SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 28, 1996
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
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 Identification No.)
incorporation or organization)
10801 Corporate Drive, Kenosha, Wisconsin 53141-1430
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (414) 656-5200
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of exchange on which registered
Common stock, $1 par value New York Stock Exchange
Preferred stock purchase rights New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
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, and (2) has been subject to such
filing requirements for the past 90 days. Yes [ X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained,
to the best of the registrant's knowledge, in a definitive proxy or
information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K. [ ]
Aggregate market value of voting stock held by nonaffiliates of the
registrant at February 25, 1997:
$2,401,637,648
Number of shares outstanding of each of the registrant's classes of common
stock at February 25, 1997:
Common stock, $1 par value, 60,609,152 shares
Documents incorporated by reference
Portions of the Corporation's Annual Report to Shareholders for the fiscal
year ended December 28,1996, are incorporated by reference into Parts I,
II and IV of this report.
Portions of the Corporation's Proxy Statement, dated March 14, 1997,
prepared for the Annual Meeting of Shareholders scheduled for April 25,
1997, are incorporated by reference into Part III of this report.
TABLE OF CONTENTS
Page
PART I
Item 1. Business . . . . . . . . . . . . . . . . . . . . . . . . 3
Item 2. Description of Properties . . . . . . . . . . . . . . . 8
Item 3. Legal Proceedings . . . . . . . . . . . . . . . . . . . 9
Item 4. Submission of Matters to a Vote of Security Holders . . 9
Item 4.1. Executive Officers of the Registrant . . . . . . . . . . 9
PART II
Item 5. Market for Registrant's Common Equity and
Related Stockholder Matters . . . . . . . . . . . . . 10
Item 6. Selected Financial Data . . . . . . . . . . . . . . . 10
Item 7. Management Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . . . 10
Item 8. Financial Statements and Supplementary Data . . . . . 10
Item 9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure . . . . . . . . 10
PART III
Item 10. Directors and Executive Officers of the Registrant . . 10
Item 11. Executive Compensation . . . . . . . . . . . . . . . . 10
Item 12. Security Ownership of Certain Beneficial Owners
and Management . . . . . . . . . . . . . . . . . . . . 10
Item 13. Certain Relationships and Related Transactions . . . . 11
PART IV
Item 14. Exhibits, Financial Statement Schedules and
Reports on Form 8-K . . . . . . . . . . . . . . . . . 11
Auditor's Reports . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Signature Pages . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Exhibit Index . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
PART I
Item I: Business
Snap-on Incorporated (the "Corporation") was incorporated under the laws
of the state of Wisconsin in 1920 and reincorporated under the laws of the
state of Delaware in 1930. Its corporate headquarters are located in
Kenosha, Wisconsin.
The Corporation is a leading manufacturer and distributor of high-quality
hand tools, power tools, tool storage products, diagnostics equipment,
shop equipment, and diagnostics software and other services, primarily for
use by professional technicians in vehicle service and industrial
applications. Its products are marketed to individual automotive
technicians, shop owners, specialty service centers, national accounts,
industrial and government entities, original equipment manufacturers
("OEMs"), and other professional tool and equipment users.
The Corporation has operations throughout the world. Its largest markets
include the United States, Australia, Brazil, Canada, Germany, Japan,
Mexico, the Netherlands, Spain and the United Kingdom. Products and
services to support its products and customers are marketed and
distributed in more than 100 countries.
In 1996 the Corporation acquired new business operations that expanded its
product line, distribution channels and geographic reach, including the
John Bean Company (formerly the Automotive Equipment Service Division of
FMC Corporation), Automotive Data Solutions ("ADS") and Snap-on Tools/PST
Africa (Pty.), Ltd. ("Snap-on Tools/PST Africa").
The John Bean Company is a leading producer of wheel and brake service
equipment, including wheel aligners and balancers, tire changers, and brake
lathes. Its products are sold in North America, Europe and select other
parts of the world. ADS is a tele-diagnostics service for automotive
technicians. Snap-on Tools/PST Africa is a mobile van distributor of
tools to professional users in South Africa.
Subsequent to the close of 1996, the Corporation acquired a 50 percent
interest in the Mitchell Repair Information business of The Thomson
Corporation. The new company is a provider of print and electronic
versions of vehicle mechanical and electrical system repair information to
vehicle repair and service establishments throughout North America. The
Corporation also acquired Computer Aided Service, Inc. ("CAS"), a
developer of repair shop management systems, point of sale systems and
diagnostics equipment.
