Snap-on Announces Second Quarter 2021 Results
Snap-on reported impressive second quarter 2021 results, with net sales reaching $1,081.4 million, marking a 49.3% increase from 2020 levels. Organic sales accounted for $316.9 million of this growth. Operating earnings before financial services surged to $217.1 million, or 20.1% of sales, compared to 12.6% in 2020. Net earnings were $208.0 million, equating to $3.76 per diluted share, significantly up from $1.85 per share last year. The company remains optimistic about its growth trajectory despite ongoing pandemic uncertainties, focusing on capital expenditures between $90 million to $100 million for 2021.
- Net sales increased by $357.1 million (49.3%) compared to Q2 2020.
- Organic sales growth contributed $316.9 million (42.5%) to net sales.
- Operating earnings before financial services rose to $217.1 million (20.1% of sales) from $91.1 million (12.6%).
- Net earnings jumped to $208.0 million ($3.76 per diluted share) from $101.2 million ($1.85 per diluted share) in Q2 2020.
- Consolidated operating earnings increased to $286.0 million (24.5% of revenues) from $148.7 million (18.4%).
- Corporate expenses rose to $28.6 million from $20.8 million in the prior year, indicating increased operational costs.
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 second quarter of 2021.
-
Net sales of
$1,081.4 million in the second quarter of 2021 increased$357.1 million , or49.3% from 2020 levels, reflecting a$316.9 million , or42.5% , organic sales gain,$19.6 million of acquisition-related sales, and$20.6 million of favorable foreign currency translation. Additionally, net sales in the period increased$130.1 million , or13.7% from$951.3 million in the second quarter of 2019, reflecting an$89.9 million , or9.3% , organic sales gain,$23.0 million of acquisition-related sales, and$17.2 million of favorable foreign currency translation. -
Operating earnings before financial services for the quarter of
$217.1 million , or20.1% of sales compared to$91.1 million , or12.6% of sales in 2020, which included$4.0 million of exit and disposal costs (“restructuring charges”). Excluding the 2020 restructuring charges, operating earnings before financial services in the second quarter of 2021 increased$122.0 million , or128.3% , from$95.1 million , or13.1% of sales, as adjusted, last year. -
Financial services revenue in the quarter of
$86.9 million increased$2.3 million from 2020 levels; financial services operating earnings of$68.9 million compared to$57.6 million last year. -
Consolidated operating earnings for the quarter of
$286.0 million compared to$148.7 million last year, which included$4.0 million of restructuring charges. As a percentage of revenues (net sales plus financial services revenue), consolidated operating earnings were24.5% and18.4% in the second quarters of 2021 and 2020, respectively. Excluding the 2020 restructuring charges, consolidated operating earnings in 2021 increased$133.3 million , or87.3% , from$152.7 million , or18.9% of revenues, as adjusted, last year. -
The second quarter effective income tax rate of
23.3% compared to24.1% in 2020, which included an increase of 20 basis points (100 basis points equals 1.0 percent) from restructuring charges. -
Net earnings in the quarter of
$208.0 million , or$3.76 per diluted share, compared to second quarter 2020 net earnings of$101.2 million , or$1.85 per diluted share, and compared to net earnings, as adjusted to exclude restructuring charges, in 2020, of$104.5 million , or$1.91 per diluted share. Additionally, reported net earnings in the second quarter of 2019 were$180.4 million , or$3.22 per diluted share.
See “Non-GAAP Measures” below for a definition of, and further explanation about, organic sales and measures, as adjusted, excluding restructuring charges in 2020.
“We’re encouraged by our second quarter as Snap-on continued its upward trajectory, reaching significant heights in sales and operating earnings, and by our meaningful gains since the nadir of our pandemic-impacted activity during this period last year,” said Nick Pinchuk, Snap-on chairman and chief executive officer. “Our performance demonstrates the varied and abundant opportunities along our runways for growth and our ability to improve our operations throughout the challenges of the COVID environment. In comparison to the pre-virus second quarter of 2019, we believe our results, particularly in the Snap-on Tools Group, trace a positive onward trend, clearly confirming the resilience of our markets and the strength of our operations, and emphatically testifying to our capabilities in pursuing existing and new possibilities going forward. As we have throughout the turbulence, we continue to develop our ongoing advantages in our products, brands and people, reinforcing the proficiencies that enabled our robust quarter and that we believe will author substantial progress into the future. Finally, I want to thank our franchisees and associates worldwide for their firm dedication, for their continued contributions, and for their confidence in our prospects as we proceed through the remainder of 2021 and beyond.”
Segment Results
Commercial & Industrial Group segment net sales of
Operating earnings of
Snap-on Tools Group segment net sales of
Operating earnings of
Repair Systems & Information Group segment net sales of
Operating earnings of
Financial Services operating earnings of
Corporate expenses in the second quarter of
Outlook
With ongoing advancement against the COVID-19 pandemic, many national and local governments around the world have revised restrictive measures that were previously in place, and economic activity continues to progress towards pre-pandemic levels in most geographies. During 2021, the company believes the trajectory of advancement may be uncertain due to the evolving nature and duration of the pandemic and quarterly year-over-year comparisons to 2020 performance may be less meaningful than comparisons to pre-pandemic periods.
