-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, lwTy9d/LcbBK32MYgtbPz+/XyCmT0xEW91eMhorPDciW2j806eVzZ/iybVP1F/3Q ZQNkosBLszE4v5Llr+7tiA== 0000912057-94-002700.txt : 19940914 0000912057-94-002700.hdr.sgml : 19940914 ACCESSION NUMBER: 0000912057-94-002700 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19940702 FILED AS OF DATE: 19940815 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SNAP ON INC CENTRAL INDEX KEY: 0000091440 STANDARD INDUSTRIAL CLASSIFICATION: 3420 IRS NUMBER: 390622040 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-07724 FILM NUMBER: 94544347 BUSINESS ADDRESS: STREET 1: 2801 80TH ST STREET 2: P O BOX 1410 CITY: KENOSHA STATE: WI ZIP: 53141-1410 BUSINESS PHONE: 4146565200 MAIL ADDRESS: STREET 1: 2801 80TH ST STREET 2: P O BOX 1410 CITY: KENOSHA STATE: WI ZIP: 53141-1410 FORMER COMPANY: FORMER CONFORMED NAME: SNAP ON TOOLS CORP DATE OF NAME CHANGE: 19920703 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ------------------------ FORM 10-Q X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) --- OF THE SECURITIES EXCHANGE ACT OF 1934 For Quarterly Period Ended July 2, 1994 ------------ Commission File Number 1-7724 ------ SNAP-ON INCORPORATED ------------------------------------------------------ (Exact name of registrant as specified in its charter) DELAWARE 39-0622040 - - ------------------------------- ------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 2801 - 80TH STREET, KENOSHA, WISCONSIN 53141-1410 - - ----------------------------------------------------- (Address of principal executive offices) (zip code) Registrant's telephone number, including area code: (414) 656-5200 ---------------- Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ------- -------- Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: CLASS OUTSTANDING AT JULY 29, 1994 - - ----------------------------- ---------------------------- Common Stock, $1.00 par value 42,848,383 Shares Page 1 of 11 Pages SNAP-ON INCORPORATED INDEX PAGE NO. -------- Part I. Financial Information: Consolidated Balance Sheets - July 2, 1994 and January 1, 1994 3-4 Consolidated Statements of Earnings - Thirteen Weeks and Twenty-Six Weeks Ended July 2, 1994 and July 3, 1993 5 Consolidated Statements of Cash Flows - Twenty-Six Weeks Ended July 2, 1994 and July 3, 1993 6 Notes to Consolidated Financial Statements 7 Management's Discussion and Analysis of Financial Condition and Results of Operations 8-9 Part II. Other Information 10 -2- PART I. FINANCIAL INFORMATION SNAP-ON INCORPORATED CONSOLIDATED BALANCE SHEETS (Amounts in Thousands)
(UNAUDITED) JULY 2, JANUARY 1, 1994 1994 ---------- ---------- ASSETS CURRENT ASSETS Cash and Cash Equivalents $ 19,102 $ 6,729 Receivables Less Allowances 541,416 539,949 Inventories: Finished Stock 195,862 185,260 Work-in-Process 15,899 19,292 Raw Materials 38,430 44,550 ---------- ---------- Total Inventories 250,191 249,102 Prepaid Expenses 58,566 58,818 ---------- ---------- Total Current Assets 869,275 854,598 PROPERTY AND EQUIPMENT - AT COST Land 25,233 27,209 Buildings and Improvements 143,853 142,438 Machinery and Equipment 289,753 282,222 ---------- ---------- 458,839 451,869 Less Accumulated Depreciation (235,728) (227,059) ---------- ---------- Total Property and Equipment 223,111 224,810 Deferred Income Tax Benefit 55,357 53,819 Intangible and Other Assets 94,792 85,706 ---------- ---------- TOTAL ASSETS $1,242,535 $1,218,933 ---------- ---------- ---------- ----------
-3- SNAP-ON INCORPORATED CONSOLIDATED BALANCE SHEETS (Amounts in Thousands)
(UNAUDITED) JULY 2, JANUARY 1, 1994 1994 --------- --------- LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Notes Payable $ 60,862 $ 66,288 Accounts Payable 39,353 57,280 Dividends Payable 11,565 - Accrued Compensation 28,703 33,515 Accrued Retirement Plans, Insurance and Other 86,415 80,327 Accrued Income Taxes 15,389 8,474 Dealer Deposits 62,161 62,153 ---------- ---------- Total Current Liabilities 304,448 308,037 Long-Term Debt, Less Current Maturities 99,555 99,683 Deferred Income Taxes 4,491 7,413 Retiree Health Care Benefits - Long-Term 72,557 70,791 Pension - Long-Term 36,033 31,346 ---------- ---------- TOTAL LIABILITIES 517,084 517,270 SHAREHOLDERS' EQUITY Preferred Stock - Authorized 15,000,000 shares of $1 par value; none outstanding - - Common Stock - Authorized 125,000,000 shares of $1 par value; issued - July 2, 1994, 43,080,988 shares; January 1, 1994, 42,818,696 shares 43,081 42,819 Additional Contributed Capital 60,217 52,153 Retained Earnings 646,339 632,022 Foreign Currency Translation Adjustment (14,874) (16,019) Less Treasury Stock (250,000 shares) (9,312) (9,312) ---------- ---------- TOTAL SHAREHOLDERS' EQUITY 725,451 701,663 ---------- ---------- TOTAL LIABILITIES & SHAREHOLDERS' EQUITY $1,242,535 $1,218,933 ---------- ---------- ---------- ----------
