KENOSHA, Wis. - (BUSINESS WIRE) - Jul. 18, 2013 - 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 second quarter of 2013.
“We believe our performance in the second quarter reaffirms Snap-on’s strengths in serving serious professionals performing critical repairs around the world every day,” said Nick Pinchuk, Snap-on chairman and chief executive officer. “Again this quarter, we achieved higher year-over-year sales and increased operating income in spite of ongoing headwinds in specific parts of our business, and we continued to progress in those strategic areas of importance that we’ve identified as being decisive to our future. For example, our recent acquisition of Challenger Lifts in the second quarter broadens our established capabilities and furthers our advancement along the growth runway of expanding with repair shop owners and managers. Finally, I thank our franchisees and associates worldwide for their significant dedication and contributions, without which these results would not have been possible.”
Commercial & Industrial Group segment sales of $266.2 million in the quarter decreased $17.2 million, or 6.1%, from 2012 levels primarily due to lower sales to the military and in the segment’s European-based hand tools business. Excluding $2.1 million of unfavorable foreign currency translation, organic sales in the quarter decreased 5.4%.
Operating earnings of $33.6 million in the period increased $0.8 million from 2012 levels, and the operating margin (operating earnings as a percentage of segment sales) of 12.6% improved from 11.6% a year ago.
Snap-on Tools Group segment sales of $346.2 million in the quarter rose $21.2 million, or 6.5%, from 2012 levels, reflecting sales gains across both the company’s U.S. and international franchise operations. Excluding $1.5 million of unfavorable foreign currency translation, organic sales increased 7.0%.
Operating earnings of $54.5 million in the period increased $10.0 million from 2012 levels and the operating margin of 15.7% compared with 13.7% a year ago. Operating earnings in 2013 includes $0.2 million of restructuring costs; operating earnings in the second quarter of 2012 included $6.9 million of restructuring costs largely for a pension plan settlement. Operating earnings in 2013 also includes $1.8 million of higher stock-based and mark-to-market expenses associated with the company’s franchisee stock purchase plan.
Repair Systems & Information Group segment sales of $246.2 million in the quarter increased $18.8 million, or 8.3%, from 2012 levels. Excluding $8.5 million of sales from the Challenger acquisition and $0.8 million of unfavorable foreign currency translation, organic sales in the quarter rose 4.9%, primarily due to higher sales to Original Equipment Manufacturer (OEM) dealerships and gains in sales of diagnostics and repair information products to independent repair shop owners and managers.
Operating earnings of $56.7 million in the period increased $4.5 million from 2012 levels; the operating margin was 23.0% in both the second quarters of 2013 and 2012.
Financial Services operating earnings of $30.6 million on revenue of $44.5 million in the quarter compared with operating earnings of $25.6 million on revenue of $39.9 million a year ago.
Corporate expenses of $27.0 million in the quarter increased from $24.9 million last year, primarily due to $2.6 million of higher stock-based and mark-to-market expenses.
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.
A discussion of this release will be webcast on Thursday, July 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.
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.
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 may contain 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.
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Source: Snap-on Incorporated
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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.