Snap-on expects to make continued progress 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, the company expects that capital expenditures in 2021 will be in the range of
Snap-on currently anticipates that its full year 2021 effective income tax rate will be in the range of
Conference Call and Webcast on July 22, 2021, at 9:00 a.m. Central Time
A discussion of this release will be webcast on Thursday, July 22, 2021, 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, expanded customer base, geographic expansion, new product development and pricing changes, and excludes sales contributions from acquired operations the company did not own as of the comparable prior-year reporting period. Organic sales 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 the company’s businesses and facilitates comparisons of its sales performance with prior periods.
For the second 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
For the six months ended June 27, 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
Management believes that adjusting these measures to exclude the restructuring charges provides more meaningful year-over-year comparisons of the company’s 2021 operating performance. For a reconciliation of the 2020 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
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 January 2, 2021, 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.
SNAP-ON INCORPORATED Condensed Consolidated Statements of Earnings (Amounts in millions, except per share data) (unaudited) |
||||||||||||||||
|
Three Months Ended |
Six Months Ended |
||||||||||||||
|
July 3, |
June 27, |
July 3, |
June 27, |
||||||||||||
|
2021 |
2020 |
2021 |
2020 |
||||||||||||
|
|
|
|
|
||||||||||||
Net sales |
$ |
1,081.4 |
|
$ |
724.3 |
|
$ |
2,106.0 |
|
$ |
1,576.5 |
|
||||
Cost of goods sold |
(538.3 |
) |
(383.1 |
) |
(1,049.3 |
) |
(813.7 |
) |
||||||||
Gross profit |
543.1 |
|
341.2 |
|
1,056.7 |
|
762.8 |
|
||||||||
Operating expenses |
(326.0 |
) |
(250.1 |
) |
(638.7 |
) |
(532.8 |
) |
||||||||
Operating earnings before financial services |
217.1 |
|
91.1 |
|
418.0 |
|
230.0 |
|
||||||||
|
|
|
|
|
||||||||||||
Financial services revenue |
86.9 |
|
84.6 |
|
175.5 |
|
170.5 |
|
||||||||
Financial services expenses |
(18.0 |
) |
(27.0 |
) |
(41.3 |
) |
(56.0 |
) |
||||||||
Operating earnings from financial services |
68.9 |
|
57.6 |
|
134.2 |
|
114.5 |
|
||||||||
|
|
|
|
|
||||||||||||
Operating earnings |
286.0 |
|
148.7 |
|
552.2 |
|
344.5 |
|
||||||||
Interest expense |
(14.3 |
) |
(13.4 |
) |
(28.6 |
) |
(24.8 |
) |
||||||||
Other income (expense) – net |
3.4 |
|
2.0 |
|
7.7 |
|
3.5 |
|
||||||||
Earnings before income taxes and equity earnings |
275.1 |
|
137.3 |
|
531.3 |
|
323.2 |
|
||||||||
Income tax expense |
(62.9 |
) |
(31.9 |
) |
(122.0 |
) |
(75.8 |
) |
||||||||
Earnings before equity earnings |
212.2 |
|
105.4 |
|
409.3 |
|
247.4 |
|
||||||||
Equity earnings, net of tax |
1.0 |
|
0.5 |
|
1.5 |
|
0.5 |
|
||||||||
Net earnings |
213.2 |
|
105.9 |
|
410.8 |
|
247.9 |
|
||||||||
Net earnings attributable to noncontrolling interests |
(5.2 |
) |
(4.7 |
) |
(10.2 |
) |
(9.5 |
) |
||||||||
Net earnings attributable to Snap-on Inc. |
$ |
208.0 |
|
$ |
101.2 |
|
$ |
400.6 |
|
$ |
238.4 |
|
||||
|
|
|
|
|
||||||||||||
|
|
|
|
|
||||||||||||
Net earnings per share attributable to Snap-on Inc.: |
|
|
|
|
||||||||||||
Basic |
$ |
3.85 |
|
$ |
1.86 |
|
$ |
7.40 |
|
$ |
4.37 |
|
||||
Diluted |
3.76 |
|
1.85 |
|
7.26 |
|
4.34 |
|
||||||||
|
|
|
|
|
||||||||||||
