Diluted EPS of $3.12 up 20%;
Non-GAAP adjusted diluted EPS of $3.11
excludes $0.01 benefit related to U.S. tax legislation;
Operating margin before financial services
of 20.2% up 30 basis points;
Reported net sales of $954.6 million up
3.6%;
Organic net sales up 1.3%
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 2018.
- Net sales of $954.6 million increased
$33.2 million, or 3.6%, from 2017 levels, reflecting a $12.1
million, or 1.3%, organic sales gain, $8.1 million of
acquisition-related sales, and $13.0 million of favorable foreign
currency translation.
- Operating earnings before financial
services of $193.1 million improved 30 basis points to 20.2% of
sales as compared to $183.7 million, or 19.9% of sales, last
year.
- Financial services revenue of $82.0
million increased $4.3 million, or 5.5%, from $77.7 million in
2017; financial services operating earnings of $57.8 million
increased $3.2 million, or 5.9%, from $54.6 million last year.
- Consolidated operating earnings of
$250.9 million improved 30 basis points to 24.2% of revenues (net
sales plus financial services revenue) as compared to $238.3
million, or 23.9% of revenues, last year.
- The second quarter effective income tax
rate of 23.8% in 2018 included a benefit of 20 basis points, or
$0.5 million, related to newly issued guidance associated with the
U.S. tax legislation (“tax benefit”). Excluding the tax benefit,
the effective tax rate, as adjusted, was 24.0%. The second quarter
effective income tax rate was 30.6% in 2017.
- Net earnings of $178.7 million, or
$3.12 per diluted share, compared to net earnings of $153.2
million, or $2.60 per diluted share a year ago. Excluding the
above-mentioned tax benefit, net earnings, as adjusted, were $178.2
million in 2018, or $3.11 per diluted share.
See “Non-GAAP Measures” below for a definition of, and further
explanation about, organic sales and measures, as adjusted,
excluding the tax benefit.
At the beginning of fiscal 2018, Snap-on adopted ASU No.
2017-07, Compensation – Retirement Benefits (Topic 715) – Improving
the Presentation of Net Periodic Pension Cost and Net Periodic
Postretirement Benefit Cost. The ASU requires changes be applied
retrospectively; as such, certain prior year amounts have been
restated to reflect this adoption and conform to the 2018
presentation.
“Our second quarter 2018 results demonstrated encouraging
progress along our defined runways for growth and improvement,”
said Nick Pinchuk, Snap-on chairman and chief executive officer.
“Net sales growth in our Commercial and Industrial Group reflects
the strength of Snap-on’s value proposition of making work easier
for serious professionals in critical industries beyond vehicle
repair. In our businesses serving vehicle repair, the Repair
Systems and Information Group again realized strong sales of
diagnostics and repair information products resulting from both
successful new product launches and industry tailwinds, and we did
make some progress in overcoming our challenges in the Snap-on
Tools Group. We believe the overall macro-economic environment for
the vehicle repair and critical industries markets we serve
generally remains robust and affords significant ongoing
opportunities. Our commitment to our Snap-on Value Creation
Processes helped drive a 30 basis point improvement in operating
margin before financial services and, coupled with benefits of the
new tax legislation in the United States, a 20% year-over-year
increase in earnings per diluted share. Finally, our results are
only possible with the significant effort and contributions from
our franchisees and associates worldwide; I thank them for their
ongoing dedication and commitment.”
Segment Results
Commercial & Industrial Group segment sales of $337.8
million in the quarter increased $27.8 million, or 9.0%, from 2017
levels, reflecting a $13.9 million, or 4.4%, organic sales gain,
$8.1 million of acquisition-related sales, and $5.8 million of
favorable foreign currency translation. The organic sales increase
primarily includes higher sales to customers in critical industries
and slightly higher sales in the segment’s European-based hand
tools business, partially offset by lower sales of power tools.
Operating earnings of $49.0 million in the period increased $6.0
million, or 14.0%, from 2017 levels, and the operating margin of
14.5% improved 60 basis points from 13.9% a year ago.
Snap-on Tools Group segment sales of $411.9 million in
the quarter decreased $1.9 million, or 0.5%, from 2017 levels,
reflecting a $6.1 million, or 1.5%, organic sales decline,
partially offset by $4.2 million of favorable foreign currency
translation. The organic sales decrease includes lower sales in the
company’s U.S. franchise operations, while sales in the
international franchise operations were essentially flat.
