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Snap-on Announces Third Quarter 2012 Results

Snap-on Tools Group segment sales of $308.8 million in the third quarter rose $29.2 million, or 10.4%, from 2011 levels; excluding $1.6 million of unfavorable foreign currency translation, organic sales increased 11.1%.

Operating earnings of $40.2 million in the period increased $4.6 million, or 12.9%, from 2011 levels and the operating margin of 13.0% improved from 12.7% a year ago.

Repair Systems & Information Group segment sales of $222.0 million in the third quarter decreased $0.6 million from 2011 levels; excluding $6.5 million of unfavorable foreign currency translation, organic sales rose 2.7%.

Operating earnings of $49.5 million in the period increased $5.8 million from 2011 levels and the operating margin of 22.3% increased from 19.6% a year ago.

Financial Services operating earnings were $27.9 million on $40.5 million of revenue in the third quarter of 2012, as compared to operating earnings of $20.8 million on $32.7 million of revenue a year ago.

Corporate expenses of $26.9 million increased $12.3 million from prior-year levels primarily due to $12.2 million of higher stock-based (mark-to-market) expense. As a result of changes in the company’s quarter-end stock price, operating expenses in the third quarter of 2012 included $4.4 million of mark-to-market expense, while operating expenses in the third quarter of 2011 were partially offset by $7.8 million of mark-to-market benefit.

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 anticipates that capital expenditures in 2012 will be in a range of $75 million to $80 million, of which $59.5 million was spent in the first nine months of 2012. Snap-on anticipates that its full year 2012 effective income tax rate will approximate 33.2%.

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