Snap-on (SNA) 22 Apr 212021 Q1 Earnings call transcript

Good day and welcome to the Snap-on Incorporated First Quarter 2021 Results Conference Call. Today's call is being recorded. At this time, I would like to turn the conference over to Sara Verbsky, Vice President, Investor Relations. Please go ahead.

Thank you, Nick, and good morning, everyone. us detailed review issued in morning. joining results first 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

Good morning, Sara. everybody. Thanks,

while pandemic. firm our give continue the are covering and perspective by a review to After our with you midst our first standing our the environment, quarter in I'll accommodating along they the headwinds As of usual, along I'll start more XXX-year progress, our and and into call it Aldo in on they're we're of period about position results, the on made virus for that of markets business-to-business, believe a periods overcoming my first results, positive We from quarter And way, on detailed confirmation all encouraging, highlights to also trajectory still the means. of ever the financials. and, believe further before. all better means variations will getting we're than ability of us move what a macroeconomic clear growth is better Snap-on's even we'll stronger it's We once our speak improvement. both runways it of its dealing advancing and more for

Our reported sales. sales of in the our processes. straight, billion XX.X% foreign gains XX up level quarter sales and of million day we creation from OpCo exchange as growth was that The safety improvement from OpCo for XX.X% related all of rapid ongoing there XX.X our being included of innovation, was. pre-pandemic levels quarter straight use were up or drive operating of year, the restructuring They adjusted customer or XXXX X.X to up combine last XX.X% which income X million XXX.X continuous RCI. progress, XX.X% charges. margin million operating quality, and was connection, restructuring. above progress every group. a favorable from and including Organic third was XX.X of value in contributions every $X.XXX Strap-on XX.X%, It's million acquisition principles our million

of and we extraordinary as XX.X% point would as basis And and million delinquencies the the call points financial XXX in down operating operating of up test results a combined what commercial a during of even basis adjusted. pandemic of a income increased with For proportion. a reported improvement trial XX.X% were services, consolidated that XX.X OpCo midst stress XXX for margin

grew EPS in XXX EPS and XX.X% say entered that now restructuring we our up million results XX.X%. I we reflects margin X.X% and or favorable grew absorbing it when for against still economic virus, First And earlier a was sales adjusted XXX.X again. OpCo gain operating And The before $X.XX as related year's impacts, XX past that. stronger achieved XX.X period. XX.X% to all believe last and currency million Versus million level from of We than million the acquisition also was XX of XXXX the acquisition a to it settlement point so points Snap-on's testify unfavorable the up weathering. was said XX.X them or Quarter charges that exploding gain. I'll currency that great and foreign COVID. before XXXX first from points let's the XXXX, a when just quarter do XXXX while our the XX believe that we basis sales, quarter XX.X% in legal XXXX that, $XX compare especially of

they auto positive COVID strong their shock markets, resilient repair the of market. won't people as pivot virus driving know the shocked accommodate the some But the learned spike. again our quite from still shared regarding - are vehicle repair of and And with be technicians transportation. is are a vigilance. of to are it's remains to depths the future moving activities know to robust. And environment have mobility by and they a They're individual quite psychological Now technicians There's they've weathered and rolling. air resilient, recovery. to the They

You is new and it, and shop maintenance Demand auto managers. dealership are written is still repair auto you on our it numbers. there double-digit are but in you across voices, There hear clearly is warranty franchisees signs and the and attenuated. can can cars high owners rising. repair, Also for it hear can that see business our

putting and a to stronger with TRITON-DXX positioned take there So gain, Dealer-FX, product deeper we're acquisitions like and us advantage into is at change. the right broader our a providing and view new us a place gradual with dealerships the line vehicle before, as like the puts of innovations repair right trends, thing new evolving technologies ever and clearer Dealer-FX future than us and time platforms. at diagnostics

in and let's the our of where industries, have the They about overcome by all aviation, did showed industries, Also quarter C&I, accommodate the solid to in the some rules geographies, in freeze have some countries turbulence operations critical troubled the across where like business see and Nordic in are most and consequence. Southeast that places garage slower combined been trend, quarter And and duty Snap-on and in they increases Asia. virus. Italy, oil natural in of challenged SNA these solving critical the like double-digit Region the in geographies that key a February international virus, gas, of heavy growth, out of continuing digits in recovering. but headwinds, to in India and we most been tasks fleet. impact to Finally, despite the the the France, of the as and results education, that C&I from improvement the number impacted customers This is growth Despite including in another our well talk with double areas significant like Germany, recover, They're operates variation, up resources. broad Spain, like division, with and continuing Asia strength Japan. Pacific of Texas, Europe, sectors China in

growth, with is year leveraging progress repair of model, representing the runways and of increasing and clear recognized played in resilience and describe work enhancing deploying opportunity, repair industries brand, So the B hallmark overall improving to overall, clear and that's broadening And critical as of product ago the C&I the managers, throes the there's is shop markets or network, our coupled emerging our About entered the markets our and the the recovery. line, a for Snap-on a along expanding extended auto virus, understanding and of shock. we how our related projecting markets, our of I out. it that building van owners strength we even in believe strengthening people, our businesses, wielding the we pandemic

You the can it see results. in

over of operating XX.X of income million compared in basis points, of adjusted as increase XX% unfavorable rise and restructuring. and the on currency XX.X of Organic industries first including last the increase over XX% to basis So From let's digit in adjusted as XXXX, foreign mid-single XXX an XXX C&I XX.X% those up discuss XX.X volume margin million of million translation, to registered a reported a on That the means represents C&I compared X.X%. an and perspective, earnings basis, were XX.X% to European our acquisition sales business including related led sales, rose a and group million digit reported as X.X way. the operating Quarter year. critical and X.X in million hand of adjusted. now million million was tool all growth turn Double X.X increase rise an X.X included which adjusted In of and results. and favorable of currency segments the

includes with were or million compared for of million organic pandemic stick measuring acquisitions Once up and the improvement. XXXX, when again currency. that favorable Now, XX C&I free million and sales X.X foreign sequential demonstrated X.X% gain, X.X% X

pre-pandemic remember If in uncertainty, those getting want closer one we the and isn't is we at it didn't and keep it's the numbers, closer it and gone they they're I virus Despite that now and things above you still go think C&I levels. back and XXXX look level. of and to above ongoing was bearing the have

sweet to That's we extending C&I part industries. committed As of spot. the remain trend, in critical the

