THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES

(UNAUDITED)

May 4, 2013

February 2, 2013

April 28, 2012

Assets

Current assets:

Cash and cash equivalents

$

56,116

$

59,186

$

99,439

Accounts receivable, less allowance for uncollectible accounts of $1,230; $1,302 and $1,289

25,215

23,897

22,542

Merchandise inventories

648,148

641,208

627,314

Prepaid expenses

29,135

28,908

26,077

Other current assets

59,048

60,438

57,197

Total current assets

817,662

813,637

832,569

Property and equipment, net of accumulated depreciation of $1,183; $1,163 and $1,130

647,636

657,270

688,909

Goodwill

46,917

46,917

46,917

Deferred income taxes

46,303

47,691

67,745

Other long-term assets

37,410

38,434

32,393

Total assets

$

1,595,928

$

1,603,949

$

1,668,533

Liabilities and stockholders’ equity

Current liabilities:

Accounts payable

$

245,193

$

244,696

$

261,834

Trade payable program liability

149,387

149,718

100,414

Accrued expenses

229,452

232,277

228,675

Deferred income taxes

53,481

58,441

62,627

Current maturities of long-term debt

2,000

2,000

1,079

Total current liabilities

679,513

687,132

654,629

Long-term debt less current maturities

197,500

198,000

293,773

Other long-term liabilities

52,202

53,818

75,391

Deferred gain from asset sales

124,276

127,427

137,110

Commitments and contingencies

Stockholders’ equity:

Common stock, par value $1 per share:

Authorized 500,000,000 shares; issued 68,557,041 shares

68,557

68,557

68,557

Additional paid-in capital

295,059

295,679

295,411

Retained earnings

433,734

430,148

424,083

Accumulated other comprehensive loss

(867

)

(980

)

(16,275

)

Treasury stock, at cost - 15,365,117 shares; 15,431,298 shares and 15,716,914 shares

(254,046

)

(255,832

)

(264,146

)

Total stockholders’ equity

542,437

537,572

507,630

Total liabilities and stockholders’ equity

$

1,595,928

$

1,603,949

$

1,668,533

Supplemental Balance Sheet Information:

Working capital

$

138,149

$

126,505

$

177,940

Current ratio

1.20

1.18

1.27

Accounts payable to inventory ratio

60.9

%

61.5

%

57.7

%

Total debt as a percent of total capitalization

26.9

%

27.1

%

36.7

%

Net debt as a percent of total capitalization, net

20.9

%

20.8

%

27.8

%

THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES

(UNAUDITED)

Thirteen weeks ended

May 4, 2013

April 28, 2012

%

%

Amount

Sales

Amount

Sales

Merchandise sales

$

417,150

77.8

$

412,332

78.6

Service revenue

119,023

22.2

112,272

21.4

Total revenues

536,173

100.0

524,604

100.0

Costs of merchandise sales

296,857

71.2

290,856

70.5

Costs of service revenue

117,476

98.7

106,096

94.5

Total costs of revenues

414,333

77.3

396,952

75.7

Gross profit from merchandise sales

120,293

28.8

121,476

29.5

Gross profit from service revenue

1,547

1.3

6,176

5.5

Total gross profit

121,840

22.7

127,652

24.3

Selling, general and administrative expenses

118,203

22.0

119,710

22.8

Net loss from dispositions of assets

(116

)

—

(2

)

—

Operating profit

3,521

0.7

7,940

1.5

Other income

378

0.1

470

0.1

Interest expense

3,679

0.7

6,516

1.2

Earnings from continuing operations before income taxes and discontinued operations

220

—

1,894

0.4

Income tax (benefit) expense

(3,708

)

N/M

(1)

760

40.1

(1)

Earnings from continuing operations before discontinued operations

3,928

0.7

1,134

0.2

Loss from discontinued operations, net of tax

(65

)

—

(72

)

—

Net earnings

3,863

0.7

1,062

0.2

Basic earnings per share:

Earnings from continuing operations before discontinued operations

$

0.07

$

0.02

Discontinued operations, net of tax

—

—

Basic earnings per share

$

0.07

$

0.02

Diluted earnings per share:

Earnings from continuing operations before discontinued operations

$

0.07

$

0.02

Discontinued operations, net of tax

—

—

Diluted earnings per share

$

0.07

$

0.02

Other comprehensive income:

Defined benefit plan adjustment, net of tax

—

354

Derivative financial instruments adjustment, net of tax

113

1,020

Other comprehensive income

113

1,374

Comprehensive income

$

 3,976

$

 2,436

THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES

(UNAUDITED)

Thirteen weeks ended

May 4, 2013

April 28, 2012

Cash flows from operating activities:

Net earnings

$

 3,863

$

 1,062

Adjustments to reconcile net earnings to net cash provided by continuing operations:

Net loss from discontinued operations

65

72

Depreciation

20,857

19,938

Amortization of deferred gain from asset sales

(3,151

)

