Diluted EPS of $2.16 increases 15.5%;
Operating earnings before financial services of 18.6% of sales up 190 basis points;
Organic sales increase 2.5%
KENOSHA, Wis. - April 21, 2016 - (BUSINESS WIRE) - 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 2016.
“Our first quarter results, including a 15.5% increase in diluted earnings per share, represent an encouraging start to 2016,” said Nick Pinchuk, Snap-on chairman and chief executive officer. “We believe these results demonstrate not only the fundamental strength of Snap-on’s value proposition of making work easier for serious professionals, but also the continued progress along our defined runways for coherent growth while overcoming the headwinds of the current environment. At the same time, our operating margin improvement further confirms the ongoing potential of our Snap-on Value Creation Processes, which we employ every day around safety, quality, customer connection, innovation and rapid continuous improvement. Finally, these results would not have been possible without the dedication and capability of our franchisees and associates worldwide; I thank them for their continuing commitment and extraordinary contributions.”
Commercial & Industrial Group segment sales of $287.0 million in the quarter decreased $10.5 million, or 3.5%, from 2015 levels. Excluding $6.7 million of unfavorable foreign currency translation, organic sales declined $3.8 million, or 1.3%, as lower sales to customers in critical industries were partially offset by gains in the segment’s Asia/Pacific and power tools operations, and higher sales from the segment’s European-based hand tools business.
Operating earnings of $41.1 million in the period, including $2.2 million of unfavorable foreign currency effects, decreased $2.9 million from 2015 levels, and the operating margin (operating earnings as a percentage of segment sales) of 14.3% declined 50 basis points from 14.8% a year ago.
Snap-on Tools Group segment sales of $402.5 million in the quarter rose $24.3 million, or 6.4%, from 2015 levels, reflecting sales increases in both the company’s U.S. and international franchise operations. Excluding $6.0 million of unfavorable foreign currency translation, organic sales were up 8.1%.
Operating earnings of $66.7 million in the period, including $4.2 million of unfavorable foreign currency effects, increased $6.9 million from 2015 levels, and the operating margin of 16.6% improved 80 basis points from 15.8% a year ago.
Repair Systems & Information Group segment sales of $278.8 million in the quarter rose $6.5 million, or 2.4%, from 2015 levels. Excluding $4.5 million of unfavorable foreign currency translation and $2.6 million of acquisition-related sales, organic sales increased $8.4 million, or 3.1%, primarily due to higher sales of diagnostic and repair information products to independent repair shop owners and managers, increased sales of undercar equipment and higher sales to OEM dealerships.
Operating earnings of $69.0 million in the period, including $1.3 million of unfavorable foreign currency effects, increased $5.1 million from 2015 levels, and the operating margin of 24.7% improved 120 basis points from 23.5% a year ago.
Financial Services operating earnings of $47.0 million on revenue of $66.3 million in the quarter compared to operating earnings of $40.3 million on revenue of $57.4 million a year ago.
Corporate expenses of $21.4 million in the quarter compared to $29.8 million last year. The year-over-year decrease in corporate expenses primarily reflects lower stock-based (mark-to-market) compensation and pension expense.
Snap-on expects to make continued progress in 2016 along its defined runways for coherent growth, leveraging capabilities already demonstrated in the automotive repair arena and developing and expanding its professional customer base, not only in automotive repair, but also in adjacent markets, additional geographies and other areas, including in critical industries, where the cost and penalties for failure can be high. In pursuit of these initiatives, Snap-on continues to expect that capital expenditures in 2016 will be in a range of $80 million to $90 million. Snap-on also continues to anticipate that its full year 2016 effective income tax rate will be comparable to its 2015 full year rate.
A discussion of this release will be webcast on Thursday, April 21, 2016, 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 $3.4 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 2, 2016, 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
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.