company believes this new
format further enhances customer service by positioning its store staff
closer to shoppers in the general merchandise area of the store. The Company
anticipates that all the automotive "SUPERCENTERS" to be opened in fiscal
1995 will be in this new prototype format and will consist of approximately
22,000 gross square feet, including approximately 12 service bays with
computerized diagnostic equipment.
The Company's ability to meet its expansion goals will depend, in large
measure, upon the availability of suitable sites, prevailing economic
conditions, its success in completing negotiations to purchase or lease
properties, and its ability to obtain governmental approvals and meet
construction deadlines.
MERCHANDISING
Each Pep Boys' automotive "SUPERCENTER" carries the same basic product
line, with variations based on the number and type of cars registered in the
different markets. A full complement of a store's inventory currently
includes approximately 25,000 items. The Company's automotive product line
includes: tires; batteries; new and rebuilt parts for domestic and imported
cars, including suspension parts, ignition parts, mufflers, engines and
engine parts, oil and air filters, belts, hoses, air conditioning parts, and
brake parts; chemicals, including oil, antifreeze, polishes, additives,
cleansers and paints; mobile electronics, including sound systems, alarms
and cellular telephones; car accessories, including seat covers, floor mats,
gauges, mirrors and booster cables; and a large selection of truck and van
accessories.
In addition to offering a wide variety of high quality, branded
products, the Company sells an array of high quality products under the Pep
Boys and various other private label names. The Company sells oil,
transmission fluid, chemicals, and paints under the Pep Boys name. The
Company sells antifreeze under the name PURE AS GOLD(R). The Company sells
starters and alternators under the names "True Blue" and PRO-START(R), water
pumps under the names "True Blue" and PRO-COOL(tm) and batteries under the
name PROSTART(R). Brakes are sold under the names SHUR GRIP(R) and
PROSTOP(tm) and tires under the names CORNELL(R) and FUTURA(R). The Company
also sells shock absorbers under the name "ProRyder", and trunk and
hatchback lift supports under the name PROLIFT(tm). All products sold by
the Company under the Pep Boys and various other private label names
accounted for approximately 22% of the Company's merchandise sales in fiscal
1994. The remaining merchandise is sold under the brand names of others.
Except for revenues from maintaining or repairing automobiles and installing
products, which accounted for approximately 12.8%, 13.3% and 13.9% of the
Company's total revenues in fiscal years 1992, 1993 and 1994 respectively,
no class of products or services accounted for as much as 10% of the
Company's total revenues.
The Company has a point-of-sale system in all of its stores which
gathers sales and gross profit data by stock-keeping-unit from each store on
a daily basis. This information is then used by the Company to help
formulate its pricing, marketing and merchandising strategies.
The Company has an electronic work order system in all of its service
centers. This system creates a service history for each vehicle, provides
customers with a comprehensive, professional sales document and will enable
the Company to establish a service customer database.
The Company uses an "Everyday Low Price" (EDLP) strategy in
establishing its selling prices. Management believes that EDLP provides
better value to its customers on a day-to-day basis, helps level customer
demand and allows more efficient management of inventories.
The Company uses various forms of advertising to promote its category
dominant product offering, its state-of-the-art automotive service and
repair capabilities and its commitment to customer service and satisfaction.
The Company's advertising vehicles include, but are not limited to,
multipage catalogs, television and radio commercials and in-store
promotions. A large portion of the gross cost of the advertising directed
by the Company is customarily borne by the suppliers of the products
advertised.
In fiscal 1994, approximately 72% of the Company's total revenues were
cash transactions (including personal checks), and the remainder were credit
and charge card sales.
The Company does not experience significant seasonal fluctuation in the
generation of its revenues.
STORE OPERATIONS AND MANAGEMENT
All Pep Boys' stores are open seven days a week. Each store with
service bays has a manager, a service manager, a parts manager and two or
more assistant managers. A store manager's average length of service with
the Company is approximately eight years.
The Company has service bays in 427 of its 435 locations. Each service
department can perform a variety of services which include: engine tune-ups,
wheel alignments, state inspections, air conditioning service; the repair
and installation of parts and accessories including brake parts, suspension
parts, exhaust systems, front end parts, ignition parts, belts, hoses,
clutches, filters, radios, alarms, sun roofs, cruise controls, and various
other merchandise sold in Pep Boys' stores; installation and balancing of
tires, and oil and lubrication services.
The Company coordinates the operation and merchandising of each store
through a network of district and regional managers. The regional managers
report to one of three Vice Presidents - Store Operations who report to the
Company's Senior Vice President - Store Operations who reports to the
Company's Executive Vice President. Supervision and control over the
individual stores are facilitated by means of the Company's computer system,
operational handbooks and regular visits to the individual stores by the
district operations managers and loss prevention personnel.
All of the Company's advertising, accounting, management information
systems, purchasing and most administrative functions are conducted at its
corporate headquarters in Philadelphia, Pennsylvania. Certain
administrative functions for the Company's western, southwestern, and
southeastern operations are performed at various regional offices of the
Company. See "Properties."
INVENTORY CONTROL AND DISTRIBUTION
Almost all of the Company's merchandise is distributed to its stores
from its warehouses by Company-owned or leased trucks. Target levels of
inventory for each product have been established for each of the Company's
warehouses and stores and are based upon prior shipment history, sales
trends and seasonal demand. Inventory on hand is compared to the target
levels on a weekly basis at each warehouse. If the inventory on hand at a
warehouse is below the target levels, the Company's buyers order merchandise
from its suppliers.
Each Pep Boys store has an automatic inventory replenishment system
that automatically orders additional inventory when a store's inventory on
hand falls below the target level. In addition, the Company's centralized
buying system installed in fiscal 1992, coupled with a new warehousing
system which is currently operating in four of its five main distribution
facilities, has greatly enhanced the Company's ability to control its
inventory. The Company plans to install the new warehousing system in its
remaining distribution center in fiscal 1995.
SUPPLIERS
During fiscal 1994, the Company's ten largest suppliers accounted for
approximately 32% of the merchandise purchased by the Company. No single
supplier accounted for more than 5% of the Company's purchases. The Company
has no long-term contracts for the purchase of merchandise. Management
believes that the relationships the Company has established with its
suppliers are generally good.
In the past, the Company has not experienced difficulty in obtaining
satisfactory sources of supply and believes that adequate alternative
sources of supply exist, at substantially similar cost, for virtually all
types of merchandise sold in its stores.
COMPETITION
The business of the Company is generally highly competitive. The
Company encounters competition from nationwide and regional chains and from
local independent merchants. Some of the Company's competitors are general,
full range, discount or traditional department stores which carry automotive
parts and accessories and/or have automotive service centers, and others,
similar to the Company, are specialized automotive service retailers.
Certain of its competitors are larger in terms of sales volume and/or store
size, have access to greater capital and management resources and have been
operating longer in particular geographic areas than the Company.
Although the Company's competition varies by geographical area, the
Company believes that it generally has a favorable competitive position in
terms of depth and breadth of product line, price, quality of personnel and
customer service.
In addition, the Company believes that its operation of service bays in
its "SUPERCENTERS'" automotive service centers positively differentiates it
from most of its competitors. The Company believes that the warranty
policies in connection with the higher priced items it sells, such as tires,
batteries, brake linings and other major automotive parts and accessories,
are comparable or superior to those of its competitors.
EMPLOYEES
At January 28, 1995, the Company employed 15,874 persons as follows:
Full-time Part-time Total
Description Numbers % Numbers % Numbers %
- ------------------------------------------------------------------------------------------------------------------------------------
Store Sales 5,005 42.4 3,069 75.4 8,074 50.9
Store Service 5,115 43.3 815 20.0 5,930 37.3
Store Regional Management 79 .7 - - 79 .5
------ ----- ----- ----- ------ -----
STORE TOTAL 10,199 86.4 3,884 95.4 14,083 88.7
Warehouses 805 6.8 166 4.1 971 6.1
Offices 800 6.8 20 .5 820 5.2
------ ----- ----- ----- ------ -----
TOTAL EMPLOYEES 11,804 100.0 4,070 100.0 15,874 100.0
====== ===== ===== ===== ====== =====
Of the 805 full-time warehouse employees referred to above, 164
employees at the Company's New Jersey warehouse facilities are members of a
union. The Company believes employee relations are generally good. At the end
of fiscal 1993, the Company employed approximately 10,509 full-time and 4,386
part-time employees, and at the end of fiscal 1992, the Company employed
approximately 9,300 full-time and 4,100 part-time employees.
ITEM 2 PROPERTIES
The Company's headquarters in Philadelphia, Pennsylvania, which also
serves as an administrative regional office for its eastern operations,
occupies approximately 263,000 square feet of a five-story structure owned by
the Company with approximately 300,000 square feet of floor space. The Company
occupies approximately 30,000 square feet of a 60,000 square foot three-story
structure which the Company owns located in Los Angeles, California which
serves as an administrative regional office for its western operations. The
Company leases approximately 4,000 square feet of office space in each of
Decatur, Georgia and Richardson, Texas which serve as administrative regional
offices for its southeastern and southwestern operations, respectively.
