Snap-on (SNA) 2025 Conference May 13, 2025 02:10 PM ET Speaker0 Thanks for joining us. I'm Sherif Elsabahi with BofA on the machinery engineering and construction team within Equity Research. Really glad to have Nick with us here from from Snap on. Really fortunate, and thank you for being here. Sure. Just to start us off for those in the audience who may be less familiar with Snap on, could you provide an overview of the business model, your position in the market, and a high level operating backdrop? Sure ...

Did you analyze how Snap-On (SNA) fared in its international operations for the quarter ending March 2025? Given the widespread global presence of this tool and diagnostic equipment maker, scrutinizing the trends in international revenues becomes imperative to assess its financial strength and future growth possibilities.The global economy today is deeply interlinked, making a company's engagement with international markets a critical factor in determining its financial success and growth path. It has becom ...

Snap-on Inc. (SNA) has seen its shares slide 3.4% in the past month. Its downside was more pronounced after it reported soft first-quarter 2025 results on April 16, where the company missed revenue expectations and declined year over year. SNA’s share performance contrasts with the broader industry’s decline of 2%, the broader Consumer Discretionary sector’s rise of 12.3%, and the S&P 500’s growth of 4.4% in the same period.SNA Stock's Price Performance in the Past MonthImage Source: Zacks Investment Resear ...

Snap-on (SNA) FY Conference May 07, 2025 10:30 AM ET Speaker0 Thank you, Annie, and welcome everyone to our Generac fireside session. Special thanks to Nick Aldo and Sarah for joining from Generac and glad to have you guys back at the conference. Thanks for participating. So I think wanted to kick off with sort of a high level kind of frame up type question then get into some of the comings and goings of the business model and the market backdrops. But Nick, maybe if you could discuss Snap on's market posit ...

Core Viewpoint - Snap-on's Q1 earnings report for May 2025 revealed weaknesses but also underscored the company's strong cash flow and diversified business model, making it a compelling investment despite recent challenges [1][3]. Financial Performance - Snap-on's revenue decreased by 3.4%, which was 500 basis points below analysts' forecasts, with the Snap-on Tools segment experiencing a 6.8% decline and the Construction and Industrial segment contracting by 2.9% [3]. - The company reported GAAP earnings of $4.51 and maintained positive quarterly cash flow, despite a larger-than-expected contraction in profit margins [4]. Dividend and Capital Returns - Snap-on offers a dividend yield of 2.92%, with an annual dividend of $8.56 and a 15-year track record of dividend increases, showcasing a strong commitment to returning capital to shareholders [7][10]. - The company has a dividend payout ratio of 44.82%, indicating a healthy balance sheet that supports ongoing dividend payments and increases [7][10]. Balance Sheet Strength - Snap-on's balance sheet is characterized as "ironclad," with increased cash, receivables, inventory, and total assets, while long-term debt remains flat compared to Q1 2024 [8][9]. - The total liabilities are less than 0.5 times equity, ensuring that cash flow remains unimpeded and reserves are available in case of economic downturns [9]. Market Outlook - Analysts have shown a bullish trend for Snap-on, with a consensus forecast suggesting a 15% upside by the end of the year, supported by increasing coverage and improving sentiment [11]. - Despite recent market pullbacks, critical support targets are in place to limit downside risk, including the uptrend line and long-term moving averages [12].

Core Insights - Snap-on Inc. reported first-quarter 2025 results that missed both revenue and earnings estimates, with a decline in both metrics compared to the previous year [1][2] - The company faced challenges due to economic uncertainty, leading to mixed results, although it achieved record operating margins in certain segments [1] Financial Performance - Earnings per share were $4.51, missing the Zacks Consensus Estimate of $4.81, and declined 5.1% from $4.75 in the same quarter last year [2] - Net sales decreased 3.5% year over year to $1.141 billion, missing the Zacks Consensus Estimate of $1.196 billion, attributed to a 2.3% dip in organic sales and $13.9 million from unfavorable foreign currency translation [4] - Gross profit fell 3.1% year over year to $578.5 million, while gross margin expanded by 20 basis points to 50.7% [5] - Operating earnings before financial services totaled $243.1 million, down 10.3% year over year, with operating earnings as a percentage of sales contracting 160 basis points to 21.3% [6] - Consolidated operating earnings, including financial services, were $313.4 million, down 7.6% year over year, with operating earnings as a percentage of sales contracting 130 basis points to 25.2% [7] Segment Analysis - Sales in the Commercial & Industrial Group decreased 4.4% year over year to $343.9 million, impacted by a 2.9% organic decline and $5.6 million from unfavorable foreign currency exchange [8] - The Tools Group segment's sales declined 7.4% year over year to $462.9 million, driven by a 6.8% organic sales decline and $3.6 million from unfavorable foreign currency translation [9] - Sales in the Repair Systems & Information Group improved 2.6% year over year to $475.9 million, with organic sales growth of 3.7%, despite unfavorable currency impacts of $4.9 million [10] - The Financial Services business saw revenues rise 2.5% year over year to $102.1 million [11] Financial Snapshot - As of the end of the first quarter of 2025, Snap-on had cash and cash equivalents of $1.43 billion and shareholders' equity of $5.5 billion [12] - The company anticipates capital expenditures of $100 million for 2025 [12] Future Outlook - Management expects resilience in markets and operations against uncertainties, with anticipated progress in growth areas for 2025 [13] - The company plans to leverage capabilities in automotive repair and expand its customer base across critical industries [13] - An effective tax rate of 22-23% is expected for 2025 [13]

