SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

X    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
--   EXCHANGE ACT OF 1934

For quarterly period ended September 30, 2000

Commission File Number 1-7724

SNAP-ON INCORPORATED
(Exact name of registrant as specified in its charter)

Delaware                                       39-0622040
(State or other jurisdiction of            (I.R.S. Employer Identification No.)
incorporation or organization)

10801 Corporate Drive, Pleasant Prairie, Wisconsin         53158-1603
(Address of principal executive offices)                 (zip code)

Registrant's telephone number, including area code:  (262) 656-5200 

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [ X ] No [ ]

Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date:

Class                                 Outstanding at October 28, 2000
--------------------------                      ----------------------------
Common stock, $1 par value                           58,187,552 shares

SNAP-ON INCORPORATED

INDEX

Page
----

Part I.    Financial Information

Consolidated Statements of Earnings -
Thirteen and Thirty-nine Weeks Ended
September 30, 2000 and October 2, 1999                      3

Consolidated Balance Sheets -
September 30, 2000 and January 1, 2000                    4-5

Consolidated Statements of Cash Flows -
Thirty-nine Weeks Ended
September 30, 2000 and October 2, 1999                      6

Notes to Consolidated Unaudited Financial Statements     7-11

Management's Discussion and Analysis of
Financial Condition and Results of Operations           12-17

Part II.   Other Information                                                 18

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

SNAP-ON INCORPORATED
CONSOLIDATED STATEMENTS OF EARNINGS
(Amounts in thousands except per share data)
(Unaudited)

Thirteen Weeks Ended             Thirty-nine Weeks Ended
--------------------             -----------------------
September 30,      October 2,       September 30,      October 2,
2000             1999               2000             1999   
---------        ---------         ----------        ----------

Net sales                                                   $ 511,830        $ 453,157         $1,619,376        $1,378,895

Cost of goods sold                                           (279,378)        (234,738)          (874,260)         (716,310)

Operating expenses                                           (189,585)        (170,504)          (582,173)         (527,215)

Net finance income                                              8,426           12,267             30,576            46,400

Restructuring and other non-recurring charges                       -           (5,315)              (353)          (14,285)

Interest expense                                              (10,297)          (5,262)           (31,195)          (15,360)

Other income (expense) - net                                    1,318           16,558              3,218             3,319
---------        ---------         ----------        ----------

Earnings before income taxes                             42,314           66,163            165,189           155,444

Income tax provision                                           15,445           23,613             60,287            55,654
---------        ---------         ----------        ----------

Net earnings                                                $  26,869        $  42,550         $  104,902        $   99,790
=========        =========         ==========        ==========

Earnings per weighted average
common share - basic                                       $     .46        $     .73         $     1.79        $     1.71
=========        =========         ==========        ==========

Earnings per weighted average
common share - diluted                                     $     .46        $     .72         $     1.79        $     1.69
=========        =========         ==========        ==========

Weighted average common shares
outstanding - basic                                          58,488           58,491             58,562            58,482

Effect of dilutive options                                        190              424                189               424
---------        ---------         ----------        ----------

Weighted average common shares
outstanding - diluted                                        58,678           58,915             58,751            58,906
=========        =========         ==========        ==========

Dividends declared per common share                         $       -        $       -         $      .70        $      .67
=========        =========         ==========        ==========

The accompanying notes are an integral part of these financial statements.

3

SNAP-ON INCORPORATED
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands except share data)

September 30,    January 1,
2000           2000  
------------     ----------
(Unaudited)
ASSETS
Current Assets
Cash and cash equivalents                       $    8,968     $   17,617

Accounts receivable, less allowances               618,067        617,645

Inventories
Finished stock                                  406,700        418,490
Work in process                                  48,097         47,869
Raw materials                                    85,329         81,856
Excess of current cost over LIFO cost           (89,383)       (93,374)
----------      ---------
Total inventory                                 450,743        454,841

Prepaid expenses and other assets                 107,324        116,238
----------      ---------
Total current assets                          1,185,102      1,206,341

Property and equipment
Land                                                24,801         26,753
Buildings and improvements                         200,151        207,959
Machinery and equipment                            479,158        454,089
----------      ---------
704,110        688,801
Accumulated depreciation                          (352,364)      (326,203)
----------      ---------
Total property and equipment                    351,746        362,598

Deferred income tax benefits                           53,804         54,652
Intangibles                                           414,540        453,293
Other assets                                           70,228         72,938
----------      ---------

Total assets                              $2,075,420     $2,149,822
==========     ==========

The accompanying notes are an integral part of these financial statements.

4

SNAP-ON INCORPORATED
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands except share data)

September 30,           January 1,
2000                  2000    
----------            ----------
(Unaudited)
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities

Accounts payable                                                   $  142,769            $  146,422
Notes payable and current maturities of long-term debt                 29,811                22,349
Accrued compensation                                                   49,221                57,540
Dealer deposits                                                        37,288                48,251
Deferred subscription revenue                                          45,662                42,056
Other accrued liabilities                                             141,385               136,131
----------            ----------
Total current liabilities                                          446,136               452,749

Long-term debt                                                           563,382               607,476
Deferred income taxes                                                     26,202                26,989
Retiree health care benefits                                              94,202                91,391
Pension liability                                                         90,302                96,238
Other long-term liabilities                                               35,400                49,718
----------            ----------
Total liabilities                                                1,255,624             1,324,561

SHAREHOLDERS' EQUITY
Preferred stock - authorized 15,000,000 shares
of $1 par value; none outstanding                                          -                     -
Common stock - authorized 250,000,000 shares
of $1 par value; issued - 66,774,173 and
66,729,457 shares                                                      66,774                66,729
Additional paid-in capital                                                43,272                62,292
Retained earnings                                                      1,020,582               957,763
Accumulated other comprehensive income (loss)                            (90,545)              (35,814)
Grantor stock trust at fair market value - 6,443,033
and 6,677,450 shares                                                 (151,798)             (177,373)
Treasury stock at cost - 2,145,047 and 1,505,339 shares                  (68,489)              (48,336)
----------            ----------

Total shareholders' equity                                         819,796               825,261
----------            ----------

Total liabilities and shareholders' equity                      $2,075,420            $2,149,822
==========            ==========

The accompanying notes are an integral part of these financial statements.