Weighted-average shares outstanding: |
|
|
|
|
||||||||||||
Basic |
54.0 |
|
54.4 |
|
54.1 |
|
54.5 |
|
||||||||
Effect of dilutive securities |
1.3 |
|
0.4 |
|
1.1 |
|
0.4 |
|
||||||||
Diluted |
55.3 |
|
54.8 |
|
55.2 |
|
54.9 |
|
||||||||
SNAP-ON INCORPORATED Supplemental Segment Information (Amounts in millions) (unaudited) |
||||||||||||||||
|
Three Months Ended |
|
Six Months Ended |
|||||||||||||
|
July 3, |
|
June 27, |
|
July 3, |
|
June 27, |
|||||||||
|
2021 |
|
2020 |
|
2021 |
|
2020 |
|||||||||
Net sales: |
|
|
|
|
|
|
|
|||||||||
Commercial & Industrial Group |
$ |
350.5 |
|
|
$ |
261.9 |
|
|
$ |
696.2 |
|
|
$ |
561.8 |
|
|
Snap-on Tools Group |
484.1 |
|
|
323.3 |
|
|
962.4 |
|
|
699.2 |
|
|||||
Repair Systems & Information Group |
398.6 |
|
|
245.0 |
|
|
746.2 |
|
|
559.6 |
|
|||||
Segment net sales |
1,233.2 |
|
|
830.2 |
|
|
2,404.8 |
|
|
1,820.6 |
|
|||||
Intersegment eliminations |
(151.8 |
) |
|
(105.9 |
) |
|
(298.8 |
) |
|
(244.1 |
) |
|||||
Total net sales |
1,081.4 |
|
|
724.3 |
|
|
2,106.0 |
|
|
1,576.5 |
|
|||||
Financial Services revenue |
86.9 |
|
|
84.6 |
|
|
175.5 |
|
|
170.5 |
|
|||||
Total revenues |
$ |
1,168.3 |
|
|
$ |
808.9 |
|
|
$ |
2,281.5 |
|
|
$ |
1,747.0 |
|
|
|
|
|
|
|
|
|
|
|||||||||
Operating earnings: |
|
|
|
|
|
|
|
|||||||||
Commercial & Industrial Group |
$ |
55.5 |
|
|
$ |
22.9 |
|
|
$ |
106.2 |
|
|
$ |
54.4 |
|
|
Snap-on Tools Group |
103.5 |
|
|
38.4 |
|
|
202.4 |
|
|
87.0 |
|
|||||
Repair Systems & Information Group |
86.7 |
|
|
50.6 |
|
|
168.1 |
|
|
127.9 |
|
|||||
Financial Services |
68.9 |
|
|
57.6 |
|
|
134.2 |
|
|
114.5 |
|
|||||
Segment operating earnings |
314.6 |
|
|
169.5 |
|
|
610.9 |
|
|
383.8 |
|
|||||
Corporate |
(28.6 |
) |
|
(20.8 |
) |
|
(58.7 |
) |
|
(39.3 |
) |
|||||
Operating earnings |
286.0 |
|
|
148.7 |
|
|
552.2 |
|
|
344.5 |
|
|||||
Interest expense |
(14.3 |
) |
|
(13.4 |
) |
|
(28.6 |
) |
|
(24.8 |
) |
|||||
Other income (expense) – net |
3.4 |
|
|
2.0 |
|
|
7.7 |
|
|
3.5 |
|
|||||
Earnings before income taxes and equity earnings |
$ |
275.1 |
|
|
$ |
137.3 |
|
|
$ |
531.3 |
|
|
$ |
323.2 |
|
|
SNAP-ON INCORPORATED Condensed Consolidated Balance Sheets (Amounts in millions) (unaudited) |
||||||||
|
July 3, |
|
January 2, |
|||||
|
2021 |
|
2021 |
|||||
Assets |
|
|
|
|||||
Cash and cash equivalents |
$ |
965.9 |
|
|
$ |
923.4 |
|
|
Trade and other accounts receivable – net |
645.4 |
|
|
640.7 |
|
|||
Finance receivables – net |
535.3 |
|
|
530.2 |
|
|||
Contract receivables – net |
103.9 |
|
|
112.5 |
|
|||
Inventories – net |
760.9 |
|
|
746.5 |
|
|||
Prepaid expenses and other assets |
138.3 |
|
|
129.7 |
|
|||
Total current assets |
3,149.7 |
|
|
3,083.0 |
|
|||
|
|
|
|
|||||
Property and equipment – net |
526.1 |
|
|
526.2 |
|
|||
Operating lease right-of-use assets |
52.4 |
|
|
51.9 |
|
|||
Deferred income tax assets |
52.1 |
|
|
50.3 |
|
|||
Long-term finance receivables – net |
1,124.4 |
|
|
1,136.3 |
|
|||
Long-term contract receivables – net |
379.9 |
|
|
374.7 |
|
|||
Goodwill |
1,177.6 |
|
|
982.4 |
|
|||
Other intangibles – net |
255.2 |
|
|
260.8 |
|
|||
Other assets |
74.2 |
|
|
91.7 |
|
|||
Total assets |
$ |
6,791.6 |
|
|
$ |
6,557.3 |
|
|
|
|
|
|
|||||
Liabilities and Equity |
|
|
|
|||||
Notes payable and current maturities of long-term debt |
$ |
268.1 |
|
|
$ |
268.5 |
|
|
Accounts payable |
280.2 |
|
|
222.9 |
|
|||
Accrued benefits |
54.2 |
|
|
59.7 |
|
|||
Accrued compensation |
91.7 |
|
|
89.9 |
|
|||
Franchisee deposits |
78.3 |
|
|
78.4 |
|
|||
Other accrued liabilities |
449.6 |
