Diluted EPS of $3.28 increases
10.8%;
Operating margin before financial services
of 19.7% improves 110 basis points;
Reported net sales up 4.4%; Organic net
sales up 3.8%
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 2020.
- Net sales of $941.6 million in the third quarter of 2020
increased $39.8 million, or 4.4% from 2019 levels, reflecting a
$34.6 million, or 3.8%, organic sales gain, $4.2 million of
favorable foreign currency translation, and $1.0 million of
acquisition-related sales.
- Operating earnings before financial services for the quarter of
$185.7 million, or 19.7% of sales, including $4.5 million of
unfavorable foreign currency effects and $1.5 million of direct
costs associated with COVID-19, improved $18.0 million, or 10.7%,
from $167.7 million, or 18.6% of sales, in 2019.
- Financial services revenue in the quarter of $85.8 million
increased $1.7 million from 2019 levels; financial services
operating earnings of $65.6 million compared to $61.0 million last
year.
- Consolidated operating earnings for the quarter of $251.3
million, including $4.3 million of unfavorable foreign currency
effects and $1.5 million of direct costs associated with COVID-19,
compared to $228.7 million last year. As a percentage of revenues
(net sales plus financial services revenue), consolidated operating
earnings were 24.5% and 23.2% in the third quarters of 2020 and
2019, respectively.
- The third quarter effective income tax rate was 23.4% in 2020
and 23.5% in 2019.
- Net earnings of $179.7 million, or $3.28 per diluted share,
compared to $164.6 million, or $2.96 per diluted share, a year
ago.
See “Non-GAAP Measures” below for a definition of, and further
explanation about, organic sales.
“We’re encouraged by Snap-on’s third quarter, which included
sequential improvements in each of our operations, as well as
overall year-over-year progress,” said Nick Pinchuk, Snap-on
chairman and chief executive officer. “The momentum we experienced
in the month of June continued in the period, confirming the
ongoing accommodation to the virus as we deploy measures to proceed
safely in the COVID-19 environment. Despite the turbulence of these
times, our performance rose, even as we maintained and expanded our
advantages in product, brand, and people. To that end, the benefits
of Snap-on Value Creation Processes continued to be realized in a
variety of ways. We were honored again this year with product
awards from both Motor Magazine and Professional Tool &
Equipment News, demonstrating our deep understanding of work and
our ability to translate that insight into winning innovations that
add to the considerable strength of our line-up. At the same time,
while prioritizing the health and well-being of all our
constituents, we remain focused on seizing the abundant
opportunities inherent in our essential business segments and on
driving improvements that we believe will combine to author overall
progress going forward. Finally, and especially in the current
conditions, I want to thank our franchisees and associates
worldwide for their ongoing dedication, continued contributions,
and unfailing confidence in our future.”
Segment Results
Commercial & Industrial Group segment net sales of
$308.4 million in the quarter compared to $335.3 million last year,
reflecting a $29.1 million, or 8.6%, organic sales decline and $2.2
million of favorable foreign currency translation. The organic
decrease includes lower sales to customers in critical industries
and in the segment’s Asia Pacific operations.
Operating earnings of $43.1 million in the period, including
$0.8 million of COVID-19-related costs and $1.4 million of
unfavorable foreign currency effects, compared to $48.3 million in
2019. The operating margin (operating earnings as a percentage of
segment net sales) of 14.0% compared to 14.4% a year ago.
Snap-on Tools Group segment net sales of $449.8 million
in the quarter compared to $385.2 million last year, reflecting a
$62.8 million, or 16.2%, organic sales gain and $1.8 million of
favorable foreign currency translation. The organic increase
reflects higher sales in both the United States and in the
segment’s international operations.
Operating earnings of $87.1 million in the period, including
$0.4 million of COVID-19-related costs and $2.9 million of
unfavorable foreign currency effects, increased $34.1 million from
2019 levels, and the operating margin of 19.4% compared to 13.8%
last year.
Repair Systems & Information Group segment net sales
of $317.5 million in the quarter compared to $322.7 million last
year, reflecting a $7.0 million, or 2.2%, organic sales decrease,
$1.0 million of acquisition-related sales, and $0.8 million of
favorable foreign currency translation. The organic decrease
includes lower sales to OEM dealerships, partially offset by higher
sales of diagnostics and repair information products to independent
repair shop owners and managers.
