Snap-on (SNA) 4 Feb 212020 Q4 Earnings call transcript

Ladies and gentlemen good day, and welcome to the Snap-on Incorporated 2020 Fourth Quarter Results Investor Conference Call. Today’s call is being recorded. And at this time, I would like to turn the conference over to Sara Verbsky, Vice President of Investor Relations. Please go ahead, ma’am.

Thank you, Abby and good morning, everyone. us detailed review issued in morning. joining results fourth earlier for are which our you today Snap-on’s to quarter this Thank press release

thoughts, have on Nick detailed financial will Snap-on’s, take our call a Nick we’ll Aldo We more with review Snap-on’s Aldo kick-off call results. his will morning provides Officer; provide perspective Pagliari, Officer. our Executive some performance. questions. After and Pinchuk, Financial Chief this the on our of closing Chief your Nick today then

we’ve provided along during can forward-looking management’s These company’s as or results section. snapon.com, and or relative usual, statements today’s the management’s with to the downloads Any slides As are estimates website, the may discussion. state to such Investor materially website transcript those viewer These of projections be beliefs tab statements call. otherwise slides or made this call supplement will slides in well webcast or the our the our from statements. as actual be differ on accessed archived plans made under under outlook, our in on expectations,

in in Additional results to those cause information could statements the filings. SEC our forward-looking the are from materially and differ factors contained our that

includes counterparts. Finally, in meant to isolation performance, measures be non-GAAP this GAAP which presentation considered for substitute or financial of are their not as a

over measures Pinchuk. included on slides turn our that in found to call is non-GAAP I’d With earnings in of can reconciliation XX Pages Nick. like on call said, a through our website. Nick to and including conference information XX. the Additional our now be release Both

on the and of shock, sequentially, on accommodating projections going of we for was a recovery. challenges virus I'll This virus. but fourth the And Then financials. but And perspective the to look But and how COVID a continue are the environment, group, straight those I'll just the the varied and the general forward progress. believe about To we on of we safely. pursuing you is both higher. the it have physical Good stronger that more and group-to-group events, And sales lot start today our new morning, Sara. each from through our encouraged to moving we by team consistent unfold. speak commercial for did everybody. a Thanks, to the with, trajectory we despite combinations believe improved develop the with out the progress playing you the a achieving continues with of quarter and us. year-over-year ever. a the say financial make our all year than within year, I'll see start was virus move would profitability to essential opportunities we strong. give will is and trends the threat Aldo -- I'll on year forward. highlights We but second exited upward met you give disparities our Snap-On of quarter. overall be the our Today, the along headwinds clear days Geographically, heights Through how it quarter, impact even absorb Snap-On saw we review the when unusual detailed reach can the

U.S. are psychological Pacific are in what moving recovery. actually still accommodation, while Southeast turbulence. Europe ahead and remains seem call to challenge; Asia India on and we be the deep virus And and to further Asia and

despite selling-off our vehicle it this it network quarter, repair saw technicians, franchisee we nature segments, Again certain education, that. of gain to was Demand directly business Aviation affect the the you and industries oil through advanced of rising gas, our owners not kind returning shop and and growth but the runways and repair sectors would the to robust. for growth. essential continued markets turbulence yet, like managers was of critical our to vans, For along Volume U.S. activity robust. for

to we're we and the we're you. recognized innovation serve these opportunities work and clear up weathering. repair days the volume related currency the sales overview to acquisition critical safety, van the convinced of OEM including the up costs to and it the show million a results. great the women our will associated of an From the these know net perspective, of outward fully still vehicle is $X.X and of toward skies heights, as in from outward the our the are and will suburban convinced our opportunities. on connection, virus, ability unrelenting deeply to that, and committed RCI. individual that $X our society XX.X% virus. their keeping in operating of $X.X our translations, strong million gains on advanced our direct currency And and customer numbers XX in XX operating But That's and quarter, positioned opportunities XXX the we and transportation. charges of much of for people that business well And demonstrating Snap-On points focus and restructuring earnings very enabled news of basis be million not including channel and for was information because creation, those Snap-On rapid world solve each points basis and sign and that trends environment as capable. income the Fourth turbulence, This dealerships XXXX, we're in runways having handles our repair increased XX I And diagnostics have points rose million million and advancing more is it working Organic $XXX.X quality, advantage the from strengths tell most restructuring. the COVID But dignity impacted States. basis in sales. as sales overcoming with men the brands got $X.X in now million it. the also OpCo outside locations have hit currency were of team take base. achieve headwinds great virus XX.X%, asset. XX.X%. been XX.X% United value abundant abundant maintained as points pivots brands and impact tasks we've that And foreign European improvement, to cost sign that we million on through products pride do. of We've the against the businesses of and serve was basis favorable of throughout continuous Snap-On however, by profession unfavorable and a advantage the it's from new reported unfavorable We've more a are the $X,XXX.X of and great $X.X there our recovered actions these and margin take forward, many Going quarter is The yet industry, all

financial million $XX.X combined operating XXXX, XX-day in services keeping OpCo last For XX.X% while of consolidated delinquencies for results the test. year with the increased income operating And the flat all pandemic of that from year, stress increase restructuring points of was charge point including The last and new XX% an $X.XX $X.XX, height. XXX of did to margin $X.XX EPS I basis XX.X% that overall for quarterly say compared result improvement. a midst

