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Snap-on Announces First Quarter 2017 Results
Diluted EPS of
Operating earnings before financial services of 19.1% of sales up 50 basis points;
Reported net sales up 6.3%; Organic net sales up 4.1%
-
Net sales of
$887.1 million increased$52.9 million , or 6.3%, from 2016 levels, reflecting a$33.4 million , or 4.1%, organic sales gain and$29.1 million of acquisition-related sales, partially offset by$9.6 million of unfavorable foreign currency translation. (See “Non-GAAP Measures” below for a definition of, and further explanation about, organic sales.) -
Operating earnings before financial services of
$169.5 million improved 50 basis points to 19.1% of sales as compared to$155.4 million , or 18.6% of sales, last year. -
Financial services revenue of
$76.8 million increased$10.5 million from 2016 levels; financial services operating earnings of$52.5 million increased$5.5 million . -
Consolidated operating earnings of
$222.0 million improved 50 basis points to 23.0% of revenues (net sales plus financial services revenue) as compared to$202.4 million , or 22.5% of revenues, last year. - The first quarter effective income tax rate was 30.7% in 2017 and 31.0% in 2016.
-
Net earnings of
$141.6 million , or$2.39 per diluted share, compared to net earnings of$128.3 million , or$2.16 per diluted share, a year ago.
“We’re encouraged by our first quarter results,” said
Segment Results
Operating earnings of
Operating earnings of
Operating earnings of
Financial Services operating earnings of
Corporate expenses of
Outlook
Conference Call and Webcast on
A discussion of this release will be webcast on
Non-GAAP Measures
References in this document to “organic sales” refer to sales from
continuing operations calculated in accordance with generally accepted
accounting principles in
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 | ||||||||
April 1, | April 2, | |||||||
2017 | 2016 | |||||||
Net sales | $ | 887.1 | $ | 834.2 | ||||
Cost of goods sold | (439.1 | ) | (418.9 | ) | ||||
Gross profit | 448.0 | 415.3 | ||||||
Operating expenses | (278.5 | ) | (259.9 | ) | ||||
Operating earnings before financial services | 169.5 | 155.4 | ||||||
Financial services revenue | 76.8 | 66.3 | ||||||
Financial services expenses | (24.3 | ) | (19.3 | ) | ||||
Operating earnings from financial services | 52.5 | 47.0 | ||||||
Operating earnings | 222.0 | 202.4 | ||||||
Interest expense | (12.7 | ) | (13.1 | ) | ||||
Other income (expense) – net | (1.7 | ) | (0.7 | ) | ||||
Earnings before income taxes and equity earnings | 207.6 | 188.6 | ||||||
Income tax expense | (62.6 | ) | (57.6 | ) | ||||
Earnings before equity earnings | 145.0 | 131.0 | ||||||
Equity earnings, net of tax | 0.1 | 0.3 | ||||||
Net earnings | 145.1 | 131.3 | ||||||
Net earnings attributable to noncontrolling interests | (3.5 | ) | (3.0 | ) | ||||
Net earnings attributable to Snap-on Inc. | $ | 141.6 | $ | 128.3 | ||||
Net earnings per share attributable to Snap-on Inc.: | ||||||||
Basic | $ | 2.45 | $ | 2.21 | ||||
Diluted | 2.39 | 2.16 | ||||||
Weighted-average shares outstanding: | ||||||||
Basic | 57.9 | 58.1 | ||||||
Effect of dilutive securities | 1.4 | 1.4 | ||||||
Diluted | 59.3 | 59.5 |
SNAP-ON INCORPORATED | ||||||||
Supplemental Segment Information | ||||||||
(Amounts in millions) | ||||||||
(unaudited) | ||||||||
Three Months Ended | ||||||||
April 1, | April 2, | |||||||
2017 | 2016 | |||||||
Net sales: | ||||||||
Commercial & Industrial Group | $ | 298.7 | $ | 287.0 | ||||
Snap-on Tools Group | 409.4 | 402.5 | ||||||
Repair Systems & Information Group | 318.8 | 278.8 | ||||||
Segment net sales | 1,026.9 | 968.3 | ||||||
Intersegment eliminations | (139.8 | ) | (134.1 | ) | ||||
