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%
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.
- Sales of $827.8 million increased $40.3
million, or 5.1%, from 2014 levels; excluding $38.5 million of
unfavorable foreign currency translation and $4.9 million of
acquisition-related sales, organic sales increased 9.9%.
- Operating earnings before financial
services of $137.9 million improved 120 basis points to 16.7% of
sales as compared to $121.7 million, or 15.5% of sales, last
year.
- Financial services operating earnings
of $40.3 million increased $5.9 million, or 17.2%, from 2014
levels; financial services revenues of $57.4 million increased
14.3% from 2014 levels.
- Consolidated operating earnings of
$178.2 million improved to 20.1% of revenues (net sales plus
financial services revenue) as compared to $156.1 million, or 18.6%
of revenues, last year.
- The first quarter effective income tax
rate was 32.0% in 2015 and 31.6% in 2014.
- Net earnings of $110.5 million, or
$1.87 per diluted share, compared to net earnings of $95.9 million,
or $1.62 per diluted share, a year ago.
“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.”
Segment Results
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.
Outlook
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.
About Snap-on
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.
Forward-looking
Statements
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.
SNAP-ON INCORPORATED Condensed Consolidated
Statements of Earnings (Amounts in millions, except per
share data) (unaudited) Three Months
Ended April 4, March 29, 2015 2014
Net sales $ 827.8 $ 787.5 Cost of goods sold
(417.7 ) (408.8 )
Gross profit 410.1 378.7 Operating
expenses (272.2 ) (257.0 )
Operating earnings
before financial services 137.9 121.7
Financial
services revenue 57.4 50.2 Financial services expenses
(17.1 ) (15.8 )
Operating earnings from financial
services 40.3 34.4
Operating earnings 178.2 156.1 Interest expense (13.0 )
(13.7 ) Other income (expense) – net (0.7 ) (0.1 )
Earnings before income taxes and equity earnings
164.5 142.3 Income tax expense (51.8 ) (44.3 )
Earnings before equity earnings 112.7 98.0 Equity earnings,
net of tax 0.5 0.2
Net earnings
113.2 98.2 Net earnings attributable to noncontrolling interests
(2.7 ) (2.3 )
Net earnings attributable to Snap-on
Inc. $ 110.5 $ 95.9
Net earnings
per share attributable to Snap-on Inc.: Basic $ 1.90 $ 1.65
Diluted 1.87 1.62
Weighted-average shares
outstanding: Basic 58.1 58.2 Effect of dilutive securities
1.0 0.9 Diluted 59.1
59.1
SNAP-ON INCORPORATED
Supplemental Segment Information (Amounts in
millions) (unaudited) Three Months
Ended April 4, March 29, 2015 2014
Net sales: Commercial & Industrial Group $ 297.5
$ 290.6 Snap-on Tools Group 378.2 343.6 Repair Systems &
Information Group 272.3 262.7
Segment net sales 948.0 896.9 Intersegment eliminations
(120.2 ) (109.4 )
Total net sales $ 827.8 $
787.5 Financial Services revenue 57.4 50.2
Total revenues $ 885.2 $ 837.7
Operating earnings: Commercial & Industrial Group $ 44.0
$ 39.1 Snap-on Tools Group 59.8 49.2 Repair Systems &
Information Group 63.9 58.1 Financial Services 40.3
34.4
Segment operating earnings 208.0 180.8
Corporate (29.8 ) (24.7 )
Operating earnings $
178.2 $ 156.1 Interest expense (13.0 ) (13.7 ) Other income
(expense) – net (0.7 ) (0.1 )
Earnings before
income taxes and equity earnings $ 164.5 $ 142.3
SNAP-ON INCORPORATED Condensed Consolidated
Balance Sheets (Amounts in millions) (unaudited)
April 4, January 3, 2015
2015 Assets Cash and cash equivalents $ 114.4
$ 132.9 Trade and other accounts receivable – net 548.4 550.8
Finance receivables – net 408.6 402.4 Contract receivables – net
70.2 74.5 Inventories – net 482.3 475.5 Deferred income tax assets
92.1 101.0 Prepaid expenses and other assets 127.3
121.5 Total current assets 1,843.3 1,858.6
Property and equipment – net 396.2 404.5 Deferred income tax assets
87.8 93.2 Long-term finance receivables – net 667.2 650.5 Long-term
contract receivables – net 244.7 242.0 Goodwill 778.3 810.7 Other
intangibles – net 198.8 203.3 Other assets 46.1
47.3
Total assets $ 4,262.4 $ 4,310.1
Liabilities and Equity Notes payable $ 78.8 $