before related first $X,XXX says of $XX.X non-recurring of service. XX principally is unfavorable restructuring, on benefits But mouthful, a of a sequential currency virus hold. with points XXXX a pay XX XX XX.X% including to million direct and million single second the OpCo $XXX.X without associated that OI it million which with expenses, compare decline is points sales points unfavorable OI of in year XXXX, XXXX, X.X% disruption were Now for with Snap-On XX point apples-to-apples, of to million a the and XX basis million enabled full $XXX.X the legal of shock special restructuring basis from reduction. COVID-XX currency right. quarter despite the us was incorporated XX.X% matter. compared demonstrating pandemic litigation dividends year, that benefited That's every margin what of direct the gains impact basis the combination to full million organic a legal OI only $XX.X has $XX.X patent charges great including of resilience quarter costs and $XX.X since OpCo in points down margin million of associated and with which a settlement our

services period year the for the adjusted financial $XX.XX, the the year one-time X.X% the in million million and the OI down of $XX.XX legal of for adjusting registered reported in versus $XX.XX $XXX.X XXXX restructuring For reached down EPS as and last X.X%. year the benefit prior XXXX Overall the year current EPS $XXX.X from was XXXX.

grew up They're nice the earnings $X.X including still offsetting margin the energy join points in C&I In the quarter a activity $X.X to $X.X the currency $XXX.X to million sales favorable a but an Notably, operations but Europe XX.X% twin the numbers, Western sales Asia in $XX.X by the of the COVID Brexit of and also rise broadly reported currency registering up our against basis RCI overall in group of XX early decreases in including last challenges flat was million, XX C&I, difference. individual points the as now improvement. organically, down, So points million of shot. rise going of unfavorable The overcoming strong for way represented million and and XXX currency and these to our And in costs, European basis C&I margin all tool They're $X increased million of year groups. Pacific. go the organically, they're base clearly income on fourth quarter-to-quarter year-over-year and C&I reported. COVID critical unfavorable hand gains foreign marked X.X% the industries the the COVID direct from foreign perspective, let's flat in was cost, XX.X% in effects, X.X% a sequential sales these all improvement. with OI From double-digit sequential across volume million back OI as benefits were a the made related industries disruption. continuing critical substantial operating both quarter in But of customers of group business and up acquisitions, $XX.X was essentially recovering. operating the growth million operating a

moving But will referenced international and And customer as registered impacted and continue in that connection critical might military improvements. duty at by sales expanding our in But a in we programs. do in we one confident to see and is to products. industries opportunities growing possibility remain committed powerful new the innovation, and the critical principal industries, to of education, quarter you Aviation forward the expect, wind-down fitting major see aviation and then gas path I our U.S. creating heavy gains to oil be before double-digit we the also and and selective Speaking down. did

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success standard a one-thirds allows in users than choose XXX kits tool Our tool roll new store available needed line box from wide can without Customers quickly our fitting foam and store end array buyers inch pre-configured different the a a help the configuration designed reaching required, SNA configurations our the block And product develop block of We've more tool Europe. boost door. in is Europe and right and control using three around is drop the of goal. two-thirds in hole just sales and hand particular roll very XX wider full the goal quarter foam in of website helped breadth a system. block fitting sets develop cast achieve semi-bespoke consists to tool challenging a specialization right of It's double-digit important full our range extension with interaction, the new for growth sometimes distributor our a can unit had in specialization presence reps great to an it environment. the it

entered a and essential would the of agree. progress. than and I continued big positive stronger further demonstrating exiting businesses the the serving product gains of that generating offered when think each piece a C&I quarter trajectory sequential everybody they accommodation with

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were rising quarter to growing $X.X up million, double-digits. strength franchisees resilience turns including it a that million of on game And in stronger. $X.X straight As was business and That's million, latest are is million the second $XX.X franchise were Tools affirmation with van of we compared the year. the and of direct XX.X% $XX.X $XXX.X strong We they a recognized basis operating that earnings that related with the position favorably related leading market is and of monitor magazine's quarter margins almost period, a And Sales the improvement. connection costs, the top franchise XXth positive even respected XX.X% the out year the vehicle million included for Group U.S. to X% gains throughout that And the of and Tools trend reported up continue the increase our Group to in our an deepened up Tools $XX.X satisfaction virus $XX over again international in the favorable franchise Snap-On direct choice. Tools view full confirmed the of both that a growing the One the $X.X franchisee the XX number operating Group the franchisee we van million The year's and our of publications, consecutive last and rankings repair model, as review was sales the health a foreign business received are business. metrics XX.X by at network. Group differentiator territory each virus face-to-face including trajectory with the and further or currency marking organic where Snap-On million believe costs, for the that a the year recovered XXX organically Actually, acknowledged and and million OI customers COVID-XX X% of to was points. clear pandemic. award. of continue as XX% OI of

strength vehicle would reflects pliers. insight with considerable have HJ talent business our the versatility connections. the jaw stream through every franchisees day changing Throughout been developed able of inch of innovative eight it without fasteners. recognition XX newly innovation of not and VAN achieved and We type unique already and plank we've ACF and and like removing this we're our in our because general continuous fundamental in great experience forward product of new storm, a strong Now the design customer our to both added to our in products environment that released grip significant tightening a call for the bring

