<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 2, 1995
REGISTRATION NO. 33-
=============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
THE PEP BOYS -- MANNY, MOE & JACK
(Exact name of registrant as specified in its charter)
Pennsylvania 23-0962915
(State or other jurisdiction (I.R.S. EMPLOYER
of incorporation) IDENTIFICATION NO.)
----------------
3111 West Allegheny Avenue
Philadelphia, Pennsylvania 19132
(215) 229-9000
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
----------------
Mitchell G. Leibovitz
Chairman of the Board,
President and Chief Executive Officer
3111 West Allegheny Avenue
Philadelphia, Pennsylvania 19132
(215) 229-9000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
----------------
with copies to:
Daniel D. Rubino, Esq. Morton A. Pierce, Esq.
Willkie Farr & Gallagher Dewey Ballantine
One Citicorp Center 1301 Avenue of the Americas
153 East 53rd Street New York, New York 10019
New York, New York 10022 (212) 259-8000
(212) 821-8000
(Counsel for Registrant) (Counsel for Underwriters)
----------------
Approximate date of commencement of proposed sale to the public: As soon
as practicable after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [ ]
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities
Act of 1933, other than securities offered only in connection with dividend
or reinvestment plans, check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
----------------
<PAGE> 2
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
==============================================================================================================
Proposed
Proposed Maximum Maximum Amount of
Title of Each Class of Securities Amount to be Offering Price per Aggregate Offering Registration
to be Registered Registered Security(1) Price(1) Fee
--------------------------------- -------------- ------------------ ------------------ --------------
<S> <C> <C> <C> <C>
% Notes due 2005 .............. $100,000,000 100% $100,000,000 $34,483
===============================================================================================================
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee.
----------------
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment that specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until this Registration
Statement shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
=============================================================================
<PAGE> 3
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement
becomes effective. This prospectus shall not constitute an offer to sell or
the solicitation of an offer to buy nor shall there be any sale of these
securities in any State in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws of
any such State.
SUBJECT TO COMPLETION, DATED JUNE 2, 1995
(LOGO)
PEP BOYS
$100,000,000
The Pep Boys -- Manny, Moe & Jack
% Notes Due 2005
Interest payable and Due , 2005
----------------
The Notes will not be redeemable prior to maturity and will not be subject
to any sinking fund.
----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
Underwriting
Price to Discounts and Proceeds to
Public (1) Commissions Company (1)(2)
-------------- ----------------- ---------------
Per Note .... % % %
Total ....... $ $ $
(1) Plus accrued interest, if any, from , 1995.
(2) Before deduction of estimated expenses of $225,000 payable by the
Company.
----------------
The Notes are offered by the several Underwriters when, as and if issued
by the Company, delivered to and accepted by the Underwriters and subject to
their right to reject orders in whole or in part. It is expected that
delivery of the Notes, in book-entry form, will be made through the
facilities of The Depository Trust Company on or about , 1995.
CS First Boston
The date of this Prospectus is , 1995
<PAGE> 4
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR
EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE NOTES
OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE
OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
----------------
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files annual and quarterly reports, proxy statements and other
information with the Securities and Exchange Commission (the "Commission").
Such reports, proxy statements and other information concerning the Company
may be inspected, and copies of such material may be obtained at prescribed
rates, at the Commission's Public Reference Section, Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549, as well as at the Commission's Regional
Offices at Seven World Trade Center, New York, New York 10048 and
Northwestern Atrium Center, 500 West Madison Street, Room 1400, Chicago,
Illinois 60661-2511. The Company's Common Stock is listed on the New York
Stock Exchange (the "NYSE"). Reports, proxy statements and other information
concerning the Company may be inspected at the offices of the NYSE at 20
Broad Street, New York, New York 10005.
This Prospectus constitutes part of a Registration Statement on Form S-3
(the "Registration Statement") filed by the Company with the Commission under
the Securities Act of 1933, as amended (the "Securities Act"). This
Prospectus omits certain of the information contained in the Registration
Statement and the exhibits and schedules thereto, in accordance with the
rules and regulations of the Commission. For further information concerning
the Company and the Notes offered hereby, reference is made to the
Registration Statement and the exhibits and schedules filed therewith, which
may be inspected without charge at the office of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549 and copies of which may be obtained from
the Commission at prescribed rates. Any statements contained herein
concerning the provisions of any document are not necessarily complete, and,
in each instance, reference is made to the copy of such document filed as an
exhibit to the Registration Statement or otherwise filed with the Commission.
Each such statement is qualified in its entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's Annual Report on Form 10-K for the year ended January 28,
1995 and the Company's Quarterly Report on Form 10-Q for the quarter ended
April 29, 1995, each as filed with the Commission pursuant to the Exchange
Act, are incorporated into this Prospectus by reference.
All reports and other documents subsequently filed by the Company pursuant
to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of
this Prospectus and prior to the termination of this Offering shall be deemed
to be incorporated by reference herein and to be a part hereof from the date
of filing of such reports and documents. Any statement incorporated herein
shall be deemed to be modified or superseded for purposes of this Prospectus
to the extent that a statement contained herein or in any other subsequently
filed document which also is or is deemed to be incorporated by reference
herein modifies or supersedes such statement. Any statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
The Company will provide without charge to each person to whom this
Prospectus is delivered, upon written or oral request of such person, a copy
of any or all of the foregoing documents incorporated herein by reference
(other than exhibits to such documents, unless such exhibits are specifically
incorporated by reference into such document). Requests for such documents
should be submitted in writing to Mr. Michael J. Holden, Senior Vice
President -- Chief Financial Officer and Treasurer, The Pep Boys -- Manny,
Moe & Jack, 3111 West Allegheny Avenue, Philadelphia, Pennsylvania 19132,
telephone (215) 229-9000.
2
<PAGE> 5
THE COMPANY
The Pep Boys -- Manny, Moe & Jack (together with its subsidiaries, the
"Pep Boys" or the "Company") is a leading automotive aftermarket retail and
service chain. The Company is engaged principally in the retail sale of
automotive parts and accessories, automotive maintenance and service and the
installation of parts. Pep Boys operates its business through its chain of
436 Pep Boys stores (as of April 29, 1995) located in 32 states, of which 300
stores are owned and 136 stores are leased. Pep Boys' operations are supplied
by distribution facilities in five locations.
The Company operates approximately 8,900,000 gross square feet of retail
space for an average of approximately 20,500 gross square feet per store,
including an aggregate of 4,187 service bays. A typical new Pep Boys store is
a free-standing warehouse format supercenter of approximately 22,000 square
feet. Each new supercenter has approximately 12 service bays along with a
product offering of approximately 25,000 stock-keeping units ("SKUs") and is
generally located in an area with high automotive traffic count and
population density. Pep Boys believes that the operation of service bays in
its supercenter stores differentiates it from most of its competitors by
providing its customers with the ability to purchase parts and have them
installed at the same location.
In 1994, the Company introduced a supplemental store format under the name
"Pep Boys -- PARTS USA" to operate in locations that the Company believes
will be better served by stores with an extensive selection of parts and
accessories but without tires or service bays. These locations will primarily
consist of certain urban areas, smaller markets and areas located between
supercenters. PARTS USA stores will generally be approximately 10,000 to
13,000 square feet and will stock approximately 22,000 SKUs. As compared to
the supercenters, these stores will have a higher percentage of hard parts
and accessories, the highest margin merchandise categories, in the sales mix.
By supplementing its supercenter expansion with PARTS USA stores, the Company
seeks to increase its market penetration and share over time.
During fiscal years 1992, 1993 and 1994, Pep Boys added a net of 20, 29
and 49 stores, respectively, including the first PARTS USA store in fiscal
1994. In fiscal 1995, the Company plans to open approximately 50 new
warehouse format supercenters and 25 PARTS USA stores, and expects to close
approximately four older stores. Included in the Company's expansion will be
its initial entry into Puerto Rico -- its first units outside of the
continental United States. In fiscal 1994, the Company's annual gross
revenues increased by more than $165 million to $1.41 billion (a 13%
increase) and earnings before the cumulative effect of a change in
accounting principle increased by $14 million to $80.0 million (a 22%
increase). See "Management's Discussion and Analysis of Financial Condition
and Results of Operations."
Although the Company's competition varies by geographical area, the
Company believes that it generally has a favorable competitive position in
terms of price, depth and breadth of merchandise, quality of personnel and
customer service. The Company believes that it provides customers with among
the lowest prices in each of its markets. Pep Boys employs an
everyday-low-price strategy which it believes provides its customers better
value and consistency on a day-to-day basis and improves inventory
management. In addition, Pep Boys believes that it carries among the largest
selection of parts, accessories and chemicals in the automotive aftermarket
retail industry, with approximately 25,000 SKUs per supercenter. The Company
also believes it provides a high level of customer service through its
well-trained and knowledgeable employees. The Company's advertising strategy
consists primarily of television advertising and multi-page catalogs,
supplemented with radio advertising and various in-store promotions.
