Business Wire | Feb 4, 2021 06:30AM EST

Snap-on Announces Fourth Quarter and Full Year 2020 Results

Feb. 04, 2021

KENOSHA, Wis.--(BUSINESS WIRE)--Feb. 04, 2021--Snap-on Incorporated (NYSE: SNA), a leading global innovator, manufacturer and marketer of tools, equipment, diagnostics, repair information and systems solutions for professional users performing critical tasks, today announced 2020 operating results for the fourth quarter and full year.

* Net sales of $1,074.4 million in the fourth quarter of 2020 increased $119.2 million, or 12.5% from 2019 levels, reflecting a $102.1 million, or 10.6%, organic sales gain, $9.6 million of favorable foreign currency translation, and $7.5 million of acquisition-related sales. * Operating earnings before financial services for the quarter of $216.2 million, or 20.1% of sales, including the impacts from $2.8 million of direct costs associated with COVID-19, $1.5 million of unfavorable currency effects and $1.0 million of exit and disposal costs for actions outside of the United States ("restructuring charges"), compared to $171.4 million, or 17.9% of sales in 2019. Excluding the restructuring charges, operating earnings before financial services in 2020, as adjusted, of $217.2 million, or 20.2% of sales, increased $45.8 million, or 26.7%, from 2019 levels. * Financial services revenue in the quarter of $93.4 million increased $9.5 million from 2019 levels; financial services operating earnings of $68.5 million compared to $62.2 million last year. * Consolidated operating earnings for the quarter of $284.7 million, including $2.8 million of direct costs associated with COVID-19, $1.3 million of unfavorable currency effects and $1.0 million of restructuring charges, compared to $233.6 million last year. As a percentage of revenues (net sales plus financial services revenue), consolidated operating earnings were 24.4% and 22.5% in the fourth quarters of 2020 and 2019, respectively. Excluding the restructuring charges, consolidated operating earnings in 2020, as adjusted, of $285.7 million, or 24.5% of revenues, increased $52.1 million, or 22.3%, from 2019 levels. * The fourth quarter effective income tax rate was 21.8% in 2020 and 22.3% in 2019. * Net earnings in the quarter of $208.9 million, or $3.82 per diluted share, compared to $170.6 million, or $3.08 per diluted share, a year ago. Excluding the restructuring charges, net earnings, as adjusted, were $209.9 million in 2020, or $3.84 per diluted share. * Full year net sales of $3,592.5 million decreased $137.5 million, or 3.7%, from 2019 levels, reflecting a $140.9 million, or 3.8%, organic sales decline and $10.9 million of unfavorable foreign currency translation, partially offset by $14.3 million of acquisition-related sales. The lower sales volume is primarily due to decreased activity in the first half of the year as a result of the initial shock associated with the COVID-19 pandemic. Full year net earnings of $627.0 million, or $11.44 per diluted share, compared to net earnings of $693.5 million, or $12.41 per diluted share, last year. In 2020, excluding restructuring charges, net earnings, as adjusted, were $637.3 million. In 2019, excluding a legal settlement related to a litigation matter that was being appealed (the "legal settlement"), net earnings, as adjusted, were $684.8 million. Earnings per diluted share, as adjusted, of $11.63 in 2020, decreased 5.1% as compared to earnings per diluted share, as adjusted, of $12.26 last year.

See "Non-GAAP Measures" below for a definition of, and further explanation about, organic sales and measures, as adjusted, excluding the restructuring charges and the legal settlement.

"Our fourth quarter was another encouraging period in which Snap-on continued its upward trajectory, extending to new heights in both sales and earnings . . . achieved directly against a disruption of historic proportion . . . all while prioritizing the health and safety of our constituents," said Nick Pinchuk, Snap-on chairman and chief executive officer. "We believe our performance clearly confirms the continuing and abundant opportunities along our runways for growth and improvement, demonstrates the strength inherent in our operations, and testifies to the resilience of our enterprise, supported by our franchise network, by our capacity for critical innovation, and by our deep connection with makers and fixers. We're further heartened that the gains were achieved in the challenging COVID environment, while still expanding our special advantage in our products, in our brands, and in our people. Those elevated capabilities enabled us to reach higher in the quarter and will serve as an effective base for attaining increased progress as we move forward through 2021. Finally, I want to celebrate our franchisees, our associates, and our customers who have labored at their essential tasks, especially in repair shops, in warehouses, and in factories. Their dedication and hard work have helped preserve our society during the time of the virus . . . an effort that will be remembered for years to come."

