Diluted EPS of $4.91, including a $0.16 per
share benefit from a legal payment, compares to $4.60 in Q1
2023;
Operating margin before financial services
of 22.9% compares to 22.0% in Q1 2023; Sales of $1,182.3
million consistent with last year
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 2024.
- Net sales of $1,182.3 million in the first quarter of 2024
represented a decrease of $0.7 million, or 0.1%, from 2023 levels,
reflecting a $9.9 million, or 0.8%, organic sales decline,
partially offset by $6.7 million of acquisition-related sales and
$2.5 million of favorable foreign currency translation.
- Operating earnings before financial services for the quarter of
$270.9 million compared to $259.8 million in 2023. As a percentage
of net sales, operating earnings before financial services were
22.9% in the first quarter compared to 22.0% last year.
- Financial services revenue in the quarter of $99.6 million
compared to $92.6 million in 2023; financial services operating
earnings of $68.3 million compared to $66.3 million last year.
- Consolidated operating earnings for the quarter of $339.2
million, or 26.5% of revenues (net sales plus financial services
revenue), compared to $326.1 million, or 25.6% of revenues, last
year.
- The first quarter effective income tax rate was 22.2% in 2024
and 23.1% in 2023.
- Net earnings in the quarter of $263.5 million, or $4.91 per
diluted share, compared to net earnings of $248.7 million, or $4.60
per diluted share, a year ago.
- In the quarter, operating earnings before financial services
and consolidated operating earnings included an $11.3 million
benefit for payments received associated with a legal matter (the
“legal payment”); net earnings included an $8.8 million, or $0.16
per diluted share, after-tax benefit from the legal payment.
See “Non-GAAP Measures” below for a definition of, and further
explanation about, organic sales.
“We’re encouraged by our first quarter 2024 results, achieved
against the general uncertainty and turbulence of this time,” said
Nick Pinchuk, Snap-on chairman and chief executive officer.
“Despite the varying levels of confidence among technicians served
through our Snap-on Tools franchised van channel, we believe our
growth with customers in critical industries and with repair shop
owners and managers demonstrates the broad strength of our
individual operations, the resilience of our multiple markets, and
the substantial opportunities along our runways for growth. As we
move forward, we’ll continue pivoting our focus to match technician
preferences in this period, we’ll maintain our momentum with repair
shops and with critical industries, and we’ll reinforce our brand
with significant new products. In addition, we’ll remain engaged in
our Snap-on Value Creation Processes to maximize capacity for
ongoing advancement, resisting and overcoming the headwinds of the
day. Finally, the power of our enterprise is dependent on the
experience and capability of Snap-on people worldwide. I want to
thank both our franchisees and our associates for their valuable
contributions to our company, for their steadfast dedication to our
team, and for their unshakable belief in our future.”
Segment Results
Commercial & Industrial Group segment sales of $359.9
million in the quarter compared to $363.8 million last year,
reflecting a $9.2 million, or 2.5%, organic sales decline and $1.4
million of unfavorable foreign currency translation, partially
offset by $6.7 million of acquisition-related sales. The organic
decrease is primarily due to declines in both the segment’s power
tools and Asia-Pacific operations, partially offset by higher
activity with customers in critical industries.
Operating earnings of $55.4 million in the period compared to
$55.8 million in 2023. The operating margin (operating earnings as
a percentage of segment sales) of 15.4% compared to 15.3% last
year.
Snap-on Tools Group segment sales of $500.1 million in
the quarter compared to $537.0 million last year, reflecting a
$37.5 million, or 7.0%, organic sales decline, partially offset by
$0.6 million of favorable foreign currency translation. The organic
decrease is due to lower activity in the U.S. operations, partially
offset by higher sales in the segment’s international
operations.
Operating earnings of $117.3 million in the period compared to
$131.7 million in 2023. The operating margin of 23.5% compared to
24.5% a year ago.
Repair Systems & Information Group segment sales of
$463.8 million in the quarter compared to $446.6 million last year,
reflecting a $14.7 million, or 3.3%, organic sales increase and
$2.5 million of favorable foreign currency translation. The organic
gain includes increased activity with OEM dealerships and higher
sales of undercar equipment.
Operating earnings of $112.9 million in the period compared to
$104.6 million in 2023. The operating margin improved 90 basis
points to 24.3% in the quarter from 23.4% last year.
Financial Services operating earnings of $68.3 million on
revenue of $99.6 million in the quarter compared to operating
earnings of $66.3 million on revenue of $92.6 million a year ago.
Originations of $301.7 million in the first quarter represented an
increase of $0.8 million, or 0.3%, from 2023 levels.
Corporate expenses in the first quarter of $14.7 million,
including a benefit from the legal payment, compared to $32.3
million last year.