The Corporation conducts its business through four principal operations:
Tools
- The Transportation business focuses on the development and sale of
products and services through the Corporation's worldwide dealer direct
sales programs to professional technicians and shop owners, and through
distributors in some non-U.S. locations. Trademarks associated with this
operating group include: Snap-on - hand tools, power tools, tool storage
units, and certain equipment; Blue Point - hand tools and power tools; and
Wheeltronic - hoists and lifts for vehicle service shops. Some
differentiated equipment products developed by the Corporation's other
operations are also sold through the distribution channels employed by
this business. In addition, to complete the product line, some items are
purchased from external manufacturers.
- The Industrial operation focuses on the development and sale of
industrial tools and equipment through a direct sales force as well as
through industrial distributors, and on the development and sale of tools
for the medical profession. Trademarks associated with this operating
group include: Snap-on - hand tools and tool storage units; J.H. Williams
- hand tools; A.T.I. Tools - tools and equipment for aerospace and
industrial applications; Sioux Tools - power tools; and Snap-on Medical
Products - tools for orthopedic applications.
Equipment
This operation focuses on the development and sale of diagnostics, under-
car, emissions and safety, and shop equipment; shop management systems;
and vehicle repair and service information to vehicle service and repair
shops. Trademarks associated with this operating group include: Sun
Electric ("Sun") - diagnostics and service equipment; John Bean - under-
car and other service equipment; Balco - engine diagnostics, wheel
balancing and alignment equipment; Mitchell - repair and service
information and shop managment systems; and Edge Diagnostic Systems -
software to diagnose vehicle computer systems.
Financial Services
Through its Snap-on Credit Corporation subsidiary, Financial Services is
responsible for certain credit and non-credit services used to support
sales and to provide dealer financing options. Credit programs facilitate
the sale of the Corporation's products and services, especially higher-
value products such as diagnostics and other shop equipment.
Products, Services, and Markets Served
The Corporation offers a broad product line which it divides into two
groups -- tools and equipment.
Tools -- Includes hand tools, power tools and tool storage products. Hand
tools include wrenches, screwdrivers, sockets, pliers, ratchets and other
similar products, and instruments developed for medical applications and
for the manufacture and servicing of electronic equipment. Power tools
include pneumatic (air), cord-free (battery) and corded (electric) tools
such as impact wrenches, ratchets, chisels, drills, sanders, polishers and
similar products. Tool storage units include tool chests, roll cabinets
and other similar products for automotive, industrial, aerospace and other
storage applications.
Equipment -- Includes hardware and software solutions for the diagnosis
and service of automotive and industrial equipment. The primary products
are: engine and emissions analyzers, air conditioning service equipment,
brake service equipment, wheel balancing and alignment equipment,
transmission troubleshooting equipment, vehicle safety testing equipment,
battery chargers, and lifts and hoists used in repair shops. Also included
are service and repair information products, on-line diagnostics services,
systems integration and purchasing facilitation services.
In the U.S. the Corporation supports the sale of its diagnostics and shop
equipment by offering training programs to technician customers. These
programs offer certification in both specific automotive technologies and
in the application of specific diagnostics equipment developed and
marketed by the Corporation.
Competition
The Corporation competes on the basis of its product quality, service,
brand awareness and technological innovation. While no one company
competes with the Corporation across all of its product lines and
distribution channels, various companies compete in one or more product
categories and/or distribution channels.
The Corporation believes that it is a leading manufacturer and distributor
of its products within the markets it serves in the vehicle service
industry, and that it offers the broadest line of products to the vehicle
service industry. The major competitors selling to professional
technicians in the vehicle service and repair sector through the mobile
van channel include MAC Tools (The Stanley Works) and Matco (Danaher
Corporation). The Corporation also competes against companies that sell
through non-mobile-van distributors; these competitors include The Stanley
Works, Sears, Roebuck and Co., and Strafor Facom. In the industrial
sector, major competitors include Armstrong (Danaher Corporation), Cooper
Industries and Proto (The Stanley Works). The major competitors selling
diagnostics and shop equipment to shop owners in the vehicle service and
repair sector include SPX Corporation and Hunter Engineering.
Consolidated Sales
The following table shows the approximate percentage of consolidated sales
for each of the Corporation's product groups in each of the past three
years.
