--- title: "Snap-on Announces Fourth Quarter and Full Year 2021 Results" url: https://burnaze.com/article/8770d471-6cb3-4398-81b0-a21c50009d0d source: "Franchising.com" original_url: https://www.franchising.com/news/20220203_snapon_announces_fourth_quarter_and_full_year_2021_results.html category: "General" published: 2022-02-03T12:00:00.000Z modified: 2026-11-01T02:09:29.646Z image: https://images.unsplash.com/photo-1450101499163-c8848c66ca85?w=1600&q=80&auto=format&fit=crop --- # Snap-on Announces Fourth Quarter and Full Year 2021 Results **TL;DR:** Snap-on Incorporated announced its fourth quarter and full year 2021 results, with net sales of $1,108.3 million in the quarter, up 3.2% from 2020, and diluted EPS of $4.10, increasing 7.3% from 2020. The company's chairman and CEO, Nick Pinchuk, stated that the performance reflects the company's continued upward trajectory and resilience in the face of the ongoing pandemic and supply chain inefficiencies. *originally published in Franchising.com on 2022-02-03. [Read the original](https://www.franchising.com/news/20220203_snapon_announces_fourth_quarter_and_full_year_2021_results.html).* ## Key facts - Snap-on's Q4 sales increased 3.2% to $1,108.3 million - Q4 operating margin before financial services was 21.0% - Diluted EPS increased 7.3% to $4.10 ## Story ## Fourth Quarter Results - ***Operating margin before financial services of 21.0% in the fourth quarter improves 90 basis points;*** - ***Diluted EPS of $4.10 in the quarter increases 7.3% from 2020 and 33.1% from pre-pandemic 2019;*** - ***Sales of $1,108.3 million in the quarter up 3.2% from 2020, organic sales up 2.3%;*** - ***Sales in the quarter up 16.0% from pre-pandemic levels of 2019, organic sales up 13.0%*** KENOSHA, Wis. - (BUSINESS WIRE) - Feb. 3, 2022 - Snap-on Incorporated (NYSE: SNA), a global innovator, manufacturer and marketer of tools, equipment, diagnostics, repair information and systems solutions for professional users performing critical tasks, today announced 2021 operating results for the fourth quarter and full year. - Net sales of $1,108.3 million in the fourth quarter of 2021 increased $33.9 million, or 3.2% from 2020 levels, reflecting a $24.7 million, or 2.3%, organic sales gain and $12.2 million of acquisition-related sales, partially offset by $3.0 million of unfavorable foreign currency translation. Additionally, net sales in the period increased $153.1 million, or 16.0%, from $955.2 million in the pre-pandemic fourth quarter of 2019, reflecting a $125.1 million, or 13.0%, organic sales gain, $20.9 million of acquisition-related sales, and $7.1 million of favorable foreign currency translation. - Operating earnings before financial services for the quarter of $232.2 million, or 21.0% of sales, compared to $216.2 million, or 20.1% of sales, in 2020, which included $1.0 million of exit and disposal costs (“restructuring charges”). - Financial services revenue in the quarter of $86.9 million compared to $93.4 million in 2020; financial services operating earnings of $67.2 million compared to $68.5 million last year. - Consolidated operating earnings for the quarter of $299.4 million compared to $284.7 million last year, which included $1.0 million of restructuring charges. As a percentage of revenues (net sales plus financial services revenue), consolidated operating earnings were 25.1% and 24.4% in the fourth quarters of 2021 and 2020, respectively. - The fourth quarter effective income tax rate was 22.3% in 2021 and 21.8% in 2020. - Net earnings in the quarter of $223.7 million, or $4.10 per diluted share, compared to fourth quarter 2020 net earnings of $208.9 million, or $3.82 per diluted share, which included a $1.0 million, or $0.02 per diluted share, after-tax charge related to the restructuring actions. Additionally, reported net earnings in the pre-pandemic fourth quarter of 2019 were $170.6 million, or $3.08 per diluted share. ## Full Year Results - Full year net sales of $4,252.0 million increased $659.5 million, or 18.4%, from 2020 levels, reflecting a $550.5 million, or 15.1%, organic sales gain, $62.6 million of acquisition-related sales, and $46.4 million of favorable foreign currency translation. Full year net earnings of $820.5 million, or $14.92 per diluted share, compared to net earnings of $627.0 million, or $11.44 per diluted share, last year. In 2020, excluding restructuring charges, net earnings, as adjusted, were $637.3 million. Earnings per diluted share in 2021 increased 28.3% as compared with the earnings per diluted share, as adjusted, of $11.63 recorded last year. See “Non-GAAP Measures” below for a definition of, and further explanation about, organic sales and measures, as adjusted, excluding restructuring charges in 2020. ## Segment Performance “Our fourth quarter performance was encouraging, as it reflects our continued upward trajectory, reaching new heights in sales, profitability and earnings, directly