Of the 435 store locations operated by the Company at January 28, 1995,
298 are owned and 137 are leased. Of the 137 leased store locations, 56 are
fully leased and 81 are ground leases only.
The following table sets forth certain information regarding the owned and
leased warehouse space utilized by the Company at January 28, 1995.
Warehouse Products Square Owned or Stores States
Location Warehoused Footage Leased Serviced Serviced
- ---------------------------------------------------------------------------
Los Angeles, CA All except 216,000 Owned 105 AZ, CA, NV
tires
Los Angeles, CA Tires 73,000 Leased 105 AZ, CA, NV
Los Angeles, CA All except 137,000 Leased 105 AZ, CA, NV
tires
Phoenix, AZ All except 100,000 Owned 54 AZ, CO, NM,
tires and NV, TX, UT
chemicals
Phoenix, AZ Tires and 57,000 Leased 54 AZ, CO, NM,
chemicals NV, TX, UT
Phoenix, AZ Tires and 42,000 Leased 54 AZ, CO, NM,
chemicals NV, TX, UT
Bridgeport, NJ All except 195,000 Owned 95 DE, MA, MD,
tires MI, NH, NJ,
NY, OH, PA,
RI, VA
Bridgeport, NJ Tires and 273,000 Leased 95 DE, MA, MD,
chemicals MI, NH, NJ,
NY, OH, PA,
RI, VA
Atlanta, GA All 392,000 Owned 110 AL, FL, GA,
IL, IN, KY,
NC, OH, SC,
TN, VA
Mesquite, TX All 244,000 Owned 71 AR, KS, LA,
MO, OK, TX
---------
Total 1,729,000
The Company anticipates that its existing current and leased warehouse
space will accommodate inventory necessary to support store expansion and any
increase in stock-keeping-units during fiscal 1995.
The Company is subject to federal, state and local provisions relating to
the protection of the environment, including provisions with respect to the
disposal of oil at its store locations. Estimated capital expenditures
relating to compliance with such environmental provisions are not
material.
ITEM 3 LEGAL PROCEEDINGS
The Company is involved in a number of lawsuits arising in the ordinary
course of business. Management is of the opinion that such lawsuits will not
result in any material liability to the Company.
ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders, through the
solicitation of proxies or otherwise, during the fourth quarter of the fiscal
year ended January 28, 1995.
ITEM A EXECUTIVE OFFICERS OF THE COMPANY
The following table indicates the names, ages, years with the Company and
positions (together with the year of election to such positions) of the
executive officers of the Company:
Years with Position with the Company and
Name Age Company Year of Election to Position
- --------------------- ---- ---------- -----------------------------
Mitchell G. Leibovitz 49 16 Chairman of the Board since
March 1994; Chief Executive
Officer since March 1990;
President since 1986
Wendel H. Province 47 5 Executive Vice President
since November 1994; Chief
Operating Officer since
March 1993.
Michael J. Holden 43 15 Senior Vice President & Chief
Financial Officer since March
1987; Treasurer since 1984
Frederick A. Stampone 39 13 Senior Vice President since
March 1987; Chief
Administrative Officer since
March 1993; Secretary since
December 1988
Mark L. Page 38 19 Senior Vice President - Store
Operations since March 1993
Messrs. Leibovitz, Province, Holden and Stampone have been executive officers
of the Company for more than the past five years. Mr. Page has been an
executive officer of the Company for less than the past five years. Mr. Page
was a regional manager for the Company from February 1987 until February 1991
when he was elected Vice President - Western Store Operations. On March 14,
1993 Mr. Page became Senior Vice President - Store Operations. Each of the
officers serves at the pleasure of the Board of Directors of the Company. There
are no arrangements or understandings pursuant to which any officer was elected
to office.
PART II
ITEM 5 MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
The common stock of The Pep Boys - Manny, Moe & Jack is listed on the New
York Stock Exchange under the symbol "PBY". There were 3,843 registered
shareholders as of January 28, 1995. The following table sets forth for the
periods listed the high and low sale prices and the cash dividends paid on the
Company's common stock.
MARKET PRICE PER SHARE
Market Price Per Share Cash Dividends
Fiscal year ended January 28, 1995 High Low Per Share
- -----------------------------------------------------------------------------
First Quarter $31 $26 $.0425
Second Quarter 33 3/4 29 1/4 .0425
Third Quarter 36 29 1/8 .0425
Fourth Quarter 36 7/8 28 1/2 .0425
Fiscal year ended January 29, 1994
- -----------------------------------------------------------------------------
First Quarter $26 1/2 $20 3/4 $.0375
Second Quarter 23 7/8 20 1/2 .0375
Third Quarter 24 7/8 20 3/4 .0375
Fourth Quarter 27 1/2 23 1/4 .0375
It is the present intention of the Company's Board of Directors to continue to
pay regular quarterly cash dividends; however, the declaration and payment of
future dividends will be determined by the Board of Directors in its sole
discretion and will depend upon the earnings, financial condition and capital
needs of the Company and other factors which the Board of Directors deems
relevant.
ITEM 6 SELECTED FINANCIAL DATA
The following tables sets forth the selected financial data for the Company and should be read in conjunction with the Consolidated
Financial Statements and Notes thereto included elsewhere herein.
SELECTED FINANCIAL DATA (UNAUDITED)
(dollar amounts in thousands, except per share amounts)
Year ended Jan. 28, 1995 Jan. 29, 1994 Jan. 30, 1993 Feb. 1, 1992 Feb. 2, 1991
- ------------------------------------------------------------------------------------------------------------------------------------
STATEMENT OF EARNINGS DATA
Merchandise sales $1,211,536 $1,076,543 $1,008,191 $ 873,381 $ 774,502
Service revenue 195,449 164,590 147,403 128,127 110,172
Total revenues 1,406,985 1,241,133 1,155,594 1,001,508 884,674
Gross profit from merchandise sales 364,378 307,861 272,412 240,199 217,052
Gross profit from service revenue 32,417 27,457 24,528 19,726 17,854
Total gross profit 396,795 335,318 296,940 259,925 234,906
Selling, general and
administrative expenses 247,872 214,710 194,160 176,275 157,468
Operating profit 148,923 120,608 102,780 83,650 77,438
Nonoperating income 3,490 3,601 3,015 1,933 1,601
Interest expense 25,931 19,701 20,180 25,071 20,262
Earnings before income taxes
and cumulative effect of change
in accounting principle 126,482 104,508 85,615 60,512 58,777
Earnings before cumulative effect
of change in accounting principle 80,008 65,512 54,579 38,872 37,530
Cumulative effect of change in
accounting principle (4,300) - - - -
Net earnings 75,708 65,512 54,579 38,872 37,530
BALANCE SHEET DATA
Working capital $ 121,858 $ 92,518 $ 104,622 $ 81,935 $ 91,801
Current ratio 1.42 to 1 1.37 to 1 1.47 to 1 1.46 to 1 1.55 to 1
Merchandise inventories $ 366,843 $ 305,872 $ 295,179 $ 230,894 $ 234,688
Property and equipment-net 861,910 723,452 628,918 588,593 556,990
Total assets 1,291,019 1,078,518 967,813 856,925 819,421
Long-term debt (including convertible
subordinated notes) 380,787 253,000 209,347 279,250 285,868
Stockholders' equity 586,253 547,759 509,763 378,514 344,603
DATA PER COMMON SHARE
Earnings before cumulative effect
of change in accounting principle $ 1.32 $ 1.06 $ .90 $ .69 $ .67
Cumulative effect of change in
accounting principle (.07) - - - -
Net earnings 1.25 1.06 .90 .69 .67
Cash dividends .17 .15 .1375 .1275 .1175
Stockholders' equity 9.53 8.97 8.40 6.79 6.20
Common share price range: high-low 36 7/8-26 27 1/2-20 1/2 27 3/8-17 1/8 19 1/2-10 3/8 17 1/4-8 3/8
OTHER STATISTICS
Return on average
stockholders' equity 13.4% 12.4% 12.3% 10.8% 11.4%
Common shares outstanding 61,501,679 61,060,055 60,669,102 55,773,813 55,606,116
Capital expenditures $ 185,072 $ 135,165 $ 78,025 $ 65,801 $ 105,826
Number of retail outlets 435 386 357 337 313
/TABLE
ITEM 7 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
The following table presents for the periods indicated certain items in the consolidated statements of earnings as a percentage of
total revenues (except as otherwise provided) and the percentage change in dollar amounts of such items compared to the indicated
prior period.
Percentage of Total Revenues Percentage Change
-------------------------------------------- -------------------------------
Jan. 28, 1995 Jan. 29, 1994 Jan. 30, 1993 Fiscal 1994 vs. Fiscal 1993 vs.
