Welcome!

News Feed Item

Snap-on Announces First Quarter 2013 Results

Snap-on Incorporated (NYSE: SNA), a leading global innovator, manufacturer and marketer of tools, equipment, diagnostics, repair information and systems solutions for professional users performing critical tasks, today announced operating results for the first quarter of 2013.

  • Sales of $741.7 million increased $6.5 million, or 0.9%, from 2012 levels; excluding $4.3 million of unfavorable foreign currency translation, organic sales increased 1.5%.
  • Operating earnings before financial services of $107.8 million improved to 14.5% of sales as compared to $97.5 million, or 13.3% of sales, last year.
  • Financial services operating earnings of $30.5 million increased $6.6 million from 2012 levels.
  • Consolidated operating earnings of $138.3 million improved to 17.6% of revenues (net sales plus financial services revenue) as compared to $121.4 million, or 15.7% of revenues, last year.
  • Net earnings of $82.8 million, or $1.40 per diluted share, compares with net earnings of $71.0 million, or $1.21 per diluted share, a year ago.

“We’re encouraged with our first quarter performance, which included a significant improvement in operating margin and a 15.7% increase in diluted earnings per share, despite continuing headwinds that are impacting specific areas of our business,” said Nick Pinchuk, Snap-on chairman and chief executive officer. “We’re focused on our Snap-on Value Creation Processes and are committed to our decisive strategic initiatives…enhancing the van network…expanding with repair shop owners and managers…extending to critical industries…and building in emerging markets. We believe it’s that effective balance which, once again, has enabled progress along our runways for growth and improvement, and has authored the positive performance evident in the first quarter results. I thank our franchisees and associates for their ongoing contributions. Without their capability, energy and dedication, these results would not have been possible.”

Segment Results

Commercial & Industrial Group segment sales of $266.4 million in the quarter decreased $20.1 million, or 7.0%, from 2012 levels primarily due to lower sales to the military and in the segment’s European-based hand tools business as a result of ongoing economic weakness in that region. Excluding $2.2 million of unfavorable foreign currency translation, organic sales in the quarter decreased 6.3%.

Operating earnings of $30.6 million in the period increased $1.4 million, or 4.8%, from 2012 levels, and the operating margin (operating earnings as a percentage of segment sales) of 11.5% improved from 10.2% a year ago.

Snap-on Tools Group segment sales of $327.3 million in the quarter rose $10.7 million, or 3.4%, from 2012 levels, reflecting sales gains across both the company’s U.S. and international franchise operations. Excluding $0.9 million of unfavorable foreign currency translation, organic sales increased 3.7%.

Operating earnings of $47.2 million in the period increased $1.1 million, or 2.4%, from 2012 levels and the operating margin of 14.4% compared with 14.6% a year ago.

Repair Systems & Information Group segment sales of $246.1 million in the quarter increased $20.0 million, or 8.8%, from 2012 levels primarily due to higher sales to Original Equipment Manufacturer (OEM) dealerships and gains in sales of diagnostics and repair information products to repair shop owners and managers. Excluding $1.0 million of unfavorable foreign currency translation, organic sales in the quarter rose 9.3%.

Operating earnings of $56.5 million in the period increased $7.9 million, or 16.3%, from 2012 levels and the operating margin of 23.0% increased from 21.5% a year ago.

Financial Services operating earnings of $30.5 million on revenue of $44.0 million in the quarter compared with operating earnings of $23.9 million on revenue of $38.0 million a year ago.

Corporate expenses of $26.5 million in the quarter compared with $26.4 million last year.

Outlook

In 2013, Snap-on expects to continue with the advancement of its strategic framework designed to enhance its mobile tool distribution network, expand in the vehicle repair garage, extend to critical industries and build in emerging markets. In pursuit of these initiatives, Snap-on continues to anticipate that capital expenditures in 2013 will be in a range of $70 million to $80 million. Snap-on also expects that its full year 2013 effective income tax rate will be comparable to its 2012 rate.

