Q3 2019 diluted EPS of $2.96, up 3.9% from
Q3 2018, and up 2.8% from Q3 2018 adjusted diluted EPS; Reported
net sales of $901.8 million up 0.4%; Organic net sales up
1.4%
Snap-on Incorporated (NYSE: SNA), a leading global innovator,
manufacturer and marketer of tools, equipment, diagnostics, repair
information and systems solutions for professional users performing
critical tasks, today announced operating results for the third
quarter of 2019.
- Net sales of $901.8 million increased $3.7 million, or 0.4%,
from 2018 levels, reflecting a $12.5 million, or 1.4%, organic
sales increase and $2.9 million of acquisition-related sales,
partially offset by $11.7 million of unfavorable foreign currency
translation.
- Operating earnings before financial services for the quarter of
$167.7 million, or 18.6% of sales, including $4.4 million of
unfavorable foreign currency effects, compared to $173.1 million,
or 19.3% of sales, in 2018.
- Financial services revenue of $84.1 million in the third
quarter of 2019 increased $2.1 million from 2018 levels; financial
services operating earnings of $61.0 million increased $1.7 million
from $59.3 million last year.
- Consolidated operating earnings for the quarter of $228.7
million, including $4.7 million of unfavorable currency effects,
compared to $232.4 million last year. As a percentage of revenues
(net sales plus financial services revenue), consolidated operating
earnings were 23.2% and 23.7% in the third quarters of 2019 and
2018, respectively.
- The effective income tax rate of 23.5% in the quarter compared
to 24.0% last year. In 2018, the effective income tax rate included
a charge of 90 basis points, or $1.8 million, related to the
implementation of U.S. tax legislation (the “tax charge”).
Excluding the tax charge, the 2018 effective tax rate, as adjusted,
was 23.1%.
- Net earnings of $164.6 million, or $2.96 per diluted share,
compared to $163.2 million, or $2.85 per diluted share, a year ago.
Excluding the above-mentioned tax charge, net earnings, as
adjusted, were $165.0 million in 2018, or $2.88 per diluted
share.
See “Non-GAAP Measures” below for a definition of, and further
explanation about, organic sales and measures, as adjusted,
excluding the tax charge.
“Our third quarter results were encouraging, demonstrating
overall organic growth and clear and positive progress with
customers across our U.S. operations. Despite ongoing headwinds
related to challenged geographies and to unfavorable currency, we
believe the overall macro-environment for vehicle repair and
critical industries generally remains favorable and affords ongoing
opportunities,” said Nick Pinchuk, Snap-on chairman and chief
executive officer. “Through our Snap-on Value Creation Processes,
the quarter saw continued strengthening of our product lines,
matching the increasing complexity of workplace tasks and
reinforcing our commitment to making work easier for serious
professionals. Along those lines, Snap-on again was honored to
receive product awards from both MOTOR Magazine and the
Professional Tools & Equipment News. We believe this
recognition confirms Snap-on’s success in connecting with customers
and translating that insight into decisive innovations. Finally,
our results are only possible with the significant effort and
contributions from our franchisees and associates, and I thank them
for their capability and their dedication.
Segment Results
Commercial & Industrial Group segment sales of $335.3
million in the quarter increased $5.1 million, or 1.5%, from 2018
levels, reflecting a $9.5 million, or 2.9%, organic sales gain and
$1.1 million of acquisition-related sales, partially offset by $5.5
million of unfavorable foreign currency translation. The organic
sales increase includes higher sales in the segment’s specialty
tools and European-based hand tools businesses, as well as
increases with customers in critical industries.
Operating earnings of $48.3 million in the period, including
$0.7 million of unfavorable foreign currency effects, compared to
$53.0 million in 2018, while the operating margin (operating
earnings as a percentage of segment sales) of 14.4% compared to
16.1% a year ago.
Snap-on Tools Group segment sales of $385.2 million in
the quarter decreased $4.6 million, or 1.2%, from 2018 levels,
reflecting a $1.3 million, or 0.3%, organic sales decline and $3.3
million of unfavorable foreign currency translation. The organic
sales decrease includes lower sales in the segment’s international
operations, partially offset by higher sales in the United
States.