Year ended (Fiscal 1994) (Fiscal 1993) (Fiscal 1992) Fiscal 1993 Fiscal 1992
- --------------------------------------- ------------- ------------- ------------ ----------- -----------
Merchandise Sales...................... 86.1% 86.7% 87.2% 12.5% 6.8%
Service Revenue(1)..................... 13.9 13.3 12.8 18.7 11.7
------------- ------------- ------------ ----------- -----------
Total Revenues 100.0 100.0 100.0 13.4 7.4
Costs of Merchandise Sales(2).......... 69.9(3) 71.4(3) 73.0(3) 10.2 4.5
Costs of Service Revenue(2)............ 83.4(3) 83.3(3) 83.4(3) 18.9 11.6
------------- ------------- ------------ ----------- -----------
Total Costs of Revenues................ 71.8 73.0 74.3 11.5 5.5
Gross Profit from Merchandise Sales.... 30.1(3) 28.6(3) 27.0(3) 18.4 13.0
Gross Profit from Service Revenue...... 16.6(3) 16.7(3) 16.6(3) 18.1 11.9
------------- ------------- ------------ ----------- -----------
Total Gross Profit..................... 28.2 27.0 25.7 18.3 12.9
Selling, General and
Administrative Expenses.............. 17.6 17.3 16.8 15.4 10.6
------------- ------------- ------------ ----------- -----------
Operating Profit....................... 10.6 9.7 8.9 23.5 17.3
Nonoperating Income.................... .2 .3 .3 (3.1) 19.4
Interest Expense....................... 1.8 1.6 1.8 31.6 (2.4)
------------- ------------- ------------ ----------- -----------
Earnings Before Income Taxes and
Cumulative Effect of Change in
Accounting Principle................. 9.0 8.4 7.4 21.0 22.1
Income Taxes........................... 36.7(4) 37.3(4) 36.3(4) 19.2 25.6
------------- ------------- ------------ ----------- -----------
Earnings Before Cumulative Effect of
Change in Accounting Principle....... 5.7 5.3 4.7 22.1 20.0
Cumulative Effect of Change in
Accounting Principle................. (.3) - - - -
------------- ------------- ------------ ----------- -----------
Net Earnings 5.4 5.3 4.7 15.6 20.0
============= ============= ============ =========== ===========
(1) Service revenue consists of the labor charge for installing merchandise or maintaining or repairing vehicles, excluding the
sale of any installed parts or materials.
(2) Costs of merchandise sales include the cost of products sold, buying, warehousing and store occupancy costs. Costs of
service revenue include service center payroll and related employee benefits and service center occupancy costs. Occupancy
costs include utilities, rents, real estate and property taxes, repairs and maintenance and depreciation and amortization
expenses.
(3) As a percentage of related sales or revenue, as applicable.
(4) As a percentage of earnings before income taxes and cumulative effect of change in accounting principle.
/TABLE
FISCAL 1994 vs. FISCAL 1993
Total revenues for fiscal 1994 increased 13% over fiscal 1993 due to a
higher store count (435 at January 28, 1995 compared with 386 at January 29,
1994) coupled with a 5% increase in comparable store revenues (revenues
generated by stores in operation during the same months of each period).
Comparable store merchandise sales increased 5% while comparable store service
revenue increased 8% over fiscal 1993.
The increase in gross profit from merchandise sales, as a percentage of
merchandise sales, was due primarily to significantly higher merchandise
margins and a slight decrease in store occupancy costs.
The small decrease in gross profit from service revenue, as a percentage
of service revenue, was due primarily to an increase in service payroll costs
offset, in part, by a decrease in service employee benefits costs.
The increase in selling, general and administrative expenses, as a
percentage of total revenues, was due primarily to an increase in store
expenses offset, in part, by a decrease in employee benefits costs.
The 32% increase in interest expense was due to higher debt levels
incurred to fund the Company's store expansion program coupled with higher
interest rates.
The 22% increase in earnings before the cumulative effect of a change in
accounting principle in fiscal 1994, as compared with fiscal 1993, was due to
increases in comparable store revenues and gross profit from merchandise sales,
as a percentage of merchandise sales, offset, in part, by increases in selling,
general and administrative expenses and interest expense, as a percentage of
total revenues.
FISCAL 1993 vs. FISCAL 1992
Total revenues for fiscal 1993 increased 7% over fiscal 1992 due to a
higher store count (386 at January 29, 1994 compared with 357 at January 30,
1993) coupled with a 1% increase in comparable store revenues. Comparable
store merchandise sales remained constant while comparable store service
revenue increased 3% over fiscal 1992.
The increase in gross profit from merchandise sales, as a percentage of
merchandise sales, was due primarily to significantly higher merchandise
margins offset, in part, by increases in store occupancy costs and warehousing
costs.
The small increase in gross profit from service revenue, as a percentage
of service revenue, was due primarily to a decrease in service employee
benefits costs offset, in part, by an increase in service payroll and occupancy
costs.
The increase in selling, general and administrative expenses, as a
percentage of total revenues, was due primarily to an increase in store
expenses.
The 2% decrease in interest expense was due to lower interest rates
offset, in part, by higher debt levels incurred to fund the Company's store
expansion program.
The increase in income taxes, as a percentage of earnings before income
taxes and cumulative effect of change in accounting principle, was due
primarily to a 1% increase in the federal statutory tax rate from 34% to 35%.
The 20% increase in net earnings in fiscal 1993, as compared with fiscal
1992, was due to a substantial increase in gross profit from merchandise sales,
as a percentage of merchandise sales, offset, in part, by an increase in
selling, general and administrative expenses, as a percentage of total
revenues.
EFFECTS OF INFLATION
The Company uses the LIFO method of inventory valuation. Thus, the cost
of merchandise sold approximates current cost. Although the Company
cannot accurately determine the precise effect of inflation on its operations,
it does not believe inflation has had a material effect on revenues or results
of operations during fiscal 1994, fiscal 1993 or fiscal 1992.
LIQUIDITY AND CAPITAL RESOURCES
The Company's cash requirements arise principally from the need to finance
the acquisition, construction and equipping of new stores and to purchase
inventory. The Company opened 51 stores in fiscal 1994, 37 stores in fiscal
1993 and 29 stores in fiscal 1992. In fiscal 1994, with increased levels of
capital expenditures, coupled with cash utilized to acquire shares of the
Company's common stock for its benefits trust, the Company increased its debt
by $182,859,000. In fiscal 1993, with increased levels of capital expenditures
coupled with cash utilized to acquire treasury stock which was subsequently
transferred to its benefits trust, the Company increased its debt by
$77,525,000. In fiscal 1992, with substantial cash flows from operating
activities and the conversion of substantially all its $75,000,000 convertible
subordinated notes, the Company reduced its debt by $72,639,000.
The following table indicates the Company's principal cash requirements
for the past three years.
(dollar amounts Fiscal Fiscal Fiscal
in thousands) 1994 1993 1992 Total
- ----------------------------------------------------------------------------
Cash Requirements
Capital expenditures $185,072 $135,165 $ 78,025 $398,262
Net inventory additions(1) 87,248 26,487 24,001 137,736
- ----------------------------------------------------------------------------
Total $272,320 $161,652 $102,026 $535,998
- ----------------------------------------------------------------------------
Net cash provided by
operating activities
(excluding net
inventory additions) $124,474 $111,595 $100,415 $336,484
--------------------------------------------------------------------------
1 Net inventory additions include the increase in inventory less the net
change in checks outstanding and accounts payable.
Inventories have increased in the past three years as the Company added a
net of 98 stores while stock-keeping-units per store rose during the period
from approximately 22,000 to approximately 25,000, many of which were higher
cost hard parts.
The Company currently plans to open approximately 75 stores in fiscal
1995. Management estimates that the cost to open 75 stores, coupled with
capital expenditures in existing stores, warehouses and offices during fiscal
1995 will be approximately $200,000,000. Funds required to finance the store
expansion are expected to come from operating activities with the remainder
provided by unused lines of credit, which totalled $96,800,000 at January 28,
1995, or from accessing traditional lending sources which may include the
public capital markets.
The Company's working capital increased to $121,858,000 at January 28,
1995 from $92,518,000 at January 29, 1994. The Company's long-term debt
increased, as a percentage of its total capitalization, to 39% at January 28,
1995 from 32% at January 29, 1994.
ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
INDEPENDENT AUDITORS' REPORT
Board of Directors and Stockholders
The Pep Boys - Manny, Moe & Jack
Philadelphia, Pennsylvania
We have audited the accompanying consolidated balance sheets of
The Pep Boys - Manny, Moe & Jack and subsidiaries as of January 28, 1995
and January 29, 1994, and the related consolidated statements of earnings,
stockholders' equity, and cash flows for each of the three years in the
period ended January 28, 1995. Our audits also included the financial
statement schedule listed in the index at Item 14. These financial
statements and the financial statement schedule are the responsibility of the
Company's management. Our responsibility is to express an opinion on the
financial statements and the financial statement schedule based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of The Pep Boys - Manny, Moe & Jack
and subsidiaries at January 28, 1995 and January 29, 1994, and the results of
their operations and their cash flows for each of the three years in the period
ended January 28, 1995 in conformity with generally accepted accounting
principles. Also, in our opinion, such financial statement schedule, when
considered in relation to the basic consolidated financial statements taken as
a whole, presents fairly in all material respects the information set forth
therein.