|
|
445.5 |
|
|||
Total current liabilities |
1,222.1 |
|
|
1,164.9 |
|
|||
|
|
|
|
|||||
Long-term debt |
1,182.5 |
|
|
1,182.1 |
|
|||
Deferred income tax liabilities |
81.8 |
|
|
70.4 |
|
|||
Retiree health care benefits |
33.0 |
|
|
34.5 |
|
|||
Pension liabilities |
111.6 |
|
|
127.1 |
|
|||
Operating lease liabilities |
34.2 |
|
|
34.0 |
|
|||
Other long-term liabilities |
100.9 |
|
|
97.7 |
|
|||
Total liabilities |
2,766.1 |
|
|
2,710.7 |
|
|||
|
|
|
|
|||||
Equity |
|
|
|
|||||
Shareholders' equity attributable to Snap-on Inc. |
|
|
|
|||||
Common stock |
67.4 |
|
|
67.4 |
|
|||
Additional paid-in capital |
461.1 |
|
|
391.7 |
|
|||
Retained earnings |
5,423.5 |
|
|
5,156.9 |
|
|||
Accumulated other comprehensive loss |
(362.7 |
) |
|
(365.8 |
) |
|||
Treasury stock at cost |
(1,585.9 |
) |
|
(1,425.3 |
) |
|||
Total shareholders' equity attributable to Snap-on Inc. |
4,003.4 |
|
|
3,824.9 |
|
|||
Noncontrolling interests |
22.1 |
|
|
21.7 |
|
|||
Total equity |
4,025.5 |
|
|
3,846.6 |
|
|||
Total liabilities and equity |
$ |
6,791.6 |
|
|
$ |
6,557.3 |
|
|
SNAP-ON INCORPORATED Condensed Consolidated Statements of Cash Flows (Amounts in millions) (unaudited) |
||||||||
|
Three Months Ended |
|||||||
|
July 3, |
|
June 27, |
|||||
|
2021 |
|
2020 |
|||||
Operating activities: |
|
|
|
|||||
Net earnings |
$ |
213.2 |
|
|
$ |
105.9 |
|
|
Adjustments to reconcile net earnings to net cash provided (used) by operating activities: |
|
|
|
|||||
Depreciation |
19.2 |
|
|
18.1 |
|
|||
Amortization of other intangibles |
6.3 |
|
|
5.7 |
|
|||
Provision for losses on finance receivables |
6.6 |
|
|
15.1 |
|
|||
Provision for losses on non-finance receivables |
5.5 |
|
|
6.7 |
|
|||
Stock-based compensation expense |
11.5 |
|
|
5.8 |
|
|||
Deferred income tax provision |
1.7 |
|
|
1.7 |
|
|||
Loss on sales of assets |
1.4 |
|
|
0.1 |
|
|||
Settlement of treasury lock |
— |
|
|
1.4 |
|
|||
Changes in operating assets and liabilities, net of effects of acquisitions: |
|
|
|
|||||
Trade and other accounts receivable |
5.8 |
|
|
78.2 |
|
|||
Contract receivables |
(1.1 |
) |
|
(13.0 |
) |
|||
Inventories |
(24.4 |
) |
|
(8.2 |
) |
|||
Prepaid and other assets |
(12.5 |
) |
|
(21.3 |
) |
|||
Accounts payable |
42.0 |
|
|
(10.0 |
) |
|||
Accruals and other liabilities |
(37.0 |
) |
|
67.4 |
|
|||
Net cash provided by operating activities |
238.2 |
|
|
253.6 |
|
|||
|
|
|
|
|||||
Investing activities: |
|
|
|
|||||
Additions to finance receivables |
(238.0 |
) |
|
(201.8 |
) |
|||
Collections of finance receivables |
219.3 |
|
|
166.8 |
|
|||
Capital expenditures |
(18.3 |
) |
|
(11.8 |
) |
|||
Acquisitions of businesses, net of cash acquired |
4.2 |
|
|
— |
|
|||
Disposals of property and equipment |
1.4 |
|
|
0.9 |
|
|||
Other |
1.7 |
|
|
0.3 |
|
|||
Net cash used by investing activities |
(29.7 |
) |
|
(45.6 |
) |
|||
|
|
|
|
|||||
Financing activities: |
|
|
|
|||||
Proceeds from issuance of long-term debt |
— |
|
|
489.9 |
|
|||
Net increase (decrease) in other short-term borrowings |
0.5 |
|
|
(148.1 |
) |
|||
Cash dividends paid |
(66.7 |
) |
|
(58.7 |
) |
|||
Purchases of treasury stock |
(137.4 |
) |
|
— |
|
|||
Proceeds from stock purchase and option plans |
61.8 |
|
|
12.3 |
|
|||
Other |
(6.1 |
) |
|
(5.9 |
) |
|||
Net cash provided (used) by financing activities |
(147.9 |
) |
|
289.5 |
|
|||
|
|
|
|
|||||
Effect of exchange rate changes on cash and cash equivalents |
0.7 |
|
|
2.9 |
|
|||
Increase in cash and cash equivalents |
61.3 |
|
|
500.4 |
|
|||
|
|
|
|
|||||
