News Release
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Snap-on Announces Second Quarter 2009 Results
- EPS of $0.65 for the second quarter 2009;
- Strong operating cash flow of $155.6 million in the quarter;
- Sales, operating earnings and EPS improve sequentially from first quarter 2009;
- Investment in strategic growth opportunities continues
-
Sales of
$590.0 million were up 3.0% sequentially from first quarter levels, but down 23.0% compared to last year. Without the effects of currency, sales were up 0.8% sequentially, but down 16.4% year over year. -
Operating earnings of
$70.3 million increased$6.0 million , or 9.3%, over first quarter 2009 on essentially flat sales levels as improved operating performance and higher financial services income were partially offset by$6.6 million of higher restructuring costs. As a percentage of revenues, operating earnings improved to 11.4% from 10.9% in the first quarter. Restructuring costs in the second quarter of$8.6 million reduced the operating margin by approximately 140 basis points. Operating earnings in the second quarter of 2008 were$111.7 million on significantly higher sales volumes. -
Cash flow from operations of
$155.6 million increased significantly from$14.7 million in the first quarter of 2009 and$80.5 million in the second quarter of 2008 primarily due to working capital improvements principally as a result of increased emphasis on inventory reduction. -
Net earnings attributable to
Snap-on of$37.4 million , or$0.65 per diluted share, increased$2.6 million , or$0.05 per diluted share, over first quarter 2009 levels. Net earnings attributable toSnap-on in the second quarter of 2008 were$66.9 million , or$1.15 per diluted share.
“There were a number of encouraging signs in the second quarter,
particularly the sequential improvements for our Snap-on Tools and
Diagnostics & Information businesses,” said
Operating earnings of
Operating earnings in the second quarter of 2009 were significantly
impacted by the company’s European-based tools business where lower
sales levels, continued distributor inventory de-stocking, and further
reduction of production levels to draw down inventories had an adverse
effect on manufacturing performance. As a result of these factors, and
combined with
Operating earnings of
Operating earnings of
Financial Services operating income of
Corporate expenses of
Outlook
The difficulties posed by the global economy continued in the second
quarter of 2009, further challenging Snap-on’s sales. In the near term,
On
As a result of the above,
Conference Call and Webcast
A discussion of this release will be webcast on
About
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
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 | |||||||||||||||
| July 4, | June 28, | July 4, | June 28, | |||||||||||||
| 2009 | 2008 | 2009 | 2008 | |||||||||||||
| Net sales | $ | 590.0 | $ | 766.1 | $ | 1,162.6 | $ | 1,487.7 | ||||||||
| Cost of goods sold | (336.0 | ) | (419.6 | ) | (649.9 | ) | (815.3 | ) | ||||||||
| Gross profit | 254.0 | 346.5 | 512.7 | 672.4 | ||||||||||||
| Financial services revenue | 25.6 | 18.3 | 45.6 | 43.7 | ||||||||||||
| Financial services expenses | (9.0 | ) | (7.5 | ) | (19.0 | ) | (20.1 | ) | ||||||||
| Operating income from financial services | 16.6 | 10.8 | 26.6 | 23.6 | ||||||||||||
| Operating expenses | (200.3 | ) | (245.6 | ) | (404.7 | ) | (491.1 | ) | ||||||||
| Operating earnings | 70.3 | 111.7 | 134.6 | 204.9 | ||||||||||||
| Interest expense | (11.6 | ) | (8.8 | ) | (20.2 | ) | (18.3 | ) | ||||||||