As discussed in Note A to the consolidated financial statements, in 1994 the
Company changed its method of accounting for postemployment benefits to conform
with Statement of Financial Accounting Standards No. 112.
Deloitte & Touche LLP
Philadelphia, Pennsylvania
March 20, 1995
CONSOLIDATED BALANCE SHEETS The Pep Boys - Manny, Moe & Jack and Subsidiaries
(dollar amounts in thousands, except per share amounts)
January 28, January 29,
1995 1994
---------- ----------
ASSETS
Current Assets:
Cash ......................................................... $ 11,748 $ 12,050
Accounts receivable, less allowance for uncollectible
accounts of $126 and $50..................................... 3,804 1,525
Merchandise inventories....................................... 366,843 305,872
Deferred income taxes......................................... 12,000 9,100
Other......................................................... 16,914 13,161
---------- ----------
Total Current Assets....................................... 411,309 341,708
Property and Equipment - at cost:
Land.......................................................... 215,623 183,601
Building and improvements..................................... 592,748 500,467
Furniture, fixtures and equipment............................. 283,317 229,730
Construction in progress...................................... 13,287 9,364
---------- ----------
1,104,975 923,162
Less accumulated depreciation and amortization................ 243,065 199,710
---------- ----------
Total Property and Equipment............................... 861,910 723,452
Other.............................................................. 17,800 13,358
---------- ----------
Total Assets $1,291,019 $1,078,518
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Checks outstanding............................................ $ 8,422 $ 22,193
Accounts payable.............................................. 91,742 104,248
Accrued expenses.............................................. 72,318 59,574
Short-term borrowings......................................... 97,200 54,500
Income taxes payable.......................................... - 1,278
Current maturities of long-term debt.......................... 19,769 7,397
---------- ----------
Total Current Liabilities.................................. 289,451 249,190
Long-Term Debt, less current maturities............................ 294,537 253,000
Deferred Income Taxes.............................................. 34,528 28,569
Convertible Subordinated Notes..................................... 86,250 -
Commitments
Stockholders' Equity:
Common Stock, par value $1 per share:
Authorized 500,000,000 shares;
Issued and outstanding 61,501,679 and 61,060,055............ 61,502 61,060
Additional paid-in capital.................................... 130,732 122,977
Retained earnings............................................. 454,288 388,653
---------- ----------
646,522 572,690
Less:
Treasury Stock - 948,200 shares, at cost...................... - 24,931
Cost of shares in benefits trust - 2,232,500 shares, at cost.. 60,269 -
---------- ----------
Total Stockholders' Equity................................. 586,253 547,759
---------- ----------
Total Liabilities and Stockholders' Equity $1,291,019 $1,078,518
========== ==========
See notes to consolidated financial statements.
/TABLE
CONSOLIDATED STATEMENTS OF EARNINGS The Pep Boys - Manny, Moe & Jack and Subsidiaries
(dollar amounts in thousands, except per share amounts)
January 28, January 29, January 30,
Year ended 1995 1994 1993
- ------------------------------------------------------ ---------- ---------- ----------
Merchandise Sales..................................... $1,211,536 $1,076,543 $1,008,191
Service Revenue....................................... 195,449 164,590 147,403
---------- ---------- ----------
Total Revenues........................................ 1,406,985 1,241,133 1,155,594
---------- ---------- ----------
Costs of Merchandise Sales............................ 847,158 768,682 735,779
Costs of Service Revenue.............................. 163,032 137,133 122,875
---------- ---------- ----------
Total Costs of Revenues............................... 1,010,190 905,815 858,654
---------- ---------- ----------
Gross Profit from Merchandise Sales................... 364,378 307,861 272,412
Gross Profit from Service Revenue..................... 32,417 27,457 24,528
---------- ---------- ----------
Total Gross Profit.................................... 396,795 335,318 296,940
Selling, General and Administrative Expenses.......... 247,872 214,710 194,160
---------- ---------- ----------
Operating Profit...................................... 148,923 120,608 102,780
Nonoperating Income................................... 3,490 3,601 3,015
Interest Expense...................................... 25,931 19,701 20,180
---------- ---------- ----------
Earnings Before Income Taxes and Cumulative Effect
of Change in Accounting Principle................... 126,482 104,508 85,615
Income Taxes.......................................... 46,474 38,996 31,036
---------- ---------- ----------
Earnings before Cumulative Effect of Change in
Accounting Principle................................ 80,008 65,512 54,579
Cumulative Effect of Change in Accounting Principle.. (4,300) - -
---------- ---------- ----------
Net Earnings $ 75,708 $ 65,512 $ 54,579
========== ========== ==========
Earnings per Share Before Cumulative Effect of Change
in Accounting Principle............................. $ 1.32 $ 1.06 $ .90
Cumulative Effect of Change in Accounting Principle... (.07) - -
---------- ---------- ----------
Net Earnings per Share $ 1.25 $ 1.06 $ .90
========== ========== ==========
See notes to consolidated financial statements.
/TABLE
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY The Pep Boys - Manny, Moe & Jack and Subsidiaries
(dollar amounts in thousands, except per share amounts)
Common Stock
-------------------- Additional Retained Treasury Benefits Total Stock-
Shares Amount Paid-in Capital Earnings Stock Trust holders' Equity
---------- ------- --------------- --------- -------- -------- ---------------
Balance, February 1, 1992.................. 55,773,813 $55,774 $ 36,885 $285,855 $ - $ - $378,514
Net earnings............................... 54,579 54,579
Cash dividends ($.1375 per share).......... (8,173) (8,173)
Conversion of 6% convertible subordinated
notes into equity........................ 4,162,776 4,163 71,211 75,374
Exercise of stock options and related
tax benefits............................. 720,699 720 8,761 9,481
Dividend reinvestment plan................. 11,814 12 267 279
Acquisitions and transfers of 107,700
shares to employees' savings plan........ (291) (291)
---------- ------- --------------- -------- -------- -------- ---------------
Balance, January 30, 1993.................. 60,669,102 60,669 116,833 332,261 - - 509,763
Net earnings............................... 65,512 65,512
Cash dividends ($.15 per share)............ (9,120) (9,120)
Exercise of stock options and related
tax benefits............................. 377,569 378 5,744 6,122
Dividend reinvestment plan................. 13,384 13 291 304
Acquisitions and transfers of 80,000
shares to employees' savings plan........ 109 109
Acquisition of 948,200 shares of
treasury stock............................ (24,931) (24,931)
---------- ------- --------------- -------- --------- -------- ---------------
Balance, January 29, 1994.................. 61,060,055 61,060 122,977 388,653 (24,931) - 547,759
Net earnings............................... 75,708 75,708
Cash dividends ($.17 per share)............ (10,073) (10,073)
Exercise of stock options and related
tax benefits............................. 427,543 428 7,568 7,996
Dividend reinvestment plan................. 14,081 14 421 435
Acquisitions and transfers of 75,000
shares to employees' savings plan........ (122) 807 685
Acquisitions and transfers of 2,232,500
shares of treasury stock to benefits
trust.................................... (112) 24,124 (60,269) (36,257)
---------- ------- --------------- -------- --------- ---------- ---------------
Balance, January 28, 1995.................. 61,501,679 $61,502 $130,732 $454,288 $ - $(60,269) $586,253
========== ======= =============== ======== ========= ========== ===============
See notes to consolidated financial statements.
/TABLE
CONSOLIDATED STATEMENTS OF CASH FLOWS The Pep Boys - Manny, Moe & Jack and Subsidiaries
(dollar amounts in thousands)
January 28, January 29, January 30,
Year ended 1995 1994 1993
- -------------------------------------------------------------------------- ----------- ----------- -----------
Cash Flows from Operating Activities:
Net earnings............................................................ $75,708 $ 65,512 $ 54,579
Adjustments to Reconcile Net Earnings to Net Cash
Provided by Operating Activities:
Depreciation and amortization........................................... 44,402 39,125 36,674
Cumulative effect of accounting change.................................. 4,300 - -
Increase (decrease)in deferred income taxes............................. 5,611 680 (2,266)
(Gain)loss from sales of assets......................................... (1,406) (297) 266
Increase in accounts receivable and other............................... (7,854) (2,023) (2,865)
Increase in merchandise inventories................................... (60,971) (10,693) (64,285)
(Decrease) increase in checks outstanding and accounts payable.......... (26,277) (15,794) 40,284
Increase in accrued expenses............................................ 6,683 8,325 9,256
(Decrease) increase in income taxes payable............................. (2,970) 273 4,771
----------- ----------- -----------
Total Adjustments................................................. (38,482) 19,596 21,835
----------- ----------- -----------
Net Cash Provided by Operating Activities................................. 37,226 85,108 76,414
----------- ----------- -----------
Cash Flows from Investing Activities:
Capital expenditures.................................................... (183,872) (135,165) (78,025)
Proceeds from sales of assets........................................... 3,437 1,494 738
Other, net.............................................................. 116 68 (1,993)
Net sales and maturities of marketable securities....................... - - 3,286
----------- ----------- -----------
Net Cash Used in Investing Activities..................................... (180,319) (133,603) (75,994)
----------- ----------- -----------
Cash Flows from Financing Activities:
Net borrowings under line of credit agreements.......................... 117,700 44,500 18,301
Reduction of long-term debt............................................. (22,291) (41,975) (16,177)
Net proceeds from issuance of notes..................................... 85,387 73,892 -
Acquisitions of treasury stock.......................................... (36,257) (24,931) -
Dividends paid.......................................................... (10,073) (9,120) (8,173)
Proceeds from exercise of stock options................................. 7,996 6,122 6,252
Proceeds from dividend reinvestment plan................................ 435 304 279
(Loss) gain on stock purchased for employees' savings plan.............. (106) 109 (291)
----------- ----------- -----------
Net Cash Provided by Financing Activities................................. 142,791 48,901 191
----------- ----------- -----------
Net (Decrease) Increase in Cash........................................... (302) 406 611
Cash at Beginning of Year................................................. 12,050 11,644 11,033
----------- ----------- -----------
Cash at End of Year....................................................... $11,748 $ 12,050 $ 11,644
=========== =========== ===========
....................................................................................................................................