Financial Data and Key Metrics Changes - The company reported net sales of $1,100 million for the quarter, reflecting a 0.3% organic sales decline and a $13.9 million unfavorable foreign currency translation [63] - Operating income for the quarter was $243.1 million, down from $270.9 million in the previous year, with an operating margin of 21.3%, compared to 22.9% last year [11][66] - Quarterly EPS was $4.51, down 40 cents from the previous year, impacted by lower volume and higher pension amortization costs [13][66] Business Line Data and Key Metrics Changes - In the CNI group, organic sales decreased by 2.9%, with operating income of $53.2 million, and operating margins at 15.5%, a record for the first quarter [31][66] - The Tools group saw organic sales down 6.8%, with operating earnings of $92.4 million and an operating margin of 20% [40][71] - The RS&I group reported sales of $475.9 million, reflecting a 0.7% organic sales increase, with operating earnings of $122.1 million and an operating margin of 25.7%, an all-time high for the first quarter [51][74] Market Data and Key Metrics Changes - The automotive repair market remains strong, with household spending on car repairs increasing year-over-year, despite a drop in hours worked [14][15] - The U.S. car park is aging, with an average age of 12.6 years, leading to increased demand for repair services [14] - Sales to OEM and independent shop owners increased, but were offset by lower sales to technicians through the franchise van channel [63] Company Strategy and Development Direction - The company is focusing on pivoting towards quicker payback products to align with technician preferences amid economic uncertainty [18][41] - Snap-on is committed to maintaining investments in product development and branding to emerge from turbulence at full strength [12][90] - The company is leveraging its manufacturing strategy to produce in the markets where it sells, allowing for quick adjustments to changing production landscapes [27][28] Management's Comments on Operating Environment and Future Outlook - Management noted significant economic uncertainty impacting consumer sentiment, which has dropped 30% since December [9][10] - Despite challenges, management expressed confidence in the company's ability to navigate through turbulence and capitalize on opportunities in critical industries [25][91] - The company anticipates continued growth in critical industries and plans to strengthen its position through innovative product offerings [22][90] Other Important Information - The company reported a gross margin of 50.7%, up 20 basis points despite lower volumes [59] - Cash provided by operating activities was $298.5 million, representing 121% of net earnings [79] - The company has approximately $2.5 billion in gross financing receivables, with a 60-day plus delinquency rate of 2% [78] Q&A Session Summary Question: What is the game plan regarding technician confidence and product offerings? - Management indicated that the pivot to quicker payback items has shown traction, and they will continue to adjust their offerings based on market conditions [96][100] Question: What would the organic sales rates in RS&I be if intercompany declines were backed out? - Management estimated that the organic rate would be around 4% if intercompany declines were excluded [103][104] Question: How did military sales impact critical industries? - Management noted that military sales were affected by budget cycles and changes in administration, which typically slow down procurement processes [108][110]

Quarterly Financial Review First Quarter 2025 Q1-2025 Quarterly Review © 2025 Snap-on Incorporated Q1-2025 Quarterly Review © 2025 Snap-on Incorporated Consolidated Results Cautionary Statement Q1-2025 Quarterly Review © 2025 Snap-on Incorporated 3 These slides should be read in conjunction with comments from the April 17, 2025 conference call. The financial statement information included herein is unaudited. Statements made during the April 17, 2025 conference call and/or information included in this prese ...

