Snap-on Inc. announced operating results for the third quarter of 2013.
- Sales of $753.2 million increased $41.6 million, or 5.8 percent, from 2012 levels; excluding $15.6 million of sales from the May 2013 acquisition of Challenger Lifts, Inc. and $7.3 million of unfavorable foreign currency translation, organic sales increased 4.7 percent.
- Operating earnings before financial services of $111.3 million, or 14.8 percent of sales, compares with $96.2 million, or 13.5 percent of sales, last year.
- Financial services operating earnings of $31.6 million increased $3.7 million from 2012 levels.
- Consolidated operating earnings of $142.9 million, or 17.9 percent of revenues (net sales plus financial services revenue), increased from $124.1 million, or 16.5 percent of revenues, last year.
- Net earnings of $84.6 million, or $1.43 per diluted share, compares with net earnings of $74.1 million, or $1.26 per diluted share, a year ago.
"We're encouraged by our third quarter results, which reflect a 5.8 percent increase in net sales and a 130 basis point improvement in operating margin before financial services. We believe these results demonstrate our continued progress along our defined runways for coherent growth and underscore the benefits of our Snap-on Value Creation processes of safety, quality, customer connection, innovation and rapid continuous improvement," said Nick Pinchuk, Snap-on chairman and chief executive officer. "In the third quarter, we were also the only company to receive three MOTOR Magazine Top 20 Tool Awards for 2013, continuing a multi-year streak recognizing our capabilities in connecting with our professional customers and in translating that insight into winning innovation. Finally, these results and achievements reflect extraordinary effort and dedication across the company and I thank our franchisees and associates worldwide for their significant contributions and commitment."
Commercial and industrial group segment sales of $275.2 million in the quarter decreased $5.2 million, or 1.9 percent, from 2012 levels. Excluding $2.7 million of unfavorable foreign currency translation, organic sales in the quarter decreased $2.5 million, or 0.9 percent, primarily due to continued lower sales to the military coupled with a slight sales decline in the segment's European-based hand tools business.
Operating earnings of $36.0 million in the period increased $2.6 million from 2012 levels, and the operating margin (operating earnings as a percentage of segment sales) of 13.1 percent improved from 11.9 percent a year ago.
Snap-on tools group segment sales of $333.8 million in the quarter rose $25.0 million, or 8.1 percent, from 2012 levels, reflecting sales gains across both the company's U.S. and international franchise operations. Excluding $4.0 million of unfavorable foreign currency translation, organic sales increased 9.5 percent.
Operating earnings of $41.9 million in the period increased $1.7 million from 2012 levels and the operating margin of 12.6 percent compared with 13.0 percent a year ago.
Repair systems and information group segment sales of $252.7 million in the quarter increased $30.7 million, or 13.8 percent, from 2012 levels. Excluding $15.6 million of sales from the Challenger acquisition and $0.2 million of favorable foreign currency translation, organic sales in the quarter rose $14.9 million, or 6.7 percent, primarily due to gains in sales of diagnostics and repair information products to independent repair shop owners and managers and higher sales to original equipment manufacturer (OEM) dealerships.
Operating earnings of $57.9 million in the period increased $8.4 million from 2012 levels and the operating margin of 22.9 percent improved from 22.3 percent a year ago.
Financial services operating earnings of $31.6 million on revenue of $45.1 million in the quarter compared with operating earnings of $27.9 million on revenue of $40.5 million a year ago.
Corporate expenses of $24.5 million in the quarter decreased from $26.9 million last year, primarily due to lower stock-based and mark-to-market expenses.
Snap-on expects to continue with the advancement of its strategic framework designed to enhance its mobile tool distribution network, expand in the vehicle repair garage, extend to critical industries and build in emerging markets. In pursuit of these initiatives, Snap-on anticipates that capital expenditures in 2013 will approximate $75 million. Snap-on also expects that its full year 2013 effective income tax rate will be comparable to its 2012 rate.