Conference Call and Webcast April 18, 2013, at 9:00 a.m. Central Time

A discussion of this release will be webcast on Thursday, April 18, 2013, at 9:00 a.m. Central Time, and a replay will be available for at least 10 days following the call. To access the webcast, including the accompanying slide presentation, visit www.snapon.com/sna and click on the link toward the bottom of the page. Additional detail about Snap-on is also available on the Snap-on web site.

About Snap-on

Snap-on Incorporated is a leading global innovator, manufacturer and marketer of tools, equipment, diagnostics, repair information and systems solutions for professional users performing critical tasks. Products and services include hand and power tools, tool storage, diagnostics software, information and management systems, shop equipment and other solutions for vehicle dealerships and repair centers, as well as for customers in industries, including aviation and aerospace, agriculture, construction, government and military, mining, natural resources, power generation and technical education. Snap-on also derives income from various financing programs to facilitate the sales of its products. Products and services are sold through the company’s franchisee, company-direct, distributor and internet channels. Founded in 1920, Snap-on is a $2.9 billion, S&P 500 company headquartered in Kenosha, Wisconsin.

Forward-looking Statements

Statements in this news release that are not historical facts, including statements that (i) are in the future tense; (ii) include the words “expects,” “anticipates,” “intends,” “approximates,” or similar words that reference Snap-on or its management; (iii) are specifically identified as forward-looking; or (iv) describe Snap-on’s or management’s future outlook, plans, estimates, objectives or goals, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Snap-on cautions the reader that this news release contains statements, including earnings projections, that are forward-looking in nature and were developed by management in good faith and, accordingly, are subject to risks and uncertainties regarding Snap-on’s expected results that could cause (and in some cases have caused) actual results to differ materially from those described or contemplated in any forward-looking statement. Factors that may cause the company’s actual results to differ materially from those contained in the forward-looking statements include those found in the company’s reports filed with the Securities and Exchange Commission, including the information under the “Safe Harbor” and “Risk Factors” headings in its Annual Report on Form 10-K for the fiscal year ended December 29, 2012, which are incorporated herein by reference. Snap-on disclaims any responsibility to update any forward-looking statement provided in this news release, except as required by law.

For additional information, please visit www.snapon.com.

   
 
 
SNAP-ON INCORPORATED
Condensed Consolidated Statements of Earnings
(Amounts in millions, except per share data)
(unaudited)
 
Three Months Ended
March 30, March 31,
2013 2012
 
Net sales $ 741.7 $ 735.2
Cost of goods sold   (384.8 )   (387.5 )
Gross profit 356.9 347.7
Operating expenses   (249.1 )   (250.2 )
Operating earnings before financial services 107.8 97.5
 
Financial services revenue 44.0 38.0
Financial services expenses   (13.5 )   (14.1 )
Operating earnings from financial services   30.5     23.9  
 
Operating earnings 138.3 121.4
Interest expense (13.6 ) (13.9 )
Other income (expense) – net   (0.6 )   (0.4 )

Earnings before income taxes and equity earnings (loss)

124.1 107.1
Income tax expense   (38.8 )   (35.2 )
Earnings before equity earnings (loss) 85.3 71.9
Equity earnings (loss), net of tax   (0.2 )   1.1  
Net earnings 85.1 73.0
Net earnings attributable to noncontrolling interests   (2.3 )   (2.0 )
Net earnings attributable to Snap-on Inc. $ 82.8   $ 71.0  
 
 
Net earnings per share attributable to Snap-on Inc.:
Basic $ 1.42 $ 1.22
Diluted 1.40 1.21
 
Weighted-average shares outstanding:
Basic 58.3 58.2
Effect of dilutive options   0.9     0.6  
Diluted   59.2     58.8  
 
 
 

SNAP-ON INCORPORATED
Supplemental Segment Information
(Amounts in millions)
(unaudited)
   
