Diluted EPS of $2.49 for the first quarter
of 2020; Excluding restructuring charges, diluted EPS of
$2.60, as adjusted Global economic uncertainty causes lower
year-over-year sales and earnings
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 first
quarter of 2020.
- Net sales of $852.2 million in the first quarter of 2020
compared to $921.7 million in 2019, reflecting a $62.7 million, or
6.9%, organic sales decline and $10.3 million of unfavorable
foreign currency translation, partially offset by $3.5 million of
acquisition-related sales. The lower sales volume primarily
reflects the impact of economic uncertainty associated with the
COVID-19 pandemic.
- Operating earnings before financial services for the quarter of
$138.9 million, or 16.3% of sales, including $7.5 million of exit
and disposal costs (“restructuring charges”), primarily related to
actions in Europe, and $3.3 million of unfavorable foreign currency
effects, compared to $187.4 million, or 20.3% of sales last year.
In 2019, operating earnings before financial services included an
$11.6 million benefit from a legal settlement (the “legal
settlement”). Excluding the restructuring charges in the first
quarter of 2020 and the legal settlement in 2019, operating
earnings before financial services, as adjusted, of $146.4 million
decreased $29.4 million, or 16.7%, from $175.8 million in 2019. As
a percentages of sales, operating earnings before financial
services, as adjusted, of 17.2% compared to 19.1% last year.
- Financial services revenue in the quarter of $85.9 million
increased $0.3 million from 2019 levels; financial services
operating earnings of $56.9 million compared to $62.1 million last
year. Under the recently adopted credit loss standard, financial
services operating earnings in 2020 include $2.6 million of higher
credit reserve requirements as a result of global economic
uncertainty.
- Consolidated operating earnings for the quarter of $195.8
million, including $7.5 million of restructuring charges, $2.6
million of higher credit reserve requirements and $3.5 million of
unfavorable currency effects, compared to $249.5 million last year,
which included an $11.6 million benefit from the legal settlement.
As a percentage of revenues (net sales plus financial services
revenue), consolidated operating earnings were 20.9% and 24.8% in
the first quarters of 2020 and 2019, respectively. Excluding the
restructuring charges in 2020 and the legal settlement in 2019,
consolidated operating earnings, as adjusted, of $203.3 million
decreased $34.6 million, or 14.5%, from $237.9 million in 2019. As
a percentage of revenues, consolidated operating earnings, as
adjusted, of 21.7% compared to 23.6% last year.
- The first quarter effective income tax rate was 24.2% in 2020
and 24.3% in 2019. The effective income tax rates in both periods
were increased by 10 basis points, from the restructuring charges
in 2020 and the legal settlement in 2019.
- Reported net earnings in the first quarter of 2020 of $137.2
million, or $2.49 per diluted share, compared to $177.9 million, or
$3.16 per diluted share, a year ago. Excluding the restructuring
charges in 2020 and the legal settlement in 2019, net earnings, as
adjusted, were $143.2 million, or $2.60 per diluted share, in 2020,
and $169.2 million, or $3.01 per diluted share, last year.
See “Non-GAAP Measures” below for a definition of, and further
explanation about, organic sales and measures, as adjusted,
excluding restructuring charges in 2020 and the legal settlement in
2019.
At the beginning of fiscal 2020, Snap-on adopted ASU No.
2016-13, Financial Instruments – Credit Losses (Topic 326), which
required the measurement of expected credit losses for financial
instruments held at the reporting date based on historical
experience, current conditions and reasonable and supportable
forecasts. The adoption did not have a significant impact on the
company’s consolidated financial statements. Among the changes, the
adoption resulted in an increase in the allowance for credit losses
in the Condensed Consolidated Balance Sheets of $8.1 million, but
did not have any impact on the Condensed Consolidated Statements of
Earnings.
