Snap-on Inc (SNA) March 17, 2026 Conference Transcript

Good afternoon, everyone. My name is Sharif El-Sabahi. I'm on the U.S. Machinery Research Team here at B of A, and really happy to have with me Aldo Pagliari, CFO of Snap-on Incorporated. To start us off, Aldo, for those in the audience that might be a little less familiar with Snap-on, could you just give us an overview of business model, your core marketing positions, and different segments?

Okay. Well, first off, Snap-on's been around for quite some time. It was founded in 1920 and was devoted strictly to auto repair. If you think about 1920, there was probably 100 different auto manufacturers in the United States, maybe not so dissimilar to what you find in China today. And everyone thinking about how do you make new cars and how do you sell new cars and how is this technology going to unfold? Meanwhile, you had a company that came into existence thinking how do you fix cars? So it devoted its entire attention to repair of automobiles and did it in such a fashion that said, we're going to go up close and personally visit the technicians. At that time, a technician mechanic was also a garage shop owner. They were one and the same. But over the ages, that's changed. Now you have mechanics that still exist to this day, and it's a very important part of the company. Our Snap-on Tools Group, which visits mechanics every single week, makes up about 34%, 35% of the total company revenues. But immediately adjacent, what used to be one and the same, is now a repair shop owner and manager. There's still mom and pop repair shop owners, but now you've morphed into sophisticated car dealerships. Toyota, which tends to be urban-centric, could have as many as 90 technicians in one location. You have people like Costco, Canadian Tire, Walmart, Sam's Club, that are huge sellers of tires. And that's their primary reason to sell tires in their auto repair centers. So they don't want to get under-hood repairs, as I call them. They want to get more tire repair. Well, they have certain needs. And then you have Firestone, Goodyear, Change, Pep Boys, Penske Auto, a variety of different national chains that have to service fleets. That's done by a repair systems and information group. And then finally, you have people that work on things other than light cars and trucks. That could be heavy machinery, things like Caterpillar, John Deere tractors, Boeing aircraft, aviation, oil and gas, natural resources, solar, windmills. That's in a section that we call commercial and industrial. So over the tunnel of time, what we've said is we expect the Snap-on tools group to have opportunities to grow organically about 4%. The repair systems and information, because there's a little bit more geography available to it and is less penetrated, maybe 5 plus percent. And critical industries because it has most, not all, but most of the emerging markets and a lot of fragmented, undeveloped addressable markets like oil, gas, aviation, military, technical education. We think that growth rate should be in the neighborhood of 6%. So the common denominator that underlies all of this is getting up close and observing the work, not surveying at a distance, but actually observing the work. Where are people struggling with problems? Do we have a hardware or a software solution that can make it easier for them? So the common denominator is observation. And that doesn't come for free. So you have to make an investment. Therefore, Snap-on is married to selling premium products, solving critical tasks. Because if you're solving a truly critical task, then people are willing to pay that premium for it. And whatever nuance you bring to the equation, if you could show them the subtlety and how it helps them perform, then the problem you're solving dwarfs the cost of the premium that one pays. At least that's our philosophy.

Thank you for that. And thinking about sort of the core tools business, you know, there's been a long stretch of growth. It kind of turned down for a little bit, flipped negative, mostly on negative sentiment. It came back in the middle of last year and then kind of flipped towards the end of this year. Just as we think about the unrest in the Middle East, some of the roll-on impacts to sentiment, How should we think about that maybe translating into your business? Are you seeing any impacts from that just on the sentiment side? And then more broadly, what impact should we expect that to have on maybe miles driven, any of the sort of roll-on secondary impacts to the business more broadly?