Cash and cash equivalents at beginning of period |
904.6 |
|
|
185.8 |
|
|||
Cash and cash equivalents at end of period |
$ |
965.9 |
|
|
$ |
686.2 |
|
|
|
|
|
|
|||||
Supplemental cash flow disclosures: |
|
|
|
|||||
Cash paid for interest |
$ |
(8.5 |
) |
|
$ |
(0.9 |
) |
|
Net cash paid for income taxes |
(110.7 |
) |
|
(12.3 |
) |
|||
|
|
|
|
|||||
SNAP-ON INCORPORATED Condensed Consolidated Statements of Cash Flows (Amounts in millions) (unaudited) |
||||||||
|
Six Months Ended |
|||||||
|
July 3, |
|
June 27, |
|||||
|
2021 |
|
2020 |
|||||
Operating activities: |
|
|
|
|||||
Net earnings |
$ |
410.8 |
|
|
$ |
247.9 |
|
|
Adjustments to reconcile net earnings to net cash provided (used) by operating activities: |
|
|
|
|||||
Depreciation |
37.9 |
|
|
36.2 |
|
|||
Amortization of other intangibles |
12.3 |
|
|
11.4 |
|
|||
Provision for losses on finance receivables |
17.9 |
|
|
31.4 |
|
|||
Provision for losses on non-finance receivables |
8.1 |
|
|
11.7 |
|
|||
Stock-based compensation expense |
23.8 |
|
|
6.9 |
|
|||
Deferred income tax provision (benefit) |
4.0 |
|
|
(1.9 |
) |
|||
Loss on sales of assets |
1.4 |
|
|
0.2 |
|
|||
Settlement of treasury lock |
— |
|
|
1.4 |
|
|||
Changes in operating assets and liabilities, net of effects of acquisitions: |
|
|
|
|||||
Trade and other accounts receivable |
(4.0 |
) |
|
112.5 |
|
|||
Contract receivables |
4.5 |
|
|
(11.8 |
) |
|||
Inventories |
(16.1 |
) |
|
(32.0 |
) |
|||
Prepaid and other assets |
(14.3 |
) |
|
(18.1 |
) |
|||
Accounts payable |
59.5 |
|
|
(8.1 |
) |
|||
Accruals and other liabilities |
11.7 |
|
|
79.3 |
|
|||
Net cash provided by operating activities |
557.5 |
|
|
467.0 |
|
|||
|
|
|
|
|||||
Investing activities: |
|
|
|
|||||
Additions to finance receivables |
(454.5 |
) |
|
(414.6 |
) |
|||
Collections of finance receivables |
447.9 |
|
|
357.5 |
|
|||
Capital expenditures |
(37.6 |
) |
|
(29.0 |
) |
|||
Acquisitions of businesses, net of cash acquired |
(195.8 |
) |
|
(6.1 |
) |
|||
Disposals of property and equipment |
1.4 |
|
|
0.9 |
|
|||
Other |
1.7 |
|
|
(4.1 |
) |
|||
Net cash used by investing activities |
(236.9 |
) |
|
(95.4 |
) |
|||
|
|
|
|
|||||
Financing activities: |
|
|
|
|||||
Proceeds from issuance of long-term debt |
— |
|
|
489.9 |
|
|||
Net increase (decrease) in other short-term borrowings |
2.9 |
|
|
(190.0 |
) |
|||
Cash dividends paid |
(133.4 |
) |
|
(117.7 |
) |
|||
Purchases of treasury stock |
(289.3 |
) |
|
(50.5 |
) |
|||
Proceeds from stock purchase and option plans |
154.8 |
|
|
13.8 |
|
|||
Other |
(13.9 |
) |
|
(13.1 |
) |
|||
Net cash provided (used) by financing activities |
(278.9 |
) |
|
132.4 |
|
|||
|
|
|
|
|||||
Effect of exchange rate changes on cash and cash equivalents |
0.8 |
|
|
(2.3 |
) |
|||
Increase in cash and cash equivalents |
42.5 |
|
|
501.7 |
|
|||
|
|
|
|
|||||
Cash and cash equivalents at beginning of year |
923.4 |
|
|
184.5 |
|
|||
Cash and cash equivalents at end of period |
$ |
965.9 |
|
|
$ |
686.2 |
|
|
|
|
|
|
|||||
Supplemental cash flow disclosures: |
|
|
|
|||||
Cash paid for interest |
$ |
(27.9 |
) |
|
$ |
(21.6 |
) |
|
Net cash paid for income taxes |
(126.6 |
) |
|
(27.4 |
) |
|||
|
|
|||||||
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 reported 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 are 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 |
|||||||||||||
|
July 3, |
|
June 27, |
|
July 3, |
|
June 27, |
|||||||||
|
2021 |
|
2020 |
|
2021 |
|
2020 |
|||||||||
|
|
|
|
|
|
|
|
|||||||||
Net sales |
$ |
1,081.4 |
|
|
$ |