The Company utilizes electronic parts catalogs, enabling employees to
reference and access parts instantly while noting price, related items and
in-stock position. In addition, the Company monitors product sales by SKU
through its point-of-sale system which utilizes bar code slot scanning. This
system enables the Company to monitor its gross margins and set minimum and
maximum inventory levels for each store. The Company's centralized buying
system and a perpetual inventory-automatic replenishment system orders
additional inventory from one of the Company's warehouses when a store's
inventory on hand falls below the minimum level set for each SKU.
The Pep Boys -- Manny, Moe & Jack, a Pennsylvania corporation, was
incorporated in 1925. The Company's executive offices are located at 3111
West Allegheny Avenue, Philadelphia, Pennsylvania 19132, telephone (215)
229-9000.
3
<PAGE> 6
USE OF PROCEEDS
The net proceeds from the sale of the Notes due 2005 (the "Notes") offered
hereby will be used to repay portions of the Company's long-term variable-rate
bank debt, bearing interest at rates which range from 6.22% to 6.38%, and for
general corporate purposes. The long-term debt expected to be repaid was
incurred within one year of the date hereof to finance a portion of the capital
expenditures incurred in connection with the opening of new stores, to retire
the 9.33% Notes of the Company and for working capital purposes. The long-term
debt expected to be repaid matures in March 2000. See "Capitalization." Pending
use of the proceeds of the Offering, the Company expects to invest such funds in
short-term marketable securities.
CAPITALIZATION
The following table sets forth the capitalization of the Company at April
29, 1995, and as adjusted to give effect to the sale of the Notes offered
hereby. See "Use of Proceeds."
<TABLE>
<CAPTION>
Actual As Adjusted
---------- -------------
(amounts in thousands)
<S> <C> <C>
Short-term debt ...................................................... $ -- $ --
Current maturities of long-term debt ................................. 114,311 114,311
Long-term debt less current maturities: ..............................
Indebtedness to banks under revolving credit loan agreement ......... $150,000 $ 79,275
Other lines of credit with banks .................................... 28,400 --
Mortgage notes ...................................................... 2,554 2,554
8 7/8 % Notes ....................................................... 107,040 107,040
9.33% Notes(1) ...................................................... 16,072 16,072
6 5/8 % Notes ....................................................... 75,000 75,000
4% Convertible subordinated notes ................................... 86,250 86,250
Notes offered hereby ................................................ -- 100,000
--------- ----------
$465,316 $466,191
Less current maturities .......................................... 114,311 114,311
--------- ----------
Total long-term debt ............................................... $351,005 $351,880
--------- ----------
Stockholders' equity: ................................................
Common Stock, par value $1.00 per share: Authorized 500,000,000
shares; 61,559,559 shares issued and outstanding .................. 61,560 61,560
Paid-in capital ..................................................... 131,278 131,278
Retained earnings ................................................... 467,675 467,675
--------- ----------
660,513 660,513
Less: ...............................................................
Treasury Stock, 100,000 shares at cost ............................ 2,705 2,705
Shares held in benefits trust, 2,232,500 shares at cost ........... 60,269 60,269
--------- ----------
Total stockholders' equity ....................................... 597,539 597,539
--------- ----------
Total long-term debt and stockholders' equity ........................ $948,544 $949,419
========= ==========
</TABLE>
- ------
(1) On May 30, 1995, the Company retired the 9.33% Notes with borrowings
under the revolving credit loan agreement.
4
<PAGE> 7
SELECTED FINANCIAL DATA
The selected financial data for the five years ended January 28, 1995 (except
for "Number of retail outlets," "Ratio of earnings to fixed charges" and "Total
square footage") were derived from audited financial statements. The financial
statements for the three years ended January 28, 1995, which have been audited
by Deloitte & Touche LLP, independent auditors, are incorporated by reference
herein. The selected financial data for the 13-week periods ended April 29, 1995
and April 30, 1994, respectively, have been derived from unaudited financial
statements and reflect, in the opinion of the Company, all adjustments necessary
to present fairly the information for such periods. The results of operations in
the 13-week period ended April 29, 1995 are not necessarily indicative of the
operating results for the full year. The selected financial data should be read
in conjunction with the financial statements and other information contained in
the Company's Annual Report on Form 10-K for the year ended January 28, 1995,
the Company's Quarterly Report on Form 10-Q for the quarter ended April 29, 1995
and "Management's Discussion and Analysis of Financial Condition and Results of
Operations" appearing elsewhere in this Prospectus.
<TABLE>
<CAPTION>
13 Weeks Ended
--------------------------------
April 29, 1995 April 30, 1994
-------------- --------------
<S> <C> <C>
Earnings Statement Data
Merchandise sales ........ $ 307,549 $ 290,826
Service revenue .......... 53,660 46,874
---------- -----------
Total revenues ........... 361,209 337,700
Gross profit from
merchandise sales ...... 90,288 82,603
Gross profit from service
revenue ................ 10,099 7,924
---------- -----------
Total gross profit ....... 100,387 90,527
Selling, general and
administrative expenses 67,055 57,926
Operating profit ......... 33,332 32,601
Nonoperating income ...... 456 1,099
Interest expense ......... 7,965 5,720
Earnings before income
taxes and change in
accounting principle ... 25,823 27,980
Income taxes ............. 9,619 10,423
Earnings before change in
accounting principle ... 16,204 17,557
Cumulative effect of
change in accounting
principle .............. -- (4,300)
Net ernings.............. 16,204 13,257
Balance Sheet Data
Working capital .......... $ 77,666 $ 77,468
Total assets ............. 1,330,465 1,155,615
Long-term debt ........... 351,005 272,956
Stockholders' equity ..... 597,539 532,744
Other Statistics
Ratio of earnings to fixed
charges(1) ............. 3.6x 4.7x
Depreciation and
amortization ........... $ 12,407 $ 10,542
Capital expenditures ..... $ 39,211 $ 30,032
Number of retail outlets . 436 387
Total square footage ..... 8,940,000 7,813,000
</TABLE>
<PAGE> 8
<TABLE>
<CAPTION>
Year Ended
---------------------------------------------------------------------------------------
Jan. 28, 1995 Jan. 29, 1994 Jan. 30, 1993 Feb. 1, 1992 Feb. 2, 1991
--------------- --------------- --------------- ------------- -------------
(dollars in thousands)
<S> <C> <C> <C> <C> <C>
Earnings Statement Data
Merchandise sales ..................... $ 1,211,536 $ 1,076,543 $ 1,008,191 $ 873,381 $ 774,502
Service revenue ....................... 195,449 164,590 147,403 128,127 110,172
----------- ----------- ----------- ----------- -----------
Total revenues ........................ 1,406,985 1,241,133 1,155,594 1,001,508 884,674
Gross profit from
merchandise sales .................... 364,378 307,861 272,412 240,199 217,052
Gross profit from service
revenue .............................. 32,417 27,457 24,528 19,726 17,854
----------- ----------- ----------- ----------- -----------
Total gross profit .................... 396,795 335,318 296,940 259,925 234,906
Selling, general and
administrative expenses .............. 247,872 214,710 194,160 176,275 157,468
Operating profit ...................... 148,923 120,608 102,780 83,650 77,438
Nonoperating income ................... 3,490 3,601 3,015 1,933 1,601
Interest expense ...................... 25,931 19,701 20,180 25,071 20,262
Earnings before income
taxes and change in
accounting principle ................. 126,482 104,508 85,615 60,512 58,777
Income taxes .......................... 46,474 38,996 31,036 21,640 21,247
Earnings before change in
accounting principle ................. 80,008 65,512 54,579 38,872 37,530
Cumulative effect of
change in accounting
principle ............................ (4,300) -- -- -- --
Net earnings .......................... 75,708 65,512 54,579 38,872 37,530
Balance Sheet Data
Working capital ....................... $ 121,858 $ 92,518 $ 104,622 $ 81,935 $ 91,801
Total assets .......................... 1,291,019 1,078,518 967,813 856,925 819,421
Long-term debt ........................ 380,787 253,000 209,347 279,250 285,868
Stockholders' equity .................. 586,253 547,759 509,763 378,514 344,603
Other Statistics
Ratio of earnings to fixed
charges(1) ........................... 4.7x 4.9x 4.3x 3.1x 3.3x
Depreciation and
amortization ......................... $ 44,402 $ 39,125 $ 36,674 $ 33,439 $ 27,838
Capital expenditures .................. $ 185,072 $ 135,165 $ 78,025 $ 65,801 $ 105,826
Number of retail outlets .............. 435 386 357 337 313
Total square footage .................. 8,900,000 7,771,000 7,039,000 6,522,000 5,950,000
</TABLE>
- ------
(1) Computed by dividing earnings by fixed charges. "Earnings" consist of
earnings before income taxes and change in accounting principle plus fixed
charges (exclusive of capitalized interest costs). "Fixed charges" consist
of interest costs (including capitalized interest costs) plus one-third of
rental expense (which amount is considered representative of the interest
factor in rental expense).
5
<PAGE> 9
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
The following table presents for the periods indicated certain items in
the consolidated statements of earnings 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.
