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) November 7, 2002
Snap-on Incorporated
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(Exact name of registrant as specified in its charter)
Delaware 1-7724 39-0622040
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(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation Identification No.)
10801 Corporate Drive, Pleasant Prairie, Wisconsin 53158-1603
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(Address of principal executive offices, including zip code)
Registrant's telephone number, including area code (262) 656-5200
Item 5. Other Information
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 previously reported two business segments: the Snap-on
Dealer Group, which represented the worldwide franchised dealer van channel, and
the Commercial and Industrial Group, which included all of Snap-on's non-dealer
businesses. Due to recent changes in Snap-on's management organization
structure, coupled with the growth in the company's diagnostics and
vehicle-service information products, Snap-on changed its reportable business
segments in the third quarter of 2002 to include the following: (i) the Snap-on
Dealer Group; (ii) the Commercial and Industrial Group; and (iii) the
Diagnostics and Information Group. 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 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, equipment repair
services and other solutions for vehicle service to customers in the worldwide
vehicle service and repair marketplace.
Snap-on evaluates the performance of its operating segments based on segment net
sales and operating earnings. Segment net sales are defined as total net sales,
including both net sales from external customers and intersegment sales, before
elimination of intersegment activity. Segment operating earnings are defined as
segment net sales less cost of goods sold and operating expenses. Snap-on
accounts for intersegment sales and transfers based primarily on standard costs
with reasonable mark-ups established between the segments. Snap-on allocates
shared services expenses to those segments that utilize the services based on a
percentage of either cost of goods sold or segment net sales, as appropriate.
Restructuring and other non-recurring charges are not allocated to the
reportable segments.
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 management organizational 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, year-to-date and/or full-year segment information
for fiscal 2000, 2001 and 2002 is presented in the new segment structure.
2
Snap-on Incorporated
Fiscal 2002 Segment Disclosures
(Amounts in millions)
Fiscal 2002
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First Second Third Year to
Quarter Quarter Quarter Date
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Net sales from external customers
Snap-on Dealer Group $ 256.5 $ 275.0 $ 240.4 $ 771.9
Commercial and Industrial Group 214.9 232.1 220.3 667.3
Diagnostics and Information Group 38.6 40.1 41.7 120.4
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Total net sales from external customers $ 510.0 $ 547.2 $ 502.4 $ 1,559.6
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Intersegment sales
Snap-on Dealer Group $ 3.8 $ 5.8 $ 6.1 $ 15.7
Commercial and Industrial Group 29.9 30.8 29.0 89.7
Diagnostics and Information Group 42.7 49.1 43.3 135.1
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Total intersegment sales $ 76.4 $ 85.7 $ 78.4 $ 240.5
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Total net sales
Snap-on Dealer Group $ 260.3 $ 280.8 $ 246.5 $ 787.6
Commercial and Industrial Group 244.8 262.9 249.3 757.0
Diagnostics and Information Group 81.3 89.2 85.0 255.5
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Total net sales 586.4 632.9 580.8 1,800.1
Intersegment eliminations (76.4) (85.7) (78.4) (240.5)
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Total consolidated net sales $ 510.0 $ 547.2 $ 502.4 $ 1,559.6
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Operating earnings
Snap-on Dealer Group $ 28.0 $ 27.2 $ 12.6 $ 67.8
Commercial and Industrial Group 8.4 13.5 9.7 31.6
Diagnostics and Information Group 1.4 7.9 8.3 17.6
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Segment operating earnings 37.8 48.6 30.6 117.0