724.3 |
|
|
$ |
— |
|
|
$ |
— |
|
|
Cost of goods sold |
(538.3 |
) |
|
(383.1 |
) |
|
— |
|
|
— |
|
|||||
Gross profit |
543.1 |
|
|
341.2 |
|
|
— |
|
|
— |
|
|||||
Operating expenses |
(326.0 |
) |
|
(250.1 |
) |
|
— |
|
|
— |
|
|||||
Operating earnings before financial services |
217.1 |
|
|
91.1 |
|
|
— |
|
|
— |
|
|||||
|
|
|
|
|
|
|
|
|||||||||
Financial services revenue |
— |
|
|
— |
|
|
86.9 |
|
|
84.6 |
|
|||||
Financial services expenses |
— |
|
|
— |
|
|
(18.0 |
) |
|
(27.0 |
) |
|||||
Operating earnings from financial services |
— |
|
|
— |
|
|
68.9 |
|
|
57.6 |
|
|||||
|
|
|
|
|
|
|
|
|||||||||
Operating earnings |
217.1 |
|
|
91.1 |
|
|
68.9 |
|
|
57.6 |
|
|||||
Interest expense |
(14.2 |
) |
|
(13.4 |
) |
|
(0.1 |
) |
|
— |
|
|||||
Intersegment interest income (expense) – net |
14.8 |
|
|
16.5 |
|
|
(14.8 |
) |
|
(16.5 |
) |
|||||
Other income (expense) – net |
3.3 |
|
|
2.0 |
|
|
0.1 |
|
|
— |
|
|||||
Earnings before income taxes and equity earnings |
221.0 |
|
|
96.2 |
|
|
54.1 |
|
|
41.1 |
|
|||||
Income tax expense |
(49.2 |
) |
|
(21.3 |
) |
|
(13.7 |
) |
|
(10.6 |
) |
|||||
Earnings before equity earnings |
171.8 |
|
|
74.9 |
|
|
40.4 |
|
|
30.5 |
|
|||||
Financial services – net earnings attributable to Snap-on |
40.4 |
|
|
30.5 |
|
|
— |
|
|
— |
|
|||||
Equity earnings, net of tax |
1.0 |
|
|
0.5 |
|
|
— |
|
|
— |
|
|||||
Net earnings |
213.2 |
|
|
105.9 |
|
|
40.4 |
|
|
30.5 |
|
|||||
Net earnings attributable to noncontrolling interests |
(5.2 |
) |
|
(4.7 |
) |
|
— |
|
|
— |
|
|||||
Net earnings attributable to Snap-on |
$ |
208.0 |
|
|
$ |
101.2 |
|
|
$ |
40.4 |
|
|
$ |
30.5 |
|
|
|
|
|
|
|
|
|
|
|||||||||
* 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 |
|||||||||||||
|
Six Months Ended |
|
Six Months Ended |
|||||||||||||
|
July 3, |
|
June 27, |
|
July 3, |
|
June 27, |
|||||||||
|
2021 |
|
2020 |
|
2021 |
|
2020 |
|||||||||
|
|
|
|
|
|
|
|
|||||||||
Net sales |
$ |
2,106.0 |
|
|
$ |
1,576.5 |
|
|
$ |
— |
|
|
$ |
— |
|
|
Cost of goods sold |
(1,049.3) |
|
|
(813.7) |
|
|
— |
|
|
— |
|
|||||
Gross profit |
1,056.7 |
|
|
762.8 |
|
|
— |
|
|
— |
|
|||||
Operating expenses |
(638.7) |
|
|
(532.8) |
|
|
— |
|
|
— |
|
|||||
Operating earnings before financial services |
418.0 |
|
|
230.0 |
|
|
— |
|
|
— |
|
|||||
|
|
|
|
|
|
|
|
|||||||||
Financial services revenue |
— |
|
|
— |
|
|
175.5 |
|
|
170.5 |
|
|||||
Financial services expenses |
— |
|
|
— |
|
|
(41.3) |
|
|
(56.0) |
|
|||||
Operating earnings from financial services |
— |
|
|
— |
|
|
134.2 |
|
|
114.5 |
|
|||||
|
|
|
|
|
|
|
|
|||||||||
Operating earnings |
418.0 |
|
|
230.0 |
|
|
134.2 |
|
|
114.5 |
|
|||||
Interest expense |
(28.5) |
|
|
(24.7) |
|
|
(0.1) |
|
|
(0.1) |
|
|||||
Intersegment interest income (expense) – net |
29.2 |
|
|
34.6 |
|
|
(29.2) |
|
|
(34.6) |
|
|||||
Other income (expense) – net |
7.6 |
|
|
3.5 |
|
|
0.1 |
|
|
— |
|
|||||
Earnings before income taxes and equity earnings |
426.3 |
|
|
243.4 |
|
|
105.0 |
|
|
79.8 |
|
|||||
Income tax expense |
(95.7) |
|
|
(55.1) |
|
|
(26.3) |
|
|
(20.7) |
|
|||||
Earnings before equity earnings |
330.6 |
|
|
188.3 |
|
|
78.7 |
|
|
59.1 |
|
|||||
Financial services – net earnings attributable to Snap-on |
78.7 |
|
|
59.1 |
|
|
— |
|
|
— |
|
|||||
Equity earnings, net of tax |
1.5 |
|
|
0.5 |
|
|
— |
|
|
— |
|
|||||
Net earnings |
410.8 |
|
|
247.9 |
|
|
78.7 |
|
|
59.1 |
|
|||||
Net earnings attributable to noncontrolling interests |
(10.2) |
|
|
(9.5) |
|
|
— |
|
|
— |
|
|||||
Net earnings attributable to Snap-on |
$ |
400.6 |
|
|