Operating earnings of $79.0 million in the period decreased $1.7
million, or 2.1%, from 2017 levels, and the operating margin of
19.2% declined 30 basis points from 19.5% a year ago.
Repair Systems & Information Group segment sales of
$343.1 million in the quarter increased $5.0 million, or 1.5%, from
2017 levels, reflecting a $0.1 million organic sales gain and $4.9
million of favorable foreign currency translation. The organic
sales level includes higher sales of diagnostic and repair
information products to independent repair shop owners and
managers, largely offset by a sales decrease of undercar equipment;
sales to OEM dealerships were essentially flat.
Operating earnings of $88.7 million in the period increased $6.5
million, or 7.9%, from 2017 levels, and the operating margin of
25.9% improved 160 basis points from 24.3% a year ago.
Financial Services operating earnings of $57.8 million on
revenue of $82.0 million in the quarter compared to operating
earnings of $54.6 million on revenue of $77.7 million a year ago.
Originations of $276.1 million in the second quarter increased $5.5
million, or 2.0%, from 2017 levels.
Corporate expenses of $23.6 million in the quarter
compared to $22.2 million last year.
Outlook
Snap-on expects to make continued progress in 2018 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 2018 will
be in a range of $90 million to $100 million, of which $38.6
million was incurred in the first six months of the year. Snap-on
currently anticipates that its full year 2018 effective income tax
rate will be in a range of 24% to 25%.
Conference Call and Webcast on July 19,
2018, at 9:00 a.m. Central Time
A discussion of this release will be webcast on Thursday, July
19, 2018, 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 document 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, 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.
For the three and six months ended June 30, 2018, the company is
including net earnings, diluted earnings per share and effective
tax rate, all as adjusted to exclude the impact of a $0.5 million
benefit and $2.1 million charge, respectively, related to newly
issued guidance associated with the U.S. tax legislation. In
addition, for the six months ended June 30, 2018, the company is
including net earnings and diluted earnings per share, both as
adjusted to exclude a net gain of $5.5 million ($4.1 million after
tax) associated with a treasury lock settlement gain of $13.3
million related to the issuance of debt, partially offset by a $7.8
million expense related to the early extinguishment of debt, both
of which were incurred in the three months ended March 31, 2018.
Management believes that these are unusual events and therefore the
non-GAAP financial measures adjusted to exclude them provide more
meaningful year-over-year comparisons of the company’s 2018
operating performance. For a reconciliation of the adjusted
metrics, see “Reconciliation of Non-GAAP Financial Measures”
below.
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 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 $3.7 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 December 30, 2017, which are
incorporated herein by reference. As Snap-on further evaluates the
effects of the new U.S. tax legislation, it may recognize further
adjustments. 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 Six Months Ended June 30, July
1, June 30, July 1, 2018 2017
2018 2017 Net sales $ 954.6 $ 921.4 $
1,890.1 $ 1,808.5 Cost of goods sold (467.5 ) (458.2
) (931.4 ) (897.0 )
Gross profit 487.1 463.2
958.7 911.5 Operating expenses (294.0 ) (279.5 )
