News Release
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Snap-on Announces First Quarter 2013 Results
Diluted EPS of
Operating
earnings before financial services of 14.5% of sales improves 120 basis
points
-
Sales of
$741.7 million increased$6.5 million , or 0.9%, from 2012 levels; excluding$4.3 million of unfavorable foreign currency translation, organic sales increased 1.5%. -
Operating earnings before financial services of
$107.8 million improved to 14.5% of sales as compared to$97.5 million , or 13.3% of sales, last year. -
Financial services operating earnings of
$30.5 million increased$6.6 million from 2012 levels. -
Consolidated operating earnings of
$138.3 million improved to 17.6% of revenues (net sales plus financial services revenue) as compared to$121.4 million , or 15.7% of revenues, last year. -
Net earnings of
$82.8 million , or$1.40 per diluted share, compares with net earnings of$71.0 million , or$1.21 per diluted share, a year ago.
“We’re encouraged with our first quarter performance, which included a
significant improvement in operating margin and a 15.7% increase in
diluted earnings per share, despite continuing headwinds that are
impacting specific areas of our business,” said
Segment Results
Operating earnings of
Operating earnings of
Operating earnings of
Financial Services operating earnings of
Corporate expenses of
Outlook
In 2013,
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 | ||||||||
March 30, | March 31, | |||||||
2013 | 2012 | |||||||
Net sales | $ | 741.7 | $ | 735.2 | ||||
Cost of goods sold | (384.8 | ) | (387.5 | ) | ||||
Gross profit | 356.9 | 347.7 | ||||||
Operating expenses | (249.1 | ) | (250.2 | ) | ||||
Operating earnings before financial services | 107.8 | 97.5 | ||||||
Financial services revenue | 44.0 | 38.0 | ||||||
Financial services expenses | (13.5 | ) | (14.1 | ) | ||||
Operating earnings from financial services | 30.5 | 23.9 | ||||||
Operating earnings | 138.3 | 121.4 | ||||||
Interest expense | (13.6 | ) | (13.9 | ) | ||||
Other income (expense) – net | (0.6 | ) | (0.4 | ) | ||||
Earnings before income taxes and equity earnings (loss) |
124.1 | 107.1 | ||||||
Income tax expense | (38.8 | ) | (35.2 | ) | ||||
Earnings before equity earnings (loss) | 85.3 | 71.9 | ||||||
Equity earnings (loss), net of tax | (0.2 | ) | 1.1 | |||||
Net earnings | 85.1 | 73.0 | ||||||
Net earnings attributable to noncontrolling interests | (2.3 | ) | (2.0 | ) | ||||
Net earnings attributable to Snap-on Inc. | $ | 82.8 | $ | 71.0 | ||||
Net earnings per share attributable to Snap-on Inc.: | ||||||||
Basic | $ | 1.42 | $ | 1.22 | ||||
Diluted | 1.40 | 1.21 | ||||||
Weighted-average shares outstanding: | ||||||||
Basic | 58.3 | 58.2 | ||||||
Effect of dilutive options | 0.9 | 0.6 | ||||||
Diluted | 59.2 | 58.8 | ||||||
SNAP-ON INCORPORATED | ||||||||
Supplemental Segment Information | ||||||||
(Amounts in millions) | ||||||||
(unaudited) | ||||||||
Three Months Ended | ||||||||
March 30, | March 31, | |||||||
2013 | 2012 | |||||||
Net sales: | ||||||||
Commercial & Industrial Group | $ | 266.4 | $ | 286.5 | ||||
Snap-on Tools Group | 327.3 | 316.6 | ||||||
Repair Systems & Information Group | 246.1 | 226.1 | ||||||
Segment net sales | 839.8 |
|
829.2 | |||||
Intersegment eliminations | (98.1 | ) | (94.0 | ) | ||||
Total net sales | $ | 741.7 | $ | 735.2 | ||||
Financial Services revenue | 44.0 | 38.0 | ||||||
Total revenues | $ | 785.7 | $ | 773.2 | ||||
Operating earnings: | ||||||||
Commercial & Industrial Group | $ | 30.6 | $ | 29.2 | ||||
Snap-on Tools Group | 47.2 | 46.1 | ||||||