$ |
238.4 |
|
|
$ |
78.7 |
|
|
$ |
59.1 |
|
|
|
|
|
|
|
|
|
|
|||||||||
* 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 |
|||||||||||||
|
July 3, |
|
January 2, |
|
July 3, |
|
January 2, |
|||||||||
|
2021 |
|
2021 |
|
2021 |
|
2021 |
|||||||||
Assets |
|
|
|
|
|
|
|
|||||||||
Cash and cash equivalents |
$ |
965.6 |
|
|
$ |
923.2 |
|
|
$ |
0.3 |
|
|
$ |
0.2 |
|
|
Intersegment receivables |
15.2 |
|
|
14.6 |
|
|
— |
|
|
0.2 |
|
|||||
Trade and other accounts receivable – net |
644.7 |
|
|
639.7 |
|
|
0.7 |
|
|
1.0 |
|
|||||
Finance receivables – net |
— |
|
|
— |
|
|
535.3 |
|
|
530.2 |
|
|||||
Contract receivables – net |
6.8 |
|
|
7.0 |
|
|
97.1 |
|
|
105.5 |
|
|||||
Inventories – net |
760.9 |
|
|
746.5 |
|
|
— |
|
|
— |
|
|||||
Prepaid expenses and other assets |
138.2 |
|
|
131.1 |
|
|
9.6 |
|
|
7.8 |
|
|||||
Total current assets |
2,531.4 |
|
|
2,462.1 |
|
|
643.0 |
|
|
644.9 |
|
|||||
|
|
|
|
|
|
|
|
|||||||||
Property and equipment – net |
524.1 |
|
|
524.4 |
|
|
2.0 |
|
|
1.8 |
|
|||||
Operating lease right-of-use assets |
50.3 |
|
|
49.7 |
|
|
2.1 |
|
|
2.2 |
|
|||||
Investment in Financial Services |
349.4 |
|
|
349.8 |
|
|
— |
|
|
— |
|
|||||
Deferred income tax assets |
27.7 |
|
|
27.6 |
|
|
24.4 |
|
|
22.7 |
|
|||||
Intersegment long-term notes receivable |
314.5 |
|
|
316.9 |
|
|
— |
|
|
— |
|
|||||
Long-term finance receivables – net |
— |
|
|
— |
|
|
1,124.4 |
|
|
1,136.3 |
|
|||||
Long-term contract receivables – net |
10.9 |
|
|
12.4 |
|
|
369.0 |
|
|
362.3 |
|
|||||
Goodwill |
1,177.6 |
|
|
982.4 |
|
|
— |
|
|
— |
|
|||||
Other intangibles – net |
255.2 |
|
|
260.8 |
|
|
— |
|
|
— |
|
|||||
Other assets |
86.5 |
|
|
103.9 |
|
|
0.1 |
|
|
0.1 |
|
|||||
Total assets |
$ |
5,327.6 |
|
|
$ |
5,090.0 |
|
|
$ |
2,165.0 |
|
|
$ |
2,170.3 |
|
|
|
|
|
|
|
|
|
|
|||||||||
Liabilities and Equity |
|
|
|
|
|
|
|
|||||||||
Notes payable and current maturities of long-term debt |
$ |
18.1 |
|
|
$ |
18.5 |
|
|
$ |
250.0 |
|
|
$ |
250.0 |
|
|
Accounts payable |
279.4 |
|
|
222.3 |
|
|
0.8 |
|
|
0.6 |
|
|||||
Intersegment payables |
— |
|
|
— |
|
|
15.2 |
|
|
14.8 |
|
|||||
Accrued benefits |
54.2 |
|
|
59.7 |
|
|
— |
|
|
— |
|
|||||
Accrued compensation |
89.2 |
|
|
87.2 |
|
|
2.5 |
|
|
2.7 |
|
|||||
Franchisee deposits |
78.3 |
|
|
78.4 |
|
|
— |
|
|
— |
|
|||||
Other accrued liabilities |
425.5 |
|
|
418.8 |
|
|
33.6 |
|
|
35.9 |
|
|||||
Total current liabilities |
944.7 |
|
|
884.9 |
|
|
302.1 |
|
|
304.0 |
|
|||||
|
|
|
|
|
|
|
|
|||||||||
Long-term debt and intersegment long-term debt |
— |
|
|
— |
|
|
1,497.0 |
|
|
1,499.0 |
|
|||||
Deferred income tax liabilities |
81.8 |
|
|
70.4 |
|
|
— |
|
|
— |
|
|||||
Retiree health care benefits |
33.0 |
|
|
34.5 |
|
|
— |
|
|
— |
|
|||||
Pension liabilities |
111.6 |
|
|
127.1 |
|
|
— |
|
|
— |
|
|||||
Operating lease liabilities |
32.3 |
|
|
31.6 |
|
|
1.9 |
|
|
2.4 |
|
|||||
Other long-term liabilities |
98.7 |
|
|
94.9 |
|
|
14.6 |
|
|
15.1 |
|
|||||
Total liabilities |
1,302.1 |
|
|
1,243.4 |
|
|
1,815.6 |
|
|
1,820.5 |
|
|||||
|
|
|
|
|
|
|
|
|||||||||
Total shareholders' equity attributable to Snap-on |
4,003.4 |
|
|
3,824.9 |
|
|
349.4 |
|
|
349.8 |
|
|||||
Noncontrolling interests |
22.1 |
|
|
21.7 |
|
|
— |
|
|
— |
|
|||||
Total equity |
4,025.5 |
|
|
3,846.6 |
|
|
349.4 |
|
|
349.8 |
|
|||||
Total liabilities and equity |
$ |
5,327.6 |
|
|
$ |
5,090.0 |
|
|
$ |
2,165.0 |
|
|
$ |
2,170.3 |
|
|
|
|
|
|
|
|
|
|
|||||||||
* 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 |
|
Six Months Ended |
||||||||||||
|
