Q1 2026 Snap-on Inc Earnings Call

April 23, 2026

Operator: Participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by 0. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then 1 on a touch-tone phone. To withdraw your question, please press star, then 2. Please note, this event is being recorded. I would now like to turn the conference over to Sara Verbsky, Vice President, Investor Relations. Please go ahead.

Operator: Participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on a touch-tone phone. To withdraw your question, please press star, then two. Please note, this event is being recorded. I would now like to turn the conference over to Sara Verbsky, Vice President, Investor Relations. Please go ahead.

Speaker #1: Participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by 0. After today's presentation, there will be an opportunity to ask questions.

Speaker #1: Inc Inc they reaffirm that this confidence is well placed. Even in the most difficult of times. And you can see it in the numbers.

Speaker #1: To ask a question, you may press star, then 1 on the touchtone phone. To withdraw your question, please press star, then 2. Please note this event is being recorded.

Speaker #1: Overall sales in the quarter were $1,207.2 million, up 5.8% from last year as reported, including a 3.4% organic increase, a new first quarter record, and a second highest quarterly our second highest quarterly sales ever.

Speaker #1: I would now like to turn the conference over to Sara Verbsky, Vice President Investor Relations. Please go ahead.

Speaker #2: Thank you, Betsy. And good morning, everyone. We appreciate you joining us today as we review Snap-on's first quarter results, which are detailed in our press release issued earlier this morning.

Sara Verbsky: Thank you, Betsy, and good morning, everyone. We appreciate you joining us today as we review Snap-on's Q1 results, which are detailed in our press release issued earlier this morning. We have on the call Nick Pinchuk, Snap-on's Chief Executive Officer, and Aldo Pagliari, Snap-on's Chief Financial Officer. Nick will kick off our call this morning with his perspective on our performance. Aldo will then provide a more detailed review of our financial results. After Nick provides some closing thoughts, we'll take your questions. As usual, we've provided slides to supplement our discussion. These slides can be accessed under the Downloads tab in the webcast viewer, as well as on our website, snapon.com, under the Investor section. The slides will be archived on our website along with a transcript of today's call.

Speaker #2: Our operating income, or OI, for the quarter of $250.8 million was up compared to the $243.1 million recorded in 2025. And the Opco operating margin was 20.8%, 50 basis points below last year, but still strong despite the 40 basis points of unfavorable foreign currency and the impacts of higher investment.

Speaker #2: We have on the call Nick Pinchuk, Snap-on's Chief Executive Officer, and Aldo Pagliari, Snap-on's Chief Financial Officer. Nick will kick off our call this morning with his perspective on our performance.

Speaker #2: Aldo will then provide a more detailed review of our financial results. After Nick provides some closing thoughts, we'll take your questions. As usual, we provided slides to supplement our discussion.

Speaker #2: For financial services, evidenced earnings of $68 million in the quarter were lower by $2.3 million, or 3.3%, and that all leads to a consolidated margin, including both opco and financial services, at 24.4%. That compared to 25.3% last year.

Speaker #2: These slides can be accessed under the Downloads tab in the webcast viewer, as well as on our website, snapon.com, under the Investor section. The slides will be archived on our website along with a transcript of today's call.

Speaker #1: Our overall EPS was $4.69. This was up 18 cents from 2025, and the results show broad gains. Overcoming the uncertainty and demonstrating our resilience.

Speaker #2: Any statements made during this call relative to management's expectations, estimates, or beliefs, or that otherwise discuss management's or the company's outlook, plans, or projections are forward.

Sara Verbsky: Any statements made during this call relative to management's expectations, estimates, or beliefs or that otherwise discuss management's or the company's outlook, plans, or projections are forward differ materially from those made in such statements. Additional information and the factors that could cause our results to differ materially from those in our forward-looking statements are contained in our SEC filings. Finally, this presentation includes non-GAAP measures of financial performance, which are not meant to be considered in isolation or as a substitute for their GAAP counterparts. Additional information regarding these measures is included in our earnings release issued today, which can be found on our website. With that said, I'd now like to turn the call over to Nick Pinchuk. Nick.

Speaker #2: Now let's turn to the market. We believe we continue to believe we believe that the vehicle repair environment remains robust, extremely favorable, requiring continued stream of new tools and information systems for confronting the rising complexities of the modern vehicle.

Speaker #2: Differ materially from those made in such statements. Additional information and the factors that could cause our results to differ materially from those in our forward-looking statements are contained in our SEC filings.

Speaker #2: Finally, this presentation includes non-GAAP measures of financial performance, which are not meant to be considered in isolation or as a substitute for their GAAP counterparts.

Speaker #2: It's clearly an unmistakable trend. The repair shops, dealerships, and independents, they see it every day. They'll tell you repairs are tougher, tougher, and more complicated, and we love it.