Operating earnings of $80.1 million in the period, including
$0.2 million of COVID-19-related costs and $0.2 million of
unfavorable foreign currency effects, decreased $3.2 million from
2019 levels, and the operating margin of 25.2% compared to 25.8% a
year ago.
Financial Services operating earnings of $65.6 million on
revenue of $85.8 million in the quarter compared to operating
earnings of $61.0 million on revenue of $84.1 million a year ago.
Originations of $252.8 million in the third quarter decreased $0.7
million, or 0.3%, from 2019 levels.
Corporate expenses of $24.6 million in the third quarter
of 2020 compared to $16.9 million last year.
Outlook
COVID-19 has spread across the globe during 2020 and is
impacting economic activity worldwide. Snap-on experienced
sequential improvements in the third quarter as our operations
continued accommodating to the related risks while safely pursuing
opportunities in the COVID-19 environment. In the near term, the
company believes there will be continued accommodations to the
virus-related turbulence, but that the trajectory of progress may
be uncertain due to the evolving nature and duration of the
pandemic.
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. In pursuit of these initiatives, the company
expects that capital expenditures in 2020 will be in a range of $75
million to $85 million, of which $39.1 million was incurred in the
first nine months of the year. Snap-on continues to respond to the
global macroeconomic challenges through its Rapid Continuous
Improvement (RCI) process and other cost reduction initiatives.
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 October
22, 2020, at 9:00 a.m. Central Time
A discussion of this release will be webcast on Thursday,
October 22, 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 nine months ended September 26, 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 $11.5 million of restructuring charges ($9.3 million
after tax) for exit and disposal activities that occurred in the
six months ended June 27, 2020.
For the nine months ended September 28, 2019, the company is
including operating earnings before financial services,
consolidated operating earnings, net earnings and diluted earnings
per share, 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.
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.
SNAP-ON INCORPORATED
Condensed Consolidated
Statements of Earnings
(Amounts in millions, except
per share data)
(unaudited)
Three Months Ended
Nine Months Ended
September 26,
September 28,
September 26,
September 28,
2020
2019
2020
2019
Net sales
$
941.6
$
901.8
$
2,518.1
$
2,774.8
Cost of goods sold
(472.1
)
(453.7
)
(1,285.8
)
(1,381.3
)
Gross profit
469.5
448.1
1,232.3
1,393.5
Operating expenses
(283.8
)
(280.4
)
(816.6
)
(848.5
)
Operating earnings before financial
services
185.7
167.7
415.7
545.0
Financial services revenue
85.8
84.1
256.3
253.8
Financial services expenses
(20.2
)
(23.1
)
(76.2
)
(70.1
)
Operating earnings from financial
services
65.6
61.0
180.1
183.7
Operating earnings
251.3
228.7
595.8
728.7
Interest expense
(13.8
)
(12.0
)
(38.6
)
(36.9
)
Other income (expense) – net
2.8
2.8
6.3
6.4
Earnings before income taxes and equity
earnings
240.3
219.5
563.5
698.2
Income tax expense
(55.1
)
(50.4
)
(130.9
)
(162.9
)
Earnings before equity earnings
185.2
169.1
432.6
535.3
Equity earnings (loss), net of tax
(0.5
)
0.1
—
0.9
Net earnings
184.7
169.2
432.6
536.2
Net earnings attributable to
noncontrolling interests
(5.0
)
(4.6
)
(14.5
)
(13.3
)
Net earnings attributable to Snap-on
Inc.
