KENOSHA, Wis. - (BUSINESS WIRE) - July 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 second quarter of 2015.
“We’re encouraged by the ongoing progress reflected in our second quarter results, including 8.4% organic sales growth, a 17.7% operating margin before financial services, representing a 100 basis point improvement, and a 12.8% increase in diluted earnings per share,” said Nick Pinchuk, Snap-on chairman and chief executive officer. “We believe these results once again validate Snap-on’s ability to build upon our unique combination of capabilities in serving serious professionals and to successfully navigate our runways for coherent growth and operating improvement in multiple industries across varied geographies. Finally, this continued progress is only possible as a result of the tremendous dedication, effort and skill across the Snap-on team. In that regard, I thank our franchisees and associates worldwide for their contributions, commitment and support.”
Commercial & Industrial Group segment sales of $295.8 million in the quarter increased $8.6 million, or 3.0%, from 2014 levels. Excluding $21.2 million of unfavorable foreign currency translation, organic sales increased $29.8 million, or 11.2%, reflecting sales gains across all of the segment’s businesses.
Operating earnings of $42.2 million in the period, including $2.0 million of unfavorable foreign currency effects, increased $4.0 million from 2014 levels, and the operating margin (operating earnings as a percentage of segment sales) of 14.3% improved 100 basis points from 13.3% a year ago.
Snap-on Tools Group segment sales of $398.7 million in the quarter rose $29.6 million, or 8.0%, from 2014 levels. Excluding $10.6 million of unfavorable foreign currency translation, organic sales increased $40.2 million, or 11.2%, reflecting similar sales increases in both the company’s U.S. and international franchise operations.
Operating earnings of $68.0 million in the period, including $6.7 million of unfavorable foreign currency effects, increased $7.5 million from 2014 levels, and the operating margin of 17.1% improved 70 basis points from 16.4% a year ago.
Repair Systems & Information Group segment sales of $277.4 million in the quarter decreased $1.1 million, or 0.4%, from 2014 levels. Excluding $12.6 million of unfavorable foreign currency translation and $2.8 million of acquisition-related sales, organic sales increased $8.7 million, or 3.3%, reflecting higher sales of diagnostic and repair information products to independent repair shop owners and managers, increased sales to OEM dealerships, and higher sales of undercar equipment.
Operating earnings of $67.7 million in the period, including $3.3 million of unfavorable foreign currency effects, increased $3.1 million from 2014 levels, and the operating margin of 24.4% improved 120 basis points from 23.2% a year ago.
Financial Services operating earnings of $41.4 million on revenue of $58.7 million in the quarter, compared to operating earnings of $34.8 million on revenue of $51.7 million a year ago.
Corporate expenses of $27.1 million in the quarter increased $1.9 million from $25.2 million last year, primarily reflecting 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.
A discussion of this release will be webcast on Thursday, July 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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SOURCE Snap-on Incorporated
Leslie Kratcoski
Snap-on Incorporated
Investors 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.