(587.9 ) (557.6 )
Operating earnings before
financial services 193.1 183.7 370.8 353.9
Financial
services revenue 82.0 77.7 165.0 154.5 Financial services
expenses (24.2 ) (23.1 ) (50.3 ) (47.4
)
Operating earnings from financial services 57.8
54.6 114.7 107.1
Operating earnings 250.9 238.3 485.5 461.0 Interest
expense (12.0 ) (13.0 ) (25.6 ) (25.7 ) Other income (expense) –
net (0.6 ) (1.9 ) 2.2 (4.3 )
Earnings before income taxes and equity earnings 238.3 223.4
462.1 431.0 Income tax expense (55.8 ) (67.3 )
(113.4 ) (129.9 )
Earnings before equity earnings
182.5 156.1 348.7 301.1 Equity earnings, net of tax 0.2
0.7 0.8 0.8
Net
earnings 182.7 156.8 349.5 301.9 Net earnings attributable to
noncontrolling interests (4.0 ) (3.6 ) (7.8 )
(7.1 )
Net earnings attributable to Snap-on Inc. $
178.7 $ 153.2 $ 341.7 $ 294.8
Net earnings per share attributable to Snap-on Inc.:
Basic $ 3.17 $ 2.65 $ 6.04 $ 5.09 Diluted 3.12 2.60 5.93 4.98
Weighted-average shares outstanding: Basic 56.4 57.8
56.6 57.9 Effect of dilutive securities 0.9
1.2 1.0 1.3 Diluted 57.3
59.0 57.6 59.2
SNAP-ON INCORPORATED Supplemental Segment Information
(Amounts in millions) (unaudited)
Three Months Ended Six Months
Ended June 30, July 1, June 30,
July 1, 2018 2017 2018
2017 Net sales: Commercial & Industrial
Group $ 337.8 $ 310.0 $ 669.4 $ 608.7 Snap-on Tools Group 411.9
413.8 816.6 823.2 Repair Systems & Information Group
343.1 338.1 680.1 656.9
Segment net sales 1,092.8 1,061.9 2,166.1 2,088.8
Intersegment eliminations (138.2 ) (140.5 )
(276.0 ) (280.3 )
Total net sales $ 954.6 $ 921.4 $
1,890.1 $ 1,808.5 Financial Services revenue 82.0
77.7 165.0 154.5
Total
revenues $ 1,036.6 $ 999.1 $ 2,055.1 $
1,963.0
Operating earnings: Commercial &
Industrial Group $ 49.0 $ 43.0 $ 95.5 $ 84.9 Snap-on Tools Group
79.0 80.7 147.9 151.0 Repair Systems & Information Group 88.7
82.2 174.5 161.3 Financial Services 57.8 54.6
114.7 107.1
Segment operating
earnings 274.5 260.5 532.6 504.3 Corporate (23.6 )
(22.2 ) (47.1 ) (43.3 )
Operating
earnings $ 250.9 $ 238.3 $ 485.5 $ 461.0 Interest expense (12.0
) (13.0 ) (25.6 ) (25.7 ) Other income (expense) – net (0.6
) (1.9 ) 2.2 (4.3 )
Earnings before
income taxes and equity earnings $ 238.3 $ 223.4
$ 462.1 $ 431.0
SNAP-ON INCORPORATED
Condensed Consolidated Balance Sheets (Amounts in
millions) (unaudited) June 30,
December 30, 2018 2017 Assets
Cash and cash equivalents $ 112.3 $ 92.0 Trade and other accounts
receivable – net 667.1 675.6 Finance receivables – net 514.4 505.4
Contract receivables – net 87.6 96.8 Inventories – net 668.3 638.8
Prepaid expenses and other assets 105.7 110.7
Total current assets 2,155.4 2,119.3 Property and
equipment – net 479.4 484.4 Deferred income tax assets 51.7 52.0
Long-term finance receivables – net 1,051.3 1,039.2 Long-term
contract receivables – net 332.6 322.6 Goodwill 911.0 924.1 Other
intangibles – net 240.9 253.7 Other assets 49.7
53.8
Total assets $ 5,272.0 $ 5,249.1
Liabilities and Equity Notes payable and
current maturities of long-term debt $ 127.6 $ 433.2 Accounts
payable 198.5 178.2 Accrued benefits 44.6 55.8 Accrued compensation
68.1 71.5 Franchisee deposits 68.7 66.5 Other accrued liabilities
419.5 388.1 Total current liabilities
927.0 1,193.3 Long-term debt 945.4 753.6 Deferred income tax
liabilities 27.2 28.4 Retiree health care benefits 34.5 36.0
Pension liabilities 117.8 158.9 Other long-term liabilities
108.5 106.6
Total liabilities
2,160.4 2,276.8
Equity
Shareholders' equity attributable to Snap-on Inc. Common
stock 67.4 67.4 Additional paid-in capital 352.6 343.2 Retained
earnings 4,018.9 3,772.3 Accumulated other comprehensive loss