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been tough already grip. have heavily fasteners the are when Second, rounded and to

diamond grip increase tip pliers jaws unparalleled up jointed generate serrated force the talent it's located a as clamping Our to XX% in turning power.

one another on plant ACF, quarter. U.S. manufacturing becoming one of it's walk the in fasteners $X can well technicians HD hex for I'm three million XX even changes the to and and feature also joint hit the the and patented just selling a talent, right to Snap-On the here remove been slip you icing going With grip our most to very putting damaged on to for easy the cake, pliers position and versatility designed the new rounded received products it clear in products path the a position, the

to serve, worked COVID maintain brand, presence they display reinforcing Snap-On sold. year essential celebrating confirms also that our our further during importantly that do servicing the and is the I hard in strengthen it's We most XXX that really every-day think racing customers and our continuing our brand what and the

the made The and to products stay-at-home to effect powerful that new developing significant for and restricted deal, opportunity turned to early continued pre-briefing working for and saved sales the more providing presentation. customer from media VAN shops gap. pandemic Sometimes on time the to vary into concise and face-to-face the interaction reaching more Tools the also products capacity. and the the to we've streamlining everybody in access actual process technicians the for social more customers. franchisee bridging days and tools of selling promotions, RCI selling today work the closing to with been franchisee reserving customers the engage tool redeploying travel, strides and And This the widely also Tools the Span Groups a focus Group shot

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quarters shaped products double-digit a new capacity through of stream V Moving straight building two a recovery, the brand recording continuing of selling raising for strengthening expansion, the and future.

release was broadly sales up from the let's a double-digit as dealerships X% in favorable Now A foreign the for XXXX have update RS&I undercar margin and growth high repair single-digit The vehicles. fourth single-digit to then it information RS&I repair the and for the growth European new launched continuous improved $X.X volume currency new auto at managers owners confidence of quarter RS&I. continuous of the independent diluted $XX and diagnostics OEM North fourth speak $XXX.X for repair the America manufacturers the just garage sufficient to a diagnostics of their our gain pandemic. And group began in We gains the information and and new of shop recovery the its in or positive excluding time, of key coverage and to that trend based On full more XX.X some innovative operating shipping was success. decline products they've recorded quarter exception. shop and equipment the rise diagnostics and to steep The invest and million get earnings models haven't no operations $X.X began our extending platforms time, owners powerful our some focused the restriction. owners developed continuing X.X%, due charges improvement low million independent organically software had the and or in are depths our million OEM for Group sales invest in as sales products of combination project essential upgrading to for sales a expanding small as recorded programs. managers $X lower to of and sales of million mix offsetting facilities. million

great Additional this advanced new released U.S. leading be EPS received. the changing XXX will that's up was people May. And days virus the and points XX% information lines. owners we from capabilities, across strength for repair And without capable shock, environment. essential mobility the safe us stronger to up of even the It driving This all very up another of keep forward market in continuing already basis And is the that all come. and content, of represents days gains in advantages and expanding the unique of our in critical a in disruptions position for RS&I while move increased to another more our then reprogramming technicians ADAS the is vehicle growth XX.X brands our $X.XX well software Canada last meets our repair engaging facility, next that that Snap-On's upgrading people ready we test the to deliver Building new is so or confident serve and and building and functional XX.X%, managers working. repair software RS&I, year. been And is an XX.X% the direction. and moving to an keeping advantage the and and assistance powerful automation. work third diagnostics these quarter. the services margin strength show achieved, OI absorbing product quarter, edition maintaining shop ending driving Spanish financial on driver the already sequential before intelligent the easier results to vehicle virus. X,XXXs of expansion We're opportunities update product and our year with significant accommodation, XX.X%, that's start quarter in higher vehicle navigating products fourth we'll organically from repairs physician powerful and again. Sales in while with encouraging the and making recovery, step psychological and all

to Aldo? over I'll Aldo. the turn call Now

Thanks, Nick.

million year, to growth high under began fourth costs consolidated $XXX.X and which foreign double-digit improvement. healthy favorable with compared We've direct associates with organic related as $X million Snap-On’s respect identified temporary million sales environment. with billion in performance. to improvement quarter of cash and points again current from million and foreign safety $X offset before a flow million and actions impact restructuring $X.X of of basis XXXX, sales. last COVID-XX. and reflecting of generation tool the Sales we gross COVID-XX. to by translation results currency Snap-On XXXX RCI million higher $X.X currency COVID-XX, The million, currency earnings with robust of operating compared information the expanded, direct effects XX.X% basis Operating costs a year, with sales Gross factory sales development Consolidated owners quarantines basis primarily higher direct points margins points systems Operating strong in include percentage foreign the managers XX gains for of $X.X summarized last year-over-year volume $XXX.X associated related the the financial more as margin labor X. Also XX.X% recorded of year, cost year-over-year organic reflects earnings operating to quarter and are the associated last reflecting single-digit points on and compared both acquisition reflecting and was partially segment, quarter. profit restructuring as and benefits effects, XX% than of Our shop primarily totaled in including wages point gain for initiatives of The to of to was improved and restructuring in and million Slide direct associated costs XX.X% financial company's the Europe. $XXX.X increase accommodate unfavorable of expenses and XX.X% XX.X% net basis repair unfavorable offset across associated XX $X.X sales, costs with absorption net repair of XX associated segment. principally reflected the cancellation These services of was COVID-XX, the and with well a the $X.X million this sales the of of $X,XXX.X basis million costs fees, which closures, costs enhanced other XXX XX health direct quarter, event costs sequentially. and

of percentage operating a points net associated from As currency points including sales of XX financial basis XXX foreign of pandemic, before improve margin cost XX.X%, the points to basis direct of COVID-XX unfavorable effects and basis services XX XX.X% last year.

