Good morning, and welcome to the Snap-on Incorporated 2023 Third Quarter Conference Call. All participants will be in listen-only mode. Please note today's event is being recorded. I would now like to turn the conference over to Sara Verbsky, Vice President of Investor Relations. Please go ahead, ma'am.

Thank you, operator, and good morning, everyone. We appreciate you joining us today as we review Snap-on's third quarter results, which are detailed in our press release issued earlier this morning. We have on the call Nick Pinchuk, Snap-on's Chief Executive Officer; and Aldo Pagliari, Snap-on's Chief Financial Officer. Nick will kick off our call this morning with his perspective on our performance. Aldo will then provide a more detailed review of our financial results. After Nick provides some closing thoughts, we'll take your questions. As usual, we've provided slides to supplement our discussion. These slides can be accessed under the Downloads tab in the webcast viewer, as well as on our website snapon.com, under the Investors section. These slides will be archived on our website along with the transcript of today's call. Any statements made during this call relative to management's expectations, estimates, or beliefs or that otherwise discuss management's or the company's outlook, plans or projections are forward-looking statements, and actual results may differ materially from those made in such statements. Additional information and the factors that could cause our results to differ materially from those in our forward-looking statements are contained in our SEC filings. Finally, this presentation includes non-GAAP measures of financial performance, which are not meant to be considered in isolation or as a substitute for their GAAP counterparts. Additional information regarding these measures is included in our earnings release issued today, which can be found on our website. With that said, I'd now like to turn the call over to Nick Pinchuk. Nick?