5

SNAP-ON INCORPORATED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
(Unaudited)

Thirty-nine Weeks Ended 
------------------------
September 30,         October 2,
2000                 1999   
----------            ----------
OPERATING ACTIVITIES

Net earnings                                                           $  104,902            $   99,790
Adjustments to reconcile net earnings
to net cash provided by operating activities:
Depreciation                                                            38,741                28,751
Amortization of intangibles                                             12,711                 8,828
Deferred income tax provision                                           13,916                20,364
Gain on sale of assets                                                  (2,122)               (1,183)
Gain on currency hedge for purchase
price commitment, net of tax                                               -                (1,085)
Changes in operating assets and liabilities:
(Increase) decrease in receivables                                      (9,378)               52,904
(Increase) in inventories                                               (7,645)              (42,483)
(Increase) decrease in prepaid and other assets                        (11,479)               54,265
(Decrease) in accounts payable                                          (2,045)              (24,296)
Increase (decrease) in accruals and other liabilities                  (22,480)                7,106
----------            ----------

Net cash provided by operating activities                                 115,121               202,961

INVESTING ACTIVITIES
Capital expenditures                                                      (42,440)              (27,189)
Acquisitions of businesses - net of cash acquired                          (9,610)             (460,763)
Disposal of property and equipment                                          8,205                 6,276
----------            ----------

Net cash used in investing activities                                     (43,845)             (481,676)

FINANCING ACTIVITIES
Payment of long-term debt                                                  (2,946)                    -
Increase in long-term debt                                                  4,153                 6,743
Increase (decrease) in short-term borrowings - net                        (24,544)              346,296
Purchase of treasury stock - net                                          (20,153)              (14,714)
Proceeds from stock plans                                                   6,600                 7,663
Cash dividends paid                                                       (42,083)              (39,210)
----------            ----------

Net cash provided by (used in) financing activities                       (78,973)              306,778

Effect of exchange rate changes on cash and cash equivalents                   (952)                 (416)
----------            ----------

Increase (decrease) in cash and cash equivalents                             (8,649)               27,647

Cash and cash equivalents at beginning of period                             17,617                15,041
----------            ----------

Cash and cash equivalents at end of period                               $    8,968            $   42,688
==========            ==========

The accompanying notes are an integral part of these financial statements.

6

SNAP-ON INCORPORATED
NOTES TO CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS

1.   This report should be read in conjunction with the consolidated financial
statements and related notes included in Snap-on Incorporated's Annual
Report on Form 10-K for the year ended January 1, 2000.

In the opinion of management, all adjustments (consisting only of normal
recurring adjustments and adjustments related to restructuring and other
non-recurring charges) necessary to a fair statement of financial condition
and results of operations for the thirteen and thirty-nine weeks ended
September 30, 2000, have been made. Management also believes that the
results of operations for the thirteen and thirty-nine weeks ended
September 30, 2000, are not necessarily indicative of the results to be
expected for the full year. Certain prior-year amounts have been
reclassified to conform with the current-year presentation.

2.   On September 30, 1999, Snap-on Incorporated (the "Corporation") acquired
Sandvik Saws and Tools, formerly a wholly owned operating unit of Sandvik
AB. The Sandvik Saws and Tools business now operates as the Bahco Group AB
("Bahco"). Bahco is a manufacturer and supplier of professional tool
products.

The acquisition was accounted for as a purchase and the results of Bahco
have been included in the accompanying consolidated financial statements
since the date of the acquisition. A goodwill allocation in accordance with
the criteria established under Accounting Principles Board ("APB") Opinion
No. 16, "Business Combinations," was performed. The cost of the acquisition
has been allocated based on the fair market value of the assets acquired
and liabilities assumed, resulting in goodwill of $227 million.

The following unaudited pro forma summary gives effect to the acquisition
of Bahco as if the acquisition had occurred on January 1, 1998, after
giving effect to certain adjustments for depreciation, amortization,
interest expense and income taxes associated with the purchase method of
accounting as performed at the time of the acquisition. The unaudited pro
forma summary is based on historical financial data and on assumptions and
adjustments that may be inherently subject to significant uncertainty and
contingencies. It can be expected that some or all of the assumptions on
which the following unaudited pro forma summary is based will prove to be
inaccurate. As a result, the unaudited pro forma summary does not purport
to represent what the Corporation's results of operations would have been
if the acquisition of Bahco had occurred on January 1, 1998, and is not
intended to project the Corporation's results of operations for any future
period.

7

SNAP-ON INCORPORATED
NOTES TO CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS (continued)

Thirteen        Thirty-nine
Weeks Ended     Weeks Ended
(Amounts in thousands except per share data)  October 2, 1999  October 2, 1999
---------------  ---------------
Net sales:
As reported                                    $ 453,157       $1,378,895
Pro forma (unaudited)                            528,461        1,607,841
Net earnings:
As reported                                    $  42,550       $   99,790
Pro forma (unaudited)                             39,500           96,525
Earnings per share - basic:
As reported                                    $     .73       $     1.71
Pro forma (unaudited)                                .67             1.65
Earnings per share - diluted:
As reported                                    $     .72       $     1.69
Pro forma (unaudited)                                .67             1.64

3.   During the third quarter of 2000, the Corporation signed a definitive
agreement to divest the Windsor Forestry Tools Inc. business, which was
acquired as part of the Sandvik Saws and Tools acquisition. Windsor
Forestry Tools Inc. was accounted for as held for sale since acquisition in
accordance with APB Opinion No. 16 and therefore has had no impact on the
Corporation's Consolidated Statement of Earnings.

4.   The Corporation normally declares and pays in cash four regular, quarterly
dividends. However, the third quarter dividend in each year is declared in
June, giving rise to two regular quarterly dividends appearing in the
second quarter, no regular quarterly dividends appearing in the third
quarter and three regular quarterly dividends appearing in the first
thirty-nine weeks' statements.

5.   Income tax paid for the thirty-nine week period ended September 30, 2000
and October 2, 1999 was $34.8 million and $11.0 million. Interest paid for
the thirty-nine week period ended September 30, 2000 and October 2, 1999
was $30.2 million and $20.3 million.