“As a result of the global impact of COVID-19, particularly near
the end of the period, the worsening economic conditions impacted
our sales and earnings during the first quarter,” said Nick
Pinchuk, Snap-on chairman and chief executive officer. “During
these challenging times, as we prioritize the health and safety of
our associates, franchisees, customers, and communities, we
continue to support essential activities and serve serious
professionals engaged in performing the critical tasks that
underpin and advance our society. Furthermore, we will continue to
utilize our Snap-on Value Creation Processes, as we believe these
principles will help guide us through an uncertain future in a
rapidly changing environment, as they have in the past. Again this
quarter, but especially in this time of turbulence, I want to
extend my thanks to our franchisees and associates worldwide for
their significant contributions, unfailing dedication, and
extraordinary resilience.”
Impact of COVID-19
The challenges posed by the COVID-19 pandemic on the global
economy increased significantly as the first quarter progressed,
impacting Snap-on’s sales volumes in most geographies and across a
variety of customers, including those in automotive repair. In
addition, under the recently adopted ASU No. 2016-13, the impact of
economic uncertainty caused by COVID-19 led to an increase of $2.6
million in the company’s credit reserve requirements for its
financial services portfolio. COVID-19 has caused disruption and
volatility in the global capital markets, and has authored an
economic slowdown. In response to COVID-19, national and local
governments around the world have instituted certain measures,
including travel bans, prohibitions on group events and gatherings,
shutdowns of certain businesses, curfews, shelter-in-place orders
and recommendations to practice social distancing. Although the
company’s operations have been deemed essential and Snap-on is
following the COVID-19 guidelines from the Centers for Disease
Control (CDC) concerning the health and safety of the company’s
personnel, these measures have resulted in attenuating activity,
and in some cases, required temporary closures of certain
facilities, among other impacts. The duration of these measures is
unknown, may be extended and additional measures may be
imposed.
Segment Results
Commercial & Industrial Group segment net sales of
$299.9 million in the quarter compared to $322.5 million last year,
reflecting an $18.0 million, or 5.7%, organic sales decline and
$5.3 million of unfavorable foreign currency translation, partially
offset by $0.7 million of acquisition-related sales. The organic
decrease primarily reflects lower sales in the segment’s Asia
Pacific operations and European-based hand tools business,
partially offset by higher sales in the segment’s power tools
operations.
Operating earnings of $31.5 million in the period, including
$4.4 million of restructuring costs and $1.2 million of unfavorable
foreign currency effects, compared to $46.5 million in 2019, while
the operating margin (operating earnings as a percentage of segment
net sales) of 10.5%, including 150 basis points (100 basis points
“bps” equals 1.0 percent) of costs from restructuring actions and
20 bps of unfavorable foreign currency effects, compared to 14.4% a
year ago.
Snap-on Tools Group segment net sales of $375.9 million
in the quarter compared to $410.2 million last year, reflecting a
$31.8 million, or 7.8%, organic sales decline and $2.5 million of
unfavorable foreign currency translation. The organic sales
decrease includes lower sales in both the U.S. and international
franchise operations.
Operating earnings of $48.6 million in the period, including
$1.4 million of unfavorable foreign currency effects, compared to
$67.2 million in 2019, while the operating margin of 12.9%,
including 30 bps of unfavorable foreign currency effects, compared
to 16.4% a year ago.
Repair Systems & Information Group segment net sales
of $314.6 million in the quarter compared to $327.9 million last
year, reflecting a $12.9 million, or 4.0%, organic sales decrease
and $3.2 million of unfavorable foreign currency translation,
partially offset by $2.8 million of acquisition-related sales. The
organic decline includes decreased sales to OEM dealerships and
lower sales of undercar equipment, partially offset by increased
sales of diagnostic and repair information products to independent
repair shop owners and managers.
Operating earnings of $77.3 million in the period, including
$3.1 million of restructuring costs and $0.7 million of unfavorable
foreign currency effects, decreased $6.3 million from 2019 levels,
and the operating margin of 24.6%, including 100 bps of costs from
restructuring actions, compared to 25.5% last year.