Product Group % of Sales 1996 1995 1994
Tools
Hand tools 40% 40% 38%
Power tools 8% 10% 7%
Tool storage products 10% 10% 11%
--- --- ---
58% 60% 56%
Equipment 42% 40% 44%
--- --- ---
100% 100% 100%
Market Sectors Served -- The Corporation markets and distributes its
products around the world to professional users primarily in two market
sectors: the vehicle service and repair sector, and the industrial
sector. For further information on the Corporation's international and
domestic operations, see Note 14 on page 34 of the Corporation's 1996
Annual Report, incorporated herein by reference.
Vehicle Service and Repair Sector
The vehicle service and repair sector has two primary customer groups:
professional technicians, primarily in the vehicle service industry, who
purchase tools and equipment for themselves, and service and repair shop
owners (both independent and national chains) and managers who purchase
equipment for use by multiple technicians within a service or repair
facility. Following is a discussion of the characteristics of these
customers.
Professional Technicians -- The Corporation markets its products and
services to professional automotive technicians in the U.S. and select
other countries, primarily through its dealer van distribution system. It
provides innovative tool and equipment solutions, as well as technical
sales support and training, to meet technicians' evolving needs.
Shop Owners -- The Corporation also serves owners and managers of shops
where technicians work with tools, diagnostics equipment, repair and
service information, and shop management products. These products are
sold through the Corporation's dealer van distribution system. In
addition, certain tools and equipment, differentiated by product features
and brand, are sold through distributors to shop owners.
Major challenges for the Corporation and the industry include increased
competition within the dealer van channel during the past decade and the
increasing rate of technological change within motor vehicles.
Industrial Sector
The Corporation markets its products to a wide variety of industrial
customers, including industrial maintenance and repair facilities;
manufacturing and assembly operations; industrial distributors; government
facilities; schools; and OEMs who require instrumentation or service tools
and equipment for their products.
Major challenges in the industrial market include a highly competitive,
cost-conscious environment, and a trend toward customers making all of
their tool purchases through one integrated supplier. The Corporation
believes it is currently a meaningful participant in the market for
industrial tools and equipment.
Distribution Channels and the Franchise Program
The Corporation serves customers through direct and indirect sales
channels.
Distribution to Technicians and Shop Owners
Snap-on Dealer Organization -- Sales to technicians and select shop owners
are conducted weekly at the customer's place of business, primarily
through the mobile dealer van system. Dealers purchase the Corporation's
products at a discount from suggested retail prices and resell them at
prices of the dealer's choosing. Although some dealers have sales areas
defined by other methods, most U.S. dealers are provided a list of places
of business which serves as the basis of the dealer's sales route.
Since 1991, all new U.S. dealers, and a majority of existing U.S. dealers,
have been enrolled as franchisees of the Corporation. The Corporation
currently charges initial and ongoing monthly license fees, which do not
add materially to the Corporation's revenues. The Corporation makes it
possible for prospective dealer candidates to work as employee sales
representatives, at salary plus commission, for up to one year prior to
making an investment in a franchise. In addition, through Snap-on
Financial Services, Inc. and its subsidiary, Snap-on Credit Corporation,
the Corporation also provides financial assistance for newly converted
franchise dealers and other new franchise dealers, which could include
financing for initial license fees, inventory, revolving accounts
receivable acquisition, equipment, fixtures, other expenses and an initial
checking account deposit. At year-end 1996, approximately 86 percent of
all U.S. dealers were enrolled as franchisees.
The Corporation services and supports its dealers with an extensive field
organization of branch offices, and service and distribution centers. The
Corporation also provides sales training, customer and dealer financial
assistance, and marketing and product promotion programs to help maximize
dealer sales. A National Dealer Advisory Council, composed of and elected
by dealers, assists the Corporation in identifying and implementing
enhancements to the franchise program.
The Corporation has replicated its dealer van method of distribution in
Australia, Canada, Germany, Mexico, the Netherlands, Japan and the United
Kingdom. The Corporation also markets products to additional select
countries through its subsidiary, Snap-on Tools International, Ltd., which
sells to foreign distributors under license or contract with the
Corporation.
Snap-on/Sun Tech Systems -- Higher-end diagnostics and shop equipment is
also sold directly to customers through the Snap-on/Sun Tech Systems
employee sales force ("Tech Specialists"). Tech Specialists are
compensated primarily on the basis of commission. In the U.S., Tech
Specialists sell Snap-on and Sun brand equipment to accounts on their own,
and assist dealers in the demonstration and sale of Snap-on and Sun brand
diagnostics equipment.