<TABLE>
<CAPTION>
Percentage of Total Revenues
--------------------------------------------------------------------------------
13 Weeks Ended Fiscal Year Ended
-------------------------------- ----------------------------------------------
April 29, 1995 April 30, 1994 Jan. 28, 1995 Jan. 29, 1994 Jan. 30, 1993
-------------- -------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Merchandise sales .......... 85.1% 86.1% 86.1% 86.7% 87.2%
Service revenue(1) ......... 14.9 13.9 13.9 13.3 12.8
------- ------- ------- ------ ------
Total revenues ............. 100.0 100.0 100.0 100.0 100.0
Costs of merchandise
sales(2) .................. 70.6(3) 71.6(3) 69.9(3) 71.4(3) 73.0(3)
Costs of service revenue(2) 81.2(3) 83.1(3) 83.4(3) 83.3(3) 83.4(3)
------- ------- ------- ------ ------
Total costs of revenues .... 72.2 73.2 71.8 73.0 74.3
Gross profit from
merchandise sales ......... 29.4(3) 28.4(3) 30.1(3) 28.6(3) 27.0(3)
Gross profit from service
revenue ................... 18.8(3) 16.9(3) 16.6(3) 16.7(3) 16.6(3)
------- ------- ------- ------ ------
Total gross profit ......... 27.8 26.8 28.2 27.0 25.7
Selling, general and
administrative expenses ... 18.6 17.1 17.6 17.3 16.8
------- ------- ------- ------ ------
Operating profit ........... 9.2 9.7 10.6 9.7 8.9
Nonoperating income ........ .1 .3 .2 .3 .3
Interest expense ........... 2.2 1.7 1.8 1.6 1.8
------- ------- ------- ------ ------
Earnings before income taxes
and cumulative effect of
change in accounting
principle ................. 7.1 8.3 9.0 8.4 7.4
Income taxes ............... 37.2(4) 37.3(4) 36.7(4) 37.3(4) 36.3(4)
------- ------- ------- ------ ------
Earnings before cumulative
effect of change in
accounting principle ...... 4.5 5.2 5.7 5.3 4.7
Cumulative effect of
change in accounting
principle ................. -- (1.3) (0.3) -- --
------- ------- ------- ------ ------
Net earnings ............... 4.5 3.9 5.4 5.3 4.7
======= ======= ======= ====== ======
</TABLE>
<PAGE> 10
<TABLE>
<CAPTION>
Percentage Change
-----------------------------------------------------------
1st Quarter 1995 vs. Fiscal 1994 vs. Fiscal 1993 vs.
1st Quarter 1994 Fiscal 1993 Fiscal 1992
-------------------- --------------- ---------------
<S> <C> <C> <C>
Merchandise sales .......... 5.8% 12.5% 6.8%
Service revenue(1) ......... 14.5 18.7 11.7
------ ------ ------
Total revenues ............. 7.0 13.4 7.4
Costs of merchandise
sales(2) .................. 4.3 10.2 4.5
Costs of service revenue(2) 11.8 18.9 11.6
------ ------ ------
Total costs of revenues .... 5.5 11.5 5.5
Gross profit from
merchandise sales ......... 9.3 18.4 13.0
Gross profit from service
revenue ................... 27.4 18.1 11.9
------ ------ ------
Total gross profit ......... 10.9 18.3 12.9
Selling, general and
administrative expenses ... 15.8 15.4 10.6
------ ------ ------
Operating profit ........... 2.2 23.5 17.3
Nonoperating income ........ (58.5) (3.1) 19.4
Interest expense ........... 39.2 31.6 (2.4)
------ ------ ------
Earnings before income taxes
and cumulative effect of
change in accounting
principle ................. (7.7) 21.0 22.1
Income taxes ............... (7.7) 19.2 25.6
------ ------ ------
Earnings before cumulative
effect of change in
accounting principle ...... (7.7) 22.1 20.0
Cumulative effect of
change in accounting
principle ................. -- -- --
------ ------ ------
Net earnings ............... 22.2 15.6 20.0
====== ====== ======
</TABLE>
- ------
(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 earnings before income taxes.
THIRTEEN WEEKS ENDED APRIL 29, 1995 VS. THIRTEEN WEEKS ENDED APRIL 30, 1994
Total revenues for the first quarter increased 7% due to a higher store
count (436 at April 29, 1995 compared with 387 at April 30, 1994) while
comparable store revenues (revenues generated by stores in operation during
the same months of each period) decreased 2%. Comparable store merchandise
sales decreased 3% while comparable service revenue increased 3%.
Gross profit from merchandise sales increased, as a percentage of
merchandise sales, due primarily to higher merchandise margins, offset, in
part, by an increase in store occupancy costs.
6
<PAGE> 11
Gross profit from service revenue increased, as a percentage of service
revenue, due primarily to a decrease in service employee benefits costs.
Selling, general and administrative expenses increased, as a percentage of
total revenues, due primarily to higher store expenses.
The 39% increase in interest expense was due primarily to higher debt
levels coupled with higher interest rates.
The 8% decrease in earnings before the cumulative effect of a change in
accounting principle in 1995 as compared with 1994, was due primarily to a
decrease in comparable store sales coupled with increases, as a percentage of
total revenues, in selling, general and administrative expenses and interest
expense, offset, in part, by increases in gross profit from merchandise sales
and gross profit from service revenue, as a percentage of related sales and
revenues.
On January 30, 1994, the Company adopted SFAS No. 112, "Employers'
Accounting for Postemployment Benefits." This statement establishes accrual
accounting standards for employer-provided benefits which cover former or
inactive employees after employment, but before retirement. Adoption of this
accounting standard on January 30, 1994 resulted in a one-time charge to
earnings of $4,300,000 (net of income tax benefit of $2,552,000) or $.07 per
share recognized as a cumulative effect of a change in accounting principle.
FISCAL 1994 VS. FISCAL 1993
Total revenues for fiscal 1994 increased 13% over fiscal 1993 due to a
higher store count (435 at January 28, 1995 compared with 386 at January 29,
1994) coupled with a 5% increase in comparable store revenues (revenues
generated by stores in operation during the same months of each period).
Comparable store merchandise sales increased 5% while comparable store
service revenue increased 8% over fiscal 1993.
The increase in gross profit from merchandise sales, as a percentage of
merchandise sales, was due primarily to significantly higher merchandise
margins and a slight decrease in store occupancy costs.
The small decrease in gross profit from service revenue, as a percentage
of service revenue, was due primarily to an increase in service payroll
costs, offset, in part, by a decrease in service employee benefits costs.
The increase in selling, general and administrative expenses, as a
percentage of total revenues, was due primarily to an increase in store
expenses, offset, in part, by a decrease in employee benefit costs.
The 32% increase in interest expense was due to higher debt levels
incurred to fund the Company's store expansion program coupled with higher
interest rates.
The 22% increase in earnings before cumulative effect of change in
accounting principle in fiscal 1994, as compared with fiscal 1993, was due to
increases in comparable store revenues and gross profit from merchandise
sales, as a percentage of merchandise sales, offset, in part, by increases in
selling, general and administrative expenses and interest expense, as a
percentage of total revenues.
FISCAL 1993 VS. FISCAL 1992
Total revenues for fiscal 1993 increased 7% over fiscal 1992 due to a
higher store count (386 at January 29, 1994 compared with 357 at January 30,
1993) coupled with a 1% increase in comparable store revenues. Comparable
store merchandise sales remained constant while comparable store service
revenue increased 3% over fiscal 1992.
The increase in gross profit from merchandise sales, as a percentage of
merchandise sales, was due primarily to significantly higher merchandise
margins, offset, in part, by increases in store occupancy costs and warehousing
costs.
The small increase in gross profit from service revenue, as a percentage
of service revenue, was due primarily to a decrease in service employee
benefit costs, offset, in part, by an increase in service payroll and
occupancy costs.
7
<PAGE> 12
The increase in selling, general and administrative expenses, as a
percentage of total revenues, was due primarily to an increase in store
expenses.
The 2% decrease in interest expense was due to lower interest rates, offset,
in part, by higher debt levels incurred to fund the Company's store expansion
program.
The increase in income taxes, as a percentage of earnings before income
taxes, and cumulative effect of change in accounting principle was due primarily
to a 1% increase in the federal statutory tax rate from 34% to 35%.
The 20% increase in net earnings in fiscal 1993, as compared with fiscal
1992, was due to a substantial increase in gross profit from merchandise
sales, as a percentage of merchandise sales, offset, in part, by an increase
in selling, general and administrative expenses, as a percentage of total
revenues.
EFFECTS OF INFLATION
The Company uses the LIFO method of inventory valuation. Thus, the cost of
merchandise sold approximates current cost. Although the Company cannot
accurately determine the precise effect of inflation on its operations, it
does not believe inflation has had a material effect on revenues or results
of operations.
LIQUIDITY AND CAPITAL RESOURCES
The Company's cash requirements arise principally from the need to finance
the acquisition, construction and equipping of new stores and to purchase
inventory. The Company opened 51 stores in fiscal 1994, 37 stores in fiscal 1993
and 29 stores in fiscal 1992. In fiscal 1994, with increased levels of capital
expenditures coupled with cash from operating activities and lines of credit
utilized to purchase its stock for transfer to the benefits trust, the Company
increased its debt by $182,859,000. In fiscal 1993, with increased levels of
capital expenditures coupled with cash from operating activities and lines of
credit utilized to purchase its stock for transfer to the benefits trust, the
Company increased its debt by $77,525,000. In fiscal 1992, with substantial cash
flows from operating activities and the conversion of substantially all its
$75,000,000 convertible subordinated debentures, the Company reduced its debt by
$72,639,000.
