KENOSHA, Wis. - (BUSINESS WIRE) - February 2, 2017 - 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 2016 operating results for the fourth quarter and full year.
“Our fourth quarter was an encouraging finish to 2016 as we achieved an 11.3% increase in diluted earnings per share, 3.6% organic sales growth, and a 19.8% operating margin before financial services representing a gain of 70 basis points year over year,” said Nick Pinchuk, Snap-on chairman and chief executive officer. “We also concluded two coherent acquisitions in the quarter, Car-O-Liner and Sturtevant Richmont, both of which further enhance and expand Snap-on’s capabilities in serving serious professionals performing critical tasks in workplaces of consequence around the world. In 2017, we expect to make continued progress through our Snap-on Value Creation Processes and, at the same time, advance further along each of our strategic runways for growth: enhance the franchise network, expand with repair shop owners and managers, extend in critical industries and build in emerging markets. As always, I thank our franchisees and associates for their significant contributions to our team. Without their dedication, capability and commitment, the encouraging results of the fourth quarter and the continuing positive trends of the year would not have been possible.”
Commercial & Industrial Group segment sales of $286.3 million in the quarter increased $4.5 million, or 1.6%, from 2015 levels, reflecting a $6.5 million, or 2.4%, organic sales gain, $4.2 million of acquisition-related sales and $6.2 million of unfavorable foreign currency translation. The organic sales increase primarily includes gains in the segment’s European-based hand tools business and higher sales to customers in critical industries, largely due to increased sales to the military.
Operating earnings of $43.9 million in the period, including $1.8 million of favorable foreign currency effects, increased $2.0 million from 2015 levels, and the operating margin (operating earnings as a percentage of segment sales) of 15.3% improved 40 basis points from 14.9% a year ago.
Snap-on Tools Group segment sales of $417.5 million in the quarter rose $6.3 million, or 1.5%, from 2015 levels, reflecting a $12.2 million, or 3.0%, organic sales gain in the company’s U.S. and international franchise operations, and $5.9 million of unfavorable foreign currency translation.
Operating earnings of $73.5 million in the period, including $3.8 million of unfavorable foreign currency effects, increased $1.6 million from 2015 levels, and the operating margin of 17.6% improved 10 basis points from 17.5% a year ago.
Repair Systems & Information Group segment sales of $319.8 million in the quarter increased $39.2 million, or 14.0%, from 2015 levels, reflecting a $24.6 million, or 8.9%, organic sales gain, $19.1 million of acquisition-related sales and $4.5 million of unfavorable foreign currency translation. The organic sales increase includes higher sales of diagnostics 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 $82.5 million in the period, including $1.7 million of unfavorable foreign currency effects, increased $10.4 million from 2015 levels, and the operating margin of 25.8% improved 10 basis points from 25.7% a year ago.
Financial Services operating earnings of $51.6 million on revenue of $74.2 million in the quarter compared to operating earnings of $45.0 million on revenue of $63.1 million a year ago.
Corporate expenses of $23.8 million in the quarter compared to expenses of $23.6 million last year.
Snap-on expects to make continued progress in 2017 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 in adjacent markets, additional geographies and other areas, including extending in critical industries, where the cost and penalties for failure can be high. In pursuit of these initiatives, Snap-on expects that capital expenditures in 2017 will be in a range of $80 million to $90 million. Snap-on also anticipates that its full year 2017 effective income tax rate will be comparable to its 2016 full year rate.
A discussion of this release will be webcast on Thursday, February 2, 2017, 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.
References in this document to “organic sales” refer to sales from continuing operations calculated in accordance with generally accepted accounting principles in the United States (“GAAP”), excluding acquisition-related sales and the impact of foreign currency translation. Management evaluates the company’s sales performance based on organic sales growth, which primarily reflects growth from the company’s existing businesses as a result of increased output, customer base and geographic expansion, new product development and/or pricing, and excludes sales contributions from acquired operations the company did not own as of the comparable prior-year reporting period. The company’s organic sales disclosures also exclude the effects of foreign currency translation as foreign currency translation is subject to volatility that can obscure underlying business trends. Management believes that the non-GAAP financial measure of organic sales is meaningful to investors as it provides them with useful information to aid in identifying underlying growth trends in our businesses and facilitating comparisons of our sales performance with prior periods.
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 and support its franchise business. 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 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.