KENOSHA, Wis., April 20, 2017 -- Snap-on Incorporated (NYSE: SNA), a leading global innovator, manufacturer and marketer of tools, equipment, diagnostics, repair information and systems solutions for professional users performing critical tasks, today announced operating results for the first quarter of 2017.
Net sales of $887.1 million increased $52.9 million, or 6.3%, from 2016 levels, reflecting a $33.4 million, or 4.1%, organic sales gain and $29.1 million of acquisition-related sales, partially offset by $9.6 million of unfavorable foreign currency translation. (See “Non-GAAP Measures” below for a definition of, and further explanation about, organic sales.)
Operating earnings before financial services of $169.5 million improved 50 basis points to 19.1% of sales as compared to $155.4 million, or 18.6% of sales, last year.
Financial services revenue of $76.8 million increased $10.5 million from 2016 levels; financial services operating earnings of $52.5 million increased $5.5 million.
Consolidated operating earnings of $222.0 million improved 50 basis points to 23.0% of revenues (net sales plus financial services revenue) as compared to $202.4 million, or 22.5% of revenues, last year.
The first quarter effective income tax rate was 30.7% in 2017 and 31.0% in 2016.
Net earnings of $141.6 million, or $2.39 per diluted share, compared to net earnings of $128.3 million, or $2.16 per diluted share, a year ago.
“We’re encouraged by our first quarter results,” said Nick Pinchuk, Snap-on chairman and chief executive officer. “Net sales growth of 6.3%, including an organic sales increase of 4.1%, coupled with a 10.6% rise in diluted earnings per share, represent a positive start to 2017. We believe these results once again confirm Snap-on’s unique capabilities in providing valued productivity solutions to a growing range of professional customers performing critical tasks in workplaces of consequence. At the same time, the improvement in operating margin before financial services further demonstrates our ability to realize ongoing benefits from our Snap-on Value Creation Processes. Finally, this continued progress along our defined runways for both coherent growth and operating improvement would not be possible without the dedication and capability so evident across Snap-on. I thank our franchisees and associates worldwide for their significant contributions and extraordinary effort.”
A Message from Nicholas T. Pinchuk
Chairman and Chief Executive Officer,
On Tuesday of this week, Snap-on hosted President Donald J. Trump and other members of his Administration. We view his visit as an encouraging development in highlighting the essential nature of American manufacturing to our nation’s future.
Since our founding, Snap-on has been a manufacturer dedicated to making work easier for serious professionals performing the most critical tasks across a range of industries from auto repair to natural resources to aerospace. It’s always an honor when our contributions to society are recognized – especially by the President of the United States. I’m particularly happy to share this great moment for our company with our associates, our franchisees and our customers.
The capability of the American middle class to make things and keep them running has been at the base of our nation’s strength since its founding. From our perspective, we believe the President’s visit emphasizes the need to nurture such manufacturing strength. We are today in a global competition for jobs. And, the best way to make America successful in this environment is to arm our people with the technical capabilities that enable them to win that global contest for prosperity.
The upskilling of the American workforce is the seminal issue of our time. We must refocus on technical education, restore our respect for the dignity of work, and celebrate technical jobs not as the consolation prize of our society, but as what they really are – a national calling essential to our ongoing prosperity.
Snap-on knows firsthand the importance of American manufacturing. We’re proud of our 10 manufacturing facilities located in 10 states from coast to coast and of the 6,700 hard-working Americans from all walks of life and origins that we employ at Snap-on. It’s the contributions of that committed team, enabled by their capabilities and varied experiences, that make Snap-on what it is today.
It’s encouraging to know that our elected officials at the highest levels of government recognize the importance of American manufacturing and American workers and have chosen Snap-on to highlight this vital focus. We believe this is not only an honor to our company, but is also a welcome step in reenergizing the traditional American respect for the dignity of work.
I want to thank all of our associates and franchisees for the dedication, integrity, and hard work you bring to Snap-on each and every day. Without your commitment and contribution, such recognition would not be possible.
Nicholas T. Pinchuk
Chairman and Chief Executive Officer
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