Segment Results - Fourth Quarter

Commercial & Industrial Group segment sales of $364.4 million in the quarter increased $11.5 million, or 3.3%, from 2019 levels, including $7.5 million of acquisition-related sales and $6.5 million of favorable foreign currency translation, partially offset by a $2.5 million, or 0.7%, organic decline. This decrease includes lower activity with customers in the critical industries and in the segment's Asia Pacific operations, partially offset by higher volumes in the segment's European-based hand tools business.

Operating earnings of $56.2 million in the period, including $1.0 million of COVID-19-related costs and $1.3 million of unfavorable foreign currency effects, compared to $45.0 million in 2019. The operating margin (operating earnings as a percentage of segment sales) of 15.4% compared to 12.8% a year ago.

Snap-on Tools Group segment sales of $494.9 million in the quarter increased $83.2 million, or 20.2%, from 2019 levels, reflecting an $81.0 million, or 19.6%, organic gain and $2.2 million of favorable foreign currency translation. The organic increase reflects higher activity in both the segment's U.S. and international operations.

Operating earnings of $93.6 million in the period, including $1.2 million of COVID-19-related costs, increased $39.3 million from 2019 levels, and the operating margin of 18.9% compared to 13.2% last year.

Repair Systems & Information Group segment sales of $361.1 million in the quarter increased $26.1 million, or 7.8%, from 2019 levels, reflecting a $23.7 million, or 7.0%, organic increase and $2.4 million of favorable foreign currency translation. The organic gain includes higher activity with OEM dealerships and increased sales of diagnostics and repair information products to independent repair shop owners and managers, partially offset by lower volumes of undercar equipment.

Operating earnings of $90.0 million in the period, including $1.0 million of restructuring charges, $0.2 million of COVID-19-related costs and $0.2 million of unfavorable foreign currency effects, compared to $87.2 million in 2019, while the operating margin of 24.9% compared to 26.0% a year ago.

Financial Services operating earnings of $68.5 million on revenue of $93.4 million in the quarter compared to operating earnings of $62.2 million on revenue of $83.9 million a year ago. Originations of $272.4 million in the fourth quarter increased $10.0 million, or 3.8%, from 2019 levels.

Corporate expenses of $23.6 million in the quarter compared to $15.1 million last year.

Outlook

COVID-19 spread across the globe during 2020 and continues to impact economic activity worldwide into 2021. Snap-on is accommodating to the related risks while safely pursuing opportunities in the COVID-19 environment. In 2021, the company believes there will be ongoing advancement against the virus-related turbulence, and that the trajectory of progress may be uncertain due to the evolving nature and duration of the pandemic.

Snap-on does expect to make progress in 2021 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 2021 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 2021 effective income tax rate will be in the range of 23% to 24%.

Conference Call and Webcast on February 4, 2021, at 9:00 a.m. Central Time

A discussion of this release will be webcast on Thursday, February 4, 2021, at 9:00 a.m. Central Time, and a replay will be available for at least 10 days following the call. To access the webcast, visit https://www.snapon.com/EN/Investors/Investor-Events and click on the link to the call. The slide presentation accompanying the call can be accessed under the Downloads tab in the webcast viewer, as well as on the Snap-on website at https://www.snapon.com/EN/Investors/Financial-Information/Quarterly-Earnings.

Non-GAAP Measures

References in this document 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, customer base and geographic expansion, new product development and/or pricing, and excludes sales contributions from acquired operations the company did not own as of the comparable prior-year reporting period. The company's organic sales disclosures 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 our businesses and facilitates comparisons of our 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.

For the full year 2019, the company is including operating earnings before financial services, consolidated operating earnings, net earnings and diluted earnings per share, all as adjusted to exclude the impact of an $11.6 million benefit ($8.7 million after tax) from the legal settlement, which occurred in the first quarter of fiscal 2019.

Management believes that these are unusual events and therefore the non-GAAP financial measures adjusted to exclude them provide more meaningful year-over-year comparisons of the company's 2020 operating performance. For a reconciliation of the adjusted metrics, see "Reconciliation of Non-GAAP Financial Measures" below.