Thanks, Sara. Good morning, everybody. As usual, I'll start by covering the highlights of the quarter, and then I'll provide an update on our general environment and the trends we see. Aldo will then give you a detailed review of the financials. Speaking about the last three months, I can say without question or qualification, we are once again encouraged, fortified by the progress along our runways, both growth and improvement. We encountered headwinds and engaged challenges in a number of geographies; still, we capitalized on our opportunities, wielding our advantage and overcame the potential for disruption. The franchising network remains resilient, generating positive gains through a broad and sharp rise in critical industries, expanding what is now a consistent upward trajectory enabled by the confluence of our robust market, growing product lines, and an effective expansion of capacity in that business. And that progress was pretty evident in our numbers. They speak for themselves. Reported sales were $1,159 million, up 5.2% from last year, a 4.7% organic rise, and $4.4 million in favorable foreign currency effects, with growth in every segment. This represents our 13th quarter well above pre-pandemic levels. OpCo income, OI before financial services were up 9.7%, reaching $245.2 million. OpCo operating margin rose 90 basis points to 21.2%, with higher sales volumes and the benefits of great new products and the ongoing efficiencies of a rapid continuous improvement or RS&I more than offsetting a 50 basis point hit from unfavorable foreign currency effects. The operating income for our financial services operation grew to $69.4 million from the $66.4 million last year, a 4.5% improvement, and that result, combined with the OpCo performance, raised our consolidated operating margins to 25.1%, a 70 basis point rise from 2022. And EPS was $4.51, reflecting a 37 or 8.9% increase above last year. Once again, strong, signifying our corporation's continuing advance. You see, we again believe that Snap-on is stronger now than at any time in our history and the results confirm that. Now let's review the markets. In vehicle repairs, key metrics continue to be favorable. The average age of vehicles on the road is continuing to rise and in turn, the number of technicians in the garages is growing high. Technician wages are robust and continuing to climb. So the market is favorable and the metrics back it up. But more than the quantitative evidence, you get the feeling of optimism when you speak with technicians. Recently, I had a chance to visit with our customers' franchises and mechanics in New York, and I'm here to tell you the enthusiasm they displayed in the industry and the confidence they expressed in their future was remarkable. It was contagious. Even in this time of turbulence, the message was clear. They see opportunity and they're looking for innovative solutions that will increase productivity and take advantage of that potential. And their confidence about the way forward is palpable. We believe they see Snap-on products, brands, and people as the best way to ensure that positive future. Vehicle repair is a strong market. We see this confirmed throughout the franchisee network in North America and in our international operations. It's one of the reasons we've expanded capacity. Another important sector for us is the vehicle repair shop owners or managers. These are people who stand right next to the technicians, but they buy at different cadences. This is where repair systems and information group or RS&I operates every day with an advantage. The vehicle park is changing. The shops have to keep up with the upswing model by model, new challenges they have to navigate. Electronics support more features, automotive systems that enhance driver safety, new body materials to increase durability and reduce weight, networks of sensors to anticipate traffic and road conditions, and enhanced internal combustion engines, EVs and plug-in hybrids. Each of these trends creates opportunity for garages and they know it. But they also know it requires new, more sophisticated equipment. We see the shop owners and managers eager to take advantage of those trends. Snap-on has the hardware and software to enable that pursuit, bringing to shops solutions that are confirming the strength of that market and our strong position in it. Finally, let’s discuss the critical industries. This is where we extend outside the garage solving tasks that really matter. This is where commercial industrial or C&I lives. And where much more international activity happens. This is the arena of critical applications like space declarations, wind power maintenance, subsea mining, smelting that exceeds 2300 degrees Fahrenheit, and the mobilization of first responders. All these are critical environments where the penalty for error is high and the need for repeatability and reliability often requires custom tools engineered for a single purpose. Just like in previous quarters, the market is booming. Momentum in multiple sectors like the military, general industry, aerospace, heavy-duty, and aviation is evident. Of course, we see variations from geography to geography, this is an international business. Areas impacted by external factors that create disruptions include Europe, with the uncertainty associated with the Ukraine war, and Asia, where the remnants of the pandemic are still apparent; there's turbulence in China and the weakening of currencies impacting particular countries. But overall, the critical industries are robust, offering us significant potential for taking advantage and making significant gains. So our markets are resilient and are on a positive trajectory, and we believe that our runways for growth will present clear and abundant opportunities as we move forward. That's the markets. Now, let's turn to the segments. In the C&I group, third-quarter sales reached $266.4 million, up $9.6 million, which includes $1.6 million in unfavorable currency effects and an organic sales growth of 3.2% above last year. From an earnings perspective, C&I's operating income was $58.1 million, up 11.1%, including $2.9 million of unfavorable foreign currency. The operating margin was 15.9%, an increase of 120 basis points overcoming 70 basis points of negative currency. We did have some variation across the group business units with substantial gains in industrial vision offsetting declines in Asia operations. But as usual, the C&I rise showed the power of our Snap-on value creation, particularly on customer connection, innovating great new products, and solutions that make critical tasks easier. One of those is our new CT9038 power tool. We talked about this last quarter, stating that the franchisees were waiting for its launch. It was worth the wait. It's a special tool. A three-eighths inch drive, 18-volt impact unit that offers compact housing measuring only five inches long. That's why we call it the stubby. The unique silhouette is made possible by engineering the overall housing mechanism to stabilize the electric motor rather than using a whole independent structure to support the drive components. It’s what you would expect from Snap-on, ergonomically balanced, greatly reducing user fatigue, equipped with a super bright LED light, and offers three torque settings and forward and reverse, along with a variable speed trigger. The September launch was oversubscribed, clear testimony to the appreciation of the stubby’s compact power, showing great momentum. The orders remain very strong. C&I product is encouraging. But there's another story in the group. Our industrial division is extending the Snap-on brands to the critical industries. We've noted that the opportunity was there; always needed was more capabilities to deliver. It played out just that way. We added capacity for kidding, driving results with clear double-digit growth in the critical industries. That was strong margins overcoming the C&I challenge in Eastern Europe and Asia. We're adding more capability in that business right now to take full advantage of it. In summary, C&I faced substantial challenges, but we overcame them through strong products and expanded capacity, propelling us upward in the critical industries. Now onto the tools group. Sales were up organically 3.7% over last year, reaching $515.4 million in the quarter. The group’s operating income continued to move strongly upward to $113.4 million, an 11% increase over the previous year. The operating margin was 22%, up 140 basis points from last year, achieving this while overcoming 50 basis points of unfavorable currencies. This year, we held our annual Snap-on franchisee conference; the event was a net show with 9,000 people attending. Orders were up again this year. The conference also provided several training sessions, helping franchisees expand their business and topped off with a memorable Snap-on celebration. From my perspective, our van drivers at Nashville spoke enthusiastically about their current businesses and radiated firm confidence in their future with Snap-on. During the tool expo, franchisees had a chance to interact with new innovative products derived from our customer connections. Handles were significant at the SFC, and the demand was driven by special new products like our 12 millimeter 6.6 meter Duramax glow plug socket. This product was inspired by a franchisee who observed technicians removing blocking components from a diesel vehicle. We designed a new socket that reaches the glow plugs directly from a distance, making the process easier and quicker. Another example is the new FHC 72MPRR, a triple-function ratchet born out of customer connection, providing three tools in one. It drastically reduces work time in low torque situations. Our customers recognized this improved productivity, making the triple-function ratchet a million-dollar hit product in just the first month of selling. The tools group proves third-quarter achievement and momentum fueled by customer connection and innovative insight, creating great new products. Turning to RS&I, sales of $431.8 million in the third quarter were up 4.2%, with an organic improvement of 3.1%. Expansions in undercar equipment and our diagnostics and information portfolio continued to offset the OEM businesses where activity finished down slightly. OI for RS&I was $104.9 million, up 10% from the previous year, with operating margins reaching 24.3%. We have great confidence in our RS&I business. Customers feel the same. Our Zeus Plus fast track intelligent diagnostic platform was recognized as a top tool in 2023 by Motor Magazine. Our premium handheld unit simplifies repairs and improves solution accuracy, reducing the time to identify proper fits. This was another win for customer connection and a driver for RS&I. So those are the highlights of the quarter. Continued strong progress, the 13th straight quarter above pre-pandemic levels. Overall corporation sales were up 5.2%, with an EPS of $4.51, rising 8.9% versus last year. It was an encouraging quarter. Now I’ll turn the call over to Aldo. Aldo?