The following table indicates the Company's principal cash requirements
for the past three years.
<TABLE>
<CAPTION>
Fiscal 1994 Fiscal 1993 Fiscal 1992 Total
------------- ------------- ------------- ----------
(dollar amounts in thousands)
<S> <C> <C> <C> <C>
Capital expenditures .............. $185,072 $135,165 $ 78,025 $398,262
Net inventory (1) ................. 87,248 26,487 24,001 137,736
------------- ------------- ------------- ----------
Total cash requirements ........... $272,320 $161,652 $102,026 $535,998
============= ============= ============= ==========
Net cash provided by operating
activities (excluding net
inventory) ....................... $124,474 $111,595 $100,415 $336,484
============= ============= ============= ==========
</TABLE>
- ------
(1) Net inventory includes the increase in inventory less the net change in
checks outstanding and accounts payable.
Inventories have increased in the past three years as the Company added a
net of 98 stores while stock-keeping units per store rose during the period
from approximately 22,000 to approximately 25,000, many of which were higher
cost hard parts.
During the first quarter of 1995, the Company invested $39,211,000 in
property and equipment while net inventory decreased by $29,921,000.
The Company currently plans to open approximately 75 stores in fiscal
1995, four of which have been opened in the first quarter. Management
estimates that the cost to open all 75 stores, coupled with capital
expenditures relating to existing stores, warehouses and offices during
fiscal 1995 will be approximately $200,000,000. In addition to the funds
required to finance the Company's store expansion, the Company has
authorization to purchase Common Stock having a value of up to $75,000,000
for sale to the benefits trust, of which Common Stock having a value of
8
<PAGE> 13
$60,269,000 had been purchased as of April 29, 1995. Funds required to finance
the store expansion, including related inventory requirements, and the stock
repurchase are expected to come from operating activities with the remainder
provided by unused lines of credit, which totalled $140,600,000 at April 29,
1995, or from accessing traditional lending sources which may include the public
capital markets.
During the thirteen weeks ended April 29, 1995, the Company amended and
restated a revolving credit agreement it had with several major banks to
increase the amount of borrowings provided from up to $100,000,000 to up to
$200,000,000.
The Company's working capital was $77,666,000 at April 29, 1995,
$121,858,000 at January 28, 1995 and $92,518,000 at January 29, 1994. The
Company's long-term debt, as a percentage of its total capitalization, was
37% at April 29, 1995, 39% at January 28, 1995 and 32% at January 29, 1994.
9
<PAGE> 14
DESCRIPTION OF NOTES
The Notes will be issued under an Indenture, dated as of June __, 1995 (the
"Indenture") between the Company and First Fidelity Bank, National Association,
as Trustee (the "Trustee"), a form of which is filed as an exhibit to the
Registration Statement of which this Prospectus is a part. The following
summaries of certain provisions of the Indenture do not purport to be complete,
and where particular provisions of the Indenture are referred to, such
provisions, including definitions of certain terms, are incorporated by
reference as a part of such summaries or terms, which are qualified in their
entirety by reference to the provisions of the Indenture. The section references
appearing below are to sections in the Indenture.
GENERAL
The Notes will be unsecured obligations of the Company, will mature on
________ __, 2005 and will be limited to $100,000,000 aggregate principal
amount and will rank on a parity with all other unsecured and unsubordinated
indebtedness of the Company. The Notes are not redeemable prior to maturity
by the Company and do not provide for any sinking fund. The Notes will bear
interest at the rate per annum stated on the cover page of this Prospectus
from the date of issuance, payable semi-annually on ________ ____ and
________ ____ of each year, commencing _____________ __, 1995, to the person
in whose name such Note is registered at the close of business on the _____
__ or __________ __, respectively, prior to the payment date.
Principal of and any premium, if any, and interest on the Notes will be
payable, and the Notes will be exchangeable and transfers thereof will be
registrable, at the corporate trust office of the Trustee in New York, New
York, provided that, at the option of the Company, payment of any interest
may be made by check mailed to the address of the person entitled thereto as
it appears in the Note Register. Payment of any interest due on any Note will
be made to the person in whose name such Note is registered at the close of
business on the Regular Record Date for such interest. (Sections 301, 305,
307 and 1002)
FORM OF NOTES
The Notes will be represented by one or more global securities
(collectively, a "Global Note") registered in the name of The Depository
Trust Company (the "Depositary"). Except as set forth below, a Global Note
may be transferred in whole and not in part, only to the Depositary or
another nominee of the Depositary or to a successor of the Depositary or its
nominee.
Upon the issuance of a Global Note, the Depositary will credit, on its
book-entry registration and transfer system, the respective principal amounts
of the Notes represented by such Global Note to the accounts of institutions
that have accounts with the Depositary or its nominee ("Participants"). The
accounts to be credited will be designated by the Underwriters, dealers or
agents. Ownership of beneficial interests in a Global Note will be limited to
Participants or persons that may hold interests through Participants.
Ownership of interests in such Global Note will be shown on, and the transfer
of those ownership interests will be effected only through, records
maintained by the Depositary (with respect to Participants' interests) and
such Participants (with respect to the owners of beneficial interests in such
Global Note). The laws of some jurisdictions may require that certain
purchasers of securities take physical delivery of such securities in
definitive form. Such limits and laws may impair the ability to transfer or
pledge beneficial interests in a Global Note.
So long as the Depositary, or its nominee, is the registered holder and
owner of such Global Note, the Depositary or such nominee, as the case may
be, will be considered the sole owner and holder of the related Notes for all
purposes of such Notes and for all purposes under the Indenture. Except as
set forth below, owners of beneficial interests in a Global Note will not be
entitled to have the Notes represented by such Global Note registered in
their names, will not receive or be entitled to receive physical delivery of
Notes in definitive form and will not be considered to be the owners or
holders of any Notes under the Indenture or such Global Note.
10
<PAGE> 15
Accordingly, each person owning a beneficial interest in a Global Note
must rely on the procedures of the Depositary and, if such person is not a
Participant, on the procedures of the Participant through which such person
owns its interest, to exercise all rights of a holder of Notes under the
Indenture or such Global Note. The Company understands that under existing
industry practice, in the event the Company requests any action of holders of
Notes or an owner of a beneficial interest in a Global Note desires to take
any action that the Depositary, as the holder of such Global Note, is
entitled to take, the Depositary would authorize the Participants to take
such action, and that the Participants would authorize beneficial owners
owning through such Participants to take such action or would otherwise act
upon the instructions of beneficial owners owning through them.
Payment of principal of and premium, if any, and interest on Notes
represented by a Global Note will be made to the Depositary or its nominee,
as the case may be, as the registered owner and holder of such Global Note.
The Company expects that the Depositary, upon receipt of any payment of
principal, premium, if any, or interest, will immediately credit the accounts
of the Participants with such payment in amounts proportionate to their
respective holdings in principal amount of beneficial interest in the Global
Note as shown in the records of the Depositary. Payments by Participants to
owners of beneficial interests in a Global Note held through such
Participants will be governed by standing instructions and customary
practices, as is now the case with securities held for the accounts of
customers registered in "street name", and will be the responsibility of such
Participants. The Company and the Trustee will not have any responsibility or
liability for any aspect of the records relating to, or payments made on
account of, beneficial ownership interests in a Global Note for any Notes or
for maintaining, supervising or reviewing any records relating to such
beneficial ownership interests or for any other aspect of the relationship
between the Depositary and its Participants or the relationship between such
Participants and the owners of beneficial interests in such Global Note owned
through such Participants.
Unless and until it is exchanged in whole or in part for Notes in
definitive form, a Global Note may not be transferred except as a whole by
the Depositary to a nominee of such Depositary, by a nominee of such
Depositary to such Depositary or another nominee of such Depositary, or to a
successor of the Depositary or in its nominee.
Notes represented by a Global Note will be exchangeable for Notes in
definitive form of like tenor as such Global Note in denominations of $1,000
and in any greater amount that is an integral multiple thereof if (i) the
Depositary notifies the Company that it is unwilling or unable to continue as
Depositary for such Global Note or if at any time the Depositary ceases to be
qualified to act as Depositary under applicable law and the Company does not
appoint a successor depositary within 90 days or (ii) the Company in its
discretion at any time determines not to have such Notes represented by a
Global Note and notifies the Trustee thereof. Any Global Note that is
exchangeable pursuant to the preceding sentence is exchangeable for Notes
issuable in authorized denominations and registered in such names as the
Depositary shall direct and an owner of a beneficial interest in a Global
Note will be entitled to physical delivery of such Notes in definitive form.
Subject to the foregoing, a Global Note is not exchangeable except for a
Global Note or Global Notes of the same aggregate denominations to be
registered in the name of the Depositary or its nominee.
