Snap-on Announces First Quarter 2013 Results

Before you go, we thought you'd like these...
Before you go close icon

Snap-on Announces First Quarter 2013 Results

Diluted EPS of $1.40 increases 15.7%;
Operating earnings before financial services of 14.5% of sales improves 120 basis points


KENOSHA, Wis.--(BUSINESS WIRE)-- Snap-on Incorporated (NYS: 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 visitwww.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,
20132012
 
Net sales$741.7$735.2
Cost of goods sold (384.8) (387.5)
Gross profit356.9347.7
Operating expenses (249.1) (250.2)
Operating earnings before financial services107.897.5
 
Financial services revenue44.038.0
Financial services expenses (13.5) (14.1)
Operating earnings from financial services 30.5  23.9 
 
Operating earnings138.3121.4
Interest expense(13.6)(13.9)
Other income (expense) - net (0.6) (0.4)

Earnings before income taxes and equity earnings (loss)

124.1107.1
Income tax expense (38.8) (35.2)
Earnings before equity earnings (loss)85.371.9
Equity earnings (loss), net of tax (0.2) 1.1 
Net earnings85.173.0
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
Diluted1.401.21
 
Weighted-average shares outstanding:
Basic58.358.2
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,
20132012
 
Net sales:
Commercial & Industrial Group$266.4$286.5
Snap-on Tools Group327.3316.6
Repair Systems & Information Group 246.1  226.1 
Segment net sales839.8

 

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 Group47.246.1
Repair Systems & Information Group56.548.6
Financial Services 30.5  23.9 
Segment operating earnings164.8

 

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,
20132012
 
Assets
Cash and cash equivalents$213.6$214.5
Trade and other accounts receivable - net500.2497.9
Finance receivables - net329.3323.1
Contract receivables - net58.662.7
Inventories - net401.3404.2
Deferred income tax assets73.181.8
Prepaid expenses and other assets 99.7  84.8 

Total current assets

1,675.81,669.0
 
Property and equipment - net372.3375.2
Deferred income tax assets107.2110.4
Long-term finance receivables - net502.6494.6
Long-term contract receivables - net201.6194.4
Goodwill800.3807.4
Other intangibles - net185.5187.2
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 payable148.7142.5
Accrued benefits50.750.6
Accrued compensation62.288.3
Franchisee deposits51.554.7
Other accrued liabilities 245.2  247.9 
Total current liabilities669.7589.2
 
Long-term debt868.0970.4
Deferred income tax liabilities133.8127.1
Retiree health care benefits47.248.4
Pension liabilities252.9260.7
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 stock67.467.4
Additional paid-in capital203.1204.6
Retained earnings2,127.32,067.0
Accumulated other comprehensive loss(146.5)(124.2)
Treasury stock at cost (421.8) (412.7)
Total shareholders' equity attributable to Snap-on Inc.1,829.51,802.1
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,
20132012
 
Operating activities:
Net earnings$85.1$73.0

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

Depreciation12.512.6
Amortization of other intangibles6.36.4
Provision for losses on finance receivables3.93.9
Provision for losses on non-finance receivables Read Full Story

Want more news like this?

Sign up for Finance Report by AOL and get everything from business news to personal finance tips delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

From Our Partners

Gift Finder Promo
More to Explore
Thu, Dec 08
Set Your Location
City, State, or Zip