6.   For the first nine months of 2000, the Corporation recorded $0.3 million in
pre-tax, non-recurring charges relating to relocation costs. For the third
quarter of 1999, the Corporation recorded $5.3 million of pre-tax,
non-recurring charges comprised of employee incentives ($0.2 million),
relocation costs ($3.3 million) and professional services ($1.8 million).
For the first nine months of 1999, the Corporation recorded $14.3 million
of pre-tax, non-recurring charges comprised of employee incentives ($1.1
million), relocation costs ($7.0 million) and professional services ($6.2
million). The above non-recurring charges did not qualify for restructuring
treatment and were expensed as incurred.

7.   Earnings per share calculations were computed by dividing net earnings by
the corresponding weighted average common shares outstanding for the
period. The dilutive effect of the potential exercise of outstanding
options to purchase shares of common stock is calculated using the treasury
stock method.

8

SNAP-ON INCORPORATED
NOTES TO CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS (continued)

8.   In June 1999 the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 137, "Accounting
for Derivative Instruments and Hedging Activities - Deferral of the
Effective Date of FASB Statement No. 133." SFAS No. 137 defers the
effective date of SFAS No. 133, which establishes accounting and reporting
standards for derivative instruments and for hedging activities, to fiscal
years beginning after June 15, 2000. In June 2000 the FASB issued SFAS No.
138, "Accounting for Certain Derivative Instruments and Certain Hedging
Activities - an Amendment to FASB Statement No. 133". The Corporation has
identified all hedge activities and is currently evaluating the impact of
this pronouncement.

During the third quarter of 2000, the Corporation evaluated the Securities
and Exchange Commission's ("SEC") Staff Accounting Bulletin 101, "Revenue
Recognition in Financial Statements," which provides guidance on applying
generally accepted accounting principles for recognizing revenue. This
bulletin has no impact on the Corporation's consolidated financial
statements.

9.   Total comprehensive income for the thirteen and thirty-nine week periods
ended September 30, 2000, and October 2, 1999, was as follows:

Thirteen Weeks Ended                 Thirty-nine Weeks Ended
--------------------                 -----------------------
September 30,         October 2,       September 30,        October 2,
(Amounts in thousands)                      2000                1999              2000                 1999    
-----------         -----------        -----------         ------------

Net earnings                          $   26,869           $  42,550           $104,902           $  99,790
Foreign currency translation             (49,234)              4,216            (54,731)             (5,011)
----------         -----------         ----------         -----------
Total comprehensive income            $  (22,365)          $  46,766           $ 50,171           $  94,779
==========           =========          =========           =========

10.  The Corporation uses derivative instruments to manage well-defined interest
rate and foreign currency exposures. The Corporation does not use
derivative instruments for trading purposes. The criteria used to determine
if hedge accounting treatment is appropriate are (i) the designation of the
hedge to an underlying exposure, (ii) whether or not overall risk is being
reduced, and (iii) if there is a correlation between the value of the
derivative instrument and the underlying obligation.

Interest Rate Derivative Instruments: The Corporation enters into interest
rate swap agreements to manage interest costs and risks associated with
changing interest rates. The differentials paid or received on interest
rate agreements are accrued and recognized as adjustments to interest
expense. Gains and/or losses realized upon settlement of these agreements
are deferred and amortized to interest expense over a period relevant to
the agreement if the underlying hedged instrument remains outstanding, or
immediately if the underlying hedged instrument is settled.

Foreign Currency Derivative Instruments: The Corporation has operations in
a number of countries and, as a result, is exposed to changes in foreign
currency exchange rates. The Corporation manages most of these exposures on
a consolidated basis, which allows the netting of certain exposures to take
advantage of any natural offsets. To the extent the net exposures are
hedged, forward contracts are used. Gains and/or losses on these foreign
currency hedges are included in income in the period in which the exchange
rates change.

9

SNAP-ON INCORPORATED
NOTES TO CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS (continued)

In the second quarter of 1999, the Corporation entered into a forward
currency hedge to buy 3.2 billion of Swedish Krona on the US$400 million
equivalent purchase price commitment for the Sandvik acquisition. The hedge
was marked to market at the end of the second quarter resulting in a $13.6
million pre-tax unrealized loss. At the end of the third quarter of 1999, a
$15.3 million pre-tax gain was recognized at the close of the Sandvik
acquisition, resulting in a year-to-date net gain of $1.7 million pretax.

The pre-tax gain is included in the consolidated statements of earnings
under other income (expense) - net. Other than the forward currency hedge
related to the Sandvik acquisition, gains and/or losses from foreign
currency hedges have not been material to the consolidated financial
statements.

11.  In April 1996, the Corporation filed a complaint against SPX Corporation
("SPX") alleging infringement of the Corporation's patents and asserting
claims relating to SPX's hiring of the former president of Sun Electric.
SPX filed a counterclaim, alleging infringement of certain SPX patents.
Upon the Corporation's request for re-examination, the U.S. Patent and
Trademark Office initially rejected SPX's patents as invalid, but
reconfirmed them. Neither the complaint nor the counterclaim contains
specific allegations of damages; however, the parties' claims could involve
multiple millions of dollars. It is not possible at this time to assess the
outcome of any of the claims.

The Corporation is involved in other various legal matters that are being
defended and handled in the ordinary course of business. Although it is not
possible to predict the outcome of these other matters, management believes
that the results will not have a material impact on the Corporation's
financial statements.

12.  The Corporation has two reportable segments: Global Transportation and
Global Operations. These segments are based on the organization structure
used by management for making operating and investment decisions and for
assessing performance. The Global Transportation segment consists of the
Corporation's business operations serving the dealer van channel worldwide.
The Global Operations segment consists of the business operations serving
the direct sales and distributor channels worldwide. These two segments
derive revenues primarily from the sale of tools and equipment.

The Corporation evaluates the performance of its operating segments based
on segment net sales and pre-tax earnings. The Corporation accounts for
intersegment sales and transfers based primarily on standard costs
established between the segments. The Corporation allocates shared service
expenses to those segments that utilize the services based on their
percentage of revenues from external sources. Restructuring and other
non-recurring charges are not allocated to the reportable segments.

