Annual General Meeting Transcript - SNA 2026-04-30

Speaker 4

I now call the 2026 Annual Meeting of Shareholders to order. We have made the order of business and rules of order available to all attendees, and I've just asked that you please all abide by them. It is now 10.03 a.m. on April 30th, and the polls are officially open. If anyone has not yet voted and would like to do so, our inspectors of election, Abby Coart and Fred Pappenmeyer of ComputerShare are in the back, and they can record your vote. Seems like everybody's already voted. The following members of our board of directors are in attendance today, and each has been nominated as a candidate for re-election at today's meeting. In addition, Mr. James Holden, a director since 2007, and our lead director, retired president and chief executive officer of Daimler Chrysler Corporation, is also nominated, but unfortunately was not able to join us today. When I say your names, please stand. David Adams, Director since 2017 and retired Chairman of the Board and Chief Executive Officer of Curtis Wright Corporation Karen Daniel, Director since 2005 and retired Division President and Chief Financial Officer of Black and Beach Corporation Ruthann Gillis, Director since 2014 and retired Executive Vice President and Chief Administrative Officer of Exelon Corporation Nathan Jones, Director since 2008 and retired President, Worldwide Commercial and Consumer Equipment Division of Deere & Company. Henry Knipple, Director since 2011 and retired Chairman of the Board and Chief Executive Officer of Regal Beloit Corporation. Dudley Lehman, Director since 2003 and retired Group President of Kimberly Clark Corporation. Greg Sherrill, director since 2010 and retired chairman of the board and chief executive officer of Tenneco, Inc. Don Stebbins, director since 2015 and retired president and chief executive officer of Superior Industries International, Inc. And Nick Pinchuk, director since 2007, chairman and chief executive officer of SnapOne. Nick will present an update on your company's performance at the conclusion of these formal remarks. Also with us today are James Stewart and Brian Donahoe, representing our auditors, Deloitte and Touche LLP. They will be available to answer any questions following the meeting. We have an affidavit that notice of the meeting was mailed, which will be incorporated into our meeting minutes. Since all shareholders have had an opportunity to vote, will the inspectors of election please confirm that all ballots have been counted? Thank you, Abby. It is now 10.05, and the polls are officially closed. There are 52,057,343 shares of common stock, each having one vote at this meeting. I've been advised that we have 89% of all shares outstanding, and therefore we have a quorum. We have three items on our agenda today. The first, the election of our directors. The board has nominated each of the directors I introduced moments ago to serve until the 2027 annual meeting. Each director, having received 75% or more of the votes, have all been elected. Our second item is the ratification of our independent auditors, Deloitte and Touche. Over 87% of the shares represented voted in favor of this proposal, and therefore the audit committee selection of Deloitte and Touche has been ratified. The third and final official piece of business today is the advisory vote to approve the compensation of SNAP-ON's executive officers, as set forth in the proxy statement. Since 95% of shareholders cast vote in support of this non-binding resolution, it has therefore been passed. This completes the official and exciting business of the annual meeting. It is now 10.06 a.m., and the meeting is adjourned. We will now watch a few videos.

Speaker 12

Please enjoy. and the idea forged a dream and the dream shaped lives and it reached across a nation and a world we are the stewards of that spark and the keepers of that dream and we have been for more than a hundred years we summon the new out of the now moving the world forward whether it's a firefighter whether it's an ambulance, whether it's a mom picking up her kids from daycare.

Speaker 11

I really feel like what we do, what Snap-on does, is critical for the infrastructure of this country to keep moving.

Speaker 13

With the mining industry, it's super important to have the best equipment because the risk is so much higher. When customers come in here, I want them to see, boom, Snap-on toolbox, Snap-on tool, Snap-on torque wrench. We're working on machines that cost over a million dollars. I'm going to have this owner who owns 10 machines walk in here. I want him to know I think I'm at the right place.

Speaker 12

We are the bringers of prosperity and satisfaction, keeping families warm and safe and dry.

Speaker 11

It's the quality of the tools and the people that work at the different factories making them.

Speaker 16

We have 15 plants all over the country, and these 15 plants are all USA. made in America.

Speaker 12

We are the bearers of pride and dignity. We mark the special and the serious.

Speaker 10

I worked at Peterbilt for 25 years and decided I had enough of working for somebody else.

Speaker 20

When I was little he did a lot of side jobs that I'd go on with him and watch him work and did that ever since I was a baby.

Speaker 10

We're looking forward to one day she'll take over I hope.

Speaker 19

I know all this will eventually be mine so I'll have the nicest snap-on collection around here because of him oh it's incredible you know I get excited when I have a stranger come up to me and ask me you work for snap-on and I say heck yeah it's a great company we are the deliverers of dreams I basically always aspired to have a nice snap-on toolbox and snap-on tools a 68 inch epic was something I always wanted to have the quality of tools that you own reflect Your quality of work, it gives everybody the reassurance that you're a professional mechanic.

Speaker 14

I grew up about two blocks south of Snap-on. I would get to see the forges running and the sparks flying, and that was always really cool to me as a little kid. Once I saw the opportunity to come work for Snap-on, which I always wanted to do, it was really honestly feeling like I stepped into the big leagues. We are the shapers of lives.

Speaker 8

My mom started Snap-On and she immediately loved the company and a year later is when I started and I've been here ever since. 48 years. This is the best company in the world.

Speaker 22

Snap-On is my family to be honest with you and I just treat everyone as a family member. we are the people of work snap-on has been in our lives since before i can even remember it was always instilled in us snap-on is the best of the best so when my dad passed away we needed to find his final resting home and i decided let's reach out snap-on and really just made our dreams come true by giving him the most beautiful custom blue snap-on toolbox as his own. I knew it was exactly what he wanted.

Speaker 2

Over the years we've taken on numerous new customers, all have different requirements. It's the best tools on the planet and there's nobody better.

Lynn Ernst, Analyst — Snap-on Associate (Eidermaster, 48 years)

Every time my customers choose Snap-on they know that they're choosing a brand that's tried, tested and true. This is 105 years of improvements to build this product to suit your needs.

Speaker 21

105 years itself is a milestone and every member of Snap-on should be proud of it.

Speaker 15

I started at the 65th anniversary so I'm kind of the old dude now but it shows you how strong we are and how we keep progressing and getting better and better and thriving.

Speaker 8

If I had the chance to do it all over again I would.

Speaker 16

To be able to say we've been producing our own tools for 105 years it's a big deal it's huge.

Speaker 17

When a company's been around 105 years that to me that success. We are progress. Prosperity.

Speaker 9

Pride. Dreams. We shape lives.

Speaker 1

And we have for 105 years.

Speaker 12

We are Snap-On, and we make a difference.

Speaker 1

Now. Now. Now. Now. Now. Now.

Speaker 12

Now. Now. Now.

Speaker 2

Now. Now. Now. And for many years to come.