$
179.7
$
164.6
$
418.1
$
522.9
Net earnings per share attributable to
Snap-on Inc.:
Basic
$
3.31
$
2.99
$
7.69
$
9.47
Diluted
3.28
2.96
7.62
9.34
Weighted-average shares
outstanding:
Basic
54.3
55.0
54.4
55.2
Effect of dilutive securities
0.5
0.7
0.5
0.8
Diluted
54.8
55.7
54.9
56.0
SNAP-ON INCORPORATED
Supplemental Segment
Information
(Amounts in millions)
(unaudited)
Three Months Ended
Nine Months Ended
September 26,
September 28,
September 26,
September 28,
2020
2019
2020
2019
Net sales:
Commercial & Industrial Group
$
308.4
$
335.3
$
870.2
$
992.8
Snap-on Tools Group
449.8
385.2
1,149.0
1,201.2
Repair Systems & Information Group
317.5
322.7
877.1
999.5
Segment net sales
1,075.7
1,043.2
2,896.3
3,193.5
Intersegment eliminations
(134.1
)
(141.4
)
(378.2
)
(418.7
)
Total net sales
941.6
901.8
2,518.1
2,774.8
Financial Services revenue
85.8
84.1
256.3
253.8
Total revenues
$
1,027.4
$
985.9
$
2,774.4
$
3,028.6
Operating earnings:
Commercial & Industrial Group
$
43.1
$
48.3
$
97.5
$
143.7
Snap-on Tools Group
87.1
53.0
174.1
191.5
Repair Systems & Information Group
80.1
83.3
208.0
255.5
Financial Services
65.6
61.0
180.1
183.7
Segment operating earnings
275.9
245.6
659.7
774.4
Corporate
(24.6
)
(16.9
)
(63.9
)
(45.7
)
Operating earnings
251.3
228.7
595.8
728.7
Interest expense
(13.8
)
(12.0
)
(38.6
)
(36.9
)
Other income (expense) – net
2.8
2.8
6.3
6.4
Earnings before income taxes and equity
earnings
$
240.3
$
219.5
$
563.5
$
698.2
SNAP-ON INCORPORATED
Condensed Consolidated Balance
Sheets
(Amounts in millions)
(unaudited)
September 26,
December 28,
2020
2019
Assets
Cash and cash equivalents
$
787.5
$
184.5
Trade and other accounts receivable –
net
618.9
694.6
Finance receivables – net
532.1
530.1
Contract receivables – net
113.3
100.7
Inventories – net
764.4
760.4
Prepaid expenses and other assets
122.0
110.2
Total current assets
2,938.2
2,380.5
Property and equipment – net
505.4
521.5
Operating lease right-of-use assets
51.0
55.6
Deferred income tax assets
47.3
52.3
Long-term finance receivables – net
1,122.3
1,103.5
Long-term contract receivables – net
367.2
360.1
Goodwill
938.5
913.8
Other intangibles – net
241.6
243.9
Other assets
56.1
62.3
Total assets
$
6,267.6
$
5,693.5
Liabilities and Equity
Notes payable and current maturities of
long-term debt
$
267.9
$
202.9
Accounts payable
206.0
198.5
Accrued benefits
53.6
53.3
Accrued compensation
82.5
53.9
Franchisee deposits
85.9
68.2
Other accrued liabilities
421.1
370.8
Total current liabilities
1,117.0
947.6
Long-term debt
1,181.8
946.9
Deferred income tax liabilities
63.5
69.3
Retiree health care benefits
31.5
33.6
Pension liabilities
103.7
122.1
Operating lease liabilities
33.6
37.5
Other long-term liabilities
95.7
105.7
Total liabilities
2,626.8
2,262.7
Equity
Shareholders' equity attributable to
Snap-on Inc.
Common stock
67.4
67.4
Additional paid-in capital
386.3
379.1
Retained earnings
5,014.9
4,779.7
Accumulated other comprehensive loss
(465.6
)
(507.9
)
Treasury stock at cost
(1,384.0
)
(1,309.2
)
Total shareholders' equity attributable
to Snap-on Inc.