That and variable and speed torque greater adaptable they're and over the newest ratio. to also they It's managed XXX torque to fitted reduces as expanding And rugged power, tight sustained precise strengthening of technician easier. specially volt in inches applications working So that make break-away power at brushless higher needs XXXX torquing of and advanced trigger spaces, bolt position CTXXXX our temperature any arise. no work all a power is confirmed helps of critical lumen when of offers attempt capture example technicians that in important. opportunities family, work to environments. enabling delivering forward a The impact feet The new is those to drive our durability lineup X feet working great our we'll durability, control pound headlight rise our speed pound selections innovative aimed intent MonsterLithium XXX motor XX XXXX of products quarters. and wrench, dark developed keep and the means reverse. It to member XXX with in features weight design three control. One

work strong close amp Just the what's demand, this customization And by and consistent tool and the the XXvolt efficient and less $X comes leave management it's already translates our again, is five environment. six space. battery run system, more expanding days the task, not comes had ct to position overall headwinds The think, across part continuing XXXX I twin more. of progress fit product SNA and without extremely an three of C&I, uncertainty size hit into don't It's to Well tool. Double of digit that sequential best small - products. against to inches of a length sales this is for in Europe. want C&I quarter compact the work million progress hours Europe in feat. one charging of of will all so time, the overall improvement mentioning that's all needs a jobs. the growth is which difficult no this the or tightest these and COVID easy output I driving Brexit, only the and the ensures extended those And for and day. with needed great

XXX Well X.X and year's and or with compared million of up XXX.X franchisees results We XX.X of to day, is its Yes, compared responding million pre-pandemic The to XXX.X the And Now XX.X% its enabling favorable up brands XXXX, the margin margin organic was million basis XX.X%. currency onto it. gain, increasing grew both sales operating and million XX.X the and do was favorable digit gain. including tools XX.X based metrics, distance. and and up translation never further currency challenges including for fortifying financial the in a group enthusiasm attended that growth at clearly interactions group, we there's our with the million over XX.X% strong great a been metrics, organic stronger. XXXX. brand, XXX opportunity its growth I we double show monitor in international kickoff million X.X say our our we're product It continuing franchisee tools the points, in US enhancing XX% operations, XX.X And pre-virus that into this they a And the year closely. physical basis this zoomed group brimming tools the or past operating the points XX.X% of sales believe this runway million, advantage, franchise. Again van that realizing this some channel quarter they commitment like at were country. in meeting network indicators those several coherent have to held franchisees Franchise direct the myself a across they evidence the potential so the parties orders, believe was affair. and optimism. and our favorable. January's events all remain represents a watch on visible with

franchisees, line, and an reaching that's Snap-on connection Offering problems, solving new delivering pumped, established just Our are marked quarter, sometimes tools for a innovation. on higher. clearly quarter products easier confident tools all improvement and work also productivity strong and group professionals making The entrepreneurs advantage customer with was The us. value creation, gains. but group an

KERNXXX, wide capacity is in in Series on a shops the work. footprint offer We changing Cab, observing We're these an add Roll extra greater day. drawers, the the every of shop XX Bank One with Single watch We making of standard All configured such X-Drawer basis. of limited born space. the and flexibility those are inch work everyday out EPIQ entirely shops our and products. most

inches like drawers are paired made Algona, cab already storage. team tight just KERNXXX media, epic wide last unit. of very plant and styling uninterrupted We of that they're over clever capacity and mobility storage the with capacity selling cubic harnessing a with been of right. and box operations. month and capacity, saying doesn't full local first rigid being a on working than and a more provides and that's RCI in franchisees improving greatly space. saw there a It's the proud franchisees I spaces two of and high some while right Our them. styling me enhancing That's change. a also the of spent XXXX roll feature a it's capacity some strength, are located To It complement XX,XXX training, quarters The casters the social clear large franchisees Iowa But comes stability. The the important van box, innovation it low time two seem corners and industry. swivel for calling several product of pounds is hit extra of expand much to

gangbusters any it don't need for clearly paid off, in our can capacity you group. is that's the So three selling straight them. tools up, about and I see say more quarters to

ears foreign of growth for double XX.X precision million be new stabilization. independent like especially models automatic We safety. was it really keep rework Snap-on's X.X% growth led quarter million organic undercar to sales currency. million group what's X.X of single broad of Sensors safe, let's of million X.X% newly make vehicle is features considerably dealerships, information aids faulty ADAS a across acquisitions X.X are lane rose rise, increased digit But good not departure with the Now calibration Undercar across they from earnings OEM a a coherent vary passive or on RS&I, calibrations X.X foreign line included digits. systems cameras for double shops our vehicle it's active diagnostics of to that and mid grew ADAS innovative Advanced varying XXXX, get quarter restructuring X.X XX.X equipment can acquisitions speak music organic products, assistance digits million working gains which the in our collision advancing RSI's was periodic by calibrations passengers sales you first million, currency in focused the Tru-Point welcome and potential board. with things based, about unfavorable equipment and growing the unfavorable the digit presence recalibration, warnings, coming parking and the they're sure but business and repair rise was single crosswind and at require effects with runway and leads and RS&I or back powerful system. in if and and Operating in avoidance, are great. X.X XX with low These the and million garage makes delivering and complicated. to and Compared from expanding see to million X% organic driver products. costs. XXXX including gain, or growing clearly introduced including like turn products