Okay, let me tackle that step by step. In recent times, you're right, the sales of the Snap-on tools group have been somewhat flattish, for lack of a better word. We came out of it, we started showing some growth in Q3. We regressed by about one percentage point in the tools group in Q4. And we've said over the last several quarters that there's been a lack of technician confidence. We describe technicians, mechanics, as cash-rich, confidence-poor. So what do I mean by that? The employment level, steady and growing, pre-COVID, through-COVID, after-COVID. If you're a skilled technician, whether you be an auto repair or a welder or a CNC machine operator, your skills are in demand. So unlike many other disciplines, if you remember Elon Musk and Doge, if you're working in government, that was not so comforting because what job might be eliminated the next day? Here, hopefully none of the people in this room, but now white collar management employment levels are under attack from AI. I don't know if that's real or just talked about, but a mechanic doesn't have that. He can look out over the landscape and say the number of cars in service are more than they were last year and are guaranteed to be more next year. Why? Because however many they produce, lousy year, 15 million units in the U.S., great year, 18 million units. They're only going to scrap 10 million. So therefore add four or five, six million to the installed base. And the other 275 to 280 million units that are already out there got a year old. Just like people, as cars get older, they need more maintenance. So pretty steady business. Their wages have gone up about 5%. So we say the technicians are pretty, you know, cash rich. Now, does that mean they're not subject to a pinch of inflation coming from their insurance rates, their car premiums? But again, unlike a lot of other disciplines, at the same time, they go into the, you know, the conference held by Bank of America and they say, oh, I don't know, a lot of volatility, a lot of uncertainty. Well, if that's the case, maybe I'll hold off on making a big-ticket investment decision. So, for example, the mean price of our tool storage cabinets, with nothing in them, is about $8,000 U.S. And a tool storage cabinet is kind of discretionary because everybody goes to work each day, whether it be with a bag or a satchel or a toolbox. You don't have to buy a new one today. So what we've found is they've pivoted to quicker return, quicker payback items, not necessarily less profitable. Sometimes people think you're talking about cheaper products. It's not. But a hand tool actually is maybe the highest margin rate in the Snap-on portfolio for the tools group. But if all their buddies are saying, I'd be careful yet, it's not risk on yet. And therefore, maybe I'll hesitate on the $8,000, $10,000 decision. So we haven't seen solid evidence that that changed as we exited Q4. A couple of green shoots I'll talk about in a second, but I just want to comment. I can't think of anything since our earnings announcement in February that would be more positive. This war certainly doesn't help people. And what's going to be, I'll get to your question on gasoline prices, petrol. I have to say we're in the UK, got to say petrol. So we saw some signs that tool storage are starting to stabilize. We say that because of our originations in the credit company, sort of a flatness. So having been down high double digits, the down mid-single digits, down low single digits. It'll take flat if you can get it. We started to see our franchisees themselves express a little bit more confidence, and they bought a little bit more than what they sold, you know, so that was a good sign. We saw the critical industries, which is now a different segment, affected by the 43-day government shutdown, yet came out of the back half of November and of December with very strong growth. So those are kind of the positive things that we call green shoots on our earnings call. So we see some opportunities there. So you enter 2026 before the announced or unannounced invasion of Iran or bombing of Iran, however you want to term it, with a better view. You had people forecasting GDP, depending on who's forecast, 2.5 to 2.8 percent up for GDP development. You have companies lapping headwinds from tariffs because Liberation Day was in April of last year. So the second round of tariffs, whatever they are, it's hard to keep track of them. You start to lap it in Q2, 3 and 4. So there's good reason to believe that companies are going to be making more investments. And I still have that view. Now, with respect to what's happening today in oil, if you go back in the past, when there's a precipitous change in gasoline prices, It affects miles driven only in the very short run. The immediate response is, that's it, I'm changing my habits. Well, if in the United States, there's not a lot of options. Here, at least you have the tube, and if you're on the continent, you've got the metro. People do not like riding buses outside of New York City, and I guess you can use the L in Chicago. People in the United States do not like to abandon their car. So while you have a temporary reaction, I've found over history that miles driven doesn't really change very much. And if it stayed permanently down in the long run, sure, a car would be used less, it might break less, but as most people in this room know, that many repairs on cars are now time-based repairs, so not necessarily miles-based repairs. So I don't view that as a negative. For our franchisees, they do burn on average 55 gallons of diesel fuel per week, so that's not nothing. So they will deal with it as individuals in their own way. So they might offer less of a discount on certain products. They might embrace, if Snap-on were to do new products with new features that have better price points for them to be able to put in front of the customer. But I don't think it'll be anything that's really that demonstrative. Now, again, I don't want to predict. I'm not going to give the first quarter results, anything like that. I don't think anybody actually knows what's going to be the long-term effects of this in Iran. What I would say, and I want to make sure it doesn't come across as somebody endorsing a conflict, look, eventually all these things have to be repaired. Whether you're selling to the military, whatever military, it could be anything associated with NATO, certainly, or U.S. military, items will eventually create more demand for replacement. But more importantly, if you've destroyed the runway in Dubai or an oil refinery or a hotel or Gaza, if you look at the outcome, eventually those things are going to have to be repaired. And these are things where Snap-on is not going to get immediate drop-in business, but there'll be a lot of ancillary tools and repair and maintenance that's associated with restoring the infrastructure. Infrastructure never gets attention until it doesn't work. Then people will say, well, why didn't they replace the grid in California sooner so they didn't have wildfires? Or why are there so many overhead lines in Connecticut? Don't they know tree branches interrupt the power supply? It's only after a cataclysmic event occurs where people say, you know, maybe more time and energy should go into infrastructure development. And that's where we thrive.