56.6 Accounts payable 162.0 145.0 Accrued benefits 54.7 53.8
Accrued compensation 71.9 99.2 Franchisee deposits 66.9 65.8 Other
accrued liabilities 292.2 298.3 Total
current liabilities 726.5 718.7 Long-term debt 864.4 862.7
Deferred income tax liabilities 158.7 159.2 Retiree health care
benefits 41.4 42.5 Pension liabilities 196.3 217.9 Other long-term
liabilities 86.8 83.8
Total
liabilities 2,074.1 2,084.8
Equity Shareholders' equity attributable to Snap-on
Inc. Common stock 67.4 67.4 Additional paid-in capital 261.5
254.7 Retained earnings 2,716.6 2,637.2 Accumulated other
comprehensive loss (339.2 ) (248.2 ) Treasury stock at cost
(535.7 ) (503.3 )
Total shareholders' equity attributable
to Snap-on Inc. 2,170.6 2,207.8 Noncontrolling interests
17.7 17.5
Total equity 2,188.3
2,225.3
Total liabilities and equity $
4,262.4 $ 4,310.1
SNAP-ON INCORPORATED
Condensed Consolidated Statements of Cash Flows (Amounts
in millions) (unaudited) Three Months
Ended April 4, March 29, 2015 2014
Operating activities: Net earnings $ 113.2 $ 98.2
Adjustments to reconcile net earnings to net cash provided (used)
by operating activities: Depreciation 13.8 13.4 Amortization of
other intangibles 6.2 6.2 Provision for losses on finance
receivables 7.1 6.2 Provision for losses on non-finance receivables
4.9 3.4 Stock-based compensation expense 11.5 8.6 Excess tax
benefits from stock-based compensation (11.0 ) (6.9 ) Deferred
income tax provision 10.7 6.8 Changes in operating assets and
liabilities: Increase in trade and other accounts receivable (20.2
) (31.0 ) Increase in contract receivables (3.3 ) (5.9 ) Increase
in inventories (24.0 ) (18.5 ) Increase in prepaid and other assets
(27.0 ) (19.7 ) Increase in accounts payable 24.9 7.0 Increase
(decrease) in accruals and other liabilities (28.7 )
20.5
Net cash provided by operating activities 78.1
88.3
Investing activities: Additions to finance
receivables (198.8 ) (169.7 ) Collections of finance receivables
160.2 139.4 Capital expenditures (18.1 ) (18.3 ) Disposal of
property and equipment - 0.2 Other (2.8 ) (2.5 )
Net cash used by investing activities (59.5 ) (50.9 )
Financing activities: Repayment of long-term debt - (100.0 )
Net increase in short-term borrowings 22.8 4.0 Cash dividends paid
(30.9 ) (25.6 ) Purchases of treasury stock (49.7 ) (22.1 )
Proceeds from stock purchase and option plans 14.5 12.8 Excess tax
benefits from stock-based compensation 11.0 6.9 Other (3.0 )
(3.1 )
Net cash used by financing activities (35.3 )
(127.1 )
Effect of exchange rate changes on cash and cash
equivalents (1.8 ) (0.1 )
Decrease in cash and
cash equivalents (18.5 ) (89.8 ) Cash and cash
equivalents at beginning of year 132.9 217.6
Cash and cash equivalents at end of period $ 114.4
$ 127.8
Supplemental cash flow
disclosures: Cash paid for interest $ (23.7 ) $ (26.2 ) Net
cash paid for income taxes (20.7 ) (16.7 )
SNAP-ON
INCORPORATED Supplemental Consolidating Data - Condensed
Statements of Earnings (Amounts in millions)
(unaudited)
Operations* Financial Services Three Months
Ended Three Months Ended April 4, March
29, April 4, March 29, 2015 2014
2015 2014 Net sales $ 827.8 $ 787.5 $ -
$ - Cost of goods sold (417.7 ) (408.8 ) -
-
Gross profit 410.1 378.7 - -
Operating expenses (272.2 ) (257.0 ) -
-
Operating earnings before financial services
137.9 121.7 - -
Financial services revenue - - 57.4
50.2 Financial services expenses - -
(17.1 ) (15.8 )
Operating earnings from financial
services - - 40.3
34.4
Operating earnings 137.9 121.7
40.3 34.4 Interest expense (12.9 ) (13.5 ) (0.1 ) (0.2 )
Intersegment interest income (expense) – net 15.0 13.4 (15.0 )
(13.4 ) Other income (expense) – net (0.7 ) (0.1 )
- -
Earnings before income taxes
and equity earnings 139.3 121.5 25.2 20.8 Income tax expense
(42.5 ) (36.7 ) (9.3 ) (7.6 )
Earnings before equity earnings 96.8 84.8 15.9 13.2
Financial services – net earnings attributable to Snap-on
Inc. 15.9 13.2 - - Equity earnings, net of tax 0.5
0.2 - -
Net
earnings 113.2 98.2 15.9 13.2 Net earnings attributable to
noncontrolling interests (2.7 ) (2.3 ) -
-
Net earnings attributable to Snap-on
Inc. $ 110.5 $ 95.9 $ 15.9 $ 13.2
*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.