Thanks, Nick. Our consolidated operating results are summarized on Slide 6. Net sales of $1,159.3 million in the quarter represented an increase of 5.2% from 2022 levels, reflecting a 4.7% organic sales gain and $4.4 million of favorable foreign currency translation. Organic sales growth was balanced across all three of our operating segments. We experienced year-over-year gains in North and South America, as well as Europe. Asia continues to be impacted by weakness in China and Japan, the latter hampered by a depreciating yen. Consolidated gross margin improved 160 basis points to 49.9% from 48.3% last year, as gross margins expanded across all of our segments. Contributions from increased sales volume with pricing actions, lower material and other costs, and benefits to the company's RCI initiatives were partially offset by 50 basis points of unfavorable foreign currency effects. Operating expenses as a percentage of net sales rose 70 basis points to 28.7% from 28% last year, primarily due to increased investment in personnel and other costs. Operating earnings before financial services of $245.2 million in the quarter compared to $223.5 million in 2022. As a percentage of net sales, operating margin before financial services was 21.2%, including 50 basis points of unfavorable currency effects, reflecting an expansion of 90 basis points over last year. Financial services revenue of $94.9 million in the third quarter of 2023 compared to $87.3 million last year, while operating earnings of $69.4 million compared to $66.4 million in 2022. Consolidated operating earnings of $314.6 million in the quarter compared to $289.9 million last year. As a percentage of revenues, the operating earnings margin of 25.1% reflects an improvement of 70 basis points from 2022. Our third quarter effective income tax rate of 22.6% compared to 21.6% last year. Net earnings of $243.1 million or $4.51 per diluted share, including an $0.08 per share impact from unfavorable foreign currency, reflected an increase of $19.2 million and $0.37 per share from 2022 levels, representing an 8.9% year-over-year improvement in diluted earnings per share.

Now let's turn to our segment results for the quarter. Starting with C&I Group on Slide 7. Sales of $366.4 million increased from $356.8 million last year, reflecting an $11.2 million or 3.2% organic sales gain which was partially offset by $1.6 million of unfavorable foreign currency translation. Organic growth includes a double-digit gain in sales to customers in critical industries, partially offset by a double-digit decline in the segment to Asia Pacific operations. Overall C&I organic sales to external customers were up 7.1% for the quarter. Gross margin improved 210 basis points to 39% in the third quarter from 36.9% in 2022. This improvement was largely due to increased sales volumes in the higher gross margin critical industry sector, pricing actions, and benefits from RCI initiatives, partially offset by 60 basis points of unfavorable foreign currency effects. Operating expenses as a percentage of sales rose 90 basis points to 23.1% in the quarter from 22.2% in 2022, primarily due to increased sales and higher expense related investments in personnel and other costs. Operating earnings for the C&I segment were $58.1 million, including $2.9 million of unfavorable foreign currency effects, compared to $52.3 million last year. The operating margin of 15.9%, including 70 basis points of unfavorable currency effects, compared to 14.7% in 2022, reflecting an improvement of 120 basis points.