-4- SNAP-ON INCORPORATED CONSOLIDATED STATEMENTS OF EARNINGS (Amounts in Thousands Except Per Share Data) (Unaudited)
THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED -------------------- ---------------------- JULY 2, JULY 3, JULY 2, JULY 3, 1994 1993 1994 1993 -------- -------- -------- -------- Net Sales $298,752 $272,718 $597,529 $543,392 Cost of Goods Sold 142,665 125,879 287,972 257,615 -------- -------- -------- -------- Gross Profit 156,087 146,839 309,557 285,777 Operating Expenses 113,375 109,796 227,242 218,088 Other Income (Expense) - Net (2,368) (2,592) (4,728) (4,133) -------- -------- -------- -------- Earnings Before Income Taxes 40,344 34,451 77,587 63,556 Income Taxes 14,245 12,089 28,654 22,690 -------- -------- -------- -------- Net Earnings $ 26,099 $ 22,362 $ 48,933 $ 40,866 -------- -------- -------- -------- -------- -------- -------- -------- Earnings Per Weighted Average Common Share $ .61 $ .52 $ 1.15 $ .96 -------- -------- -------- -------- -------- -------- -------- -------- Dividends Declared Per Common Share (Note 1) $ .54 $ .54 $ .81 $ .81 -------- -------- -------- -------- -------- -------- -------- -------- Weighted Average Common Shares Outstanding 42,719 42,475 42,719 42,475 -------- -------- -------- -------- -------- -------- -------- --------
-5- SNAP-ON INCORPORATED CONSOLIDATED STATEMENTS OF CASH FLOWS (Amounts in Thousands) (Unaudited)
TWENTY-SIX WEEKS ENDED ---------------------- JULY 2, JULY 3, 1994 1993 ------- ------- OPERATING ACTIVITIES Net Earnings $48,933 $40,866 Adjustments to Reconcile Net Earnings to Net Cash Provided by Operating Activities: Depreciation 14,498 15,118 Amortization 1,936 1,357 Deferred Income Taxes (5,153) (2,828) Gain on Sale of Assets (49) (194) Changes in Operating Assets and Liabilities: (Increase) Decrease in Receivables (1,468) 25,775 (Increase) Decrease in Inventories (1,089) (30,442) (Increase) Decrease in Prepaid Expenses (1,773) (177) Increase (Decrease) in Accounts Payable (17,927) (8,911) Increase (Decrease) in Accruals, Deposits and Other Long-Term Liabilities 15,291 (4,581) ------- ------- NET CASH PROVIDED BY OPERATING ACTIVITIES 53,199 35,983 INVESTING ACTIVITIES Capital Expenditures (19,909) (16,544) Disposal of Property and Equipment 7,159 1,689 (Increase) Decrease in Other Noncurrent Assets (8,995) (937) ------- ------- NET CASH USED IN INVESTING ACTIVITIES (21,745) (15,792) FINANCING ACTIVITIES Increase (Decrease) in Long-Term Debt (75) 5,495 Increase (Decrease) in Notes Payable (5,426) (42,797) Proceeds from Stock Plans 8,326 4,258 Cash Dividends Paid (23,052) (22,927) ------- ------- NET CASH USED IN FINANCING ACTIVITIES (20,227) (55,971) EFFECT OF EXCHANGE RATE CHANGES 1,146 (3,380) ------- ------- INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 12,373 (39,160) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 6,729 58,973 ------- ------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $19,102 $19,813 ------- ------- ------- -------
Interest paid during the first six months was approximately $6.1 million compared with $6.0 million for the first six months of 1993. Income tax payments for the first six months, 1994 were approximately $28.8 million compared with $34.2 million for the same period last year. -6- SNAP-ON INCORPORATED NOTES TO CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS 1. Snap-on Incorporated normally declares and pays in cash four regular, quarterly dividends. However, the third quarter dividend in each year is declared in June, giving rise to two regular quarterly dividends appearing in the second quarter statements and correspondingly, three regular quarterly dividends appearing in the first twenty-six weeks' statements. In the opinion of management, all adjustments (consisting of only normal recurring adjustments) necessary to a fair statement of results of operations for the twenty-six weeks ended July 2, 1994 have been made. Management also believes that the results of operations for the twenty-six weeks ended July 2, 1994 are not necessarily indicative of the results to be expected for the full year. ------------------------------ This report should be read in conjunction with the consolidated financial statements and related notes included in Snap-on Incorporated's Annual Report for the year ended January 1, 1994. -7- SNAP-ON INCORPORATED MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OVERVIEW: Consolidated net sales for the second quarter 1994 increased 9.5%, while net earnings increased 16.7% from the second quarter last year. Six month consolidated net sales rose 10.0% while net earnings increased 19.7% from a year ago. The results reflected continued sales improvement from the Corporation's Sun Electric subsidiary, higher sales to U.S. dealers, a continued strong gross profit margin, and improved operating expenses as a percentage of sales. SALES: Net sales for the second quarter were $298.8 million compared with $272.7 million for the second quarter last year. Six month consolidated net sales were $597.5 million, up from $543.4 million for the same period in 1993. North American sales for the second quarter 1994 increased 6.8% to $235.4 million from the $220.5 million reported during the second quarter last year. Six month North American sales were $452.7 million, or about 5.0% increase over the same period last year. Sales outside of North America increased 21.4% to $63.4 million in the second quarter 1994 from $52.2 million a year ago. Sales for the first six months of 1994 were $144.8 million, a 29.0% improvement from the $112.2 million reported in 1993. European sales for the second quarter were up 23.0% and continued to benefit from sales related to the German emissions program which is now substantially complete. As planned, a lower level of emissions equipment sales were realized in the second quarter 1994 when compared with the first quarter 1994. EARNINGS: On a per share basis, second quarter earnings increased to $.61, up from $.52 in the same period last year. Earnings per share for the first six months of 1994 were $1.15 compared to $.96 for the first six months in 1993. OPERATING EXPENSES: Operating expenses in the second quarter 1994 were $113.4 million versus $109.8 million in the second quarter 1993. As a percentage of net sales, operating expenses dropped to 38.0% from 40.3% in the second quarter of 1993 including reduced legal expense for the quarter. Operating expenses for the first six months were $227.2 versus $218.1 million for the same period last year. As a percentage of net sales, operating expenses decreased to 38.0% from 40.1% for the first six months of 1993. -8- FINANCIAL CONDITION OVERVIEW: Snap-on Incorporated finished the second quarter in strong financial condition. The Corporation continues to generate positive cash flow, reduce short-term debt, and increase working capital. LIQUIDITY: Working capital increased to $564.8 million during the quarter from $546.6 million at the end of 1993. The ratio of current assets to current liabilities was 2.9 to 1 at the end of the quarter compared with 2.8 to 1 at the end of 1993. Cash and short-term investments increased to $19.1 million at the end of the second quarter 1994 from $6.7 million at the end of 1993. At the end of the quarter, the Corporation had bank lines of credit totaling $170.0 million that required compensating balances, of which $34.1 million was unused and available for short-term borrowings. Cash from operations, coupled with these sources of borrowing, are sufficient to support current and future working capital requirements, finance capital expenditures, and pay dividends. ACCOUNTS RECEIVABLE: Accounts receivable increased slightly in the second quarter to $541.4 million compared to $539.9 million at the end of 1993. Most receivables involved customers' extended credit purchases of higher-value products. Remaining receivables included those from dealers, industrial and international customers, and government. INVENTORIES: Inventories increased slightly during the first six months to $250.2 million, up from $249.1 million at the end of 1993. The increase was mainly due to expansion in our international and equipment markets. LIABILITIES: Short-term debt at the end of the second quarter was $60.9 million compared with $66.3 million at the end of 1993. Long-term debt as a percentage of shareholders' equity was 13.7% compared with 14.2% at the end of 1993. Total long-term debt stands at $99.6 million down from $99.7 million at year-end 1993. The Corporation has no plans for additional long-term debt at this time. INTEREST EXPENSE: Interest expense for the second quarter 1994 was $3.2 million compared with $2.6 million for the same period last year. For the first six months, interest expense was $6.2 million compared with $5.4 million last year. The reason for the increase is due to the rise in short-term interest rates. EFFECTIVE TAX RATE: The effective tax rate was 35.3% for the quarter and 36.9% year-to-date, compared with 35.1% and 35.7% for the same periods last year. -9- PART II. OTHER INFORMATION ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K ITEM 6(A): EXHIBITS None. ITEM 6(B): REPORTS ON FORM 8-K No reports on Form 8-K for the three months ended July 2, 1994 were required to be filed. -10- SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, Snap-on Incorporated has duly caused this report to be signed on its behalf by the undersigned duly authorized persons. SNAP-ON INCORPORATED Date: 8-15-94 /s/ R. A. CORNOG ------- ------------------------------------------------- R. A. CORNOG (Chairman, President and Chief Executive Officer) Date: 8-15-94 /s/ G. D. JOHNSON ------- ------------------------------------------------- G. D. JOHNSON (Principal Accounting Officer and Controller) - 11 - -----END PRIVACY-ENHANCED MESSAGE-----