in the face of the ongoing pandemic, rising inflation and varying supply chain inefficiencies,” said Nick Pinchuk, Snap-on chairman and chief executive officer. “We believe the period’s performance confirms the resilience of our markets, the power of our strategic position, and the considerable strength rooted in the capable execution consistently delivered by our team against any obstacle . . all coming together to author substantial momentum along our runways for growth. As we have throughout the turbulence, we’ve utilized our Snap-on Value Creation Processes to expand our advantages in our products, our brands, and our people, which we believe will serve to drive continuing and substantial progress for the foreseeable future. Finally, I want to thank our franchisees and our associates worldwide for their valuable contributions, for their ongoing dedication, and for their confidence in our prospects as we move through 2022 and beyond.” **Commercial & Industrial Group** segment sales of $358.7 million in the quarter compared to $364.4 million last year, reflecting a $1. 6 million, or 0.4%, organic sales decline and $4.1 million of unfavorable foreign currency translation. The organic decrease is primarily due to lower sales to customers in critical industries. In addition, segment net sales in the period increased $5.8 million, or 1. 6%, from $352.9 million in the pre-pandemic fourth quarter of 2019, reflecting a $6.7 million, or 1. 9%, organic sales decline, offset by $8.7 million of acquisition-related sales and $3.8 million of favorable foreign currency translation. Operating earnings of $50.1 million in the period, including $1.2 million of unfavorable foreign currency effects, compared to $56.2 million in 2020. The operating margin (operating earnings as a percentage of segment sales) of 14.0% compared to 15.4% a year ago. **Snap-on Tools Group** segment sales of $504.8 million in the quarter increased $9.9 million, or 2. 0%, from 2020 levels, reflecting a $7.9 million, or 1.6%, organic sales gain and $2. 0 million of favorable foreign currency translation. The organic increase is due to higher activity in the U.S. franchise business, partially offset by a decrease in the segment’s international operations. Additionally, segment net sales in the period increased $93.1 million, or 22. 6%, from $411.7 million in the pre-pandemic fourth quarter of 2019, reflecting an $89.2 million, or 21. 5%, organic sales gain and $3.9 million of favorable foreign currency translation. Operating earnings of $110.5 million in the period, including $3.6 million of favorable foreign currency effects, compared to $93.6 million in 2020. The operating margin of 21.9% compared to 18.9% last year. **Repair Systems & Information Group** segment sales of $392.5 million in the quarter increased $31.4 million, or 8. 7%, from 2020 levels, reflecting a $19.7 million, or 5.5%, organic sales increase and $12. 2 million of acquisition-related sales, partially offset by $0.5 million of unfavorable foreign currency translation. The organic gain is comprised of higher sales of undercar equipment and of diagnostics and repair information products to independent repair shop owners and managers, partially offset by lower activity with OEM dealerships. In addition, segment net sales in the period increased $57.5 million, or 17.2%, from $335. 0 million in the pre-pandemic fourth quarter of 2019, reflecting a $43.7 million, or 13.0%, organic sales gain, $12. 2 million of acquisition-related sales, and $1.6 million of favorable foreign currency translation. Operating earnings of $97.2 million in the period, including $0.3 million of favorable foreign currency effects, compared to $90.0 million in 2020, which included $1.0 million of restructuring costs. The operating margin of 24.8% compared to 24.9% a year ago. **Financial Services** operating earnings of $67.2 million on revenue of $86.9 million in the quarter compared to operating earnings of $68.5 million on revenue of $93.4 million a year ago. In 2020, financial services revenue in the quarter benefited from an extra week of interest income associated with the 53-week fiscal year. Originations of $256.3 million in the fourth quarter decreased $16.1 million, or 5.9%, from 2020 levels. **Corporate** expenses of $25.6 million in the quarter compared to $23.6 million last year. COVID-19, its subsequent variants, as well as related supply chain inefficiencies, continue to impact economic activity worldwide in 2022. Snap-on is accommodating to the virus-related turbulence and is capitalizing on opportunities in this mixed environment. The company believes that our markets and our operations possess and, indeed, have demonstrated considerable resilience against the impact of the virus and that there will be ongoing advancement even in the midst of the pandemic. The trajectory, however, may be uncertain due to the evolving nature and duration