3,619.0
3,409.1
Noncontrolling interests
21.8
21.7
Total equity
3,640.8
3,430.8
Total liabilities and equity
$
6,267.6
$
5,693.5
SNAP-ON INCORPORATED
Condensed Consolidated
Statements of Cash Flows
(Amounts in millions)
(unaudited)
Three Months Ended
September 26,
September 28,
2020
2019
Operating activities:
Net earnings
$
184.7
$
169.2
Adjustments to reconcile net earnings to
net cash provided (used) by operating activities:
Depreciation
18.1
17.4
Amortization of other intangibles
5.8
5.5
Provision for losses on finance
receivables
9.8
11.4
Provision for losses on non-finance
receivables
4.6
5.7
Stock-based compensation expense
5.6
4.6
Deferred income tax benefit
(6.6
)
(1.7
)
Loss on sales of assets
0.5
0.2
Changes in operating assets and
liabilities, net of effects of acquisitions:
Trade and other accounts receivable
(54.0
)
(12.3
)
Contract receivables
(15.0
)
(15.9
)
Inventories
28.4
(44.5
)
Prepaid and other assets
17.8
10.0
Accounts payable
18.4
(7.4
)
Accruals and other liabilities
5.9
(11.1
)
Net cash provided by operating
activities
224.0
131.1
Investing activities:
Additions to finance receivables
(196.9
)
(197.0
)
Collections of finance receivables
185.2
181.6
Capital expenditures
(10.1
)
(29.6
)
Acquisitions of businesses, net of cash
acquired
—
(29.6
)
Disposals of property and equipment
0.5
(0.1
)
Other
2.5
(2.1
)
Net cash used by investing
activities
(18.8
)
(76.8
)
Financing activities:
Net increase in other short-term
borrowings
2.3
65.1
Cash dividends paid
(58.8
)
(52.3
)
Purchases of treasury stock
(45.1
)
(59.7
)
Proceeds from stock purchase and option
plans
2.7
1.6
Other
(6.2
)
(4.2
)
Net cash used by financing
activities
(105.1
)
(49.5
)
Effect of exchange rate changes on cash
and cash equivalents
1.2
(1.3
)
Increase in cash and cash
equivalents
101.3
3.5
Cash and cash equivalents at beginning of
period
686.2
164.0
Cash and cash equivalents at end of
period
$
787.5
$
167.5
Supplemental cash flow
disclosures:
Cash paid for interest
$
(19.6
)
$
(21.4
)
Net cash paid for income taxes
(104.5
)
(48.3
)
SNAP-ON INCORPORATED
Condensed Consolidated
Statements of Cash Flows
(Amounts in millions)
(unaudited)
Nine Months Ended
September 26,
September 28,
2020
2019
Operating activities:
Net earnings
$
432.6
$
536.2
Adjustments to reconcile net earnings to
net cash provided (used) by operating activities:
Depreciation
54.3
52.2
Amortization of other intangibles
17.2
16.3
Provision for losses on finance
receivables
41.2
35.8
Provision for losses on non-finance
receivables
16.3
14.4
Stock-based compensation expense
12.5
18.7
Deferred income tax provision
(benefit)
(8.5
)
10.7
Loss on sales of assets
0.7
0.8
Settlement of treasury lock
1.4
—
Changes in operating assets and
liabilities, net of effects of acquisitions:
Trade and other accounts receivable
58.5
(8.4
)
Contract receivables
(26.8
)
(12.9
)
Inventories
(3.6
)
(97.3
)
Prepaid and other assets
(0.3
)
(17.0
)
Accounts payable
10.3
9.2
Accruals and other liabilities
85.2
(80.8
)
Net cash provided by operating
activities
691.0
477.9
Investing activities:
Additions to finance receivables
(611.5
)
(628.1
)
Collections of finance receivables
542.7
565.1
Capital expenditures
(39.1
)
(77.8
)
Acquisitions of businesses, net of cash
acquired
(6.1
)
(38.9
)
Disposals of property and equipment
1.4
0.3
Other
(1.6
)
(1.3
)
Net cash used by investing
activities
(114.2
)
(180.7
)
Financing activities:
Proceeds from issuance of long-term
debt
489.9
—
Net increase (decrease) in other
short-term borrowings
(187.7
)
46.9
Cash dividends paid
(176.5
)
(157.6