The Depositary has advised the Company and the Underwriters as follows:
The Depositary is a limited-purpose trust company organized under the New
York Banking Law, a "banking organization" within the meaning of the New York
Banking Law, a member of the Federal Reserve System, a "clearing corporation"
within the meaning of the New York Uniform Commercial Code and a "clearing
agency" registered pursuant to the provisions of Section 17A of the Exchange
Act. The Depositary was created to hold securities of Participants and to
facilitate the clearance and settlement of securities transactions among the
Participants in deposited securities through electronic book-entry changes in
accounts of the Participants, thereby eliminating the need for physical
movement of securities and certificates. Participants include securities
brokers and dealers (including the Underwriters), banks, trust companies,
clearing corporations and certain other organizations, some of which (and/or
their representatives) own the Depositary. Access to the Depositary's
book-entry system is also available to others such as banks, brokers, dealers
and trust companies that clear through or maintain a custodial relationship
with a Participant, either directly or indirectly ("indirect participants").
Persons who are not Participants may beneficially own securities held by the
Depositary only through Participants or indirect Participants. The rules
applicable to the Depositary and the Participants are on file with the
Commission. The Depositary currently accepts only notes denominated and
payable in U.S. dollars.
11
<PAGE> 16
CERTAIN COVENANTS OF THE COMPANY
RESTRICTIONS ON LIENS
The Company will not, and will not permit any Restricted Subsidiary to,
issue, assume or guarantee any Indebtedness secured by any mortgage, security
interest, pledge, lien or other encumbrance upon, or any interest or title of
any lessor, lender or other secured party to, or under any Capital Lease with
respect to, any Operating Property or Operating Asset of the Company or any
Restricted Subsidiary, whether such assets are now owned or hereafter
acquired (herein referred to as a "Mortgage" or "Mortgages"), without in any
such case effectively providing that the Notes (together with, if the Company
shall so determine, any other Indebtedness ranking equally with the Notes)
shall be secured equally and ratably with such Indebtedness, except that the
foregoing restrictions shall not apply to: (a) Mortgages incurred or created
in the ordinary course of business not arising in connection with
Indebtedness that do not in the aggregate materially impair the use or value
of the properties or assets of the Company and its Restricted Subsidiaries
taken as a whole, (b) Mortgages existing as of the date of the Indenture, (c)
Mortgages (other than Capital Leases) to secure the payment of all or any
part of the purchase price or construction costs in respect of property or
properties acquired by the Company or a Restricted Subsidiary after the date
of the Indenture securing Indebtedness incurred prior to, at the time of, or
within 360 days after, the acquisition of any such property or the completion
of any such construction and which secures Indebtedness not in excess of the
amount expended in the acquisition and improvements thereof, (d) Mortgages
upon any property or assets owned by any Restricted Subsidiary when it
becomes a Restricted Subsidiary, (e) Mortgages upon any property or assets of
any corporation existing at the time such corporation is merged into or
consolidated with the Company or any Restricted Subsidiary, or at the time of
a sale, lease or other disposition of the properties of an entity as an
entirety or substantially as an entirety to the Company or any Restricted
Subsidiary, (f) Mortgages upon any property when the property is acquired by
the Company or a Restricted Subsidiary, (g) Mortgages to secure the payment
of all or any part of the cost of improvements to any property owned by the
Company or a Restricted Subsidiary, (h) the extension, renewal or replacement
of any Mortgage permitted by subparagraph (b), (c), (d), (e), (f) or (g)
above, but only if the principal amount of Indebtedness secured by the
Mortgage immediately prior thereto is not increased and the Mortgage is not
extended to other property, (i) Mortgages for certain taxes or other
governmental charges, (j) Mortgages arising out of any final judgment for the
payment of money aggregating not in excess of $10,000,000, (k) Mortgages
arising out of any legal proceeding or final judgment which is being
contested in good faith, provided enforcement of any such lien has been
stayed, (l) easements or similar encumbrances, the existence of which do not
materially impair the use of the property subject thereto and (m) Mortgages
securing Indebtedness of a Restricted Subsidiary to the Company or to another
Restricted Subsidiary. (Section 1007(a) Notwithstanding the foregoing, the
Company or any Restricted Subsidiary may create or assume Mortgages in
addition to those permitted above, and renew, extend or replace such
Mortgages provided that at the time of such creation, assumption, renewal,
extension or replacement, and after giving effect thereto, Exempted Debt does
not exceed 15% of Consolidated Net Tangible Assets. (Section 1007(b)
RESTRICTIONS ON SALE AND LEASEBACK TRANSACTIONS
The Company will not, nor will it permit any Restricted Subsidiary to,
enter into any arrangement with any person providing for the leasing by the
Company or any Restricted Subsidiary of any Operating Property or Operating
Asset, whether now owned or hereafter acquired, which has been or is to be
sold or transferred by the Company or such Restricted Subsidiary to such
persons with the intention of taking back a lease on such property (a "Sale
and Leaseback Transaction") unless (a) such transaction involves a lease or
right to possession or use for a temporary period not to exceed three years
following such sale, by the end of which it is intended that the use of such
property by the lessee will be discontinued, (b) the Company or a Restricted
Subsidiary would, on the effective date of such transaction, be entitled to
issue, assume or guarantee indebtedness secured by a Mortgage on such
property at least equal in an amount to the Attributable Debt in respect
thereof, without equally and ratably securing the Notes as set forth in the
Indenture, or (c) if the proceeds of such sale (i) are equal to or greater
than the fair market value of such property and (ii) are applied within 360
days after the receipt of the proceeds of sale or transfer to either the
purchase or acquisition of fixed assets or equipment used in the operation of
the business or the construction of improvements on real property or to the
repayment of Senior Funded Debt of the Company or any Restricted Subsidiary.
The preceding restriction shall not apply to any Sale and Leaseback Transaction
12
<PAGE> 17
between the Company and a Restricted Subsidiary or between Restricted
Subsidiaries. (Section 1008(a) The Company or any Restricted Subsidiary may
enter into Sale and Leaseback Transactions in addition to those permitted above,
and without any obligation to retire any Senior Funded Debt of the Company or a
Restricted Subsidiary, provided that, at the time of entering into such Sale and
Leaseback Transactions, and after giving effect thereto, Exempted Debt does not
exceed 15% of Consolidated Net Tangible Assets. (Section 1008(b))
CERTAIN DEFINITIONS
Set forth below are certain significant terms which are defined in Section
101 of the Indenture:
"Attributable Debt" in respect of a Sale and Leaseback Transaction means,
at the time of determination, the present value (discounted at the actual
rate of interest of such transaction) of the obligation of the lessee for net
rental payments during the remaining term of the lease included in such Sale
and Leaseback Transaction (including any period for which such lease has been
extended or may, at the option of the lessor, be extended).
"Capital Lease" means any lease of property which, in accordance with
generally accepted accounting principles, should be capitalized on the
lessee's balance sheet or for which the amount of the asset and liability
thereunder as if so capitalized should be disclosed in a note to such balance
sheet.
"Consolidated" when used with respect to any of the terms defined in the
Indenture, refers to such terms as reflected in a consolidation of the
accounts of the Company and its Restricted Subsidiaries in accordance with
generally accepted accounting principles.
"Exempted Debt" means the sum of the following items outstanding as of the
date Exempted Debt is being determined: (i) Indebtedness for money borrowed
of the Company and its Restricted Subsidiaries incurred after the date of the
Indenture and secured by liens created or assumed or permitted to exist
pursuant to Section 1007(b) (excluding Indebtedness incurred in connection
with pollution control financings and industrial revenue bond financings) and
(ii) Attributable Debt of the Company and its Restricted Subsidiaries in
respect of all Sale and Leaseback Transactions entered into pursuant to
Section 1008(b).
"Funded Debt" means Indebtedness, whether incurred, assumed or guaranteed,
which matures more than one year from the date of creation thereof, or which
is extendable or renewable at the sole option of the obligor so that it may
become payable more than one year from such date.
"Indebtedness" of any person means, without duplication, indebtedness for
borrowed money and all indebtedness under purchase money mortgages or other
purchase money liens or conditional sales or similar title retention
agreements, in each case where such indebtedness has been created, incurred,
assumed or guaranteed by such person or where such person is otherwise liable
therefor, and indebtedness for borrowed money secured by any mortgage, pledge
or other lien or encumbrance upon property owned by such person even though
such person has not assumed or become liable for the payment of such
indebtedness.
"Investment" means and includes any investment in stock, evidences of
indebtedness, loans or advances, however made or acquired, but shall not
include accounts receivable of the Company or of any Restricted Subsidiary
arising from transactions in the ordinary course of business, or any
evidences of indebtedness, loans or advances made in connection with the sale
to any Restricted Subsidiary of accounts receivable of the Company or any
Restricted Subsidiary arising from transactions in the ordinary course of
business of the Company or any Restricted Subsidiary.
"Net Tangible Assets" means the total amounts of assets (less depreciation
and valuation reserves and other reserves and items deductible from gross
book value of specific asset accounts under generally accepted accounting
principles) which under generally accepted accounting principles would be
included on a balance sheet after deducting therefrom (a) all liability items
except Funded Debt, Capitalized Lease Obligations, stockholders' equity and
reserves for deferred income taxes and (b) all goodwill, trade names,
trademarks, patents, unamortized debt discount and expense and other like
intangibles, which in each such case would be so included on such balance
sheet.