of the situation. Snap-on expects to make continued progress in 2022 along its defined runways for coherent growth, leveraging capabilities already demonstrated in the automotive repair arena and developing and expanding its professional customer base, not only in automotive repair, but in adjacent markets, additional geographies and other areas, including extending in critical industries, where the cost and penalties for failure can be high. In pursuit of these initiatives, it is projected that capital expenditures in 2022 will be in a range of $90 million to $100 million. Snap-on continues to respond to the global macroeconomic challenges through its Rapid Continuous Improvement (RCI) process and other cost reduction initiatives. Snap-on currently anticipates that its full year 2022 effective income tax rate will be in the range of 23% to 24%. A discussion of this release will be webcast on Thursday, February 3, 2022, at 9:00 a.m. Central Time, and a replay will be available for at least 10 days following the call. References in this release to “organic sales” refer to sales from continuing operations calculated in accordance with generally accepted accounting principles in the United States (“GAAP”), adjusted to exclude acquisition-related sales and the impact of foreign currency translation. Management evaluates the company’s sales performance based on organic sales growth, which primarily reflects growth from the company’s existing businesses as a result of increased output, expanded customer base, geographic expansion, new product development and pricing changes, and excludes sales contributions from acquired operations the company did not own as of the comparable prior-year reporting period. Organic sales also exclude the effects of foreign currency translation as foreign currency translation is subject to volatility that can obscure underlying business trends. Management believes that the non-GAAP financial measure of organic sales is meaningful to investors as it provides them with useful information to aid in identifying underlying growth trends in the company’s businesses and facilitates comparisons of its sales performance with prior periods. For the fourth quarter of 2020, the company is including operating earnings before financial services, consolidated operating earnings, net earnings, diluted earnings per share and its effective tax rate, all as adjusted to exclude the impact of $1.0 million of restructuring charges ($1.0 million after tax) for exit and disposal activities. For the full year 2020, the company is including operating earnings before financial services, consolidated operating earnings, net earnings, diluted earnings per share and its effective tax rate, all as adjusted to exclude the impact of $12.5 million of restructuring charges ($10.3 million after tax) for exit and disposal activities, which occurred in the first, second and fourth quarters of fiscal 2020. Management believes that adjusting these measures to exclude the restructuring charges provides more meaningful year-over-year comparisons of the company’s 2021 operating performance. For a reconciliation of the 2020 adjusted metrics, see “Reconciliation of Non-GAAP Financial Measures” below. The following non-GAAP supplemental data is presented for informational purposes to provide readers with insight into the information used by management for assessing the operating performance of Snap-on Incorporated's (“Snap-on”) non-financial services (“Operations”) and “Financial Services” businesses. The supplemental Operations data reflects the results of operations and financial position of Snap-on's tools, diagnostic and equipment products, software and other non-financial services operations with Financial Services presented on the equity method. The supplemental Financial Services data reflects the results of operations and financial position of Snap-on's U.S. and international financial services operations. The financing needs of Financial Services are met through intersegment borrowings and cash generated from Operations; Financial Services is charged interest expense on intersegment borrowings at market rates. Income taxes are charged to Financial Services on the basis of the specific tax attributes generated by the U. S. and international financial services businesses. Transactions between the Operations and Financial Services businesses were eliminated to arrive at the Condensed Consolidated Financial Statements. ## Entities - Franchising.com (publication) - General (sector) - sales growth (topic) - quarterly earnings (topic) - profitability (topic) - Snap-on Incorporated (company) - full year results (topic) - Nick Pinchuk (person) --- Originally reported by Franchising.com (https://www.franchising.com/news/20220203_snapon_announces_fourth_quarter_and_full_year_2021_results.html). Summarized by Burnaze (https://burnaze.com/article/8770d471-6cb3-4398-81b0-a21c50009d0d).