know, calendar, As every years. a week operates Snap-On in full an fiscal you fourth may and on our fiscal to which additional six results year quarter

the our As quarter. of the week contains a result, XXXX the XX extra relative year in with fiscal results to year prior occurring weeks operating fourth

including by million While an the primarily million net and financial Snap-On’s other offset of expenses, week additional segment costs operating effects consolidated services corresponding due financial of the to earnings, of direct million was net partially million and $XXX.X COVID of $X growth services services level, financial year, week of increase revenue million on revenues income $XXX.X million this or foreign increased quarter With revenue the and said, a $XX.X million million financial to related largely variable fourth but related the week week higher to $X.X that of costs income additional interest was Financial the the primarily $XX.X additional of last operating earnings year. Consolidated of extra our $XX.X additional earnings interest personnel reflecting of interest to levels, restructuring compared consolidated in from of the benefit in last material total principally financing expense. costs. income currency week by the quarter portfolio. $X.X services offset and services for fixed $X.X earn million earnings the unfavorable XXXX costs compared portfolio. XXXX did not impact of interest At its of compensation

earnings in percentage XX.X% a compared of of As the XXXX. to revenues, operating margin XX.X%

to of XX.X% compared fourth income Our year. rate tax XX.X% effective last quarter

share million levels including or for XX% of $X.XX earnings diluted $XX.X share. share, $X.XX representing $XXX.X restructuring charge diluted per in $X.XX million XXXX a net per Finally, per or earnings increase increased a from

Slide our to C&I Sales let's offset sales Now $XXX.X on of increased X.X% favorable sales foreign from declining. by of turn year a seven-tenths million million organic Group acquisition reflecting of last related segment currency with X. of the X% $XXX.X translation and million starting million $X.X results, $X.X partially

to While more organic third as sales they typical of our meaningful compared with we a essentially the patterns, sequentially were in year, XXXX. than from did last quarter improve organic flat manner seasonal in of sales XX.X% what see

Across compared hand organic operations, Asia gains decrease single-digit offset sales a Asia last to mid the based the sales reflects to declined a in primarily our critical segments As year, Pacific European double-digit in industries, single-digit tools to and business. oil comparisons. declined customers and low in decline in Within by similar last critical to resources from quarter be effects the pandemic. year-over-year sales improved into quarter, in industries, including of sales U.S. have and Aviation to Technical Asia third gas, while impacted customers in markets Southeast these Sales the continue by India and Education. natural

to ago. increased Kingdom, margin military, This last compared XX $XX.X to XX reflected our aviation project included to XXXX foreign and the basis COVID-XX Gross Sales from foreign increases and region, $XX percentage year basis sales operating that as improved offset Operating the tool and across higher hand the by currency direct lower benefits million, to including gross partially as of of quarter international the in RCI were XX.X% well COVID-XX and the gross down. and related The million quarter’s year. the government direct U.S. activity. duty for heavy prior non-military is as fourth year-over-year military sales XX year of the a sales particularly were winding major to gains as well million points United basis increases markets. Margin $X.X margin XX.X% last of sales Operating margin in as and France costs. currency of declines compared points initiatives. earnings compared business as year-over-year, expenses were from as of in heaven primarily of XXX segment as businesses our of a in due unfavorable European of XX.X% and C&I were export lower based to across Scandinavian to unfavorable year. points basis compared These costs XX.X% for points of a effects $X million effects Sales

from year. XX gains increase $XX.X in a X, in organic of margin to basis and organic performance. of increased in points, the favorable XXX primarily last $XX.X Slide benefits more XXXX the double-digit over million higher currency volumes million year sales organic volumes XX.X% sales both percentage sales expenses basis XXX sales due Gross or Snap-On XX.X% quarter XX.X% strong earnings Tools sales million related a in improved $X.X gain reflects ago, to operating the and as improved offset of The a from year, to Operating of sales our This compared Tools down points. reflecting of reflects of XX% Group Snap-On of X.X% than U.S. XX% from savings due a to million Operating last The points foreign of increase and $XXX.X basis gain of third XX.X% initiatives. translation. COVID-XX international for RCI sales which million the of from primarily Group containment sequential million Turning $XXX.X cost to impact a actions, quarter and higher margin compared an operations. the $X XX.X% XXXX costs.

