Kenosha, WI-based Snap-on Inc. saw its net income grow 16.6 percent to $82.80 million in the first quarter of 2013, despite continuing headwinds that are impacting specific areas of its business. This can be seen in the fact that net sales increased by only $6.50 million (or 0.9 percent) year-over-year, going from $735.20 million to $741.70 million.
Snap-on’s top-line results were positive because higher sales to OEM dealerships, increased sales of diagnostic and repair information products, and continued higher sales from the Snap-on Tools Group were able to offset lower sales to the military, as well as ongoing weakness in Europe.
Excluding $4.30 million in unfavorable foreign currency translation, organic sales would have grown 1.5 percent.
Snap-on Tools Group sales increased $10.70 million (or 3.4 percent) to $327.30 million, reflecting sales gains across both the U.S. and international franchise operations, with international outperforming the United States due to the impact of Hurricane Sandy. Notably, management has indicated that the year-over-year comparisons got better each month of the quarter. Excluding $900,000 in unfavorable currency translation, Tools Group organic sales would have been up 3.7 percent.
Group operating earnings came in at $47.20 million, which was up 2.4 percent over the first three months of 2012. However, group operating margin slipped, going from 14.6 percent to 14.4 percent.
The company’s Repair Systems & Information Group saw its sales rise $20 million (or 8.8 percent) to $246.10 million in the first quarter of 2013. Management attributed the increase to higher sales of OEM dealerships, as well as gains in sales of diagnostic and repair information products to repair shop owners and managers. Excluding $1 million in unfavorable foreign currency translation, group organic sales were up 9.3 percent.
Repair Systems & Information Group operating earnings increased 16.3 percent to $56.50 million, while group operating margin improved from 21.5 percent to 23.0 percent.
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