UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) April 15, 2005
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Snap-on Incorporated
(Exact name of registrant as specified in its charter)
Delaware 1-7724 39-0622040
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(State or other jurisdiction of (Commission File Number) (I.R.S. Employer
incorporation or organization) Identification No.)
10801 Corporate Drive, Pleasant Prairie, Wisconsin 53158-1603
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(Address of principal executive offices)
Registrant's telephone number, including area code: (262) 656-5200
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Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
|_| Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
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Item 8.01 Other Events
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Snap-on's business segments are based on the organization structure used by
management for making operating and investment decisions and for assessing
performance. Snap-on's reportable business segments include: (i) the Snap-on
Dealer Group; (ii) the Commercial and Industrial Group; (iii) the Diagnostics
and Information Group; and (iv) Financial Services. The Snap-on Dealer Group
consists of Snap-on's business operations serving the worldwide franchised
dealer van channel. The Commercial and Industrial Group consists of the business
operations providing tools and equipment products and equipment repair services
to a broad range of industrial and commercial customers worldwide through
direct, distributor and other non-franchised distribution channels. The
Diagnostics and Information Group consists of the business operations providing
diagnostics equipment, vehicle-service information, business management systems,
and other solutions for vehicle service to customers in the worldwide vehicle
service and repair marketplace. Financial Services became a business segment in
fiscal 2004 as a result of the prospective adoption of FIN No. 46R,
"Consolidation of Variable Interest Entities (an interpretation of ARB No. 51)".
Financial Services consists of the business operations of Snap-on Credit LLC
("SOC"), a consolidated 50%-owned joint venture between Snap-on and The CIT
Group, Inc., and Snap-on's wholly owned finance subsidiaries in those
international markets where Snap-on has dealer operations. See Notes 2 and 9 to
the financial statements contained in Snap-on's 2004 Annual Report on Form 10-K
for further discussion of SOC and the company's adoption of FIN No. 46R.
Snap-on evaluates the performance of its operating segments based on segment
revenues and operating earnings, exclusive of financing activities and income
taxes. Segment revenues are defined as total revenues, including both external
customer revenue and intersegment revenue. Segment operating earnings are
defined as segment revenues less cost of goods sold and operating expenses,
including restructuring costs. Snap-on accounts for intersegment sales and
transfers based primarily on standard costs with reasonable mark-ups established
between the segments. Identifiable assets by segment are those assets used in
the respective reportable segment's operations. Intersegment amounts are
eliminated to arrive at consolidated financial results.
Due to recent changes in Snap-on's management organization structure, Snap-on
realigned its business segments during the first quarter of fiscal 2005. The
primary changes include the transfer of Snap-on's Technical Representative
support organization from the Snap-on Dealer Group to the Diagnostics and
Information Group and the segregation of Snap-on's general corporate expenses
from the operating earnings of the business segments. Prior to fiscal 2005,
shared services and general corporate expenses and corporate assets were
allocated to the business segments based on segment revenues. Beginning in
fiscal 2005, the business segments are charged only for those shared services
utilized by the business segment based on an estimate of the value of services
provided; general corporate expenses and corporate assets are not allocated to
the business segments. Corporate assets consist principally of those assets that
are centrally managed including cash and cash equivalents, short-term
investments, debt, pension assets and income taxes, as well as corporate real
estate and related assets.
2
As required by Statement of Financial Accounting Standards No. 131, "Disclosures
about Segments of an Enterprise and Related Information," all future
consolidated financial statements issued by Snap-on will reflect the
reclassification of previously published segment data as a result of the
above-mentioned changes in Snap-on's fiscal 2005 management organization
structure. The information included in this Form 8-K affects only disclosures
related to segment results and does not in any way restate or revise the
consolidated financial position, results of operations or cash flows in any
previously reported Consolidated Statements of Earnings, Consolidated Balance
Sheets or Consolidated Statements of Cash Flows of Snap-on.
The accompanying quarterly and full-year segment information for fiscal 2004 and
2003 reflects the fiscal 2005 reportable business segment changes noted above.
The restated quarterly and full-year fiscal 2003 segment disclosures do not
include the Financial Services segment due to the prospective adoption of FIN
No. 46R at the beginning of fiscal 2004.