Sara Verbsky, Head of Investor Relations

Welcome to Snap-On's annual meeting. I always love coming here. I love to meet old friends and make new ones and see many of the people I only see once a year and it's a great thing. So all I can say is boom shakalaka to quote the inimitable Bill Murray. Look, my job today is going to report to you on the state of the company And I can report to you that your company, our company, the company, even though it's been challenged and even though we live in turbulence these days and everybody knows it is and there's tremendous uncertainty, this company is wrong. We're going to tell you a few things. We're going to tell you who we are, reaffirm that, and tell you why it's so important to you. We're going to tell you what we did last year. We're going to tell you where we're going in the future. We're going to tell you how we're going to do it. We're going to introduce you to some of the people who are going to make that, have made, and will make that happen along the way. I believe by the time we're finished today, you will be convinced that this company is here. It is strong. And it justifies the capability and the energy and the commitment that all of you enlist in our corporation every day. Now, before I start on beyond that, I've been, by the way, you know, I stand up here. Rich Miller's the parliamentarian. I'm very relieved. I didn't know what he did till now, you know. But he forced me to do this. I've got to show something called the cautionary. So the cautionary is here to tell everybody that, you know, there's a lot of, there's some kind of, I guess, speculation, or when we look to the future, we're talking about where we think things are going, but we, it's kind of a belief, not a certainty. Okay, that's enough. We don't need to have that. You've probably read that already. All right. Now, let me start out, simply by saying, we're going to talk about a lot of people today, and I want to start by speaking of our board of directors. After all, they're my bosses, okay, so that's an important thing, but that's not why I'm saying this. The corporation is tremendously enabled by the team we have in our board of directors. Their guidance and support is unfailing and little known to, I think, people who aren't associated with all of us, they are a tremendous calling card for us outside. Investors and potential hires and customers are impressed when they see our board of directors because they see if we have intimate people like this on our board, we are a serious company, unique and special. So let's give the board of directors another round of applause. For anybody who is tempted to, shall I say, lose concentration during this presentation, and I know this has happened, I was once given an honorary degree when I spoke at a graduation, Master of Anesthesiology. apparently I sedated the audience in what was then record time I think I need a drink here is there anything, thank you you know, this is what do I want to start by saying I don't always think about this and I think we will start by just talking about the beginning you see it really did start with a spark and the spark was an idea and the idea forged a dream and the dream shaped lives and it reached across a nation and a world, and so it is we can see it embodied today in the Snap-on company, which was that dream. It was founded by four men, and one of the great things about our company is we always maintain a living link to our founders, and some of them are here tonight. So let me introduce them. First of all, I think in the third row down here, Patsy Callahan, and Andy Callahan and his wife, Crystal. We have over here Sarah Verbsky and Paul Tutsky. Sarah, not Sarah Verbsky. She works for the, she's back in here. Sarah Tutsky and Paul Tutsky. Sarah's the granddaughter of Joe Johnson. Patsy Callahan being the granddaughter of Stan Palm, our funder. And Paul worked for the company 30 years. We all know him last as the vice president of the Western region. And then next to them are Greg and Kathy Johnson, who are here at every event, grandson and daughter-in-law of Joe Johnson, and their daughter and her husband, Zach and Liza. So, Zach and Lynn, sorry. All right, so I'd like you all to stand up. The founder, our living link to the founders, please stand up. Give them a round of applause. It's not about as a company that, you know, if you go back to the founding, we were founded on a timeless principle, respect for the dignity of work. And we're enlisted in a cause, making work easier, making critical tasks easier, and moving the world forward, an event, a cause that's as relevant today as it was years ago, and such, 205 years ago. And one of the things we have a campaign around Snap-on, we celebrate the makers and the fixers. And the reason is because historians have held that societies advance by the number and the quality of their makers and fixers. American historians have said that. America is ascendant among all the nations of the western hemisphere at least because of that and we try to celebrate that in the video the video the video I love it starts out the founder and the haunting piano appropriate for you know something looking back more than 105 years and then after that it morphs to the roll of the years, starting in black and white, faster and faster and on to color, right to this day. And then we're joined by the Snap-on Nation from cities all over this country and from countries all over the world. And then, because we know, and I'm going to say it several times today, you create the way, we honor the stars that are in this room and beyond. So we have to the, I guess, cold place, sky full of stars. We honor the stars in the room. That's all of you. But the thing I like the most are the words. We speak now of the unique and the special. We speak of a company and its people essential to the serious and respected by the world. Snap-on is that company and you are those people. We are the bringers of prosperity. We are the bearers of pride. And we are the shapers of lives. We've been so for more than 105 years. These are things that I think it makes snap on people say, yeah, it's true. And it echoes with emotion and it rings with truth to us. And it couldn't have been done by somebody from the outside. We do not engage an outside firm to do this. We have Snap-on people do it, and we have the Snap-on production team here with us. And so over here is Sam Bottom, our chief marketing officer, and behind him is Ms. Bridget Correa, the people who are the thinkers, the writers, the directors and the producers of that great video. Please stand up. Give them a round of applause. You know, as we look forward, we say, we always pay attention to who we are. And we have this placard here shown behind me that is pretty much in every room in Snap-on. And why do we do this? Because, you know, when you've been in business as long as I have, you know that when things get tough and it's turbulent or you go to a new place, it's very important that you remember who you are and what you do and the characteristics you have. So we talk about the idea that Snap-on provides the most valuable productivity solutions in the world and we have certain beliefs. Beliefs in things like safety, quality, customer connection, innovation and rapid continuous improvement. We have certain standards and they are things like certain values. There are things like integrity and truth and respect and teamwork and listening. This is in every major room, every room in Snap-on so that we never forget this because it guides us through the difficult times, good times and bad. Now one of the things, there are other things that help us through these times and one of them or several of them are what we would call our strengths. We have particular strengths in product and brand and people. In product, we have enabling product. I'm going to tell you, you know, okay, you might say, well, how do you know you have enabling product? Well, because magazines and different people say we have the greatest product line in the world, and so it is. And Motor Magazine, for example, recognizes last year some of their top tools. The Professional Tools and Equipment News, P10, gave us five of the renovation awards, and the People's Choice for Professional Tools and Equipment News, the ones that are voted by the actual users, gave us a record 20 awards. So we do have special tools, enabling tools. We also have defining brand. You can see it up here. I think a snap-on brand is the outward sign of the pride and dignity that working men and women take in their profession. It started out that way, way back to the original five do the work of 50. When our founder said, boy, I have this device, five handles of different dimensions, a T, a cross, a ellipse, and put them together with 10 sockets of different sizes and said they snapped and made them, so they snapped on interchangeably. He said, five do the work of 50 of that and revolutionized tool sets all over the country. He also made them with great quality and snap-on product is non-parallel in quality. But here's something else he did that was really important. He went into the shop and told us he eschewed the normal distribution. They used to sell tools through distributors back in 1920. Well, no, he said, don't sell through distributors. Go right into the shop, lay those five handles and ten sockets out on green felt as if they were as precious as surgeon's knives, implying that if the mechanic used those tools, They would declare to the world they're doing something special, as special as a surgeon. And you can ask, well, why do we think that goes today? Because it's about tattoos and toddlers and tombstones. I feel like I'm in The Wizard of Oz. Tattoos, toddlers and tombstones. And in reality, these are the things that people do. And they want to identify with our brand. People tattoo, take tattoos that are snapper. One guy in the Midwest said, I want to roam the chrome for the rest of my life, and he tattooed it all over his forearm. That's phrase. And then we have people who put our wrenches