Turning now to Slide 8. Sales in the Snap-on Tools group of $515.4 million compared to $496.6 million a year ago, reflecting a 3.7% organic sales gain and $500,000 of favorable foreign currency translation. The organic sales growth reflects a double-digit gain in our international operations and a low-single-digit increase in our US business. Gross margin improved 140 basis points to 46.3% in the quarter from 44.9% last year. This increase is primarily due to higher sales volumes and pricing actions and benefits from RCI initiatives, partially offset by 50 basis points of unfavorable foreign currency effects. Operating expenses as a percentage of sales were unchanged from last year, with benefits from higher volumes offset by increased personnel and other costs. Operating earnings for the Snap-on Tools group were $113.4 million including $2.7 million of unfavorable foreign currency effects, compared to $102.2 million last year. The operating margin of 22% includes 50 basis points of unfavorable currency, compared to 20.6% in 2022, reflecting an improvement of 140 basis points. Turning to the RS&I group shown on Slide 9. Sales of $431.8 million compared to $414 million in 2022 reflecting a 3.1% organic sales gain and $4.8 million of favorable foreign currency translation. The organic sales increase includes a high-single-digit gain in sales of undercar equipment and a low-single-digit increase in sales of diagnostic and repair information products to independent shop owners and managers. These gains were partially offset by a low-single-digit decline in activity with OEM dealerships where we often see variability in essential tool programs from period to period. Gross margin improved 260 basis points to 45.5% from 42.9% last year, mostly due to lower material and other costs and increased sales volumes with savings from RCI initiatives. Operating expenses as a percentage of sales went up by 130 basis points to 21.2% from 19.9% last year, primarily reflecting increased personnel and other costs. Operating earnings for the RS&I group were $104.9 million compared to $95.4 million last year. The operating margin improved 130 basis points to 24.3% from 23% reported last year. Now turning to Slide 10. Revenue from financial services increased $7.6 million to $94.9 million from $87.3 million last year, primarily reflecting the growth of the loan portfolio. Financial services operating earnings of $69.4 million compared to $66.4 million in 2022. Financial services expenses were up $4.6 million from 2022 levels, including $4 million of higher provision for credit losses. The year-over-year increase of provisions reflects both the growth of the portfolio, as well as a return to what we believe to be a more normal pre-pandemic rate of provision. Sequentially, the provision for credit losses decreased by about $500,000. For reference, our gross worldwide extended credit or finance receivable portfolio has increased 9.3% year-over-year, and we believe that delinquency in portfolio performance trends currently remains stable. In both the third quarters of 2023 and 2022, the respective average yield on finance receivables was 17.7%. In the third quarters of 2023 and 2022, average yields on contract receivables were 8.8% and 8.6% respectively. Total loan originations of $305.2 million in the third quarter represented an increase of $5 million or 1.7% from 2022 levels, including a 4% increase in originations of finance receivables. Moving to Slide 11, our quarter-end balance sheet includes approximately $2.4 billion of gross financing receivables with $2.1 billion from our US operation. The 60-day plus delinquency rate of 1.5% for US extended credit is the same as it was in this period last year. On a sequential basis, the rate is up 20 basis points reflecting the seasonal trend we typically experience in the third quarter. As it relates to extended credit or finance receivables, trailing 12-month net losses of $47.9 million represented 2.51% of outstandings at quarter end, which is up slightly from the 2.45% reported at the end of the last quarter. Now, turning to Slide 12, cash provided by operating activities of $285.4 million in the quarter represented 115% of net earnings compared to $129.9 million last year. The improvement as compared to the third quarter of 2022 largely reflects lower year-over-year increases of working investment, as well as higher net earnings. Net cash used by investing activities of $59.7 million included net additions to finance receivables of $35.1 million and capital expenditures of $25.1 million. Net cash used by financing activities of $135.3 million included cash dividends of $85.6 million and the repurchase of 194,000 shares of common stock for $51.8 million under our existing share repurchase programs. As of quarter-end, we had remaining availability to repurchase up to an additional $304.5 million of common stock under our existing authorizations. Turning to Slide 13, trade and other accounts receivable increased by $15.1 million from 2023 events. Net sales outstanding of 60 days compared to 61 days as of 2022 year-end. Inventory decreased by $200,000 from 2022 year-end. On a trailing 12-month basis, inventory turns to 2.4 compared to 2.5 at year-end 2022. Our quarter-end cash position of $959.3 million, compared to $757.2 million at year-end 2022. Our net debt to capital ratio of 4.8% compared to 9% at year-end 2022. In addition to cash flow from operations, we entered into a five-year $900,000 multi-currency revolving credit facility on September 12, which amends and restates our previous $800 million facility. As of quarter-end, there were no amounts outstanding under the credit facility and there were no commercial paper borrowings outstanding. That concludes my remarks on our third-quarter performance. But briefly review a few outlook items for the remainder of 2023. We anticipate the capital expenditures will approximate $100 million. In addition, we currently anticipate that our full-year 2023 effective income tax rate will approximate 23%. I’ll now turn the call back to Nick for his closing thoughts. Nick?