SNAP-ON INCORPORATED Supplemental
Consolidating Data - Condensed Balance Sheets (Amounts in
millions) (unaudited)
Operations* Financial Services April 4,
January 3, April 4, January 3, 2015
2015 2015 2015 Assets Cash and
cash equivalents $ 114.2 $ 132.8 $ 0.2 $ 0.1 Intersegment
receivables 15.6 16.0 - - Trade and other accounts receivable – net
548.1 550.5 0.3 0.3 Finance receivables – net - - 408.6 402.4
Contract receivables – net 7.5 7.6 62.7 66.9 Inventories – net
482.3 475.5 - - Deferred income tax assets 76.7 85.4 15.4 15.6
Prepaid expenses and other assets 131.7 125.5
1.1 0.9 Total current assets 1,376.1 1,393.3 488.3 486.2
Property and equipment – net 395.3 403.4 0.9 1.1 Investment
in Financial Services 221.3 218.9 - - Deferred income tax assets
87.5 92.9 0.3 0.3 Intersegment long-term notes receivable 241.9
232.1 - - Long-term finance receivables – net - - 667.2 650.5
Long-term contract receivables – net 12.7 12.8 232.0 229.2 Goodwill
778.3 810.7 - - Other intangibles – net 198.8 203.3 - - Other
assets 50.3 50.9 1.0 1.0
Total
assets $ 3,362.2 $ 3,418.3 $ 1,389.7 $ 1,368.3
Liabilities and Equity Notes payable $ 78.8 $ 56.6 $ - $ -
Accounts payable 161.9 144.7 0.1 0.3 Intersegment payables - - 15.6
16.0 Accrued benefits 54.6 53.8 0.1 - Accrued compensation 70.7
95.2 1.2 4.0 Franchisee deposits 66.9 65.8 - - Other accrued
liabilities 267.6 285.0 30.1 18.2 Total
current liabilities 700.5 701.1 47.1 38.5 Long-term debt and
intersegment long-term debt - - 1,106.3 1,094.8 Deferred income tax
liabilities 158.5 158.6 0.2 0.6 Retiree health care benefits 41.4
42.5 - - Pension liabilities 196.3 217.9 - - Other long-term
liabilities 77.2 72.9 14.8 15.5
Total liabilities 1,173.9 1,193.0
1,168.4 1,149.4
Total shareholders' equity
attributable to Snap-on Inc. 2,170.6 2,207.8 221.3 218.9
Noncontrolling interests 17.7 17.5 - -
Total equity 2,188.3 2,225.3 221.3
218.9
Total liabilities and equity $ 3,362.2 $
3,418.3 $ 1,389.7 $ 1,368.3 *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.
Snap-on IncorporatedInvestors:Leslie
Kratcoski262/656-6121orMedia:Richard Secor262/656-5561
Snap on (NYSE:SNA)
Historical Stock Chart
From Mar 2024 to Apr 2024
Snap on (NYSE:SNA)
Historical Stock Chart
From Apr 2023 to Apr 2024