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Snap-on Reports Continued Higher Sales From U.S. Van Network

Snap-on Inc. was able to record higher net sales of $737.90 million in the second quarter of 2012, despite continued persistent headwinds out of Europe. Sales were up 1.5 percent year-over-year. Excluding some $20.80 million in unfavorable foreign currency translation, organic sales increased 4.5 percent.

Net income was down 2.1 percent to $76.40 million due, in part, to higher restructuring costs.

Continued higher sales in the United States paved the way for the Snap-on Tools Group to report $325 million in segment sales. This was up 8.7 percent over the second quarter of 2011 and up 10 percent excluding currency.

Segment operating earnings fell 3.7 percent to $44.50 million as the Tools Group was hit with $6.90 million in restructuring costs, largely for a pension plan settlement related to a 2011 facility closure. As a percentage of sales, operating earnings decreased 180 basis points from 15.5 percent to 13.7 percent. Without the charge, margin for the 2012 second quarter would have improved to 15.8 percent.

Snap-on Repair Systems & Information Group sales fell 3 percent to $227.40 million. Excluding currency, segment sales would have been up a scant 0.2 percent as high single-digit sales gains in diagnostics and Mitchell 1 repair information productions was partially offset by reduced undercar equipment sales in Europe, as well as a low single-digit decline in sales to OEM dealerships.

Segment operating earnings rose 6.5 percent to $52.20 million, and operating margin increased from 20.9 percent to 23 percent on a year-over-year basis. Management attributed the uptick to high single-digit growth in the higher-margin businesses.

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