Financial Services operating earnings of $56.9 million on
revenue of $85.9 million in the quarter compared to operating
earnings of $62.1 million on revenue of $85.6 million a year ago.
In the first quarter of 2020, financial services operating earnings
include $2.6 million of higher provisions for credit losses related
to the impact of economic uncertainty associated with COVID-19.
Originations of $255.6 million in the first quarter increased $3.1
million, or 1.2%, from 2019 levels.
Corporate expenses of $18.5 million in the quarter
compared to $9.9 million last year, which included an $11.6 million
benefit from the legal settlement.
Outlook
COVID-19 has spread across the globe during 2020 and is
impacting economic activity worldwide. In the near term, Snap-on
anticipates no improvement in the macroeconomic environment and, as
a result, expects sales and credit originations in the second
quarter of 2020 to be down year over year. Snap-on does not, as a
general practice, furnish quarterly sales or earnings projections.
However, in light of actions imposed by national and local
governments to contain the spread of COVID-19, the company believes
that its second quarter 2020 sales and earnings will be lower than
reported second quarter 2019 amounts.
Snap-on is responding to the global macroeconomic challenges by
deepening its Rapid Continuous Improvement (RCI), sourcing and
other cost reduction initiatives. Snap-on recorded $7.5 million of
costs related to restructuring actions, primarily in Europe, in the
first quarter of 2020. Snap-on will continue to manage its cash
flows and balance its capital allocation priorities, including
investments and the need for further cost reduction actions; the
current economic uncertainty makes it difficult to presently
predict this balance as the company continually adjusts to the
changing business environment. Snap-on expects that capital
expenditures in 2020 will be in a range of $70 million to $80
million, of which $17.2 million was incurred in the first
quarter.
Despite near term uncertainty, Snap-on expects to maintain focus
on 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.
Snap-on currently anticipates that its full year 2020 effective
income tax rate will be in the range of 23% to 25%.
Conference Call and Webcast on April
21, 2020, at 9:00 a.m. Central Time
A discussion of this release will be webcast on Tuesday, April
21, 2020, 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 first quarter of 2020, 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
$7.5 million of restructuring charges ($6.0 million after tax) for
exit and disposal activities.
For the first quarter of 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 the legal
settlement.
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 2020
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 28, 2019 and any Quarterly
Reports on Form 10-Q, which all 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
March 28,
March 30,
2020
2019
Net sales
$
852.2
$
921.7
Cost of goods sold
(430.6
)
(450.1
)
Gross profit
421.6
471.6
Operating expenses
(282.7
)
(284.2
)
Operating earnings before financial
services
138.9
187.4
Financial services revenue
85.9
85.6
Financial services expenses
(29.0
)
(23.5
)
Operating earnings from financial
services
56.9
62.1
Operating earnings
195.8
249.5
Interest expense
(11.4
)
(12.5
)
Other income (expense) – net
1.5
1.5
Earnings before income taxes and equity
earnings
185.9
238.5
Income tax expense
(43.9
)
(56.9
)
Earnings before equity earnings
142.0
181.6
Equity earnings, net of tax
—
0.5
Net earnings
142.0
182.1
Net earnings attributable to
noncontrolling interests
(4.8
)
(4.2
)
Net earnings attributable to Snap-on
Inc.
