Pep Boys - Manny, Moe & Jack
), on October 12th, announced the completion of the amended and
restated term loan facility worth $200 million at LIBOR (with a
floor of 1.25%) plus 3.75%, due October 11, 2018. The facility
has been secured by 142 stores owned by the company. Pep Boys
also swapped the interest rate on $100 million of this term loan
facility to a fixed rate of 1.855% from the variable LIBOR
portion of the interest payment.
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The company will utilize the proceeds from the increased facility
along with the cash in hand for the payment of $148 million of
7.5% senior subordinated notes due 2014. The remaining amount
will be utilized to settle the outstanding interest rate swap of
around $8 million.
The company reduced its long-term debt by $95 million, thus
achieving its targeted long-term debt reduction of roughly $100
million. The company also reduced its annual interest expense by
Pep Boys, in the second quarter of 2012 (ended July 28, 2012),
recorded a significant increase in its profit (excluding merger
termination fees and severance costs) to $76.7 million or $1.43
per share from $11.9 million or 22 cents in the prior-year
comparable quarter. The results surpassed the Zacks Consensus
Estimate of $1.28 per share.
Total revenues inched up 0.6% to $525.7 million from $522.6
million in the year-ago quarter, matching the Zacks Consensus
Estimate. The growth was mainly driven by the improvement in the
company's service business.
Pep Boys, based in Philadelphia, supplies tires, batteries, new
and remanufactured parts for vehicles, chemicals and maintenance
items, fashion, electronic, and performance accessories. It also
provides non-automotive merchandise such as generators, power
tools and personal transportation products.
The company, which competes with
O'Reilly Automotive Inc.
), currently retains a Zacks #3 Rank, which translates to a
short-term Hold rating.