Outlook
We believe that our markets and our operations possess and have
demonstrated continuing and considerable resilience against the
uncertainties of the current environment. In 2024, Snap-on expects
to make ongoing progress 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, we project
that capital expenditures in 2024 will be in the range of $100
million to $110 million, of which $21.8 million was incurred in the
first three months of the year.
Snap-on currently anticipates that its full-year 2024 effective
income tax rate will be in the range of 22% to 23%.
Conference Call and Webcast on April
18, 2024, at 9:00 a.m. Central Time
A discussion of this release will be webcast on Thursday, April
18, 2024, 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 https://www.snapon.com/EN/Investors/Investor-Events and click
on the link to the call. 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 at
https://www.snapon.com/EN/Investors/Financial-Information/Quarterly-Earnings.
Non-GAAP Measures
References in this release to “organic sales” refer to sales
from continuing operations calculated in accordance with generally
accepted accounting principles in the United States (“GAAP”),
adjusted to exclude 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, expanded customer base, geographic expansion,
new product development and pricing changes, and excludes sales
contributions from acquired operations the company did not own as
of the comparable prior-year reporting period. Organic sales 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 the company’s businesses and
facilitates comparisons of its sales performance with prior
periods.
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 including those working in vehicle repair,
aerospace, the military, natural resources, and manufacturing. From
its founding in 1920, Snap-on has been recognized as the mark of
the serious and the outward sign of the pride and dignity working
men and women take in their professions. Products and services are
sold through the company’s network of widely recognized franchisee
vans, as well as through direct and distributor channels, under a
variety of notable brands. The company also provides financing
programs to facilitate the sales of its products and to support its
franchise business. Snap-on, an S&P 500 company, generated
sales of $4.7 billion in 2023, and is 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 December 30, 2023, 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
March 30,
April 1,
2024
2023
Net sales
$
1,182.3
$
1,183.0
Cost of goods sold
(585.6
)
(593.4
)
Gross profit
596.7
589.6
Operating expenses
(325.8
)
(329.8
)
Operating earnings before financial
services
270.9
259.8
Financial services revenue
99.6
92.6
Financial services expenses
(31.3
)
(26.3
)
Operating earnings from financial
services
68.3
66.3
Operating earnings
339.2
326.1
Interest expense
(12.5
)
(12.4
)
Other income (expense) – net
18.1
15.2
Earnings before income taxes
344.8
328.9
Income tax expense
(75.2
)
(74.6
)
Net earnings
269.6
254.3
Net earnings attributable to
noncontrolling interests
(6.1
)
(5.6
)
Net earnings attributable to Snap-on
Inc.
$
263.5
$
248.7
Net earnings per share attributable to
Snap-on Inc.:
Basic
$
4.99
$
4.69
Diluted
4.91
4.60
Weighted-average shares
outstanding:
Basic
52.8
53.0
Effect of dilutive securities
0.9
1.1
Diluted
53.7
54.1
SNAP-ON INCORPORATED
Supplemental Segment
Information
(Amounts in millions)
(unaudited)
Three Months Ended
March 30,
April 1,
2024
2023
Net sales:
Commercial & Industrial Group
$
359.9
$
363.8
Snap-on Tools Group
500.1
537.0
Repair Systems & Information Group
463.8
446.6
Segment net sales
1,323.8
1,347.4
Intersegment eliminations
(141.5
)
(164.4
)
Total net sales
1,182.3
1,183.0
Financial Services revenue
99.6
92.6
Total revenues
$
1,281.9
$
1,275.6
Operating earnings:
Commercial & Industrial Group
$
55.4
$
55.8
Snap-on Tools Group
117.3
131.7
Repair Systems & Information Group
112.9
104.6
Financial Services
68.3
66.3
Segment operating earnings
353.9
358.4
Corporate
(14.7
)
(32.3
)
Operating earnings
339.2
326.1
Interest expense
(12.5
)
(12.4
)
Other income (expense) – net
18.1
15.2
Earnings before income taxes
$
344.8
$
328.9
SNAP-ON INCORPORATED
Condensed Consolidated Balance
Sheets
(Amounts in millions)
(unaudited)
March 30,
December 30,
2024
2023
Assets
Cash and cash equivalents
$
1,121.0
$
1,001.5
Trade and other accounts receivable –
net
827.5
791.3
Finance receivables – net
604.9
594.1
Contract receivables – net
116.6
120.8
Inventories – net
970.5
1,005.9
Prepaid expenses and other current
assets
135.6
138.4
Total current assets
3,776.1
3,652.0
Property and equipment – net
534.7
539.3
Operating lease right-of-use assets
74.4
74.7
Deferred income tax assets
78.4
76.0
Long-term finance receivables – net
1,290.6
1,284.2
Long-term contract receivables – net
413.6
407.9
Goodwill
1,071.3
1,097.4
Other intangible assets – net
277.7
268.9
Pension assets
130.4
130.5
Other long-term assets
19.6
14.0
Total assets
$
7,666.8
$
7,544.9
Liabilities and Equity
Notes payable
$
15.2
$
15.6
Accounts payable
257.4
238.0
Accrued benefits
70.5
64.4
Accrued compensation
67.9
102.9
Franchisee deposits
73.7
73.3
Other accrued liabilities
505.0
447.4
Total current liabilities
989.7
941.6
Long-term debt
1,184.9
1,184.6
Deferred income tax liabilities
88.3
79.2
Retiree health care benefits
21.2
21.8
Pension liabilities
75.3
82.3
Operating lease liabilities
54.5
54.6
Other long-term liabilities
89.6
87.4
Total liabilities
2,503.5
2,451.5
Equity
Shareholders' equity attributable to
Snap-on Inc.