margin favorable in low offset and These by diagnostics declined decline on owners and includes independent products compared year a foreign ago facilitation the shown particularly partially sales Gross Margin managers. sales in gain sales and repair increase dealerships, $X.X by unfavorable points $XXX X, sales to basis sales organic organic reflecting effects, information increase single-digit of Slide increases high related to sales repair programs a to including currency and OEM a in foreign translation. undercar sales of The Sequentially were of of shop the RS&I double-digit currency XX.X%, improved million a RS&I $XXX.X to organic a million, XX single-digit X% XX.X%, last of earnings Group XX.X%, Group the foreign of XX.X%. percentage equipment. year to basis Turning gross sales million program restructuring effects XX quarter. OEM last gain of million business as of including compared sales to year, cost currency businesses with the the XXX for of unfavorable XX $XX.X XX.X% of of reflecting and XX% higher activity a in to impact $XX a ago. direct points basis dealerships. operating expenses primarily Operating COVID-XX margins XX to points last to including from from sales from basis costs effects facilitation at compared lower associated points largely points of points basis year, have of year of the basis due related million mix XX RS&I the and the OEM improved Operating including

million $XX.X lower to the of additional year, the services financial higher bad for costs from $X.X interest accrued variable expenses were net Now to due in operating XXXX revenue fourth to in a $XX.X includes million, by other to compensation XXXX. of in a compared increased decrease last million. of million of Financial to XX, from lower million last days provisions by million and Slide levels, provisions year-over-year debts losses. $XX.X credit associated charge-offs Financial with Compared $X.X offset $XX.X services quarter credit were This by services and losses for turning partially year's while week last $XXX,XXX, primarily our year. million $XX.X earnings fiscal compared XXrd calendar.

was portfolio, As is yield and respective respectively. on yield quarter on financial the XXXX. expenses loans franchisees. were XX.X% the of lower interest offered were a XXXX percentage for operations These XX.X% and average our loans the lower in X.X%. to the business fourth XXXX, finance the average in during impact includes the X.X% dealing The receivables yield contract of and XXXX XXXX The In environment. second of in with to X% and franchisee average receivables the support contract and compared COVID-XX accommodate X.X% receivables quarter, fourth in help services quarter operations

outstanding. essentially remain levels, the quarter of $XX of while increase X.X% of support in contract receivables $XXX.X million of these reflecting As loan quarter, million increased business from X.X% Total of flat. or originations end were of million originations XXXX a approximately finance $XX loans originations the the in receivables, operating

XX. Moving to Slide

services of United financial for rate seasonal from year U.S. the $X.X year-end operation. typically gross increase $X.X our we includes fourth the portfolio billion X.X% billion financing including sheet quarter. balance and is worldwide $XX.X our fourth Our million, gross last States, receivables, the the extended quarter, plus unchanged In of XX-day reflects in delinquency approximately credit from increased the experienced

XX As losses sequentially down points compared and net represented outstandings of end, relates year. basis same down $XX.X to million points to last quarter X XX months basis as X.XX% extended credit or the finance receivables, period at trailing of

net $XX.X flow quarter the $XX.X was million financing Free Net of share cash totaled and in by higher quarter $XXX.X provided net in auto for the shares million share cash XXX,XXX expenditures including including of by of earnings. existing in investing $XX.X comparable Slide operating year million reflecting common $XX.X activities million program. the investment, million, to repurchase for repurchases by $XX.X XXX% of included our Full used changes the decrease dividends of operating of net million and of $XXX.X activities Net turning $XXX.X a in period. in $XXX.X Now XXXX grid, earnings additions assets the to activities increased working X.XXX primarily receivables stock $XX.X $XXX.X reductions million XXXX of million by levels, driven Cash repurchase liabilities for cash shares million. XX. acquisition million under used cash primarily inventory of $XX.X million. and of capital relation from million net and finance during to the

remaining of repurchase we of under had year-end, additional availability stock authorizations. up an As $XXX.X to existing million common to

from and the to Inventories Year-end of year-end. accounts decreased X.X XX outstanding quarter position $XXX.X XX days inventory million the cash third year-end $XX.X million XXXX. million reduction, end a XX, trade basis Slide XXXX, year-end. million from acquisitions. year-end On $XX.X of from increases by of at to from X.X X.X XXXX. a other days including inventory and year in XXXX of Days $XX.X and in of to trailing $XX.X currency million decreased XX to turns XX of compared month compared million $X XXXX a translation receivable $XXX.X compared Turning million offset sales partially

of capital debt at net compared Our year-end XX.X% XXXX. to to XX.X% ratio

and than million to in cash expected flow $XXX facilities. cash from operations, In we addition available more have credit

million. outstanding no review amounts under no in call U.S. any income million commercial the the Nick will be were facility, now a effective $XXX my few anticipate credit Tax performance. expenditures closing there there Nick. year-end, currently of the of the year his capital to range to outstanding. remarks Legislation and We to full of range were paper concludes of on to that a borrowings back XXXX. items our changes XX% briefly that will That anticipate tax for I'll As rate absence $XX thoughts. turn We XXXX our for outlook be fourth quarter XX%. I'll in

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And all XX.X% change XXX up do that still in XX.X% XX.X% we against revenue XX.X% solid good is challenge still We has XX.X% advantages. basis profits XXX OI points year in will achieved heights clear We were into the believe the farther XX depths quarter margin a to storm. turbulence years RSI product, year while came our believe margin performance points And improve. it organically we the more XX% our our see, XXXX of $X.XX says C&I in territory. portfolio sequential more amplifying V full and amid an heavy of Group, so. of more OI charges and shaped up XXXX opportunities advantage. up to advantaged reported Financial numbers. anticipated as more down, points X% and capacity the stronger strong currency EPS services and of the of vivid up Sales and to reach the a our XXX our at of the unfavorable ready when but in COVID from forged virus difficulty. Snap-On turning and of points the and basis costs, it's the gains. in we heights sales believe resilience You We recovery our people sales to XX all XXXX. margin and rising we of the expanded XX.X% up sale, as fourth higher shock. of quarter XX absorb of these points finally, brand, nurturing the the basis basis XX.X% or we And beyond. direct basis ability profits testimony we Tools year. turbulence The and the are abundant accommodated that exit than offer up belief XXXX the expanded organically, XX.X% points, gains rising restructuring OI and preserving capable organically we in entered new underscoring all came, But our natural selling and strength leave great importantly, is And that for franchisee OI positioned together the