The Snap-on/Sun Tech Systems group also sells Snap-on and Sun equipment to
volume buyers such as retail service centers and OEMs through a national
account sales organization. In addition, Sun brand equipment is marketed
through distributors in South America and Asia, and through both a direct
sales force and distributors in Europe.
With the 1996 addition of the John Bean Company, the Corporation now
distributes under-car and other service equipment through a number of
distributors, located primarily in North America, Europe and select other
parts of the world. The majority of these products are sold under the
John Bean brand and are differentiated from those sold through the dealer
van channel.
Distribution to Industrial Customers
Marketing to industrial and governmental customers is by both direct sales
through industrial sales representatives, who are employees, and indirect
sales through independent industrial distributors. At the end of 1996,
the Corporation had industrial sales representatives in the United States,
Canada, Australia, Japan, Mexico, Puerto Rico, and some European
countries, with the U.S. representing the majority of the Corporation's
total industrial sales. The sales representatives focus on industrial
customers who prefer to buy on quality and service, as well as on certain
OEM accounts.
Raw Material & Purchased Product
The Corporation's supply of raw materials (various grades of steel bars
and sheets) and purchased components are readily available from numerous
suppliers.
The majority of 1996 consolidated net sales consisted of products
manufactured by the Corporation. The remainder was purchased from outside
suppliers. No single supplier's products accounted for a material portion
of 1996 consolidated net sales.
Patents and Trademarks
The Corporation vigorously pursues and relies on patent protection to
protect its inventions and its position in the market. As of December 28,
1996, the Corporation and its subsidiaries held over 600 patents
worldwide, with more than 470 pending patent applications. No sales
relating to any single patent represent a material portion of the
Corporation's revenues.
Examples of products that have features or designs that benefit from
patent protection include engine analyzers, serrated jaw open-end
wrenches, wheel alignment systems, wheel balancers, sealed ratchets,
electronic torque wrenches, ratcheting screwdrivers, emissions sensing
devices and air conditioning equipment.
Much of the technology used in the manufacturing of automotive tools and
equipment is in the public domain. The Corporation relies primarily on
trade secret protection to protect proprietary processes used in
manufacturing. Methods and processes are patented when appropriate.
Trademarks used by the Corporation are of continuing importance to the
Corporation in the marketplace. Trademarks have been registered in the
U.S. and 67 other countries, and additional applications for trademark
registrations are pending. The Corporation rigorously polices proper use
of its trademarks.
The Corporation's right to manufacture and sell certain products is
dependent upon licenses from others. These products do not represent a
material portion of the Corporation's sales.
Working Capital
Because the Corporation's business is not seasonal, and its inventory
needs are relatively constant, no unusual working capital needs arise
during the year.
The Corporation's use of working capital to extend credit to its dealers
and to purchase installment credit receivables from dealers is discussed
in "Management's Discussion and Analysis of Results of Operations and
Financial Condition," which is found on pages 16 to 19 of the
Corporation's 1996 Annual Report and is incorporated herein by reference.
The Corporation does not depend on any single customer, small group of
customers or government for any material part of its sales, and has no
significant backlog of orders.
Environment
The Corporation complies with applicable environmental control
requirements in its operations. Compliance has not had a material effect
upon the Corporation's capital expenditures, earnings or competitive
position.
Employees
At the end of 1996, the Corporation employed approximately 10,600 people,
of whom approximately one-third are engaged in manufacturing activities.
Item 2: Description of Properties
The Corporation maintains both leased and owned manufacturing, warehouse,
distribution and office facilities throughout the world. The Corporation
believes that its facilities are well maintained and have a capacity
adequate to meet the Corporation's present and foreseeable future demand.
The Corporation's U.S. facilities occupy approximately 4.2 million square
feet, of which approximately 84 percent is owned. The Corporation's
facilities outside the U.S. contain approximately 1.7 million square
feet, of which approximately 69 percent is owned.