About Snap-on

Snap-on Incorporated is a leading global innovator, manufacturer and marketer of tools, equipment, diagnostics, repair information and systems solutions for professional users performing critical tasks. Products and services include hand and power tools, tool storage, diagnostics software, information and management systems, shop equipment and other solutions for vehicle dealerships and repair centers, as well as for customers in industries, including aviation and aerospace, agriculture, construction, government and military, mining, natural resources, power generation and technical education. Snap-on also derives income from various financing programs to facilitate the sales of its products and support its franchise business. Products and services are sold through the company's franchisee, company-direct, distributor and internet channels. Founded in 1920, Snap-on is a $3.6 billion, S&P 500 company headquartered in Kenosha, Wisconsin.

Forward-looking Statements

Statements in this news release that are not historical facts, including statements that (i) are in the future tense; (ii) include the words "expects," "anticipates," "intends," "approximates," or similar words that reference Snap-on or its management; (iii) are specifically identified as forward-looking; or (iv) describe Snap-on's or management's future outlook, plans, estimates, objectives or goals, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Snap-on cautions the reader that this news release may contain statements, including earnings projections, that are forward-looking in nature and were developed by management in good faith and, accordingly, are subject to risks and uncertainties regarding Snap-on's expected results that could cause (and in some cases have caused) actual results to differ materially from those described or contemplated in any forward-looking statement. Factors that may cause the company's actual results to differ materially from those contained in the forward-looking statements include those found in the company's reports filed with the Securities and Exchange Commission, including the information under the "Safe Harbor" and "Risk Factors" headings in its Annual Report on Form 10-K for the fiscal year ended December 28, 2019 and any Quarterly Reports on Form 10-Q, which all are incorporated herein by reference. Snap-on disclaims any responsibility to update any forward-looking statement provided in this news release, except as required by law.

SNAP-ON INCORPORATED

Condensed Consolidated Statements of Earnings

(Amounts in millions, except per share data)

(unaudited)

Fourth Quarter Full Year

2020 2019 2020 2019



Net sales $ 1,074.4 $ 955.2 $ 3,592.5 $ 3,730.0

Cost of goods sold (558.2) (504.7) (1,844.0) (1,886.0)

Gross profit 516.2 450.5 1,748.5 1,844.0

Operating expenses (300.0) (279.1) (1,116.6) (1,127.6)

Operating earnings before 216.2 171.4 631.9 716.4 financial services



Financial services revenue 93.4 83.9 349.7 337.7

Financial services expenses (24.9) (21.7) (101.1) (91.8)

Operating earnings from 68.5 62.2 248.6 245.9 financial services



Operating earnings 284.7 233.6 880.5 962.3

Interest expense (15.4) (12.1) (54.0) (49.0)

Other income (expense) - 2.4 2.4 8.7 8.8 net

Earnings before income 271.7 223.9 835.2 922.1 taxes and equity earnings

Income tax expense (58.2) (48.9) (189.1) (211.8)

Earnings before equity 213.5 175.0 646.1 710.3 earnings

Equity earnings, net of tax 0.3 - 0.3 0.9

Net earnings 213.8 175.0 646.4 711.2

Net earnings attributable (4.9) (4.4) (19.4) (17.7) to noncontrolling interests

Net earnings attributable $ 208.9 $ 170.6 $ 627.0 $ 693.5 to Snap-on Inc.





Net earnings per shareattributable to Snap-on Inc.:

Basic $ 3.85 $ 3.12 $ 11.55 $ 12.59

Diluted 3.82 3.08 11.44 12.41



Weighted-average shares outstanding:

Basic 54.2 54.7 54.3 55.1

Effect of dilutive 0.5 0.7 0.5 0.8 securities

Diluted 54.7 55.4 54.8 55.9

SNAP-ON INCORPORATED

Supplemental Segment Information

(Amounts in millions)

(unaudited)

Fourth Quarter Full Year

2020 2019 2020 2019

Net sales:

Commercial & Industrial $ 364.4 $ 352.9 $ 1,234.6 $ 1,345.7 Group

Snap-on Tools Group 494.9 411.7 1,643.9 1,612.9

Repair Systems & 361.1 335.0 1,238.2 1,334.5 Information Group

Segment net sales 1,220.4 1,099.6 4,116.7 4,293.1

Intersegment eliminations (146.0) (144.4) (524.2) (563.1)