Repair Systems & Information Group | 56.5 | 48.6 | ||||||
Financial Services | 30.5 | 23.9 | ||||||
Segment operating earnings | 164.8 |
|
147.8 | |||||
Corporate | (26.5 | ) | (26.4 | ) | ||||
Operating earnings | $ | 138.3 | $ | 121.4 | ||||
Interest expense | (13.6 | ) | (13.9 | ) | ||||
Other income (expense) – net | (0.6 | ) | (0.4 | ) | ||||
Earnings before income taxes and equity earnings (loss) |
$ | 124.1 | $ | 107.1 | ||||
SNAP-ON INCORPORATED | ||||||||
Condensed Consolidated Balance Sheets | ||||||||
(Amounts in millions) | ||||||||
(unaudited) | ||||||||
March 30, | December 29, | |||||||
2013 | 2012 | |||||||
Assets | ||||||||
Cash and cash equivalents | $ | 213.6 | $ | 214.5 | ||||
Trade and other accounts receivable – net | 500.2 | 497.9 | ||||||
Finance receivables – net | 329.3 | 323.1 | ||||||
Contract receivables – net | 58.6 | 62.7 | ||||||
Inventories – net | 401.3 | 404.2 | ||||||
Deferred income tax assets | 73.1 | 81.8 | ||||||
Prepaid expenses and other assets | 99.7 | 84.8 | ||||||
Total current assets |
1,675.8 | 1,669.0 | ||||||
Property and equipment – net | 372.3 | 375.2 | ||||||
Deferred income tax assets | 107.2 | 110.4 | ||||||
Long-term finance receivables – net | 502.6 | 494.6 | ||||||
Long-term contract receivables – net | 201.6 | 194.4 | ||||||
Goodwill | 800.3 | 807.4 | ||||||
Other intangibles – net | 185.5 | 187.2 | ||||||
Other assets | 57.9 | 64.1 | ||||||
Total assets | $ | 3,903.2 | $ | 3,902.3 | ||||
Liabilities and Equity | ||||||||
Notes payable and current maturities of long-term debt | $ | 111.4 | $ | 5.2 | ||||
Accounts payable | 148.7 | 142.5 | ||||||
Accrued benefits | 50.7 | 50.6 | ||||||
Accrued compensation | 62.2 | 88.3 | ||||||
Franchisee deposits | 51.5 | 54.7 | ||||||
Other accrued liabilities | 245.2 | 247.9 | ||||||
Total current liabilities | 669.7 | 589.2 | ||||||
Long-term debt | 868.0 | 970.4 | ||||||
Deferred income tax liabilities | 133.8 | 127.1 | ||||||
Retiree health care benefits | 47.2 | 48.4 | ||||||
Pension liabilities | 252.9 | 260.7 | ||||||
Other long-term liabilities | 85.2 | 87.5 | ||||||
Total liabilities | 2,056.8 | 2,083.3 | ||||||
Equity | ||||||||
Shareholders' equity attributable to Snap-on Inc. | ||||||||
Common stock | 67.4 | 67.4 | ||||||
Additional paid-in capital | 203.1 | 204.6 | ||||||
Retained earnings | 2,127.3 | 2,067.0 | ||||||
Accumulated other comprehensive loss | (146.5 | ) | (124.2 | ) | ||||
Treasury stock at cost | (421.8 | ) | (412.7 | ) | ||||
Total shareholders' equity attributable to Snap-on Inc. | 1,829.5 | 1,802.1 | ||||||
Noncontrolling interests | 16.9 | 16.9 | ||||||
Total equity | 1,846.4 | 1,819.0 | ||||||
Total liabilities and equity | $ | 3,903.2 | $ | 3,902.3 | ||||
SNAP-ON INCORPORATED | ||||||||
Condensed Consolidated Statements of Cash Flow | ||||||||
(Amounts in millions) | ||||||||
(unaudited) | ||||||||
Three Months Ended | ||||||||
March 30, | March 31, | |||||||
2013 | 2012 | |||||||
Operating activities: | ||||||||
Net earnings | $ | 85.1 | $ | 73.0 | ||||
Adjustments to reconcile net earnings to net cash provided (used) by operating activities: |
||||||||
Depreciation | 12.5 | 12.6 | ||||||
Amortization of other intangibles | 6.3 | 6.4 | ||||||
Provision for losses on finance receivables | 3.9 | 3.9 | ||||||
Provision for losses on non-finance receivables | 4.1 | 2.8 | ||||||
Stock-based compensation expense | 9.5 | 8.7 | ||||||
Excess tax benefits from stock-based compensation | (4.0 | ) | (2.0 | ) | ||||
Deferred income tax provision | 14.4 | 13.4 | ||||||
Gain on sale of assets | (0.1 | ) | (0.8 | ) | ||||