10

SNAP-ON INCORPORATED
NOTES TO CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS (continued)

Thirteen Weeks Ended           Thirty-nine Weeks Ended
--------------------           -----------------------
Financial data by segment:                       September 30,       October 2,    September 30,      October 2,
(Amounts in thousands)                                 2000             1999             2000            1999 
-----------      -----------      -----------     -----------

Net sales from external customers:
Global Transportation                              $   251,298      $   253,004      $   796,569     $   779,656
Global Operations                                      260,532          200,153          822,807         599,239
-----------      -----------      -----------     -----------
Total from reportable segments                     $   511,830      $   453,157      $ 1,619,376     $ 1,378,895
===========      ===========      ===========     ===========

Intersegment sales:
Global Transportation                              $        34      $        79      $        41     $        90
Global Operations                                       81,899          100,042          269,846         319,556
-----------      -----------      -----------     -----------
Total from reportable segments                          81,933          100,121          269,887         319,646
Elimination of intersegment sales                      (81,933)        (100,121)        (269,887)       (319,646)
-----------      -----------      -----------     -----------
Total consolidated intersegment sales              $         -      $         -      $         -     $         -
===========      ===========      ===========     ===========

Earnings:
Global Transportation                              $    23,590      $    30,827      $    98,996       $  87,982
Global Operations                                       19,277           17,088           63,947          47,388
-----------      -----------      -----------       ---------
Total from reportable segments                          42,867           47,915          162,943         135,370
Net finance income                                       8,426           12,267           30,576          46,400
Restructuring and other
non-recurring charges                                      -           (5,315)            (353)        (14,285)
Interest expense                                       (10,297)          (5,262)         (31,195)        (15,360)
Other income (expense) - net                             1,318           16,558            3,218           3,319
-----------      -----------      -----------      ----------
Total consolidated earnings before taxes           $    42,314       $   66,163      $   165,189      $  155,444
===========      ===========      ===========      ==========

Financial data by segment as of:                 September 30,       January 1,
(Amounts in thousands)                               2000               2000     
-----------      -----------
Total assets:

Global Transportation                              $   776,412      $   766,759
Global Operations                                    1,219,269        1,315,602
-----------      -----------
Total from reportable segments                       1,995,681        2,082,361
Financial Services                                     102,823           97,267
Elimination of intersegment receivables                (23,084)         (29,806)
-----------      -----------
Total consolidated assets                          $ 2,075,420      $ 2,149,822
===========      ===========

11

SNAP-ON INCORPORATED
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Item 2. Management's Discussion and Analysis of Financial Condition and Results
-------------------------------------------------------------------------------
of Operations.
-------------

RESULTS OF OPERATIONS

Overview: Net sales increased 12.9% to a record $511.8 million for the third
quarter and increased 17.4% to a record $1.6 billion for the first nine months
of 2000 as compared to $453.2 million and $1.4 billion in the prior-year
periods. The increase in net sales in the third quarter of 2000 primarily
reflects the contribution from Bahco Group AB ("Bahco," formerly Sandvik Saws
and Tools), which was acquired September 30, 1999. Organic sales growth was 1%
in the third quarter of 2000, excluding the 15% contribution from Bahco, the
negative 2% impact from currency translation and the negative 1% impact from
discontinued product lines. The increase in net sales for the first nine months
of 2000 primarily reflects the contribution from Bahco and growth in franchise
dealer sales. Organic sales growth for the first nine months of 2000 was 6%,
excluding the 15% contribution from Bahco, the negative 2% impact from currency
translation and the negative 2% impact from discontinued product lines.

Net earnings for the third quarter and first nine months of 2000 were $26.9
million and $104.9 million as compared to $42.6 million and $99.8 million in the
prior-year periods. Diluted earnings per share for the third quarter and first
nine months of 2000 were $0.46 and $1.79 per share, as compared to $0.72 and
$1.69 per share in the prior-year periods. Net earnings for the third quarter of
2000 were adversely impacted by a less robust market for tools and equipment in
the vehicle-repair market in both Europe and North America. Net earnings for the
nine months ended September 30, 2000 were driven by an increase in operating
profit (segment earnings before the contribution of net finance income) of
20.4%. The improvement in operating profit for the nine-month period was due to
the increase in sales and savings generated by Project Simplify. Net earnings
for both the three- and nine-month periods were impacted by higher interest
expense as a result of the Bahco acquisition and the expected decline in net
finance income.

Net earnings for the third quarter of 1999 were $36.6 million, excluding other
non-recurring charges related to Project Simplify of $3.2 million after tax, a
gain of $9.8 million after tax on the forward currency hedge for the Bahco
acquisition and a $0.7 million after tax charge resulting from settlement of
litigation with the State of Texas ("non-recurring items"). Net earnings for the
first nine months of 1999 were $108.2 million, excluding non-recurring charges
related to Project Simplify of $8.8 million after tax, a gain on a forward
currency hedge of $1.1 million after tax and the settlement of litigation with
the State of Texas of $0.7 million after tax. Diluted earnings per share,
excluding non-recurring items were $0.62 and $1.84 for the third quarter and
nine months ended October 2, 1999.

The Corporation's simplification initiative, Project Simplify, which began in
the third quarter of 1998 and was essentially completed and fully provided for
at 1999 year end, was a broad program of internal rationalizations,
consolidations and reorganizations intended to make the Corporation's business
operations simpler and more effective. The initiative's savings goal, which was
to reduce annual costs by approximately $60 million, with one-half of the
savings realized in 1999, has been achieved.

12

SNAP-ON INCORPORATED
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

For the first nine months of 2000, the Corporation recorded $0.3 million in
pre-tax, non-recurring charges relating to relocation costs. For the third
quarter of 1999, the Corporation recorded $5.3 million of pre-tax, non-recurring
charges comprised of employee incentives ($0.2 million), relocation costs ($3.3
million) and professional services ($1.8 million). For the first nine months of
1999, the Corporation recorded $14.3 million of pre-tax, non-recurring charges
comprised of employee incentives ($1.1 million), relocation costs ($7.0 million)
and professional services ($6.2 million). The above non-recurring, pre-tax
charges did not qualify for restructuring treatment and were therefore expensed
as incurred.