Total net sales 1,074.4 955.2 3,592.5 3,730.0

Financial Services 93.4 83.9 349.7 337.7 revenue

Total revenues $ 1,167.8 $ 1,039.1 $ 3,942.2 $ 4,067.7



Operating earnings:

Commercial & Industrial $ 56.2 $ 45.0 $ 153.7 $ 188.7 Group

Snap-on Tools Group 93.6 54.3 267.7 245.8

Repair Systems & 90.0 87.2 298.0 342.7 Information Group

Financial Services 68.5 62.2 248.6 245.9

Segment operating 308.3 248.7 968.0 1,023.1 earnings

Corporate (23.6) (15.1) (87.5) (60.8)

Operating earnings 284.7 233.6 880.5 962.3

Interest expense (15.4) (12.1) (54.0) (49.0)

Other income (expense) - 2.4 2.4 8.7 8.8 net

Earnings before income $ 271.7 $ 223.9 $ 835.2 $ 922.1 taxes and equity earnings

SNAP-ON INCORPORATED

Condensed Consolidated Balance Sheets

(Amounts in millions)

(unaudited)

Fiscal Year End

2020 2019

Assets

Cash and cash equivalents $ 923.4 $ 184.5

Trade and other accounts receivable - net 640.7 694.6

Finance receivables - net 530.2 530.1

Contract receivables - net 112.5 100.7

Inventories - net 746.5 760.4

Prepaid expenses and other assets 129.7 110.2

Total current assets 3,083.0 2,380.5



Property and equipment - net 526.2 521.5

Operating lease right-of-use assets 51.9 55.6

Deferred income tax assets 50.3 52.3

Long-term finance receivables - net 1,136.3 1,103.5

Long-term contract receivables - net 374.7 360.1

Goodwill 982.4 913.8

Other intangibles - net 260.8 243.9

Other assets 91.7 62.3

Total assets $ 6,557.3 $ 5,693.5



Liabilities and Equity

Notes payable and current maturities of long-term $ 268.5 $ 202.9 debt

Accounts payable 222.9 198.5

Accrued benefits 59.7 53.3

Accrued compensation 89.9 53.9

Franchisee deposits 78.4 68.2

Other accrued liabilities 445.5 370.8

Total current liabilities 1,164.9 947.6



Long-term debt 1,182.1 946.9

Deferred income tax liabilities 70.4 69.3

Retiree health care benefits 34.5 33.6

Pension liabilities 127.1 122.1

Operating lease liabilities 34.0 37.5

Other long-term liabilities 97.7 105.7

Total liabilities 2,710.7 2,262.7



Equity

Shareholders' equity attributable to Snap-on Inc.

Common stock 67.4 67.4

Additional paid-in capital 391.7 379.1

Retained earnings 5,156.9 4,779.7

Accumulated other comprehensive loss (365.8) (507.9)

Treasury stock at cost (1,425.3) (1,309.2)

Total shareholders' equity attributable to Snap-on 3,824.9 3,409.1 Inc.

Noncontrolling interests 21.7 21.7

Total equity 3,846.6 3,430.8

Total liabilities and equity $ 6,557.3 $ 5,693.5



SNAP-ON INCORPORATED

Condensed Consolidated Statements of Cash Flows

(Amounts in millions)

(unaudited)

Fourth Quarter

2020 2019

Operating activities:

Net earnings $ 213.8 $ 175.0

Adjustments to reconcile net earnings to net cash provided (used) by operating activities:

Depreciation 19.0 17.9

Amortization of other intangibles 6.2 6.0

Provision for losses on finance receivables 13.4 14.1

Provision for losses on non-finance receivables 6.4 3.9

Stock-based compensation expense 7.0 5.1

Deferred income tax provision 0.3 23.5

Loss on sales of assets 0.7 0.1

Changes in operating assets and liabilities, net of effects of acquisition:

Trade and other accounts receivable (10.6) (7.3)

Contract receivables (3.1) (8.0)

Inventories 37.8 0.3

Prepaid and other assets 8.8 (5.2)

Accounts payable 7.5 (11.8)

Accruals and other liabilities 10.4 (16.9)

Net cash provided by operating activities 317.6 196.7



Investing activities:

Additions to finance receivables (223.5) (213.8)

Collections of finance receivables 207.6 189.2

Capital expenditures (26.5) (21.6)

Acquisition of business, net of cash acquired (35.4) 0.3

Disposals of property and equipment 0.4 1.4

Other 3.8 3.1

Net cash used by investing activities (73.6) (41.4)



Financing activities:

Net increase (decrease) in other short-term borrowings 0.5 (29.3)

Cash dividends paid (66.8) (59.0)

Purchases of treasury stock (78.7) (71.2)

Proceeds from stock purchase and option plans 39.3 25.2

Other (5.9) (4.9)

Net cash used by financing activities (111.6) (139.2)



Effect of exchange rate changes on cash and cash 3.5 0.9 equivalents

Increase in cash and cash equivalents 135.9 17.0



Cash and cash equivalents at beginning of period 787.5 167.5

Cash and cash equivalents at end of year $ 923.4 $ 184.5



Supplemental cash flow disclosures:

Cash paid for interest $ (8.6) $ (1.5)

Net cash paid for income taxes (56.5) (50.7)

SNAP-ON INCORPORATED

Condensed Consolidated Statements of Cash Flows

(Amounts in millions)

(unaudited)

Full Year

2020 2019

Operating activities:

Net earnings $ 646.4 $ 711.2

Adjustments to reconcile net earnings to net cash provided (used) by operating activities:

Depreciation 73.3 70.1

Amortization of other intangibles 23.4 22.3

Provision for losses on finance receivables 54.6 49.9

Provision for losses on non-finance receivables 22.7 18.3

Stock-based compensation expense 19.5 23.8

Deferred income tax provision (benefit) (8.2) 34.2

Loss on sales of assets 1.4 0.9

Settlement of treasury lock 1.4 -

Changes in operating assets and liabilities, net of effects of acquisitions:

Trade and other accounts receivable 47.9 (15.7)

Contract receivables (29.9) (20.9)

Inventories 34.2 (97.0)

Prepaid and other assets 8.5 (22.2)

Accounts payable 17.8 (2.6)

Accruals and other liabilities 95.6 (97.7)

Net cash provided by operating activities 1,008.6 674.6



Investing activities:

Additions to finance receivables (835.0) (841.9)

Collections of finance receivables 750.3 754.3

Capital expenditures (65.6) (99.4)

Acquisitions of businesses, net of cash acquired (41.5) (38.6)

Disposals of property and equipment 1.8 1.7

Other 2.2 1.8

Net cash used by investing activities (187.8) (222.1)



Financing activities:

Proceeds from issuance of long-term debt 489.9 -

Net increase (decrease) in other short-term borrowings (187.2) 17.6

Cash dividends paid (243.3) (216.6)

Purchases of treasury stock (174.3) (238.4)

Proceeds from stock purchase and option plans 55.8 51.4

Other (25.2) (23.4)

Net cash used by financing activities (84.3) (409.4)



Effect of exchange rate changes on cash and cash 2.4 0.5 equivalents

Increase in cash and cash equivalents 738.9 43.6



Cash and cash equivalents at beginning of year 184.5 140.9

Cash and cash equivalents at end of year $ 923.4 $ 184.5



Supplemental cash flow disclosures:

Cash paid for interest $ (49.8) $ (46.3)

Net cash paid for income taxes (188.4) (191.2)



Non-GAAP Supplemental Data

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 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.

SNAP-ON INCORPORATED

Non-GAAP Supplemental Consolidating Data - Supplemental Condensed Statements ofEarnings

(Amounts in millions)

(unaudited)

Operations* Financial Services

Fourth Quarter Fourth Quarter

2020 2019 2020 2019



Net sales $ 1,074.4 $ 955.2 $ - $ -

Cost of goods sold (558.2) (504.7) - -

Gross profit 516.2 450.5 - -

Operating expenses (300.0) (279.1) - -

Operating earnings before 216.2 171.4 - - financial services



Financial services revenue - - 93.4 83.9

Financial services expenses - - (24.9) (21.7)

