Exhibit 99
Snap-on Announces Expected Results for the
Second Quarter and Updates Full-year Earnings Outlook
KENOSHA, Wis.--(BUSINESS WIRE)--June 26, 2003--
Continued economic weakness impacts Commercial and Industrial
segment results; Snap-on continues to implement
initiatives to improve performance
Snap-on Incorporated (NYSE:SNA), a global leader in tools,
diagnostics and equipment, today announced expected results for the
second quarter ending June 28, 2003, and updated its fiscal full-year
2003 earnings outlook. For the second quarter, Snap-on currently
expects diluted earnings per share to be in the range of $0.36 to
$0.40. For the full year, Snap-on anticipates a 5%-10% increase year
over year in diluted earnings per share, rather than the 10%-15%
increase previously expected.
-- In the Dealer Group and Diagnostics and Information Group
segments, expected results for the second quarter and full
year are on track. End-user demand - sales of tools and
handheld diagnostics to technicians - remains solid and is
expected to increase, year over year, in a mid-single digit
range for the second quarter.
-- In the Commercial and Industrial Group segment, second-quarter
sales volume of tools for industrial and commercial
applications in both Europe and North America, as well as for
capital goods equipment sold to vehicle repair shops in North
America, are expected to decline from last year's already
depressed levels. Volume in the segment reflects continued
weak economic conditions, beyond what was anticipated for the
quarter, in the manufacturing, government and commercial
sectors. Additionally, strategic action taken in the equipment
business to strengthen expected long-term operating margins
has led to a short-term disruption in sales. The combined
near-term effect of the lower volumes has further compressed
operating margin in the segment.
-- Snap-on continues to implement its performance improvement
initiatives to lower its cost structure, while taking
additional steps to align production with the reduced demand.
The expenses associated with these realignment actions,
principally for severance costs, are expected to approximate
$0.04 per share for the second quarter. Production capacity is
being conformed to current marketplace realities and will
continue to be adjusted as necessary for the remainder of the
year.
"We are making progress in our drive to transform Snap-on into a
stronger performing company, in spite of the challenging marketplace
for industrial and capital goods," said Dale F. Elliott, chairman and
chief executive officer. "We are driving continuous improvement
activities within all of our business units, with a focus on
strengthening operating processes and reducing inefficiencies. Cash
flow remains solid, our balance sheet is sound, and we believe we are
doing the right things to create shareholder value over time."
During the second quarter, Snap-on initiated strategic action
within its Commercial and Industrial Group to enhance the future
profitability of its North American equipment business serving the
vehicle repair industry.
In North America, Snap-on's existing equipment distribution
network and its technical representatives (Tech Rep) organization,
which supports the Snap-on Dealer Group, are being supplemented with a
new sales organization, the Technical Automotive Group (TAG), focused
on marketing equipment. This action builds upon Snap-on's existing
distribution capabilities and enhances the company's alignment of
resources to provide better sales support, training and service to its
customers.
"We are seeing positive indications that this is the right
framework for the future," said Elliott. "Gross profit margins and
sales leads are up significantly and have been improving month to
month during the quarter.
"While we are now able to reach more customers for equipment and
serve them better, the building of a new sales organization has led to
some short-term dislocation of sales volume," said Elliott. "However,
we believe market participation and sales productivity will increase
as we hire and train additional talented sales professionals and as
the organization becomes more seasoned. We expect this to translate
into improved equipment sales and profitability trends toward the
latter part of 2003."
Snap-on expects to announce actual results for the second quarter
and six months on Wednesday, July 23, 2003, along with the traditional
discussion and analysis of performance and trends.
In the 2002 second quarter, Snap-on reported net earnings of $29.2
million, or $0.50 per diluted share, on sales of $547.2 million. For
fiscal 2002, earnings were $106.0 million, or $1.81 per diluted share,
on sales of $2,109.1 million.
A discussion of this announcement will be webcast at 10:00 a.m.
CDT today, and a replay will be available for approximately 10 days
following the call. To access the audio presentation, go to
www.snapon.com, click on the Investor Information tab at the top of
the page and then on Presentations in the menu to the left. There you
will see the link to the call. Additional detail about Snap-on is also
available on the Snap-on Web site.
Snap-on Incorporated is a leading global innovator, manufacturer
and marketer of tool, diagnostic and equipment solutions for
professional tool users. Product lines include hand and power tools,
diagnostics and shop equipment, tool storage, diagnostics software and
other solutions for vehicle-service, industrial, government and
agricultural customers, and commercial applications, including
construction and electrical. Products are sold through its franchised
dealer van, company-direct sales and distributor channels, as well as
over the Internet. Founded in 1920, Snap-on is a $2+ billion, S&P 500
company headquartered in Kenosha, Wisconsin, and employs approximately
12,800 people worldwide.
Statements in this news release that are not historical facts,
including statements (i) that include the words "expects," "believes,"
or "anticipates," or similar words that reference Snap-on or its
management; (ii) specifically identified as forward-looking; or (iii)
describing Snap-on's or management's future outlook, plans, estimates,
objectives or goals, are forward-looking statements. Snap-on or its
representatives may also make similar forward-looking statements from
time to time orally or in writing. Snap-on cautions the reader that
these statements are subject to risks, uncertainties or other factors
that could cause (and in some cases have caused) actual results to
differ materially from those described in any such statement. Those
important factors include the validity of the assumptions and bases
underlying such statements and the timing and progress with which
Snap-on can continue to achieve savings from its cost reduction and
other Operational Fitness initiatives; Snap-on's capability to retain
and attract dealers and effectively implement new programs; its
ability to capture new business; the success of new products and other
Profitable Growth initiatives; Snap-on's ability to withstand external
negative factors including terrorist disruptions on business; changes
in trade, monetary and fiscal policies, regulatory reporting
requirements, laws and regulations, or other activities of governments
or their agencies, including military actions and such aftermath that
might occur, and the absence of significant changes in inflation, the
current competitive environment, energy supply or pricing, legal
proceedings, supplier disruptions, currency fluctuations or the
material worsening of economic and political situations around the
world.
These factors may not constitute all factors that could cause
actual results to differ materially from those discussed in any
forward-looking statement. Snap-on operates in a continually changing
business environment and new factors emerge from time to time. Snap-on
cannot predict such factors nor can it assess the impact, if any, of
such factors on Snap-on's financial position or its results of
operations. Accordingly, forward-looking statements should not be
relied upon as a prediction of actual results. Snap-on disclaims any
responsibility to update any forward-looking statement provided in
this news release. Any opinions, estimates or forecasts regarding
Snap-on performance made by analysts are theirs alone and do not
represent the opinions, forecasts or predictions of Snap-on or its
management, nor does Snap-on endorse or otherwise comment on such
forecasts.
CONTACT: Snap-on Incorporated
Media:
Richard Secor, 262/656-5561
or
Investors:
William Pfund, 262/656-6488
www.snapon.com