Operating earnings of $53.0 million in the period, including
$2.7 million of unfavorable foreign currency effects, decreased
$6.3 million from 2018 levels, and the operating margin of 13.8%
compared to 15.2% last year.
Repair Systems & Information Group segment sales of
$322.7 million in the quarter increased $8.3 million, or 2.6%, from
2018 levels, reflecting a $10.1 million, or 3.2%, organic sales
gain and $1.8 million of acquisition-related sales, partially
offset by $3.6 million of unfavorable foreign currency translation.
The organic sales increase includes higher sales to OEM dealerships
and increased sales of diagnostics and repair information products
to independent repair shop owners and managers, partially offset by
lower sales of undercar equipment.
Operating earnings of $83.3 million in the period, including
$1.0 million of unfavorable foreign currency effects, increased
$2.6 million from 2018 levels, and the operating margin of 25.8%
compared to 25.7% a year ago.
Financial Services operating earnings of $61.0 million on
revenue of $84.1 million in the quarter compared to operating
earnings of $59.3 million on revenue of $82.0 million a year ago.
Originations of $253.5 million in the third quarter decreased $13.5
million, or 5.1%, from 2018 levels.
Corporate expenses of $16.9 million in the quarter
compared to $19.9 million last year.
Outlook
Snap-on expects to make continued progress through the remainder
of 2019 along its defined runways for coherent growth, leveraging
capabilities already demonstrated in the automotive repair arena
and developing and expanding its professional customer base, not
only in automotive repair, but in adjacent markets, additional
geographies and other areas, including extending in critical
industries, where the cost and penalties for failure can be high.
In pursuit of these initiatives, Snap-on expects that capital
expenditures in 2019 will be in a range of $95 million to $105
million, of which $77.8 million was incurred in the first nine
months of the year.
Snap-on currently anticipates that its full year 2019 effective
income tax rate will be comparable to its full year 2018 effective
tax rate of 24.0%.
Conference Call and Webcast on October
17, 2019, at 9:00 a.m. Central Time
A discussion of this release will be webcast on Thursday,
October 17, 2019, at 9:00 a.m. Central Time, and a replay will be
available for at least 10 days following the call. To access the
webcast, visit https://www.snapon.com/EN/Investors/Investor-Events
and click on the link to the call. The slide presentation
accompanying the call can be accessed under the Downloads tab in
the webcast viewer, as well as on the Snap-on website at
https://www.snapon.com/EN/Investors/Financial-Information/Quarterly-Earnings.
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 the United States (“GAAP”),
adjusted to exclude acquisition-related sales and the impact of
foreign currency translation. Management evaluates the company’s
sales performance based on organic sales growth, which primarily
reflects growth from the company’s existing businesses as a result
of increased output, customer base and geographic expansion, new
product development and/or pricing, and excludes sales
contributions from acquired operations the company did not own as
of the comparable prior-year reporting period. The company’s
organic sales disclosures also exclude the effects of foreign
currency translation as foreign currency translation is subject to
volatility that can obscure underlying business trends. Management
believes that the non-GAAP financial measure of organic sales is
meaningful to investors as it provides them with useful information
to aid in identifying underlying growth trends in our businesses
and facilitates comparisons of our sales performance with prior
periods.
For the nine months ended September 28, 2019, the company is
including operating earnings before financial services,
consolidated operating earnings, net earnings, diluted earnings per
share and its effective tax rate, all as adjusted to exclude the
impact of an $11.6 million benefit ($8.7 million after tax) from a
legal settlement that occurred in the three months ended March 30,
2019.
For the three and nine months ended September 29, 2018, the
company is including net earnings, diluted earnings per share and
its effective tax rate, all as adjusted, to exclude the impact of
$1.8 million and $3.9 million of charges, respectively, related to
the implementation of U.S. tax legislation. In addition, for the
nine months ended September 29, 2018, the company is including net
earnings and diluted earnings per share, both as adjusted to
exclude a net gain of $5.5 million ($4.1 million after tax)
associated with a treasury lock settlement gain of $13.3 million
related to the issuance of debt, partially offset by a $7.8 million
expense related to the early extinguishment of debt.