Three Months Ended
March 30, March 31,
2013 2012
 
Net sales:
Commercial & Industrial Group $ 266.4 $ 286.5
Snap-on Tools Group 327.3 316.6
Repair Systems & Information Group   246.1     226.1  
Segment net sales 839.8

 

829.2
Intersegment eliminations   (98.1 )   (94.0 )
Total net sales $ 741.7 $ 735.2
Financial Services revenue   44.0     38.0  
Total revenues $ 785.7   $ 773.2  
 
Operating earnings:
Commercial & Industrial Group $ 30.6 $ 29.2
Snap-on Tools Group 47.2 46.1
Repair Systems & Information Group 56.5 48.6
Financial Services   30.5     23.9  
Segment operating earnings 164.8

 

147.8
Corporate   (26.5 )   (26.4 )
Operating earnings $ 138.3 $ 121.4
Interest expense (13.6 ) (13.9 )
Other income (expense) – net   (0.6 )   (0.4 )

Earnings before income taxes and equity earnings (loss)

$ 124.1   $ 107.1  
 
 
 

SNAP-ON INCORPORATED
Condensed Consolidated Balance Sheets
(Amounts in millions)
(unaudited)
   
March 30, December 29,
2013 2012
 
Assets
Cash and cash equivalents $ 213.6 $ 214.5
Trade and other accounts receivable – net 500.2 497.9
Finance receivables – net 329.3 323.1
Contract receivables – net 58.6 62.7
Inventories – net 401.3 404.2
Deferred income tax assets 73.1 81.8
Prepaid expenses and other assets   99.7     84.8  

Total current assets

1,675.8 1,669.0
 
Property and equipment – net 372.3 375.2
Deferred income tax assets 107.2 110.4
Long-term finance receivables – net 502.6 494.6
Long-term contract receivables – net 201.6 194.4
Goodwill 800.3 807.4
Other intangibles – net 185.5 187.2
Other assets   57.9     64.1  
Total assets $ 3,903.2   $ 3,902.3  
 
Liabilities and Equity
Notes payable and current maturities of long-term debt $ 111.4 $ 5.2
Accounts payable 148.7 142.5
Accrued benefits 50.7 50.6
Accrued compensation 62.2 88.3
Franchisee deposits 51.5 54.7
Other accrued liabilities   245.2     247.9  
Total current liabilities 669.7 589.2
 
Long-term debt 868.0 970.4
Deferred income tax liabilities 133.8 127.1
Retiree health care benefits 47.2 48.4
Pension liabilities 252.9 260.7
Other long-term liabilities   85.2     87.5  
Total liabilities   2,056.8     2,083.3  
 
Equity
Shareholders' equity attributable to Snap-on Inc.
Common stock 67.4 67.4
Additional paid-in capital 203.1 204.6
Retained earnings 2,127.3 2,067.0
Accumulated other comprehensive loss (146.5 ) (124.2 )
Treasury stock at cost   (421.8 )   (412.7 )
Total shareholders' equity attributable to Snap-on Inc. 1,829.5 1,802.1
Noncontrolling interests   16.9     16.9  
Total equity   1,846.4     1,819.0  
Total liabilities and equity $ 3,903.2   $ 3,902.3  
 
 
 

SNAP-ON INCORPORATED
Condensed Consolidated Statements of Cash Flow
(Amounts in millions)
(unaudited)
   
Three Months Ended
March 30, March 31,
2013 2012
 
Operating activities:
Net earnings $ 85.1 $ 73.0

Adjustments to reconcile net earnings to net cash provided (used) by operating activities:

Depreciation 12.5 12.6
Amortization of other intangibles 6.3 6.4
Provision for losses on finance receivables 3.9 3.9
Provision for losses on non-finance receivables 4.1 2.8
Stock-based compensation expense 9.5 8.7
Excess tax benefits from stock-based compensation (4.0 ) (2.0 )
Deferred income tax provision 14.4 13.4
Gain on sale of assets (0.1 ) (0.8 )
Changes in operating assets and liabilities:
(Increase) decrease in trade and other accounts receivable (12.3 ) 3.0
Increase in contract receivables (6.5 ) (4.2 )
Increase in inventories (3.1 ) (4.1 )
Increase in prepaid and other assets (9.3 ) (20.4 )
Increase in accounts payable 9.9 15.0
Decrease in accruals and other liabilities   (34.7 )   (42.3 )
Net cash provided by operating activities 75.7 65.0
 
