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Snap-on Management Discusses Q2 2012 Results - Earnings Call Transcript

And the operating margin expansion is a reflection of our Snap-on Value Creation Processes at work. As I said before, these are crucial set of principles that we apply everyday. Our focus on safety, on quality, customer connection, Rapid Continuous Improvement or RCI and on innovation. It's a powerful framework and it is helping to fuel our results. I mentioned that the OpCo operating margin expanded by 60 basis points from last year, but I'll also point out that this year's restructuring charge in the second quarter included $6.8 million for the settlement of a pension plan related to our Canadian tools storage facility, which we closed last year. But for that item, the margin expansion would have been 150 basis points. That increased profitability is a strong testimony that the positive contributions of Snap-on value creation.

Now regarding sales growth. The numbers appeared to validate that we are building advantage in each of the 4 areas we've identified as being decisive for our future. Critical industries where the penalty for failure is high. Another double-digit gain for our industrial division, with the growth rate in the aerospace sector leading the way.

Emerging markets. In addition to strong double-digit gains in China, as you probably would expect, we also saw a particularly large uplifts in places like Indonesia and Russia.

The franchise channel what we call auto mechanics or auto technicians, volume is up 10% in the quarter with strong operating margin.

And finally, in vehicle repair shops, we saw growth in categories that are quite important to those shop owners and managers. Sales in the RS&I business that provide diagnostic units, repair information and shop management systems were up high single digits.

Read the rest of this transcript for free on seekingalpha.com

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