Supplemental Disclosure of Cash Flow Information:
Income taxes paid....................................................... $46,384 $38,043 $28,531
Interest paid, net of amounts capitalized............................... 23,959 19,110 18,915
....................................................................................................................................
Supplemental Disclosure of Noncash Financing Activities:
Mortgage note assumed in property acquisition........................... $ 1,200 $ - $ -
Conversion of 6% convertible subordinated notes into equity............. - - 74,763
....................................................................................................................................
See notes to consolidated financial statements
THE PEP BOYS- MANNY, MOE & JACK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years ended January 28, 1995, January 29, 1994 and January 30, 1993
(dollar amounts in thousands, except per share amounts)
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BUSINESS The Pep Boys-Manny, Moe & Jack and Subsidiaries (the "Company") is
engaged principally in the retail sale of automotive parts and accessories,
automotive maintenance and service and the installation of parts through a
chain of 435 stores at January 28, 1995.
FISCAL YEAR END The Company's fiscal year ends on the Saturday nearest to
January 31. Fiscal years 1994, 1993 and 1992 each comprised 52 weeks.
PRINCIPLES OF CONSOLIDATION The consolidated financial statements include the
accounts of the Company and its subsidiaries. All significant intercompany
balances and transactions have been eliminated.
MERCHANDISE INVENTORIES Merchandise inventories are valued at the lower of
cost (last-in, first-out method) or market. If the first-in, first-out method
of valuing inventories had been used, inventories would have been approximately
$15,319 and $15,452 higher at January 28, 1995 and January 29, 1994,
respectively.
PROPERTY AND EQUIPMENT Property and equipment are recorded at cost.
Depreciation and amortization are computed using the straight-line method over
the following estimated useful lives: building and improvements, 5 1/2 to 40
years; furniture, fixtures and equipment, 3 to 10 years.
CAPITALIZED INTEREST Interest on borrowed funds is capitalized in connection
with the construction of certain long-term assets. Capitalized interest
amounted to $1,850, $1,254 and $852 in fiscal years 1994, 1993 and 1992,
respectively.
SERVICE REVENUE Service revenue consists of the labor charge for installing
merchandise or maintaining or repairing vehicles, excluding the sale of any
installed parts or materials.
COSTS OF REVENUES Costs of merchandise sales include the cost of products
sold, buying, warehousing and store occupancy costs. Costs of service revenue
include service center payroll and related employee benefits and service center
occupancy costs. Occupancy costs include utilities, rents, real estate and
property taxes, repairs and maintenance and depreciation and amortization
expenses.
PENSION EXPENSE Annual pension expense is actuarially computed using the
"projected unit credit method" which attributes an equal portion of total
projected benefits to each year of employee service.
INCOME TAXES The Company uses the liability method of accounting for income
taxes in accordance with SFAS No. 109, "Accounting for Income Taxes." Under
the liability method, deferred income taxes are determined based upon enacted
tax laws and rates applied to the differences between the financial statement
and tax basis of assets and liabilities. The adoption of SFAS No. 109 on
February 2, 1992 did not have any effect on the Company's financial position or
results of operations.
POSTRETIREMENT AND POSTEMPLOYMENT BENEFITS Effective February 2, 1992 the
Company adopted SFAS No. 106, "Accounting for Postretirement Benefits Other
than Pensions." As a result of adopting this standard, the Company recognized
an expense of $12 in fiscal year 1992, which is the full impact of SFAS No. 106
on the Company's financial position and results of operations.
Effective January 30, 1994 the Company adopted SFAS No. 112, "Employers'
Accounting for Postemployment Benefits." This statement establishes accrual
accounting standards for employer-provided benefits which cover former or
inactive employees after employment, but before retirement. As a result of
adopting this standard, the Company recognized a charge to earnings of $4,300,
net of income tax benefit of $2,552.
RECLASSIFICATIONS Certain reclassifications have been made to the prior years'
consolidated financial statements to conform to the current year's
presentation.
NOTE B - DEBT
SHORT-TERM BORROWINGS The Company had short-term borrowings of $97,200 at
January 28, 1995 and $54,500 at January 29, 1994. The Company had short-term
lines of credit with several banks totalling $194,000 at January 28, 1995 and
$119,000 at January 29, 1994. The interest rates on these lines are negotiated
based upon market conditions. The weighted average interest rate on borrowings
from these lines was 4.7% during 1994 and 3.4% during 1993. The weighted
average interest rate on borrowings from these lines was 5.9% at January 28,
1995 and 3.4% at January 29, 1994. The average and maximum month end balances
on these borrowings were $78,488 and $97,200 in 1994 and $30,435 and $54,500 in
1993.
LONG-TERM DEBT
...............................................................................
Jan. 28, Jan. 29,
1995 1994
-------- --------
8 7/8% notes due April 15, 1996 .................... $110,650 $125,000
Indebtedness to banks under revolving
credit loan agreement dated
June 16, 1989 (a)................................ 100,000 35,000
6 5/8% notes due May 15, 2003 ...................... 75,000 75,000
9.3% senior notes (b)............................... 16,071 23,214
Other revolving lines of credit (c)................. 10,000 -
Mortgage notes payable at annual
interest rates ranging from 4.2%
to 7.5% (d)..................................... 2,585 2,183
-------- --------
314,306 260,397
Less current maturities.......................... 19,769 7,397
-------- --------
Total long-term debt................................ $294,537 $253,000
======== ========
.............................................................................
(a) The Company has a revolving credit agreement with seven major banks
providing for borrowings of up to $100,000. Funds may be drawn and repaid
anytime prior to June 30, 1995, at which time the total commitment, or any
portion thereof, may be converted, at the Company's election, into term
loans payable at 6.3% of the term commitment amount each quarter for the
next four years. At the Company's option, the interest rate on any loan
may be based on the prime rate, a "CD-based" rate, a "LIBOR-based" rate or
a negotiated rate based upon market conditions. The weighted average
interest rate was 6.1% at January 28, 1995 and 3.3% at January 29, 1994.
(b) Annual maturities for the 9.3% senior notes are as follows: $7,143 due in
each of 1995 and 1996 with the remaining balance of $1,785 due in 1997.
(c) The Company entered into a revolving credit agreement with a bank which
permits the Company to borrow an aggregate of $10,000. Upon the bank's
demand, this line is due and payable in 13 months. The interest rate on
this line, at the Company's election, is based on the prime rate, a "CD-
based" rate, a "LIBOR-based" rate or a negotiable rate based upon market
conditions. The weighted average interest rate was 6.2% at January 28,
1995.
(d) The weighted average interest rate on the mortgage notes payable was 6.9%
at January 28, 1995 and 5.3% at January 29, 1994. These notes, which
mature at various times through August 2016, are collateralized by land and
building with an aggregate carrying value of approximately $7,839 at
January 28, 1995.
CONVERTIBLE SUBORDINATED NOTES On August 24, 1994 the Company sold $86,250 of
4% convertible subordinated notes. These notes are convertible by the holders
into the common stock of the Company anytime on or before September 1, 1999
(the maturity date) at a conversion price of $41 per share subject to
adjustment in certain events. The notes are redeemable, in whole or in part,
at the option of the Company at any time on or after September 15, 1997, at a
redemption price of 101% of the principal amount and at par on or after
September 1, 1998.
Several of the Company's debt agreements require the maintenance of certain
financial ratios and covenants. Approximately $116,409 of the Company's net
worth was not restricted by these covenants at fiscal year end. The Company is
in compliance with all debt covenants at January 28, 1995.
The annual maturities of all long-term debt for the next five years are $19,769
in 1995, $153,959 in 1996, $26,932 in 1997, $25,157 in 1998 and $98,920 in
1999. Any compensating balance requirements related to all revolving credit
agreements and debt were satisfied by balances available from normal business
operations.
The Company was contingently liable for outstanding letters of credit in the
amount of approximately $28,904 at January 28, 1995.