Changes in operating assets and liabilities: | ||||||||
(Increase) decrease in trade and other accounts receivable | (12.3 | ) | 3.0 | |||||
Increase in contract receivables | (6.5 | ) | (4.2 | ) | ||||
Increase in inventories | (3.1 | ) | (4.1 | ) | ||||
Increase in prepaid and other assets | (9.3 | ) | (20.4 | ) | ||||
Increase in accounts payable | 9.9 | 15.0 | ||||||
Decrease in accruals and other liabilities | (34.7 | ) | (42.3 | ) | ||||
Net cash provided by operating activities | 75.7 | 65.0 | ||||||
Investing activities: | ||||||||
Additions to finance receivables | (144.4 | ) | (135.5 | ) | ||||
Collections of finance receivables | 122.5 | 106.1 | ||||||
Capital expenditures | (14.7 | ) | (21.8 | ) | ||||
Disposal of property and equipment | 0.3 | 1.9 | ||||||
Other | (10.2 | ) | - | |||||
Net cash used by investing activities | (46.5 | ) | (49.3 | ) | ||||
Financing activities: | ||||||||
Proceeds from short-term borrowings | - | 6.5 | ||||||
Repayments of short-term borrowings | (0.5 | ) | (7.7 | ) | ||||
Net increase (decrease) in other short-term borrowings | 6.6 | (1.0 | ) | |||||
Cash dividends paid | (22.1 | ) | (20.1 | ) | ||||
Purchase of treasury stock | (21.7 | ) | (29.9 | ) | ||||
Proceeds from stock purchase and option plans | 7.4 | 13.3 | ||||||
Excess tax benefits from stock-based compensation | 4.0 | 2.0 | ||||||
Other | (3.0 | ) | (3.6 | ) | ||||
Net cash used by financing activities | (29.3 | ) | (40.5 | ) | ||||
Effect of exchange rate changes on cash and cash equivalents | (0.8 | ) | 0.8 | |||||
Decrease in cash and cash equivalents | (0.9 | ) | (24.0 | ) | ||||
Cash and cash equivalents at beginning of year | 214.5 | 185.6 | ||||||
Cash and cash equivalents at end of period | $ | 213.6 | $ | 161.6 | ||||
|
|
|||||||
Supplemental cash flow disclosures: | ||||||||
Cash paid for interest | $ | (25.9 | ) | $ | (26.2 | ) | ||
Net cash paid for income taxes | (21.6 | ) | (6.9 | ) | ||||
SNAP-ON INCORPORATED | ||||||||||||||||
Supplemental Consolidating Data - Condensed Statements of Earnings | ||||||||||||||||
(Amounts in millions) | ||||||||||||||||
(unaudited) | ||||||||||||||||
Operations* | Financial Services | |||||||||||||||
Three Months Ended | Three Months Ended | |||||||||||||||
March 30, | March 31, | March 30, | March 31, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Net sales | $ | 741.7 | $ | 735.2 | $ | - | $ | - | ||||||||
Cost of goods sold | (384.8 | ) | (387.5 | ) | - | - | ||||||||||
Gross profit | 356.9 | 347.7 | - | - | ||||||||||||
Operating expenses | (249.1 | ) | (250.2 | ) | - | - | ||||||||||
Operating earnings before financial services | 107.8 | 97.5 | - | - | ||||||||||||
Financial services revenue | - | - | 44.0 | 38.0 | ||||||||||||
Financial services expenses | - | - | (13.5 | ) | (14.1 | ) | ||||||||||
Operating earnings from financial services | - | - | 30.5 | 23.9 | ||||||||||||
Operating earnings | 107.8 | 97.5 | 30.5 | 23.9 | ||||||||||||
Interest expense | (13.2 | ) | (13.6 | ) | (0.4 | ) | (0.3 | ) | ||||||||
Intersegment interest income (expense) – net | 11.3 | 9.8 | (11.3 | ) | (9.8 | ) | ||||||||||
Other income (expense) – net | (0.7 | ) | (0.4 | ) | 0.1 | - | ||||||||||
Earnings before income taxes and equity earnings (loss) |
105.2 | 93.3 | 18.9 | 13.8 | ||||||||||||
Income tax expense | (31.9 | ) | (30.1 | ) | (6.9 | ) | (5.1 | ) | ||||||||
Earnings before equity earnings (loss) | 73.3 | 63.2 | 12.0 | 8.7 | ||||||||||||
Financial services – net earnings attributable to Snap-on Inc. |
12.0 | 8.7 | - | - | ||||||||||||