in the hands of their newborns, and yes, we have people who bury their loved ones in our boxes and carve their tombstones in the shape of that loved one's box. The outward sign of pride and dignity that working men and women take in their profession, indeed. And our brands define people. That's why they want to have that as part of their body or in their child's hands or on their jacket. It defines them as a special professional who is doing something critical and essential. And it's not just Snap-on. We, this year, interesting, not many people know this, but we have a, not many people here I suppose know it, but we have a brand in Europe called Bako. The brand in Bako is 140 years old this year. It was founded in 1886, and it's founded by a guy named Johann Peter Johansson, one of the great inventors of Sweden, actually, and he founded it with a pipe wrench, but he also went on to design, he and his colleagues, or successors, went on to design adjustable wrenches, and to this day in Europe, when somebody says, give me the adjustable wrench, they say, give me the Bako. This has a following in its own right. Last year, the Bako team went to Rock Sweden. It's a rock concert in Stockholm. And they opened a booth that gave out Bako tattoos. They tattooed 500 people, turned away 1,200. Wowza, huh? Wowza. Okay, so we have a defining brand. We also have differentiating people. You can see pictures of them. But, you know, our team is capable, and it's committed. It's experienced and battle-tested. I'd like to introduce you to a few of them. First, I'd like to introduce you to Michelle Lang, who's been with us 45 years. She was my first support assistant at Snap-on. Stand up, Michelle. Hold your applause to the end. I know you want to make applause. Stand up, Michelle. then after her I have Lynn Ernst who is from something called Eidermaster here in Kenosha she's been with us 48 years and then I have the voice and the face of Snap-on who all the directors come to see as opposed to seeing me Miss Pam Serby who is the video star many of you know her here and then we have Joe Swan who's been with us Pam's been with us 48 years Joe Swan's been with us 49 years He is the father of the ATC, and the reason why we have this special toolbox all around the world that keeps track of tools is because of him. And then, from our IT department, Miss Louise Pitch, 52 years with Snap-on, 52 years and counting. Stand up, ladies and gentlemen, let's give them a round of applause. Joe Swan, you missed your mark. I said, stand up. It took you 20 seconds. I see. I see. Well, that's good. Good excuse. Good excuse. All right. Okay. So, we do have a differentiating team, and that is probably what makes the difference in our company. So, let's look forward and see how 2025, you know, we are advantaged as we go forward. We say, it's time to cover the annual report this year, that we're advantaged by strategy and structure. And what this means is that in this time of tariffs and supply chain disruption, we're advantaged because we have factories everywhere. We have 36 factories in the world and 15 are in the United States. And We have a policy that says, make in the markets where you sell. So 80% of what we sell over our vans in the United States is made right here. And a hand tool can be up to 50% labor. How much labor is a television, by the way? So somehow we make it. We make tools in America with a high labor content, and we do quite well. Thank you very much. So let's look at some of the numbers. If you look at the sales last year. Now, I want to start by saying that there's been some headwinds. I think we have a headwind slide here. I forgot about the headwinds. How could I forget about the headwinds? The headwinds are particularly difficult. You know, I don't even have to enumerate them to you, but you've got tariffs and you have wars and you have uncertainty all over the country. And, in fact, it weighs on the working men and women of the United States. And so our sales are still pretty good in that aspect. Last year, our sales were $4.71 billion, and this year it's 4.74 so a nice increase in the sales we feel pretty good about this that's something you want to feel good about but then with the tariffs and the material cost you look at the operating income margin and the operating income margin was well 22.7% last year 22.1% this year down 60 basis points, but that's pretty much currency. The currency shifted against you and made everything you'd buy, a lot of things you buy more expensive, and some of your overseas operations don't make as much money as you would hope they'd make. So that is part of the question here. And then, let's look at the trends. The trends are really great. You go back to 2011, And you see the sales in 2011, I actually was here then, you know. The sales were 2,850,000,000. The next year there were 2,940,000,000. The next year was 3.06, then 3.28, then 3.35, then 3.43, then 3.69, then 3.74, then 3.73. Then there was the pandemic. It went down to 3.59. Then it came back to 4.24 billion, 250 million. And then it came to 4.49. And then it was 4.73, 4.71, and the aforementioned 4.73. And this is a great trend. I really, most companies would love to have this trend. And we're proud of this trend, but we're unsatisfied. But we have benefited from great people and also from some great leadership. And we have some of those leaders here and some of their relations. So the first one I want to talk about is the seventh president of Snap-on, Mr. Norm Lutz, who was the first president, I think he was president in the late 70s. He brought Snap-on on to the public stock exchange and to New York Stock Exchange. And we have here his, I think his daughter and her husband, Susan Lutz Kenyon and Bill Kenyon, up here from Libertyville. Stand up. Let's give them a round of applause. And then, next to them, we have somebody who was once known as the First Lady of Snap-On, and she was, Ms. Faye Gregory, the wife of the 10th president of Snap-On, Marion Gregory. Faye, welcome back. Stand up. And then, a man who needs no introduction. A man who gave us so much rapid, continuous improvement and taught us how to remember who we are and what we would do. And, of course, I'm talking about my former boss, current counselor, and ongoing friend, Mr. Jack Dwayne Michaels. Stand up, Jack. You're looking good, Jack. You keep looking younger. I look older. What's the problem? You're a kind guy not to answer that. Look, okay, so that's the trend in what we would call operating numbers. Let's look at the EPS. So the EPS last year was $19.51, and this year it's $19.19. But, I mean, 2025 was $19.19. Now, this looks like it's down, but actually it was up slightly because there was a huge pension charge. And we love our pension. Anybody out here who's there, in fact, there are many retirees in the audience, don't worry about your pension. But it costs us a little more at the bottom line in terms of expense. In fact, I think it was 36 cents. So actually, this year, adjusted for pension, last year, would have been a little bit better. And the trend is fairly nice for us. but first before I go through the trend go back one I want to introduce the team that authored all of this our management team down here they're I guess sitting along here right but Rich is up here Rich Rich Miller you've met already the parliamentarian of snap-on anything else no okay all right down here in the front hold your I think we can applaud them one by one because okay from Scranton, Pennsylvania. The second most famous son of Scranton, Mr. Aldo Pagliari, our CFO. From South Jersey, the Senior Vice President and President of our Repair System Information Group, Mr. Tom Ward. Our Chief Development Officer, having been promoted on this day in this room one year ago, Ms. Mary Bouchman. From Kenosha, and then from parts unknown, otherwise referred to as Iowa, we have Tim Chambers, the president of our tools group. From the Basque Country, the president of our commercial group, Mr. Jesus Zaregi. And I apologize for this next item because I'm introducing a man who I believe holds the world's record for being in quarantine during the COVID. He missed two of these meetings because he was in quarantine. so I'm happy to say that today he has not missed the meeting so I can say introducing live Mr. James Ong the president of Asia-Pacific operations and then John Wolfe the president of our repair systems operation right former Marquette basketball player do you have to be in the game to be a player on the team or is sitting on the bench okay what did they call you splinters in college right yes right okay let's see all right next him I'm going to introduce these other people because our chief marketing officer the heretofore mentioned Mr. Sam Bottom Sam was so shocked that he didn't know whether to stand up or not June Lemmern our chief information officer June and the quarterback and the quarterback the quarterback of a response to the COVID and our vice president of ESG and disruption, Mr. Raul Colon. Stand up, senor. Okay. We got a great team. So let's go on to the trend here. And I think it starts in 2011 at 471 and then 520 and 593. And I guess after that it jumps to 714, 810, 920, 954, 1187. It's going up there. It's kind of gotten a Great, great improvement. $12.41, and then the COVID hit at $11.44, and then it was $12. Then it snapped back and made it to $14, $14.92. And then, and then, $16.82. And then, $18.76. And after that, $19.51. and we just showed you the $19.19, but I told you already that's carrying 36% of our pension difficulties. All right, so we have this, and if you look at that trend, you can say somebody had to make it so, and we have here with us some of those people have gone on. They've left our corporation and are retired, so I have some retirees over here that I'd like to introduce you. Just retired. our former director of internal audit, Ms. Rachel Nyberg. After her, Rachel, can you stand up? Where are you over here? Okay, Rachel. I think if we give everybody applause at once, we'll be here forever. So, okay, we'll stand up. And then