Management believes that these are unusual events and therefore
the non-GAAP financial measures adjusted to exclude them provide
more meaningful year-over-year comparisons of the company’s 2019
operating performance. For a reconciliation of the adjusted
metrics, see “Reconciliation of Non-GAAP Financial Measures”
below.
About Snap-on
Snap-on Incorporated is a leading global innovator, manufacturer
and marketer of tools, equipment, diagnostics, repair information
and systems solutions for professional users performing critical
tasks. Products and services include hand and power tools, tool
storage, diagnostics software, information and management systems,
shop equipment and other solutions for vehicle dealerships and
repair centers, as well as for customers in industries, including
aviation and aerospace, agriculture, construction, government and
military, mining, natural resources, power generation and technical
education. Snap-on also derives income from various financing
programs to facilitate the sales of its products and support its
franchise business. Products and services are sold through the
company’s franchisee, company-direct, distributor and internet
channels. Founded in 1920, Snap-on is a $3.7 billion, S&P 500
company headquartered in Kenosha, Wisconsin.
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 Snap-on or its management; (iii) are
specifically identified as forward-looking; or (iv) describe
Snap-on’s or management’s future outlook, plans, estimates,
objectives or goals, are forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
Snap-on cautions the reader that this news release may contain
statements, including earnings projections, that are
forward-looking in nature and were developed by management in good
faith and, accordingly, are subject to risks and uncertainties
regarding Snap-on’s expected results that could cause (and in some
cases have caused) actual results to differ materially from those
described or contemplated in any forward-looking statement. Factors
that may cause the company’s actual results to differ materially
from those contained in the forward-looking statements include
those found in the company’s reports filed with the Securities and
Exchange Commission, including the information under the “Safe
Harbor” and “Risk Factors” headings in its Annual Report on Form
10-K for the fiscal year ended December 29, 2018, which are
incorporated herein by reference. Snap-on disclaims any
responsibility to update any forward-looking statement provided in
this news release, except as required by law.
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
Nine Months Ended September 28, September 29,
September 28, September 29,
2019
2018
2019
2018
Net sales
$
901.8
$
898.1
$
2,774.8
$
2,788.2
Cost of goods sold
(453.7
)
(444.2
)
(1,381.3
)
(1,375.6
)
Gross profit
448.1
453.9
1,393.5
1,412.6
Operating expenses
(280.4
)
(280.8
)
(848.5
)
(868.7
)
Operating earnings before financial services
167.7
173.1
545.0
543.9
Financial services revenue
84.1
82.0
253.8
247.0
Financial services expenses
(23.1
)
(22.7
)
(70.1
)
(73.0
)
Operating earnings from financial services
61.0
59.3
183.7
174.0
Operating earnings
228.7
232.4
728.7
717.9
Interest expense
(12.0
)
(12.4
)
(36.9
)
(38.0
)
Other income (expense) – net
2.8
(1.0
)
6.4
1.2
Earnings before income taxes and equity earnings
219.5
219.0
698.2
681.1
Income tax expense
(50.4
)
(51.5
)
(162.9
)
(164.9
)
Earnings before equity earnings
169.1
167.5
535.3
516.2
Equity earnings (loss), net of tax
0.1
(0.1
)
0.9
0.7
Net earnings
169.2
167.4
536.2
516.9
Net earnings attributable to noncontrolling interests
(4.6
)
(4.2
)
(13.3
)
(12.0
)
Net earnings attributable to Snap-on Inc.