Thank you for that. And, you know, kind of coming back to the change in customer behavior, how long can that last? It feels like this is more of a deferral. And, you know, let's say when sentiment recovers, is that something where they come back to the market and we see sort of a larger pull from all this deferred sort of purchases? Or how do you expect to see that play out once sentiment improves?

I think there'd be, I don't think it'd be a demonstrative. I've used that word twice now. It must be stuck in my head. I don't think there's a great recoil of a spring. I think if people start to buy more big ticket items, it would be beneficial. it'll create some incremental opportunities for the Snap-on franchisee because their cash flow will be enhanced. When they tend to sell things on credit they get immediate cash flow from that outcome. They don't have to wait to collect the money over time. The money is advanced by Snap-on credit put into their account and they can choose to use it as they see fit. They might go to the World Cup or they might choose to invest in buying more tools from Snap-on. Hopefully we see the ladder. So I think you'll get some incremental benefits coming from that. But as confidence is restored, I think Snap-on should more in the tools group tend to get back to that 4% growth rate. That's what we believe is the correct long-term vision. And again, the reason for that is GDP development's about 2% in the mature markets. We think because the number of cars that I mentioned already and the ever-increasing complexity of the vehicles, it requires incrementalism, that you need to have a more and more array of tools, software and hardware included, to be able to service these vehicles properly. So that's what we think are the drivers of the business. So the minute, not the minute, but as the clouds lift, I think the willingness for people to invest will be there. That's our view.

And, you know, we sort of talked about the demand side of things, but tools margins have been strong even last quarter. And, you know, if you think about the last few years post-COVID, they've been structurally higher than they have been. What's driven on some of that change and kind of contributed to the higher margins in that group?

Okay, I don't ever know anything with certainty, but what I would suggest is that through COVID, I've said this story to some already a number of times, so I apologize for being repetitive, Snap-on never closed. There were some districts in the European continent that forced temporary closures, but other than that, Snap-on didn't lay anybody off during COVID, Snap-on never closed. It's a high-touch business model. We tried to get paperwork that would convince the state of California police department that our franchisees are essential, so they had to get out and visit shops because initially it was orders to stay at home. New York City, New Rochelle in particular, had restrictions on travel initially, and I can't blame the world. in March of 2020, people didn't know if there was ever going to be a vaccine or if you're facing a pandemic that was unstoppable. But Snap-on never closed. As a result of that, it came out of, starting in June of 2020, with very dynamic growth. Why? Maybe because one of the few that was still out there consistently. And by being there, people said, well, when I really need someone, Snap-on's there on a rainy day. So that benefited. And then, you know, the COVID morphed into supply chain disruption because you had China closing for, I think it was six to nine weeks. I forget the exact number. Port of Los Angeles strikes. Very strong changes in chip availability. What are you going to manufacture and where? And as a result of that, it created underlying inflation. Tariffs didn't exist quite as prominent as a word yet. So you had supply chain inflation. And as many people on TV will say and note, when prices go up for everybody, not just for Snap-on, they don't tend to go down as quick, if anybody's ever noticed that. Companies don't give it back quite as readily, unless it's so obvious that, let's say, oil prices go up and there's a short-term effect, and then it goes down. It's called surcharges, usually. And then you top it off with the second layer of tariffs introduced by Donald Trump, and of course they became more prominent after Liberation Day. So that creates, even if you're like Snap-on and use U.S. manufactured steel. Even if you're somewhat insulated from tariff inflation compared to some of your competitors, the prices still go up. It didn't take the U.S. steel producers long to realize that, well, if all my competition from overseas are going to go up because of a 10, 15, 20 percent tariff, sometimes 50 percent, I can increase my price. And they did. So that created inflation. And at this point in time, if you can continue to come to market with new products, new ideas that don't make the price point of inflation obvious, if you can bring features to the market, your pricing kind of become sticky, and it has, and therefore benefits that you can create, we call it rapid continuous improvement to offset the cost of inflation or production. They accrue to the company that can come up with those solutions and the Snap-on has benefited in that regard.

