Pep Boys 2014 Annual Report Download - page 27

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RESULTS OF OPERATIONS
The following discussion explains the material changes in our results of operations for the years
ended January 31, 2015, February 1, 2014 and February 2, 2013.
Analysis of Statement of Operations
The following table presents, for the periods indicated, certain items in the consolidated statements
of operations as a percentage of total revenues (except as otherwise provided) and the percentage
change in dollar amounts of such items compared to the indicated prior period. Percentage changes are
reflected as favorable or (unfavorable).
Percentage of Total Revenues Percentage Change
Jan 31, 2015 Feb 1, 2014 Feb 2, 2013 Fiscal 2014 vs. Fiscal 2013 vs.
Year ended (Fiscal 2014) (Fiscal 2013) (Fiscal 2012 Fiscal 2013 Fiscal 2012
Merchandise sales ............. 76.5% 77.8% 78.6% (0.9)% (2.1)%
Service revenue(1) .............. 23.5 22.2 21.4 7.2 2.5
Total revenues ................ 100.0 100.0 100.0 0.9 (1.2)
Costs of merchandise sales(2) ...... 70.6(3) 68.9(3) 70.6(3) (1.5) 4.5
Costs of service revenue(2) ....... 98.7(3) 102.8(3) 98.3(3) (2.9) (7.2)
Total costs of revenues .......... 77.2 76.4 76.5 (1.9) 1.3
Gross profit from merchandise sales 29.4(3) 31.1(3) 29.4(3) (6.2) 3.4
Gross (loss) profit from service
revenue ................... 1.3
(3) (2.8)(3) 1.7(3) 148.7 (271.8)
Total gross profit .............. 22.8 23.6 23.5 (2.4) (0.8)
Selling, general and administrative
expenses .................. 23.2 22.5 22.2 (4.2) (0.3)
Goodwill impairment ........... 1.1 ——(100.0) —
Pension settlement expense ....... ——0.9 — 100.0
Net (gain) loss from disposition of
assets ..................... (0.7) —0.1 100.0 (117.2)
Operating (loss) profit .......... (0.9) 1.1 0.6 (184.6) 91.3
Merger termination fees, net ..... ——2.1 — (100.0)
Non-operating income .......... 0.1 0.1 0.1 (33.6) (11.1)
Interest expense ............... (0.7) (0.7) 1.6 6.2 56.5
(Loss) earnings from continuing
operations before income taxes . . (1.5) 0.5 1.1 (439.5) (58.7)
Income tax (benefit) expense ..... (14.5)(4) 24.1(4) 41.5(4) (304.8) 76.1
(Loss) earnings from continuing
operations ................. (1.3) 0.3 0.6 (482.3) (46.4)
Discontinued operations, net of tax . ———(76.6) 45.5
Net (loss) earnings ............. (1.3) 0.3 0.6 (497.6) (46.4)
(1) Service revenue consists of the labor charge for installing merchandise or maintaining or repairing
vehicles, excluding the sale of any installed parts or materials.
(2) Costs of merchandise sales include the cost of products sold, buying, warehousing and store
occupancy costs. Costs of service revenue include service center payroll and related employee
benefits and service center occupancy costs. Occupancy costs include utilities, rents, real estate and
property taxes, repairs and maintenance and depreciation and amortization expenses.
(3) As a percentage of related sales or revenue, as applicable.
(4) As a percentage of (loss) earnings from continuing operations before income taxes.
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