after him, just retired also, the chief financial officer of our credit company down at Liberty, Mr. Andy Tressler. He's been with us 26 years. Give him a round of applause. And then our RCI effect, our RCI leader in Milwaukee plant, Ann Witte, also kind of just retired just a few years ago, stand up, Ann. And then Gary Henning, Gary Henning, who retired recently and was with us 51 years as the thinker behind all our metallurgy. And then as a special treat, special treat, all the way from Australia. Do you realize how long it takes to get here from Australia? We have Mr. Ajit Panambalan, who is the general manager of Australia, and he's brought with him his wife, Dami. So please stand up, both of you. Give them a special round of applause. Thanks so much for all you've done for the company. Thank you. Now, this trend has, if you're an investor, you're kind of saying, great, I'm glad the stock price went up and all this, but what about the dividends? and the dividends have been pretty good. You have dividends of $1.30 way back in 2011, $1.40, $1.58, $1.85, $2.20, and then it jumps all the way, I don't want to read them all, or recite them all, jumps all the way to last year it was $8.86. And one of the people who contributed to that is sitting out here in the audience, he's a retiree, he was retired 21 years, my friend, my colleague, and my brother, Mr. Anup Banerjee. Stand up and up. Welcome back. Okay, and the good thing about our dividends is, is, we started paying them in 1939, and they have, we've paid one every quarter since then. and we have never reduced it. So that's the longest stretch, probably the longest stretch, of uninterrupted, unreduced dividends in the New York Stock Exchange, which says how strong and capable and resilient our company is. So that's where we've been. Now let's think about where we're going. You know, I said we're advantaged by strategy and structure. I explained that to you but it's funny you know when you when you prepare for one of these things you think about it anyway obviously don't prepare that much is that you think that there are many people involved many constituencies and one of the constituencies is the community we don't go very very far without the support of our community and Kenosha right here is our home and I just like to mention not yes to stand but mention some of the community leaders. David Bagdala, who is the mayor. Samantha Kirkland, who is the county executive. Brian Albrecht, who is the former president of Gateway Community College, one of our partners. Matt Janison, current vice president of that college. Gina Madrigano-Pribus, who is the chair of the Board of Trustees of Carthage College. Lynn Akey, who is the president of Parkside College. And then back in there somewhere, is my old friend, community leader, and rumored to be former Green Bay running back, Mr. Mahone. Everybody knows him. All right, let's give those people a round of applause. Okay, so that's where we're going. And you can see our first step is we kind of say we have runways. When we look forward, we say we have runways for improvement and runways for growth. So let's talk about the runways for improvement. They're actually off for who we are. Remember I said we had certain beliefs and we believed in safety and quality. Well, these are runways for growth. They are, we call them snap-on value creations, processes. We work every day to make our business better. First is safety. The purview of Mr. Raul Colon down here. And safety, look at the record in terms of accidents. Last year, in fact, 98 of our 103 facilities had no lost time accidents. And a snap-on associate is six times less likely to have an accident today than they were 20 years ago. It's the work of Mr. Colon and the teams throughout the organization. So we feel pretty good about that and sometimes investors will ask me why do you talk about safety? Well the problem is we talk about it because it affects us and we make tools for working men and women. We want them to be safe using our tools. What does it say about us if we can't keep our own people safe? And then you talk about quality. I talked about the idea that five do the work of 50. Those five handles and ten sockets were made of the highest quality steel and so it remains today. And we measure a lot of things about quality, but one of the things we do is ask customers, what do you think? And you ask them a bunch of different questions like, what tool is most innovative? What tool has the highest quality? What tool are you proudest of? What tool makes you think that it'll get the job done and what tool do you want to have? And in each of these cases, Snap-on is above 60% of the people saying that's our name and number two is just at 10%. And number two varies. So we have quality. Then we talk about customer connection. This is an important feature of Snap-on. You see, we don't survey customers. We go to the And build our tools on that basis We go to the actual work site Observe the work And then turn that insight into a tool Which will move the world forward By solving a particular problem We say, we summon, the video said We summon the new out of the now And that's what it means We go into the garage, that's now We see the new tool in those insights We have 85,000 SKUs and we've built a number of them. But one of the reasons why we're able to do that is we have a lot of places where we see work. We have 3,700 franchisees. We have, who call on, one million technicians. The 3,700 franchisees call on one million technicians every week. Almost no one else does this. We have a number of direct sales forces. We are in 700,000 garages in the United States and Europe. We have databases of 3 billion repair records and 600 billion repair data points. We call on 3,700 schools, community schools, to equip them with Snap-on product and see how the students use them, making the students Snap-on customers for life. And then this very building has had 4,000 customers visit for special interaction. So customer interaction is very important to us. And it generates innovation. Innovation is the way in which we take these insights and we develop a product. And the people who do this are our engineers. So I've got a bunch of our engineers back here. I'd like to introduce some of them. And each of them has something to do with one of these tools. you see the ratchet you see the the hand tools up there the little ratchet the little ratchet that's the smallest ratchet on the market and we have Peter we have Dave Gross in the back who's one of our manufacturing engineers came to us from from he's a Saluki he came to us from southern Illinois stand up Dave okay let's give him a round of applause okay I'm going to ask the rest of you just to stand and we'll give him applause at the end okay your hands must be getting tired so right Just keep standing, Dave. And then Dave Sabursky, who is a power tool engineer, came to us from southern Illinois, not southern Illinois, northern Illinois, and he helped design this long neck ratchet here. It's 13 inches. It allows you to reach in and get anything you need, you know, get to places where other ratchets can't match, can't reach, and it's 30% longer. It's a great seller. Stand up. Just stay there. Both David, both Davids stand up. Okay. Now, all right. Next to him, I've got from Algona. You see this box out here? This is a 1776 box. We made it just for the semi-quincentennial. And this young lady helped design it and produce it. Heidi Stiglstad, who has only been with us three years. She came to us from the South Dakota School of Mines in the University of Nebraska. Stand up, Heidi. Okay, she's up. And then James Panko, who's been with us, by the way, 38 years and he's an electrical engineer and he worked on the new Triton. And I think on the new Apollo, which just launched last night, which is a diagnostic unit. You can see it up here. This is a Triton unit. Then Matt Stout, who came to us from Purdue, who's in our Challenger lift facility in Louisville and helped design this 12K, 12,000 pound lift that's particularly adjustable and groundbreaking on the market and finally Pat Mancini from California who designed part of this design this control tech state-of-the-art torque wrench for industrial use and Pat is from unbelievably he's in California but he's from my neck of the woods he went to Alford and then RIT I believe our engineers the innovators give them a round of applause right you can sit down now. Okay, so our runways for improvement, snap-on value creation, safety, quality, customer management, innovation, and rapid continuous improvement. Rapid continuous improvement is how people get up every day and figure out how to make their job better. You heard a lot about AI, and AI is important, but an equally tremendous force is harnessing the force of your people who know the work and can figure out how to make it simpler and better step by step by step by step by step. We have RCI coordinators in every place. We have an RCI conference where we celebrate the best RCI events in the world, in our world, and the winner gets $15,000, a traveling trophy, and $15,000 for a party in his own facility. And you can see the results of this? You see the numbers for OI, the OI margin that I just talked about, and what this adds up to since 2005 is 1,560 basis points of improvement. This is 80 basis points per year. Anybody who's in business and hears that number knows it is a wowza. It is a wowza. This is a place where people kill for 10 basis points. And so rapid continuous improvement. So those are our runways for growth. Safety, quality, customer connection, innovation, and rapid continuous improvement. And they drive our way forward. We don't go anywhere unless we keep improving. Mr. Jack Michaels taught us this. And then, though, when we step back and we think about growth, you have to think of it in this way, and I think this is important to share with all of you because it was a watershed event in our business. We looked at our business, and we were saying, we're a great business. We make wrenches. We sell them through