NOTE C - LEASE COMMITMENTS
The Company leases certain property and equipment under operating leases
which contain renewal and escalation clauses. Aggregate minimum rental
commitments for leases having noncancellable lease terms of more than one year
are approximately: 1995 - $16,811; 1996 - $15,827; 1997 - $15,015; 1998 -
$14,027; 1999 - $13,673; thereafter - $185,984. The present value of the
aggregate minimum rental commitments for operating leases, discounted at 10% is
approximately $124,626. Rental expenses incurred for operating leases in 1994,
1993 and 1992 were $18,474, $16,786 and $14,094, respectively.
NOTE D - STOCKHOLDERS' EQUITY
RIGHTS AGREEMENT On December 31, 1987, the Company distributed as a dividend
one common share purchase right on each of its common shares. The rights will
not be exercisable or transferable apart from the Company's common stock until
a person or group, as defined in the rights agreement, (dated December 17, 1987
and as amended on June 6, 1989), without the proper consent of the Company's
Board of Directors, acquires 20% or more, or makes an offer to acquire 30% or
more of the Company's outstanding stock, exclusive of stock holdings as of
December 17, 1987. When exercisable, the rights entitle the holder to purchase
one share of the Company's common stock for $55. Under certain circumstances,
including the acquisition of 20% of the Company's stock by a person or group,
the rights entitle the holder to purchase common stock of the Company or common
stock of an acquiring company having a market value of twice the exercise price
of the right. The rights do not have voting power and are subject to
redemption by the Company's Board of Directors for $.02 per right anytime
before a 20% position has been acquired and for 15 days thereafter, at which
time the rights become nonredeemable. The rights expire on December 31, 1997.
BENEFITS TRUST On April 29, 1994 the Company established a flexible employee
benefits trust with the intention of purchasing up to $75,000 worth of the
Company's common shares. The repurchased shares will be held in the trust and
will be used to fund the Company's existing benefit plan obligations including
healthcare programs, savings and retirement plans and other benefit
obligations. The trust will allocate or sell the repurchased shares over the
next 15 years to fund these benefit programs. As shares are released from the
trust, the Company will charge or credit additional paid-in capital for the
difference between the fair value of shares released and the original cost of
the shares to the trust. For financial reporting purposes the trust is
consolidated with the accounts of the Company. All dividend and interest
transactions between the trust and the Company are eliminated. As of January
28, 1995, the Company has repurchased 2,232,500 shares of its common stock at a
cost of $60,269,000 which is shown as "Cost of shares in benefits trust" on the
Company's consolidated balance sheets.
NOTE E - PENSION AND SAVINGS PLANS
The Company has a pension plan covering substantially all of its full-time
employees hired on or before February 1, 1992. Normal retirement age is 65.
Pension benefits are based on salary and years of service. The Company's
policy is to fund amounts as are necessary on an actuarial basis to provide
assets sufficient to meet the benefits to be paid to plan members in accordance
with the requirements of ERISA.
The actuarial computations using the "projected unit credit method" assumed
a discount rate on benefit obligations of 7.8% in 1994 and 8% in 1993 and 1992,
and an expected long-term rate of return on plan assets of 8.5%. The
assumption for annual salary increases over the average remaining service lives
of employees under the plan was 4% in 1994 and 1993, and 6.5% in 1992.
Variances between actual experience and assumptions for costs and returns on
assets are amortized over the remaining service lives of employees under the
plan.
Pension expense includes the following:
.............................................................................
Jan. 28, Jan. 29, Jan. 30,
1995 1994 1993
-------- -------- -------
Normal service costs................ $1,516 $ 1,478 $ 1,733
Interest cost on projected
benefit obligation................ 1,413 1,250 1,291
Actual return on plan assets........ (1,706) (1,361) (1,474)
Net amortization of transition
asset and unrecognized net loss... (214) (257) (256)
Prior service cost.................. 19 23 23
Asset gain (loss) deferred.......... 56 (217) -
-------- -------- --------
Total pension expense............... $1,084 $ 916 $ 1,317
======== ======== ========
.............................................................................
Pension plan assets are stated at fair market value and are composed primarily
of guaranteed investment contracts, group annuity contracts and money market
funds, all with major insurance companies and banking institutions, and
investments in the Company's common stock.
The following table sets forth the reconciliation of the plan's funded status
as of December 31 of each year. The actuarial present value of benefit
obligation assumed a discount rate of 8.5% at December 31, 1994 and 7.8% at
December 31, 1993.
.............................................................................
Dec. 31, Dec. 31,
1994 1993
---------- ----------
Actuarial present value of benefit
obligation:
Vested benefit obligation....................... $(13,885) $(14,218)
---------- ----------
Accumulated benefit obligation.................. $(14,840) $(15,506)
---------- ----------
Projected benefit obligation for
service rendered to date..................... $(17,912) $(18,918)
Plan assets at fair value....................... 20,625 19,637
---------- ----------
Assets in excess of projected
benefit obligation........................... 2,713 719
Unrecognized net asset (at date of transition).. (1,500) (1,714)
Unrecognized net gain from past
experience different from previous
assumption................................... (4,454) (1,204)
Unrecognized prior service cost................. 85 127
---------- ----------
Accrued pension expense
as of January 28, 1995 and
January 29, 1994, respectively............... $ (3,156) $ (2,072)
========== ==========
.............................................................................
The Company has a 401(k) savings plan which covers all full-time employees who
are at least 21 years of age with one or more years of service. The Company
contributes the lesser of 50% of the first 6% of a participant's contributions
or 3% of the participant's compensation. The Company's savings plan
contribution expense was $2,563 in 1994, $2,277 in 1993, and $1,980 in 1992.
NOTE F - INCOME TAXES
The provision for income taxes includes the following:
.............................................................................
Jan. 28, Jan. 29, Jan. 30,
Year ended 1995 1994 1993
- -------------------------------- --------- --------- ---------
Current:
Federal...................... $39,210 $34,234 $29,739
State........................ 4,205 3,587 3,563
Deferred:
Federal...................... 2,865 2,527 (1,946)
State........................ 194 (1,352) (320)
--------- --------- ---------
$46,474 $38,996 $31,036
========= ========= =========
.............................................................................
A reconciliation of the statutory federal income tax rate to the effective
rate of the provision for income taxes follows:
.............................................................................
Jan. 28, Jan. 29, Jan. 30,
Year ended 1995 1994 1993
- -------------------------------- --------- --------- ---------
Statutory tax rate.............. 35.0% 35.0% 34.0%
State income taxes,
net of federal
tax benefits................. 2.3 2.3 2.5
Other, net...................... (0.6) - (0.2)
--------- --------- ---------
36.7% 37.3% 36.3%
========= ========= =========
.............................................................................
Deferred income taxes relate to the following temporary differences:
.............................................................................
Jan. 28, Jan. 29, Jan. 30,
Year ended 1995 1994 1993
- -------------------------------- --------- --------- ---------
Depreciation.................... $4,594 $ 2,293 $ 1,124
Inventories..................... 257 (2,244) (1,504)
Vacation accrual................ (259) (189) (216)
Pension accrual................. (406) (344) (1,178)
Casualty gain................... 1,289 544 -
Insurance....................... (2,459) 680 -
All other....................... 43 435 (492)
--------- --------- ---------
$3,059 $ 1,175 $(2,266)
========= ========= =========
.............................................................................
The following are components of the net deferred tax accounts as of January
28, 1995:
...............................................................................
Federal State Total
------- ------ -------
Deferred tax assets:
Current....................... $16,288 $1,103 $17,391
Long-term..................... 12,995 882 13,877
Deferred tax liabilities:
Current....................... 5,049 342 5,391
Long-term..................... 45,333 3,072 48,405
.............................................................................
The following are components of the net deferred tax accounts as of January
29, 1994:
..............................................................................
Federal State Total
------- ------ -------
Deferred tax assets:
Current....................... $11,887 $ 807 $12,694
Long-term..................... 11,212 758 11,970
Deferred tax liabilities:
Current....................... 3,366 228 3,594
Long-term..................... 37,966 2,573 40,539
.............................................................................
Items that gave rise to significant portions of the deferred tax accounts
are as follows:
.............................................................................
Jan. 28, Jan. 29,
Year ended 1995 1994
- -------------------------- --------- --------
Deferred tax assets:
Inventories................. $6,421 $ 6,678
Vacation accrual............ 2,423 2,164
Other....................... 3,156 258
--------- --------
$12,000 $ 9,100
========= ========
Deferred tax liabilities:
Depreciation................ $32,628 $28,034
Other....................... 1,900 535
--------- --------
$34,528 $28,569
========= ========
..............................................................................
NOTE G --- NET EARNINGS PER SHARE
Net earnings per share is computed by dividing net earnings by the weighted
average number of common shares outstanding after reduction for treasury shares
and shares held in benefits trust and assuming exercise of dilutive stock
options computed by the treasury stock method using the average market price
during the period. Primary and fully diluted earnings per share are
essentially the same.