13
<PAGE> 18
"Operating Assets" means all merchandise inventories, furniture, fixtures
and equipment (including all transportation and warehousing equipment but
excluding office equipment and data processing equipment) owned or leased
pursuant to Capital Leases by the Company or a Restricted Subsidiary.
"Operating Property" means all real property and improvements thereon
owned or leased pursuant to Capital Leases by the Company or a Restricted
Subsidiary and constituting, without limitation, any store, warehouse,
service center or distribution center wherever located, provided that such
term shall not include any store, warehouse, service center or distribution
center which the Company's Board of Directors declares by resolution not to
be of material importance to the business of the Company and its Restricted
Subsidiaries.
"Restricted Subsidiaries" means all Subsidiaries other than Non-Restricted
Subsidiaries. "Non-Restricted Subsidiaries" means (a) any Subsidiary so
designated by the Board of Directors of the Company in accordance with the
Indenture and (b) any other Subsidiary of which the majority of the voting
stock is owned directly or indirectly by one or more Non-Restricted
Subsidiaries. The Indenture provides that, subject to certain restrictions,
the Company's Board of Directors may change the designations of Restricted
Subsidiaries and Non-Restricted Subsidiaries. (Section 1009) Initially the
Company will have no Non-Restricted Subsidiaries.
"Senior Funded Debt" means all Funded Debt, except Funded Debt the payment
of which is subordinated to the payment of the Notes.
"Subsidiary" means any corporation of which at least a majority of the
outstanding stock having voting power under ordinary circumstances for the
election of directors of said corporation is at the time owned by the
Company, or by the Company and one or more Subsidiaries, or by any one or
more Subsidiaries.
MERGER, CONSOLIDATION AND DISPOSITION OF ASSETS
The Company will not consolidate with or merge into any other corporation
or convey, transfer or lease its properties and assets substantially as an
entirety to any person, and the Company will not permit any person to
consolidate with or merge into the Company or convey, transfer or lease its
assets and properties substantially as an entirety to the Company, unless (a)
the successor shall be a corporation organized under the laws of the United
States or a jurisdiction thereof, and such successor shall expressly assume
the Company's obligations under the Indenture and the Notes, (b) immediately
after giving effect to such transaction, no Event of Default under the
Indenture or event which, after notice or lapse of time or both, would become
an Event of Default thereunder would exist and be continuing, (c) if, as a
result of such transaction, properties or assets of the Company would become
subject to a Mortgage not permitted by the Indenture, the successor shall
cause the Notes to be secured equally and ratably with (or prior to) all
indebtedness secured by such Mortgage and (d) the Company has delivered to
the Trustee an Officers' Certificate and an Opinion of Counsel, each stating
that such transaction complies with the Indenture. Upon compliance with these
provisions by a successor corporation, the Company will be relieved (except
in the case of a lease) of its obligations under the Indenture and the Notes.
(Sections 801 and 802)
The Indenture would not necessarily afford holders of the Notes protection
in the event of a highly leveraged transaction involving the Company, such as
a leveraged buyout.
MODIFICATION OF THE INDENTURE; WAIVERS
The Indenture provides that the Company and the Trustee, with the consent
of not less than a majority in principal amount of the Notes at the time
outstanding, may execute supplemental indentures adding any provisions to, or
changing or eliminating any of the provisions of, the Indenture or modifying
the rights of the holders of the Notes at the time outstanding, except that
no such supplemental indenture may, without the consent of the holders of all
the Notes at the time outstanding, (a) change the stated maturity date of the
principal of, or any installment of principal of or any interest on, any Note
or reduce the principal amount thereof or the rate of interest thereon, or
change the place of payment or the currency in which payment is to be made,
or impair the right to institute suit for the enforcement of any such payment
on or after the due date thereof, (b) reduce the percentage of outstanding
Notes, the consent of the holders of which is required for any supplemental
indenture, (c) reduce the percentage of outstanding Notes required to waive
certain provisions of the Indenture or (d) modify certain provisions of the
Indenture. (Section 902)
14
<PAGE> 19
The Holders of a majority in principal amount of the Notes at the time
outstanding may on behalf of the holders of all Notes waive compliance by the
Company with certain restrictive provisions of the Indenture. (Section 1011)
The holders of a majority in principal amount of the Notes at the time
outstanding may on behalf of the Holders of all Notes waive any past default
under the Indenture except a default not heretofore cured in the payment of
the principal of (or premium, if any) or any interest on any Note or in
respect of a provision under which the Indenture cannot be modified or
amended without the consent of the holder of each outstanding Note. (Section
513)
EVENTS OF DEFAULT, WAIVER, AND NOTICE
"Event of Default" is defined in the Indenture with respect to the Notes
as being (a) default for 30 days in the payment of any interest installment
on any Notes, (b) default in the payment when due of principal of or premium,
if any, on any Note, (c) default for 60 days, after notice to the Company by
the Trustee or to the Company and the Trustee by the holders of not less than
25% in principal amount of the Notes at that time outstanding, in the
performance, or breach, of any covenant or warranty of the Indenture (other
than covenants and warranties specifically dealt with elsewhere), (d) default
in respect to certain indebtedness in excess of $10,000,000 for money
borrowed by the Company, which indebtedness shall have been accelerated for
30 days after notice specified in the next preceding clause and (e) certain
events of bankruptcy, insolvency and reorganization. (Section 501)
If an Event of Default with respect to the Notes at that time outstanding
shall occur and be continuing, either the Trustee or the holders of not less
than 25% in principal amount of the outstanding Notes may, by notice in
writing to the Company (and to the Trustee if given by holders), declare the
principal amount of all Notes to be due and payable. (Section 502) In certain
cases, the holders of a majority in principal amount of the outstanding Notes
may, on behalf of the holders of all the Notes, rescind and annul such
acceleration or waive any past default or Event of Default, except a default
not theretofore cured in payment of the principal of or premium, if any, or
interest on any of the Notes or a default relating to a covenant or provision
of the Indenture which could not be modified or amended without the consent
of all holders of Notes. (Sections 502 and 513) See "-- Modification of the
Indenture; Waivers."
The Indenture provides that the Trustee shall, within 90 days after the
occurrence of a default with respect to the Notes, give to the holders of the
Notes notice of such default known to it, unless such default shall have been
cured or waived; but the Trustee shall be protected in withholding such
notice if in good faith it determines that the withholding of such notice is
in the interest of such holders, except in the case of a default in the
payment of the principal of or premium, if any, or interest on any of the
Notes and except that in the case of a default in respect of certain
covenants and warranties, no such notice shall be given until at least 60
days after the occurrence of such default. (Section 602) The Indenture
contains a provision entitling the Trustee, subject to the duty of the
Trustee during a default to act with the required standard of care, to be
indemnified by holders of the Notes before proceeding to exercise any right
or power under the Indenture at the request of such holders. (Sections 601
and 603) The Indenture provides that the holders of a majority in principal
amount of the outstanding Notes may direct the time, method and place of
conducting proceedings for remedies available to the Trustee or of exercising
any trust or power conferred on the Trustee with respect to the Notes.
(Section 512)
No holder of any Notes will have any right to institute any proceeding
with respect to the Indenture or for any remedy thereunder, unless (a) such
holder shall have previously given to the Trustee written notice of a
continuing Event of Default with respect to the Notes, (b) the holders of at
least 25% in aggregate principal amount of the outstanding Notes shall have
made written request to the Trustee to institute proceedings as Trustee, (c)
such holder or holders shall have offered to the Trustee reasonable
indemnity, (d) the Trustee shall have failed to institute such proceeding
within 60 days thereafter and (e) the Trustee shall not have received from
the holders of a majority in aggregate principal amount of the outstanding
Notes a direction inconsistent with such request. (Section 507) However, the
holder of any Notes will have an absolute right to receive payment of the
principal of (and premium, if any) and any interest on such Notes on or after
the due dates expressed in such Notes and to institute suit for the
enforcement of any such payment. (Section 508)
The Company will be required to file with the Trustee annually, within 120
days of the end of each fiscal year of the Company, a certificate as to the
compliance with all conditions and covenants of the Indenture. (Section 704)
15
<PAGE> 20
DISCHARGE AND DEFEASANCE OF NOTES OR CERTAIN COVENANTS
DEFEASANCE AND DISCHARGE
The Indenture provides that the Company, at its option, (a) will be
discharged from any and all obligations with respect to the Notes (except for
certain obligations which include registering the transfer or exchange of the
Notes, replacing stolen, lost or mutilated Notes, maintaining paying agencies
and holding monies for payment in trust), or (b) need not comply with certain
restrictive covenants of the Indenture, upon the deposit with the Trustee (and
in the case of a discharge, 91 days after such deposit), in trust, cash in
U.S. dollars or U.S. Government Obligations, or a combination thereof, which
through the payment of interest thereon and principal thereof in accordance with
their terms will provide money in an amount sufficient to pay each installment
of principal of (and premium, if any) and any interest on the Notes on the dates
such payments are due in accordance with the terms of the Indenture. To exercise
any such option, the Company is required to meet certain conditions, including
delivery to the Trustee of an Opinion of Counsel to the effect that the deposit
and related defeasance and discharge would not cause the holders of the Notes to
recognize income, gain or loss for Federal income tax purposes which, in the
case of a discharge pursuant to clause (a), must refer to and be based upon a
ruling or administrative pronouncement of the Internal Revenue Service.