You mentioned our rapid continuous improvement. The other thing that's sort of new has been brand building that you're investing in that you mentioned last quarter. As you think about the brand building, what are the early stages of that look like? Any early successes? And, you know, is there any sort of focus within there in particular?

I've said a couple of times today, I've kind of coined the phraseology, if you want to sell a super premium product, regardless of what it is, whether it's a hand tool, or if it's an Hermes Birkin bag. You have to act like you're a super premium company. That means even when times are tough, you can't rush. I'm going to say not to be mindful of operating expense investment, but you can't throttle back that you destroy or attenuate the service level. Because if people are buying super premium price products, whatever it is, they expect a level of attention after the sale. It's not a one-time episodic event. If not, I'll just buy off the internet or some lower priced solution that might be out there because you're going to walk away. Well, Snap-on's around for 106 years. It doesn't walk away. So we're going to continue to invest. We thought it was still appropriate, even when there might be technician lack of confidence, to show we have confidence and we want to reinforce the brand and what it stands for and what it can do for you. No, that requires you still to get out there and meet people and show people the solution. They might not buy immediately, but if you saturate that demand and make your knowledge around your capabilities better known, we think it'll have a long-term effect in a positive way.

And thinking about some of your other segments, CNI, for example, has been fairly robust. There's a wide variety of markets contained within that. On the whole, what are you hearing from your customers? What are sort of the main markets that are driving that right now?

Aviation has been huge. Military and defense has been steady, Not as robust as you might think. I think that's been more because of the U.S. government shutdown. But aviation, if you think about it, you've heard nothing. If you're on this side of the ocean, you've heard Mr. Ryanair talk noticeably about Boeing and now Airbus's inability to deliver. There's a huge demand for more fuel-efficient aircraft. So that's not going to be – I think the forecast for aircraft growth is huge between now and 2030 and 32. And I'm not an expert on aircraft manufacturing. Boeing's here, so you're better off to talk to them. But what I'm going to get at is that there's a stronger need than ever to keep the existing installed base of aircraft in the air and on time. So we sell to Boeing in Everett, Washington. We help them build new planes. We sell to Airbus. But we much prefer selling to Heathrow and Gatwick because coming in, they don't know what type of problem is coming in. They know there's an aircraft coming in and it's going to need some type of service. So the more unpredictable the nature of service, the more wider variety of tools. And for something as simple as British Air having an on-time departure or not an on-time departure, that's a big event. So if the flight line supervisor can convince their local management that, hey, if I invest in this set of tools or this array of know-how, I can better guarantee our performance, the benefit of that pales in comparison. So it doesn't go back to American Airlines headquarters in Dallas or United's headquarters in, I don't know if they're in Denver or Chicago these days. So it's a local decision made up close and personal and Snap-on can have an impact on that. So aviation, huge sector. You heard Germany declare they're going to invest more in defense. I don't know if all the nations in NATO will follow with that, but I see more investment, not less, on the defense-related industries. And over time, it's not going to be immediate drop-in because the countries don't have the revenue to do everything at once, but they're going to invest more in defense. The writing's kind of on the wall. And then oil and gas, despite the disruption, oil and gas and natural resources are still a very sizable opportunity. Snap-on has only scratched the surface on what it sells there, but we have a company not so far away in Banbury, United Kingdom. It's about an hour up the road that started with servicing Rolls-Royce engines that morphed into bridge construction and special torque know-how. That then grew into the North Sea oil platforms, both commissioning new development as well as decommissioning. And all of that has built a technology around opportunities. And like I said, even if you're not putting new oil wells into the North Sea, you still have to protect the ones and make sure they're not spilling oil onto the floor. So huge opportunities in those venues. So again, people don't just hand you the work. You have to go there and the pacing element will be going to the place of work and observing it. But it's a very fragmented market. So I think it's ripe for upsized opportunities.

