KENOSHA, Wis. — Snap-on Incorporated (NYSE: SNA), a manufacturer and marketer of tools, equipment, diagnostics, repair information, and systems solutions for professional users performing critical tasks, announced Thursday its operating results for the third quarter of 2014.
- Sales of $806.3 million increased $53.1 million, or 7.0 percent, from 2013 levels; excluding $5.6 million of acquisition-related sales and $0.7 million of favorable foreign currency translation, organic sales increased 6.2 percent.
- Operating earnings before financial services of $130.6 million improved to 16.2 percent of sales as compared to $111.3 million, or 14.8 percent of sales, last year.
- Financial services operating earnings of $37.7 million increased $6.1 million, or 19.3 percent, from 2013 levels.
- Consolidated operating earnings of $168.3 million improved to 19.6 percent of revenues (net sales plus financial services revenue) as compared to $142.9 million, or 17.9 percent of revenues, last year.
- Net earnings of $103.7 million, or $1.76 per diluted share, compared with net earnings of $84.6 million, or $1.43 per diluted share, a year ago.
“We were encouraged by our third quarter results that demonstrate ongoing progress along Snap-on’s runways for both coherent growth and improvement, as solid organic sales gains across all operating segments were accompanied by a 23.1 percent increase in earnings per share,” said Nick Pinchuk, Snap-on chairman and chief executive officer. “In the third quarter, Snap-on was honored to again receive product awards from both MOTOR Magazine and Professional Tool & Equipment News. We believe this recognition reflects Snap-on’s capabilities in translating our deep understanding of professionals’ work into winning innovations. Finally, our results and progress reflect a tremendous dedication and effort all across Snap-on. In that regard, I thank our franchisees and associates worldwide for their commitment and their contributions.”
Segment Results
Commercial & Industrial Group segment sales of $298.8 million in the quarter increased $23.6 million, or 8.6 percent, from 2013 levels. Excluding $2.0 million of unfavorable foreign currency translation, organic sales increased $25.6 million, or 9.4 percent, primarily due to higher volume with customers in critical industries and in the segment’s European-based hand tools business.
Operating earnings of $40.8 million in the period increased $4.8 million from 2013 levels, and the operating margin (operating earnings as a percentage of segment sales) of 13.7 percent improved 60 basis points from 13.1 percent a year ago.
Snap-on Tools Group segment sales of $355.0 million in the quarter rose $21.2 million, or 6.4 percent, from 2013 levels, reflecting sales increases in both the company’s U.S. and international franchise operations. Excluding $1.2 million of favorable foreign currency translation, organic sales increased 6.0 percent.
Operating earnings of $49.5 million in the period increased $7.6 million from 2013 levels, and the operating margin of 13.9 percent improved 130 basis points from 12.6 percent a year ago.
Repair Systems & Information Group segment sales of $271.2 million in the quarter increased $18.5 million, or 7.3 percent, from 2013 levels. Excluding $5.6 million of acquisition-related sales and $1.6 million of favorable foreign currency translation, organic sales increased $11.3 million, or 4.4 percent, primarily due to higher sales to OEM dealerships and increased sales of diagnostic and repair information products to independent repair shop owners and managers, partially offset by lower sales of undercar equipment, largely reflecting weakness in Eastern Europe.
Operating earnings of $63.3 million in the period increased $5.4 million from 2013 levels, and the operating margin of 23.3 percent improved 40 basis points from 22.9 percent a year ago.
Financial Services operating earnings of $37.7 million on revenue of $53.6 million in the quarter compared with operating earnings of $31.6 million on revenue of $45.1 million a year ago.
Corporate expenses of $23.0 million in the quarter compared with expenses of $24.5 million last year.