$
137.2
$
177.9
Net earnings per share attributable to
Snap-on Inc.:
Basic
$
2.52
$
3.21
Diluted
2.49
3.16
Weighted-average shares
outstanding:
Basic
54.5
55.5
Effect of dilutive securities
0.5
0.8
Diluted
55.0
56.3
SNAP-ON INCORPORATED
Supplemental Segment
Information
(Amounts in millions)
(unaudited)
Three Months Ended
March 28,
March 30,
2020
2019
Net sales:
Commercial & Industrial Group
$
299.9
$
322.5
Snap-on Tools Group
375.9
410.2
Repair Systems & Information Group
314.6
327.9
Segment net sales
990.4
1,060.6
Intersegment eliminations
(138.2
)
(138.9
)
Total net sales
852.2
921.7
Financial Services revenue
85.9
85.6
Total revenues
$
938.1
$
1,007.3
Operating earnings:
Commercial & Industrial Group
$
31.5
$
46.5
Snap-on Tools Group
48.6
67.2
Repair Systems & Information Group
77.3
83.6
Financial Services
56.9
62.1
Segment operating earnings
214.3
259.4
Corporate
(18.5
)
(9.9
)
Operating earnings
195.8
249.5
Interest expense
(11.4
)
(12.5
)
Other income (expense) – net
1.5
1.5
Earnings before income taxes and equity
earnings
$
185.9
$
238.5
SNAP-ON INCORPORATED
Condensed Consolidated Balance
Sheets
(Amounts in millions)
(unaudited)
March 28,
December 28,
2020
2019
Assets
Cash and cash equivalents
$
185.8
$
184.5
Trade and other accounts receivable –
net
635.2
694.6
Finance receivables – net
514.3
530.1
Contract receivables – net
92.2
100.7
Inventories – net
757.4
760.4
Prepaid expenses and other assets
118.2
110.2
Total current assets
2,303.1
2,380.5
Property and equipment – net
508.3
521.5
Operating lease right-of-use assets
51.3
55.6
Deferred income tax assets
53.3
52.3
Long-term finance receivables – net
1,101.9
1,103.5
Long-term contract receivables – net
355.4
360.1
Goodwill
898.2
913.8
Other intangibles – net
234.3
243.9
Other assets
58.5
62.3
Total assets
$
5,564.3
$
5,693.5
Liabilities and Equity
Notes payable
$
160.1
$
202.9
Accounts payable
193.7
198.5
Accrued benefits
55.0
53.3
Accrued compensation
51.3
53.9
Franchisee deposits
64.8
68.2
Other accrued liabilities
397.0
370.8
Total current liabilities
921.9
947.6
Long-term debt
948.2
946.9
Deferred income tax liabilities
66.3
69.3
Retiree health care benefits
32.9
33.6
Pension liabilities
113.2
122.1
Operating lease liabilities
34.7
37.5
Other long-term liabilities
93.7
105.7
Total liabilities
2,210.9
2,262.7
Equity
Shareholders' equity attributable to
Snap-on Inc.
Common stock
67.4
67.4
Additional paid-in capital
378.4
379.1
Retained earnings
4,852.0
4,779.7
Accumulated other comprehensive loss
(609.9
)
(507.9
)
Treasury stock at cost
(1,356.6
)
(1,309.2
)
Total shareholders' equity attributable
to Snap-on Inc.