| Other income (expense) – net | 1.1 | 1.3 | 0.8 | 2.3 | ||||||||||||
| Earnings before income taxes and | ||||||||||||||||
| equity earnings (loss) | 59.8 | 104.2 | 115.2 | 188.9 | ||||||||||||
| Income tax expense | (17.6 | ) | (34.5 | ) | (35.9 | ) | (62.8 | ) | ||||||||
| Earnings before equity earnings (loss) | 42.2 | 69.7 | 79.3 | 126.1 | ||||||||||||
| Equity earnings (loss), net of tax | (0.2 | ) | 0.7 | (0.1 | ) | 2.0 | ||||||||||
| Net earnings | 42.0 | 70.4 | 79.2 | 128.1 | ||||||||||||
| Net earnings attributable to noncontrolling interests | (4.6 | ) | (3.5 | ) | (7.0 | ) | (4.6 | ) | ||||||||
| Net earnings attributable to Snap-on Inc. | $ | 37.4 | $ | 66.9 | $ | 72.2 | $ | 123.5 | ||||||||
| Net earnings per share attributable to Snap-on Inc.: | ||||||||||||||||
| Basic | $ | 0.65 | $ | 1.16 | $ | 1.25 | $ | 2.15 | ||||||||
| Diluted | 0.65 | 1.15 | 1.25 | 2.12 | ||||||||||||
| Weighted-average shares outstanding: | ||||||||||||||||
| Basic | 57.7 | 57.6 | 57.6 | 57.6 | ||||||||||||
| Effect of dilutive options | 0.2 | 0.5 | 0.3 | 0.6 | ||||||||||||
| Diluted | 57.9 | 58.1 | 57.9 | 58.2 | ||||||||||||
| SNAP-ON INCORPORATED | |||||||||||||||||
| Supplemental Segment Information | |||||||||||||||||
| (Amounts in millions) | |||||||||||||||||
| (unaudited) | |||||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||
| July 4, | June 28, | July 4, | June 28, | ||||||||||||||
| 2009 | 2008 | 2009 | 2008 | ||||||||||||||
| Net sales: | |||||||||||||||||
| Commercial & Industrial Group | $ | 256.4 | $ | 387.7 | $ | 516.2 | $ | 744.4 | |||||||||
| Snap-on Tools Group | 258.3 | 292.8 | 500.7 | 582.1 | |||||||||||||
| Diagnostics & Information Group | 137.0 | 164.8 | 269.5 | 319.8 | |||||||||||||
| Segment net sales | 651.7 |
|
845.3 | 1,286.4 | 1,646.3 | ||||||||||||
| Intersegment eliminations | (61.7 | ) | (79.2 | ) | (123.8 | ) | (158.6 | ) | |||||||||
| Total net sales | $ | 590.0 | $ | 766.1 | $ | 1,162.6 | $ | 1,487.7 | |||||||||
| Financial Services revenue | 25.6 | 18.3 | 45.6 | 43.7 | |||||||||||||
| Total revenues | $ | 615.6 | $ | 784.4 | $ | 1,208.2 | $ | 1,531.4 | |||||||||
| Operating earnings: | |||||||||||||||||
| Commercial & Industrial Group | $ | 0.1 | $ | 49.3 | $ | 18.1 | $ | 87.5 | |||||||||
| Snap-on Tools Group | 28.0 | 35.3 | 49.1 | 69.7 | |||||||||||||
| Diagnostics & Information Group | 34.0 | 31.0 | 59.7 | 51.4 | |||||||||||||
| Financial Services | 16.6 | 10.8 | 26.6 | 23.6 | |||||||||||||
| Segment operating earnings | 78.7 |
|
126.4 | 153.5 | 232.2 | ||||||||||||
| Corporate | (8.4 | ) | (14.7 | ) | (18.9 | ) | (27.3 | ) | |||||||||
| Operating earnings | $ | 70.3 | $ | 111.7 | $ | 134.6 | $ | 204.9 | |||||||||
| Interest expense | (11.6 | ) | (8.8 | ) | (20.2 | ) | (18.3 | ) | |||||||||
| Other income (expense) – net | 1.1 | 1.3 | 0.8 | 2.3 | |||||||||||||
| Earnings before income taxes | |||||||||||||||||
| and equity earnings (loss) | $ | 59.8 | $ | 104.2 | $ | 115.2 | $ | 188.9 | |||||||||
| SNAP-ON INCORPORATED | ||||||||
| Condensed Consolidated Balance Sheets | ||||||||
| (Amounts in millions) | ||||||||
| (unaudited) | ||||||||
| July 4, | January 3, | |||||||
| 2009 | 2009 | |||||||
| Assets | ||||||||
| Cash and cash equivalents | $ | 524.4 | $ | 115.8 | ||||
| Accounts receivable – net | 472.6 | 522.1 | ||||||
| Inventories – net | 302.8 | 359.2 | ||||||
| Deferred income tax assets | 59.7 | 64.1 | ||||||
| Prepaid expenses and other assets | 84.8 | 79.5 | ||||||
| Total current assets | 1,444.3 | 1,140.7 | ||||||
| Property and equipment – net | 337.8 | 327.8 | ||||||