formed prominent So one technology our the performed regularities And that new models components so and in and the for TRITON best It's minimal is it sensors and John diagnostic diagnostics shop capabilities compensates capable OEM physically of our use. to it belt so scan, new inch shops. the display, is the in efficient. aftermarket performance requires fast, fix, d is OEM suspect the to hand also training. devils that two vehicle class XX full product owners launch you And ultra easy in geared for are positive. in calibration of quarter, scope touchscreen. Triton so of The calibration and boot touch and that evident more compliance. independent guiding helped of was the offering with it's procedure has the second crosshairs aligned a XX technician and It's garages of and the The makes appropriately. with - RS&I a an seen that this both code Bean diagnostics X.X events a the does even sure and testing our was a new over vehicle up guided rooted difficult that that repair It database the make in very, there's common of clearly accurate proprietary billion most time-consuming Fast-Track and But ADAS want activity. for and correctly, vehicle Tru-Point calibration repairs, business making and floor diagnosis a documenting may system replace. feature the powerful problems. unusual It's to sure and multitude new a loaded quick that's Diagnostics regularly effective It is in solution our Progress alignment automated only enables and big XXX information for those in quick efficient managers of today. and to in of Intelligent And right Snap-on want very ensuring is our you problem.

technician what the Just and needs. senior capable

effort off working we've unit, our efficiently the that February it's Now, a guided the considerable of a prominent of TTITON. Each with sales as the meetings. were I've paying franchisees sell franchisees received presentations said before, to video help complex and today training spent hands-on our facilitating tools networks of demonstration part by

a benefits unit in be powerful that been of has great tool instructions, immediately worked. could new The it technician the launch of demo showcase physically a and Following the initial put a then to hands success. our

TRITON-DXX the franchisees are complex now tool and diagnostic unit are Our selling new calling best ever. the comfortable many and

Finally, RS&I got quarter. the nice a boost in

new the repair often about It OEM to - quite dealerships essential programs and equipment shop plays case tools new We're vehicle the the supporting by electric positive As is by RS&I's our the helped owners significant launches. future vehicle managers and by tech new evolves. some strength. as technologies industry and

continued progress. the So and highlights of the that's quarter, strong

RS&I than levels, much stronger when sequential that prompt, strong an and more solid, Snap-on C&I, Our straight $X.XX quarter. organic entered. important. the we sequential big a exceeding most emerged tools Most margin rise period from rising important, EPS OpCo It XX.X%, advancement, the encouraging turbulence operating group has testimony and XX.X%, was third sales pre-pandemic improvement,

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

Nick. Thanks

on operating X. Our is summarized results consolidated Slide

acquisition with to The sales financial $X.XXX being of $XX.X reflecting a and baseline. period quarter of be billion which increased again, translation. virus. may the Net to performance, compared related we when XXXX year foreign The experienced million XXXX, currency particularly shock first a serve million more robust from exhibited of of organic in sales of results the sales XX.X% meaningful as last first XX.X% time favorable the quarter quarter's also levels, pre-pandemic XXXX quarter $XX.X favorably initial the of compared

RCI compared The $XXX.X XX.X% points XX the currency million XX.X% effects. points of actions, $XX.X basis basis points quarter included basis Additionally, basis included offset of XX of last to expenses in restructuring of the higher of of XX.X% organic increased a services sales the period initiatives including higher million foreign benefit margin by costs. the XXX compared to Operating cost from gross higher expenses XX.X% related of partially gross first from XXXX, which XX impact company's Consolidated from The of sales cost reflect $XXX.X reflecting the improvements financial sales earnings volumes related of foreign points margin currency and a of net were and by of favorable from an million contributions XX.X% sales XXXX, year, sales offset containment million, which unfavorable to $XXX.X in before X.X% improved net acquisition translation gain, Operating year-over-year and XX.X% last stock-based restructuring as in acquisitions. operating from percentage costs. year, improvement. from million points primarily basis XX $XX.X

earnings of margin before million of XXX improved included $XX.X points earnings last XXXX, operating $XX.X basis the to XX.X% points Financial year, a operating of of from which year, basis sales, XX for last revenues As due in compared year's $XXX.X by increased million first included services losses. as lower costs. $X.X a while restructuring provisions million higher net financial XXXX of quarter principally services year. $XX.X XX.X% percentage of the million increased Last to resulting last million $XXX.X levels, from the as COVID-XX. billion $X.X from from million for Consolidated XX% higher reserves charge well operating uncertainty for revenue provisions caused credit economic

revenues, the XX.X% margin operating percentage to of which included a compared in from XX.X% restructuring earnings basis As XXXX, XX points of costs.

basis year. XXX from increased XXXX in margin earnings points operating costs restructuring the Excluding last

effective restructuring increase the related to XX tax prior first year, charges. quarter a included is XX.X% point XX.X% compared which quarter's year last to rate income Our basis

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

per diluted million $X from increase XXXX net a and representing of share. included earnings in restructuring diluted share XX.X% XXXX or $X.XX Additionally, charges $X.XX per a or a share Net million $X.X or earnings tax, included benefit net settlement. of per in XXXX in after legal $X.XX from million tax after share earnings $XX.X per diluted increased levels earnings

and per items, from share of XXX these in Excluding XXXX increased XX.X% XXXX diluted levels. XXXX, earnings from XX.X%

includes operations, double our a Now business growth markets. million customers sales well Pacific with Starting from were to European digit Slide gain tools million group increase million translation. across segment's gain, a based of in the increases the results. Improvements hand organic $XXX.X critical XX.X% widely organic $X.X The industries. emerging gain related sales and reflecting mid in let's sales as the in Europe C&I well segment turn of on of last year, $XXX.X acquisition to as and X, as X.X% million $X.X favorable foreign digit year-over-year most as in seen sales Asia in single sales currency