Net finance income 7.3 8.8 10.3 26.4
Restructuring and other non-recurring charges (3.4) (1.4) (1.6) (6.4)
Interest expense (7.8) (7.5) (6.9) (22.2)
Other income (expense) - net (0.1) (2.9) (2.3) (5.3)
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Earnings before income taxes $ 33.8 $ 45.6 $ 30.1 $ 109.5
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Assets (at period end)
Snap-on Dealer Group $ 809.9 $ 821.4 $ 818.1 $ 818.1
Commercial and Industrial Group 948.3 1,038.2 1,004.6 1,004.6
Diagnostics and Information Group 198.6 207.5 207.4 207.4
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Total from reportable segments 1,956.8 2,067.1 2,030.1 2,030.1
Financial Services 78.7 81.4 74.8 74.8
Elimination of intersegment receivables (51.6) (73.9) (107.7) (107.7)
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Total assets $ 1,983.9 $ 2,074.6 $ 1,997.2 $ 1,997.2
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3
Snap-on Incorporated
Fiscal 2001 Segment Disclosures
(Amounts in millions)
Fiscal 2001
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First Second Third Fourth Full
Quarter Quarter Quarter Quarter Year
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Net sales from external customers
Snap-on Dealer Group $ 248.9 $ 254.9 $ 254.6 $ 267.6 $ 1,026.0
Commercial and Industrial Group 240.6 230.8 212.0 222.5 905.9
Diagnostics and Information Group 37.9 39.9 41.5 44.5 163.8
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Total net sales from external customers $ 527.4 $ 525.6 $ 508.1 $ 534.6 $ 2,095.7
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Intersegment sales
Snap-on Dealer Group $ 7.6 $ 6.6 $ 5.6 $ 5.0 $ 24.8
Commercial and Industrial Group 25.9 31.9 29.1 22.9 109.8
Diagnostics and Information Group 38.5 41.6 37.2 40.1 157.4
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Total intersegment sales $ 72.0 $ 80.1 $ 71.9 $ 68.0 $ 292.0
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Total net sales
Snap-on Dealer Group $ 256.5 $ 261.5 $ 260.2 $ 272.6 $ 1,050.8
Commercial and Industrial Group 266.5 262.7 241.1 245.4 1,015.7
Diagnostics and Information Group 76.4 81.5 78.7 84.6 321.2
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Total net sales 599.4 605.7 580.0 602.6 2,387.7
Intersegment eliminations (72.0) (80.1) (71.9) (68.0) (292.0)
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Total consolidated net sales $ 527.4 $ 525.6 $ 508.1 $ 534.6 $ 2,095.7
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Operating earnings
Snap-on Dealer Group $ 31.9 $ 26.1 $ 30.9 $ 34.0 $ 122.9
Commercial and Industrial Group 9.0 8.3 3.7 4.7 25.7
Diagnostics and Information Group 0.3 (1.0) 1.2 7.8 8.3
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Segment operating earnings 41.2 33.4 35.8 46.5 156.9
Net finance income 12.1 7.9 7.7 8.0 35.7
Restructuring and other non-recurring charges - (14.4) (30.4) (17.2) (62.0)
Arbitration resolution - - - (44.0) (44.0)
Interest expense (8.9) (9.2) (9.1) (8.3) (35.5)
Other income (expense) - net 1.9 (1.6) (0.8) (3.0) (3.5)
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Earnings before income taxes $ 46.3 $ 16.1 $ 3.2 $ (18.0) $ 47.6
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Assets (at period end)
Snap-on Dealer Group $ 810.1 $ 831.6 $ 813.8 $ 805.0 $ 805.0
Commercial and Industrial Group 933.5 901.8 913.0 921.8 921.8
Diagnostics and Information Group 242.6 232.2 229.8 208.7 208.7
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Total from reportable segments 1,986.2 1,965.6 1,956.6 1,935.5 1,935.5
Financial Services 95.6 99.6 94.2 82.0 82.0
Elimination of intersegment receivables (53.0) (48.6) (34.9) (43.2) (43.2)
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Total assets $ 2,028.8 $ 2,016.6 $ 2,015.9 $ 1,974.3 $ 1,974.3
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4
Snap-on Incorporated
Fiscal 2000 Segment Disclosures
(Amounts in millions)
Fiscal 2000
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First Second Third Fourth Full
Quarter Quarter Quarter Quarter Year
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Net sales from external customers
Snap-on Dealer Group $ 263.3 $ 280.8 $ 250.6 $ 271.1 $ 1,065.8
Commercial and Industrial Group 240.1 241.0 221.0 241.2 943.3
