Pep Boys 2006 Annual Report Download - page 43

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5
COMPETITION
The business of the Company is highly competitive. The Company encounters competition from
nationwide and regional chains and from local independent merchants. The Company’s competitors
include general, full range, discount or traditional department stores which carry automotive parts and
accessories and/or have automotive service centers, as well as specialized automotive retailers. Generally,
the specialized automotive retailers focus on either the “do-it-yourself” or “do-it-for-me” areas of the
business. The Company believes that its operation in both the “do-it-yourself” and “do-it-for-me” areas of
the business positively differentiates it from most of its competitors. However, certain competitors are
larger in terms of sales volume, store size, and/or number of stores. Therefore, these competitors have
access to greater capital and management resources and have been operating longer in particular
geographic areas than the Company.
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.
REGULATION
The Company is subject to various federal, state and local laws and governmental regulations relating
to the operation of its business, including those governing the handling, storage and disposal of hazardous
substances contained in the products it sells and uses in its service bays, the recycling of batteries, tires and
used lubricants, and the ownership and operation of real property.
EMPLOYEES
At February 3, 2007, the Company employed 18,794 persons as follows:
Description Full-time % Part-time % Total %
Retail............................. 5,023 37.7 3,831 70.2 8,854 47.1
ServiceCenter ..................... 6,764 50.7 1,549 28.5 8,313 44.2
STORETOTAL ................... 11,787 88.4 5,380 98.7 17,167 91.3
Warehouses........................ 696 5.2 66 1.2 762 4.1
Offices............................ 857 6.4 8 0.1 865 4.6
TOTAL EMPLOYEES . . . . . . . . . . . . . 13,340 100.0 5,454 100.0 18,794 100.0
The Company had no union employees as of February 3, 2007. At the end of fiscal 2005, the Company
employed approximately 14,358 full-time and 5,622 part-time employees.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements contained herein, including in “Item 1. Business” and “Item 7. Management’s
Discussion and Analysis of Financial Condition and Results of Operations”, constitute “forward-looking
statements” within the meaning of The Private Securities Litigation Reform Act of 1995. The words
“guidance,” “expects,” “anticipates,” “estimates,” “forecasts” and similar expressions are intended to
identify these forward-looking statements. Forward-looking statements include management’s expectations
regarding future financial performance, automotive aftermarket trends, levels of competition, business
development activities, future capital expenditures, financing sources and availability and the effects of
regulation and litigation. Although we believe that the expectations reflected in these forward-looking
statements are based on reasonable assumptions, we can give no assurance that our expectations will be
achieved. Our actual results may differ materially from the results discussed in the forward-looking
statements due to factors beyond our control, including the strength of the national and regional