The Corporation's principal manufacturing locations and distribution
centers are as follows:
Location Type of property Owned/Leased
Conway, Arkansas Manufacturing Owned
City of Industry, California Manufacturing Leased
Escondido, California Manufacturing Owned
San Jose, California Manufacturing Leased
Sunnyvale, California Manufacturing Leased
Columbus, Georgia Manufacturing Owned
Crystal Lake, Illinois Distribution Owned
and manufacturing
Mt. Carmel, Illinois Manufacturing Owned
Ottawa, Illinois Distribution Owned
Algona, Iowa Manufacturing Owned
Sioux City, Iowa Manufacturing Owned
Natick, Massachusetts Manufacturing Owned
Olive Branch, Mississippi Distribution Leased and owned
Carson City, Nevada Distribution Owned
Robesonia, Pennsylvania Distribution Owned
Johnson City, Tennessee Manufacturing Owned
Elizabethton, Tennessee Manufacturing Owned
East Troy, Wisconsin Manufacturing Owned
Elkhorn, Wisconsin Manufacturing Owned
Kenosha, Wisconsin Manufacturing Owned
Milwaukee, Wisconsin Manufacturing Owned
Sydney, Australia Distribution Leased
Barbara D'oeste, Brazil Manufacturing Owned
Calgary, Canada Distribution Leased
Mississagua, Canada Manufacturing Leased
Newmarket, Canada Distribution Owned
and manufacturing
Kettering, England Distribution Owned
King's Lynn, England Distribution Owned
and manufacturing
Altmittweida, Germany Distribution Owned
Cork, Ireland Manufacturing Leased
Shannon, Ireland Manufacturing Leased
Tokyo, Japan Distribution Leased
Amsterdam, the Netherlands Distribution Owned
Irun, Spain Manufacturing Owned
Urretxu, Spain Manufacturing Owned
Vitoria, Spain Distribution Owned
and manufacturing
Item 3: Legal Proceedings
Note 4 to the Financial Statements of the Corporation on pages 25 and
26 of its 1996 Annual Report is incorporated herein by reference. None
of such litigation is material within the meaning of Section 103 of
Regulation S-K in that such matters individually or in the aggregate
do not exceed 10% of current assets. The Corporation intervened in
litigation commenced by Tejas Testing Technology One, L.C. and Tejas
Testing Technology Two, L.C. (the "Tejas Companies"), as described in
Note 13 to the Financial Statements of the Corporation on pages 32 and
33 of its 1996 Annual Report, which Note is incorporated herein by
reference. Such litigation was commenced on May 2, 1995 and is pending
in the United States District Court for the Western District of Texas,
Austin Division, and was also commenced on November 20, 1995 in the
345th Judicial District Court of Travis County, Texas. On February 11,
1997, Systems Control, Inc. and Systems Control Acquisition Corp.,
affiliates of the Tejas Companies, commenced litigation against the
Corporation in the Superior Court of the State of California for the
County of San Francisco to resist their obligation to indemnify the
Corporation in full as described in Note 13.
Item 4: Submission of Matters to a Vote of Security Holders
There was no matter submitted to a vote of the shareholders during the
fourth quarter of the fiscal year ending December 28, 1996.
Item 4.1: Executive Officers of the Registrant
The executive officers of the Corporation, their ages as of December 28,
1996, and their current titles and positions held during the last five
years are listed below.
Robert A. Cornog (56) - Chairman, President and Chief Executive Officer
since July 1991. A Director since 1982.
Branko M. Beronja (62) - Senior Vice President - Diagnostics, North
America since April 1996. President - North American Operations from
April 1994 to April 1996, and Vice President - Sales, North America from
August 1989 to April 1994. A Director since January 1997.
Frederick D. Hay (52) - Senior Vice President - Transportation since
February 1996. Prior to joining Snap-on, he was President of the Interior
Systems and Components Division of UT Automotive, a business unit of
United Technologies Corporation, from December 1989 to January 1996.
Donald S. Huml (50) - Senior Vice President - Finance and Chief Financial
Officer since August 1994. Prior to joining Snap-on, he was Vice
President and Chief Financial Officer of Saint-Gobain Corporation from
December 1990 to August 1994.
Michael F. Montemurro (48) - Senior Vice President - Financial Services
and Administration since August 1994. Senior Vice President - Financial
Services, Administration and Chief Financial Officer from April 1994 to
August 1994. Senior Vice President - Finance and Chief Financial Officer
from March 1990 to April 1994.
Jay H. Schnabel (54) - Senior Vice President - Europe since April 1996.
Senior Vice President - Diagnostics from April 1994 to April 1996. Senior
Vice President - Administration from April 1990 to April 1994. A Director
since August 1989.
Gregory D. Johnson (47) - Controller since April 1992. Financial
Controller - Asia/Pacific from May 1991 to April 1992.
Susan F. Marrinan (48) - Vice President, Secretary and General Counsel
since January 1992. Secretary and General Counsel from November 1990 to
January 1992.