Operating earnings from financial - - 68.5 62.2 services



Operating earnings 216.2 171.4 68.5 62.2

Interest expense (15.3) (12.1) (0.1) -

Intersegment interest income 17.4 17.7 (17.4) (17.7) (expense) - net

Other income (expense) - net 2.2 2.4 0.2 -

Earnings before income taxes and 220.5 179.4 51.2 44.5 equity earnings

Income tax expense (45.2) (37.5) (13.0) (11.4)

Earnings before equity earnings 175.3 141.9 38.2 33.1

Financial services - net earnings 38.2 33.1 - - attributable to Snap-on

Equity earnings, net of tax 0.3 - - -

Net earnings 213.8 175.0 38.2 33.1

Net earnings attributable to (4.9) (4.4) - - noncontrolling interests

Net earnings attributable to $ 208.9 $ 170.6 $ 38.2 $ 33.1 Snap-on



* Snap-on with Financial Services on the equity method.

SNAP-ON INCORPORATED

Non-GAAP Supplemental Consolidating Data - Supplemental Condensed Statements ofEarnings

(Amounts in millions)

(unaudited)

Operations* Financial Services

Full Year Full Year

2020 2019 2020 2019



Net sales $ 3,592.5 $ 3,730.0 $ - $ -

Cost of goods sold (1,844.0) (1,886.0) - -

Gross profit 1,748.5 1,844.0 - -

Operating expenses (1,116.6) (1,127.6) - -

Operating earnings before 631.9 716.4 - - financial services



Financial services revenue - - 349.7 337.7

Financial services expenses - - (101.1) (91.8)

Operating earnings from - - 248.6 245.9 financial services



Operating earnings 631.9 716.4 248.6 245.9

Interest expense (53.8) (48.8) (0.2) (0.2)

Intersegment interest income 68.5 70.5 (68.5) (70.5) (expense) - net

Other income (expense) - net 8.5 8.9 0.2 (0.1)

Earnings before income taxes 655.1 747.0 180.1 175.1 and equity earnings

Income tax expense (142.7) (166.6) (46.4) (45.2)

Earnings before equity 512.4 580.4 133.7 129.9 earnings

Financial services - netearnings attributable to 133.7 129.9 - - Snap-on

Equity earnings, net of tax 0.3 0.9 - -

Net earnings 646.4 711.2 133.7 129.9

Net earnings attributable to (19.4) (17.7) - - noncontrolling interests

Net earnings attributable to $ 627.0 $ 693.5 $ 133.7 $ 129.9 Snap-on



* Snap-on with Financial Services on the equity method.

SNAP-ON INCORPORATED

Non-GAAP Supplemental Consolidating Data - Supplemental Condensed BalanceSheets

(Amounts in millions)

(unaudited)