Speaker #2: Additional information regarding these measures is included in our earnings release issued today, which can be found on our website. With that said, I'd now like to turn the call over to Nick Pinchuk.

Speaker #2: The ongoing strength of the market is and, and the ongoing strength of the market is confirmed by, you know, its key metrics. Car park continues to age.

Speaker #2: Nick?

Speaker #3: Thanks, Sara.

Nick Pinchuk: Thanks, Sara. Good morning, everybody. Wow, this was some quarter. You know, there are a number of different storylines threaded through our last three months. I believe if you step back and you look at the whole, you can see several important facts. First is that this has been a period of considerable uncertainty, but the resilience of our markets and the strength of our operations have restarted a momentum, registering strong sales. It's also quite clear that our team continued to invest in expanding and preserving our strengths and our rely on new products and our continuing brand position and new technologies for more powerfully wielding our proprietary databases. You know, we believe, and many people believe, that the combination of technology and proprietary databases are among the great powers in business today.

Speaker #4: Good morning, everybody. Well, this was some quarter. There are a number of different storylines threaded through our last three months, but I believe if you step back and you look at the whole, you can see several important facts.

Speaker #2: The average age is now up 12.8 years, and naturally that requires more extensive maintenance and overhauls. And, and, and that's seen clearly if, if you look at the household spending on, vehicle repairs, it's up single up high single digits.

Speaker #4: First is that this has been a period of considerable uncertainty, but the resilience of our markets and the strength of our operations have restarted a momentum registering strong sales.

Speaker #2: In the in the quarter. But it's more than vehicle it's also seen in the world of the shops and, and the techs. The hours worked are up.

Speaker #2: And the tech wages are rising. Garages are buzzing. And the need for more skilled techs continues to and the need for more skills continues to increase.

Speaker #4: It's also quite clear that our team continued to invest and expanding and preserving our strengths. And our line of new products and our continuing brand position and new technologies for new technologies for more powerfully wielding our proprietary databases.

Speaker #2: And we believe all these data points say that vehicle repair is stronger than ever, and the prospects they just keep getting better. But that said, uncertainty is still high across the American grassroots.

Speaker #4: We believe in many people believe that the combination of technology and proprietary databases are among the great powers in business today. And through the blizzard, with uncertainty and tariffs opposing currencies, rising material costs, all the elements of storm are gross margins have resisted the impacts.

Speaker #2: Tech confidence remains tepid. Reticence toward long-term purchases. But they are bullish on shorter payback solutions that make work easier, faster, safer, and helps them beat the clock and move on to the next vehicle.

Nick Pinchuk: Through the blizzard, with uncertainty and tariffs, opposing currencies, rising material costs, all the elements of storm, our gross margins have resisted the impacts. Overall profits have remained at a, you know, strong level. Today, I'll review with you the highlights of our Q1. I'll give you my perspective on our results, on the markets, and on our progress. After that, as usual, Aldo will give you a more detailed review of the financials. For us, when we look at the Q1 and what it means, we proceed with confidence. Confidence in our markets, in our products, in our brands, and of course, confidence in the knowledge and energy of our experienced and capable team. As such, we're encouraged by our Q1 results.

Speaker #2: Now Snap-on speaks with, its franchisees and techs all the time. And my recent conversations with, with individuals in our van network, coast to coast say that, you know, green shoots are popping up.

Speaker #4: And overall profits have remained at a strong level. So today, I'll review with you the highlights of our quarter. I'll give you my perspective on our results, on the markets, and our progress.

Speaker #2: Even with our tool storage units, they were up this quarter. I'll say that again. Tool storage was up. And as we spoke, the franchisees expressed their excitement about, about and as we as spoke to them, you know, I had the extended conversations, the, the franchisees, were excited about where their position and their enthusiasm about their future.

Speaker #4: And after that, as usual, Aldo will give you a more detailed review of the financials. For us, when we look at the quarter, and what it means, we proceed with confidence.

Speaker #4: Confidence in our markets. In our products. In our brands. And of course, confidence in the knowledge and energy of our experience and capable team.

Speaker #2: As I said, they see green shoots. But it's still seems that with each day having said that, it still seems that with each day there's more bad news for breakfast.

Speaker #4: And as such, we're encouraged by our first quarter results. We believe they reaffirm that this confidence is well-placed. Even in the most difficult of times.

Nick Pinchuk: We believe they reaffirm that this confidence is well-placed, even in the most difficult of times, and you can see it in the numbers. Overall sales in the quarter were $1,207.2 million, up 5.8% from last year as reported, including a 3.4% organic increase, a new Q1 record, and the second highest quarterly, our second-highest quarterly sales ever. OPCO operating income or OI for the quarter of $250.8 million was up compared to the $243.1 million recorded in 2025. The OPCO operating margin was 20.8%, 50 basis points below last year, still strong despite the 40 basis points of unfavorable foreign currency and the impacts of higher investment.