There is no family relationship among the executive officers and there has
been no involvement in legal proceedings during the past five years that
would be material to the evaluation of the ability or integrity of any of
the executive officers. Executive officers may be elected by the Board of
Directors or appointed by the Chief Executive Officer at the regular
meeting of the Board which follows the Annual Shareholders' Meeting, held
on the fourth Friday of April each year, and at such other times as new
positions are created.
PART II
Item 5: Market for Registrant's Common Equity and Related Stockholder
Matters
At December 28, 1996, the Corporation had 60,785,367 shares of common
stock outstanding.
On January 26, 1996, the Corporation's Board of Directors authorized the
Corporation to repurchase shares of the Corporation's common stock from
time to time in the open market or in privately negotiated transactions.
The authority allows the repurchase of up to the number of shares issued
or delivered from treasury from time to time under the various plans the
Corporation has in place that call for the issuance of the Corporation's
common stock. Currently, those plans include the Corporation's Employee
Stock Ownership Plan, Franchise Dealer Stock Ownership Plan, Amended and
Restated 1986 Incentive Stock Program, Amended and Restated Directors'
1993 Fee Plan, and Dividend Reinvestment and Stock Purchase Plan. Based
upon the number of shares issued under plans and programs through February
25, 1997, as of that date the Corporation had the authority pursuant to
the Board's action to repurchase 243,503 shares.
Additional information required by Item 5 is contained on page 40 of the
Corporation's 1996 Annual Report and is incorporated herein by reference
to said Annual Report.
Item 6: Selected Financial Data
The information required by Item 6 is contained on pages 36 and 37 of the
Corporation's 1996 Annual Report and is incorporated herein by reference
to said Annual Report.
Item 7: Management's Discussion and Analysis of Financial Condition and
Results of Operations
The information required by Item 7 is contained on pages 16 to 19 of the
Corporation's 1996 Annual Report and is incorporated herein by reference
to said Annual Report.
Item 8: Financial Statements and Supplementary Data
The information required by Item 8 is contained on pages 20 to 34 of the
Corporation's 1996 Annual Report and is incorporated herein by reference
to said Annual Report.
Item 9: Changes in and Disagreements With Accountants on Accounting and
Financial Disclosure
None.
PART III
Item 10: Directors and Executive Officers of the Registrant
The identification of the Corporation's directors as required by Item 10
is contained in the Corporation's Proxy Statement, dated March 14, 1997,
and is incorporated herein by reference to said Proxy Statement. With
respect to information about the Corporation's executive officers, see
caption "Executive Officers of the Registrant" at the end of Part I of
this report.
The disclosure of late filers pursuant to Item 405 of Regulation S-K is
contained on page 11 of the Corporation's Proxy Statement, dated March 14,
1997, and is incorporated herein by reference to said Proxy Statement.
Item 11: Executive Compensation
The information required by Item 11 is contained on pages 7 to 9 of the
Corporation's Proxy Statement, dated March 14, 1997, and is incorporated
herein by reference to said Proxy Statement.
Item 12: Security Ownership of Certain Beneficial Owners and Management
The information required by Item 12 is contained on page 5 of the
Corporation's Proxy Statement, dated March 14, 1997, and is incorporated
herein by reference to said Proxy Statement.
Item 13: Certain Relationships and Related Transactions
None.
PART IV
Item 14: Exhibits, Financial Statement Schedules and Reports on Form 8-K
Item 14(A): Document List
1. List of Financial Statements
The following consolidated financial statements of Snap-on Incorporated,
and the Auditors' Report thereon, each included in the 1996 Annual Report
of the Corporation to its shareholders for the year ended December 28,
1996, are incorporated by reference in Item 8 of this report:
Consolidated Balance Sheets as of December 28, 1996 and December 30, 1995.
Consolidated Statements of Earnings for the years ended December 28, 1996,
December 30, 1995 and December 31, 1994.
Consolidated Statements of Shareholders' Equity for the years ended
December 28, 1996, December 30, 1995 and December 31, 1994.
Consolidated Statements of Cash Flows for the years ended December 28,
1996, December 30, 1995 and December 31, 1994.
Notes to Consolidated Financial Statements.
2. Financial Statement Schedule
The following consolidated financial statement schedule of Snap-on
Incorporated is included in Item 14(d) as a separate section of this
report.