(3,163

)

Amortization of deferred financing costs

563

633

Stock compensation expense

869

652

Deferred income taxes

(3,872

)

719

Net loss from disposition of assets

116

2

Loss from asset impairment

1,183

—

Other

(44

)

(22

)

Changes in assets and liabilities:

(Increase) decrease in accounts receivable, prepaid expenses and other

(699

)

6,428

Increase in merchandise inventories

(6,940

)

(13,178

)

Increase in accounts payable

262

18,122

(Decrease) increase in accrued expenses

(2,211

)

6,385

(Decrease) increase in other long-term liabilities

(1,338

)

466

Net cash provided by continuing operations

9,523

38,116

Net cash used in discontinued operations

(88

)

(106

)

Net cash provided by operating activities

9,435

38,010

Cash flows from investing activities:

Capital expenditures

(12,840

)

(11,940

)

Proceeds from dispositions of assets

2

—

Release of collateral investment

1,000

—

Net cash used in investing activities

(11,838

)

(11,940

)

Cash flows from financing activities:

Borrowings under line of credit agreements

590

524

Payments under line of credit agreements

(590

)

(524

)

Borrowings on trade payable program liability

46,181

42,722

Payments on trade payable program liability

(46,512

)

(27,522

)

Debt payments

(500

)

(270

)

Proceeds from stock issuance

164

195

Net cash (used in) provided by financing activities

(667

)

15,125

Net (decrease) increase in cash and cash equivalents

(3,070

)

41,195

Cash and cash equivalents at beginning of period

59,186

58,244

Cash and cash equivalents at end of period

$

 56,116

$

 99,439

Supplemental cash flow information:

Cash paid for income taxes

$

 1,430

$

 1,227

Cash received from income tax refunds

$

 51

$

—

Cash paid for interest

$

 2,987

$

 2,940

Accrued purchases of property and equipment

$

 1,055

$

 1,970

COMPUTATION OF BASIC AND DILUTED EARNINGS PER SHARE

(in thousands, except per share data)

Thirteen weeks ended

May 4, 2013

April 28, 2012

(a) Earnings from continuing operations before discontinued operations

$

 3,928

$

 1,134

Loss from discontinued operations, net of tax

(65

)

(72

)

Net earnings

$

 3,863

$

 1,062

(b) Basic average number of common shares outstanding during period

53,388

53,071

Common shares assumed issued upon exercise of dilutive stock options, net of assumed repurchase, at the average market price

603

878

(c) Diluted average number of common shares assumed outstanding during period

53,991

53,949

Basic earnings per share:

Earnings from continuing operations before discontinued operations

(a) / (b)

$

0.07

$

0.02

Discontinued operations, net of tax

—

—

Basic earnings per share

$

0.07

$

0.02

Diluted earnings per share:

Earnings from continuing operations before discontinued operations

(a) / (c)

$

0.07

$

0.02

Discontinued operations, net of tax

—

—

Diluted earnings per share

$

0.07

$

0.02

ADDITIONAL INFORMATION

(dollar amounts in thousands)

Thirteen weeks ended

May 04, 2013

April 28, 2012

Capital expenditures

$

12,840

$

11,940

Depreciation

$

20,857

$

19,938

Non-operating income:

Net rental revenue

$

250

$

385

Investment income

49

48

Other income

79

37

Total

$

378

$

470

Comparable sales percentages:

Service

4.2

%

-1.2

%

Merchandise

0.1

%

-3.2

%

Total

1.0

%

-2.8

%

Total square feet of retail space (including service centers)

12,815,000

12,645,000

Store count

Supercenter

569

562

Service & Tire Center

188

169

Retail Only

6

7

Total

763

738

Sales and gross profit by line of business (A):

Service center revenue

$

286,978

$

 271,089

Retail sales

249,195

253,515

Total revenues

$

536,173

$

 524,604

Gross profit from service center revenue, prior to impairment charge

$

53,012

$

 53,888

Service center revenue impairment charge

(1,017

)

—

Gross profit from service center revenue

$

51,995

$

 53,888

Gross profit from retail sales, prior to impairment charge

$

70,011

$

 73,764

Retail sales impairment charge

(166

)

—

Gross profit from retail sales

$

69,845

$

 73,764

Total gross profit

$

121,840

$

 127,652

Comparable sales percentages by line of business (A):

Service center revenue

3.9

%

-0.7

%

Retail sales

-2.1

%

-4.6

%

Total revenues

1.0

%

-2.8

%

Gross profit percentage by line of business (A):

Gross profit percentage from service center revenue, prior to impairment charge

18.5

%

19.9

%

Impairment charge

(0.4

)

—

Gross profit percentage from service center revenue

18.1

%

19.9

%

Gross profit percentage from retail sales, prior to impairment charge

28.1

%

29.1

%

Impairment charge

(0.1

)

—

Gross profit percentage from retail sales

28.0

%

29.1

%

Total gross profit percentage

22.7

%

24.3

%