franchised vans to automotive technicians, and we did, and we did it great. No one did it better, but it was a narrow description of what we really do. What we really do is what I told you just a minute ago. We get in a workplace. We observe the work. We figure out what are the stickiest and most difficult tasks. We summon the new out of that now, and we provide a new product. So Snap-on is a company that observes work and takes those observations and creates it to make it easier. And you can make it easier, not necessarily just with a wrench, but you can make it with a piece of software or a number of other things. And you don't have to sell it through the vans, although the vans do a great job. We can sell it other ways because other people buy from other types of distribution. And then finally, we don't have to sell it to auto mechanics. We sell it to anybody, anybody who works on critical tasks. Because a snap-on, like all the way back to that green felt, a snap-on tool is like a jewel. And so people who are doing something where the penalty for failure is high want a snap-on level tool. And so that's what we focus on. Now, as we look forward, there's one other thing in our way. There's a couple other things in our way. Headwinds. Okay. You know, everybody talks about headwinds, but there's a lot of uncertainty out there. Shouldn't there be? You know, we have things like people talking about Greenland. We have problems with China. I think the relationship with China has never been worse. We have a war in Iran or some kind of action in Iran. We have a war in the Ukraine. We have tariffs. We have government shutdowns. And I'm not playing. This is not a political statement. I'm not commenting on who, what. But these things, if you think about it, create a fog of uncertainty. Just tariffs. You look at tariffs. I mean, tariffs, you can have a different opinion about tariffs, okay. But what you can't have, what you probably don't have, if you were in our place, you'd say, wait a minute, what tariffs are we going to use? Tariffs from April? China's 150, 170% in April. Tariffs from later on in July? Well, 55. Later on, 45. And you see the same thing in Taiwan, and the thing is written across all the tariffs. So one of the things that creates headwinds, and I am not, it's way above my pay grade to say whether this is a good thing or a bad thing in terms of national policy, but it doesn't help business because you can't plan anything. And so that's another headwind we have. So I think we have some things, though, that will offset the headwinds, I believe. Go ahead. We call them points of light. How do you like this new coloration? We have a bunch of different colors that come out of our new building out here. I think we're one of the few people to build a building in the boundaries of the city here in a while. It's because Kenosha is the wellspring of our past, and we're going to be here, we think, for another 105 years. So we want to build here. So go ahead. This points of light. This is the box. We introduced Heidi Stickelstad, and she was one of the people who worked on this box. And you can see it up here. You can see the outline of the American flag. And then the top part, you know, the iconic events, iconic American scenes like the Statue of Liberty and the raising of the flag at Iwo Jima and Mount Rushmore and the landing on the moon. and took a lot of effort to create the stars. You know, you had to cut out the stars and have a white background in there and make sure they got painted white. And we built these, and everybody loved them. But we didn't sell that many. You know how many we sold? 1,776. We built 1,776 of these boxes. So did everybody, franchisees, talk about, I got one of the boxes. It's one of our points of light. It helped us grow in this situation. Now, here we got another one. You look at the power tools. And I'm going to talk about Verizon here, the Triton. The Triton is a handheld diagnostic. Now, a lot of people here, I suppose, don't know what a handheld diagnostic is. But what it is, is it's a laptop for a car. You go in and you contact the car. By the way, this does it wirelessly. Contact the car, reads the code. It says, the car says this. I'm sick because of this. But that isn't definitive. There are a lot of possibilities. And this will put you in touch with one of our proprietary databases of three billion records and allow you to diagnose the car with great speed. No one else has this database. No one. Fords and General Motors and Stellantis are blind to it because it happens at the warranty so it's a great advantage for us it's one of the great things snap on wheels and it'll be especially more powerful now that AI is becoming more prominent and can wring more patterns out of such data and then finally we have the nano power tool the nano power tools it's a small tool it fits in your pocket and everybody loves it because there's a lot of work under the dash or in different places that don't take a lot of power but you need to get in there today's cars geometry and access is a big factor, and these things, our nanos, have been a point of light. We also have, go ahead, I want to talk for a moment about this box. 1776 of them. You know that this is the semi-quincentennial of America. I remember the bicentennial, so I'm kind of bummed out about this a little bit, but but I'll be celebrating it all. And it's worthwhile thinking about America. How is it we are where we are? Well, one of the reasons is from all through America, all through our history, men and women have been willing to leave their homes and go into harm's way for the good of our nation. This happened in the snows of Valley Forge, The bayous of New Orleans, the fields of Gettysburg, the hill at San Juan, the forests at Ardennes, the beaches at Normandy, the cliffs of Saipan, the perimeter at Pusan, the slopes of Nui Badin, the Black Virgin Mountain, the ridge at Kalusha and places all around Kandahar. And it continues today, people leaving their homes and willing to sacrifice for us, if nothing else, just to put their lives on hold. It's one of the very cores of America. And Snap-on people have been central to this in many different ways, not always to leave their home, but to work on behalf of the nation. And one of our great heirlooms out here in the garage is a, not in a garage, in the museum, is a telegram. And the telegram is addressed to the people of Snap-on Tools. And it says, it's dated November 25, 1942. And it says, thank God for the people of industry, labor and management in America that have given us the supplies we need to pursue this noble campaign. Thank you all and God bless. And it's from the Supreme Allied headquarters in Europe. and it's signed, Eisenhower, Dwight D., Lieutenant General Commanding. This is an heirloom which we treasure because it shows how important Snap-on was and how all the people who work here went to bat for America, working for our country. That's particularly meaningful in a semi-quincentennial. There's another story I want to tell you about Werner Steinseffer. He's passed away, but this was an American. He worked for Snap-on for 44 years in our press shop. And this guy leaves here, trains with the 10th Mountain Division, fights in a famous and bloody battle in Italy called Reaver Ridge. He tells me that he carried a .50 caliber machine gun up the Reaver Ridge and used it, and they won that battle, which was pivotal in our taking of Italy. And he went on to fight other battles throughout the war. Then in the full, and by the way, anybody who's been in the Army and hefted a .50 caliber machine gun knows it ain't so easy a lift. Anyway, this guy did all this, and he comes back. He's about to come home. So he comes on a boat. He gets to New York City. He gets on a train. The train takes him after a couple of changes to Kenosha. He gets off the train. This is how he's describing it to me. He gets off the train, and his father, only his father, greets him. They shake hands. He goes home. His mother makes him, in his own words, his favorite dish, skiddy and meatballs. And so after fighting all these battles, coming over on a boat, getting on a train, coming here, going home and having a skiddy, the next day he got up and came to work at Snap-on. This was an American. And we have other people here who have sacrificed for us in the military. So I'd like to, you know, ask some of them to stand. You know, save your applause again. First, we have Rich Bowker, who's back here. And he was with us 26 years, a machinist. And he was in the Army of the Vietnam era, and he's very active in supporting Vietnam veterans, I think, when they come back. And then we have Jim Singer, who's here. And he's with his wife, Roseanne, who everybody knows because she used to work here. And then we have Dave Singer, who is here with his wife, Susan. And he was in the Army, and I believe he was a member of the story, the Big Red One, the 1st Infantry Division. We have Peter Stieber, who worked for us for 38 years, was automated. And he's here with his wife, Carol. He was in the Army during Vietnam. And then a Vietnam-era Navy veteran, Mr. James Gamble, who's here with his wife Estella and his daughter Quinita, he was a single man in the Navy, leaving in their homes, going into harm's way, and sacrificed for America. These are Americans. Give them a round of applause. Okay, let's go ahead. All right, so we have some things in our favor, though. I said that, you know, we're going forward and there's a lot of headwinds, but we have our principal value creating mechanism, which is pretty strong. I described it to you already, and it's simply customer connection. Go into the garage, seeing what works, what's needed, what tools can move the world forward, and turning those insights into an actual tool. By the way, this principal value creating mechanism doesn't tie us to any industry, any distribution, any technology. It works for all of that. That's why Snap-on has such a great future. So, okay, the other thing we have, as I told you about advantage by strategy and structure, is our factories. Our