Earnings Continue to Rebound at Pep Boys; Company Reports $.18 vs. Adjusted $.09 in 1st Quarter
PHILADELPHIA--May 17, 2001--The Pep Boys - Manny, Moe & Jack , the nation's leading full service automotive aftermarket chain, announced a significant increase in earnings per share for the thirteen weeks ended May 5, 2001.The Company earned $.18 per share as compared to the $.09 reported last year before inclusion of a $.04 per share net gain on the early retirement of debt.
Sales
Sales for the quarter ended May 5, 2001, which reflected the negative impact of 38 store closures and other steps that were taken in October 2000 in conjunction with implementing the Company's previously announced "Profit Enhancement Plan," were $551,383,000, 10.3% less than the $614,809,000 recorded last year.
Service labor revenue, exclusive of installed product, was $108,474,000, 7.4% less than the $117,089,000 recorded last year.
Continued weakness in "do-it-yourself" sales, challenging economic conditions and the negative impact of steps that were taken in October 2000, collectively contributed to the 7.6% decline in comparable store sales. During the quarter, comparable service labor revenue and comparable merchandise sales declined 4.0% and 8.5% respectively.
Service labor revenue, installed product, tires and commercial delivery accounted for approximately 56% of total sales.
Earnings
An improvement in merchandise and service center margins as well as lower operating expenses more than offset the decline in sales. As a result, the Company achieved net earnings of $9,108,000 ($.18 per share - basic and diluted), compared to $6,447,000 ($.13 per share - basic and diluted), which includes $2,040,000 ($.04 per share - basic and diluted) net gain on the early retirement of debt.
Commentary
Pep Boys' Chief Executive Officer, Mitchell G. Leibovitz, made the following comments:
"We are pleased to report a significant improvement in our first quarter results.
"The improvement in our performance was a direct result of the steps that we took last October to enhance our future profitability. Although many of those steps have had a negative impact on sales, they have had a positive impact on earnings.
"That being said, April sales were better than the levels that we achieved in February and March and we anticipate continued improvement in our merchandise margins, gross profit from service center operations and general and administrative expenses. As a result, we enter our second quarter with optimism."
Pep Boys Financial Highlights
Thirteen Thirteen
Weeks Ended Weeks Ended
May 5, 2001 April 29, 2000
------------ --------------
Total Revenues $551,383,000 $614,809,000
Net Earnings $ 9,108,000 $ 6,447,000(a)
Average Shares-Diluted 51,266,000 51,001,000
Basic Earnings Per Share $ .18 $ .13(a)
Diluted Earnings Per Share $ .18 $ .13(a)
(a) Includes $2,040,000 ($.04 per share - basic and diluted) net
gain on the early retirement of debt
Notes: Certain statements made herein, including those discussing management's expectations for future periods, are forward-looking and involve risks and uncertainties. The Company's actual results may differ materially from the results discussed in the forward-looking statements due to factors beyond the control of the Company, including the strength of the national and regional economies and retail and commercial consumers' ability to spend, the health of the various sectors of the market that the Company serves, the weather in geographical regions with a high concentration of the Company's stores, competitive pricing, location and number of competitors' stores and product and labor costs. Further factors that might cause such a difference include, but are not limited to, the factors described in the Company's filings with the Securities and Exchange Commission.
In accordance with the SEC's recently adopted Regulation FD (fair disclosure), investors will now have an opportunity to listen to the Company's quarterly conference calls discussing its results and related matters. The calls will be broadcast live over the Internet at Broadcast Networks' Vcall web site, located at http://www.vcall.com. The call for the first quarter will be broadcast live on Friday, May 18, at 9:00 AM EST. To listen to the call live, please go to the web site at least 15 minutes early to register, download and install any necessary audio software. For those who cannot listen to the live broadcast, a replay will be available shortly after the call. Supplemental financial information is available on Pep Boys web site at www.pepboys.com.
Internet: http://www.pepboys.com