Total net sales | $ | 887.1 | $ | 834.2 | ||||
Financial Services revenue | 76.8 | 66.3 | ||||||
Total revenues | $ | 963.9 | $ | 900.5 | ||||
Operating earnings: | ||||||||
Commercial & Industrial Group | $ | 41.6 | $ | 41.1 | ||||
Snap-on Tools Group | 70.3 | 66.7 | ||||||
Repair Systems & Information Group | 78.7 | 69.0 | ||||||
Financial Services | 52.5 | 47.0 | ||||||
Segment operating earnings | 243.1 | 223.8 | ||||||
Corporate | (21.1 | ) | (21.4 | ) | ||||
Operating earnings | $ | 222.0 | $ | 202.4 | ||||
Interest expense | (12.7 | ) | (13.1 | ) | ||||
Other income (expense) – net | (1.7 | ) | (0.7 | ) | ||||
Earnings before income taxes | ||||||||
and equity earnings | $ | 207.6 | $ | 188.6 |
SNAP-ON INCORPORATED | ||||||||||
Condensed Consolidated Balance Sheets | ||||||||||
(Amounts in millions) | ||||||||||
(unaudited) | ||||||||||
April 1, | December 31, | |||||||||
2017 | 2016 | |||||||||
Assets | ||||||||||
Cash and cash equivalents | $ | 123.0 | $ | 77.6 | ||||||
Trade and other accounts receivable – net | 608.1 | 598.8 | ||||||||
Finance receivables – net | 484.7 | 472.5 | ||||||||
Contract receivables – net | 84.5 | 88.1 | ||||||||
Inventories – net | 556.8 | 530.5 | ||||||||
Prepaid expenses and other assets | 117.0 | 116.5 | ||||||||
Total current assets | 1,974.1 | 1,884.0 | ||||||||
Property and equipment – net | 437.5 | 425.2 | ||||||||
Deferred income tax assets | 68.0 | 72.8 | ||||||||
Long-term finance receivables – net | 966.3 | 934.5 | ||||||||
Long-term contract receivables – net | 292.6 | 286.7 | ||||||||
Goodwill | 859.8 | 895.5 | ||||||||
Other intangibles – net | 240.4 | 184.6 | ||||||||
Other assets | 39.1 | 39.9 | ||||||||
Total assets | $ | 4,877.8 | $ | 4,723.2 | ||||||
Liabilities and Equity | ||||||||||
Notes payable and current maturities of long-term debt | $ | 267.2 | $ | 301.4 | ||||||
Accounts payable | 189.9 | 170.9 | ||||||||
Accrued benefits | 52.5 | 52.8 | ||||||||
Accrued compensation | 61.5 | 89.8 | ||||||||
Franchisee deposits | 66.1 | 66.7 | ||||||||
Other accrued liabilities | 334.3 | 307.9 | ||||||||
Total current liabilities | 971.5 | 989.5 | ||||||||
Long-term debt | 755.4 | 708.8 | ||||||||
Deferred income tax liabilities | 24.4 | 13.1 | ||||||||
Retiree health care benefits | 35.9 | 36.7 | ||||||||
Pension liabilities | 230.7 | 246.5 | ||||||||
Other long-term liabilities | 94.1 | 93.4 | ||||||||
Total liabilities | 2,112.0 | 2,088.0 | ||||||||
Equity | ||||||||||
Shareholders' equity attributable to Snap-on Inc. | ||||||||||
Common stock | 67.4 | 67.4 | ||||||||
Additional paid-in capital | 320.8 | 317.3 | ||||||||
Retained earnings | 3,485.2 | 3,384.9 | ||||||||
Accumulated other comprehensive loss | (450.4 | ) | (498.5 | ) | ||||||
Treasury stock at cost | (675.3 | ) | (653.9 | ) | ||||||
Total shareholders' equity attributable to Snap-on Inc. | 2,747.7 | 2,617.2 | ||||||||
Noncontrolling interests | 18.1 | 18.0 | ||||||||
Total equity | 2,765.8 | 2,635.2 | ||||||||
Total liabilities and equity | $ | 4,877.8 | $ | 4,723.2 |
SNAP-ON INCORPORATED | ||||||||
Condensed Consolidated Statements of Cash Flows | ||||||||
(Amounts in millions) | ||||||||
(unaudited) | ||||||||
Three Months Ended | ||||||||
April 1, | April 2, | |||||||
2017 | 2016 | |||||||
Operating activities: | ||||||||
Net earnings | $ | 145.1 | $ | 131.3 | ||||
Adjustments to reconcile net earnings to net cash provided (used) by |
||||||||
operating activities: |
||||||||
Depreciation | 16.0 | 14.9 | ||||||
Amortization of other intangibles | 7.1 | 6.1 | ||||||
Provision for losses on finance receivables | 13.0 | 9.3 | ||||||
Provision for losses on non-finance receivables | 2.2 | 3.2 | ||||||
Stock-based compensation expense | 7.4 | 5.8 | ||||||