(Sections 403 and 1010)
DEFEASANCE AND EVENTS OF DEFAULT
In the event the Company exercises its option to omit compliance with
certain covenants of the Indenture and the Notes are declared due and payable
because of the occurrence of any Event of Default, the amount of money and U.S.
Government Obligations on deposit with the Trustee should be sufficient to pay
amounts due on the Notes at the time of their Stated Maturity but may not be
sufficient to pay amounts due on the Notes at the time of the acceleration
resulting from such Event of Default. However, the Company shall remain liable
for such payments.
CONCERNING THE TRUSTEE
In the ordinary course of business, the Company maintains deposits with
affiliates of the Trustee and affiliates of the Trustee have also from time
to time provided other banking services to the Company.
UNDERWRITING
Under the terms and subject to the conditions contained in an Underwriting
Agreement dated June , 1995 (the "Underwriting Agreement"), the Underwriters
named below (the "Underwriters"), for whom CS First Boston Corporation is
acting as representative (the "Representative"), have severally but not
jointly agreed to purchase from the Company the following respective
principal amounts of the Notes:
Principal
Underwriter Amount
----------- --------------
CS First Boston Corporation $
--------------
Total ................ $100,000,000
==============
The Underwriting Agreement provides that the obligations of the Underwriters
are subject to certain conditions precedent and that the Underwriters will be
obligated to purchase all of the Notes being offered hereby if any are
purchased. The Underwriting Agreement provides that, in the event of a default
by an Underwriter, in certain circumstances the purchase commitments of
non-defaulting Underwriters may be increased or the Underwriting Agreement may
be terminated.
The Company has been advised by the Representative that the Underwriters
propose to offer the Notes to the public initially at the public offering price
set forth on the cover page of this Prospectus and, through the Representative,
16
<PAGE> 21
to certain dealers at such price less a concession of % of the principal
amount per Note and the Underwriters and such dealers may allow a discount of %
of such principal amount per Note on sales to certain other dealers. After the
initial public offering, the public offering price and concession and discount
to dealers may be changed by the Representative.
The Notes are a new issue of securities with no established trading
market. The Representative has advised the Company that it intends to act as
a market maker for the Notes. However, the Representative is not obligated to
do so and may discontinue any market making at any time without notice. No
assurance can be given as to the liquidity of the trading market for the
Notes.
The Company has agreed to indemnify the Underwriters against certain
liabilities, including civil liabilities under the Securities Act, and under
certain circumstances, to contribute to payments which the Underwriters may be
required to make in respect thereof.
CS First Boston Corporation from time to time performs investment banking
services for the Company for customary fees.
NOTICE TO CANADIAN RESIDENTS
RESALE RESTRICTIONS
The distribution of the Notes in Canada is being made only on a private
placement basis exempt from the requirement that the Company prepare and file
a prospectus with the securities regulatory authorities in each province
where trades of Notes are effected. Accordingly, any resale of the Notes in
Canada must be made in accordance with applicable securities laws which will
vary depending on the relevant jurisdiction, and which may require resales to
be made in accordance with available statutory exemptions or pursuant to a
discretionary exemption granted by the applicable Canadian securities
regulatory authority. Purchasers are advised to seek legal advice prior to
any resale of the Notes.
REPRESENTATIONS OF PURCHASERS
Each purchaser of Notes in Canada who receives a purchase confirmation
will be deemed to represent to the Company and the dealer from whom such
purchase confirmation is received that (i) such purchaser is entitled under
applicable provincial securities laws to purchase such Notes without the
benefit of a prospectus qualified under such securities laws, (ii) where
required by law, such purchaser is purchasing as principal and not as agent,
and (iii) such purchaser has reviewed the text above under "Resale
Restrictions."
RIGHTS OF ACTION AND ENFORCEMENT
The securities being offered are those of a foreign issuer and Ontario
purchasers will not receive the contractual right of action prescribed by
section 32 of the Regulation under the Securities Act (Ontario). As a result,
Ontario purchasers must rely on other remedies that may be available,
including common law rights of action for damages or rescission or rights of
action under the civil liability provisions of the U.S. federal securities
laws.
All of the issuer's directors and officers as well as the experts named
herein may be located outside of Canada and, as a result, it may not be
possible for Ontario purchasers to effect service of process within Canada
upon the issuer or such persons. All or a substantial portion of the assets
of the issuer and such persons may be located outside Canada and, as a
result, it may not be possible to satisfy a judgment against the issuer or
such persons in Canada or to enforce a judgment obtained in Canadian courts
against such issuer or person outside of Canada.
NOTICE TO BRITISH COLUMBIA RESIDENTS
A purchaser of Notes to whom the Securities Act (British Columbia) applies
is advised that such purchaser is required to file with the British Columbia
Securities Commission a report within ten days of the sale of any Notes
17
<PAGE> 22
acquired by such purchaser pursuant to this offering. Such report must be in the
form attached to British Columbia Securities Commission Blanket Order BOR #88/5,
a copy of which may be obtained from the Company. Only one such report must be
filed in respect of Notes acquired on the same date and under the same
prospectus exemption.
LEGAL MATTERS
The validity of the authorization and issuance of the Notes offered hereby
is being passed upon for the Company by Willkie Farr & Gallagher, New York,
New York, and for the Underwriters by Dewey Ballantine, New York, New York.
EXPERTS
The financial statements and the related financial statement schedules
incorporated in this Prospectus by reference from the Company's Annual Report
on Form 10-K for the year ended January 28, 1995 have been audited by
Deloitte & Touche LLP, independent auditors, as stated in their report which
is incorporated herein by reference, and have been so incorporated in
reliance upon the report of such firm given upon their authority as experts
in accounting and auditing.
18
<PAGE> 23
- -----------------------------------------------------------------------------
No dealer, salesperson or other person has been authorized to give any
information or to make any representation not contained in this Prospectus
and, if given or made, such information or representation must not be relied
upon as having been authorized by the Company or any Underwriter. This
Prospectus does not constitute an offer to sell or a solicitation of an offer
to buy any of the securities offered hereby in any jurisdiction to any person
to whom it is unlawful to make such offer in such jurisdiction. Neither the
delivery of this Prospectus nor any sale made hereunder shall, under any
circumstances, create any implication that the information herein is correct
as of any time subsequent to the date hereof or that there has been no change
in the affairs of the Company since such date.
------
TABLE OF CONTENTS
Page
--------
Available Information ..................... 2
Incorporation of Certain Documents by
Reference ................................ 2
The Company ............................... 3
Use of Proceeds ........................... 4
Capitalization ............................ 4
Selected Financial Data ................... 5
Management's Discussion and Analysis of
Financial Condition and Results of
Operations ............................... 6
Description of Notes ...................... 10
Underwriting .............................. 16
Notice to Canadian Residents .............. 17
Legal Matters ............................. 18
Experts ................................... 18
- -----------------------------------------------------------------------------
<PAGE> 24
- ----------------------------------------------------------------------------
LOGO
PEP BOYS
$100,000,000
% Notes Due 2005
PROSPECTUS
LOGO CS FIRST BOSTON
----------------------------------------------------------------------------
<PAGE> 25
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth all expenses (other than the underwriting
discounts and commissions) in connection with the sale and distribution of
the securities being registered, which will be paid solely by the Company.
All the amounts shown are estimates, except the Commission registration fee
and the NASD fee:
SEC Registration Fee ......................... $ 34,483
NASD Fee ..................................... 10,500
Printing and Engraving Expenses .............. 20,000
Legal Fees and Expenses ...................... 100,000
Accounting Fees and Expenses ................. 15,000
Blue Sky Fees and Expenses ................... 10,000
Trustee Fees ................................. 8,500
Miscellaneous Expenses ....................... 26,517
--------
Total ................................... $225,000
========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Sections 1741 through 1750 of Subchapter D, Chapter 17, of the BCL contain
provisions for mandatory and discretionary indemnification of a corporation's
directors, officers and other personnel, and related matters.
Under Section 1741, subject to certain limitations, a corporation has the
power to indemnify directors and officers under certain prescribed
circumstances against expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred in connection
with an action or proceeding, whether civil, criminal, administrative or
investigative (other than derivative actions), to which any of them is a
party or is threatened to be made a party by reason of his being a
representative of the corporation or serving at the request of the
corporation as a representative of another corporation, partnership, joint
venture, trust or other enterprise, if he acted in good faith and in a manner
he reasonably believed to be in, or not opposed to, the best interests of the
corporation and, with respect to any criminal proceeding, had no reasonable
cause to believe his conduct was unlawful.
Section 1742 permits indemnification in derivative actions if the
appropriate standard of conduct is met, except in respect of any claim, issue
or matter as to which the person has been adjudged to be liable to the
corporation unless and only to the extent that the proper court determines
upon application that, despite the adjudication of liability but in view of
all the circumstances of the case, the person is fairly and reasonably
entitled to indemnity for the expenses that the court deems proper.