)
Purchases of treasury stock
(95.6
)
(167.2
)
Proceeds from stock purchase and option
plans
16.5
26.2
Other
(19.3
)
(18.5
)
Net cash provided (used) by financing
activities
27.3
(270.2
)
Effect of exchange rate changes on cash
and cash equivalents
(1.1
)
(0.4
)
Increase in cash and cash
equivalents
603.0
26.6
Cash and cash equivalents at beginning of
year
184.5
140.9
Cash and cash equivalents at end of
period
$
787.5
$
167.5
Supplemental cash flow
disclosures:
Cash paid for interest
$
(41.2
)
$
(44.8
)
Net cash paid for income taxes
(131.9
)
(140.5
)
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 26,
September 28,
September 26,
September 28,
2020
2019
2020
2019
Net sales
$
941.6
$
901.8
$
—
$
—
Cost of goods sold
(472.1
)
(453.7
)
—
—
Gross profit
469.5
448.1
—
—
Operating expenses
(283.8
)
(280.4
)
—
—
Operating earnings before financial
services
185.7
167.7
—
—
Financial services revenue
—
—
85.8
84.1
Financial services expenses
—
—
(20.2
)
(23.1
)
Operating earnings from financial
services
—
—
65.6
61.0
Operating earnings
185.7
167.7
65.6
61.0
Interest expense
(13.8
)
(11.9
)
—
(0.1
)
Intersegment interest income (expense) –
net
16.5
17.3
(16.5
)
(17.3
)
Other income (expense) – net
2.8
2.9
—
(0.1
)
Earnings before income taxes and equity
earnings
191.2
176.0
49.1
43.5
Income tax expense
(42.4
)
(39.2
)
(12.7
)
(11.2
)
Earnings before equity earnings
148.8
136.8
36.4
32.3
Financial services – net earnings
attributable to Snap-on
36.4
32.3
—
—
Equity earnings (loss), net of tax
(0.5
)
0.1
—
—
Net earnings
184.7
169.2
36.4
32.3
Net earnings attributable to
noncontrolling interests
(5.0
)
(4.6
)
—
—
Net earnings attributable to
Snap-on
$
179.7
$
164.6
$
36.4
$
32.3
* 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 26,
September 28,
September 26,
September 28,
2020
2019
2020
2019
Net sales
$
2,518.1
$
2,774.8
$
—
$
—
Cost of goods sold
(1,285.8
)
(1,381.3
)
—
—
Gross profit
1,232.3
1,393.5
—
—
Operating expenses
(816.6
)
(848.5
)
—
—
Operating earnings before financial
services
415.7
545.0
—
—
Financial services revenue
—
—
256.3
253.8
Financial services expenses
—
—
(76.2
)
(70.1
)
Operating earnings from financial
services
—
—
180.1
183.7
Operating earnings
415.7
545.0
180.1
183.7
Interest expense
(38.5
)
(36.7
)
(0.1
)
(0.2
)
Intersegment interest income (expense) –
net
51.1
52.8
(51.1
)
(52.8
)
Other income (expense) – net
6.3
6.5
—
(0.1
)
Earnings before income taxes and equity
earnings
434.6
567.6
128.9
130.6
Income tax expense
(97.5
)
(129.1
)
(33.4
)
(33.8
)
Earnings before equity earnings
337.1
438.5
95.5
96.8
Financial services – net earnings
attributable to Snap-on
95.5
96.8
—
—
Equity earnings, net of tax
—
0.9
—
—
Net earnings
432.6
536.2
95.5
96.8
Net earnings attributable to
noncontrolling interests
(14.5
)
(13.3
)
—
—
Net earnings attributable to
Snap-on
$
418.1
$
522.9
$
95.5
$
96.8
* 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 26,
December 28,
September 26,
December 28,
2020
2019
2020
2019
Assets
Cash and cash equivalents
$
787.2
$
184.4
$
0.3
$
0.1
Intersegment receivables
11.3
14.2
—
—
Trade and other accounts receivable –
net
617.8
693.5
1.1
1.1
Finance receivables – net
—
—
532.1
530.1
Contract receivables – net
7.0
6.8
106.3
93.9
Inventories – net
764.4
760.4
—
—
Prepaid expenses and other assets
122.7
111.8
8.3
7.0
Total current assets
2,310.4
1,771.1
648.1
632.2
Property and equipment – net
503.8
519.8
1.6
1.7
Operating lease right-of-use assets
48.6
52.9
2.4
2.7
Investment in Financial Services
347.0
340.5
—
—
Deferred income tax assets
24.6
32.7