3,331.3
3,409.1
Noncontrolling interests
22.1
21.7
Total equity
3,353.4
3,430.8
Total liabilities and equity
$
5,564.3
$
5,693.5
SNAP-ON INCORPORATED
Condensed Consolidated
Statements of Cash Flows
(Amounts in millions)
(unaudited)
Three Months Ended
March 28,
March 30,
2020
2019
Operating activities:
Net earnings
$
142.0
$
182.1
Adjustments to reconcile net earnings to
net cash provided (used) by operating activities:
Depreciation
18.1
17.2
Amortization of other intangibles
5.7
5.4
Provision for losses on finance
receivables
16.3
12.5
Provision for losses on non-finance
receivables
5.0
5.0
Stock-based compensation expense
1.1
7.3
Deferred income tax (benefit)
provision
(3.6
)
5.4
Loss on sales of assets
0.1
0.3
Changes in operating assets and
liabilities, net of effects of acquisitions:
Trade and other accounts receivable
34.3
14.8
Contract receivables
1.2
6.1
Inventories
(23.8
)
(33.2
)
Prepaid and other assets
3.2
(19.7
)
Accounts payable
1.9
1.8
Accruals and other liabilities
11.9
(3.7
)
Net cash provided by operating
activities
213.4
201.3
Investing activities:
Additions to finance receivables
(212.8
)
(210.5
)
Collections of finance receivables
190.7
191.9
Capital expenditures
(17.2
)
(20.2
)
Acquisitions of businesses, net of cash
acquired
(6.1
)
(1.3
)
Disposals of property and equipment
—
0.2
Other
(4.4
)
1.2
Net cash used by investing
activities
(49.8
)
(38.7
)
Financing activities:
Net decrease in other short-term
borrowings
(41.9
)
(43.8
)
Cash dividends paid
(59.0
)
(52.8
)
Purchases of treasury stock
(50.5
)
(47.4
)
Proceeds from stock purchase and option
plans
1.5
4.8
Other
(7.2
)
(8.4
)
Net cash used by financing
activities
(157.1
)
(147.6
)
Effect of exchange rate changes on cash
and cash equivalents
(5.2
)
0.5
Increase in cash and cash
equivalents
1.3
15.5
Cash and cash equivalents at beginning of
year
184.5
140.9
Cash and cash equivalents at end of
period
$
185.8
$
156.4
Supplemental cash flow
disclosures:
Cash paid for interest
$
(20.7
)
$
(21.6
)
Net cash paid for income taxes
(15.1
)
(18.4
)
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
March 28,
March 30,
March 28,
March 30,
2020
2019
2020
2019
Net sales
$
852.2
$
921.7
$
—
$
—
Cost of goods sold
(430.6
)
(450.1
)
—
—
Gross profit
421.6
471.6
—
—
Operating expenses
(282.7
)
(284.2
)
—
—
Operating earnings before financial
services
138.9
187.4
—
—
Financial services revenue
—
—
85.9
85.6
Financial services expenses
—
—
(29.0
)
(23.5
)
Operating earnings from financial
services
—
—
56.9
62.1
Operating earnings
138.9
187.4
56.9
62.1
Interest expense
(11.3
)
(12.5
)
(0.1
)
—
Intersegment interest income (expense) –
net
18.1
17.7
(18.1
)
(17.7
)
Other income (expense) – net
1.5
1.5
—
—
Earnings before income taxes and equity
earnings
147.2
194.1
38.7
44.4
Income tax expense
(33.8
)
(45.4
)
(10.1
)
(11.5
)
Earnings before equity earnings
113.4
148.7
28.6
32.9
Financial services – net earnings
attributable to Snap-on
28.6
32.9
—
—
Equity earnings, net of tax
—
0.5
—
—
Net earnings
142.0
182.1
28.6
32.9
Net earnings attributable to
noncontrolling interests
(4.8
)
(4.2
)
—
—
Net earnings attributable to
Snap-on
$
137.2
$
177.9
$
28.6
$
32.9
* 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
March 28,
December 28,
March 28,
December 28,
2020
2019
2020
2019
Assets
Cash and cash equivalents
$
185.6
$
184.4
$
0.2
$
0.1
Intersegment receivables
11.3
14.2
—
—
Trade and other accounts receivable –
net
634.3
693.5
0.9
1.1
Finance receivables – net
—
—
514.3
530.1
Contract receivables – net