Diagnostics and Information Group 40.9 41.4 40.3 44.0 166.6
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Total net sales from external customers $ 544.3 $ 563.2 $ 511.9 $ 556.3 $ 2,175.7
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Intersegment sales
Snap-on Dealer Group $ 13.2 $ 10.5 $ 7.5 $ 11.8 $ 43.0
Commercial and Industrial Group 29.5 37.3 21.8 28.1 116.7
Diagnostics and Information Group 30.3 36.5 29.4 32.2 128.4
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Total intersegment sales $ 73.0 $ 84.3 $ 58.7 $ 72.1 $ 288.1
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Total net sales
Snap-on Dealer Group $ 276.5 $ 291.3 $ 258.1 $ 282.9 $ 1,108.8
Commercial and Industrial Group 269.6 278.3 242.8 269.3 1,060.0
Diagnostics and Information Group 71.2 77.9 69.7 76.2 295.0
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Total net sales 617.3 647.5 570.6 628.4 2,463.8
Intersegment eliminations (73.0) (84.3) (58.7) (72.1) (288.1)
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Total consolidated net sales $ 544.3 $ 563.2 $ 511.9 $ 556.3 $ 2,175.7
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Operating earnings
Snap-on Dealer Group $ 35.5 $ 45.0 $ 27.9 $ 27.9 $ 136.3
Commercial and Industrial Group 15.1 21.7 13.8 11.7 62.3
Diagnostics and Information Group 3.0 4.6 3.6 3.9 15.1
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Segment operating earnings 53.6 71.3 45.3 43.5 213.7
Net finance income 11.7 10.5 8.4 7.5 38.1
Restructuring and other non-recurring charges (0.4) - - (21.4) (21.8)
Interest expense (10.3) (10.6) (10.3) (9.5) (40.7)
Other income (expense) - net 1.1 0.8 1.3 0.1 3.3
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Earnings before income taxes $ 55.7 $ 72.0 $ 44.7 $ 20.2 $ 192.6
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Assets (at period end)
Snap-on Dealer Group $ 822.0 $ 802.5 $ 766.0 $ 802.4 $ 802.4
Commercial and Industrial Group 1,002.6 1,028.1 954.6 968.8 968.8
Diagnostics and Information Group 268.4 255.7 257.0 269.0 269.0
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Total from reportable segments 2,093.0 2,086.3 1,977.6 2,040.2 2,040.2
Financial Services 103.7 103.5 102.8 96.2 96.2
Elimination of intersegment receivables (44.6) (29.3) (23.7) (67.3) (67.3)
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Total assets $ 2,152.1 $ 2,160.5 $ 2,056.7 $ 2,069.1 $ 2,069.1
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5
Restructuring and Other Non-recurring Charges
Snap-on does not allocate restructuring and other non-recurring charges to its
reportable segments. Had it been Snap-on's policy to allocate the charges to
its reportable segments, restructuring and other non-recurring charges would
have been allocated as follows:
Restructuring and Other Non-recurring Charges
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Snap-on Commercial Diagnostics
Dealer and Industrial and Information Total for
(Amounts in millions) Group Group Group Period
---------------------- ---------------------- ---------------------- ---------------
Fiscal 2002
First Quarter $ 1.6 $ 1.8 $ - $ 3.4
Second Quarter - 1.4 - 1.4
Third Quarter 0.8 0.6 0.2 1.6
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Year to date $ 2.4 $ 3.8 $ 0.2 $ 6.4
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Fiscal 2001
First Quarter $ - $ - $ - $ -
Second Quarter 8.4 5.0 1.0 14.4
Third Quarter 3.8 10.4 16.2 30.4
Fourth Quarter 2.0 7.0 8.2 17.2
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Full year $ 14.2 $ 22.4 $ 25.4 $ 62.0
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Fiscal 2000
First Quarter $ 0.4 $ - $ - $ 0.4
Second Quarter - - - -
Third Quarter - - - -
Fourth Quarter 12.9 0.7 7.8 21.4
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Full year $ 13.3 $ 0.7 $ 7.8 $ 21.8
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6
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, Snap-on
Incorporated has duly caused this report to be signed on its behalf by the
undersigned duly authorized person.
SNAP-ON INCORPORATED
Date: November 7, 2002 By: /s/ Blaine A. Metzger
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Blaine A. Metzger, Acting Principal
Financial Officer, Principal Accounting
Officer, Vice President and Controller
7