Deferred income tax provision | 7.4 | 9.4 | ||||||
Gain on sales of assets | (0.2 | ) | - | |||||
Settlement of treasury lock | 14.9 | - | ||||||
Changes in operating assets and liabilities, net of effects of acquisitions: | ||||||||
Increase in trade and other accounts receivable | (1.9 | ) | (4.8 | ) | ||||
(Increase) decrease in contract receivables | (2.1 | ) | 0.3 | |||||
Increase in inventories | (17.3 | ) | (9.9 | ) | ||||
Increase in prepaid and other assets | (7.5 | ) | (15.5 | ) | ||||
Increase in accounts payable | 20.3 | 15.0 | ||||||
Decrease in accruals and other liabilities | (12.0 | ) | (23.5 | ) | ||||
Net cash provided by operating activities | 192.4 | 141.6 | ||||||
Investing activities: | ||||||||
Additions to finance receivables | (227.0 | ) | (230.9 | ) | ||||
Collections of finance receivables | 173.8 | 174.1 | ||||||
Capital expenditures | (18.6 | ) | (19.5 | ) | ||||
Acquisitions of businesses | (9.5 | ) | - | |||||
Disposals of property and equipment | 1.0 | 0.2 | ||||||
Other | (1.4 | ) | (3.5 | ) | ||||
Net cash used by investing activities | (81.7 | ) | (79.6 | ) | ||||
Financing activities: | ||||||||
Proceeds from issuance of long-term debt | 297.8 | - | ||||||
Repayment of long-term debt | (150.0 | ) | - | |||||
Repayments of notes payable | - | (0.8 | ) | |||||
Net increase (decrease) in other short-term borrowings | (135.7 | ) | 3.6 | |||||
Cash dividends paid | (41.2 | ) | (35.4 | ) | ||||
Purchases of treasury stock | (35.8 | ) | (23.1 | ) | ||||
Proceeds from stock purchase and option plans | 14.1 | 9.9 | ||||||
Other | (15.8 | ) | (3.5 | ) | ||||
Net cash used by financing activities | (66.6 | ) | (49.3 | ) | ||||
Effect of exchange rate changes on cash and cash equivalents | 1.3 | 0.8 | ||||||
Increase in cash and cash equivalents | 45.4 | 13.5 | ||||||
Cash and cash equivalents at beginning of year | 77.6 | 92.8 | ||||||
Cash and cash equivalents at end of period | $ | 123.0 | $ | 106.3 | ||||
Supplemental cash flow disclosures: | ||||||||
Cash paid for interest | $ | (24.0 | ) | $ | (23.9 | ) | ||
Net cash paid for income taxes | (14.0 | ) | (17.7 | ) |
Non-GAAP Supplemental Data
The following non-GAAP supplemental data is presented for informational
purposes to provide readers with insight into the information used by
management for assessing the operating performance of
The supplemental Operations data reflects the results of operations and
financial position of
SNAP-ON INCORPORATED | ||||||||||||||||
Non-GAAP Supplemental Consolidating Data - Condensed Statements of Earnings | ||||||||||||||||
(Amounts in millions) | ||||||||||||||||
(unaudited) | ||||||||||||||||
Operations* | Financial Services | |||||||||||||||
Three Months Ended | Three Months Ended | |||||||||||||||
April 1, | April 2, | April 1, | April 2, | |||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Net sales | $ | 887.1 | $ | 834.2 | $ | - | $ | - | ||||||||
Cost of goods sold | (439.1 | ) | (418.9 | ) | - | - | ||||||||||
Gross profit | 448.0 | 415.3 | - | - | ||||||||||||
Operating expenses | (278.5 | ) | (259.9 | ) | - | - | ||||||||||
Operating earnings before financial services | 169.5 | 155.4 | - | - | ||||||||||||
Financial services revenue | - | - | 76.8 | 66.3 | ||||||||||||
Financial services expenses | - | - | (24.3 | ) | (19.3 | ) | ||||||||||
Operating earnings from financial services | - | - | 52.5 | 47.0 | ||||||||||||
Operating earnings | 169.5 | 155.4 | 52.5 | 47.0 | ||||||||||||
Interest expense | (12.6 | ) | (13.0 | ) | (0.1 | ) | (0.1 | ) | ||||||||
Intersegment interest income (expense) – net | 17.5 | 17.3 | (17.5 | ) | (17.3 | ) | ||||||||||
Other income (expense) – net | (1.7 | ) | (0.7 | ) | - | - | ||||||||||
Earnings before income taxes and equity earnings | 172.7 | 159.0 | 34.9 | 29.6 | ||||||||||||