Schedule II Valuation and Qualifying Accounts Page 17
All other schedules for which provision is made in the applicable
accounting regulations of the Securities and Exchange Commission are
inapplicable and, therefore, have been omitted, or are included in the
Corporation's 1996 Annual Report in the Notes to Consolidated Financial
Statements for the years ended December 28, 1996, December 30, 1995 and
December 31, 1994, which are incorporated by reference in Item 8 of this
report.
3. List of Exhibits
The exhibits filed with or incorporated by reference in this report are as
specified in the exhibit index.
Item 14(B): Reports on Form 8-K
No reports on Form 8-K were filed during the last quarter of the period
covered by this report.
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
ON FINANCIAL STATEMENT SCHEDULE
We have audited, in accordance with generally accepted auditing standards,
the financial statements included in Snap-on Incorporated's (the
"Corporation") Annual Report to Shareholders, incorporated by reference in
this Form 10-K, and have issued our report thereon dated January 27, 1997.
Our audit was made for the purpose of forming an opinion on those
statements taken as a whole. The schedule listed on page 17 is the
responsibility of the Corporation's management and is presented for
purposes of complying with the Securities and Exchange Commission's rules
and is not part of the basic financial statements. This schedule has been
subjected to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, fairly states in all material
respects the financial data required to be set forth therein in relation
to the basic financial statements taken as a whole.
/s/ Arthur Andersen LLP
ARTHUR ANDERSEN LLP
Chicago, Illinois
January 27, 1997
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
of our reports included (or incorporated by reference) in this Form 10-K,
into the Corporation's previously filed Registration Statement File Nos.
2-53663, 2-53578, 33-7471, 33-22417, 33-37924, 33-39660, 33-57898, 33-
55607, 33-58939, 33-58943, 333-14769, 333-21277 and 333-21285.
/s/ Arthur Andersen LLP
ARTHUR ANDERSEN LLP
Chicago, Illinois
March 27, 1997
SIGNATURES
Pursuant to the requirements of Section 13 of 15(d) of the Securities
Exchange Act of 1934, the Corporation has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
SNAP-ON INCORPORATED
By: /s/ R. A. Cornog Date: March 27, 1997
R. A. Cornog, Chairman of the Board of Directors,
President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed by the following persons on behalf of the
Corporation and in the capacities as indicated.
/s/ R. A. Cornog Date: March 27, 1997
R. A. Cornog, Chairman of the Board of Directors,
President and Chief Executive Officer
/s/ D. S. Huml Date: March 27, 1997
D. S. Huml, Principal Financial Officer,
and Senior Vice President - Finance
/s/ G. D. Johnson Date: March 27, 1997
G. D. Johnson, Principal Accounting Officer,
and Controller
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed by the following persons on behalf of the
Corporation and in the capacities as indicated.
By: /s/ B. M. Beronja Date: March 27, 1997
B. M. Beronja, Director
By: /s/ D. W. Brinckman Date: March 27, 1997
D. W. Brinckman, Director
By: /s/ B. S. Chelberg Date: March 27, 1997
B. S. Chelberg, Director
By: /s/ R. J. Decyk Date: March 27, 1997
R. J. Decyk, Director
By: /s/ R. F. Farley Date: March 27, 1997
R. F. Farley, Director
By: /s/ L. A. Hadley Date: March 27, 1997
L. A. Hadley, Director
By: /s/ A. L. Kelly Date: March 27, 1997
A. L. Kelly, Director
By: /s/ G. W. Mead Date: March 27, 1997
G. W. Mead, Director
By: /s/ E. H. Rensi Date: March 27, 1997
E. H. Rensi, Director
By: /s/ J. H. Schnabel Date: March 27, 1997
J. H. Schnabel, Director
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
Balance of
Balance at Subsidiary Charged to Balance
beginning at time of costs and at end
Description of year acquisition expenses Deductions(1) of year
Allowance for
doubtful accounts
Year ended
December 28,
1996 $14,650,458 $296,140 $13,611,414 $11,655,431 $16,902,581
Year ended
December 30,
1995 $13,180,862 $205,414 $12,999,732 $11,735,550 $14,650,458
Year ended
December 31,
1994 $14,946,208 $ 96,355 $ 8,652,343 $10,514,044 $13,180,862
(1) This amount represents write-offs of bad debts.
EXHIBIT INDEX
Item 14(c): Exhibits
(3) (a) Restated Certificate of Incorporation of the Corporation,
effective as of March 10, 1995 (incorporated by reference to
Exhibit (3)(a) to the Corporation's Annual Report on Form 10-K
for the fiscal year ended December 31, 1994 (Commission File No.