$
164.6
$
163.2
$
522.9
$
504.9
Net earnings per share attributable to Snap-on
Inc.: Basic
$
2.99
$
2.90
$
9.47
$
8.95
Diluted
2.96
2.85
9.34
8.78
Weighted-average shares outstanding: Basic
55.0
56.3
55.2
56.4
Effect of dilutive securities
0.7
1.0
0.8
1.1
Diluted
55.7
57.3
56.0
57.5
SNAP-ON INCORPORATED Supplemental Segment Information
(Amounts in millions) (unaudited)
Three Months Ended Nine Months Ended September
28, September 29, September 28, September
29,
2019
2018
2019
2018
Net sales: Commercial & Industrial Group
$
335.3
$
330.2
$
992.8
$
999.6
Snap-on Tools Group
385.2
389.8
1,201.2
1,206.4
Repair Systems & Information Group
322.7
314.4
999.5
994.5
Segment net sales
1,043.2
1,034.4
3,193.5
3,200.5
Intersegment eliminations
(141.4
)
(136.3
)
(418.7
)
(412.3
)
Total net sales
$
901.8
$
898.1
$
2,774.8
$
2,788.2
Financial Services revenue
84.1
82.0
253.8
247.0
Total revenues
$
985.9
$
980.1
$
3,028.6
$
3,035.2
Operating earnings: Commercial & Industrial Group
$
48.3
$
53.0
$
143.7
$
148.5
Snap-on Tools Group
53.0
59.3
191.5
207.2
Repair Systems & Information Group
83.3
80.7
255.5
255.2
Financial Services
61.0
59.3
183.7
174.0
Segment operating earnings
245.6
252.3
774.4
784.9
Corporate
(16.9
)
(19.9
)
(45.7
)
(67.0
)
Operating earnings
$
228.7
$
232.4
$
728.7
$
717.9
Interest expense
(12.0
)
(12.4
)
(36.9
)
(38.0
)
Other income (expense) – net
2.8
(1.0
)
6.4
1.2
Earnings before income taxes and equity earnings
$
219.5
$
219.0
$
698.2
$
681.1
SNAP-ON INCORPORATED Condensed Consolidated Balance
Sheets (Amounts in millions) (unaudited)
September 28, December 29,
2019
2018
Assets Cash and cash equivalents
$
167.5
$
140.9
Trade and other accounts receivable – net
684.8
692.6
Finance receivables – net
533.5
518.5
Contract receivables – net
102.7
98.3
Inventories – net
753.5
673.8
Prepaid expenses and other assets
105.9
92.8
Total current assets
2,347.9
2,216.9
Property and equipment – net
511.8
495.1
Operating lease right-of-use assets
52.4
-
Deferred income tax assets
54.4
64.7
Long-term finance receivables – net
1,084.7
1,074.4
Long-term contract receivables – net
348.6
344.9
Goodwill
920.1
902.2
Other intangibles – net
225.2
232.9
Other assets
51.3
42.0
Total assets
$
5,596.4
$
5,373.1
Liabilities and Equity Notes payable
$
232.3
$
186.3
Accounts payable
205.8
201.1
Accrued benefits
46.8
52.0
Accrued compensation
66.1
71.5
Franchisee deposits
76.8
67.5
Other accrued liabilities
362.3
373.6
Total current liabilities
990.1
952.0
Long-term debt
947.5
946.0
Deferred income tax liabilities
45.8
41.4
Retiree health care benefits
29.9
31.8
Pension liabilities
115.3
171.3
Operating lease liabilities
34.3
-
Other long-term liabilities
108.3
112.0
Total liabilities
2,271.2
2,254.5
Equity Shareholders' equity attributable to
Snap-on Inc. Common stock
67.4
67.4
Additional paid-in capital
374.5
359.4
Retained earnings
4,668.3
4,257.6
Accumulated other comprehensive loss
(543.9
)
(462.2
)
Treasury stock at cost
(1,262.5
)
(1,123.4
)
Total shareholders' equity attributable to Snap-on Inc.