Thanks, Aldo. Well, that's our third quarter. You know, I always say that the third quarter can be somewhat squirrely, not always indicative of trends, because of the SFC and the vacation seasons around the world. But having said that, the last three months have been encouraging. We took on some significant headwinds, the war in Ukraine, and uncertainty in China, both politically and economically. We engaged those challenges and came through with clear progress, reaching new heights across the board. Continuing our upward trajectory that we've been on for some time. We’ve spoken quite a bit about capacity constraints, first in the industrial business and later in the tools group, born of the increasing demand for our solutions. In this quarter, we see the power of such expansions wielded by a capable and experienced team, enabled by decisive advantages, products, brands, and applied in critical markets that are resilient even amidst the challenges. The industrialization is performing as we said it would, demonstrating clear double-digit growth and strong profitability now, demonstrated for three straight quarters as the new capacity has come online. The tools groups are starting to see the early effects of that capacity propulsion, closing out the quarter with great momentum and significant rises in overall profitability. At RS&I, not capacity-bound, but establishing a strong position in repair shops with software strength like our Mitchell 1 systems, diagnostic ascendance like our decorated Zeus Core and clear answers to challenges of repair complexity. This was an encouraging quarter, as seen in the results. C&I sales were up 3.2% organically, external sales particularly robust. Significant gains in critical industry overcoming uncertainty in Europe and Asia. OI margin of 15.9%, up 120 basis points against 70 basis points of unfavorable currency. The tools group saw sales rise organically 3.7%, exiting the quarter with momentum, an OI margin of 22%, up 140 basis points. In RS&I, sales rose 3.1%, with OI rising 10% and OI margins reaching 24.3%, an uplift of 130 points. All of this drove the corporation higher. Sales were up 4.7% organically. Overall OpCo operating margins were 21.2%, a gain of 90 basis points against 50 basis points of unfavorable currency, leading to an EPS of $4.51, up versus every comparison. We believe that with our widening advantages in product, customer connection, and innovation, our team will continue to roll out powerful new products day after day. Our advantages in brand remain the outward sign of pride and dignity that working men and women take in their profession. Everybody knows it's true, and we believe our resilient enterprise will continue on a positive trajectory through the remainder of the year and into 2024 and well beyond. Before I turn the call over to the operator, I'll speak directly to our franchisees and associates. My friends, this was an encouraging quarter, hard-won against significant turbulence, and it was driven by your constant dedication and effort. For the success in our third quarter delivered by your hands, you have my congratulations. For the extraordinary capability you bring to bear every day, you have my admiration. And for the unwavering confidence you consistently express and clearly demonstrate in the future of our enterprise, you have my thanks. Now I'll turn the call over to the operator. Operator?

Today's first question comes from Brad Jordan at Jeffries. Please go ahead.

Hey, good morning, guys. This is Patrick Buckley on for Brad. Thanks for taking our questions.

Sure.

Last quarter, you guys called out the demand exceeding capacity in a few tools product lines. Did you see that mix mismatch balance out this quarter? Or have some of the trends persisted?

Yeah. I think what I was trying to say in my remark is that it got better through the quarter. We started to get some of the value from the capacity expansions. We’re starting to see the early effects of those things. So you saw some of that start to balance out, but it's still there. We expect those capacity expansions to continue helping us going forward. It’s still there, though. We had some capacity constraints, principally in hand tools and tool storage. The quarter shows some easing, but they're not where we want them to be.

Got it. That's helpful. Thank you. And then, within your OEM dealership customer base, you called out some weakness and lumpiness in that RS&I business. Is overall demand pretty healthy there or what exactly is the driver?

Demand is pretty healthy on a relative basis. The challenge for this business comes from projects authored or commissioned by OEMs to deal with the idiosyncrasies of a changing environment or the introduction of new vehicles. These projects can be lumpy, and that's created some offset to C&I for RS&I.

Got it. That's helpful. That's all for us. Thanks, guys.

Sure.

Thank you. And our next question today comes from Gary Prestopino with Barrington Research. Please go ahead.

Hey, good morning, everyone.

Good morning, Gary.