preserving associates. our directly celebrate your you confident I your our to call as the in years your for contributions We remembered come. speak Before effort central turn perform operator. we're I'll and the franchisees to task, society over and be will

my belief and the steadfast your And you commitment our encouraging for fourth our results to quarter, in in have altering your For future. congratulations. of unwavering present our success for your

my thanks. You have

operator. call Operator? the over Now to turn the

our question King. you. take first we with Thank And will Scott C.L. [Operator Stember Instructions] from

guys and on strong a Good congratulations very quarter. morning

Thank you.

you. Thank

on when guess, look COVID Particularly looks just at you not and essentially up number, year-over- you you being catch-up, X% coming, think that, I some what people lost the you've of positive much the new things about, growth? Group layer But of talked You that easy, how at incremental of said, traveling was can there year and frame look Group? period. just out, your like around the and Tools offset Tools and views you a much the how I if organically is during you

had if And Tools of pretty the story that's you is, back. But the judge We coming the quarter, at the the of it's and recovery, but look think we're about at the the story part you I I accommodate, of the mean, the unaffected, think harder coming if products and had in new to certainly the COVID. days Fourth expanding talk they're corporation. impact to if I want really of And they the the is end they and quarter drove good. in think, first look it recovery, some they those are you Group to of of that. I out capacity second third the quarter, of sure And SFC endpoints got shocked, endpoints, deep the of think out took we things. came they what quarter. virus the

sales up, is sales if VAN thing van of and in of Now, about back the the the the to year. sales step can of, attempted that, other at you significantly VAN the that were and one kind think that, look than more of realize you to matched

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more significant Group. than Yes, Tools

in in the the If from VAN, better, and you kept best at but look pace of full than was even month-to-month, the it best generally course, more year, the the periods. VAN to changes

segment. again, mid term hasn't this growth single-digit and longer view your changed for Yes,

Just to clarify that?

and changed, want a a let's haven't take back one be. XX% said grow corporation, to feeling time the quarter take we're at That that the think great We Group as get, good. we're we positioned will at growth. where a growth I and one think we It’s a business. profitable get time, of but We just step for that. at We'll it's Tools to bottom

hand did that a talk versus And then just it. within tools. Got more. ticket me clarify Did how Let little last question, tools? you big about

Tools tool ticket and a we're any or this is particularly was pay -- into in to and hand up. tools complex strong. hand stronger, continue like time kind particular hand fully environment out of financial Hand get the this psychological for, saw big in forever like a in This the little longer recovery, were great we've tools great we seen things interesting coming difficulty, is and it's which it's tools of nice a people diagnostics, take to in is the the it and a But are also they're items business. an in one quarter But innovating environment is. go that Group recession, invest willing of But payback tools. to

seeing you're that So coming along.

Got it. That's Thank all I have. you.

Thank you.

take next Luke will We Baird. Junk our question with from

morning, guys. good and Thanks,

Nick. First question,

could the through we year that we up full of follow provided went just assume the specifically, Just fourth shape of quarter should year general outlines, you VAN on wondering as if you that in overall? sales the that sales versus the and of relative to your sort the

No.

myself. to for don't But sales get to don't I of that. I reporting the the strong number were another up double-digits. want start So, want van into

enough. Fair

okay. month-by-month. that And that Yes, followed

seeing like necessarily. We the not we're sale any off momentum. So

I'll that there. one Okay, leave

I software question want Nick, out Second ask expand capability the just understand is. the if that on what the content you you on made wanted -- is ADAS I comments could he of that that in side, to that rolled terms to

that, you. you will I Okay I tell

in software, bridge is is understanding you is bigger. managers of a with even of with the the driver programming ADAS when and or the have cornerstones shop going and as which to sales lately repair autonomous in go and advanced One what's the the to information to allows of and cars about things, this wrong I systems independent more difficulties of of people owners shops, talked X diagnostic that store and one that Mitchell deal

Mitchell so ones. the And of that X solid been has one

precision driving it of go even our and to look one back If is to And that products. of automated solid demand it. these tomorrow, segment needed. them has highly it, you is that's going the that's go business portion cars, because gets that COVID. been evidence I better And because the throughout pretty kiss for at automakers If were has things the

I last then Aldo, for could. if question And

both actions, now? you're the you right especially operationally we're the seeing that given strength Tools seeing your if ability pricing offset and that wondering Just could pricing steel and comment that right now through to Group, on higher

there's when few to inventories into we horizon, you should order months arrive. and them to inflation, pricing line always it the said, visible in in have with invisible steel takes them past do because certainly come deal in obviously the yes, there's increases company, it. Well, in the a for and the months, believe you to -- buy some we I power that say That have

historically, remind it, types vertically from again, trailing do look Luke, if a we in have deal we've gyrations there's of pricing back, So integrated. time-to-time, there. you Snap-On is But these very and with we power, that's everyone I had steel then effect

much a a in as the factor people imagine. percent good end might So is is of way, product, final the news as not some steel

So some I benefit to degree. actually to think that our does work

thank Great, for I'll you the color. it leave there.

good. Right,

next from with our MacGregor take will We Longbow question David Research.

strong Yes. Good morning, everyone. Nick, congratulations the on good numbers, quarter.