factories are terrific places, and we have 36 of them, 36 factories, and 15 right here in the United States. So these things allow us to pursue our four runways for growth. Enhance the van channel. You know, the vans we have, the franchise vans, the tremendous channel, we want to enhance them, we want to expand, and they sell just to technicians. We want to expand to repair shop owners and managers. They are people who like Snap-on and stand right next to the technicians, but they buy differently through direct and through distributors, extend to critical industries, roll the Snap-on brand out of the garage where people want the effect of Snap-on tools in places like aerospace and the military and mining and oil and gas and education. And then build in emerging markets, because no matter how our situation is with some of the emerging markets now, they are opportunities for us going forward. So let's talk about enhance the van channel. Enhancing the van channel takes making sure that you have great franchisees and leveraging their capability. And I've asked several of our franchisees to come here today. I want to introduce them to you so you can recognize them when you see them afterwards. Mr. Lyle Yannish, right, Yannick Lyle from Esteban, Saskatchewan. Stand up. Who's sitting in front of you there? Can you move to the left a little bit? Let him be seen here. He's been with us, I think he's been with us eight years. Next time somebody's been with us 26 years, Mr. Paul McGrath, the number one franchisee in the United States. you're standing and then we have from Waterloo, Iowa six years with us, Ms. Ellen Woods who is a video star for us and she was one of them and then I have a retired franchisee here Mr. Brian Neal who was with us who had a route in Menden, Iowa in Menden, Illinois and the reason why I asked him to come is he worked for us he was a franchisee for 38 years but more than that he had one of the great quotes that we ever heard out of the franchise system we had him on camera and he said I feel like I shape lives I change lives every day wouldn't you want to be in a company that was able to give somebody something that was their most prized possession. And so it is. He's here with his wife, Natalie. Let's give them all a round of applause. Brian, thank you. All right. Thank you. Thank you. So expand, enhance the van channel, expand with repair shop owners and managers. This is basically taking what was our inherent understanding about auto repair. And you have like, there's 600 people in this building, 300 fancy themselves with auto repair people. And you take that and you move it to help the shop owners and managers. Part of that help is from things like the diagnostic unit that allows repairs to go much faster. And that business run by Mr. Tom Ward and Mr. John Wolf has done pretty well for us. And then extended critical industries. A lot of people didn't think this was likely, but extended critical industries is just rolling a Snap-on brand out of the garage to meet people who actually want our tools. I once met an airline mechanic who said to me, I love snap-on tools, but I can't buy them. There's nobody that calls on us. I feel like the only way I can get a snap-on tool is to throw myself in front of a snap-on truck. And then they'll be able to... Now, we call on those people directly. A lot of them direct and people like Boeing and other places, and we're in the F-35 jet. The building and the maintenance thing of the F-35 jet, the Artemis II use snap-on tools to build it. These are places where the penalty for failure is high and the need for snap-on product is necessary, is really wanted, and we extend to critical energy to do that. And then build in emerging markets. We have about 1,000 people in emerging, There are 1,500 people in emerging markets. Mr. James Ung is in charge of a big piece of it in Asia Pacific. And we have five factories there. And we don't have them to support the United States. We have them to take the advantage of all the billions and billions of people who will want to buy our products in that situation. So our runways for growth. Enhance a van channel. Enhance a van channel. Expand repair shop owners and managers. Expand to critical industries and build in emerging markets. and you could say, okay, in the future, how do things look? They look good or bad? Well, we think we have a lot of strengths, but the markets we play in, particularly the auto repair market, looks pretty good. Look at this data. If you look at cars, you think you're going to need more repairs? Well, cars are getting older every year. They're now 12.8 years old. They just keep getting older every year. It's the math, and so therefore there's more business for us. And the car park keeps getting larger in the United States. It's now up to 290 million cars, which means there's almost one car for every man, woman, and child in the United States. This is a great market. And the other thing about it is, it is a place where cars keep getting more complex. You know, to repair a car today, you feel like you need a Ph.D. in electronics and mechanical engineering combined. It's a very difficult thing. You know, here's a fact for you, interesting fact. You know how many doctors there are in the United States? One million. You know how many car mechanics there are? One million. So a doctor is no more rare than a car mechanic. So people need car mechanics. And we see this. We see the aging of the car park and the rising complexity. Because as the cars get more complex and the mechanics need more help, We can put them right on target with products like our Nano and our Triton and the new Apollo that we launched last night. And so you can look at Bureau of Labor data, and the Bureau of Labor data just simply says the number of technicians is growing, the number of hours they're working is growing, their wages is growing very fast, and the amount of money Americans are spending, American households spend on car repair has grown high single digits. this is a good market and we plan to take advantage this is one of the reasons why you should be confident why we proceed with confidence even though this has been a challenging year and the challenges remain we proceed with confidence oh I want to say something about this logo here 105th plus logo why do we have a 105th plus logo because we decided we're 106 years old we didn't want to start talking about 106 so we're greater than 105 that's the idea saves us marketing money to keep changing but then you look at okay, that was last year old news, as Aldo would say old news Jethro, he called me Jethro Tull living in the past that's an in joke for most people here but I remember that album alright, so our numbers in Q1 were like, these are pretty good 1 billion, 207 million up 5.8% in sales up 5.8% as reported And then if you take out currency, which is a financial construct, 3.4% growth, which is, I think, fairly good. And the 1207 was the highest first quarter ever for Snap-on, and the second highest of all quarters ever, which means we did pretty well in a difficult environment. And the OA margins, the gross margins, which are an indication of how bad material pricing and tariffs are hitting you, And it held up pretty well, 50.4% down 30 basis points, but that was mostly due to currency. If the currency didn't change, that would have been rock solid. It's quite a feat when the world is spinning all around you with tariffs and increases. And then the OI margin, 20.8% versus 22.1% versus 27% last year, down 60 basis points, but again, it's currency. and spending on things like AI. But it was a good quarter. The street was pleased, and so were we. Now, remember, I always say, we look at these things, and we are proud of them, but we are unsatisfied. We're proud of these results. They're terrific. It shows how strong and resilient your company is in the storm. But we always think we could do better, and we will. So that's my story. You know, it's sort of like this, is that these are challenging times, and your company is still strong and resilient and powerful. And we are proud of our results, but we're unsatisfied. But when we look forward, we see the opportunities in our markets and other things we have, so we are proceeding with confidence. And the principal reason why we proceed with confidence is we know of our strengths in product. Snap-on products really do make work easier. They really are the basis of summoning the new out of the now. They do make work easier, and they move the world forward, and everybody knows it. And Motor Magazine and Professional Tools and Equipment News with their Innovation Awards Awards and Professional Tools and Equipment News and their People's Choice Awards say it's so. Snap on brand is, our tools are enabling. Snap on brand is defining. We really are the outward sign of pride and dignity that working men and women take in their professions. And tattoos and toddlers and tombstones say it's so. Every day. And then we do have differentiating of people. That was one of the big purposes of this, to convince you of that and show you that. We do have people capable, energetic, committed, battle-tested, not accepting less than strength. And you saw it in their longevity from 45 years to 52 years. You saw it in our retirees who are proud to be with us here. You saw it in the tie to the founders. You saw it in the innovation people, the engineers who delivered all this. You see it in the franchisees who are enlisted in our company. All of those say it so. So I hope that when you heard this, you have a couple more things to say, but I hope you hear this. You leave here convinced that this company is unique and special. That we really do have strength in the fog and this company is worthy and it justifies the commitment and energy and capability that you enlisted in success. And that's true because the final message of today is this is a strong company with an extraordinary past and exciting now and a promising future and all of you make the way. Now we'll take some questions. Okay, questions from the audience.