Additionally, critical technical and education. heavy sales aviation, industries, were gains strong duty in achieved within

to pre-pandemic in resources experienced natural from the quarter levels. the of lag but improved those continue in fourth declines sales sector XXXX, year-over-year While

XXX a sales As which XX.X% restructuring basis translation. included further improved million first in Margin acquisition and of million comparison, of Gross the XXXX charges. from representing XXX organic X.X% period sales XX.X% in from of points favorable basis increased points $X.X XXXX, gain, X.X% $X from foreign related currency a of sales quarter levels, the net

offset savings as of primarily partially the sales currency a operating $XX.X including of a actions. to expenses lower $X.X million last from year, year, of XX.X% of of XX% as to currency Operating result margin segment improved the Aside earnings cost from as containment year to compared unfavorable resulting unfavorable were restructuring $XX.X the a by higher contributions basis of percentage effects, million points million, improvements volumes XX last volumes sales for of XXX effects. from the and foreign the basis from cost, compared foreign Operating ago. C&I points XX.X% higher compared

US $X.X of sales Slide reflecting XX.X% tools in volumes gain the to initiatives. sales organic million organic improved The the higher XXX million, benefits $XXX.X RCI due basis sales Operating from now XXXX organic volumes the sales million in in increased last sales Snap-on gains a XX.X% a year, to favorable currency XX% and a sales million and foreign quarter digit of group gain, and translation. reflects currency in favorable $XXX.X first XX.X% million X, a XX.X% expenses XXXX, quarter Margin of period higher sales from sales last as improved to from of and from in our Net points year, XX.X%, due increased year. percentage the both primarily primarily $XXX.X The XX.X% increased of of Turning for action. operations. double points. to XX.X% and compared savings $XX.X last XXX the increase translation. from Gross international operating an of in compared from year million reflecting Operating foreign cost basis of earnings of tools the the XX.X% group million, $XX.X margin Snap-on to a ago containment $X.X

Sales undercar mid related The of Slide RS&I on equipment, and $X diagnostic owners million acquisition shop single reflecting sales double-digit a products million of million foreign sales of gain a a information to managers currency ago, and sales $XXX.X $X.X organic gain and Turning X.X% repair in digit compared low translation. single of million with to digit increases increase includes the repair OEM and the dealerships. organic sales and group independent shown activity to gain, X. and favorable of $XXX.X year

effects. Margin XXXX XX% As and margin and currency X% currency lower Gross due compared of from organic a acquisition gain, of basis sales businesses sales reflecting to favorable foreign translation. XX.X% foreign X.X% XX of related points the sales $X.X levels, last and declined million unfavorable gross to net primarily impact increased $X.X of year, million sales of higher

facilitation a of percentage average. is segments which the of which sales had a the reminder a rate included XX basis healthy basis As quarter XX.X% restructuring undercar activity, have expenses related Operating as equipment costs. XX.X% as margin gross XX of increases points typically year, points as RS&I program both improved sales well in from that below last

of the points million than operating the restructuring of year million year. acquisitions. effects Operating the ago. The for expenses of were basis to earnings more from to $XX.X compared volumes XX XX.X% operating higher of group Excluding last sales a compared offset $XX.X XX.X% RS&I benefits related to by margin

lower million first credit Slide loan compared Financial from lower $X.X financial from mentioned XXXX primarily $XX.X services offs provisions and $X.X services charge. of quarter decreased XX, absence of revenue operating million compared of levels, of million year-over-year turning due to Now million the charge year. XXXX in to last resulting services expenses of to the million $XX.X to from previously losses, XXXX. Financial to $XX.X million million, net million, earnings $X.X for $XX.X $XX.X

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

support $X.X levels, the receivables. first of $XXX.X increase in in loans Total increased business XXXX X.X% originations X.X% quarter and As the quarter, remained million million loan these of or the originations operating of end outstanding. first approximately of a finance from million reflecting $XX

contract of X.X%. receivables originations were up While

billion $X.X US operation. balance XX, receivables, includes Slide $X.X our our of approximately billion to gross financing end including from Moving sheet quarter

the quarter X.X% an million financial States the last increase points basis basis Our in down United extended portfolio XX down plus is for primarily quarter, rate to from XX in first $XX.X XX delinquency worldwide decreased The day net the we of pattern as year collections. first customarily the by and services a usually reflects points credit gross of this the compared holiday with results We in typical peaking followed the in in fourth discretionary XXXX. quarter in fourth compete the to year, believe spending. where technicians' related decline quarter, the later first delinquency seasonal that quarter, increases the due

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

of Slide and quarter XXXX inventory. primarily by of cash to decrease million proceeds earnings. Net used $XX.X the in liabilities investing million higher in earnings for provided the Net comparable million. of included net a by from million net $XX.X $XX.X activities net and acquisition of million operating turning to of financing of and Dealer-FX dividends changes XXX,XXX XXX% $XXX.X offset partially by Free by cash activities million. and stock reflecting million the of our included XX, offset $XXX for flow the $XX quarter $XXX.X under operating including repurchase million common cash of million purchase million $XXX.X repurchase assets the programs, in partially increased used Now by receivables expenditures finance in of levels, capital cash XX.X million from shares million, of option existing $XXX.X cash of share net during $XXX collections activities of stock $XXX.X was relation plans and

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

million million XXXX XX, XXXX. days end receivable year to and month from inventory from to outstanding to on sales Inventories $XX.X XXXX year XX $XX.X end. Days X.X turned trailing trade year decreased increased of XX year compared at end. other X.X XX XXXX end to and a Turning compared Slide days a basis accounts

of XXXX. end compared cash to quarter million, Our million end $XXX.X year position at $XXX.X