Segment Results: In the worldwide Snap-on(R) dealer channel segment, Global
Transportation, sales for the third quarter declined by 0.7% over the prior year
to $251.3 million. Organic sales for the segment grew 1%, excluding currency
translation and the impact of emissions-testing equipment. North American dealer
sales increased 1% in the third quarter of 2000 compared with the equivalent
period in 1999, excluding emissions-testing equipment. In local currencies,
Japan and Australia were down 8% and European dealer sales were down 5% (and
down 13% in dollar terms). Segment earnings for the third quarter decreased 24%
year-over-year, largely reflecting less-than-anticipated sales, coupled with a
less profitable product mix and higher freight costs. For the nine-month period,
sales were up 2.2% to $796.6 million. Overall, organic sales grew 4%, excluding
currency translation and the impact of emissions-testing equipment. North
American dealer sales increased 3% in the nine months of 2000 compared with the
equivalent period in 1999, excluding emissions-testing equipment. In local
currencies, Japan and Australia were up less than 1% and European dealer sales
were up 1%. Segment earnings for the nine-month period increased 13%
year-over-year reflecting sales growth. In addition, continued cost savings from
the Corporation's streamlining efforts positively influenced segment earnings
for both the three- and nine-month periods.

In the Corporation's commercial and industrial tool, diagnostics and equipment
business segment, Global Operations, sales for the third quarter grew by 30.2%
over the prior year to $260.5 million, primarily from the addition of Bahco.
Excluding currency translation, sales grew 35.3%. Organic sales for the third
quarter increased 1%, excluding Bahco and currency effects. For the third
quarter, a 5% growth in industrial sales and incremental facilitation sales to
new-vehicle dealerships was partially offset by the negative impact from
currency translation, the continued soft market for diagnostics and
emissions-testing equipment in Europe, and a decline in equipment sales in North
America. Segment earnings increased 13% during the quarter versus the comparable
prior-year period, principally from the addition of Bahco, the growth in
industrial sales and an improvement in operating profitability in Europe,
partially offset by the decline in equipment sales. For the nine months ended
September 30, 2000, sales grew by 37.3% to $822.8 million from $599.2 million in
the comparable 1999 period, primarily from the addition of Bahco and incremental
growth in the facilitation business. Excluding currency translation, sales grew
42.7%. Organic growth, excluding Bahco and the impact of currency translation
was 6.0% for the nine months ended September 30, 2000, versus the comparable
1999 period. For the nine-month period, earnings increased 35% year-over-year,
benefiting from organic growth, the addition of Bahco and improved operating
profitability in Europe, partially offset by the decline in equipment sales.

13

SNAP-ON INCORPORATED
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

Gross margins as a percentage of sales were 45.4% and 46.0% for the third
quarter and first nine months of 2000 compared to 48.2% and 48.1% in the
comparable prior-year periods. The decline in margins reflects both a shift from
the historical mix of Snap-on product to include higher volumes of lower margin
sales associated with the facilitation business (equipment sales to new vehicle
dealerships under facilitation agreements such as the Ford Rotunda program) and
sales of lower-margin Bahco product. Bahco primarily sells its products through
distributors, resulting in lower gross margins and higher operating expenses as
a percent of sales when compared to the Corporation's historical business mix.
In addition, the Corporation's margin erosion was also the result of having
significant sourcing platforms in strong currency denominated countries.

Operating expenses as a percentage of net sales decreased to 37.0% in the third
quarter of 2000 from 37.6% in the prior-year period. For the nine-month period,
operating expenses as a percentage of net sales decreased to 36.0% in 2000 from
38.2% in the prior-year period. The decline in operating expenses as a
percentage of net sales for the third quarter and nine-month periods primarily
reflects the business mix shift from the addition of Bahco and the incremental
growth of the distribution facilitation business along with benefits realized
from Project Simplify. This was partially offset by higher freight costs and
other increases in expenses not absorbed due to the less-than-anticipated sales
levels.

Net finance income was $8.4 million and $30.6 million for the third quarter and
first nine months of 2000, a decline from $12.3 million and $46.4 million in the
comparable 1999 periods. The declines in net finance income are largely a result
of difficult comparisons to 1999 and the adverse effect of higher interest
rates, partially offset by an increase in loan originations. In January 1999,
credit receivables were sold that generated a gain, the result of the
establishment of the financial services joint venture with Newcourt Financial
USA Inc. (now CIT) to leverage the infrastructure and new product development
capabilities of a strong financial products partner and to enhance economic
profit. As the Corporation made its transition to an "origination fee" business
model from what had essentially been an "interest-rate-spread" business, the
domestic credit receivables portfolio was sold, generating incremental gains.
During the third quarter and first nine months of 2000, originations have grown
at a low double-digit rate influenced by the addition of new financing products.

Interest expense for the third quarter of 2000 was $10.3 million, up from $5.3
million in the third quarter of 1999. For the first nine months of 2000,
interest expense increased to $31.2 million from $15.4 million in the comparable
1999 period. The year-over-year increase in interest expense is primarily due to
the financing of the Bahco acquisition and higher domestic and international
interest rates.

Other income (expense)-net was $1.3 million for the third quarter and $3.2
million for the first nine months of 2000 as compared to $16.6 million and $3.3
million in the comparable 1999 periods. This line item includes all
non-operating items such as interest income, minority interests, gains and
losses on the disposal of fixed assets, foreign exchange transaction gains and
losses, and other miscellaneous items. Included in the 1999 third quarter is a
$15.3 million gain on a forward currency hedge related to the purchase price
commitment for the Bahco acquisition.

14

SNAP-ON INCORPORATED
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

The effective tax rate was 36.5% in the third quarter and first nine months of
2000, and 35.7% and 35.8% in the comparable prior-year periods. The increase in
2000 is due primarily to goodwill amortization from the Bahco acquisition.