3,303.8
3,098.8
Noncontrolling interests
21.4
19.8
Total equity
3,325.2
3,118.6
Total liabilities and equity
$
5,596.4
$
5,373.1
SNAP-ON INCORPORATED Condensed Consolidated Statements of
Cash Flows (Amounts in millions) (unaudited)
Three Months Ended September 28, September
29,
2019
2018
Operating activities: Net earnings
$
169.2
$
167.4
Adjustments to reconcile net earnings to net cash provided (used)
by operating activities: Depreciation
17.4
17.0
Amortization of other intangibles
5.5
6.2
Provision for losses on finance receivables
11.4
12.1
Provision for losses on non-finance receivables
5.7
3.9
Stock-based compensation expense
4.6
8.0
Deferred income tax benefit
(1.7
)
(2.8
)
Loss on sales of assets
0.2
0.6
Changes in operating assets and liabilities, net of effects of
acquisitions: Increase in trade and other accounts receivable
(12.3
)
(17.4
)
Increase in contract receivables
(15.9
)
(23.4
)
Increase in inventories
(44.5
)
(24.8
)
(Increase) decrease in prepaid and other assets
10.0
(7.5
)
Decrease in accounts payable
(7.4
)
(0.2
)
Decrease in accruals and other liabilities
(11.1
)
(9.3
)
Net cash provided by operating activities
131.1
129.8
Investing activities: Additions to finance
receivables
(197.0
)
(206.8
)
Collections of finance receivables
181.6
184.1
Capital expenditures
(29.6
)
(29.9
)
Acquisitions of businesses, net of cash acquired
(29.6
)
-
Disposals of property and equipment
(0.1
)
(0.2
)
Other
(2.1
)
4.2
Net cash used by investing activities
(76.8
)
(48.6
)
Financing activities: Net increase in other
short-term borrowings
65.1
38.1
Cash dividends paid
(52.3
)
(46.1
)
Purchases of treasury stock
(59.7
)
(85.7
)
Proceeds from stock purchase and option plans
1.6
25.8
Other
(4.2
)
(3.4
)
Net cash used by financing activities
(49.5
)
(71.3
)
Effect of exchange rate changes on cash and cash
equivalents
(1.3
)
-
Increase in cash and cash equivalents
3.5
9.9
Cash and cash equivalents at beginning of period
164.0
112.3
Cash and cash equivalents at end of period
$
167.5
$
122.2
Supplemental cash flow disclosures: Cash paid for
interest
$
(21.4
)
$
(21.9
)
Net cash paid for income taxes
(48.3
)
(50.7
)
SNAP-ON INCORPORATED Condensed Consolidated Statements of
Cash Flows (Amounts in millions) (unaudited)
Nine Months Ended September 28, September
29,
2019
2018
Operating activities: Net earnings
$
536.2
$
516.9
Adjustments to reconcile net earnings to net cash provided (used)
by operating activities: Depreciation
52.2
52.0
Amortization of other intangibles
16.3
19.2
Provision for losses on finance receivables
35.8
41.5
Provision for losses on non-finance receivables
14.4
9.4
Stock-based compensation expense
18.7
22.6
Deferred income tax provision (benefit)
10.7
(6.9
)
Loss on sales of assets
0.8
0.7
Loss on early extinguishment of debt
-
7.8
Changes in operating assets and liabilities, net of effects of
acquisitions: Increase in trade and other accounts receivable
(8.4
)
(26.5
)
Increase in contract receivables
(12.9
)
(27.9
)
Increase in inventories
(97.3
)
(49.3
)
Increase in prepaid and other assets
(17.0
)
(1.1
)
Increase in accounts payable
9.2
25.2
Decrease in accruals and other liabilities
(80.8
)
(35.0
)
Net cash provided by operating activities
477.9
548.6
Investing activities: Additions to finance
receivables
(628.1
)
(643.5
)
Collections of finance receivables
565.1
564.0
Capital expenditures
(77.8
)
(68.5
)
Acquisitions of businesses, net of cash acquired
(38.9
)
(3.0
)
Disposals of property and equipment
0.3
0.3
Other
(1.3
)
1.3
Net cash used by investing activities
(180.7
)
(149.4
)
Financing activities: Proceeds from issuance of
long-term debt
-
395.4
Repayments of long-term debt
-
(457.8
)
Repayment of notes payable
-
(16.8
)
Net increase in other short-term borrowings
46.9
0.9
Cash dividends paid
(157.6
)
(138.9
)
Purchases of treasury stock
(167.2
)
(184.4
)
Proceeds from stock purchase and option plans
26.2
54.1
Other
(18.5
)
(19.6
)
Net cash used by financing activities
(270.2
)
(367.1
)
Effect of exchange rate changes on cash and cash
equivalents
(0.4
)
(1.9
)
Increase in cash and cash equivalents
26.6
30.2
Cash and cash equivalents at beginning of year
140.9
92.0
Cash and cash equivalents at end of period
$
167.5
$
122.2
Supplemental cash flow disclosures: Cash paid for
interest
$
(44.8
)
$
(49.7
)
Net cash paid for income taxes
(140.5
)
(148.1
)
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 Snap-on Incorporated's ("Snap-on") non-financial
services ("Operations") and "Financial Services" businesses.