Speaker 18

I think we have our first one right here in the center.

Stephen Lovell, Analyst — Shareholder (Snap-on Legal)

Nick, Stephen Lovell with Legal. I'm wondering, with all the tariffs and the ongoing...

Sara Verbsky, Head of Investor Relations

Are you also a parliamentarian?

Stephen Lovell, Analyst — Shareholder (Snap-on Legal)

Not today, no. Can you tell me what Rich Miller does?

Sara Verbsky, Head of Investor Relations

A lot, everything. You know, this is the section of the presentation where you're supposed to tell the truth.

Stephen Lovell, Analyst — Shareholder (Snap-on Legal)

Okay, go ahead. So with all the tariffs and the ongoing conflict with Iran, I'm wondering what are the company's key priorities to maintain growth and profitability going forward?

Sara Verbsky, Head of Investor Relations

That's a pretty big question. You know, our key priorities are just what I showed you is we want to nurture our snap-on. First of all, we want to nurture our snap-on value creation process. Let's keep working on safety, quality, customer retention, and innovation, rapid, continuous improvement, because this creates the substrate on which we leap forward. And then you could even add AI fits in this. You know, everybody's worried about AI. Well, okay, you know, but we have a strategy around AI. We reviewed it with the board yesterday, but it is just part of that value creation. We engage our people to create the way.

Stephen Lovell, Analyst — Shareholder (Snap-on Legal)

We're going to keep doing that, so that will give us a great substrate.

Sara Verbsky, Head of Investor Relations

Then, we have great opportunities in repairs in the vans because, just as I said here, vehicle repair just gets more complex. We can sell them more product because it's harder for the mechanic to do it based on his seat of their pants. Although, I understand somebody tried to fix one of the board members' cars just by getting a description of the noise in the car last night. But I don't think it generally cuts it today. We're going to try to expand with repair shop owners and managers. And all that means is getting more product to sell to them because they love Snap-on product. We just don't have enough of it. We haven't been building that product line as long as they're the ones we built for the technicians. So we're doing things like expanding in diagnostics and equipment and software, both software and hardware. Then we're going to extend to critical industries because this is our biggest opportunity because we haven't really penetrated this. And those people love our product. So right back here, why did we add this building? to give us more capacity to access the Boeings of the world and the SpaceX's and just the places that are building, you know, even the general factories. So access aerospace and the military and mining and oil and gas and natural resources and general industry and heavy-duty equipment. And then finally, we don't want to forget about emerging markets. They're a little off the bubble now, but we like to be everywhere. You saw in the beginning where we said we had the snap-on nation from cities all over this country and from countries all over the world. We want to keep that strength up. So that's what we're going to do. Okay, next.