And, you know, you mentioned earlier the complexity of vehicles, particularly software. That's been a big driver for RS&I because of the core software offerings you have there. You know, has that structurally changed the backdrop where dealers are spending more on CapEx, these larger complex diagnostic systems that's helping drive that for the next few years? Or how do you kind of think about that?

Well, OEMs themselves have always prescribed their own diagnostic laptops to fix cars. And the reason we have some access to this, because some of them have us populate the database for them, install it and distribute it to the dealership. So we have some visibility to what's actually happening at the OEMs. But in the aftermarket, there's no one to do that. And you can't afford to buy one for Toyota, one for Ford. So it's just impractical. So if you can buy a more broad-based solution like Snap-on or competitors, then that becomes the preferred methodology. Plus, every car company has its own speak in terms of how it refers to an oxygen sensor versus an O2 sensor versus a mass airflow sensor. I think we saw the other day that was pronounced as 32 different names for an oxygen sensor. Well, if you have a great search engine, and we think we do. It's an opinion. But if you overlay that, then it speaks technicians. So the technician doesn't have to precise and say, well, what does BMW call it versus what does Ford call it? So overlaying a great search engine is very valuable because of the speed of the repair. And then it helps both in the stocking of parts and what parts have to be applied to that repair. And I was talking today to some people, if we feel you can get an estimate done more rapidly, if you've all related to taking your car in for service, you're going in for a known problem that you're having, or a tire change, or an oil change. If I can get you to become aware at the time of check-in that there's other problems with your car you should seriously think about, and I can know if I have the parts in stock to fix it today, and I can know and tell you here's the estimated cost to fix it, the odds of the customer signing up at the point of check-in are much greater. Whereas if I wait three to four hours to call you and say, hey, we fixed what you came in for, but we came across this other problem. And would you like to do it? You don't have to do it. We recommend it. Yeah, that's you approving it diminished. So therefore, the quicker you can search a database, the quicker you can estimate the necessity of a repair and do you have the parts to fix it and what should you quote as a cost, the likelihood of that shop getting more revenues is greatly enhanced. So this is kind the stories behind the scenes that people really never think about but they exist out there in the aftermarket in the repair business.

As we think about that technology you know obviously AI has become a new area you know is that something where the current software model is potentially disrupted by that or is this something where there's a bit more of a barrier just given some of the databases you maintained over years?

I think before we use the word artificial intelligence. We have large language learning modules, and I believe that is a form of AI, just that we didn't use the word. So we start to weave into our script because it makes you sound more trendy, and it's true. So we use elements of AI to enhance the database and do what I call statistical probability analysis, that if a car comes in with these type of symptoms, and here's the mileage, here's the likely probability as to what it takes to get it fixed. Now, the question is in the Wall Street Journal today, so I apologize for being redundant because I've said it to some of the people I've met with. There's a model today in the Wall Street Journal that says perplexity has come up with an alternative to the Bloomberg terminal for $2,500 a year. I think Bloomberg is quoted in the article as charging $30,000. Now, you're going to have the argument go on. Are they really equivalent? I think that'll have to play out. You're going to have the Bloomberg loyalists who say, no way, no how. And by the way, I like where everything is at in my Bloomberg terminal. I'm not going to give it up. I think you'd be naive, Snap-on, to not be prepared for someone to make arguments that I've used other forms of data gathering. Snap-on has accumulated over decades by actually looking at how cars are repaired, what do the repair orders say, what are done. We actually have taken cars apart and measured ourselves. We actually licensed data from manufacturers. We've accumulated that over decades until you have these 3.5 billion data points that you can do some statistical analysis on. Can AI come in and supersede and do maybe in a shorter time what it's taken us decades to do? You have to be prepared for that eventuality. You have to be prepared to say, okay, is there truth to that or is it leaving something short? Because people will claim, just like perplexity today, will claim you can get the same type of information. Can you? I don't know yet. You know, see how it plays out. So, again, there will always be competition. There will always be disruption. You have to be prepared to deal with it. You can't ignore it, I guess, would be my answer for today.

