Diluted EPS of $1.80 increases 20%;
Operating earnings before financial services of 16.7% of sales improves 130 basis points;
Second quarter sales up 8.2%
KENOSHA, Wis. - (BUSINESS WIRE) - July 17, 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, announced operating results for the second quarter of 2014.
"Our second quarter results include broad-based organic sales growth, which we believe affirms Snap-on’s unique capabilities in providing repeatability and reliability to a wide range of professional customers performing critical tasks in workplaces of consequence," said Nick Pinchuk, Snap-on chairman and chief executive officer. "At the same time, we remain committed to realizing ongoing benefits from our Snap-on Value Creation processes, as evidenced by this quarter’s 130 basis point improvement in operating margin before financial services and 20% growth in earnings per share. Finally, this continued progress along our defined runways for coherent growth and operating improvement would not be possible without the capability and commitment so evident across Snap-on, and I thank our franchisees and associates worldwide for their significant contributions and extraordinary efforts."
Commercial & Industrial Group segment sales of $287.2 million in the quarter increased $21.0 million, or 7.9%, from 2013 levels. Excluding $1.2 million of unfavorable foreign currency translation, organic sales increased $22.2 million, or 8.4%, primarily due to higher volume with customers in critical industries and in the segment’s European-based hand tools business.
Operating earnings of $38.2 million in the period increased $4.6 million from 2013 levels, and the operating margin (operating earnings as a percentage of segment sales) of 13.3% improved 70 basis points from 12.6% a year ago.
Snap-on Tools Group segment sales of $369.1 million in the quarter rose $22.9 million, or 6.6%, from 2013 levels, reflecting sales increases in both the company’s U.S. and international franchise operations. Excluding $0.1 million of favorable foreign currency translation, organic sales also increased 6.6%.
Operating earnings of $60.5 million in the period increased $6.0 million from 2013 levels, and the operating margin of 16.4% improved 70 basis points from 15.7% a year ago.
Repair Systems & Information Group segment sales of $278.5 million in the quarter increased $32.3 million, or 13.1%, from 2013 levels. Excluding $10.5 million of acquisition-related sales and $2.7 million of favorable foreign currency translation, organic sales increased $19.1 million, or 7.7%, primarily due to higher sales to OEM dealership service and repair shops, and increased sales of diagnostic and repair information products to independent repair shop owners and managers.
Operating earnings of $64.6 million in the period increased $7.9 million from 2013 levels, and the operating margin of 23.2% improved 20 basis points from 23.0% a year ago.
Financial Services operating earnings of $34.8 million on revenue of $51.7 million in the quarter compares with operating earnings of $30.6 million on revenue of $44.5 million a year ago.
Corporate expenses of $25.2 million in the quarter compares with $27.0 million last year.
In 2014, Snap-on expects to make continued progress along its defined runways for coherent growth, including enhancing the franchise network, expanding in the vehicle repair garage, extending to critical industries and building in emerging markets. In pursuit of these initiatives, Snap-on anticipates that capital expenditures in 2014 will be in a range of $75 million to $80 million. Snap-on continues to expect 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, July 17, 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 28, 2013, 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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* Snap-on Inc. with Financial Services on the equity method.
Transactions between the Operations and Financial Services businesses were eliminated to arrive at the consolidated financial statements.
SOURCE Snap-on Incorporated
Leslie Kratcoski
Snap-on Incorporated
Investor Relations
262-656-6121
Richard Secor
Snap-on Incorporated
Media Relations
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.