Speaker #2: I mean, the hits just keep on coming. Risk in another rise in uncertainty. Having said that, though, we like where we're standing. Rooted in the resilient vehicle repair market, continuously connected with the techs, observing the work, launching great new products, and having the capacity to manufacture them right here in America.

Speaker #4: And you can see it in the numbers. Overall sales in the quarter were $1,207.2 million, up 5.8% from last year as reported, including a 3.4% organic increase, a new first quarter record, and the second highest quarterly our second highest quarterly sales ever.

Speaker #2: And and this environment we're seeing, what we think might be an early thaw. Now let's shift to the other half of the automotive segment.

Speaker #4: Our cooperating income or OI for the quarter of $250.8 million was up compared to the $243.1 million recorded in 2025. And the opco operating margin was 20.8%, 50 basis points below last year, but still strong despite the 40 basis points of unfavorable foreign currency and the impacts of higher investment.

Speaker #2: This is where repair system information or RSNI resides. Service and, shop owners and managers. The activity in the sector remains consistent. Although it does at times reflect variations based on new product timing or OEM campaigns.

Nicholas Pinchuk: They reaffirm that this confidence is well-placed even in the most difficult of times, and you can see it in the numbers. Overall sales in the quarter were $1,207.2 million, up 5.8% from last year as reported, including a 3.4% organic increase, a new first-quarter record, and our second highest quarterly sales ever. OPCO operating income or OI for the quarter of $250.8 million was up compared to the $243.1 million recorded in 2025. The OPCO operating margin was 20.8%, 50 basis points below last year, but still strong despite the 40 basis points of unfavorable foreign currency and the impacts of higher investment.

Nick Pinchuk: They reaffirm that this confidence is well-placed even in the most difficult of times, and you can see it in the numbers. Overall sales in the quarter were $1,207.2 million, up 5.8% from last year as reported, including a 3.4% organic increase, a new first-quarter record, and our second highest quarterly sales ever. OpCo operating income or OI for the quarter of $250.8 million was up compared to the $243.1 million recorded in 2025. The OpCo operating margin was 20.8%, 50 basis points below last year, but still strong despite the 40 basis points of unfavorable foreign currency and the impacts of higher investment.

Speaker #2: shop owners and manufacturers see the trends. They know vehicle complexity is rising, and that it drives the need for more sophisticated systems, equipment, and tech assists to manage those changes.

Speaker #4: For financial services, evidence earnings of $68 million in the quarter were lower by 2.3 million or 3.3% than that will lead to a consolidated margin, including both opco and financial services at 24.4% that compared to 25.3% last year.

Nick Pinchuk: For financial services, earnings of $68 million in the quarter were lower by $2.3 million or 2.3%. That all leads to a consolidated margin, including both OPCO and financial services, of 24.4%. That compares to 25.3% last year. Our overall EPS was $4.69. This was up $0.18 from 2025, and the results show broad gains, overcoming the uncertainty and demonstrating our resilience. Now let's turn to the market. We continue to believe. We believe that the vehicle repair environment remains robust, extremely favorable, requiring continued stream of new tools and information systems for confronting the rising complexities of the modern vehicle. It's clearly an unmistakable trend. The repair shops, dealerships, and independents, they see it every day.

Speaker #2: As I just said, the drumbeat can be influenced by the lumpy nature of the OEM project sector, but the owners and managers keep saving, saying, "They need more techs.

Speaker #2: The garages are busy. The repair difficulties increasing. And they need more help in keeping pace." I can tell you, Snap-on is up to that, folks.

Speaker #4: Our overall EPS was $4.69. This was up 18 cents from 2025. And the results show broad gains. Overcoming the uncertainty and demonstrating our resilience.

Speaker #2: That's why RSNI continues investing in, in modern equipment and diagnostic platforms that navigate procedures on vehicles new and old with precision and with speed.

Speaker #2: Now, we do have a, a, a strong lineup in undercar and collision equipment in RSNI, but particularly powerful are our diagnostics and information systems and proprietary databases.

Speaker #4: Now let's turn to the market. We believe we continue to believe. We believe that the vehicle repair environment remains robust. Extremely favorable. Requiring continued stream of new tools and information systems for confronting the rising complexities of the modern vehicle.

Nicholas Pinchuk: For financial services revenues, earnings of $68 million in a quarter were lower by $2.3 million or 3.3%, and that all leads to a consolidated margin, including both OPCO and financial services at 24.4%. That compared to 25.3% last year. Our overall EPS was $4.69. This was up $0.18 from 2025, and the results show broad gains, overcoming the uncertainty and demonstrating our resilience. Now let's turn to the market. We continue to believe that the vehicle repair environment remains robust, extremely favorable, requiring a continued stream of new tools and information systems for confronting the rising complexities of the modern vehicle. It's clearly an unmistakable trend. The repair shops, dealerships, and independents, they see it every day. They'll tell you repairs are tougher and more complicated, and we love it. The ongoing strength of the market is confirmed by its key metrics.

