KENOSHA, Wis. - (BUSINESS WIRE) - Oct. 17, 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 third quarter of 2013.
"We’re encouraged by our third quarter results, which reflect a 5.8% increase in net sales and a 130 basis point improvement in operating margin before financial services. We believe these results demonstrate our continued progress along our defined runways for coherent growth and underscore the benefits of our Snap-on Value Creation processes of safety, quality, customer connection, innovation and rapid continuous improvement," said Nick Pinchuk, Snap-on chairman and chief executive officer. "In the third quarter, we were also the only company to receive three MOTOR Magazine Top 20 Tool Awards for 2013, continuing a multi-year streak recognizing our capabilities in connecting with our professional customers and in translating that insight into winning innovation. Finally, these results and achievements reflect extraordinary effort and dedication across the company and I thank our franchisees and associates worldwide for their significant contributions and commitment."
Commercial & Industrial Group segment sales of $275.2 million in the quarter decreased $5.2 million, or 1.9%, from 2012 levels. Excluding $2.7 million of unfavorable foreign currency translation, organic sales in the quarter decreased $2.5 million, or 0.9%, primarily due to continued lower sales to the military coupled with a slight sales decline in the segment’s European-based hand tools business.
Operating earnings of $36.0 million in the period increased $2.6 million from 2012 levels, and the operating margin (operating earnings as a percentage of segment sales) of 13.1% improved from 11.9% a year ago.
Snap-on Tools Group segment sales of $333.8 million in the quarter rose $25.0 million, or 8.1%, from 2012 levels, reflecting sales gains across both the company’s U.S. and international franchise operations. Excluding $4.0 million of unfavorable foreign currency translation, organic sales increased 9.5%.
Operating earnings of $41.9 million in the period increased $1.7 million from 2012 levels and the operating margin of 12.6% compared with 13.0% a year ago.
Repair Systems & Information Group segment sales of $252.7 million in the quarter increased $30.7 million, or 13.8%, from 2012 levels. Excluding $15.6 million of sales from the Challenger acquisition and $0.2 million of favorable foreign currency translation, organic sales in the quarter rose $14.9 million, or 6.7%, primarily due to gains in sales of diagnostics and repair information products to independent repair shop owners and managers and higher sales to Original Equipment Manufacturer (OEM) dealerships.
Operating earnings of $57.9 million in the period increased $8.4 million from 2012 levels and the operating margin of 22.9% improved from 22.3% a year ago.
Financial Services operating earnings of $31.6 million on revenue of $45.1 million in the quarter compared with operating earnings of $27.9 million on revenue of $40.5 million a year ago.
Corporate expenses of $24.5 million in the quarter decreased from $26.9 million last year, primarily due to lower stock-based and mark-to-market expenses.
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 anticipates that capital expenditures in 2013 will approximate $75 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 October 17, 2013, at 9:00 a.m. Central Time
A discussion of this release will be webcast on Thursday, October 17, 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.