(377.3 ) (329.0 ) Treasury stock at cost (968.4 )
(900.0 )
Total shareholders' equity attributable to Snap-on
Inc. 3,093.2 2,953.9 Noncontrolling interests 18.4
18.4
Total equity 3,111.6
2,972.3
Total liabilities and equity $ 5,272.0
$ 5,249.1
SNAP-ON INCORPORATED Condensed
Consolidated Statements of Cash Flows (Amounts in
millions) (unaudited) Three Months
Ended June 30, July 1, 2018 2017
Operating activities: Net earnings $ 182.7 $ 156.8
Adjustments to reconcile net earnings to net cash provided (used)
by operating activities: Depreciation 17.6 16.3 Amortization of
other intangibles 6.4 6.5 Provision for losses on finance
receivables 13.6 12.8 Provision for losses on non-finance
receivables 3.5 2.4 Stock-based compensation expense 7.9 7.0
Deferred income tax benefit (4.5 ) (4.3 ) Loss on sales of assets
0.2 - Changes in operating assets and liabilities, net of effects
of acquisitions: Increase in trade and other accounts receivable
(10.7 ) (24.9 ) Increase in contract receivables (6.7 ) (3.5 )
Increase in inventories (14.3 ) (31.0 ) (Increase) decrease in
prepaid and other assets 6.4 (2.4 ) Increase in accounts payable
15.9 7.4 Decrease in accruals and other liabilities (31.1 )
(16.0 )
Net cash provided by operating activities
186.9 127.1
Investing activities: Additions to
finance receivables (231.1 ) (231.8 ) Collections of finance
receivables 190.8 179.1 Capital expenditures (20.6 ) (15.8 )
Acquisitions of businesses, net of cash acquired - (70.7 )
Disposals of property and equipment 0.1 (0.1 ) Other (2.9 )
0.7
Net cash used by investing activities
(63.7 ) (138.6 )
Financing activities: Net increase
(decrease) in other short-term borrowings (16.1 ) 83.0 Cash
dividends paid (46.3 ) (41.1 ) Purchases of treasury stock (55.2 )
(86.7 ) Proceeds from stock purchase and option plans 16.8 20.5
Other (4.5 ) 0.9
Net cash used by financing
activities (105.3 ) (23.4 )
Effect of exchange rate
changes on cash and cash equivalents (3.1 ) 0.9
Increase (decrease) in cash and cash equivalents 14.8
(34.0 ) Cash and cash equivalents at beginning of period
97.5 123.0
Cash and cash equivalents
at end of period $ 112.3 $ 89.0
Supplemental cash flow disclosures: Cash paid for interest $
(1.5 ) $ (0.9 ) Net cash paid for income taxes (86.0 ) (85.8 )
SNAP-ON INCORPORATED Condensed Consolidated Statements of
Cash Flows (Amounts in millions) (unaudited)
Six Months Ended June 30,
July 1, 2018 2017 Operating activities:
Net earnings $ 349.5 $ 301.9 Adjustments to reconcile net earnings
to net cash provided (used) by operating activities: Depreciation
35.0 32.3 Amortization of other intangibles 13.0 13.6 Provision for
losses on finance receivables 29.4 25.8 Provision for losses on
non-finance receivables 5.5 4.6 Stock-based compensation expense
14.6 14.4 Deferred income tax provision (benefit) (4.1 ) 3.1 Loss
(gain) on sales of assets 0.1 (0.2 ) Settlement of treasury lock -
14.9 Loss on early extinguishment of debt 7.8 - Changes in
operating assets and liabilities, net of effects of acquisitions:
Increase in trade and other accounts receivable (9.1 ) (26.8 )
Increase in contract receivables (4.5 ) (5.6 ) Increase in
inventories (24.5 ) (48.3 ) (Increase) decrease in prepaid and
other assets 6.4 (9.9 ) Increase in accounts payable 25.4 27.7
Decrease in accruals and other liabilities (25.7 )
(28.0 )
Net cash provided by operating activities 418.8
319.5
Investing activities: Additions to finance
receivables (436.7 ) (458.8 ) Collections of finance receivables
379.9 352.9 Capital expenditures (38.6 ) (34.4 ) Acquisitions of
businesses, net of cash acquired (3.0 ) (80.2 ) Disposals of