The supplemental Operations data reflects the results of operations
and financial position of Snap-on's tools, diagnostic and equipment
products, software and other non-financial services operations with
Financial Services on the equity method. The supplemental Financial
Services data reflects the results of operations and financial
position of Snap-on's U.S. and international financial services
operations. The financing needs of Financial Services are met
through intersegment borrowings and cash generated from Operations;
Financial Services is charged interest expense on intersegment
borrowings at market rates. Income taxes are charged to Financial
Services on the basis of the specific tax attributes generated by
the U.S. and international financial services businesses.
Transactions between the Operations and Financial Services
businesses were eliminated to arrive at the Condensed Consolidated
Financial Statements.
SNAP-ON INCORPORATED Non-GAAP
Supplemental Consolidating Data - Supplemental Condensed Statements
of Earnings (Amounts in millions) (unaudited)
Operations* Financial Services Three
Months Ended Three Months Ended September 28,
September 29, September 28, September 29,
2019
2018
2019
2018
Net sales
$
901.8
$
898.1
$
-
$
-
Cost of goods sold
(453.7
)
(444.2
)
-
-
Gross profit
448.1
453.9
-
-
Operating expenses
(280.4
)
(280.8
)
-
-
Operating earnings before financial services
167.7
173.1
-
-
Financial services revenue
-
-
84.1
82.0
Financial services expenses
-
-
(23.1
)
(22.7
)
Operating earnings from financial services
-
-
61.0
59.3
Operating earnings
167.7
173.1
61.0
59.3
Interest expense
(11.9
)
(12.3
)
(0.1
)
(0.1
)
Intersegment interest income (expense) – net
17.3
16.8
(17.3
)
(16.8
)
Other income (expense) – net
2.9
(1.0
)
(0.1
)
-
Earnings before income taxes and equity earnings
176.0
176.6
43.5
42.4
Income tax expense
(39.2
)
(40.7
)
(11.2
)
(10.8
)
Earnings before equity earnings
136.8
135.9
32.3
31.6
Financial services – net earnings attributable to
Snap-on
32.3
31.6
-
-
Equity earnings (loss), net of tax
0.1
(0.1
)
-
-
Net earnings
169.2
167.4
32.3
31.6
Net earnings attributable to noncontrolling interests
(4.6
)
(4.2
)
-
-
Net earnings attributable to Snap-on
$
164.6
$
163.2
$
32.3
$
31.6
* Snap-on with Financial Services on the equity method.
SNAP-ON INCORPORATED Non-GAAP Supplemental Consolidating
Data - Supplemental Condensed Statements of Earnings
(Amounts in millions) (unaudited)
Operations* Financial Services Nine Months
Ended Nine Months Ended September 28,
September 29, September 28, September 29,
2019
2018
2019
2018
Net sales
$
2,774.8
$
2,788.2
$
-
$
-
Cost of goods sold
(1,381.3
)
(1,375.6
)
-
-
Gross profit
1,393.5
1,412.6
-
-
Operating expenses
(848.5
)
(868.7
)
-
-
Operating earnings before financial services
545.0
543.9
-
-
Financial services revenue
-
-
253.8
247.0
Financial services expenses
-
-
(70.1
)
(73.0
)
Operating earnings from financial services
-
-
183.7
174.0
Operating earnings
545.0
543.9
183.7
174.0
Interest expense
(36.7
)
(37.7
)
(0.2
)
(0.3
)
Intersegment interest income (expense) – net
52.8
52.9
(52.8
)
(52.9
)
Other income (expense) – net
6.5
1.1
(0.1
)
0.1
Earnings before income taxes and equity earnings
567.6
560.2
130.6
120.9
Income tax expense
(129.1
)
(133.7
)
(33.8
)
(31.2
)
Earnings before equity earnings
438.5
426.5
96.8
89.7
Financial services – net earnings attributable to
Snap-on
96.8
89.7
-
-
Equity earnings, net of tax
0.9
0.7
-
-
Net earnings
536.2
516.9
96.8
89.7
Net earnings attributable to noncontrolling interests
(13.3
)
(12.0
)
-
-
Net earnings attributable to Snap-on
$
522.9
$
504.9
$
96.8
$
89.7
* Snap-on with Financial Services on the equity method.