FINANCIAL CONDITION

Liquidity: Cash and cash equivalents were $9.0 million at the end of the third
quarter, down from $17.6 million at the end of 1999. Net cash provided by
operating activities was $115.1 million for the first nine months of 2000. In
the comparable prior-year period, net cash provided by operating activities was
$203.0 million, including $96.8 million related to the sale of receivables to
CIT during the first quarter of 1999. Working capital of $739.0 million at the
end of the third quarter was down from $753.6 million at the end of 1999.
Total-debt-to-total-capital ratio at the end of the third quarter was 42.0%
compared to 43.3% at year-end 1999.

The Corporation has a shelf registration that allows for the issuance from time
to time of up to $300.0 million of unsecured indebtedness. As of September 30,
2000, $100.0 million aggregate principal amount of notes have been issued. The
notes require payment of interest on a semiannual basis at a rate of 6.625% and
mature on October 1, 2005.

The Corporation believes it has sufficient sources of liquidity to support
working capital requirements, finance capital expenditures and pay dividends.

Accounts receivable, less allowances: Net receivables were $618.1 million at
September 30, 2000, versus $617.6 million at year-end.

Inventories: Inventories are down slightly to $450.7 million at the end of the
third quarter as compared to $454.8 million at the end of 1999, due to currency
translation and the emphasis on improving inventory turnover.

Capital Expenditures: Capital expenditures increased to $42.2 million at the end
of September, versus $27.2 million over last year, reflecting capital
expenditures from the addition of Bahco, new product development involving
capitalizable software, development cost for the Corporation's new e-commerce
initiative, and production and distribution equipment.

Liabilities: Total short-term and long-term debt decreased 5.8% to $593.2
million at the end of the third quarter, versus $629.8 million at the end of
1999, reflecting strong cash flow.

15

SNAP-ON INCORPORATED
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

Share repurchase: The Corporation has undertaken stock repurchases from time to
time to prevent dilution created by shares issued for employee and dealer stock
purchase plans, stock options and other corporate purposes, as well as to
repurchase shares when market conditions are favorable. At its January 1999
meeting, the Board of Directors authorized the repurchase of up to $50.0 million
of the Corporation's common stock. This action followed the board's
authorization in 1998 to repurchase up to $100.0 million of common stock and its
authorization in 1997 for the repurchase of up to $100.0 million of common
stock. At the end of 1999, all of the 1999 authorization and substantially all
of the 1998 authorization remained available. The Corporation repurchased
639,708 shares of its common stock during the third quarter of 2000, 492,800
shares in 1999 and 2,279,400 shares in 1998. Since 1995, the Corporation has
repurchased 9,209,791 shares.

Foreign currency: The Corporation operates in a number of countries and, as a
result, is exposed to changes in foreign currency exchange rates. Most of these
exposures are managed on a consolidated basis to take advantage of natural
offsets. To the extent that net exposures are hedged, forward contracts are
used. Refer to Note 10 for a discussion of the Corporation's accounting policies
for the use of derivative instruments.

Euro conversion: On January 1, 1999, certain member countries of the European
Union established fixed conversion rates between their existing currencies
("legacy currencies") and one common currency - the euro. The euro trades on
currency exchanges and may be used in business transactions. Beginning in
January 2002, the new euro-denominated bills and coins will be used, and legacy
currencies will be withdrawn from circulation. The Corporation's operating
subsidiaries affected by the euro conversion are developing plans to address the
systems and business issues affected by the euro currency conversion. These
issues include, among others, (i) the need to adapt computer and other business
systems and equipment to accommodate euro-denominated transactions, and (ii) the
competitive impact of cross-border price transparency, which may affect pricing
strategies. The Corporation does not expect this conversion to have a material
impact on its financial condition or results of operations.

Outlook: As the markets adapt to the effects of higher fuel costs, the
Corporation is beginning to see some moderation in their impact on sales levels.
The Corporation expects a resumption of increased sales during the fourth
quarter. Increasing the number of new dealers remains a point of focus. The
Corporation anticipates that the dealer network will increase approximately 10%
during the next twelve to eighteen months to better serve North American
customers. In addition, the Corporation will manage expenses to adjust to the
overall softer market conditions. As of the filing date of this Form 10-Q, as
tracked by First Call Corporation, the consensus estimate for the fourth quarter
was $0.66 per dilutive share within a range of $0.53 to $0.72 per dilutive share
and the 2001 consensus estimate was $2.74 per dilutive share within a range of
$2.55 to $2.85 per dilutive share. The Corporation currently expects to meet
these fourth quarter and year 2001 expectations.

Safe Harbor: Statements in this document that are not historical facts,
including statements (i) that include the words "believes," "expects,"
"anticipates," or "estimates" or similar words with reference to the Corporation
or management; (ii) specifically identified as forward-looking; or (iii)
describing the Corporation's or management's future plans, objectives or goals,
are forward-looking statements. The Corporation or its representatives may also
make similar forward-looking statements from time to time orally or in writing.
The Corporation cautions the reader that these statements are subject to risks,
uncertainties or other factors that could cause (and in some cases have caused)
actual results to differ materially from those described in any such statement.
Those important factors include the timing and progress with which the
Corporation can continue to achieve higher productivity and attain further cost
reductions; the Corporation's ability to retain and attract dealers, to
integrate Bahco successfully, to realize benefits in growth and efficiencies

16

SNAP-ON INCORPORATED
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

from e-business investments and to withstand external negative factors including
changes in trade, monetary and fiscal policies, laws and regulations, or other
activities of governments or their agencies; and the absence of significant
changes in the current competitive environment, inflation, oil and fuel prices,
customer demand, currency fluctuations or the material worsening of economic and
political situations around the world. These factors may not constitute all
factors that could cause actual results to differ materially from those
discussed in any forward-looking statement. The Corporation operates in a
continually changing business environment and new factors emerge from time to
time. The Corporation cannot predict such factors nor can it assess the impact,
if any, of such factors on the Corporation or its results. Accordingly,
forward-looking statements should not be relied upon as a prediction of actual
results. The Corporation disclaims any responsibility to update any
forward-looking statement provided in this document. The Corporation's outlook
contains consensus earnings estimates calculated by First Call Corporation based
on earnings projections made by the analysts who cover Snap-on Incorporated. Any
opinions, estimates or forecasts regarding Snap-on Incorporated's performance
made by these analysts are theirs alone and do not represent opinions, forecasts
or predictions of Snap-on Incorporated or its management except as specifically
noted above. First Call Corporation is a global research network that offers
shareholder data.