Nick, can you - you said that the orders coming out of the conference were strong. Could you give us some idea of some metrics to surround that? I mean, was it one of …

Yeah, sure. They were up mid-single-digits. This is encouraging for us since it shows we expect to keep growing in that range. We've seen growth during the pandemic and we generally view mid-single-digit growth as pretty good. But keep in mind that those orders are spread out over six months or seven months; it’s hard to correlate with any particular quarter. Nonetheless, orders being up mid-single-digits is better than nothing.

Right. Okay. And then, just a question just in terms of, as we go forward as the car park gets older, where does your emphasis go at that point?

You would think that would be logical. It indeed foretells a greater emphasis on electronics and software and calibration, but I'm not so sure that demand for hand tools will fade. We continue to see a solid demand for hand tools, even as we also invest in electronics and calibration.

Okay. And then, just a question for Aldo, just on the tax rate.

Actually, you are looking at a year where we had some negative impacts for taxes year over year with each quarter seeing about a 5 to 6 cent impact for taxes. Even with that, we were still up 8.9% compared to last year.

Thank you. And our next question today comes from David McGregor with Longbow Research. Please go ahead.

Yeah. Good morning, everyone.

Hi, David.

Hey, Nick. I just wanted to ask you about the UAW strikes and any potential impact across the business.

It's hard to predict, of course. The dealership business, while OEM programs were down slightly, remains at relatively high levels. With the UAW strike, cash flow may diminish as the strike continues, but it’s also possible they might not cancel programs; instead, just delay or make adjustments. There could be good news for us during that period, as dealerships may focus more on repair and parts. So it's a mixed bag.

Right. Okay, thanks for that. And then, just back to your earlier observation with the SFC order book was up 5% to mid-single-digit.

Right. Those orders will help us, but as I mentioned earlier, we will still be navigating some capacity challenges in Q4. I think we expect to see a better situation than in the recent past as things continue to improve. This quarter we feel more optimistic than looking back.

Great. Thanks, gentlemen.

Sure.

Thank you. And our next question today comes from Christopher Glenn with Oppenheimer. Please go ahead.

Hey, thanks. Good morning all. Curious Nick if you could elaborate on your comments about adding capabilities in the critical industry space, what types of activities? What's the scale? What exactly are you chasing?

First, we haven't reached the full ceiling of our capacity expansion yet. We're figuring out how to leverage that momentum. We've just added a new machine shop specifically for critical industries. That will allow us to optimize sourcing and better meet direct customer demands.

Great. And then, cash is approaching $1 billion. How are you thinking about that cash balance?

First, we are working capital intensive. Some of that cash will be used for working capital needs. We look at dividends, acquisitions, and also repurchase shares opportunistically. We're proactive about managing our cash balance.

Yeah, following up on the pipeline. Are you seeing any changes in availability of some of the larger prospects?

We observe a bit more availability recently, though actionability remains largely unchanged. Prices have not come down significantly despite discussions in the market.

Okay, great. Sorry last point for me. I think you said technician count meant high-single-digits. Is that fair to think as a driver during 2024?

That’s a fair assessment. The increase in technicians means more tools needed in the market, and we’ve been actively engaging with thousands of schools across the country to ensure that the Snap-on brand is established as a prime choice among new technicians. That's vital for growth.

Thank you. And our final question today comes from Scott Stember with Roth MKM. Please go ahead.

Good morning, guys. Thanks for taking my questions.

Hey Scott.

Within the tools group, could you tell us how some of the sub-segments did, hand tools versus tool storage versus diagnostics and power tools?

Hand tools sold very well in the quarter, strong performance overall. Diagnostics did see a slight reduction due to absence of a new installation. Power tools experienced some declines since the stubby was launched only after the SFC. Tool storage was down somewhat because customers generally opted for lower-priced carts, affecting revenue.

Got it. And as far as the sales after the van versus into the van.

Sales from the van generally followed the tools group performance overall.

Okay. Got it. And then just last housekeeping question, corporate expenses were up more than $5 million. What was that related to?

Stock-based compensation was a significant factor; as our performance improves, it also impacts our long-term incentives. That’s the main contributor.

Got it. That's all I have. Thank you.

Okay.

Thank you. And ladies and gentlemen, this concludes our question and answer session. I'd like to turn the conference back over to Sara Verbsky for any closing remarks.

Thank you all for joining us today. A replay of this call will be available shortly on Snap-on.com. As always, we appreciate your interest in Snap-on. Good day.

Thank you. This concludes today's conference call. We thank you all for attending today's presentation. You may now disconnect your lines and have a wonderful day.