Profile: Snap-on Incorporated (SNA)

Snap-on Incorporated (Snap-on), incorporated in 1920, is a manufacturer and marketer of tools, diagnostics, equipment, software and service solutions for professional users. The Company’s product and services include hand and power tools, tool storage, diagnostics software, information and management systems, shop equipment and other solutions for vehicle dealerships and repair centers, as well as customers in industry, government, agriculture, aviation and natural resources. The Company operates in four segments: the Commercial & Industrial Group, the Snap-on Tools Group, the Diagnostics & Information Group and Financial Services. Snap-on markets its products and brands through multiple distribution sales channels in more than 130 countries. Snap-on’s largest geographic markets include the United States, Australia, Canada, China, France, Germany, Italy, Japan, the Netherlands, Spain, Sweden and the United Kingdom. Snap-on also reaches its customers through the Company’s franchisee, company-direct, distributor and Internet channels. On March 5, 2008, Snap-on acquired a 60% interest in Zhejiang Wanda Tools Co., Ltd. (Wanda Snap-on), a tool manufacturer in China.

The Commercial & Industrial Group consists of the business operations providing tools and equipment products and equipment repair services to a range of industrial and commercial customers worldwide through direct, distributor and other non-franchise distribution channels. The Snap-on Tools Group consists of the business operations serving the worldwide franchise van channel. The Diagnostics & Information Group consists of the business operations providing diagnostics equipment, vehicle service information, business management systems, electronic parts catalogs, and other solutions for vehicle service to customers in the worldwide vehicle service and repair marketplace. Financial Services consists of the business operations of Snap-on Credit LLC (SOC), a 50%-owned joint venture between the Company and The CIT Group, Inc. (CIT), and Snap-on’s wholly owned finance subsidiaries in those international markets where it has franchise operations.

Snap-on offers a line of products and services that are grouped into three product categories: tools, diagnostics and repair information, and equipment. The tools product category includes hand tools, power tools and tool storage products. Hand tools include wrenches, screwdrivers, sockets, pliers, ratchets, saws and cutting tools, pruning tools, torque measuring instruments and other similar products. Power tools include pneumatic (air), hydraulic, cordless (battery) and corded (electric) tools, such as impact wrenches, ratchets, chisels, drills, sanders, polishers and similar products. Tool storage includes tool chests, roll cabinets, tool control systems and other similar products. The majority of products are manufactured by Snap-on, and in completing the product line, other items are purchased from external manufacturers.

The diagnostics and repair information product category includes handheld and personal computer (PC)-based diagnostics products, service and repair information products, diagnostic software solutions, electronic parts catalogs, business management systems, business services, point-of-sale systems, integrated systems for vehicle service shops, equipment repair services, original equipment manufacturers (OEMs) purchasing facilitation services, and warranty management systems, and analytics to help dealerships manage and track performance. Snap-on supports the sale of its diagnostics and vehicle service shop equipment by offering training programs, as well as after sales support for its customers, primarily focusing on the technologies and the application of products developed and marketed by Snap-on.

The equipment product category includes solutions for the diagnosis and service of automotive and industrial equipment. Products include wheel alignment equipment, wheel balancers, tire changers, vehicle lifts, test lane systems, collision repair equipment, air conditioning service equipment, brake service equipment, fluid exchange equipment, transmission troubleshooting equipment, safety testing equipment, battery chargers and hoists.

Products are marketed under a number of brand names and trademarks, including Snap-on, Acesa, BAHCO, Blackhawk, Blue-Point, Cartec, Fish and Hook, Hofmann, Irimo, John Bean, Mitchell1, Nexiq, Palmera, ShopKey, Sioux, Sun and Williams. In addition to its sales of tool, diagnostic, service and equipment solutions, Snap-on also generates revenue from various financing activities that include loans to franchisees, loans to the franchisees’customers and loans to its industrial and other customers for the purchase of tools, equipment and diagnostics products on an extended-term payment plan.

Snap-on markets and distributes its products and related services principally to professional tool and equipment users around the world. The two largest market sectors are the vehicle service and repair sector and the industrial sector. Snap-on provides tool, equipment solutions and business solutions, as well as technical sales support and training, to meet technicians’ needs. The Company also provides owners and managers of shops, where technicians work, with tools, diagnostics equipment, repair and service information, including electronic parts catalogs and shop management products. Through its equipment solutions (OEM facilitation) business, Snap-on provides OEMs with products and services, including tools, consulting and facilitation services. Snap-on’s facilitation services include product procurement, distribution and administrative support to customers for their dealership equipment programs.

Snap-on serves customers primarily through various channels of distribution, including the mobile van channel, company direct sales, distributors and e-commerce. In the United States, the majority of sales to the vehicle service and repair sector are conducted through the Company’s franchise van channel. Snap-on’s franchisees primarily serve vehicle service technicians and vehicle service shop owners, generally providing weekly contact at the customer’s place of business.

The Company offers customers online, around-the-clock access to purchase products through its public Internet Website at www.snapon.com. The site features an online catalog containing nearly 14,000 products, including Snap-on hand tools, power tools, tool storage units and diagnostic equipment available to consumers and professionals in the United States, the United Kingdom, Canada and Australia. As of January 3, 2009, Snap-on had more than 500,000 registered users, including approximately 39,000 industrial accounts.

The Company competes with The Stanley Works, Danaher Corporation, Cornwell, Sears Brands LLC, The Home Depot, Inc., Lowes Companies, Inc. NAPA, AutoZone, Inc. and Pep Boys, MEDCO, Integrated Supply Network, Inc., Ingersoll-Rand Co. Limited, The Black & Decker Corporation, Makita Corporation, Atlas Copco, Techtronic Industries Co. Ltd., Newell Rubbermaid Inc. Cooper Industries, Ltd., W.W. Grainger, Inc., SPX Corporation, Dover Corporation Car-O-Liner AB, Lexcom GmbH, Infomedia Ltd., Enigma and AutoZone, Inc.