Item 3: Quantitative and Qualitative Disclosures About Market Risk
------------------------------------------------------------------

The Corporation uses derivative instruments to manage well-defined interest rate
and foreign currency exposures and to limit the impact of interest rate and
foreign currency rate changes on earnings and cash flows. The Corporation does
not use derivative instruments for trading purposes.

Value at Risk: The Corporation utilizes a "Value-at-Risk" ("VAR") model to
determine the potential one-day loss in the fair value of its interest rate and
foreign exchange-sensitive financial instruments from adverse changes in market
factors. The VAR model estimates are made assuming normal market conditions and
a 95% confidence level. The Corporation's computations are based on the
inter-relationships among movements in various currencies and interest rates
(variance/co-variance technique). These inter-relationships were determined by
observing interest rate and foreign currency market changes over the preceding
quarter.

The Corporation has operations in a number of countries and has intercompany
transactions among them and, as a result, is exposed to changes in foreign
currency exchange rates. The Corporation manages most of these exposures on a
consolidated basis, which allows netting certain exposures to take advantage of
any natural offsets. To the extent the net exposures are hedged, forward
contracts are used. The Corporation also enters into interest rate swap
agreements to manage interest costs and risks associated with changing interest
rates.

The estimated maximum potential one-day loss in fair value, calculated using the
VAR model, at September 30, 2000, was $0.3 million on interest rate-sensitive
financial instruments, and $0.8 million on foreign currency-sensitive financial
instruments.

The VAR model is a risk management tool and does not purport to represent actual
losses in fair value that will be incurred by the Corporation, nor does it
consider the potential effect of favorable changes in market factors.

17

PART II. OTHER INFORMATION

Item 6: Exhibits and Reports on Form 8-K
----------------------------------------

Item 6(a):  Exhibits 
--------------------

Exhibit 27        Financial Data Schedule

Exhibit 99        Acquisition Schedule

Item 6(b): Reports on Form 8-K Filed During the Reporting Period 
-----------------------------------------------------------------

During the third quarter of 2000, the Corporation reported on Form 8-K the
following:

Date Filed           Date of Report       Item
----------           --------------       ----
September 21, 2000   September 21, 2000   Item 5. The Corporation filed a press
release announcing third-quarter and 
full-year performance expectations.

18

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, Snap-on
Incorporated has duly caused this report to be signed on its behalf by the
undersigned duly authorized persons.

SNAP-ON INCORPORATED

Date:  November 13, 2000       /s/ R. A. Cornog                         
---------------------   ---------------------------------------------
R. A. CORNOG
(Chairman, President and Chief Executive Officer)

Date:  November 13, 2000       /s/ N. T. Smith                      
---------------------   ---------------------------------------------
N. T. SMITH
(Principal Accounting Officer and Controller)

19

<ARTICLE>                     5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE 
CONSOLIDATED FINANCIAL STATEMENTS OF SNAP-ON INCORPORATED AS OF AND FOR 
THE THIRTY-NINE WEEKS ENDED SEPTEMBER 30, 2000 AND IS QUALIFIED IN ITS 
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER>                                   1,000

<PERIOD-TYPE>                   9-MOS
<FISCAL-YEAR-END>                              DEC-30-2000
<PERIOD-START>                                 JAN-02-2000
<PERIOD-END>                                   SEP-30-2000
<CASH>                                         8,968
<SECURITIES>                                   0
<RECEIVABLES>                                  647,966
<ALLOWANCES>                                   29,899
<INVENTORY>                                    450,743
<CURRENT-ASSETS>                               1,185,102
<PP                                         704,110
<DEPRECIATION>                                 352,364
<TOTAL-ASSETS>                                 2,075,420
<CURRENT-LIABILITIES>                          446,136
<BONDS>                                        563,382
<PREFERRED-MANDATORY>                          0
<PREFERRED>                                    0
<COMMON>                                       66,774
<OTHER-SE>                                     753,022
<TOTAL-LIABILITY-AND-EQUITY>                   2,075,420
<SALES>                                        1,619,376
<TOTAL-REVENUES>                               1,619,376
<CGS>                                          874,260
<TOTAL-COSTS>                                  874,260
<OTHER-EXPENSES>                               582,173
<LOSS-PROVISION>                               0
<INTEREST-EXPENSE>                             31,195
<INCOME-PRETAX>                                165,189
<INCOME-TAX>                                   60,287
<INCOME-CONTINUING>                            104,902
<DISCONTINUED>                                 0
<EXTRAORDINARY>                                0
<CHANGES>                                      0
<NET-INCOME>                                   104,902
<EPS-BASIC>                                    1.79
<EPS-DILUTED>                                  1.79

Exhibit 99

UNAUDITED PRO FORMA FINANICAL STATEMENT SCHEDULE
OF BAHCO GROUP AB ACQUISITION

On September 30, 1999, the Corporation acquired Sandvik Saws and Tools, formerly
a wholly owned operating unit of Sandvik AB. Sandvik Saws and Tools business now
operates as the Bahco Group AB ("Bahco"). Bahco is a manufacturer and supplier
of professional tool products and employs approximately 2,400 people. Of those,
approximately 1,000 employees are in Sweden. Products are manufactured at 11
plants in Sweden, Germany, Portugal, France, England, the United States and
Argentina.

The acquisition has been accounted for as a purchase and the results of Bahco
have been included in the accompanying consolidated financial statements since
the date of the acquisition. The total purchase price of $391 million includes
the purchase of facilities, a number of brand names and trademarks, and certain
other assets and liabilities. The Corporation funded the acquisition through
working capital and an expansion of an existing commercial paper credit
facility.

A goodwill allocation in accordance with the criteria established under
Accounting Principles Board ("APB") Opinion No. 16, "Business Combinations," has
been performed. The cost of the acquisition has been allocated on the basis of
the fair market value of the assets acquired and the liabilities assumed,
resulting in goodwill of $227 million.