Investing activities:
Additions to finance receivables (144.4 ) (135.5 )
Collections of finance receivables 122.5 106.1
Capital expenditures (14.7 ) (21.8 )
Disposal of property and equipment 0.3 1.9
Other   (10.2 )   -  
Net cash used by investing activities (46.5 ) (49.3 )
 
Financing activities:
Proceeds from short-term borrowings - 6.5
Repayments of short-term borrowings (0.5 ) (7.7 )
Net increase (decrease) in other short-term borrowings 6.6 (1.0 )
Cash dividends paid (22.1 ) (20.1 )
Purchase of treasury stock (21.7 ) (29.9 )
Proceeds from stock purchase and option plans 7.4 13.3
Excess tax benefits from stock-based compensation 4.0 2.0
Other   (3.0 )   (3.6 )
Net cash used by financing activities (29.3 ) (40.5 )
 
Effect of exchange rate changes on cash and cash equivalents   (0.8 )   0.8  
Decrease in cash and cash equivalents (0.9 ) (24.0 )
 
Cash and cash equivalents at beginning of year   214.5     185.6  
Cash and cash equivalents at end of period $ 213.6   $ 161.6  

 

 

Supplemental cash flow disclosures:
Cash paid for interest $ (25.9 ) $ (26.2 )
Net cash paid for income taxes (21.6 ) (6.9 )
 
 
 

SNAP-ON INCORPORATED
Supplemental Consolidating Data - Condensed Statements of Earnings
(Amounts in millions)
(unaudited)
       
Operations* Financial Services
Three Months Ended Three Months Ended
March 30, March 31, March 30, March 31,
2013 2012 2013 2012
 
Net sales $ 741.7 $ 735.2 $ - $ -
Cost of goods sold   (384.8 )   (387.5 )   -     -  
Gross profit 356.9 347.7 - -
Operating expenses   (249.1 )   (250.2 )   -     -  
Operating earnings before financial services 107.8 97.5 - -
 
Financial services revenue - - 44.0 38.0
Financial services expenses   -     -     (13.5 )   (14.1 )
Operating earnings from financial services   -     -     30.5     23.9  
 
Operating earnings 107.8 97.5 30.5 23.9
Interest expense (13.2 ) (13.6 ) (0.4 ) (0.3 )
Intersegment interest income (expense) – net 11.3 9.8 (11.3 ) (9.8 )
Other income (expense) – net   (0.7 )   (0.4 )   0.1     -  

Earnings before income taxes and equity earnings (loss)

105.2 93.3 18.9 13.8
Income tax expense   (31.9 )   (30.1 )   (6.9 )   (5.1 )
Earnings before equity earnings (loss) 73.3 63.2 12.0 8.7

Financial services – net earnings attributable to Snap-on Inc.

12.0 8.7 - -
Equity earnings (loss), net of tax   (0.2 )   1.1     -     -  
Net earnings 85.1 73.0 12.0 8.7
Net earnings attributable to noncontrolling interests   (2.3 )   (2.0 )   -     -  
Net earnings attributable to Snap-on Inc. $ 82.8   $ 71.0   $ 12.0   $ 8.7  
 
* Snap-on Inc. with Financial Services on the equity method.
Transactions between Operations and Financial Services were eliminated to arrive at the consolidated financial statements.
 