July 3, |
|
June 27, |
|
July 3, |
|
June 27, |
||||||||
|
2021 |
|
2020 |
|
2021 |
|
2020 |
||||||||
AS REPORTED |
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Charges associated with exit and disposal activities ("restructuring charges") |
|
|
|
|
|
|
|
||||||||
Pre-tax restructuring charges |
$ |
— |
|
|
$ |
(4.0 |
) |
|
$ |
— |
|
|
$ |
(11.5 |
) |
Income tax benefits |
— |
|
|
0.7 |
|
|
— |
|
|
2.2 |
|
||||
Restructuring charges, after tax |
$ |
— |
|
|
$ |
(3.3 |
) |
|
$ |
— |
|
|
$ |
(9.3 |
) |
|
|
|
|
|
|
|
|
||||||||
Weighted-average shares outstanding - diluted |
55.3 |
|
|
54.8 |
|
|
55.2 |
|
|
54.9 |
|
||||
|
|
|
|
|
|
|
|
||||||||
Diluted EPS - restructuring charges |
$ |
— |
|
|
$ |
(0.06 |
) |
|
$ |
— |
|
|
$ |
(0.17 |
) |
|
|
|
|
|
|
|
|
||||||||
ADJUSTED INFORMATION - NON-GAAP |
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
1) Operating earnings before financial services |
|
|
|
|
|
|
|
||||||||
As reported |
$ |
217.1 |
|
|
$ |
91.1 |
|
|
$ |
418.0 |
|
|
$ |
230.0 |
|
Restructuring charges |
— |
|
|
4.0 |
|
|
— |
|
|
11.5 |
|
||||
As adjusted |
$ |
217.1 |
|
|
$ |
95.1 |
|
|
$ |
418.0 |
|
|
$ |
241.5 |
|
|
|
|
|
|
|
|
|
||||||||
Operating earnings before financial services as a percentage of sales |
|
|
|
|
|
|
|
||||||||
As reported |
20.1 |
% |
|
12.6 |
% |
|
19.8 |
% |
|
14.6 |
% |
||||
As adjusted |
20.1 |
% |
|
13.1 |
% |
|
19.8 |
% |
|
15.3 |
% |
||||
|
|
|
|
|
|
|
|
||||||||
2) Operating earnings |
|
|
|
|
|
|
|
||||||||
As reported |
$ |
286.0 |
|
|
$ |
148.7 |
|
|
$ |
552.2 |
|
|
$ |
344.5 |
|
Restructuring charges |
— |
|
|
4.0 |
|
|
— |
|
|
11.5 |
|
||||
As adjusted |
$ |
286.0 |
|
|
$ |
152.7 |
|
|
$ |
552.2 |
|
|
$ |
356.0 |
|
|
|
|
|
|
|
|
|
||||||||
Operating earnings as a percentage of revenue |
|
|
|
|
|
|
|
||||||||
As reported |
24.5 |
% |
|
18.4 |
% |
|
24.2 |
% |
|
19.7 |
% |
||||
As adjusted |
24.5 |
% |
|
18.9 |
% |
|
24.2 |
% |
|
20.4 |
% |
||||
SNAP-ON INCORPORATED Reconciliation of Non-GAAP Financial Measures (continued) (Amounts in millions, except per share data) (unaudited) |
|||||||||||||||
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
|
July 3, |
|
June 27, |
|
July 3, |
|
June 27, |
||||||||
|
2021 |
|
2020 |
|
2021 |
|
2020 |
||||||||
ADJUSTED INFORMATION - NON-GAAP (continued) |
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
3) Net earnings attributable to Snap-on Incorporated |
|
|
|
|
|
|
|
||||||||
As reported |
$ |
208.0 |
|
|
$ |
101.2 |
|
|
$ |
400.6 |
|
|
$ |
238.4 |
|
Restructuring charges, after tax |
— |
|
|
3.3 |
|
|
— |
|
|
9.3 |
|
||||
As adjusted |
$ |
208.0 |
|
|
$ |
104.5 |
|
|
$ |
400.6 |
|
|
$ |
247.7 |
|
|
|
|
|
|
|
|
|
||||||||
4) Diluted EPS |
|
|
|
|
|
|
|
||||||||
As reported |
$ |
3.76 |
|
|
$ |
1.85 |
|
|
$ |
7.26 |
|
|
$ |
4.34 |
|
Restructuring charges, after tax |
— |
|
|
0.06 |
|
|
— |
|
|
0.17 |
|
||||
As adjusted |
$ |
3.76 |
|
|
$ |
1.91 |
|
|
$ |
7.26 |
|
|
$ |
4.51 |
|
|
|
|
|
|
|
|
|
||||||||
5) Effective tax rate |
|
|
|
|
|
|
|
||||||||
As reported |
23.3 |
% |
|
24.1 |
% |
|
23.4 |
% |
|
24.2 |
% |
||||
Restructuring charges |
— |
|
|
(0.2) |
|
|
— |
|
|
(0.2) |
|
||||
As adjusted |
23.3 |
% |
|
23.9 |
% |
|
23.4 |
% |
|
24.0 |
% |
||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20210722005235/en/
FAQ
What were Snap-on's net sales in Q2 2021?
How much did Snap-on's organic sales increase in Q2 2021?
What is Snap-on's net earnings for the second quarter of 2021?
What was the operating margin for Snap-on in Q2 2021?
When will Snap-on's next conference call be held?