And you mentioned competition. Just for the audience, broadly speaking, who do you think of as your competitors within the tools markets? You've always been the premium product. There's always been budget options. It feels like some of those budget players have been more aggressive in recent years. Has that landscape changed at all?

It's always changing, yet it's still the same. When I grew up, Sears and Roebuck was a dominant seller of tools under the craftsman label, made in America, guaranteed for life. Selling through a catalog. Remember, the internet wasn't invented yet in the 60s. I actually grew up in 1954, so I got to be honest here. So it's one of just the 60s. But there's always been significantly lower cost competition. You have to differentiate yourself. You have to be able to back it up. So while there's other people that might be in the news today, and big boxes are bigger and there's more of them, you're going to have the wholesale sale of tools occurring. So one is, as I said before, you have to deliver both the premium product and premium service to go along with that. And that comes with investment. It comes at a cost. Our operating expenses, the gross margins are very robust. Operating expenses are not nothing. But net net, we made 22.1% operating income as a percent of sales. That excludes the credit company. It'd be even better if you put the credit company in. And we weren't happy with that because that was 60 basis points lower than the year before. And we don't like taking steps backward. Yet still the absolute pretty high and not lower at all because, at least we don't think so, because of the competitive landscape. So you have to stay leaning edge. You have to reinvent your tools, your products, your feature set, hardware and software. And you can't abandon what got you to the dance. And the dance is superior customer service, up close and personal, Being able, sometimes the first credit that a technician will ever get, it's called credit start. There might not be any credit profile. They might not be able to get a credit card. Yet their first loan they might ever get is from Snap-on Credit. It's not because we're trying to hover over them like a payday loan situation. It's because we give them what we think is a reasonable interest rate and get them started. And actually that brings a very sticky relationship. sometimes tearful memorials to Snap-on over the tunnel of time because Snap-on took a chance on them when other people would not.

I want to turn to the balance sheet for a moment. Snap-on's got a really strong balance sheet. You've got a good cash bill the last few years. As we think about capital allocation, you've been fairly consistent on the dividend and so forth, but have your key priorities for cash changed at all? And, you know, with the growth in your position?

No, not really. I mean, Snap-on's capital allocation model is first and foremost support organic growth. So while organic growth hasn't been dynamic over the last year or so, it's still when it occurs, we're very working capital intense because of the nature of what we bring to the party. So every dollar of sale is usually 32%, 33%, working capital is a percent of sales. So that's number one. Number two would be M&A. And while we look at things each and every quarter through good times and in bad, we're fairly selective. We look for what we call coherent acquisitions. The room might think of them more as bolt-on acquisitions. We're not looking to diversify the company into a new segment. So we're not looking to get away from what is in our DNA because that's where we think we add value. And if we get away from that, we don't know, you know, because the expression I use is anybody can buy something. I assume that something that's for sale is at a fair price, not necessarily a bargain price. So if that's the case, unless you bring some type of synergistic effect, what is it that you bring to the party? So we want to feel comfortable enough, while the synergy is never guaranteed, that we can bring something to the equation that makes one plus one equals something more than two. But we're picky. So because of that, you could make the argument, well, snap, I'm going to do a multi-billion dollar acquisition. It doesn't mean over time that we have not looked at a one or two billion dollar acquisition because we have. But the bigger the target, the more likely you might find things that we don't prefer, like we don't like selling to do it yourself. We don't like selling on the internet and we don't like selling to big boxes. So if a sizable portion of a target's activity engages in things like that, then it wouldn't be so interesting. There's an example without naming exact names that came to market a short time ago, not a short time, 2010, dating. It comes back on market every year pretty much, but it had a lot of business that was predicated on serving the big box. Yet within it, they had certain specialty tools that were great for power tools for aircraft applications. If you've ever looked at the wing of an airplane, you'll realize how many rivets there are. There's a lot of what they call drilling and filling when it comes to aircraft maintenance. So if we could have bought some of the sub-companies, we would have been very interested. But you're not going to buy this whole $2 billion item to get access to, say, $500 million of interesting activity. So long story short, capital allocation is to look at acquisitions. Next, the dividend. We've stated publicly that uninterrupted, unreduced since 1939, 39, which means that every time we increase it, even if it's only one penny a quarter, it means it's a perpetuity. At least that's how we look at it.

It doesn't make it right or wrong, academically speaking, but that's our view.

