Organic sales up 9.9%;
Operating earnings before financial services of 16.7% of sales improves 120 basis points;
Diluted EPS of $1.87 increases 15.4%
KENOSHA, Wis. - (BUSINESS WIRE) - April 23, 2015 - 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 first quarter of 2015.
“We’re pleased to begin 2015 with encouraging first quarter results that included broad-based organic sales growth of 9.9% and a 15.4% increase in diluted earnings per share,” said Nick Pinchuk, Snap-on chairman and chief executive officer. “We believe these results confirm Snap-on’s unique capabilities in providing valued productivity solutions to a growing range of professional customers performing critical tasks in workplaces of consequence. Additionally, we achieved a 120 basis point improvement in operating margin before financial services, further demonstrating our ability to realize ongoing benefits from our Snap-on Value Creation Processes. Finally, this continued progress along our defined runways for both 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 effort.”
Commercial & Industrial Group segment sales of $297.5 million in the quarter increased $6.9 million, or 2.4%, from 2014 levels. Excluding $19.6 million of unfavorable foreign currency translation, organic sales increased $26.5 million, or 9.8%, primarily due to higher volumes with customers in critical industries and increased sales in the segment’s European-based hand tools business.
Operating earnings of $44.0 million in the period, including $1.3 million of unfavorable foreign currency effects, increased $4.9 million from 2014 levels, and the operating margin (operating earnings as a percentage of segment sales) of 14.8% improved 130 basis points from 13.5% a year ago.
Snap-on Tools Group segment sales of $378.2 million in the quarter rose $34.6 million, or 10.1%, from 2014 levels, reflecting sales increases in both the company’s U.S. and international franchise operations. Excluding $8.7 million of unfavorable foreign currency translation, organic sales for the Group increased 12.9%.
Operating earnings of $59.8 million in the period, including $3.0 million of unfavorable foreign currency effects, increased $10.6 million from 2014 levels, and the operating margin of 15.8% improved 150 basis points from 14.3% a year ago.
Repair Systems & Information Group segment sales of $272.3 million in the quarter increased $9.6 million, or 3.7%, from 2014 levels. Excluding $11.2 million of unfavorable foreign currency translation and $4.9 million of acquisition-related sales, organic sales increased $15.9 million, or 6.3%, primarily due to higher sales of undercar equipment, increased sales to OEM dealerships, and higher sales of diagnostic and repair information products to independent repair shop owners and managers.
Operating earnings of $63.9 million in the period, including $2.1 million of unfavorable foreign currency effects, increased $5.8 million from 2014 levels, and the operating margin of 23.5% improved 140 basis points from 22.1% a year ago.
Financial Services operating earnings of $40.3 million on revenue of $57.4 million in the quarter, compared to operating earnings of $34.4 million on revenue of $50.2 million a year ago.
Corporate expenses of $29.8 million in the quarter increased $5.1 million from $24.7 million last year, primarily reflecting increased performance-based and stock-based compensation expenses, as well as planned higher pension expense.
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 continues to expect that capital expenditures in 2015 will be in a range of $80 million to $90 million. Snap-on also continues to expect that its full year 2015 effective income tax rate will be at or below its 2014 full year rate.
Conference Call and Webcast on April 23, 2015, at 9:00 a.m. Central Time
A discussion of this release will be webcast on Thursday, April 23, 2015, 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, visit http://www.snapon.com/sna and click on the link to the webcast. The slide presentation accompanying the call can be accessed under the Downloads tab in the webcast viewer, as well as on the Snap-on website under the tabs Investor Information / Investor Events / Company Presentations.
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 $3.3 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 January 3, 2015, 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.