Kathy Parker, Other

Nick, right over here.

Sara Verbsky, Head of Investor Relations

Yeah.

Kathy Parker, Other

Hi, Nick. Kathy Parker from the Tools Group. You've been a strong advocate for upskilling the American workforce. I'm curious to know how you think AI might impact the skilled workers in our customer base.

Sara Verbsky, Head of Investor Relations

It's going to be an impact, but look, I think people adjust. Our view is AI is an enabler. Armed with AI, our capable people, our differentiating team, will become more powerful, generate more products. See, one of the things about our company is we don't make a lot of common products. We go into the shop. We observe the work. It's a smaller group of people, smaller task we're trying to fix, and we build a product for that, and that's pretty costly when you do it in low volume, and so AI will allow that cost to go down, but it also will enable us to do more of that. The real value of AI is to develop stronger products, not to do things more efficiently, although doing it more efficiently is something to do that. I think, look, and the other thing, If you look at our customer base, the economist, I'm going to say this later, the economist said that the people of work, mechanics, are among the most AI-proof of professions. And I believe that to be true. Okay, next.

Speaker 1

We got one over here.

Sara Verbsky, Head of Investor Relations

Yes.

Steve Bartles, Other

Good morning, Nick. Steve Bartles, retiree. Steve Bartles? Yes, sir.

Sara Verbsky, Head of Investor Relations

Did you work here? I did for a few years. Ah, I see. Very few. If you count only working years. Go ahead, Steve.

Steve Bartles, Other

The tools group had a great start to the year and a strong first quarter. Wondering what you're going to do to keep that momentum going.

Sara Verbsky, Head of Investor Relations

Well, one of the reasons why we had a good start, I mean, there are a lot of reasons, our franchisees and so on. But the technicians today, because of what I talked about, all those headwinds and tariffs and other things, or the wars, it's pretty uncertain. If you think about it, we haven't been in such an uncertain time in a long period. And so what we know is the technicians, the everyday people, the grassroots people, they still have work. The technicians, I showed you the technicians, the wages are going up, the hours are going up, everything's going up. So they're cash rich, but they're somewhat confidence poor. So they're not investing in as many boxes as we used to sell because it requires that box is pretty expensive. It requires them to pay it off over an extended period of time. We're able to help them with our credit company, but they're still tied to a payment for a long period, and they are less likely to do that. So if you're Snap-on, we have an 85,000 SKU product line, 40,000 for the tools group. You just shift to try to build more of those quick payback items to take advantage of their preferences. And that's what worked in the first quarter. We're going to keep doing it. And what I mean by that, fewer boxes, more power tools and hand tools. Anything else?

Speaker 18

One more right over here, Nick.

Chris Mason, Other

Nick, Chris Mason with IT here. You talked about rolling the brand out of the garage. Do you see any opportunities in the data center boom?

Sara Verbsky, Head of Investor Relations

Oh, yes, actually, we just did a deal for doing data centers to help construct it. I'm not sure what will happen when the data centers are running. We'll have to see that. But the construction is going to give us some pretty big opportunities because a lot of it has to do with, you know, the construction, yeah, it isn't all bites and bits. There's a lot of mechanicals in holding some of the items to cooling the space, and we have opportunity to address all of that. We've got air conditioning units that do this. We have torque product that will allow them to build the racks that are necessary to hold the data, the data devices. So we see that as being pretty good for us. Any other questions? That's it, huh? Look, bear with me one more minute. I like to say, when I stand here, I'm thinking about it. I guess I could say we've done what we said we would do. We have spoken of the unique and the special. We have spoken of a company and its essential to the serious and respected by the world. We are a company that is the bringers of prosperity. We are the bearers of pride and dignity. And we are the shapers of lives. And we spoke about that all here today. And we spoke about the resilience and the capability of the company going forward. And this is, I've been in big companies and great companies, but this is a special one. It is unique and special. And one of the things I want you to realize when you go here, it is all of us who do this. You see, Snap-on cannot do what it does. It cannot proceed with confidence if it doesn't have the confidence of our investors. We can't go forward if we don't have the conviction of our franchisees, the commitment of our associates, the faith of our customers, the support of our communities. And of course, we wouldn't be where we are if we didn't have the legacy of our retirees. To the extent we strive to go forward, we stand on your shoulders. And it's true. See, these are interesting times. I mean, whatever side of the political spectrum you are, you've got to recognize, I think you'd have to recognize that things are going like this. Every day you get up and you can read something new. Now, I'm not making any comments on a political basis. I'm simply saying this does create a kind of version of difficulties. So as you move forward, it's a challenging time. Our technicians are uncertain. But you see, the clouds we see, the threats we meet, the wars we wage, the fears we hold, they are formidable. And they create a fog when we look forward. Ask yourself if that's not true. It is true. But shining through that fog, shining through that fog are the resilience and the power and the importance of work. and we are the people of work you can say okay it's just a you know it's mechanics and other things but if you think about what i said about makers and fixers historians have held that america and any other society that goes forward does so because they have people who can accomplish things can make and fix things america was ascendant because it is and you don't have to have any greater evidence than to look at the telegram in the museum. You see, America won World War II because we had great leaders and brave people like our heroes that we talked about here. But most people recognize us. They also were aided by the people in the factories, the people in the laboratories who created the industrial substrate that in World War II allowed us to win the one war we could not afford to lose. And okay, you can say that's ancient history, but recently in the pandemic, we saw that while a third of America was sheltering in place, the people of work were at their posts, ensuring that life went on and that society would not disintegrate. And we were all witnesses, and you know it's true. And Snap-on is a company, and all of us are people who, one way or another, are involved in that work, which does, by virtue of resilience and being essential, shines through that fog. That's the story about the economists saying that, boy, the professions that are immune from disintermediation from AI I are the professions of work. I believe it's true. And Snap-on is a part of that and dedicated to it. You can hear it in the video. In terms of people in the litany of work, we speak now of the unique and special. We speak of a company and its people, essential to the serious and respected by the world we are snap-on and we are those people we are snap-on and we are progress we are pride we are prosperity and we shape lives and we have for 105 years we are snap-on and we make a difference now now, now, now, now and for many years to come why is it we have resilience why is it we're confident going forward because of that because we know that without what we do vehicles don't roll cities don't rise, lights don't shine planes don't fly dreams aren't made and yes, in this semi-quincentennial of America freedom doesn't ring and all of that God is created by you. I hope that's the message you take here, that you're all involved in this. You know, for us, I just want to end by saying, for all the, we talked about the history. You saw those trends. And people in this audience have their fingerprints all over these trends. And they had, we think the first quarter of this year was a success. And we thought last year was a success and a turbulence. And for the progress you have created, All of you have created. In this most challenging of times, you have my congratulations. For the capability and energy and special understanding and commitment you bring to our company every day, you have my admiration. And for allowing me to be, as a person, and for allowing me to be among you, people that I respect, people that I can depend on, and people that I can count on as friends, this allows me to shape my life and fulfill my dream for that and for many other things. I thank you all. See you back next year.