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Snap-on Announces Second Quarter 2012 Results

Segment Results

Commercial & Industrial Group segment sales of $283.4 million in the second quarter increased $3.7 million, or 1.3%, from 2011 levels; excluding $10.1 million of unfavorable foreign currency translation, organic sales increased 5.1%.

Operating earnings of $32.8 million in the period includes $3.2 million of restructuring costs, primarily to improve the segment’s cost structure in Europe; operating earnings of $29.2 million last year included $0.5 million of restructuring costs. As a percentage of sales, operating earnings of 11.6% in the quarter increased 120 basis points (100 basis points equals 1.0 percent) from 10.4% a year ago, despite a 90 basis point impact from the higher restructuring costs.

Snap-on Tools Group segment sales of $325.0 million in the second quarter rose $26.0 million, or 8.7%, from 2011 levels; excluding $3.5 million of unfavorable foreign currency translation, organic sales increased 10.0%.

Operating earnings of $44.5 million in the period includes $6.9 million of restructuring costs, largely for a pension plan settlement related to a 2011 facility closure; operating earnings of $46.2 million last year included $0.8 million of restructuring costs. As a percentage of sales, operating earnings of 13.7% in the quarter decreased 180 basis points from 15.5% a year ago, including a 190 basis point impact from the higher restructuring costs.

Repair Systems & Information Group segment sales of $227.4 million in the second quarter decreased $7.1 million, or 3.0%, from 2011 levels; excluding $7.5 million of unfavorable foreign currency translation, organic sales rose 0.2%.

Operating earnings of $52.2 million in the period increased $3.2 million from 2011 levels. As a percentage of sales, operating earnings of 23.0% in the quarter compared with 20.9% a year ago.

Financial Services operating earnings were $25.6 million on $39.9 million of revenue in the second quarter of 2012, as compared to operating earnings of $17.5 million (excluding the $18.0 million arbitration settlement gain) on $30.3 million of revenue a year ago.

Corporate expenses were $24.9 million and $25.6 million in the second quarters of 2012 and 2011, respectively.

Outlook

Snap-on expects to continue with its planned strategic investments to enhance its mobile tool distribution network, expand in the vehicle repair garage, extend to critical industries and build in emerging markets. As a result of these initiatives, Snap-on now anticipates that capital expenditures in 2012 will be in a range of $70 million to $80 million, of which $39.8 million was spent in the first six months of 2012. Snap-on also anticipates that its full year 2012 effective income tax rate will approximate 33.5%.

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