 
 

SNAP-ON INCORPORATED
Supplemental Consolidating Data - Condensed Balance Sheets
(Amounts in millions)
(unaudited)
       
Operations* Financial Services
March 30, December 29, March 30, December 29,
2013 2012 2013 2012
 
Assets
Cash and cash equivalents $ 209.3 $ 211.2 $ 4.3 $ 3.3
Intersegment receivables 12.7 14.1 - -
Trade and other accounts receivable – net 499.8 497.5 0.4 0.4
Finance receivables – net - - 329.3 323.1
Contract receivables – net 7.5 7.4 51.1 55.3
Inventories – net 401.3 404.2 - -
Deferred income tax assets 61.1 68.8 12.0 13.0
Prepaid expenses and other assets   103.2   88.3   1.1   1.0
Total current assets 1,294.9 1,291.5 398.2 396.1
 
Property and equipment – net 370.4 373.2 1.9 2.0
Investment in Financial Services 172.3 165.3 - -
Deferred income tax assets 107.0 110.2 0.2 0.2
Long-term finance receivables – net - - 502.6 494.6
Long-term contract receivables – net 12.1 12.1 189.5 182.3
Goodwill 800.3 807.4 - -
Other intangibles – net 185.5 187.2 - -
Other assets   59.2   65.3   1.0   1.1
Total assets $ 3,001.7 $ 3,012.2 $ 1,093.4 $ 1,076.3
 
Liabilities and Equity
Notes payable and current maturities of long-term debt $ 13.2 $ 5.2 $ 98.2 $ -
Accounts payable 148.2 142.1 0.5 0.4
Intersegment payables - - 12.7 14.1
Accrued benefits 50.6 50.6 0.1 -
Accrued compensation 60.9 84.9 1.3 3.4
Franchisee deposits 51.5 54.7 - -
Other accrued liabilities   224.9   207.8   27.2   46.9
Total current liabilities 549.3 545.3 140.0 64.8
 
Long-term debt and intersegment long-term debt 105.0 143.2 763.0 827.2
Deferred income tax liabilities 132.8 125.7 1.0 1.4
Retiree health care benefits 47.2 48.4 - -
Pension liabilities 252.9 260.7 - -
Other long-term liabilities   68.1   69.9   17.1   17.6
Total liabilities   1,155.3   1,193.2   921.1   911.0
 
Total shareholders' equity attributable to Snap-on Inc. 1,829.5 1,802.1 172.3 165.3
Noncontrolling interests   16.9   16.9   -   -
Total equity   1,846.4   1,819.0   172.3   165.3
Total liabilities and equity $ 3,001.7 $ 3,012.2 $ 1,093.4 $ 1,076.3
 
* Snap-on Inc. with Financial Services on the equity method.
Transactions between Operations and Financial Services were eliminated to arrive at the consolidated financial statements.