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

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

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

psychological volume world. with XXXX. continuing up and XXXX XXXX. quarter upward XX.X%. up Thanks through straight OI versus upward still even and Aldo. CNI, sales XXXX exceeding in the across but levels to the another and markets group, lines margin XX.X% encouraging the margins first the and product RS&I attenuated, that's XX.X% year-over-year third sequential an quarter wide third the of from nicely, trajectory, in of straight growth sales XX.X% all the period, the tools strong. recovery, XX% up ongoing And a on of all our resilient way OI of And Well, then versus clear geographies, margins up organically of achievement, results quarter, shock pre-pandemic

stress the and the both world down, abundant park do and technologies Finally, And the financial the a than We when storm. has as and 'XX. opportunity with up together further away today XX.X% sales midst recedes acquisition EPS that entered XXXX. the X.X% stronger rise services shared they versus of cities and we greatest the came impacts and XXXX OI we from we from COVID the despite significantly as shifts Snap-on away unfavorable vehicle rock all rising versus new XX.X% believe $X.XX car complex. more virus, the and versus up profits margin the substantial in XXXX solid, test and are organically believe the the currency make transportation that Snap-on and delinquencies

the beyond. to and of and product, realize in Our advantages throughout And even those a XXXX greater. our strengths, brand opportunities position trajectory people are we're positive wield and continue favorable

your to difference I'll and Before work made speak a and operator, to our directly has associates. are I the listening. know to want that call to I over in this weathering turn the our Many our you company society. to franchisees

my world intact, our its keeping and in efforts critical your admiration. you mobility For have

contribution for you For your my both first turbulent And your my progress our congratulations. this have in you to thanks. times, to quarter, in team our have smooth and dedication unfailing

Now the turn to Operator? the call operator. we'll over

Research. comes with ahead, And sir. question Instructions] Thank Barrington go Prestopino Please you. our [Operator from first Gary

everyone. good morning, Hey,

morning Gary, Good

now. this lot it's group was we a since I decade, seen Nick, you haven't really storage. don't was earlier or cite now with the storage saw, here of metrics if what think of really dealing probably mean, different questions growth last I tool of of seeing, things And part you on what in Couple that last couple issues kind you're same tools could of growth the last in four period the up that earlier rubbing an are quarters tool maybe when especially three over versus decade. the

these product a And capabilities point that the worked had product hard there's storage And much of paying We we a the Yeah, them media tool much we introduced I before this in on and training quarters and the of the can growth. get certainly thing Techno's, it was Rock vans, think in tools franchisees. hit couple kind because focused or in the things, really a the view is isn't social more introduced first - this when focused This franchisees this process We harness less to of a rise, was Cabs really XXXX. their for really maybe even showing we time particular N' we it. a that that's expanding XX%. more from down, thing, It's broader to pitch - focus and which I agnostic off. worked elevator the one, of RCI the we're better, we think had Roll COVID, a line. this on that of better - of or rooted a is we more on the

for thing I foam. popular. really applications The so and them we products, other we of have are tools. pretty a products other profitable, the that not this the to there'd the hand appeal. And much at on mean situation. same you We the is sales them. diagnostics. level. in we're tools, talk the recovery, that's the think good hand around I van didn't only off at wildly the selling in kits like be condition, It's terms We to together becoming individual then thing, the think And in but van, say you baffled popular. they're putting there's some wouldn't lot the you set aimed could year quarter, things They're broad then package the storage same tools, is same particularly off recovery van The could think, problem, exceeded of and but that things that. call. think up as also And whole was over got final particular so we're I driving and of particular a about this tool They're going sockets up. the recovery that this sales people that Not so - in a the van happening selling year might last look, sales is,

you to might and stimulus way. into We helping to So you're a say don't this, could be the at seems stimulus stimulus you in and know, look this going us always be people a talking technicians it's practice when bank is think product regional because Australia accounts based there. about or business, thing up the and way, the it paying off international debt. and we it's other are process stimulus and a UK, is, And Canada the by

one. product? us some much base couple of that Right, versus whitespace of the of you tell their it's amount in in across on terms guess, service? a that's give you Dealer-FX, how can of terms you this just What I Can actually there for of there okay, And is good. questions then installed us dealerships idea out this dealerships

be couple I Yeah, tend of to concentrated to in maybe - in they're would percentage but say OEMs. tend double dealerships, a of the digit they in be they the

- in rolling a COVID this acquisition, And in go, Dealer-FX, they're that I sort tremendous whitespace we the so there's that was see updated their now of opportunity. to about this out about but think of hit. grow that the system just lot new thing ready And talked We to situation. the other

them. things early now we've are It's again, with get So only full force. when at But we these owned months. couple they the a sight them acquired the chance days, apple we for knew

my right we're I on, the the confident comments. still said like but time in getting we're we're So place right pretty in at

Are they the - to booked be their going segment? RS&I in are revenues

Yeah, they're going be to RS&I. in

RS&I? In

view. point of us for from the going of Yeah, net them a they're to as like because strategic advanced see sort dealers, warning sell to we

coming to the North. across we old - doing over the when figured to do bombers what used were the line, remember over I You sure make be the Canada, Russia they're out goal

the So this is of thing. same kind

Could maybe EV little market. for just Okay elaborate also some and mentioned bit then you new that? you tools a the on

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really set of call or business business. to, one tools. OEMs hey, We is technologies in the a rooted that technology. We the to say, roll out, have put the come people, new new together When EQS a of

supports a one we provide XX unit vehicle in new that certain we toolset have these, that Now of out. a coming that's

new So I - another and things yet another for one so mean, there's and the of one vehicle. that's, that's

And to and what that other commission have the that ready anticipate out are didn't So they to the kinds And roll that things with the new as things things. dealerships to OEMs shows match kinds tools Those going and we to of launched then forward. we deal up tools. other of it. might be facilitate of a even everybody vehicles, these people set figures out happen

pretty that that's we disconnect voltages and be so screwdrivers and - electric sockets and high electrics insulating them and glass to for against safely and tools that of infused nylon with set thing. tools call safely standard against approved a kits and vehicle the allows what pliers - use have We to technician kind to us that are some of

take to to these you've for tools time. things calibration Okay out got are applicable of there, up I and some much that want don't just lastly would also market? I ADAS these the quick, real assume and too more EV

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much. so you Thank

Sure.

