Pep Boys 2007 Annual Report Download - page 97

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THE PEP BOYS—MANNY, MOE & JACK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Years ended February 2, 2008, February 3, 2007 and January 28, 2006
(dollar amounts in thousands, except share data)
Other Notes
In the third quarter of fiscal 2004, the Company entered into a vendor financing program with an
availability of $20,000. Under this program, the Company’s factor makes accelerated and discounted
payments to its vendors and the Company, in turn, makes its regularly scheduled full vendor payments
to the factor. This program was terminated effective December 2007. As of February 2, 2008 and
February 3, 2007, the Company had an outstanding balance of $0 and $13,990, respectively, under these
arrangements, classified as trade payable program liability in the consolidated balance sheets.
Other Matters
On June 29, 2007, the Company entered into a new vendor financing program with an availability
up to $65,000. Under this program, the Company’s factor makes accelerated and discounted payments
to its vendors and the Company, in turn, makes its regularly-scheduled full vendor payments to the
factor. There was an outstanding balance of $14,254 under the program as of February 2, 2008.
The other notes payable have an aggregate principal balance of $248 and $268 and a weighted
average interest rate of 8.0% and 8.0% at February 2, 2008 and February 3, 2007, respectively, and
mature at various times through August 2016. Certain of these notes are collateralized by land and
buildings with an aggregate carrying value of approximately $1,773 and $1,774 at February 2, 2008 and
February 3, 2007, respectively.
Several of the Company’s debt agreements require the maintenance of certain financial ratios and
compliance with covenants. The most restrictive of these covenants, an EBITDA requirement, is
triggered if the Company’s availability under its line of credit agreement drops below $50,000. As of
February 2, 2008 the Company had an availability of approximately $131,000 under its line of credit,
and was in compliance with all covenants contained in its debt agreements.
The annual maturities of all long-term debt and capital lease commitments for the next five fiscal
years are:
Long-Term Capital Lease Financing
Year Debt Leases Obligation Total
2008 ............................... $ 1,585 $258 $ 271 $ 2,114
2009 ............................... 43,630 141 247 44,018
2010 ............................... 1,587 — 258 1,845
2011 ............................... 1,589 — 270 1,859
2012 ............................... 1,591 — 281 1,872
Thereafter ........................... 346,963 — 3,459 350,422
Total ............................... $396,945 $399 $4,786 $402,130
The Company has letter of credit arrangements in connection with its risk management, import
merchandising and vendor financing programs. The Company was contingently liable for $691 and $487
in outstanding import letters of credit and $63,477 and $55,708 in outstanding standby letters of credit
as of February 2, 2008 and February 3, 2007, respectively. The Company was also contingently liable for
surety bonds in the amount of approximately $6,598 and $11,224 at February 2, 2008 and February 3,
2007, respectively.
51
10-K