Income tax expense | (49.7 | ) | (46.7 | ) | (12.9 | ) | (10.9 | ) | ||||||||
Earnings before equity earnings | 123.0 | 112.3 | 22.0 | 18.7 | ||||||||||||
Financial services – net earnings | ||||||||||||||||
attributable to Snap-on | 22.0 | 18.7 | - | - | ||||||||||||
Equity earnings, net of tax | 0.1 | 0.3 | - | - | ||||||||||||
Net earnings | 145.1 | 131.3 | 22.0 | 18.7 | ||||||||||||
Net earnings attributable to noncontrolling interests | (3.5 | ) | (3.0 | ) | - | - | ||||||||||
Net earnings attributable to Snap-on | $ | 141.6 | $ | 128.3 | $ | 22.0 | $ | 18.7 | ||||||||
*Snap-on with Financial Services on the equity method. |
SNAP-ON INCORPORATED | ||||||||||||
Non-GAAP Supplemental Consolidating Data - Condensed Balance Sheets | ||||||||||||
(Amounts in millions) | ||||||||||||
(unaudited) | ||||||||||||
Operations* | Financial Services | |||||||||||
April 1, | December 31, | April 1, | December 31, | |||||||||
2017 | 2016 | 2017 | 2016 | |||||||||
Assets | ||||||||||||
Cash and cash equivalents | $ | 123.0 | $ | 77.5 | $ | - | $ | 0.1 | ||||
Intersegment receivables | 18.0 | 15.0 | - | - | ||||||||
Trade and other accounts receivable – net | 607.3 | 598.2 | 0.8 | 0.6 | ||||||||
Finance receivables – net | - | - | 484.7 | 472.5 | ||||||||
Contract receivables – net | 8.0 | 7.9 | 76.5 | 80.2 | ||||||||
Inventories – net | 556.8 | 530.5 | - | - | ||||||||
Prepaid expenses and other assets | 122.6 | 122.4 | 1.5 | 1.1 | ||||||||
Total current assets | 1,435.7 | 1,351.5 | 563.5 | 554.5 | ||||||||
Property and equipment – net | 435.9 | 423.8 | 1.6 | 1.4 | ||||||||
Investment in Financial Services | 294.5 | 288.7 | - | - | ||||||||
Deferred income tax assets | 44.4 | 49.1 | 23.6 | 23.7 | ||||||||
Intersegment long-term notes receivable | 467.3 | 584.7 | - | - | ||||||||
Long-term finance receivables – net | - | - | 966.3 | 934.5 | ||||||||
Long-term contract receivables – net | 11.4 | 11.2 | 281.2 | 275.5 | ||||||||
Goodwill | 859.8 | 895.5 | - | - | ||||||||
Other intangibles – net | 240.4 | 184.6 | - | - | ||||||||
Other assets | 47.3 | 47.9 | 0.1 | 0.1 | ||||||||
Total assets | $ | 3,836.7 | $ | 3,837.0 | $ | 1,836.3 | $ | 1,789.7 | ||||
Liabilities and Equity | ||||||||||||
Notes payable and current maturities of long-term debt | $ | 17.2 | $ | 151.4 | $ | 250.0 | $ | 150.0 | ||||
Accounts payable | 188.8 | 170.3 | 1.1 | 0.6 | ||||||||
Intersegment payables | - | - | 18.0 | 15.0 | ||||||||
Accrued benefits | 52.5 | 52.8 | - | - | ||||||||
Accrued compensation | 60.1 | 85.7 | 1.4 | 4.1 | ||||||||
Franchisee deposits | 66.1 | 66.7 | - | - | ||||||||
Other accrued liabilities | 307.8 | 292.1 | 33.6 | 22.8 | ||||||||
Total current liabilities | 692.5 | 819.0 | 304.1 | 192.5 | ||||||||
Long-term debt and intersegment long-term debt | - | - | 1,222.7 | 1,293.5 | ||||||||
Deferred income tax liabilities | 24.4 | 13.1 | - | - | ||||||||
Retiree health care benefits | 35.9 | 36.7 | - | - | ||||||||
Pension liabilities | 230.7 | 246.5 | - | - | ||||||||
Other long-term liabilities | 87.4 | 86.5 | 15.0 | 15.0 | ||||||||
Total liabilities | 1,070.9 | 1,201.8 | 1,541.8 | 1,501.0 | ||||||||
Total shareholders' equity attributable to Snap-on | 2,747.7 | 2,617.2 | 294.5 | 288.7 | ||||||||
Noncontrolling interests | 18.1 | 18.0 | - | - | ||||||||
Total equity | 2,765.8 | 2,635.2 | 294.5 | 288.7 | ||||||||
Total liabilities and equity | $ | 3,836.7 | $ | 3,837.0 | $ | 1,836.3 | $ | 1,789.7 | ||||
*Snap-on with Financial Services on the equity method. |
View source version on businesswire.com: http://www.businesswire.com/news/home/20170420005278/en/
Source:
Snap-on Incorporated
Investors:
Leslie Kratcoski
262/656-6121
or
Media:
Richard
Secor
262/656-5561