6.4
6.8
85.8
93.9
Inventories – net
757.4
760.4
—
—
Prepaid expenses and other assets
118.6
111.8
8.3
7.0
Total current assets
1,713.6
1,771.1
609.5
632.2
Property and equipment – net
506.7
519.8
1.6
1.7
Operating lease right-of-use assets
48.7
52.9
2.6
2.7
Investment in Financial Services
335.1
340.5
—
—
Deferred income tax assets
32.8
32.7
20.5
19.6
Intersegment long-term notes
receivable
727.4
755.5
—
—
Long-term finance receivables – net
—
—
1,101.9
1,103.5
Long-term contract receivables – net
15.8
16.0
339.6
344.1
Goodwill
898.2
913.8
—
—
Other intangibles – net
234.3
243.9
—
—
Other assets
69.7
73.0
0.3
0.2
Total assets
$
4,582.3
$
4,719.2
$
2,076.0
$
2,104.0
Liabilities and Equity
Notes payable
$
160.1
$
202.9
$
—
$
—
Accounts payable
192.2
197.3
1.5
1.2
Intersegment payables
—
—
11.3
14.2
Accrued benefits
55.0
53.2
—
0.1
Accrued compensation
50.0
52.2
1.3
1.7
Franchisee deposits
64.8
68.2
—
—
Other accrued liabilities
372.8
353.7
32.9
25.7
Total current liabilities
894.9
927.5
47.0
42.9
Long-term debt and intersegment long-term
debt
—
—
1,675.6
1,702.4
Deferred income tax liabilities
66.3
69.3
—
—
Retiree health care benefits
32.9
33.6
—
—
Pension liabilities
113.2
122.1
—
—
Operating lease liabilities
31.8
34.5
2.9
3.0
Other long-term liabilities
89.8
101.4
15.4
15.2
Total liabilities
1,228.9
1,288.4
1,740.9
1,763.5
Total shareholders' equity attributable
to Snap-on
3,331.3
3,409.1
335.1
340.5
Noncontrolling interests
22.1
21.7
—
—
Total equity
3,353.4
3,430.8
335.1
340.5
Total liabilities and equity
$
4,582.3
$
4,719.2
$
2,076.0
$
2,104.0
* 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
March 28,
March 30,
2020
2019
AS
REPORTED
Charges associated with exit and
disposal activities ("restructuring charges")
Pre-tax restructuring charges
$
(7.5
)
$
—
Income tax benefits
1.5
—
Restructuring charges, after tax
$
(6.0
)
$
—
Weighted-average shares outstanding -
diluted
55.0
56.3
Diluted EPS - restructuring
charges
$
(0.11
)
$
—
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
55.0
56.3
Diluted EPS - legal settlement
$
—
$
0.15
ADJUSTED
INFORMATION - NON-GAAP
1) Operating earnings before financial
services
As reported
$
138.9
$
187.4
Restructuring charges
7.5
—
Legal settlement
—
(11.6
)
As adjusted
$
146.4
$
175.8
Operating earnings before financial
services as a percentage of sales
As reported
16.3
%
20.3
%
As adjusted
17.2
%
19.1
%
2) Operating earnings
As reported
$
195.8
$
249.5
Restructuring charges
7.5
—
Legal settlement
—
(11.6
)
As adjusted
$
203.3
$
237.9
Operating earnings as a percentage of
revenue
As reported
20.9
%
24.8
%
As adjusted
21.7
%
23.6
%
SNAP-ON INCORPORATED
Reconciliation of Non-GAAP
Financial Measures (continued)
(Amounts in millions, except
per share data)
(unaudited)
Three Months Ended
March 28,
March 30,
2020
2019
ADJUSTED
INFORMATION - NON-GAAP (continued)
3) Net earnings attributable to Snap-on
Incorporated
As reported
$
137.2
$
177.9
Restructuring charges, after tax
6.0
—
Legal settlement, after tax
—
(8.7)
As adjusted
$
143.2
$
169.2
4) Diluted EPS
As reported
$
2.49
$
3.16
Restructuring charges, after tax
0.11
—
Legal settlement, after tax
—
(0.15)
As adjusted
$
2.60
$
3.01
5) Effective tax rate
As reported
24.2
%
24.3
%
Restructuring charges
(0.1)
%
—
%
Legal settlement
—
%
(0.1)
%
As adjusted
24.1
%
24.2
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200421005195/en/
Investors: Sara Verbsky 262/656-4869
Media: Samuel Bottum 262/656-5793
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