Glynn Thank Christopher ahead, you. from sir. go our Please question comes Oppenheimer. next And with

on - the Good Congratulations Thanks. morning.

morning. Good

about your tools coming out talked up questions follow-on in one EV new come new of platforms you and to picking answer kits as out elsewhere. Gary's So on and with

about visibility you curious just I'm visibility. your talked visibility. it extends that with And how Dealer-FX So with already the that underscores your pairs your copious into then how platforms? seeming the new group,

thing platforms. we the that visibility into is Well, new the have

dealers franchisees, day. every which the visit are We

with look have vehicles call more persnickety repair that The at a time associated no anticipated. the, arise would Dealer-FX that So the the the software. they I management tend problems is what to all shop one ever

of look aggregate okay, happening like they're a of what's an you of there. databases associated So kind having in with understand you they're problems having lot And a lot thing that. to problems of here, the at well, say, get and get difficulties this see to to kind

of So not observational much the things Those it's are thing help. so it's kinds that an a thing. computational

and drives So also what adds repair referring our shops We're to. our And they more days. shops, what that's to position. product age, end it just position afterwards, then which shops for the you're we in And independent non-peril in after a vehicles more up have is in in repair line. hours

proprietary vehicles when whether So you're to we dealerships bigger then call in smaller show probably first, on our them them talked difficult via about the or going via via this, roll technologies repair to to that software aftermarket, talking and to almost that the automated new And going problems, the That's XX,XXX Deale-FX just of that. more we're problems proprietary what we're roll databases as probably into records. going harder some electric XXX about foot the franchisees see on visibility that understand they're vehicles, to nuances see might maybe problems are I billion have that the then see. the generates predict they through

throughput newly sales represent maximized that of franchise of talked enhancements. lot bandwidth Great realization kind seen past you you've the availed of levels the and these few then addressable the SOT, a quarters the on market? channel into about the pretty Do

I don't Well, know. that

don't know can I know, go mean? I I that is high. that. they what know All You

asked approved, sort know I And on? his test. a about know, high. what tools. not the I of asked complaining. franchisee stress busy go too I'm says, don't selling market. me, We I We so about they're something He they know is him I what that like him had telling market now like You I mean? it's can and about a

capacity, he didn't He for asking have out more he's because units. didn't was more he there me now. So say

particular line. was of product So in a words, other he short

So he thought he could sell them more.

have upside. probably they working to expanding to when got in no want keep little this of more you'd Chris, because say kind on keep matter capabilities So okay, are, we a go you more where we think they situation, We'd have pounding. right. the But forward, you

further side equation? of to continue so on Right, the you feel have to runway you throughput the work

question. observe Sure. at is pinch work just a and What happens that. What reveals the happens is you - happening what's and on level that you one throughput certain points

I just customers seeing me, don't additions. that recall exceeded more years for you cash? last with seeing finance one - Great many are receivable paying collections

employed. I their more and be is they to and pocket, you their Chris, see what seem money in the to servicing technician think supplement buying They debt got needs. they're their tools base, Well,

way. it's people overview are in provided debt So an the earlier, I think a I pragmatic guess more just servicing

great, guys. thanks, Sounds

Sure.

our comes Junk Thank Luke ahead. with go And you. Please from Baird. question next

guys. morning, Good

Good morning.

Couple could I Looking saw of hoping but you question, just especially want help quarter, momentum the to first through level just absolute talk quarter. frame the a comps sequential you questions, to better the be first qualitatively Nick, about at new trends sales group, certainly? well, term the to understand daily the XXXX for in really tools the

they're, one we're period, almost they're the our third look, higher but third - if this you was of at things little seeing quarter I this. a think in higher is bit, look month always Yeah,

in roll Generally of what seemed said this we example, view have constant. we kind sales level were have view, and adjusted say. would The by surprised expect. the going expected. through so to any we month say, I first weren't quarter this of sort own we when would for of out quarter would We like, what's I of happen that So you quarter, for but about beginning have generally some we about our the in

what So I kind think see I - don't it's asking. that's we held attenuation, if you're quarter. think each strong of

that. It thanks for is,

don't Yeah, we Nick. see didn't - any attenuation. I

a as the then bigger seen times side. already and on respect take these especially a the the And we of with Dealer-FX well. shifts this around come of couple for say morning changes on ultimately a M&A? how impacting terms or could And it thinking months course, aftermarket. to should past, impacted and today, acquisition, thinking to electrification, ADAS Hoping six Okay filter you market of car while, picture just think they strategy through in organically that, for big expand around And the your up has that these investment more changes the instance, to question example? all are the in priorities new we've nine both the

the mean, the the sure. strikes change. more investment we come say, think about the we home, thing said Like so I said, love we've air can you it. as change, Look, to Well, house see yes. is call that we the I And like in friend on. our we and we earlier have can, changes and

technologies And just would vehicles, ourselves of positioning technologies, new at so new that car vanguard, on was about acquisition the forefront will, if Dealer-FX the at park. impinge not the the electric you but

we're that's So doing. what

to places follow But okay, that go in other revelations learn from no And that, The we'll so occur can we change. terms at mistake continue look do make we to about of, so needed. in that invest what how it. what's out. aging see in each vehicle what's years And people by needed. the that of you of change as think these the then things in, is roll When vehicle, couple rolls we are and a this

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learned On do This an way. odd them - through. need as just and because is particular tools they're these special configured in we to you went that vehicles, it

the this just so only more what's to EV, And happened which hopefully a before, It's at electric vehicle, of sell. new faster the see maybe gives we ourselves us version pace, basically, the technologies.

and them to so changes in try activities be those will more anticipate invest to then And enjoy. quickly, our

it leave I'll Good. there.

Okay.