More Stories By Business Wire

Copyright © 2009 Business Wire. All rights reserved. Republication or redistribution of Business Wire content is expressly prohibited without the prior written consent of Business Wire. Business Wire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
IBM helps FinTechs and financial services companies build and monetize cognitive-enabled financial services apps quickly and at scale. Hosted on IBM Bluemix, IBM’s platform builds in customer insights, regulatory compliance analytics and security to help reduce development time and testing. In his session at 20th Cloud Expo, Tom Eck, Industry Platforms CTO at IBM Cloud, will discuss how these tools simplify the time-consuming tasks of selection, mapping and data integration, allowing developers ...
In order to meet the rapidly changing demands of today’s customers, companies are continually forced to redefine their business strategies in order to meet these needs, stay relevant and continue to see profitable growth. IoT deployment and development is integral in this transformation, and today businesses are increasingly seeing the value of investing their resources into IoT deployments. These technologies are able increase ROI through projects such as connecting supply chains or enabling sm...
SYS-CON Events announced today that Progress, a global leader in application development, has been named “Bronze Sponsor” of SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Enterprises today are rapidly adopting the cloud, while continuing to retain business-critical/sensitive data inside the firewall. This is creating two separate data silos – one inside the firewall and the other outside the firewall. Cloud ISVs ofte...
DevOps is often described as a combination of technology and culture. Without both, DevOps isn't complete. However, applying the culture to outdated technology is a recipe for disaster; as response times grow and connections between teams are delayed by technology, the culture will die. A Nutanix Enterprise Cloud has many benefits that provide the needed base for a true DevOps paradigm.
SYS-CON Events announced today that DivvyCloud will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. DivvyCloud software enables organizations to achieve their cloud computing goals by simplifying and automating security, compliance and cost optimization of public and private cloud infrastructure. Using DivvyCloud, customers can leverage programmatic Bots to identify and remediate common cloud problems in rea...
Interested in leveling up on your Cloud Foundry skills? Join IBM for Cloud Foundry Days on June 7 at Cloud Expo New York at the Javits Center in New York City. Cloud Foundry Days is a free half day educational conference and networking event. Come find out why Cloud Foundry is the industry's fastest-growing and most adopted cloud application platform.
For financial firms, the cloud is going to increasingly become a crucial part of dealing with customers over the next five years and beyond, particularly with the growing use and acceptance of virtual currencies. There are new data storage paradigms on the horizon that will deliver secure solutions for storing and moving sensitive financial data around the world without touching terrestrial networks. In his session at 20th Cloud Expo, Cliff Beek, President of Cloud Constellation Corporation, w...
While some vendors scramble to create and sell you a fancy solution for monitoring your spanking new Amazon Lambdas, hear how you can do it on the cheap using just built-in Java APIs yourself. By exploiting a little-known fact that Lambdas aren’t exactly single threaded, you can effectively identify hot spots in your serverless code. In his session at 20th Cloud Expo, David Martin, Principal Product Owner at CA Technologies, will give a live demonstration and code walkthrough, showing how to ov...
You know you need the cloud, but you’re hesitant to simply dump everything at Amazon since you know that not all workloads are suitable for cloud. You know that you want the kind of ease of use and scalability that you get with public cloud, but your applications are architected in a way that makes the public cloud a non-starter. You’re looking at private cloud solutions based on hyperconverged infrastructure, but you’re concerned with the limits inherent in those technologies.
SYS-CON Events announced today that Outscale, a global pure play Infrastructure as a Service provider and strategic partner of Dassault Systèmes, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Founded in 2010, Outscale simplifies infrastructure complexities and boosts the business agility of its customers. Outscale delivers a secure, reliable and industrial strength solution for its customers, which in...
New competitors, disruptive technologies, and growing expectations are pushing every business to both adopt and deliver new digital services. This ‘Digital Transformation’ demands rapid delivery and continuous iteration of new competitive services via multiple channels, which in turn demands new service delivery techniques – including DevOps. In this power panel at @DevOpsSummit 20th Cloud Expo, moderated by DevOps Conference Co-Chair Andi Mann, panelists will examine how DevOps helps to meet th...
As DevOps methodologies expand their reach across the enterprise, organizations face the daunting challenge of adapting related cloud strategies to ensure optimal alignment, from managing complexity to ensuring proper governance. How can culture, automation, legacy apps and even budget be reexamined to enable this ongoing shift within the modern software factory?
SYS-CON Events announced today that Cloudistics, an on-premises cloud computing company, has been named “Bronze Sponsor” of SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Cloudistics delivers a complete public cloud experience with composable on-premises infrastructures to medium and large enterprises. Its software-defined technology natively converges network, storage, compute, virtualization, and management into a ...
SYS-CON Events announced today that A&I Solutions has been named “Bronze Sponsor” of SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Founded in 1999, A&I Solutions is a leading information technology (IT) software and services provider focusing on best-in-class enterprise solutions. By partnering with industry leaders in technology, A&I assures customers high performance levels across all IT environments including: mai...
Every successful software product evolves from an idea to an enterprise system. Notably, the same way is passed by the product owner's company. In his session at 20th Cloud Expo, Oleg Lola, CEO of MobiDev, will provide a generalized overview of the evolution of a software product, the product owner, the needs that arise at various stages of this process, and the value brought by a software development partner to the product owner as a response to these needs.