Snap-On (SNA) came out with quarterly earnings of $4.51 per share, missing the Zacks Consensus Estimate of $4.81 per share. This compares to earnings of $4.75 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -6.24%. A quarter ago, it was expected that this tool and diagnostic equipment maker would post earnings of $4.80 per share when it actually produced earnings of $4.82, delivering a surprise of 0.42%.Over the last four quar ...

Financial Performance - Net sales for Q1 2025 were $1,141.1 million, a decrease of $41.2 million, or 3.5%, from 2024 levels, with an organic decline of $27.3 million, or 2.3%[4] - Operating earnings before financial services were $243.1 million, or 21.3% of net sales, compared to $270.9 million, or 22.9% of net sales in the previous year[4] - Consolidated operating earnings for the quarter were $313.4 million, or 25.2% of revenues, down from $339.2 million, or 26.5% of revenues in 2024[4] - Net earnings for the quarter were $240.5 million, or $4.51 per diluted share, compared to $263.5 million, or $4.91 per diluted share in 2024[4] - Net earnings for the three months ended March 29, 2025, were $246.7 million, a decrease of 8.8% compared to $269.6 million for the same period in 2024[24] - Operating earnings before financial services decreased to $243.1 million in Q1 2025, down from $270.9 million in Q1 2024, reflecting a decline of 10.3%[29] - The company reported a gross profit of $578.5 million for the three months ended March 29, 2025, down from $596.7 million in the same period last year, a decrease of 3.4%[29] Revenue Segments - Financial services revenue increased to $102.1 million from $99.6 million in 2024, with operating earnings rising to $70.3 million from $68.3 million[4] - The Repair Systems & Information Group segment saw sales increase by $12.1 million, or 3.7%, to $475.9 million, driven by higher activity with OEM dealerships[8] - The Snap-on Tools Group segment reported a sales decrease of $33.6 million, or 6.8%, to $462.9 million, primarily due to lower activity in the U.S.[7] - Financial services revenue for the three months ended March 29, 2025, was $102.1 million, compared to $99.6 million in the same period last year, representing a growth of 2.5%[29] Expenses and Liabilities - Corporate expenses increased to $24.6 million from $14.7 million in the previous year, which included a benefit from legal payments[10] - Total current liabilities rose to $999.9 million in March 2025, up from $961.5 million in December 2024, indicating an increase of 4.0%[22] - Total liabilities increased to $1,303.9 million from $1,270.4 million, marking a growth of 2.6%[32] Assets and Equity - Total assets increased to $8,069.0 million in March 2025, up from $7,896.8 million in December 2024, representing a growth of 2.18%[22] - Total current assets grew to $3,427.5 million, compared to $3,282.5 million, reflecting a rise of 4.4%[32] - Total shareholders' equity attributable to Snap-on Incorporated increased to $5,520.8 million in March 2025, up from $5,394.1 million in December 2024, an increase of 2.34%[22] - Total shareholders' equity attributable to Snap-on reached $5,520.8 million, up from $5,394.1 million, showing an increase of 2.3%[32] Cash Flow and Dividends - Cash and cash equivalents at the end of the period increased to $1,434.9 million, compared to $1,360.5 million at the beginning of the year, marking a rise of 5.5%[24] - Cash dividends paid increased to $112.2 million in Q1 2025, compared to $98.2 million in Q1 2024, reflecting a rise of 14.0%[24] - The company’s net cash provided by operating activities was $298.5 million for the three months ended March 29, 2025, down from $348.7 million in the same period in 2024, a decrease of 14.4%[24] Tax and Capital Expenditures - The effective income tax rate for Q1 2025 was 22.2%, consistent with the previous year[4] - The company expects capital expenditures in 2025 to approximate $100 million, with $22.9 million incurred in the first quarter[11] Inventory and Receivables - Trade and other accounts receivable – net increased to $851.4 million from $815.0 million, a growth of 4.5%[32] - Inventories – net rose to $961.2 million, compared to $943.4 million, indicating an increase of 1.8%[32] Other Financial Metrics - Cash and cash equivalents rose to $1,434.7 million, up from $1,360.4 million, indicating an increase of 5.4%[32] - Long-term debt and intersegment long-term debt remained stable at approximately $2,002.0 million[32] - The company reported a slight increase in accrued benefits to $72.8 million from $67.2 million, reflecting an increase of 8.3%[32] - Goodwill increased to $1,077.7 million from $1,056.8 million, representing a growth of 2.0%[32]