Pep Boys Retires Convertible Debentures

2 September 1999

Pep Boys Retires Convertible Debentures

    PHILADELPHIA--Sept. 1, 1999--The Pep Boys -- Manny, Moe & Jack , the nation's leading full-service automotive aftermarket chain, announced that it has repaid the remaining principal of $55,794,000 of its 4% Convertible Debentures that mature today.
    From time to time, the Company has repurchased an aggregate of $30,456,000 of these Debentures.
    Subsequent to today's repayment, Pep Boys will have a cash balance in excess of $30 million and no short-term borrowings.
    The Company expects to generate approximately $100 million of "free" cash flow during the fiscal year ending January 29, 2000, and will fund the current year store expansion of 25 Supercenters from operations.
    Since repurchasing 17.7% of its outstanding shares at $16 per share on February 1, 1999, Pep Boys has achieved earnings per share increases of 25% and 35% in the first and second quarters, respectively.
    Pep Boys' CEO, Mitchell G. Leibovitz, made the following comment:
    "We are pleased with the improvement in our operating results and balance sheet and continue to believe that Pep Boys is uniquely positioned to grow and succeed in the rapidly changing automotive aftermarket."

    Note: Certain statements made herein are forward-looking which 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 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, product costs and the ability to enhance the profitability of the commercial delivery program.
    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.