Operations* Financial Services

Fiscal Year End Fiscal Year End

2020 2019 2020 2019

Assets

Cash and cash equivalents $ 923.2 $ 184.4 $ 0.2 $ 0.1

Intersegment receivables 14.6 14.2 0.2 -

Trade and other accounts 639.7 693.5 1.0 1.1 receivable - net

Finance receivables - net - - 530.2 530.1

Contract receivables - 7.0 6.8 105.5 93.9 net

Inventories - net 746.5 760.4 - -

Prepaid expenses and 131.1 111.8 7.8 7.0 other assets

Total current assets 2,462.1 1,771.1 644.9 632.2



Property and equipment - 524.4 519.8 1.8 1.7 net

Operating lease 49.7 52.9 2.2 2.7 right-of-use assets

Investment in Financial 349.8 340.5 - - Services

Deferred income tax 27.6 32.7 22.7 19.6 assets

Intersegment long-term 316.9 755.5 - - notes receivable

Long-term finance - - 1,136.3 1,103.5 receivables - net

Long-term contract 12.4 16.0 362.3 344.1 receivables - net

Goodwill 982.4 913.8 - -

Other intangibles - net 260.8 243.9 - -

Other assets 103.9 73.0 0.1 0.2

Total assets $ 5,090.0 $ 4,719.2 $ 2,170.3 $ 2,104.0



Liabilities and Equity

Notes payable and currentmaturities of long-term $ 18.5 $ 202.9 $ 250.0 $ - debt

Accounts payable 222.3 197.3 0.6 1.2

Intersegment payables - - 14.8 14.2

Accrued benefits 59.7 53.2 - 0.1

Accrued compensation 87.2 52.2 2.7 1.7

Franchisee deposits 78.4 68.2 - -

Other accrued liabilities 418.8 353.7 35.9 25.7

Total current liabilities 884.9 927.5 304.0 42.9



Long-term debt andintersegment long-term - - 1,499.0 1,702.4 debt

Deferred income tax 70.4 69.3 - - liabilities

Retiree health care 34.5 33.6 - - benefits

Pension liabilities 127.1 122.1 - -

Operating lease 31.6 34.5 2.4 3.0 liabilities

Other long-term 94.9 101.4 15.1 15.2 liabilities

Total liabilities 1,243.4 1,288.4 1,820.5 1,763.5



Total shareholders'equity attributable to 3,824.9 3,409.1 349.8 340.5 Snap-on

Noncontrolling interests 21.7 21.7 - -

Total equity 3,846.6 3,430.8 349.8 340.5

Total liabilities and $ 5,090.0 $ 4,719.2 $ 2,170.3 $ 2,104.0 equity



* Snap-on with Financial Services on the equity method.

SNAP-ON INCORPORATED

Reconciliation of Non-GAAP Financial Measures

(Amounts in millions, except per share data)

(unaudited)

Fourth Quarter Full Year

2020 2019 2020 2019

AS REPORTED



Charges associated with exit anddisposal activities ("restructuring charges")

Pre-tax restructuring charges $ (1.0) $ - $ (12.5) $ -

Income tax benefits - - 2.2 -

Restructuring charges, after tax $ (1.0) $ - $ (10.3) $ -



Weighted-average shares outstanding 54.7 55.4 54.8 55.9 - diluted



Diluted EPS - restructuring charges $ (0.02) $ - $ (0.19) $ -



Benefit related to the settlementof a litigation matter ("legal settlement")

Pre-tax legal settlement $ - $ - $ - $ 11.6

Income tax expense - - - (2.9)

Legal settlement, after tax $ - $ - $ - $ 8.7



Weighted-average shares outstanding 54.7 55.4 54.8 55.9 - diluted



Diluted EPS - legal settlement $ - $ - $ - $ 0.15



SNAP-ON INCORPORATED

Reconciliation of Non-GAAP Financial Measures (continued)

(Amounts in millions, except per share data)

(unaudited)

Fourth Quarter Full Year

2020 2019 2020 2019

ADJUSTED INFORMATION - NON-GAAP



1) Operating earnings before financial services

As reported $ 216.2 $ 171.4 $ 631.9 $ 716.4

Restructuring charges 1.0 - 12.5 -

Legal settlement - - - (11.6)

As adjusted $ 217.2 $ 171.4 $ 644.4 $ 704.8



Operating earnings beforefinancial services as a percentage of sales

As reported 20.1 % 17.9 % 17.6 % 19.2 %

As adjusted 20.2 % 17.9 % 17.9 % 18.9 %



2) Operating earnings

As reported $ 284.7 $ 233.6 $ 880.5 $ 962.3

Restructuring charges 1.0 - 12.5 -

Legal settlement - - - (11.6)

As adjusted $ 285.7 $ 233.6 $ 893.0 $ 950.7



Operating earnings as a percentage of revenue

As reported 24.4 % 22.5 % 22.3 % 23.7 %

As adjusted 24.5 % 22.5 % 22.6 % 23.4 %



3) Net earnings attributable to Snap-on Incorporated

As reported $ 208.9 $ 170.6 $ 627.0 $ 693.5

Restructuring charges, after tax 1.0 - 10.3 -

Legal settlement, after tax - - - (8.7)

As adjusted $ 209.9 $ 170.6 $ 637.3 $ 684.8



4) Diluted EPS

As reported $ 3.82 $ 3.08 $ 11.44 $ 12.41

Restructuring charges, after tax 0.02 - 0.19 -

Legal settlement, after tax - - - (0.15)

As adjusted $ 3.84 $ 3.08 $ 11.63 $ 12.26



5) Effective tax rate

As reported 21.8 % 22.3 % 23.2 % 23.4 %

Restructuring charges (0.1) % - (0.1) % -

Legal settlement - - - -

As adjusted 21.7 % 22.3 % 23.1 % 23.4 %

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CONTACT: For additional information, please visitwww.snapon.comor contact: Investors: Sara Verbsky 262/656-4869

CONTACT: Media: Samuel Bottum 262/656-5793