property and equipment 0.5 0.9 Other (2.9 ) (0.7 )
Net cash used by investing activities (100.8 ) (220.3 )
Financing activities: Proceeds from issuance of
long-term debt 395.4 297.8 Repayments of long-term debt (457.8 )
(150.0 ) Repayment of notes payable (16.8 ) - Net decrease in other
short-term borrowings (37.2 ) (52.7 ) Cash dividends paid (92.8 )
(82.3 ) Purchases of treasury stock (98.7 ) (122.5 ) Proceeds from
stock purchase and option plans 28.3 34.6 Other (16.2 )
(14.9 )
Net cash used by financing activities (295.8
) (90.0 )
Effect of exchange rate changes on cash and
cash equivalents (1.9 ) 2.2
Increase in
cash and cash equivalents 20.3 11.4 Cash and cash
equivalents at beginning of year 92.0 77.6
Cash and cash equivalents at end of period $ 112.3
$ 89.0
Supplemental cash flow
disclosures: Cash paid for interest $ (27.8 ) $ (24.9 ) Net
cash paid for income taxes (97.4 ) (99.8 )
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, diagnostic
and equipment products, software and other non-financial services
operations with Financial Services 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 were 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 June 30,
July 1, June 30, July 1, 2018
2017 2018 2017 Net sales $ 954.6
$ 921.4 $ - $ - Cost of goods sold (467.5 ) (458.2 )
- -
Gross profit 487.1 463.2 - -
Operating expenses (294.0 ) (279.5 ) -
-
Operating earnings before financial services
193.1 183.7 - -
Financial services revenue - - 82.0
77.7 Financial services expenses - -
(24.2 ) (23.1 )
Operating earnings from financial
services - - 57.8
54.6
Operating earnings 193.1 183.7
57.8 54.6 Interest expense (11.9 ) (12.9 ) (0.1 ) (0.1 )
Intersegment interest income (expense) – net 17.2 17.9 (17.2 )
(17.9 ) Other income (expense) – net (0.7 ) (1.9 )
0.1 -
Earnings before income taxes
and equity earnings 197.7 186.8 40.6 36.6 Income tax expense
(45.2 ) (53.7 ) (10.6 ) (13.6 )
Earnings before equity earnings 152.5 133.1 30.0 23.0
Financial services – net earnings attributable to
Snap-on 30.0 23.0 - - Equity earnings, net of tax 0.2
0.7 - -
Net
earnings 182.7 156.8 30.0 23.0 Net earnings attributable to
noncontrolling interests (4.0 ) (3.6 ) -
-
Net earnings attributable to Snap-on
$ 178.7 $ 153.2 $ 30.0 $ 23.0
*Snap-on with Financial Services on the equity method.
SNAP-ON
INCORPORATED Non-GAAP Supplemental Consolidating Data -
Supplemental Condensed Statements of Earnings (Amounts in
millions) (unaudited) Operations*
Financial Services Six Months Ended
Six Months Ended June 30, July 1,
June 30, July 1, 2018 2017
2018 2017 Net sales $ 1,890.1 $ 1,808.5
$ - $ - Cost of goods sold (931.4 ) (897.0 ) -
-
Gross profit 958.7 911.5 - -
Operating expenses (587.9 ) (557.6 ) -
-
Operating earnings before financial services
370.8 353.9 - -
Financial services revenue - - 165.0
154.5 Financial services expenses - -
(50.3 ) (47.4 )
Operating earnings from financial
services - - 114.7
107.1
Operating earnings 370.8 353.9
114.7 107.1 Interest expense (25.4 ) (25.5 ) (0.2 ) (0.2 )
Intersegment interest income (expense) – net 36.1 35.4 (36.1 )
(35.4 ) Other income (expense) – net 2.1 (4.3
) 0.1 -
Earnings before income taxes
and equity earnings 383.6 359.5 78.5 71.5 Income tax expense
(93.0 ) (103.4 ) (20.4 ) (26.5 )
Earnings before equity earnings 290.6 256.1 58.1 45.0
Financial services – net earnings attributable to
Snap-on 58.1 45.0 - - Equity earnings, net of tax 0.8
0.8 - -
Net
earnings 349.5 301.9 58.1 45.0 Net earnings attributable to
noncontrolling interests (7.8 ) (7.1 ) -
-
Net earnings attributable to Snap-on
$ 341.7 $ 294.8 $ 58.1 $ 45.0
*Snap-on with Financial Services on the equity method.
