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Snap-on Incorporated Reports First Quarter 1999 Results
"The trend of improving results on a quarter-over-quarter basis continues," said Robert A. Cornog, Snap-on chairman, president and chief executive officer. "We're making solid progress in creating a more effective and efficient Snap-on due to Project Simplify, our recently implemented restructuring effort. We believe we are now better positioned to continue our efforts to build long-term shareholder value by taking advantage of marketplace opportunities."
The quarter included restructuring charges and other non-recurring charges related to the company's previously announced Project Simplify initiative, which it began implementing late in the third quarter of 1998.
"Snap-on's management and employees have been intensely focused on implementing the initiatives of Project Simplify. I am proud to report that Snap-on is on track, and in some cases ahead of schedule, to meet our goals. Of the $60 million in annualized savings targeted for the year 2000, we are already at $30 million on an annualized run-rate basis," said Mr. Cornog. "We are improving customer access; streamlining manufacturing, engineering, order fulfillment and administration processes; and have eliminated two business units."
The finance income for the first quarter represents a disproportionately large percentage of the full year's anticipated results due to gains on the initial tranche of receivable sales, not subject to recourse. Additionally, extended credit originations during the quarter were strong. Partially offsetting this solid contribution were unplanned operating costs primarily related to emissions programs, mainly increased costs to support a discontinued product line.
The Company noted that it repurchased $14.7 million worth of Snap-on shares during the first quarter of 1999. Since 1995, the Company has repurchased $266.5 million worth of Snap-on shares. Snap-on also reiterated that it would continue its program of share repurchases, which will be made from time to time through the open market and other purchases. The Company's outstanding authorizations now total in excess of approximately $140 million.
Snap-on Incorporated is a $1.8 billion leading global developer, manufacturer and distributor of tool and equipment solutions for professional technicians, motor service shop owners, specialty repair centers, original equipment manufacturers, and industrial tool users worldwide. Product lines include hand and power tools, diagnostics and shop equipment, tool storage units, diagnostics software, and other solutions for the transportation service industry.
Statements in this news release that are not historical facts, including statements (i) that include the words "believes," "expects," "anticipates," or "estimates" or words of similar importance 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 Corporation's ability to manufacture, distribute, and/or record the sale of products during the implementation of a new computer system involving the replacement of hardware and software components and the enterprise-wide linking of all functions; the timing or speed with which the Corporation can implement the Project Simplify initiatives and the roll-out of Snap-on Credit LLC without unanticipated complications; the Corporation's ability to withstand external negative factors including changes in trade, monetary and fiscal policies, laws and regulations, or other activities of governments or their agencies; significant changes in the current competitive environment; inflation; currency fluctuations or the material worsening of the economic and political situation in Asia or other parts of the world; and the achievement of productivity improvements and cost reductions. 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 news release.
Consolidated Balance Sheets and Statements of Earnings for First Quarter 1999
Media contact:
Richard Secor
414/656-5561