| Deferred income tax assets | 63.1 | 77.2 | ||||||
| Goodwill | 806.4 | 801.8 | ||||||
| Other intangibles – net | 213.4 | 218.3 | ||||||
| Other assets | 142.0 | 144.5 | ||||||
| Total Assets | $ | 3,007.0 | $ | 2,710.3 | ||||
| Liabilities and Shareholders' Equity | ||||||||
| Accounts payable | $ | 108.1 | $ | 126.0 | ||||
| Notes payable and current maturities of long-term debt | 166.7 | 12.0 | ||||||
| Accrued benefits | 38.3 | 41.7 | ||||||
| Accrued compensation | 53.2 | 78.3 | ||||||
| Franchisee deposits | 42.9 | 46.9 | ||||||
| Deferred subscription revenue | 23.8 | 22.3 | ||||||
| Income taxes | 5.2 | 15.4 | ||||||
| Other accrued liabilities | 182.9 | 204.9 | ||||||
| Total current liabilities | 621.1 | 547.5 | ||||||
| Long-term debt | 652.6 | 503.4 | ||||||
| Deferred income tax liabilities | 94.8 | 95.0 | ||||||
| Retiree health care benefits | 56.2 | 57.5 | ||||||
| Pension liabilities | 214.6 | 209.1 | ||||||
| Other long-term liabilities | 81.5 | 93.3 | ||||||
| Total Liabilities | 1,720.8 | 1,505.8 | ||||||
| Shareholders' Equity | ||||||||
| Shareholders' Equity attributable to Snap-on Inc.: | ||||||||
| Common stock | 67.2 | 67.2 | ||||||
| Additional paid-in capital | 155.0 | 155.5 | ||||||
| Retained earnings | 1,501.5 | 1,463.7 | ||||||
| Accumulated other comprehensive income (loss) | (68.7 | ) | (106.5 | ) | ||||
| Treasury stock at cost | (392.6 | ) | (393.4 | ) | ||||
| Total Shareholders' Equity attributable to Snap-on Inc. | 1,262.4 | 1,186.5 | ||||||
| Noncontrolling interests | 23.8 | 18.0 | ||||||
| Total Shareholders' Equity | 1,286.2 | 1,204.5 | ||||||
| Total Liabilities and Shareholders' Equity | $ | 3,007.0 | $ | 2,710.3 | ||||
| SNAP-ON INCORPORATED | ||||||||
| Condensed Consolidated Statements of Cash Flow | ||||||||
| (Amounts in millions) | ||||||||
| (unaudited) | ||||||||
| Three Months Ended | ||||||||
| July 4, | June 28, | |||||||
| 2009 | 2008 | |||||||
| Operating activities | ||||||||
| Net earnings | $ | 42.0 | $ | 70.4 | ||||
| Adjustments to reconcile net earnings to net cash provided (used) by | ||||||||
| operating activities: | ||||||||
| Depreciation | 12.8 | 12.4 | ||||||
| Amortization of other intangibles | 6.2 | 6.4 | ||||||
| Stock-based compensation expense (income) | (4.2 | ) | 4.3 | |||||
| Excess tax benefits from stock-based compensation | - | (2.6 | ) | |||||
| Deferred income tax provision | 3.6 | 1.1 | ||||||
| Loss on sale of assets | 0.3 | 0.1 | ||||||
| Gain on mark to market for cash flow hedges | - | (0.1 | ) | |||||
| Changes in operating assets and liabilities, net of effects of acquisition: | ||||||||
| (Increase) decrease in receivables | 29.0 | 0.6 | ||||||
| (Increase) decrease in inventories | 55.1 | (28.3 | ) | |||||
| (Increase) decrease in prepaid and other assets | 11.1 | 5.3 | ||||||
| Increase (decrease) in accounts payable | (14.8 | ) | (13.2 | ) | ||||
| Increase (decrease) in accruals and other liabilities | 14.5 | 24.1 | ||||||
| Net cash provided by operating activities | 155.6 | 80.5 | ||||||
| Investing activities | ||||||||
| Capital expenditures | (19.5 | ) | (17.9 | ) | ||||
| Acquisitions of business – net of cash acquired | - | (0.4 | ) | |||||
| Proceeds from disposal of property and equipment | (0.1 | ) | 0.2 | |||||
| Other | 0.3 | (4.3 | ) | |||||
| Net cash used by investing activities | (19.3 | ) | (22.4 | ) | ||||
| Financing activities | ||||||||
| Net increase in short-term borrowings | 1.9 | 1.3 | ||||||
| Purchase of treasury stock | - | (45.5 | ) | |||||