The weighted average number of shares and share equivalents used in
computing net earnings per share were: 60,565,000 in 1994, 61,891,000 in 1993
and 60,636,000 in 1992.
NOTE H - STOCK OPTIONS AND AWARDS
Options to purchase the Company's common stock have been granted to key
employees and certain members of the Board of Directors. The option prices are
at least 100% of the fair market value of the common stock on the grant date.
Under the terms of the Company's Incentive Stock Option Plan adopted in
1982, options to purchase up to 3,600,000 shares of the Company's common stock
were authorized. Options granted prior to 1988 are exercisable from the date
of grant. Options granted in 1988 and thereafter are exercisable on the second
anniversary of the grant date. All options under this plan cannot be exercised
more than ten years from the grant date. As of May 21, 1990, no additional
options will be granted under this plan.
Under the terms of the Company's Nonqualified Stock Option Plans, adopted in
1984 and 1985, options to purchase up to 3,300,000 shares of the Company's
common stock were authorized. The options became exercisable over a five-year
period with one-fifth exercisable on the grant date and one-fifth on each
anniversary date for the four years following the grant date. Options granted
cannot be exercised more than ten and one-half years after the grant date. As
of May 21, 1990, no additional options will be granted under these plans.
On May 21, 1990, the stockholders approved the 1990 Stock Incentive Plan
which authorized the issuance of restricted stock and/or options to purchase up
to 1,000,000 shares of the Company's common stock. An additional 1,500,000
shares were authorized by stockholders on June 1, 1993. Under this plan, both
incentive and nonqualified stock options may be granted to eligible
participants. Incentive stock options are exercisable on the second
anniversary of the grant date and nonqualified options become exercisable over
a five-year period with one-fifth exercisable on the grant date and one-fifth
on each anniversary date for the four years following the grant date. Options
cannot be exercised more than ten years after the grant date. As of January
28, 1995, 644,439 shares remain available for grant.
The Company has reserved sufficient shares of common stock to meet its stock
option plans' obligations.
............................................................................
Stock option transactions are summarized as follows:
.............................................................................
Incentive Nonqualified
Fiscal 1993 Stock Options Stock Options
- -----------------------------------------------------------------------------
Outstanding--beginning of
year 830,041 2,776,390
Granted 234,100 322,585
Exercised (178,111) (191,750)
Canceled (73,050) (6,500)
------------- -------------
Outstanding--end of year 812,980 2,900,725
Exercisable--end of year 456,930 2,397,911
Price range of options exercised $3.97 to $14.98 $10.94 to $16.19
Price range of options
outstanding end of year $3.97 to $26.25 $3.97 to $23.13
.............................................................................
.............................................................................
Fiscal 1994
- -----------------------------------------------------------------------------
Outstanding--beginning of
year................................ 812,980 2,900,725
Granted................................ 272,050 197,301
Exercised.............................. (209,215) (216,587)
Canceled............................... (87,600) (6,875)
------------- -------------
Outstanding--end of year............... 788,215 2,874,564
Exercisable--end of year............... 399,215 2,445,716
Price range of options exercised.......$3.97 to $21.81 $3.97 to $27.94
Price range of options
outstanding end of year..............$6.19 to $34.88 $5.91 to $32.69
.............................................................................
NOTE I - FAIR VALUE OF FINANCIAL INSTRUMENTS
The estimated fair value of the Company's financial instruments are as
follows:
January 28, 1995 January 29, 1994
---------------------- ---------------------
Carrying Estimated Carrying Estimated
Amount Fair Value Amount Fair Value
---------- ---------- -------- ----------
Assets:
Cash..................... $ 11,748 $ 11,748 $ 12,050 $ 12,050
Accounts receivable...... 3,804 3,804 1,525 1,525
Liabilities:
Checks outstanding....... $ 8,422 $ 8,422 $ 22,193 $ 22,193
Accounts payable......... 91,742 91,742 104,248 104,248
Short-term borrowings.... 97,200 97,200 54,500 54,500
Long-term debt including
current maturities...... 314,306 309,228 260,397 275,430
Convertible Subordinated
Notes................... 86,250 83,231 - -
...............................................................................
CASH, ACCOUNTS RECEIVABLE, CHECKS OUTSTANDING, ACCOUNTS PAYABLE AND SHORT-TERM
BORROWINGS The carrying amounts approximate fair value because of the short
maturity of these items.
LONG-TERM DEBT INCLUDING CURRENT MATURITIES AND CONVERTIBLE SUBORDINATED NOTES
Interest rates that are currently available to the Company for issuance of debt
with similar terms and remaining maturities are used to estimate fair value for
debt issues that are not quoted on an exchange.
The fair value estimates presented herein are based on pertinent information
available to management as of January 28, 1995 and January 29, 1994. Although
management is not aware of any factors that would significantly affect the
estimated fair value amounts, such amounts have not been comprehensively
revalued for purposes of these financial statements since those dates, and
current estimates of fair value may differ significantly from amounts presented
herein.
QUARTERLY FINANCIAL DATA (UNAUDITED) The Pep Boys - Manny, Moe & Jack and Subsidiaries
(dollar amounts in thousands, except per share amounts)
....................................................................................................................................
Net Cash Market Price
Year ended Total Gross Operating Net Earnings Dividends Per Share
Jan. 28, 1995 Revenues Profit Profit Earnings Per Share Per Share High Low
- ------------------------------------------------------------------------------------------------------------------------------------
1st Quarter $337,700 $90,527 $32,601 $17,557 (1) $.29 (1) $.0425 31 26
2nd Quarter 370,395 102,885 42,448 23,518 .39 .0425 33 3/4 29 1/4
3rd Quarter 363,229 100,195 38,311 20,640 .34 .0425 36 29 1/8
4th Quarter 335,661 103,188 35,563 18,293 .30 .0425 36 7/8 28 1/2
- ------------------------------------------------------------------------------------------------------------------------------------
....................................................................................................................................
Net Cash Market Price
Year ended Total Gross Operating Net Earnings Dividends Per Share
Jan. 29, 1994 Revenues Profit Profit Earnings Per Share Per Share High Low
- ------------------------------------------------------------------------------------------------------------------------------------
1st Quarter $299,147 $74,789 $25,093 $13,442 $.22 $.0375 26 1/2 20 3/4
2nd Quarter 329,146 87,752 34,226 19,102 .31 .0375 23 7/8 20 1/2
3rd Quarter 316,015 84,492 31,954 17,443 .28 .0375 24 7/8 20 3/4
4th Quarter 296,825 88,285 29,335 15,525 .25 .0375 27 1/2 23 1/4
- ------------------------------------------------------------------------------------------------------------------------------------
1 Does not include a $4,300 ($.07 per share) charge from a cumulative effect of an accounting change for postemployment
benefits.
Under the Company's present accounting system, actual gross profit from merchandise sales can be determined only at the time of
physical inventory, which is taken at the end of the fiscal year. Gross profit from merchandise sales for the first, second and
third quarters is estimated by the Company based upon recent historical gross profit experience and other appropriate factors. Any
variation between estimated and actual gross profit from merchandise sales for the first three quarters is reflected in the fourth
quarter's results.
ITEM 9 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
None.
PART III
ITEM 10 DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The material contained in the registrant's definitive proxy statement,
which will be filed pursuant to Regulation 14A not later than 120 days after
the end of the Company's fiscal year, (the "Proxy Statement") under the caption
"Election of Directors" is hereby incorporated herein by reference. The
information regarding executive officers called for by Item 401 of Regulation
S-K is included in Part I as Item A, in accordance with General Instruction
G(3) to Form 10-K.
ITEM 11 EXECUTIVE COMPENSATION
The material in the Proxy Statement under the caption "Executive
Compensation" other than the material under the caption "Executive Compensation
- - Report of Compensation Committee of the Board of Directors on Executive
Compensation" and "Executive Compensation - Performance Graph" is hereby
incorporated herein by reference.
ITEM 12 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The material in the Proxy Statement under the caption "Share Ownership of
Certain Beneficial Owners and Management" is hereby incorporated herein by
reference.
ITEM 13 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The material in the Proxy Statement under the caption "Executive
Compensation - Certain Relationships and Related Transactions" is hereby
incorporated herein by reference.
PART IV
ITEM 14 EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a).
1. The following consolidated financial statements
of The Pep Boys - Manny, Moe & Jack are included
in Item 8.
Consolidated Balance Sheets - January 28, 1995
and January 29, 1994
Consolidated Statements of Earnings - Years
ended January 28, 1995, January 29, 1994 and
January 30, 1993
Consolidated Statements of Stockholders' Equity -
Years ended January 28, 1995, January 29, 1994
and January 30, 1993
Consolidated Statements of Cash Flows - Years
ended January 28, 1995, January 29, 1994
and January 30, 1993
Notes to Consolidated Financial Statements
2. The following consolidated financial statement
schedule of The Pep Boys - Manny, Moe & Jack
is included.
Schedule II Valuation and Qualifying
Accounts and Reserves
All other schedules have been omitted because they are not applicable or
not required or the required information is included in the consolidated
financial statements or notes thereto.