1-7724))
(b) Bylaws of the Corporation, effective as of January 26, 1996
(4) (a) Rights Agreement dated as of October 23, 1987 between the
Corporation and Harris Trust and Savings Bank, as Rights Agent
(incorporated by reference to Exhibit 1 to the Corporation's
Registration Statement on Form 8-A dated October 26, 1987
(Commission File No. 1-7724))
(b) Amendment to Rights Agreement dated as of May 21, 1992
(incorporated by reference to Exhibit 1 to the Corporation's
Current Report on Form 8-K dated June 4, 1992 (Commission File
No. 1-7724))
(c) Amendment to Rights Agreement dated as of January 28, 1994
(incorporated by reference to Exhibit 1 to the Corporation's
Current Report on Form 8-K dated January 28, 1994 (Commission
File No. 1-7724))
(d) Amendment to Rights Agreement dated as of June 28, 1996
(incorporated by reference to Exhibit 1.1 to the Corporation's
Current Report on Form 8-A dated June 28, 1996 (Commission File
No. 1-7724))
The Corporation and its subsidiaries have no long-term debt
agreement for which the related outstanding debt exceeds 10% of
consolidated total assets as of December 28, 1996. Copies of
debt instruments for which the related debt is less than 10% of
consolidated total assets will be furnished to the Commission
upon request.
(10) Material Contracts
(a) Amended and Restated Snap-on Incorporated 1986 Incentive Stock
Plan*
(b) Form of Restated Senior Officer Agreement between the
Corporation and each of Robert A. Cornog, Branko M. Beronja,
Frederick D. Hay, Donald S. Huml, Michael F. Montemurro and Jay
H. Schnabel (incorporated by reference to Exhibit (10)(b) to the
Corporation's Annual Report on Form 10-K for the fiscal year
ended December 30, 1995 (Commission File No. 1-7724))*
(c) Form of Restated Executive Agreement between the Corporation and
each of Richard V. Caskey, Dan G. Craighead, Dale F. Elliott,
Gregory D. Johnson, Nicholas L. Loffredo, Denis J. Loverine,
Susan F. Marrinan, Lawrence G. Panatera, and William R. Whyte
(incorporated by reference to Exhibit (10)(b) to the
Corporation's Annual Report on Form 10-K for the fiscal year
ended December 30, 1995 (Commission File No. 1-7724))*
(d) Indemnification Agreement for Directors (incorporated by
reference to Exhibit B to the Corporation's Proxy Statement
dated March 23, 1990 (Commission File No. 1-7724))*
(e) Amended and Restated Snap-on Incorporated Directors' 1993 Fee
Plan*
(f) Snap-on Incorporated Deferred Compensation Plan*
(g) Snap-on Incorporated Supplemental Retirement Plan for Officers
(incorporated by reference to Exhibit (10)(b) to the
Corporation's Annual Report on Form 10-K for the fiscal year
ended December 30, 1995 (Commission File No. 1-7724))*
(h) Receivables Purchase and Sale Agreement, dated as of October 6,
1995, among Snap-on Credit Corporation, as Seller, Corporate
Asset Funding Company, Inc., as Investor, and Citicorp North
America, Inc., individually and as Agent (incorporated by
reference to Exhibit (10)(a) to the Corporation's Quarterly
Report on Form 10-Q for the quarter ended September 28, 1996
(Commission File No. 1-7724))
(i) Receivables Purchase and Sale Agreement, dated as of October 6,
1995, among Snap-on Credit Corporation, as Seller, the banks set
forth on the signature pages thereof, and Citicorp North
America, Inc., individually and as Agent (incorporated by
reference to Exhibit (10)(b) to the Corporation's Quarterly
Report on Form 10-Q for the quarter ended September 28, 1996
(Commission File No. 1-7724))
(j) Support Agreement, dated as of October 6, 1995, by Snap-on
Incorporated in favor of Corporate Asset Funding Company, Inc.,
Citibank, N.A. and Citicorp North America, Inc. (incorporated by
reference to Exhibit 10.3 to the Corporation's Quarterly Report
on Form 10-Q for the quarter ended September 30, 1995
(Commission File No. 1-7724))
(13) Annual Report to Shareholders
(21) Subsidiaries of the Corporation
(23) Consent of Independent Public Accountants (included with Report of
Independent Public Accountants on Financial Statement Schedule)
(27) Financial Data Schedule
* Denotes management contract or compensatory plan or arrangement