SNAP-ON INCORPORATED Non-GAAP Supplemental Consolidating
Data - Supplemental Condensed Balance Sheets (Amounts in
millions) (unaudited) Operations*
Financial Services September 28, December 29,
September 28, December 29,
2019
2018
2019
2018
Assets Cash and cash equivalents
$
167.3
$
140.5
$
0.2
$
0.4
Intersegment receivables
13.9
15.1
-
-
Trade and other accounts receivable – net
684.1
692.1
0.7
0.5
Finance receivables – net
-
-
533.5
518.5
Contract receivables – net
6.5
6.6
96.2
91.7
Inventories – net
753.5
673.8
-
-
Prepaid expenses and other assets
105.4
100.2
8.7
0.5
Total current assets
1,730.7
1,628.3
639.3
611.6
Property and equipment – net
510.1
493.5
1.7
1.6
Operating lease right-of-use assets
50.8
-
1.6
-
Investment in Financial Services
336.2
329.5
-
-
Deferred income tax assets
34.9
45.8
19.5
18.9
Intersegment long-term notes receivable
733.3
701.3
-
-
Long-term finance receivables – net
-
-
1,084.7
1,074.4
Long-term contract receivables – net
15.3
11.9
333.3
333.0
Goodwill
920.1
902.2
-
-
Other intangibles – net
225.2
232.9
-
-
Other assets
61.5
51.9
0.2
0.1
Total assets
$
4,618.1
$
4,397.3
$
2,080.3
$
2,039.6
Liabilities and Equity Notes payable
$
232.3
$
186.3
$
-
$
-
Accounts payable
204.3
199.6
1.5
1.5
Intersegment payables
-
-
13.9
15.1
Accrued benefits
46.8
52.0
-
-
Accrued compensation
62.7
66.8
3.4
4.7
Franchisee deposits
76.8
67.5
-
-
Other accrued liabilities
342.4
355.4
28.1
26.1
Total current liabilities
965.3
927.6
46.9
47.4
Long-term debt and intersegment long-term debt
-
-
1,680.8
1,647.3
Deferred income tax liabilities
45.8
41.4
-
-
Retiree health care benefits
29.9
31.8
-
-
Pension liabilities
115.3
171.3
-
-
Operating lease liabilities
33.0
-
1.3
-
Other long-term liabilities
103.6
106.6
15.1
15.4
Total liabilities
1,292.9
1,278.7
1,744.1
1,710.1
Total shareholders' equity attributable to Snap-on
3,303.8
3,098.8
336.2
329.5
Noncontrolling interests
21.4
19.8
-
-
Total equity
3,325.2
3,118.6
336.2
329.5
Total liabilities and equity
$
4,618.1
$
4,397.3
$
2,080.3
$
2,039.6
* Snap-on with Financial Services on the equity method.