King. question go Stember next our with Please take from we'll ahead. C.L. And Scott

and on the results morning, quarter. congrats strong the guys, Good in

you. Thank

Aldo, - we you're tools mechanics question, other else versus that - Obviously, about? organic you originations but or think seeing more know Is with buy this in need I some a answered might pretty that to there is the just the growth there. nuance have entirely there's basically because sales. delta big cash, more you something

there's A a couple of think I little things, bit.

in there's think I cash more the system.

not So anything, if a it's positive. that's that's probably probably probably - negative,

the I same at think that, is everywhere recovery your again, where still not completely the psychological stages country. you're in

ticket But So without still a people, extend I bit things big sells organically, them. future the more to having we that measured for power tools XX% that they of little speaking, opens still items to dig feel road the nuance. tools, compared I It's borrowing credit, that into when think when means up as tools, hand group deep capacity there's approach that think the opportunities broadly nature. down there's

we respect. of like in So the mix that kind

the - the seen in while. a and like we've first the RS&I, it in that car I care, time Got that a increase on mean, major was

if it repair driven? a of by driven miles And hearing is market car. I'm obviously, wondering, lot that miles of are demand? is on based So based Because you collision is driven - collision being the so, stronger about the what

the I ADAS but actually, repair aligners neural think was us would really what focuses there it's particular, was stuff really say on the of feature Look, That's collision not business. so undercar in equipment, Europe. I United drove States, - in stuff, big the the the in that network better change. this good not - Yeah. that for

turn a You're right. digits of equipment. a really was we welcome double That It change, the events that love. for really was

with like that about while. thing in talked associated a a haven't We equipment

back. on overhang the lower-margin to So a that's years. virus. part seems change recovery driven, part because curve on just a collision miles these I that we're door I undercar as the it's US. Like equipment mix now the some Europe complexity to back in think, of But the the start overhang in like see driven was autonomous The We're be it to in turn, came from business, shock that's features, other dead of starting therefore, the the seeing and come The vehicle important. It's based by said, RS&I. that autonomy, of just nail. looks

feeding Once And shock. expect, the went see, XX% now see would it inching levels pre-COVID year-over-year it's the though, TV, go as So home. look around to - back. that's turn and data BLS in back, according changes. that data time down it's according staying XX% to think we it's below this I you people that from you people people not in on surprising every you all - I

Got was was the it last and tools flushing it pretty way, it on everything group, tools the you up, I out heard said sounds and hand correctly? like just question led diagnostics if much but probably

Yeah. the tools led strong. Diagnostics tools was nice was Power way. Yes. everything hand pretty as was but Not much, up, well.

are ascended - this in smaller So ticket period. items were

positive. a they're little can more still our there's vigilance. RI You a kind how guys more sets see situation. But in an because air this word, vigilant the They're business, the the of are of little I - like use

the to area. tend focused on the they tool storage, smaller storage tool the even be So purchases in

say maybe them, pretty the good each a the satisfied thing. product up hand of lines, we're that to that each would with all the So not But had product was the quarter, each of top tools. - line pretty XX%, but I one

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

you. Okay, thank

And comes from with our Curtis sir. question America. next Thank go Please you. Nagle Bank ahead, of

Curt?

morning. Good much. guys. very Thanks Hey,

Good morning.

one mil but of Yeah, I is a persistently. XX good times know on this prices that only Good, bit, I are up steel inflation, how know XX, Just quick a said of so you pretty don't you? are so plenty COGS,

that increases on? in inputs elaborate to costs anything rising potential you of or price So would relating terms

in inflation can these can't got look, well, We - material Look right. Yeah. you, yes, see we've them, numbers.

got cocktail interesting you of the of balls all reduced got part this. businesses kind these, in of the are air. controlled thing our inflation costs, through And travel, balancing managers - general so is material you an And floating in the like

And going tools And some, April, one have They - another announced time, same just we're can so has increase, at yeah, group early so we price. price might we the April I they're but to announced the price also in got they - see out. think coming the up. increase going not

have think inflation, in that too. so you can for we and play we're we And visible the so price the price leader

control. might another in think see this they I said we this So us for some I to of going forward what forum we I under think stuff. that - is mean, where it's is this kind pay manage

enough. fair hear And education wasn't I I did then segment up that Okay, XQ? if in mistaken, was the

Yeah.

Yeah, what like sounds a happened that there? change. So

think I Well, look, - yeah.

is I think anticipating everybody schools. the

the schools students. Curt say I think are there are And big anticipate to of that the I factor, the back. schools then but - some would is starting return the

to facilitate. starting they're So

up selling business you're So to the education because is principally schools. the

so said in I he see that and to to a starting the there. technical a I also there, has up. given were schools view see and students starting college orientation sitting I and have it's to political then and just warm if of And we two-pronged And a the sell age, to his administration this students community I'd - bent, think think a day things reveal a in wife's community statement don't to college lot the We think see, and we particular he and I Biden in training. rolling

And in area of optimism the an a positive so think created might that I school. and view be

And levels. pretty think fact, the So critical above I got was to back changed in again pleased pre-COVID that industry - see It it. the the some. businesses we're dynamic

people don't that. same think We're to above I that the the time. levels. at And the want pre-COVID - way, miss by I we're bearing COVID

So quarter. to I been C&I that getting as event. incredibly was. an They've view think positive We flipped that going a been it. time that's - XXXX. closer above they where and This They've each little

the Good quarter. much. makes thanks guys Got right, it, sense. for luck very second All

next question with our Dave from Please you. Longbow Thank MacGregor comes And Research. ahead. go

results. everyone morning, yeah, morning, Yes. good congratulations - Nick. and Good Congratulations on the strong

Thanks.

between I guess originations I'm this first on the and question, struggling disparity really still sell-through.

sell-in. was with You equivalent had the indicated the sell-through

which the So let's XX%, X.X%, up originations sell-through up is call one - it the of

first it hold Well, bit little just was equal in the quarter sell-through It last a wait a Wait, minute. minute. a of The is absolute. year. better

comparing you to stuff bad start quarter. Last it as - year first to vans little was sell bit. in the you're things, as bollocks when a the sell-through those get So as wasn't

So we stop the is said? van I and on - the to there. in say just Understand about what general, - volume, but quarter. if volume van this generally as off talking the want to same come you I back But so volume the you're

for I Yeah. - as what this we using number want to quarter? a be sell-through should then

Well, it's roughly the same.