And then share repurchase has a role. We have not done accelerated share repurchase programs, so there's probably no obvious indicator that we would, yet we've nibbled, I guess, for lack of a better word. We've about one and a half to two percent of the outstanding share count has gone down in the last several years. So there's a role for share repurchase, but we're not what they call big bang share repurchases.

You kind of touched on liking some of those sub-brands when you look at acquisitions. And, you know, one thing Snap-on has been very good about is introducing new products, doing a lot of the designs in-house. Is that something where when you see sub-brands like that, you kind of consider, well, maybe we can do this in-house ourselves and kind of compete there? or is there enough sort of brand loyalty in these fragmented markets where it's a bit more difficult to do that?

There always is elements of brand loyalty. Again, I'll turn to the example up the street in Banbury, Norbar, name of the company. Niche, yet well-respected among technical disciplines around the world when it comes to applying thousands of foot-pounds of torque. Torque is a measure of effort, a force. Snap-on is very educated in how to apply it to auto repair. So from the zero foot-pounds to 500 foot-pounds, Snap-on has a lot of experience. Here's a company that's in England that is very niche-y but knows how to apply thousands of foot-pounds of torque in very adverse conditions. On the other hand, they had to buy some of their power technology from others, where Snap-on has its own power tool manufacturing, and say, well, how can I get a handheld battery-operated torque multiplier, as an example? I'm getting a little granular here. Well, Snap-on has technologies that might be able to do that where they would have to outsource us from an outside supplier. It doesn't mean that it wouldn't work that way, but Snap-on has now that synergistic opportunity to say, well, if I work more in tandem, will they work more closely because they're all under one common ownership? We think that is an example, yet the loyalty to the Norbar name is noticed, and that's why in Sarah's portfolio deck, you'll see a variety of brands that are very niche-y and well-understood. When it comes to alignment machines, the inventor of hauling wagons in the field for agriculture was a guy by the name of John Bean. We preserved that name to today because he determined that if you line the wheels on a wagon, it's a lot easier to pull through the fields and you're off-road. So that has stuck. So to this day, we use that name. In the case of the European Theater, we bought a company from Sandvik back in the 1990s. Its brand name is Bako. Bako has existed, I think, since 1860. It's very well known in the trades, particularly among electricians and plumbers and woodworkers, as well as in the pruning industry. So they make a lot of cutting tools. Out of Sweden. Sweden at one time was known for Swedish steel. It was very appealing. You don't want to take away from that halo effect that comes from those brands' reputations. So while Snap-on might have common ownership, we are very appreciative of the loyalty of the brands that come with it and stay true to their heritage. And that's why we've bought companies that have that type of follow. If you go to a Sweden Rock Festival, a guy like yourself loves music. There's people that actually will get the Baco name tattooed on their arm out there and they stand in line by the hundreds to get this. And we have the same phenomenon. And, of course, if people have seen any Snap-on photos, you know, tattoos are ubiquitous among the Snap-on cognoscente.

Certainly a lot of land loyalty. Yeah. I guess just as we close out, you know, going forward, what are you keeping your eye on in terms of factors that are out there? There's obviously a volatile backdrop. What do you think investors should pay most attention to for Snap-on?

Well, I guess the heritage of the company, it's enduring. Like I said, I worry about everything, and yet there's not one thing that'll make or save the company. It takes a lot of tools. For example, we came up with new water pump pliers. That sounds kind of mundane, but, you know, $6.4 million worth of sales in the first year of existence, not chump change. But it takes a lot of $6 million sales to add up to $4.8 billion in total revenue. So it's not any single thing that'll make or break the enterprise. But I think staying true to the heritage of the company that is observing the work, exploring the critical, and bringing a problem-solving solution that can have demonstrable productivity, I think that's what the world craves. You might not like diesel engines, but if I can help you service a diesel engine to be the way the inventor intended it to be, so it had only this much particulates and not some mass particulates, you've done the world of good. Not that you have to love diesel engines, but if they exist, you want them to at least be within tolerance. And therefore, I think Snap-on makes products that are not disposable, that help products run for as long a cycle as can be. I think it's actually a healthy approach and doing something good to the world. And we make money while we're doing it.

Well, thanks so much for that, Neil.

Appreciate you joining us here today.