Equity earnings (loss), net of tax | (0.2 | ) | 1.1 | - | - | |||||||||||
Net earnings | 85.1 | 73.0 | 12.0 | 8.7 | ||||||||||||
Net earnings attributable to noncontrolling interests | (2.3 | ) | (2.0 | ) | - | - | ||||||||||
Net earnings attributable to Snap-on Inc. | $ | 82.8 | $ | 71.0 | $ | 12.0 | $ | 8.7 | ||||||||
* | Snap-on Inc. with Financial Services on the equity method. |
Transactions between Operations and Financial Services were eliminated to arrive at the consolidated financial statements. | |
SNAP-ON INCORPORATED | ||||||||||||
Supplemental Consolidating Data - Condensed Balance Sheets | ||||||||||||
(Amounts in millions) | ||||||||||||
(unaudited) | ||||||||||||
Operations* | Financial Services | |||||||||||
March 30, | December 29, | March 30, | December 29, | |||||||||
2013 | 2012 | 2013 | 2012 | |||||||||
Assets | ||||||||||||
Cash and cash equivalents | $ | 209.3 | $ | 211.2 | $ | 4.3 | $ | 3.3 | ||||
Intersegment receivables | 12.7 | 14.1 | - | - | ||||||||
Trade and other accounts receivable – net | 499.8 | 497.5 | 0.4 | 0.4 | ||||||||
Finance receivables – net | - | - | 329.3 | 323.1 | ||||||||
Contract receivables – net | 7.5 | 7.4 | 51.1 | 55.3 | ||||||||
Inventories – net | 401.3 | 404.2 | - | - | ||||||||
Deferred income tax assets | 61.1 | 68.8 | 12.0 | 13.0 | ||||||||
Prepaid expenses and other assets | 103.2 | 88.3 | 1.1 | 1.0 | ||||||||
Total current assets | 1,294.9 | 1,291.5 | 398.2 | 396.1 | ||||||||
Property and equipment – net | 370.4 | 373.2 | 1.9 | 2.0 | ||||||||
Investment in Financial Services | 172.3 | 165.3 | - | - | ||||||||
Deferred income tax assets | 107.0 | 110.2 | 0.2 | 0.2 | ||||||||
Long-term finance receivables – net | - | - | 502.6 | 494.6 | ||||||||
Long-term contract receivables – net | 12.1 | 12.1 | 189.5 | 182.3 | ||||||||
Goodwill | 800.3 | 807.4 | - | - | ||||||||
Other intangibles – net | 185.5 | 187.2 | - | - | ||||||||
Other assets | 59.2 | 65.3 | 1.0 | 1.1 | ||||||||
Total assets | $ | 3,001.7 | $ | 3,012.2 | $ | 1,093.4 | $ | 1,076.3 | ||||
Liabilities and Equity | ||||||||||||
Notes payable and current maturities of long-term debt | $ | 13.2 | $ | 5.2 | $ | 98.2 | $ | - | ||||
Accounts payable | 148.2 | 142.1 | 0.5 | 0.4 | ||||||||
Intersegment payables | - | - | 12.7 | 14.1 | ||||||||
Accrued benefits | 50.6 | 50.6 | 0.1 | - | ||||||||
Accrued compensation | 60.9 | 84.9 | 1.3 | 3.4 | ||||||||
Franchisee deposits | 51.5 | 54.7 | - | - | ||||||||
Other accrued liabilities | 224.9 | 207.8 | 27.2 | 46.9 | ||||||||
Total current liabilities | 549.3 | 545.3 | 140.0 | 64.8 | ||||||||
Long-term debt and intersegment long-term debt | 105.0 | 143.2 | 763.0 | 827.2 | ||||||||
Deferred income tax liabilities | 132.8 | 125.7 | 1.0 | 1.4 | ||||||||
Retiree health care benefits | 47.2 | 48.4 | - | - | ||||||||
Pension liabilities | 252.9 | 260.7 | - | - | ||||||||
Other long-term liabilities | 68.1 | 69.9 | 17.1 | 17.6 | ||||||||
Total liabilities | 1,155.3 | 1,193.2 | 921.1 | 911.0 | ||||||||
Total shareholders' equity attributable to Snap-on Inc. | 1,829.5 | 1,802.1 | 172.3 | 165.3 | ||||||||
Noncontrolling interests | 16.9 | 16.9 | - | - | ||||||||
Total equity | 1,846.4 | 1,819.0 | 172.3 | 165.3 | ||||||||
Total liabilities and equity | $ | 3,001.7 | $ | 3,012.2 | $ | 1,093.4 | $ | 1,076.3 | ||||
* | Snap-on Inc. with Financial Services on the equity method. |
Transactions between Operations and Financial Services were eliminated to arrive at the consolidated financial statements. |
Source:
Snap-on Incorporated
Investors:
Leslie Kratcoski, 262/656-6121
or
Media:
Richard
Secor, 262/656-5561