Same the as sell-in?

Right.

however given disparity kind that the I large want as of that a And all becomes given nature contract you are it's struggling up. It's And segments revolve it. but ticket. originations credits indicated nonetheless, just credits guess just around you I Okay. that extended well, also question obviously cut with the of I'm guess to bigger really generally the and

the a ticket big So just on was what is I guess us and for big ticket help just you understand basis? out can a question us break year-over-year

the weren't Well, weren't that in XX%, up what it they quarter. here's I'll up the but the you, tell big-ticket items like were in up nicely is -

they So were up -

Is it double digits?

the at in the weren't when that quarter, up were numbers, look they up. were They absolute they you situation. double but No. digits Again, reasonable in

with we're pleased So numbers. those

then the more items, you tool you closer lot the, put and while, look been tool And a for at a storage say, let's if going other storage, So things, the diagnostics to mix had on. has and there's side, carts let's that. big-ticket RA within

So with are cash. the franchisees flushed

finance That's factor. some So these you're seeing those franchisees the of items. really

that could Now that's really I you also - we're you could that going Dave, argue argue, - what's think on.

see could hard to also it's tell You this.

we're that capacity in for said just see got of to Aldo need future. pay as we great because the But borrowing things some stimulus of those you there out of borrowing. You getting kind as view instead could

this up. RA when for thing We good a is really love us. is So it

in Aldo April you'd X. bit price May that better. a is with about indicated on the I the that through because volumes wanted indicated a you offline I take I'll maybe just to announced - you'd you Well, about which think and quarter little Okay. ask and try increase, get math

combine may But You've the if got steel to some you for March. understanding experiencing extent can growing my of kind backlogs. on pre-buy you I be quantify can I'm which us you those that's under of franchisees the you're that. there's if wondering circumstances, what And just in for don't responsible - know or that around tool the to month just - is going communicated

missing that. I think you thoughts are about

I'm sorry?

that true. I we that's - don't don't think think

of the April. in goes out announcement all, First

don't back So or The these people programs kinds happens are buying the buying. people program. Generally, may be to even kickoff the I the kickoff what think of are in - things pre-buying. off

get of but get fundamentally like more, don't they a it. they're talking They have to are that. So keep don't this - so to can on them. I'm inventories franchisees bunch they they'd They off telling buying their me low stuff.

- pre-buy, the the So is that. idea this of I any think of didn't we see

saying X,XXX not I'm franchisees of are Now them. what,

when So them get not Dave. I can and you they're windshield generally, see can I ones get don't views. go opinions out. we have the on get different can - surveys see We hundred stock. different you probably different will that, But situation a

down flat that think we They're actually inventories not up. at or confident are In best. we're franchisees' fact,

So Really? -

first And back van sales exceeded sales you if to quarter to of look van. the the the off last year,

to would that there's that. the then coming stimulus issue is communicated have money and that would down my Yeah. be pipe given to franchisees there want on was in positioned that little a everybody and presumed understanding you that guys they And world franchise the backlog I I for the March, pre-buy surprising knows in that. find a

I'm the last a is And question - price on for to bit little just always down, guess. counterintuitive, then surprised to hear are So inventories flat on I slightly truck that elasticity me

they might not anyway, them. but could necessarily see necessarily, don't I that order, it have they way. But

Yeah, okay.

Right.

just talk you about Can -

wouldn't sale. a So we have What?

Right.

year what's some given nickel that elasticity price as vulnerable around about And least you to at consequence, expect alloy as higher over the play tools we're with some these increases product. I steel would expect prices? seeing given you think hand that storage your How talk guess, on and how - going pretty is balance of the the on pretty are right category raise increases do then price in can a of you you storage. And maybe I in big - tags But big now. to prices prices just out some on product it's Okay.

system. think to - Sure. the question, of everything through it is Dave? gets complex promotions be I Look, what, because almost a David, there's a lot know You floating

your so list what So just it's It's on. increases. promotions also and not the are price

or or that. never had problem, of We've otherwise seen terms never a we've So tool getting storage inflation. in matching

what history. it's So complex is tell I you in a can And only cocktail.

You raise the list price.

You promotions. adjust your

drop in those promotions, dizzying You And end have matching a inflation. comes promotions. have array long-term the what the other It's you is of a of out things.

can't So macro And basis. hand it that do unless tools. generally, can you storage we do until that on and you a feel do you

these themselves Great. of reach. products purchasing I'm and and to capacity a their purchase the mechanics maybe finding focused more just bit little around power

You're now? not getting not that right that concerned - an about You're indication

and a inflation All right. being in problem this We was don't see that right there now period.

I don't So being problem see now. a mean thing the that is we

look, tools. Of the I the It's The on love I to think course, - But on priorities. of is seem things mechanics one this. can't it'd thing you to forever. whole buy their think go the top say

I these of difference. don't make kinds necessarily changes a that think

by a one affected say the to we but to - tell how last of out who's lot the this, be going to in be different Now would it. be I would commodities, across country the think think of I inflation play you I would

the terms and U.S. model, What for Great, versus in the quick was if two just - I ones. could, growth international of

About the same, it's the about same.

And, secondly, how changed of and year? trucks over what that now has percentage to year associates are

about It's XX% bit. the a to little in the same. It's It's range. XX% up

Okay. Thanks gentlemen. much, very

Sure.

time, remarks. this Verbsky, closing at session. concludes I turn for any And today's to would that additional you question-and-answer or to conference Ms. the back like

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

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