SNAP-ON
INCORPORATED Non-GAAP Supplemental Consolidating Data -
Supplemental Condensed Balance Sheets (Amounts in
millions) (unaudited)
Operations* Financial Services June 30,
December 30, June 30, December 30, 2018
2017 2018 2017 Assets Cash and
cash equivalents $ 112.3 $ 91.8 $ - $ 0.2 Intersegment receivables
18.2 17.1 - - Trade and other accounts receivable – net 666.5 674.9
0.6 0.7 Finance receivables – net - - 514.4 505.4 Contract
receivables – net 6.8 9.4 80.8 87.4 Inventories – net 668.3 638.8 -
- Prepaid expenses and other assets 112.5 117.6
0.8 0.7 Total current assets 1,584.6 1,549.6 596.6
594.4 Property and equipment – net 477.6 482.4 1.8 2.0
Investment in Financial Services 320.0 317.4 - - Deferred income
tax assets 33.7 25.2 18.0 26.8 Intersegment long-term notes
receivable 654.3 583.7 - - Long-term finance receivables – net - -
1,051.3 1,039.2 Long-term contract receivables – net 12.0 13.2
320.6 309.4 Goodwill 911.0 924.1 - - Other intangibles – net 240.9
253.7 - - Other assets 59.2 63.1 0.1 -
Total assets $ 4,293.3 $ 4,212.4 $ 1,988.4 $ 1,971.8
Liabilities and Equity Notes payable and current maturities
of long-term debt $ 127.6 $ 183.2 $ - $ 250.0 Accounts payable
197.5 177.1 1.0 1.1 Intersegment payables - - 18.2 17.1 Accrued
benefits 44.6 55.8 - - Accrued compensation 65.4 67.8 2.7 3.7
Franchisee deposits 68.7 66.5 - - Other accrued liabilities
396.2 366.0 30.9 29.7 Total current
liabilities 900.0 916.4 52.8 301.6 Long-term debt and
intersegment long-term debt - - 1,599.7 1,337.3 Deferred income tax
liabilities 27.2 28.4 - - Retiree health care benefits 34.5 36.0 -
- Pension liabilities 117.8 158.9 - - Other long-term liabilities
102.2 100.4 15.9 15.5
Total
liabilities 1,181.7 1,240.1 1,668.4
1,654.4
Total shareholders' equity attributable to
Snap-on 3,093.2 2,953.9 320.0 317.4 Noncontrolling interests
18.4 18.4 - -
Total equity
3,111.6 2,972.3 320.0 317.4
Total
liabilities and equity $ 4,293.3 $ 4,212.4 $ 1,988.4 $ 1,971.8
*Snap-on with Financial Services on the equity method.
SNAP-ON INCORPORATED Reconciliation of Non-GAAP Financial
Measures (Amounts in millions, except per share data)
(unaudited)
Three Months Ended Six Months Ended June 30,
July 1, June 30, July 1, 2018
2017 2018 2017
AS
REPORTED
Debt-related items ("net debt items") Gain on
settlement of treasury lock (A) Gain on settlement of treasury
lock $ - $ - $ 13.3 $ - Income tax expense - -
(3.3 ) - Gain on settlement of treasury
lock, after tax $ - $ - $ 10.0 $ -
Weighted-average shares outstanding - diluted 57.3
59.0 57.6 59.2
Diluted EPS - gain on settlement of
treasury lock $ - $ - $ 0.17 $ -
Loss on early extinguishment of debt (B) Loss on
early extinguishment of debt $ - $ - $ (7.8 ) $ - Income tax
benefit - - 1.9 -
Loss on early extinguishment of debt, after tax $ - $
- $ (5.9 ) $ -
Weighted-average shares
outstanding - diluted 57.3 59.0 57.6 59.2
Diluted EPS
- loss on early extinguishment of debt $ - $ - $
(0.10 ) $ -
Net debt items (A + B) Net debt
items $ - $ - $ 5.5 $ - Income tax expense - -
(1.4 ) - Net debt items, after tax $ -
$ - $ 4.1 $ -
Weighted-average shares outstanding - diluted 57.3 59.0 57.6
59.2
Diluted EPS - net debt items $ - $ -
$ 0.07 $ -
Adjustments related to
implementation of tax legislation ("tax benefit/charge")
Tax benefit/(charge) $ 0.5 $ - $ (2.1 ) $ -
Weighted-average shares outstanding - diluted 57.3
59.0 57.6 59.2
Diluted EPS - tax benefit/(charge) $
0.01 $ - $ (0.04 ) $ -
ADJUSTED
INFORMATION - NON-GAAP
1 )
Net earnings attributable to Snap-on Incorporated
As reported $ 178.7 $ 153.2 $ 341.7 $ 294.8 Net debt items, after
tax - - (4.1 ) - Tax (benefit)/charge (0.5 ) -
2.1 - As adjusted to exclude net debt
items and tax benefit/charge $ 178.2 $ 153.2 $ 339.7
$ 294.8 2 )
Diluted EPS As reported $
3.12 $ 2.60 $ 5.93 $ 4.98 Net debt items, after tax - - (0.07 ) -
Tax (benefit)/charge (0.01 ) - 0.04
- As adjusted to exclude net debt items and
tax benefit/charge $ 3.11 $ 2.60 $ 5.90 $ 4.98
3 )
Effective tax rate As reported 23.8 % 30.6
% 25.0 % 30.6 % Tax benefit/(charge) 0.2 % -
-0.5 % - As adjusted to exclude net debt items
and tax benefit/charge 24.0 % 30.6 % 24.5 %
30.6 %
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Snap-on IncorporatedInvestors:Leslie
Kratcoski262/656-6121orMedia:Richard Secor262/656-5561
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