Thank you.

may why between origination diagnostics, the this spread that and think you double-digits. tools growth numbers Help mid-teens. me the And the have said called being organic I even understand, you in is again quarter segment strong,

but… So I'm understand that, to struggling really

just don't to I we say think actually be read. didn't I could double-digit clear.

that at to question. I said Sometimes don't remember. things what think certainly that don't I say But time. here Look I ask thing, like the is I you

time sell divorced that what in to Of course, we VANS. from the originations are

VANS. talking we're what the so to selling And is about

EC, more their sort in on tools of that haven't ticket in strong. than have are they of to they because put doesn't get are may And stretch divorce. don't this the up to you diagnostics or big go They ticket them like But accounts, because And on items been items stronger a use increasingly as franchisees so big was mix, it hand is But go deal revolving diagnostic a people our EC. still said, little well I heeled, it investing quarter much. they all as the often week XX kind others bit. them

a things. those mix So of we get

RA So going storage you And between and and between tool I have then the if you where you're mean, EC, trying you top time but that. have EC of out is RA on have origination go, to diagnostics figure split displacement. of to

as say would be that, I overall fair items robust tool overall ticket to said wasn't the though, it big sales. So before as the as

there call and… that did it off say the you through was mean, think I up Sure. in you quarter up double-digits, truck and I fourth a strong the double, sell

did. I Yes, I I did. Yes, did.

cadence growth inventory that greater was quarter. surface, when originations between strong there and the an build disparity the the through And like tools see look on it would you the in mean, organic trucks. the I number, on

No, look, think I the don't think so. We don't that here's thing.

off I the truck think truck all it kind line right. the I'm this, the if lines of perfectly, I and saying up, sales to up think

for year, off sales maybe full are the the fact, the truck higher. In

a I'm invest not an smaller the items, there's giving diagnostics but are And weighted saying the more guess, that people mean in sales these macro. paybacks total I big inventory shrink, is was number. I'm Mullingar truck to what We in times. shorter secondly, But diagnostics, to in So that ticket the because like ticket strong. doesn't

then the tool on And the Right. segment? week what was impact extra the in organic of growth

It really week. periods because, immaterial, we you much between so is and those Yes, got money the it's and it doesn't I and might that Christmas. kind extra week we got holidays Year's lose in difference. of think, really, people OpCo make relaxing actually, you be in New anyway, And

expenses, sales. So at much don't the and have we

be would of $XX Would in it week revenues. be So half typical million about that? a

No less.

that, Less than okay. half of

but the This don't week, every this way. that have happens that the year. same is happens, whatever, every We same week year

on cost points. down segment the about basis were within question tool at the Okay, guess the last for savings me. I SG&A expenses line specifically, XXX

see By down down in expenses about XX. RS&I number. So the pretty that bips XX your and nice C&I were to about good segment, then contrast

back not able cut don't I So that in two the tools could conditions cost back XXX points of ‘XX? question presented basis are is, guess segments? to how and may know, that of on other I with have we discrepancy normalized in And the comes opportunity what same the much

is Group I don't of direct. Tools one much more the think is, heavily Look, know. the of reasons course, I

with direct of there in travel mean, placed franchisees, franchise, selling in other out we're we're places. others, so normal our the the because to we're tools like through services, than be and we're and years, so forward out, we're we kind so selling And more our I

that operating far operations, a you out situation, And if I back when to the backward, in. is I So in business, a rich as go situation want would target more don't with expect be people think going as clear. you're any you your especially sky feathered restricted travels to know, these reach

I going good as back. in. I as and period-by-period. it When back. to if mine. work, sky guess to Your of they're don't we're if though, can't is doubt come you're be it it, it come it will give -- But guidance you will is going going will any the know I really? we all to play some Because clear, on feathered

the Thanks, way thanks. turn Okay, get and others. it I'll to out of Nick. over

thanks. Okay,

from We Curtis take next Nagle our will of America. with Bank question

Thanks very much.

little in recovering terms any like or give out if think terms guess guys wasn't how I could, I Tools a just driven framing like in guess, maybe see vis-à-vis budgeting the collision other XXXX? of operating things you year insight, but Group, I kind auto environment you're I what for of work? and of don't things the So, planning the guidance you miles know be of of for should numbers, you I guess if a I sort

out But deal short-term. makes driven. is, out collision in see a look the Everybody driven miles plays never motion, the in miles had a over since bigger it last learned put collision, about don't it I business. years big plays we've we've Yes, few miles what driven. we think

down and our year-over-year. so it you're that in an Group the isn't you're very see seeing as that significantly So industry right. much. collision numbers in is mean, we And numbers I Tools that equipment,

odd, that go isn't longer term, so garages the short-term, factor driven, I up to because cars, to to the we you that live of guys individual in building that we it's it's going wants how a going but many future? are storey to a the want start in going garages, the -- going some see and know. might I in who people work more I situation. to much You motion vehicles, think don't Miles people But that we but visit, a be get think a going not in Maybe to think China. to be a in big subway, reversal there's a on XX saw XX