| Proceeds from stock purchase and option plans | 3.3 | 27.8 | ||||||
| Cash dividends paid | (17.0 | ) | (17.4 | ) | ||||
| Excess tax benefits from stock-based compensation | - | 2.6 | ||||||
| Other | (3.2 | ) | (0.2 | ) | ||||
| Net cash used by financing activities | (15.0 | ) | (31.4 | ) | ||||
| Effect of exchange rate changes on cash and cash equivalents | 2.4 | (0.4 | ) | |||||
| Increase in cash and cash equivalents | 123.7 | 26.3 | ||||||
| Cash and cash equivalents at beginning of period | 400.7 | 114.3 | ||||||
| Cash and cash equivalents at end of period | $ | 524.4 | $ | 140.6 | ||||
| Supplemental cash flow disclosures | ||||||||
| Cash paid for interest | $ | (1.5 | ) | $ | (3.6 | ) | ||
| Net cash paid for income taxes | (12.8 | ) | (18.2 | ) | ||||
| SNAP-ON INCORPORATED | ||||||||
| Condensed Consolidated Statements of Cash Flow | ||||||||
| (Amounts in millions) | ||||||||
| (unaudited) | ||||||||
| Six Months Ended | ||||||||
| July 4, | June 28, | |||||||
| 2009 | 2008 | |||||||
| Operating activities | ||||||||
| Net earnings | $ | 79.2 | $ | 128.1 | ||||
| Adjustments to reconcile net earnings to net cash provided (used) by | ||||||||
| operating activities: | ||||||||
| Depreciation | 24.8 | 24.4 | ||||||
| Amortization of other intangibles | 12.3 | 12.1 | ||||||
| Stock-based compensation expense (income) | (4.2 | ) | 8.0 | |||||
| Excess tax benefits from stock-based compensation | - | (5.4 | ) | |||||
| Deferred income tax provision | 18.2 | 16.4 | ||||||
| Loss (gain) on sale of assets | 0.4 | (0.1 | ) | |||||
| Gain on mark to market for cash flow hedges | - | (0.1 | ) | |||||
| Changes in operating assets and liabilities, net of effects of acquisition: | ||||||||
| (Increase) decrease in receivables | 56.2 | (13.5 | ) | |||||
| (Increase) decrease in inventories | 62.5 | (39.5 | ) | |||||
| (Increase) decrease in prepaid and other assets | 3.1 | 14.0 | ||||||
| Increase (decrease) in accounts payable | (19.0 | ) | 6.7 | |||||
| Increase (decrease) in accruals and other liabilities | (63.2 | ) | (2.8 | ) | ||||
| Net cash provided by operating activities | 170.3 | 148.3 | ||||||
| Investing activities | ||||||||
| Capital expenditures | (33.6 | ) | (33.3 | ) | ||||
| Acquisitions of business – net of cash acquired | - | (13.8 | ) | |||||
| Proceeds from disposal of property and equipment | 0.1 | 7.7 | ||||||
| Other | 3.2 | (5.1 | ) | |||||
| Net cash used by investing activities | (30.3 | ) | (44.5 | ) | ||||
| Financing activities | ||||||||
| Proceeds from issuance of long-term debt | 297.7 | - | ||||||
| Net increase (decrease) in short-term borrowings | 4.2 | (0.7 | ) | |||||
| Purchase of treasury stock | - | (66.3 | ) | |||||
| Proceeds from stock purchase and option plans | 3.4 | 39.0 | ||||||
| Cash dividends paid | (34.4 | ) | (34.9 | ) | ||||
| Excess tax benefits from stock-based compensation | - | 5.4 | ||||||
| Other | (3.4 | ) | (0.4 | ) | ||||
| Net cash provided (used) by financing activities | 267.5 | (57.9 | ) | |||||
| Effect of exchange rate changes on cash and cash equivalents | 1.1 | 1.7 | ||||||
| Increase in cash and cash equivalents | 408.6 | 47.6 | ||||||
| Cash and cash equivalents at beginning of year | 115.8 | 93.0 | ||||||
| Cash and cash equivalents at end of period | $ | 524.4 | $ | 140.6 | ||||
| Supplemental cash flow disclosures | ||||||||
| Cash paid for interest | $ | (13.9 | ) | $ | (18.4 | ) | ||
| Net cash paid for income taxes | (23.4 | ) | (28.0 | ) | ||||
Source:
Snap-on Incorporated
Investors:
Martin M. Ellen
262/656-6462
or
Media:
Richard
Secor
262/656-5561