The allocation of the purchase price of $391 million, which includes direct
acquisition costs of $14 million, is as follows:

(Amounts in millions)
Fair value of property and equipment                   $    98
Fair value of patents and trademarks                        25
Other net assets acquired                                   41
Goodwill                                                   227
-------
Purchase price                                      $   391
=======

Assigned useful lives are as follows:
Patents                                            13 years
Trademarks                                         40 years
Goodwill                                           40 years

The following unaudited pro forma statement of earnings of the Corporation gives
effect to the acquisition of Bahco as if the acquisition had occurred on January
1, 1998, after giving effect to certain adjustments for depreciation,
amortization, interest expense, and income taxes associated with the purchase
method of accounting as performed at the time of the acquisition.

For pro forma purposes, the Corporation's Unaudited Consolidated Statement of
Earnings for the thirteen weeks ended October 2, 1999, has been combined with
the Unaudited Combined Statement of Revenues and Direct Expenses of the Bahco
Group for the three months ended September 30, 1999, and the effects of pro
forma adjustments as set forth in the notes thereto.

For pro forma purposes, the Corporation's Unaudited Consolidated Statement of
Earnings for the thirty-nine weeks ended October 2, 1999, has been combined with
the Unaudited Combined Statement of Revenues and Direct Expenses of the Bahco
Group for the nine months ended September 30, 1999, and the effects of pro forma
adjustments as set forth in the notes thereto.

The following unaudited pro forma statements of earnings are based on historical
financial data and on assumptions and adjustments described in the notes
thereto. All such assumptions and adjustments are inherently subject to
significant uncertainty and contingencies. It can be expected that some or all
of the assumptions on which the following unaudited pro forma statements of
earnings are based will prove to be inaccurate. As a result, the unaudited pro
forma statements of earnings do not purport to represent what the Corporation's
results of operations would have been if the acquisition of Bahco had occurred
on January 1, 1998, and is not intended to project the Company's results of
operations for any future period. The actual purchase price allocation will
result in changes to the amount of recorded assets and goodwill included as pro
forma amounts.

1

Unaudited Pro Forma Statement of Earnings
(Amounts in thousands except per share data)

Snap-on             Bahco Group
Incorporated           Unaudited
Unaudited             Combined
Consolidated           Statement of
Statement            Revenues and
of Earnings          Direct Expenses
Thirteen Weeks         Three-Months
Ended                 Ended             Pro forma  
October 2, 1999       September 30, 1999     Adjustments         Pro forma
-----------------------------------------------------------    -------------

Net sales                                              $  453,157            $    75,304         $       -           $ 528,461

Cost of goods sold                                       (234,738)               (55,349)             (615) a         (290,702)

Operating expenses                                       (170,504)               (18,743)           (1,320) b         (190,567)

Net finance income                                         12,267                      -                 -              12,267

Restructuring and other non-recurring charges              (5,315)                     -                 -              (5,315)

Interest expense                                           (5,262)                     -            (3,912) c           (9,174)

Other income (expense) - net                               16,558                    185                 -              16,743
----------            -----------         ---------           ---------
Earnings (loss) before income taxes                        66,163                  1,397            (5,847)             61,713

Income tax provision (benefit)                             23,613                      -            (1,400) d           22,213
----------            -----------         ---------           ---------

Net earnings (loss)                                    $   42,550            $     1,397         $  (4,447)          $  39,500
==========            ===========         =========           =========
Earnings per weighted average
common share - basic                                  $      .73                                                    $     .67
==========                                                    =========
Earnings per weighted average
common share - diluted                                $      .72                                                    $     .67
==========                                                    =========
Weighted average common shares
outstanding - basic                                      58,491                                                       58,491

Effect of dilutive options                                    424                                                          424
----------                                                    ---------
Weighted average common shares
outstanding - diluted                                    58,915                                                       58,915
==========                                                    =========

2

Unaudited Pro Forma Statement of Earnings
(Amounts in thousands except per share data)

Snap-on             Bahco Group
Incorporated           Unaudited
Unaudited             Combined
Consolidated           Statement of
Statement            Revenues and
of Earnings          Direct Expenses
Thiry-nine Weeks         Nine Months
Ended                 Ended             Pro forma  
October 2, 1999       September 30, 1999     Adjustments         Pro forma
-----------------------------------------------------------    -------------

Net sales                                             $ 1,378,895            $   228,946         $       -          $ 1,607,841

Cost of goods sold                                       (716,310)              (159,064)           (1,845) a          (877,219)

Operating expenses                                       (527,215)               (57,964)           (3,960) b          (589,139)

Net finance income                                         46,400                      -                 -               46,400

Restructuring and other non-recurring charges             (14,285)                     -                 -              (14,285)

Interest expense                                          (15,360)                     -           (11,738) c           (27,098)

Other income (expense) - net                                3,319                    983                 -                4,302 
-----------            -----------         ---------           ----------
Earnings (loss) before income taxes                       155,444                 12,901           (17,543)             150,802

Income tax provision (benefit)                             55,654                      -            (1,377) d            54,277
-----------            -----------         ---------           ----------

Net earnings (loss)                                   $    99,790            $    12,901         $ (16,166)          $   96,525
===========            ===========         =========           ==========

Earnings per weighted average
common share - basic                                 $      1.71                                                    $     1.65
===========                                                    ==========

Earnings per weighted average
common share - diluted                               $      1.69                                                    $     1.64
===========                                                    ==========

Weighted average common shares
outstanding - basic                                      58,482                                                        58,482

Effect of dilutive options                                    424                                                           424
-----------                                                    ----------
Weighted average common shares
outstanding - diluted                                    58,906                                                        58,906
===========                                                    ==========

3

The following notes to the pro forma adjustments for the Unaudited Pro forma
Statement of Earnings for the third quarter and first nine months of 1999
represent the adjustments that would have resulted from the acquisition of the
Bahco Group had the acquisition occurred on January 1, 1998.

(a)  To adjust depreciation expense for the preliminary change in the basis to
fair market value of property, plant and equipment.

(b)  To adjust depreciation and amortization expense for the preliminary change
in the basis to fair market value of property, plant and equipment and
intangible assets, including goodwill.

(c)  To record additional interest expense resulting from the debt issued to
acquire the Bahco Group.

(d)  To record an income tax benefit(expense) to return to an appropriate
consolidated effective tax rate of 36% for 1999.

4