3. Exhibits
(3.1) Articles of Incorporation, Incorporated by reference from
as amended the Company's Form 10-K for the
fiscal year ended January 30,
1988.
(3.2) By-Laws, as amended Incorporated by reference from
the Registration Statement on
Form S-3 (File No. 33-39225).
(4.1) Indenture dated as of March 22, Incorporated by reference from
1991 between the Company and the Registration Statement on
Bank America Trust Company of Form S-3 (File No. 33-39225).
New York as Trustee, including
Form of Debt Security
(4.2) Indenture, dated as of August Incorporated by reference from the
31, 1994, between the Company Registration Statement on Form S-3
and First Fidelity Bank, (File No. 33-55115) filed August,
National Association as Trustee, 17, 1994.
including Form of Debenture
(10.1) Medical Reimbursement Plan of Incorporated by reference from
the Company the Company's Form 10-K for the
fiscal year ended January 31,
1982.
(10.2)* 1982 Incentive Stock Option Plan Incorporated by reference from
of the Company the Company's Form 10-K for the
fiscal year ended January 31,
1982.
(10.3)* 1984 Non-Qualified Stock Option Incorporated by reference from
Plan the Company's Form 10-K for the
fiscal year ended February 2,
1985.
(10.4)* 1985 Non-Qualified Stock Option Incorporated by reference from
Plan the Company's Form 10-K for the
fiscal year ended February 2,
1985.
(10.5) Rights Agreement dated as of Incorporated by reference from
December 17, 1987 between the the Company's Form 8-K dated
Company and the Philadelphia December 17, 1987.
National Bank
(10.6)* Directors' Deferred Compensation Incorporated by reference from
Plan, as amended the Company's Form 10-K for the
fiscal year ended January 30,
1988.
(10.7)* Form of Employment Agreement, as Incorporated by reference from
amended, dated as of December 12, the Company's Form 10-K for the
1989 fiscal year ended February 3,
1990.
(10.8) Loan Agreement dated as of Incorporated by reference from
June 28, 1988 related to 9.33% the Company's Form 10-K for the
Senior Notes due May 30, 1998 fiscal year ended January 28,
1989.
(10.9)* Amendment No. 1 to the 1985 Incorporated by reference from
Non-Qualified Stock Option Plan the Company's Form 10-K for the
fiscal year ended January 28,
1989.
(10.10)* Amendment No. 1 to the 1982 Incorporated by reference from
Incentive Stock Option Plan the Company's Form 10-K for the
fiscal year ended January 28,
1989.
(10.11) Amendment dated June 6, 1989 Incorporated by reference from
to Rights Agreement dated as of the Company's Report on Form 8
December 17, 1987 between the filed July 6, 1989.
Company and the Philadelphia
National Bank
(10.12) Dividend Reinvestment and Stock Incorporated by reference from
Purchase Plan dated January 4, the Registration Statement on
1990 Form S-3 (File No. 33-32857)
filed January 5, 1990.
(10.13) Credit Agreement dated as of Incorporated by reference from
June 16, 1989 between the the Company's Form 10-K for the
Company and the Chase Manhattan fiscal year ended February 3,
Bank (Agent) 1990.
(10.14)* Executive Supplemental Pension Incorporated by reference from
Plan amended and restated the Company's Form 10-K for the
effective January 1, 1988 fiscal year ended February 3,
1990.
(10.15)* 1990 Stock Incentive Plan Incorporated by reference from
the Company's Form 10-Q for the
quarter ended November 3, 1990.
(10.16)* Amendment No. 1 to 1990 Stock Incorporated by reference from
Incentive Plan the Company's Form 10-K for the
fiscal year ended February 1,
1992.
(10.17)* The Pep Boys - Manny, Moe & Incorporated by reference from
Jack Trust Agreement for the the Company's Form 10-K for the
Executive Supplemental Pension fiscal year ended February 1,
Plan and Certain Contingent 1992.
Compensation Arrangements,
dated as of February 13, 1992
(10.18)* Amendment to the Executive Incorporated by reference from
Supplemental Pension Plan the Company's Form 10-K for the
(amended and restated effective fiscal year ended February 1,
January 1, 1988), dated as of 1992.
February 13, 1992
(10.19)* Consulting and Retirement Incorporated by reference from
Agreement by and between the the Company's Form 10-K for the
Company and Benjamin Strauss, fiscal year ended February 1,
dated as of February 2, 1992 1992.
(10.20)* Amendment No. 2 to the 1982 Incorporated by reference from
Incentive Stock Option Plan the Company's Form 10-Q for the
quarter ended October 31, 1992.
(10.21)* Amendment No. 3 to the Non- Incorporated by reference from
Qualified Stock Option Plan the Company's Form 10-Q for the
quarter ended October 31, 1992.
(10.22)* Amendment No. 2 to the 1990 Incorporated by reference from
Stock Incentive Plan the Company's Form 10-Q for the
quarter ended October 31, 1992.
(10.23)* President's Merit Award Program Incorporated by reference from
of the Company, as amended, the Company's Form 10-K for the
dated as of April 1, 1992 year ended January 30, 1993.
(10.24) Flexible Employee Benefits Trust Incorporated by reference from the
Company's Form 8-K dated May 6,
1994
(10.25)* The Pep Boys- Manny, Moe & Jack
Pension Plan, as amended, dated
December 28, 1994
(10.26)* The Pep Boys Savings Plan, as
amended, dated December 28, 1994
(10.27)* Executive Incentive Bonus Plan
of the Company, as amended and
restated as of March 30, 1994.
(11) Computation of Earnings per Share
(12) Computation of Ratio of Earnings
to Fixed Charges
(21) Subsidiaries of the Company
(23) Independent Auditors' Consent
(27) Financial Data Schedules
(b) No Form 8-K was filed for the fourth quarter of the year ended
January 28, 1995.
*Management contract or compensatory plan or arrangement.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
THE PEP BOYS - MANNY, MOE & JACK
(Registrant)
Dated: April 27, 1995 by: /s/Michael J. Holden
--------------------------
Michael J. Holden
Senior Vice President and
Chief Financial Officer and
Treasurer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
SIGNATURE CAPACITY DATE
/s/Mitchell G. Leibovitz Chairman of the Board, President April 24, 1995
- ------------------------ and Chief Executive Officer ----------------
Mitchell G. Leibovitz (Principal Executive Officer)
/s/Michael J. Holden Senior Vice President - Chief April 27, 1995
- ------------------------ Financial Officer & Treasurer ----------------
Michael J. Holden (Principal Financial and
Accounting Officer)
/s/Lennox K. Black Director April 24, 1995
- ------------------------ ----------------
Lennox K. Black
/s/Pemberton Hutchinson Director April 24, 1995
- ------------------------ ----------------
Pemberton Hutchinson
/s/Bernard J. Korman Director April 24, 1995
- ------------------------ ----------------
Bernard J. Korman
/s/J. Richard Leaman, Jr. Director April 25, 1995
- ------------------------ ----------------
J. Richard Leaman, Jr.
/s/Malcolmn D. Pryor Director April 25, 1995
- ------------------------ ----------------
Malcolmn D. Pryor
/s/Lester Rosenfeld Director April 24, 1995
- ------------------------ ----------------
Lester Rosenfeld
/s/Benjamin Strauss Director April 25, 1995
- ------------------------ ----------------
Benjamin Strauss
/s/Myles H. Tanenbaum Director April 25, 1995
- ------------------------ ----------------
Myles H. Tanenbaum
/s/David V. Wachs Director April 25, 1995
- ------------------------ ----------------
David V. Wachs
FINANCIAL STATEMENT SCHEDULES FURNISHED PURSUANT TO THE REQUIREMENTS OF FORM
10-K
THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES SCHEDULE II - VALUATION AND QUALIFYING
ACCOUNTS AND RESERVES
(in thousands)
- ----------------------------------------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E
- ----------------------------------------------------------------------------------------------------------------------------------
Additions Additions
Balance at Charged to Charged to Balance at
Beginning of Costs and Other End of
Descriptions Period Expenses Accounts Deductions-* Period
- ----------------------------------------------------------------------------------------------------------------------------------
ALLOWANCE FOR DOUBTFUL ACCOUNTS:
Year Ended January 28, 1995 $50 $114 $ - $38 $126
- ----------------------------------------------------------------------------------------------------------------------------------
Year Ended January 29, 1994 $85 $4 $ - $39 $50
- ----------------------------------------------------------------------------------------------------------------------------------
Year Ended January 30, 1993 $246 $41 $ - $202 $85
- ----------------------------------------------------------------------------------------------------------------------------------
*Uncollectible accounts written off.
/TABLE
INDEX TO EXHIBITS
(10.25) The Pep Boys- Manny, Moe & Jack Pension Plan
(10.26) The Pep Boys Savings Plan
(10.27) Executive Incentive Bonus Plan
(11) Computation of Earnings per Share
(12) Computation of Ratio of Earnings to Fixed Charges
(21) Subsidiaries of the Company
(23) Independent Auditors' Consent
(27) Financial Data Schedules