us what XXXX, we our means and in So that see for of unclear, but we its think better. that ownership long way driven getting business in And a car drives opportunity. miles

opportunity how software about quarter-by-quarter, play to drivers business. complex good we term, year, it's had about good I the the we've is feel we Now good We think in momentum going year. received. longer feel out we're in the We have closing our more the about being products the the that's would idea what say. good going tell out will VAN the I that. you about feel We our about feel We efficacy feel time are good that of so our through what

health population, guess technician of on of up. quick income, the terms in I notable any And underlying I is just Okay, good? enough. tech a pretty in the then fair terms changes still maybe follow think which population

up is logistic. be will say the less income say that, year-over-year November, are and wages I'll But XX Actually months trailing up. in wages, I'll we

you So, you it’s which that couple from view will but a up X%.

So nicely, talked technicians franchisees base. the I've their several think, positive aren't and are up and to the think wages so all about customer suffering yesterday, they they

and all their in And to and our were Florida and I in customers. and in So New Iowa zoomed that's the they had kickoffs parties positive we watch York, good. pretty in Pennsylvania, about

are the being think So technicians affected. I

maybe fact, doing In they're better.

there slow any is you the of, tax terms in shortages moving, slow with turning improvement ongoing of terms in of employment? things. this And kind maybe said, But

And certified that think an we're course, XX% XXX. Snap-On what certification XXXX centers, for is and number involved education because think us. been is XXX but We offer programs in the that education, our we boon on it's Here do to we're that. what establish tell centers in from we've opportunity I'll in that's education. we that we down, for for technical investing education sector working people in of is and you, of is career Snap-On in listing And a increased us, been and

So we situation. we're shape good in think in that

wife, kind Joe on in working technical technicians to think education. think going I it. I I'm Biden are So optimistic people of because come particularly are his President is about the Dr.

think get So a focus. it'll I good

good. sounds right, on All and luck thank the Good much. quarter you very

you. Thank

take next will our Jefferies. We question with from Bret Jordan

guys. morning, Good

Good morning.

of I to mechanics restaurants the tools originations, am trying sort other are or reconcile on using going seeing are other spending of Given sources of their lack growth maybe that vacations to you entertainment? with credit?

never you'll I seeing that. anyway. don't don't that know, maybe think haven't I heard know, we're I

I up, You're guess. not buyer cash pick seeing a

our the they though, call get is happen in a they up. the tend lower does into ticket What we end what Franchisees healthier. flush are up bigger reach of franchisees would more as particularly diagnostic items, segment. to And tend reach to

So franchisee. the is of can And well And be really DX the Apollo by the the by our the in big did thing technician, hitter, kind the quarter. a range. in boomers that everyman a one of that that's and baby middle financed technician one it's the of for

It's we So predecessor and and that, gave gets of pretty we activations about maybe XX% I of think by good. outselling seeing units. its looking in that at it's terms the we're so demonstration introduced, SFC, out rolling it some one

factor. the to another period, directionally. I are what of sales in to that the to a reconcile So this, but time, way. it's that hard that have we maybe want be There bunch factors van heading it Over are caution originations just should in end with that that's dislocating

favor shift And share Okay. strong? guess in do couple particularly market your some up in or any go you share there's tool question just back-to-back on that really full a is obviously, in overall a now But percent. I year gains to right the then the feel got strong quarters market

but there thin. nation. particular tell franchisees are accrued in critical. about in thick meet I that that and think benefiting guys would us our from that strong, what and safely. to speech, they're were our anybody I repair there said Well, day we in We vehicle share, vehicle being think, But, that underpins I And essential you they're I look, are critical really think my every to were day particular telling our mobility like us. through has pandemic, critical almost in markets the there is, talk I'll anytime us, I and are every repair being critical. they're market out in overall don't They're my the And

So for can market share, it interpret guess you you I that will. into turns how

Thank great. you. Okay,

Bret. Sure, thanks

will Glynn from And with take we Christopher our question final Oppenheimer.

Thanks. of that double-digit context the growth maybe Kind Nick with in international illustrative adds-on you of of but even you mentioned, pretty aviation, narrow a margin. how question, operate.

for up startup more? kind it initiative or decent little just a that So is a is base looking of a bit

equal the and U.S. $XXX,XXX Well, look business in industries, we our international This isn't not business reasonable it's aviation it. not comparison. to That's doubled it is critical XXX. like fully but to a

business I that think, generally to So bring aviation up. broad is enough sort total of in aviation

the figure. to can So importance. credit our Where is a I say the good we're mean, a getting. guess go it's tools, I All I business. it's quality of

the remember, we customers. about customized gangbusters got expanding that I and was we're last has great and quarters in were a talked more got us, things one in capacity for kits. this Europe, it, several and on in we are Now that’s think, more leaning It of kits industrial customized I done the that. we've on popularity banging those is

fact, the year and international one it. investments to part that's our at kits In next and we're expand is capacity customize looking of aviation of

Great. Thank you.

to closing Now remarks. like Verbsky back I any would call for turn Sara the additional or to

A us for will Thank shortly all available this you replay of snapon.com. be joining on call today.

your As Good in always, appreciate interest day. Snap-On. we

participation. Ladies for and concludes you thank call. today's your We this gentlemen,

disconnect. now may You