Pep Boys 2011 Annual Report Download - page 119

THE PEP BOYS—MANNY, MOE & JACK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Years ended January 29, 2011, January 30, 2010 and January 31, 2009
NOTE 17—LEGAL MATTERS (Continued)
on the Company’s financial position. However, there exists a possibility of loss in excess of the amounts
accrued, the amount of which cannot currently be estimated. While the Company does not believe that
the amount of such excess loss could be material to the Company’s financial position, any such loss
could have a material adverse effect on the Company’s results of operations in the period(s) during
which the underlying matters are resolved.
NOTE 18—QUARTERLY FINANCIAL DATA (UNAUDITED)
Earnings /
Loss
Per Share
from Earnings /
Earnings / Continuing Loss Market Price
Operating Loss from Cash
Operations Per Share Per Share
Total Gross Profit / Continuing Earnings / Dividends
Revenues Profit Loss Operations Loss Basic Diluted Basic Diluted Per Share High Low
Year Ended January 28,
2012
4th quarter ......... $505,318 $112,273 $ (29) $ (4,191) $(4,420) $(0.08) $(0.08) $(0.08) $(0.08) $0.0300 $12.08 $10.21
3rd quarter ......... 522,173 126,921 17,347 7,022 7,011 0.13 0.13 0.13 0.13 0.0300 12.04 8.18
2nd quarter ......... 522,594 135,210 21,939 13,891 13,943 0.26 0.26 0.26 0.26 0.0300 14.28 10.27
1st quarter ......... 513,540 135,122 26,311 12,405 12,368 0.23 0.23 0.23 0.23 0.0300 14.70 10.53
Year Ended January 29,
2011
4th quarter ......... $477,389 $124,400 $17,605 $ 8,538 $ 8,365 $ 0.16 $ 0.16 $ 0.16 $ 0.16 $0.0300 $15.96 $11.37
3rd quarter ......... 496,364 125,856 15,125 5,674 5,718 0.11 0.11 0.11 0.11 0.0300 12.00 8.82
2nd quarter ......... 504,855 134,501 23,842 10,799 10,598 0.21 0.20 0.20 0.20 0.0300 13.26 7.86
1st quarter ......... 510,033 137,595 26,008 12,160 11,950 0.23 0.23 0.23 0.23 0.0300 13.42 8.08
The sum of individual share amounts may not equal due to rounding.
In the second quarter of fiscal 2011, the Company released $3.4 million (net of federal tax) of
valuation allowance relating to state net loss operating carryforwards and credits. In the fourth quarter
of fiscal 2011, the Company recorded a $1.1 million reduction to its reserve for excess inventory.
In the fourth quarter of 2010, the Company recorded a $4.6 million reduction to its reserve for
excess inventory and an income tax benefit of $1.0 million related to the reduction of a valuation
allowance on certain state net operating loss carryforwards and credits.
NOTE 19—SUBSEQUENT EVENT
On January 29, 2012, the Company entered into an Agreement and Plan of Merger (the ‘‘Merger
Agreement’’) with Auto Acquisition Company, LLC and Auto Mergersub, Inc., entities formed by
affiliates of The Gores Group, LLC. The Merger Agreement was unanimously approved by the
Company’s Board of Directors on January 29, 2012. On the terms and subject to the conditions set
forth in the Merger Agreement, at the effective time of the merger; (i) each share of the Company’s
common stock issued and outstanding immediately prior to such time shall be converted into the right
to receive $15.00 in cash, without interest; (ii) each outstanding option will vest (if not already vested),
then will be canceled, and the holder will receive an amount, if any, equal to the excess of $15.00 over
the applicable exercise price for each option; and (iii) each outstanding restricted stock unit, including
those deferred by the holder and those with performance or market conditions, will vest (if not already
vested), then will be canceled, and the holder will receive $15.00 for each unit. As a result of the
vesting of the options and restricted stock units, at the effective time of the merger, the Company will
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