SNAP-ON INCORPORATED Reconciliation of Non-GAAP Financial
Measures (Amounts in millions, except per share data)
(unaudited) Three Months Ended
Nine Months Ended September 28, September 29,
September 28, September 29,
2019
2018
2019
2018
AS REPORTED Benefit
related to the settlement of a litigation matter ("legal
settlement") Pre-tax legal settlement
$
-
$
-
$
11.6
$
-
Income tax expense
-
-
(2.9
)
-
Legal settlement, after tax
$
-
$
-
$
8.7
$
-
Weighted-average shares outstanding - diluted
55.7
57.3
56.0
57.5
Diluted EPS - legal settlement
$
-
$
-
$
0.15
$
-
Debt-related items ("net debt items") Gain on
settlement of treasury lock (A) Gain on settlement of treasury
lock
$
-
$
-
$
-
$
13.3
Income tax expense
-
-
-
(3.3
)
Gain on settlement of treasury lock, after tax
$
-
$
-
$
-
$
10.0
Weighted-average shares outstanding - diluted
55.7
57.3
56.0
57.5
Diluted EPS - gain on settlement of treasury lock
$
-
$
-
$
-
$
0.17
Loss on early extinguishment of debt (B) Loss on
early extinguishment of debt
$
-
$
-
$
-
$
(7.8
)
Income tax benefit
-
-
-
1.9
Loss on early extinguishment of debt, after tax
$
-
$
-
$
-
$
(5.9
)
Weighted-average shares outstanding - diluted
55.7
57.3
56.0
57.5
Diluted EPS - loss on early extinguishment of debt
$
-
$
-
$
-
$
(0.10
)
Net debt items (A + B) Net debt items
$
-
$
-
$
-
$
5.5
Income tax expense
-
-
-
(1.4
)
Net debt items, after tax
$
-
$
-
$
-
$
4.1
Weighted-average shares outstanding - diluted
55.7
57.3
56.0
57.5
Diluted EPS - net debt items
$
-
$
-
$
-
$
0.07
Adjustments related to implementation of tax
legislation ("tax charge") Tax charge
$
-
$
(1.8
)
$
-
$
(3.9
)
Weighted-average shares outstanding - diluted
55.7
57.3
56.0
57.5
Diluted EPS - tax charge
$
-
$
(0.03
)
$
-
$
(0.07
)
SNAP-ON INCORPORATED Reconciliation of Non-GAAP
Financial Measures (continued) (Amounts in millions, except
per share data) (unaudited)
Three Months Ended Nine Months Ended September
28, September 29, September 28, September
29,
2019
2018
2019
2018
ADJUSTED INFORMATION - NON-GAAP
1
)
Operating earnings before financial services As reported
$
167.7
$
173.1
$
545.0
$
543.9
Legal settlement
-
-
(11.6
)
-
As adjusted
$
167.7
$
173.1
$
533.4
$
543.9
Operating earnings before financial services as a
percentage of sales As reported
18.6
%
19.3
%
19.6
%
19.5
%
As adjusted
18.6
%
19.3
%
19.2
%
19.5
%
2
)
Operating earnings As reported
$
228.7
$
232.4
$
728.7
$
717.9
Legal settlement
-
-
(11.6
)
-
As adjusted
$
228.7
$
232.4
$
717.1
$
717.9
Operating earnings as a percentage of revenue As
reported
23.2
%
23.7
%
24.1
%
23.7
%
As adjusted
23.2
%
23.7
%
23.7
%
23.7
%
3
)
Net earnings attributable to Snap-on Incorporated As
reported
$
164.6
$
163.2
$
522.9
$
504.9
Legal settlement, after tax
-
-
(8.7
)
-
Net debt items, after tax
-
-
-
(4.1
)
Tax charge
-
1.8
-
3.9
As adjusted
$
164.6
$
165.0
$
514.2
$
504.7
4
)
Diluted EPS As reported
$
2.96
$
2.85
$
9.34
$
8.78
Legal settlement, after tax
-
-
(0.15
)
-
Net debt items, after tax
-
-
-
(0.07
)
Tax charge
-
0.03
-
0.07
As adjusted
$
2.96
$
2.88
$
9.19
$
8.78
5
)
Effective tax rate As reported
23.5
%
24.0
%
23.8
%
24.6
%
Tax charge
-
-0.9
%
-
-0.5
%
As adjusted
23.5
%
23.1
%
23.8
%
24.1
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20191017005159/en/
Investors: Sara Verbsky 262/656-4869 Media: Samuel Bottum
262/656-5793
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