Under Section 1743, indemnification is mandatory to the extent that the
officer or director has been successful on the merits or otherwise in defense
of any action or proceeding referred to in Section 1741 or 1742.
Section 1744 provides that, unless ordered by a court, any indemnification
under Section 1741 or 1742 shall be made by the corporation only as
authorized in the specific case upon a determination that the representative
met the applicable standard of conduct and that such determination will be
made (i) by the board of directors by a majority vote of a quorum of
directors not parties to the action or proceeding; (ii) if a quorum is not
obtainable, or if obtainable and a majority of disinterested directors so
directs, by independent legal counsel; or (iii) by the shareholders.
Section 1745 provides that expenses incurred by an officer or director in
defending an action or proceeding may be paid by the corporation in advance
of the final disposition of such action or proceeding upon receipt of an
undertaking by or on behalf of such person to repay such amount if it shall
ultimately be determined that he is not entitled to be indemnified by the
corporation.
II-1
<PAGE> 26
Section 1746 provides generally that the indemnification and advancement
of expenses provided by Subchapter 17D of the BCL (i) will not be deemed
exclusive of any other rights to which a person seeking indemnification or
advancement of expenses may be entitled under any bylaw, agreement, vote of
shareholders or disinterested directors or otherwise, both as to action in
his official capacity and as to action in another capacity while holding that
office, and (ii) may not be made in any case where the act or failure to act
giving rise to the claim for indemnification is determined by a court to have
constituted willful misconduct or recklessness.
Section 1747 grants a corporation the power to purchase and maintain
insurance on behalf of any director or officer against any liability incurred
by him in his capacity as officer or director, whether or not the corporation
would have the power to indemnify him against that liability under Subchapter
17D of BCL.
Sections 1748 and 1749 extend the indemnification and advancement of
expenses provisions contained in Subchapter 17D of the BCL to successor
corporations in fundamental corporate changes and to representatives serving
as fiduciaries of employee benefit plans.
Section 1750 provides that the indemnification and advancement of expenses
provided by, or granted pursuant to, Subchapter 17D of the BCL shall, unless
otherwise provided when authorized or ratified, continue as to a person who
has ceased to be a director, officer, employee or agent and shall inure to
the benefit of the heirs and personal representative of such person.
Article VII of the Company's Bylaws provides in general that the Company
shall indemnify its officers and directors to the fullest extent permitted by
law. The Bylaws further provide that any alteration, amendment, or repeal of
the indemnification provisions, if not approved by 80% of the Board of
Directors, requires the affirmative vote of shareholders owning at least 80%
of the outstanding shares entitled to vote.
The Company has purchased liability insurance on behalf of its directors
and officers. A form of such policy is filed as Exhibit 10.5 to the
Registrant's Annual Report on Form 10-K for the fiscal year ended February 3,
1990.
See Section 7 of the Underwriting Agreement, filed as Exhibit 1 hereto,
pursuant to which the Underwriters agree to indemnify the Company, its
directors, certain officers and controlling persons against certain
liabilities, including liabilities under the Securities Act.
II-2
<PAGE> 27
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
----------- ----------------------
<S> <C>
*1 Form of Underwriting Agreement
*4 Form of Indenture between the Company and First Fidelity Bank, National Association, as Trustee,
including form of Note
*5 Opinion of Willkie Farr & Gallagher
12.1 Calculation of Ratio of Earnings to Fixed Charges (incorporated
by reference to Exhibit 12 to the
Company's Annual Report on Form 10-K for the year ended January 28, 1995)
12.2 Calculation of Ratio of Earnings to Fixed Charges for the 13 weeks ended April 29, 1995
*23.1 Consent of Willkie Farr & Gallagher (included as part of Exhibit 5)
23.2 Consent of Deloitte & Touche LLP
24 Power of Attorney (included as part of signature page)
*25 Form T-1, Statement of Eligibility under the Trust Indenture Act of
1939 of the Trustee
</TABLE>
- ------
*To be filed by amendment.
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to section 15(d) of the Exchange Act) that is
incorporated by reference in the registration statement shall be deemed to be
a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that, in the opinion of the Commission, such indemnification
is against public policy as expressed in the Securities Act and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of
expenses incurred or paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with
the securities being registered, the registrant will, unless in the opinion
of counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question of whether such
indemnification by them is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
The undersigned registrant hereby undertakes that: (1) for purposes of
determining any liability under the Securities Act, the information omitted
from the form of prospectus filed as part of this registration statement in
reliance upon Rule 430A and contained in a form of prospectus filed by the
registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities
Act shall be deemed to be part of this registration statement as of the time
it was declared effective; and (2) for the purpose of determining any
liability under the Securities Act, each post-effective amendment that
contains a form of prospectus shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial bona fide
offering thereof.
II-3
<PAGE> 28
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant
certifies that is has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Philadelphia, Commonwealth of Pennsylvania, on
June 2, 1995.
THE PEP BOYS - MANNY, MOE & JACK
By: /s/ MITCHELL G. LEIBOVITZ
------------------------------
Mitchell G. Leibovitz
Chairman of the Board, President
and Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Mitchell G. Leibovitz and Michael J. Holden,
and each of them, his true and lawful attorneys-in-fact and agents, with
full power of substitution and resubstitution, for him and in his name, place
and stead, in any and all capacities, to sign any and all amendments to this
Registration Statement, and to file the same, with all exhibits thereto, and
other documentation in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents full power and
authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents, or their substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities and on
the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ------- ---------
<S> <C> <C>
/s/ MITCHELL G. LEIBOVITZ Chairman of the Board, President and June 2, 1995
---------------------------- Chief Executive Officer and Director
Mitchell G. Leibovitz (Principal Executive Officer)
/s/ MICHAEL J. HOLDEN Senior Vice President and Chief Financial June 2, 1995
---------------------------- Officer (Principal Financial and
Michael J. Holden Accounting Officer)
/s/ LENNOX K. BLACK Director June 2, 1995
----------------------------
Lennox K. Black
/s/ PEMBERTON HUTCHINSON Director June 2, 1995
----------------------------
Pemberton Hutchinson
Director
----------------------------
Bernard J. Korman
Director
----------------------------
J. Richard Leaman, Jr.
/s/ MALCOLMN D. PRYOR Director June 2, 1995
----------------------------
Malcolmn D. Pryor
/s/ LESTER ROSENFELD Director June 2, 1995
----------------------------
Lester Rosenfeld
/s/ BENJAMIN STRAUSS Director June 2, 1995
----------------------------
Benjamin Strauss
/s/ MYLES H. TANENBAUM Director June 2, 1995
----------------------------
Myles H. Tanenbaum
/s/ DAVID V. WACHS Director June 2, 1995
----------------------------
David V. Wachs
</TABLE>
II-4
<PAGE> 29
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description
----------- --------------
<S> <C> <C>
*1 Form of Underwriting Agreement
*4 Form of Indenture between the Company and First Fidelity Bank, National
Association, as Trustee, including form of Note
*5 Opinion of Willkie Farr & Gallagher
12.1 Calculation of Ratio of Earnings to Fixed Charges (incorporated by reference to
Exhibit 12 to the Company's Annual Report on Form 10-K for the year ended
January 28, 1995)
12.2 Calculation of Ratio of Earnings to Fixed Charges for the 13 weeks ended
April 29, 1995
*23.1 Consent of Willkie Farr & Gallagher (included as part of Exhibit 5)
23.2 Consent of Deloitte & Touche LLP
24 Power of Attorney (included as part of signature page)
*25 Form T-1, Statement of Eligibility under the Trust Indenture Act of 1939
of the Trustee
</TABLE>
- ------
*To be filed by amendment.
<PAGE> 30
EXHIBIT 12.2
STATEMENT REGARDING COMPUTATION OF RATIOS
RATIOS OF EARNINGS TO FIXED CHARGES
(IN THOUSANDS, EXCEPT RATIOS)
<TABLE>
<CAPTION>
Thirteen weeks ended
--------------------------------
April 29, 1995 April 30, 1994
-------------- --------------
<S> <C> <C> <C>
Interest 7,965 5,720
Interest factor in rental expense 1,727 1,469
Capitalized interest 307 341
(a) Fixed charges, as defined 9,999 7,530
Earnings before income taxes and cumulative effect
of change in accounting principle 25,823 27,980
Fixed charges 9,999 7,530
Capitalized interest (307) (341)
(b) Earnings, as defined 35,515 35,169
(c) Ratio of earnings to fixed charges (b/a) 3.6x 4.7x
</TABLE>
<PAGE> 31
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration
Statement of The Pep Boys -- Manny, Moe & Jack on Form S-3 of our report
dated March 20, 1995, appearing in the Annual Report on Form 10-K of The Pep
Boys -- Manny, Moe and Jack for the year ended January 28, 1995 and to the
reference to us under the headings "Selected Financial Data" and "Experts" in
the Prospectus, which is part of this Registration Statement.
DELOITTE & TOUCHE LLP
Philadelphia, Pennsylvania
June 1, 1995