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SNAP-ON INCORPORATED
Fiscal 2004 Segment Information
(Amounts in millions)
(unaudited)
Three Months Ended
----------------------------------------------------------- Year Ended
April 3, July 3, October 2, January 1, January 1,
2004 2004 2004 2005 2005
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External revenue
Snap-on Dealer Group $ 262.9 $ 261.1 $ 248.9 $ 247.7 $1,020.6
Commercial and Industrial Group 252.2 250.4 226.1 258.5 987.2
Diagnostics and Information Group 80.0 79.8 75.9 85.6 321.3
Financial Services 21.2 20.8 17.9 18.2 78.1
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Total external revenue $ 616.3 $ 612.1 $ 568.8 $ 610.0 $2,407.2
============= ============ ============= ============ ==============
Intersegment revenue
Snap-on Dealer Group $ - $ - $ - $ - $ -
Commercial and Industrial Group 30.6 32.5 29.1 30.8 123.0
Diagnostics and Information Group 38.2 34.9 53.3 39.3 165.7
Financial Services - - - - -
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Total intersegment revenue $ 68.8 $ 67.4 $ 82.4 $ 70.1 $ 288.7
============= ============ ============= ============ ==============
Total revenue
Snap-on Dealer Group $ 262.9 $ 261.1 $ 248.9 $ 247.7 $1,020.6
Commercial and Industrial Group 282.8 282.9 255.2 289.3 1,110.2
Diagnostics and Information Group 118.2 114.7 129.2 124.9 487.0
Financial Services 21.2 20.8 17.9 18.2 78.1
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Segment revenue 685.1 679.5 651.2 680.1 2,695.9
Intersegment eliminations (68.8) (67.4) (82.4) (70.1) (288.7)
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Consolidated revenue $ 616.3 $ 612.1 $ 568.8 $ 610.0 $2,407.2
============= ============ ============= ============ ==============
Operating earnings
Snap-on Dealer Group $ 14.9 $ 30.0 $ 12.8 $ 22.7 $ 80.4
Commercial and Industrial Group 3.3 4.2 3.5 12.5 23.5
Diagnostics and Information Group 9.2 6.8 18.9 12.4 47.3
Financial Services 10.9 9.6 7.4 6.2 34.1
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Segment operating earnings 38.3 50.6 42.6 53.8 185.3
Corporate (11.3) (9.8) (6.1) (15.8) (43.0)
Net finance income - - - - -
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Operating earnings 27.0 40.8 36.5 38.0 142.3
Interest expense (5.6) (5.7) (6.1) (5.6) (23.0)
Other income (expense) - net (1.9) (0.9) (0.8) 4.7 1.1
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Earnings before income taxes $ 19.5 $ 34.2 $ 29.6 $ 37.1 $ 120.4
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SNAP-ON INCORPORATED
Fiscal 2003 Segment Information
(Amounts in millions)
(unaudited)
Three Months Ended
------------------------------------------------------------- Year Ended
March 29, June 28, September 27, January 3, January 3,
2003 2003 2003 2004 2004
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External revenue
Snap-on Dealer Group $ 251.8 $ 265.4 $ 239.8 $ 256.3 $1,013.3
Commercial and Industrial Group 221.3 222.8 215.8 256.6 916.5
Diagnostics and Information Group 70.0 77.0 70.0 86.4 303.4
Financial Services - - - - -
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Total external revenue $ 543.1 $ 565.2 $ 525.6 $ 599.3 $2,233.2
============= ============= ============ ============= ==============
Intersegment revenue
Snap-on Dealer Group $ - $ - $ - $ - $ -
Commercial and Industrial Group 29.2 31.1 27.9 31.1 119.3
Diagnostics and Information Group 37.0 39.0 38.9 30.6 145.5
Financial Services - - - - -
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Total intersegment revenue $ 66.2 $ 70.1 $ 66.8 $ 61.7 $ 264.8
============= ============= ============ ============= ==============
Total revenue
Snap-on Dealer Group $ 251.8 $ 265.4 $ 239.8 $ 256.3 $1,013.3
Commercial and Industrial Group 250.5 253.9 243.7 287.7 1,035.8
Diagnostics and Information Group 107.0 116.0 108.9 117.0 448.9
Financial Services - - - - -
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Segment revenue 609.3 635.3 592.4 661.0 2,498.0
Intersegment eliminations (66.2) (70.1) (66.8) (61.7) (264.8)
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Consolidated revenue $ 543.1 $ 565.2 $ 525.6 $ 599.3 $2,233.2
============= ============= ============ ============= ==============
Operating earnings
Snap-on Dealer Group $ 29.3 $ 26.3 $ 8.1 $ 24.0 $ 87.7
Commercial and Industrial Group 11.1 6.2 6.4 8.7 32.4
Diagnostics and Information Group (0.1) 8.0 9.2 5.0 22.1
Financial Services - - - - -
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Segment operating earnings 40.3 40.5 23.7 37.7 142.2
Corporate (7.8) (11.0) (2.6) (14.5) (35.9)
Net finance income 10.5 11.2 10.0 12.1 43.8
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Operating earnings 43.0 40.7 31.1 35.3 150.1
Interest expense (6.4) (6.0) (5.8) (6.2) (24.4)
Other income (expense) - net (3.7) (0.4) (2.4) (2.5) (9.0)
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Earnings before income taxes $ 32.9 $ 34.3 $ 22.9 $ 26.6 $ 116.7
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SNAP-ON INCORPORATED
Fiscal 2004 and 2003 Segment Information
(Amounts in millions)
(unaudited)
January 1, January 3,
2005 2004
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Total assets
Snap-on Dealer Group $ 424.5 $ 444.7
Commercial and Industrial Group 1,042.7 1,028.4
Diagnostics and Information Group 243.5 267.9
Financial Services 174.6 -
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Total from reportable segments 1,885.3 1,741.0
Corporate 471.7 335.2
Financial Services - 125.1
Elimination of intersegment receivables (66.9) (62.8)
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Total assets $2,290.1 $2,138.5
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Capital expenditures
Snap-on Dealer Group $ 17.3 $ 8.1
Commercial and Industrial Group 15.7 14.9
Diagnostics and Information Group 5.1 5.7
Financial Services 0.6 -
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Total from reportable segments 38.7 28.7
Corporate - 0.7
Financial Services - -
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Total capital expenditures $ 38.7 $ 29.4
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Depreciation and amortization
Snap-on Dealer Group $ 18.4 $ 22.1
Commercial and Industrial Group 27.7 24.1
Diagnostics and Information Group 11.1 12.0
Financial Services 1.4 -
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Total from reportable segments 58.6 58.2
Corporate 2.4 2.1
Financial Services - -
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Total depreciation and amortization $ 61.0 $ 60.3
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SIGNATURES
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Pursuant to the requirements of the Securities and Exchange Act of 1934, Snap-on
Incorporated has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
SNAP-ON INCORPORATED
Date: April 15, 2005 By: /s/ Martin M. Ellen
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Martin M. Ellen, Senior Vice President -
Finance and Chief Financial Officer
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