Common stock
67.5
67.5
Additional paid-in capital
527.4
545.5
Retained earnings
7,113.1
6,948.5
Accumulated other comprehensive loss
(493.3
)
(449.5
)
Treasury stock at cost
(2,073.7
)
(2,040.7
)
Total shareholders' equity attributable
to Snap-on Inc.
5,141.0
5,071.3
Noncontrolling interests
22.3
22.1
Total equity
5,163.3
5,093.4
Total liabilities and equity
$
7,666.8
$
7,544.9
SNAP-ON INCORPORATED
Condensed Consolidated
Statements of Cash Flows
(Amounts in millions)
(unaudited)
Three Months Ended
March 30,
April 1,
2024
2023
Operating activities:
Net earnings
$
269.6
$
254.3
Adjustments to reconcile net earnings to
net cash provided (used) by operating activities:
Depreciation
18.2
18.0
Amortization of other intangible
assets
6.3
6.9
Provision for losses on finance
receivables
18.2
14.2
Provision for losses on non-finance
receivables
4.9
5.0
Stock-based compensation expense
9.8
10.2
Deferred income tax provision
(benefit)
1.6
(0.2
)
Gain on sales of assets
(0.2
)
(0.2
)
Changes in operating assets and
liabilities, net of effects of acquisitions:
Trade and other accounts receivable
(47.9
)
(22.9
)
Contract receivables
(4.0
)
0.2
Inventories
22.1
(13.2
)
Prepaid expenses and other current
assets
(3.5
)
1.7
Accounts payable
23.3
(0.5
)
Accrued and other liabilities
30.3
28.1
Net cash provided by operating
activities
348.7
301.6
Investing activities:
Additions to finance receivables
(248.0
)
(257.1
)
Collections of finance receivables
207.8
207.5
Capital expenditures
(21.8
)
(23.0
)
Disposals of property and equipment
1.1
0.5
Other
(2.3
)
(0.8
)
Net cash used by investing
activities
(63.2
)
(72.9
)
Financing activities:
Net increase (decrease) in other
short-term borrowings
(0.4
)
0.8
Cash dividends paid
(98.2
)
(86.1
)
Purchases of treasury stock
(70.2
)
(87.2
)
Proceeds from stock purchase plan and
stock option exercises
28.3
32.8
Other
(23.7
)
(12.4
)
Net cash used by financing
activities
(164.2
)
(152.1
)
Effect of exchange rate changes on cash
and cash equivalents
(1.8
)
—
Increase in cash and cash
equivalents
119.5
76.6
Cash and cash equivalents at beginning of
year
1,001.5
757.2
Cash and cash equivalents at end of
period
$
1,121.0
$
833.8
Supplemental cash flow
disclosures:
Cash paid for interest
$
(13.7
)
$
(13.6
)
Net cash paid for income taxes
(14.7
)
(13.3
)
Non-GAAP Supplemental
Data
The following non-GAAP supplemental data is presented for
informational purposes to provide readers with insight into the
information used by management for assessing the operating
performance of Snap-on Incorporated's ("Snap-on") non-financial
services ("Operations") and Financial Services businesses.
The supplemental Operations data reflects the results of
operations and financial position of Snap-on's tools, diagnostics,
equipment products, software and other non-financial services
operations with Financial Services presented on the equity method.
The supplemental Financial Services data reflects the results of
operations and financial position of Snap-on's U.S. and
international financial services operations. The financing needs of
Financial Services are met through intersegment borrowings and cash
generated from Operations; Financial Services is charged interest
expense on intersegment borrowings at market rates. Income taxes
are charged to Financial Services on the basis of the specific tax
attributes generated by the U.S. and international financial
services businesses. Transactions between the Operations and
Financial Services businesses are eliminated to arrive at the
Condensed Consolidated Financial Statements.
