) reported strong fourth-quarter 2013 results with healthy growth
in net sales and earnings. Net income for the reported quarter
increased to $94.5 million or $1.60 per share from $84.6 million
or $1.43 per share in the year-earlier quarter. The reported
earnings exceeded the Zacks Consensus Estimate of $1.55 per
For full-year 2013, the company's net income increased to
$350.3 million or $5.93 per share, from $306.1 million or $5.20
per share in 2012. The full-year earnings were also ahead of
Zacks Consensus Estimate of $5.89 per
Despite some external headwinds, management's focus on
enhancing van network, expanding repair shop owners and managers,
extending service to critical industries, strategic acquisitions
and expansion in emerging markets continued to favorably benefit
Net sales of the company were increased 5.9% year over year to
$797.5 million in the reported quarter. Excluding inorganic
revenue of $15.2 million from the May 2013 acquisition of
Challenger Lifts, Inc. and $5.3 million of adverse foreign
currency translation effects, organic sales increased 4.6% year
over year. Total quarterly revenue fell short of the Zacks
Consensus Estimate of $781 million.
For full-year 2013, net sales of the company were up 4.0% year
over year to $3.1 billion. Excluding inorganic revenue of $39.3
million from the Challenger business and $21.6 million of adverse
foreign currency translation effects, organic sales increased
3.5% year over year.
Commercial & Industrial Group
segment sales increased 2.8% year over year to $283.2 million
driven by higher sales in power tools and European hand tools
business. Organic sales also increased 4.0% year over year.
Weakness seen in the segment's military business continued from
the third quarter.
Snap-on Tools Group
segment sales increased 9.2% year over year to $351.1 million,
driven by sales gains in both U.S. and international franchise
operations. Organic sales were up 10.2%.
Repair Systems & Information
segment sales increased 9.5% year over year to $264.6 million,
primarily on gains in sales of diagnostics and repair information
products to repair shop owners and managers. Organic sales were
up 2.9% year over year. Lower sales in original equipment
manufacturer dealerships proved to be a headwind for the
reported revenues of $47.4 million compared with $42.9 million in
the year-ago quarter. Operating earnings for the segment stood at
$33.0 million compared with $29.3 million million in the
Snap-on registered consolidated operating earnings of $156.6
million or 18.5% of total revenue for the fourth quarter 2013
compared with $140.7 million or 17.7% of total revenue in the
For full-year 2013, the company registered consolidated
operating earnings of $586.2 million or 19.2% of total revenue
compared with $516.4 million or 17.6% of total revenue in
Balance Sheet & Cash Flow
Cash and cash equivalents at year-end 2013 were $217.6 million
compared with $214.5 million at the end of 2012. The company had
a long-term debt of $858.9 million, down from the last year's
figure of $970.4 million. Net cash provided by operating
activities increased to $392.6 million in 2013 from $329.3
million in 2012.
Snap-on expects to incur capital expenditures in the range of $70
million to $80 million in 2014. The company also noted that it
will continue to focus on emerging markets, expand its presence
in new industries, enhance its mobile tool distribution network
and expand in the vehicle repair garage market going forward.
Snap-on currently has a Zacks Rank #3 (Hold). Better-ranked
stocks in the industry include
Emerge Energy Services LP
). All these carry a Zacks Rank #2 (Buy).
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