22.7
19.6
Intersegment long-term notes
receivable
302.9
755.5
—
—
Long-term finance receivables – net
—
—
1,122.3
1,103.5
Long-term contract receivables – net
13.3
16.0
353.9
344.1
Goodwill
938.5
913.8
—
—
Other intangibles – net
241.6
243.9
—
—
Other assets
67.8
73.0
0.2
0.2
Total assets
$
4,798.5
$
4,719.2
$
2,151.2
$
2,104.0
Liabilities and Equity
Notes payable and current maturities of
long-term debt
$
17.9
$
202.9
$
250.0
$
—
Accounts payable
204.9
197.3
1.1
1.2
Intersegment payables
—
—
11.3
14.2
Accrued benefits
53.6
53.2
—
0.1
Accrued compensation
80.3
52.2
2.2
1.7
Franchisee deposits
85.9
68.2
—
—
Other accrued liabilities
392.8
353.7
37.3
25.7
Total current liabilities
835.4
927.5
301.9
42.9
Long-term debt and intersegment long-term
debt
—
—
1,484.7
1,702.4
Deferred income tax liabilities
63.5
69.3
—
—
Retiree health care benefits
31.5
33.6
—
—
Pension liabilities
103.7
122.1
—
—
Operating lease liabilities
31.0
34.5
2.6
3.0
Other long-term liabilities
92.6
101.4
15.0
15.2
Total liabilities
1,157.7
1,288.4
1,804.2
1,763.5
Total shareholders' equity attributable
to Snap-on
3,619.0
3,409.1
347.0
340.5
Noncontrolling interests
21.8
21.7
—
—
Total equity
3,640.8
3,430.8
347.0
340.5
Total liabilities and equity
$
4,798.5
$
4,719.2
$
2,151.2
$
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
Nine Months Ended
September 26,
September 28,
September 26,
September 28,
2020
2019
2020
2019
AS
REPORTED
Charges associated with exit and
disposal activities ("restructuring charges")
Pre-tax restructuring charges
$
—
$
—
$
(11.5
)
$
—
Income tax benefits
—
—
2.2
—
Restructuring charges, after tax
$
—
$
—
$
(9.3
)
$
—
Weighted-average shares outstanding -
diluted
54.8
55.7
54.9
56.0
Diluted EPS - restructuring
charges
$
—
$
—
$
(0.17
)
$
—
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
54.8
55.7
54.9
56.0
Diluted EPS - legal settlement
$
—
$
—
$
—
$
0.15
ADJUSTED
INFORMATION - NON-GAAP
1) Operating earnings before financial
services
As reported
$
185.7
$
167.7
$
415.7
$
545.0
Restructuring charges
—
—
11.5
—
Legal settlement
—
—
—
(11.6
)
As adjusted
$
185.7
$
167.7
$
427.2
$
533.4
Operating earnings before financial
services as a percentage of sales
As reported
19.7
%
18.6
%
16.5
%
19.6
%
As adjusted
19.7
%
18.6
%
17.0
%
19.2
%
2) Operating earnings
As reported
$
251.3
$
228.7
$
595.8
$
728.7
Restructuring charges
—
—
11.5
—
Legal settlement
—
—
—
(11.6
)
As adjusted
$
251.3
$
228.7
$
607.3
$
717.1
Operating earnings as a percentage of
revenue
As reported
24.5
%
23.2
%
21.5
%
24.1
%
As adjusted
24.5
%
23.2
%
21.9
%
23.7
%
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 26,
September 28,
September 26,
September 28,
2020
2019
2020
2019
ADJUSTED
INFORMATION - NON-GAAP (continued)
3) Net earnings attributable to Snap-on
Incorporated
As reported
$
179.7
$
164.6
$
418.1
$
522.9
Restructuring charges, after tax
—
—
9.3
—
Legal settlement, after tax
—
—
—
(8.7
)
As adjusted
$
179.7
$
164.6
$
427.4
$
514.2
4) Diluted EPS
As reported
$
3.28
$
2.96
$
7.62
$
9.34
Restructuring charges, after tax
—
—
0.17
—
Legal settlement, after tax
—
—
—
(0.15
)
As adjusted
$
3.28
$
2.96
$
7.79
$
9.19
5) Effective tax rate
As reported
23.4
%
23.5
%
23.8
%
23.8
%
Restructuring charges
—
—
-0.1
%
—
Legal settlement
—
—
—
—
As adjusted
23.4
%
23.5
%
23.7
%
23.8
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20201022005322/en/
For additional information, please visit www.snapon.com or
contact: Investors: Sara Verbsky 262/656-4869 Media: Samuel Bottum
262/656-5793
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