Snap-on Announces First Quarter 2019 Results
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 first quarter of 2019.
- Net sales of $921.7 million in the quarter decreased $13.8 million, or 1.5%, from 2018 levels; reflecting a $12.3 million, or 1.4%, organic sales increase, more than offset by $26.1 million of unfavorable foreign currency translation.
- Operating earnings before financial services in the quarter of $187.4 million, or 20.3% of sales, included an $11.6 million benefit from the settlement of a patent-related litigation matter that was being appealed (the “legal settlement”) and $5.7 million of unfavorable foreign currency effects, compared to $177.7 million, or 19.0% of sales, last year. Excluding the legal settlement, operating earnings before financial services, as adjusted, in the first quarter of 2019 were $175.8 million, or 19.1% of sales.
- Financial services revenue in the quarter of $85.6 million increased $2.6 million from 2018 levels; financial services operating earnings of $62.1 million increased $5.2 million from $56.9 million last year.
- Consolidated operating earnings in the quarter of $249.5 million, or 24.8% of revenues (net sales plus financial services revenue), compared to $234.6 million, or 23.0% of revenues, last year. Excluding the legal settlement, consolidated operating earnings, as adjusted, in the first quarter of 2019 were $237.9 million, or 23.6% of revenues.
- Other income (expense) – net in the quarter of $1.5 million of income compares to $2.8 million of income in 2018, which included a net gain of $5.5 million related to the issuance and extinguishment of debt (the “net debt items”).
- The first quarter 2019 effective income tax rate of 24.3% was increased by 10 basis points from the legal settlement. The first quarter 2018 effective income tax rate of 26.2% was increased by 120 basis points as a result of a $2.6 million charge related to the implementation of U.S. tax legislation (the “tax charge”). Excluding the tax charge in 2018, the effective tax rate, as adjusted, was 25.0%.
- Reported net earnings in the first quarter of 2019 of $177.9 million, or $3.16 per diluted share, compared to $163.0 million, or $2.82 per diluted share, a year ago. Excluding the legal settlement in 2019, and the net debt items and tax charge in 2018, net earnings, as adjusted, were $169.2 million, or $3.01 per diluted share, in 2019, and $161.5 million, or $2.79 per diluted share, last year.
See “Non-GAAP Measures” below for a definition of, and further explanation about, organic sales and measures, as adjusted, excluding the legal settlement, net debt items and tax charge.