Diluted EPS of $1.60 for the quarter;
Operating earnings before financial services improves to 15.5% of sales in the quarter;
Fourth quarter sales up 5.9%
KENOSHA, Wis. - (BUSINESS WIRE) - Feb. 6, 2014 - 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 2013 operating results for the fourth quarter and full year.
"Our fourth quarter results, including a 5.9% sales increase and a 15.5% operating margin before financial services, demonstrate continued and balanced progress down our runways for both improvement and growth," said Nick Pinchuk, Snap-on chairman and chief executive officer. "Despite some meaningful external headwinds throughout 2013, our full year sales reached a new milestone, surpassing $3 billion, and our full year operating margin before financial services of 15.1% reflects a 120 basis point year-over-year improvement. In 2014, we believe we’ll make further advances through Snap-on Value Creation, our suite of principles and processes we employ every day around safety, quality, customer connection, innovation and rapid continuous improvement. At the same time, to reach more and more professionals performing critical tasks wherever and whenever the costs and penalties for failure can be high, we’re continuing to drive forward along our runways for coherent growth: enhancing the franchise network, expanding in the vehicle repair garage, extending to critical industries and building in emerging markets. Finally, our progress in 2013 would not have been possible without the tremendous contributions and efforts of our franchisees and associates worldwide; I thank them all for their significant commitment and extraordinary dedication."
Commercial & Industrial Group segment sales of $283.2 million in the quarter increased $7.6 million, or 2.8%, from 2012 levels. Excluding $2.8 million of unfavorable foreign currency translation, organic sales in the quarter increased $10.4 million, or 3.8%, primarily due to higher sales in the segment’s European-based hand tools business along with increased sales of power tools, partially offset by continued lower sales to the military.
Operating earnings of $37.1 million in the period increased $5.2 million from 2012 levels, and the operating margin (operating earnings as a percentage of segment sales) of 13.1% improved from 11.6% a year ago.
Snap-on Tools Group segment sales of $351.1 million in the quarter rose $29.5 million, or 9.2%, from 2012 levels, reflecting sales gains across both the company’s U.S. and international franchise operations. Excluding $2.9 million of unfavorable foreign currency translation, organic sales increased 10.2%.
Operating earnings of $51.0 million in the period increased $5.4 million from 2012 levels and the operating margin of 14.5% improved from 14.2% a year ago.
Repair Systems & Information Group segment sales of $264.6 million in the quarter increased $23.0 million, or 9.5%, from 2012 levels. Excluding $15.2 million of sales from the Challenger acquisition and $0.7 million of favorable foreign currency translation, organic sales in the quarter rose $7.1 million, or 2.9%. The year-over-year organic sales increase primarily reflects higher sales of diagnostic and repair information products to independent repair shop owners and managers, as well as gains in sales of undercar equipment, partially offset by lower sales to OEM dealerships.
Operating earnings of $60.8 million in the period increased $5.4 million from 2012 levels and the operating margin of 23.0% compared with 22.9% a year ago.
Financial Services operating earnings of $33.0 million on revenue of $47.4 million in the quarter compared with operating earnings of $29.3 million on revenue of $42.9 million a year ago.
Corporate expenses of $25.3 million in the quarter reflect higher performance-based compensation and other expenses, as compared with corporate expenses of $21.5 million last year.
In 2014, 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 2014 will be in a range of $70 million to $80 million. Snap-on expects that its full year 2014 effective income tax rate will be comparable to its 2013 rate.
A discussion of this release will be webcast on Thursday, February 6, 2014, 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 website.
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 $3.1 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
Investors
Leslie Kratcoski
262/656-6121
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Richard Secor
262/656-5561
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.