SNAP-ON INCORPORATED
Non-GAAP Supplemental
Consolidating Data - Supplemental Condensed Statements of
Earnings
(Amounts in millions)
(unaudited)
Operations*
Financial Services
Three Months Ended
Three Months Ended
March 30,
April 1,
March 30,
April 1,
2024
2023
2024
2023
Net sales
$
1,182.3
$
1,183.0
$
—
$
—
Cost of goods sold
(585.6
)
(593.4
)
—
—
Gross profit
596.7
589.6
—
—
Operating expenses
(325.8
)
(329.8
)
—
—
Operating earnings before financial
services
270.9
259.8
—
—
Financial services revenue
—
—
99.6
92.6
Financial services expenses
—
—
(31.3
)
(26.3
)
Operating earnings from financial
services
—
—
68.3
66.3
Operating earnings
270.9
259.8
68.3
66.3
Interest expense
(12.5
)
(12.4
)
—
—
Intersegment interest income (expense) –
net
16.7
15.7
(16.7
)
(15.7
)
Other income (expense) – net
18.0
15.2
0.1
—
Earnings before income taxes and equity
earnings
293.1
278.3
51.7
50.6
Income tax expense
(62.3
)
(61.5
)
(12.9
)
(13.1
)
Earnings before equity earnings
230.8
216.8
38.8
37.5
Financial services – net earnings
attributable to Snap-on
38.8
37.5
—
—
Net earnings
269.6
254.3
38.8
37.5
Net earnings attributable to
noncontrolling interests
(6.1
)
(5.6
)
—
—
Net earnings attributable to
Snap-on
$
263.5
$
248.7
$
38.8
$
37.5
* Snap-on with Financial Services
presented on the equity method.
SNAP-ON INCORPORATED
Non-GAAP Supplemental
Consolidating Data - Supplemental Condensed Balance Sheets
(Amounts in millions)
(unaudited)
Operations*
Financial Services
March 30,
December 30,
March 30,
December 30,
2024
2023
2024
2023
Assets
Cash and cash equivalents
$
1,120.9
$
1,001.3
$
0.1
$
0.2
Intersegment receivables
18.6
15.7
—
—
Trade and other accounts receivable –
net
826.7
790.6
0.8
0.7
Finance receivables – net
—
—
604.9
594.1
Contract receivables – net
5.1
5.5
111.5
115.3
Inventories – net
970.5
1,005.9
—
—
Prepaid expenses and other current
assets
140.0
143.2
8.3
7.4
Total current assets
3,081.8
2,962.2
725.6
717.7
Property and equipment – net
532.2
536.5
2.5
2.8
Operating lease right-of-use assets
73.6
73.8
0.8
0.9
Investment in Financial Services
395.5
393.9
—
—
Deferred income tax assets
53.0
51.3
25.4
24.7
Intersegment long-term notes
receivable
792.8
785.6
—
—
Long-term finance receivables – net
—
—
1,290.6
1,284.2
Long-term contract receivables – net
8.1
8.3
405.5
399.6
Goodwill
1,071.3
1,097.4
—
—
Other intangible assets – net
277.7
268.9
—
—
Pension assets
130.4
130.5
—
—
Other long-term assets
36.6
30.2
0.2
0.1
Total assets
$
6,453.0
$
6,338.6
$
2,450.6
$
2,430.0
Liabilities and Equity
Notes payable
$
15.2
$
15.6
$
—
$
—
Accounts payable
256.7
236.2
0.7
1.8
Intersegment payables
—
—
18.6
15.7
Accrued benefits
70.5
64.4
—
—
Accrued compensation
66.0
99.9
1.9
3.0
Franchisee deposits
73.7
73.3
—
—
Other accrued liabilities
480.2
432.2
37.5
27.4
Total current liabilities
962.3
921.6
58.7
47.9
Long-term debt and intersegment long-term
debt
—
—
1,977.7
1,970.2
Deferred income tax liabilities
88.3
79.2
—
—
Retiree health care benefits
21.2
21.8
—
—
Pension liabilities
75.3
82.3
—
—
Operating lease liabilities
54.1
54.0
0.4
0.6
Other long-term liabilities
88.5
86.3
18.3
17.4
Total liabilities
1,289.7
1,245.2
2,055.1
2,036.1
Total shareholders' equity attributable
to Snap-on
5,141.0
5,071.3
395.5
393.9
Noncontrolling interests
22.3
22.1
—
—
Total equity
5,163.3
5,093.4
395.5
393.9
Total liabilities and equity
$
6,453.0
$
6,338.6
$
2,450.6
$
2,430.0
* Snap-on with Financial Services
presented on the equity method.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240418703474/en/
Investors: Sara Verbsky 262/656-4869
Media: Samuel Bottum 262/656-5793
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