Nick Pinchuk: For financial services revenues, earnings of $68 million in a quarter were lower by $2.3 million or 3.3%, and that all leads to a consolidated margin, including both OpCo and financial services at 24.4%. That compared to 25.3% last year. Our overall EPS was $4.69. This was up $0.18 from 2025, and the results show broad gains, overcoming the uncertainty and demonstrating our resilience. Now let's turn to the market. We continue to believe that the vehicle repair environment remains robust, extremely favorable, requiring a continued stream of new tools and information systems for confronting the rising complexities of the modern vehicle. It's clearly an unmistakable trend. The repair shops, dealerships, and independents, they see it every day. They'll tell you repairs are tougher and more complicated, and we love it. The ongoing strength of the market is confirmed by its key metrics.

Speaker #2: We continue in, and we continue investing in that advantage to fortifying our positions by applying new technologies, like large language models and natural language translators—those capabilities that enable us to expand our data sets more quickly and wield the resulting systems more powerfully.

Speaker #4: It's clearly an unmistakable trend. The repair shops dealerships and independents, they see it every day. They'll tell you repairs are tougher and more complicated.

Nick Pinchuk: They'll tell you repairs are tougher and more complicated, and we love it. The ongoing strength of the market is confirmed by, you know, its key metrics. Car park continues to age. The average age now at 12.8 years. Naturally, that requires more extensive maintenance and overhauls. That's seen clearly if you look at the household spending on vehicle repairs, it's up high single digits in a quarter. It's more than vehicle memorabilia. It's also seen in the world of the shops and the techs. The hours worked are up. The tech wages are rising. Garages are buzzing. The need for more skills continues to increase.

Speaker #4: And we love it. The ongoing strength of the market is and the ongoing strength of the market is confirmed by its key metrics. Car park continues to age.

Speaker #2: The progress of other systems that search billions of data points, matching the unique ve a unique vehicle profile and current systems to just the right s just the right fits, fix.

Speaker #4: The average age is now up 12.8 years. And naturally, that requires more extensive maintenance and overhauls. And that's seen clearly. If you look at the household spending on vehicle repairs, it's up high single digits.

Speaker #2: And it all happens in seconds. A great example is, is our newly launched Stream newly launched, feature that streamlines the process for confronting job estimates.

Speaker #2: Kind of a Mitchell one. It's a Mitchell one brand. And it and it, it, it's a p estimates are particularly thorny and time-consuming challenge for any shop.

Speaker #4: In the quarter. But it's more than vehicle it's also seen in the world of the shops and the techs. The hours worked are up.

Speaker #2: But our new system for Mitchell one makes it much easier.

Speaker #4: And the tech wages are rising. Garages are positive. And the need for more skilled techs continues. And the need for more skills continues to increase.

Speaker #1: We're gonna hear about a lot about that later as we go forward.

Speaker #2: So that so that's vehicle repair. Robust for both individual techs and for garage owners and managers. And we believe we have a decisive advantage in both arenas.

Speaker #4: And we believe all these data points say that vehicle repair is stronger than ever. And the prospects? They just keep getting better. With that said, uncertainty is still high across the American grassroots.

Nick Pinchuk: We believe all these data points say that vehicle repair is stronger than ever, and the prospects, they just keep getting better. With that said, uncertainty is still high across the American grassroots. Tech confidence remains tepid. Reticence toward long-term purchases. They are bullish on shorter payback solutions that make work easier, faster, safer, and helps them beat the clock and move on to their next vehicle. Now, Snap-on speaks with its franchisees and techs all the time. My recent conversations with individuals in our VAN network coast to coast say that, you know, green shoots are popping up. Even with our tool storage rooms, they were up this quarter. I'll say that again. Tool storage was up. As we spoke, the franchisees expressed their excitement about.

Nicholas Pinchuk: Car parc continues to age. The average age now at 12.8 years, and naturally, that requires more extensive maintenance and overhauls. That's seen clearly if you look at the household spending on vehicle repairs. It's up high single digits in the quarter. It's more than vehicle. It's also seen in the world of the shops and the techs. The hours worked are up, and the tech wages are rising. Garages are buzzing, and the need for more skills continues to increase. We believe all these data points say that vehicle repair is stronger than ever, and the prospects, they just keep getting better. With that said, uncertainty is still high across the American grassroots. Tech confidence remains tepid, reticence toward long-term purchases.

Nick Pinchuk: Car parc continues to age. The average age now at 12.8 years, and naturally, that requires more extensive maintenance and overhauls. That's seen clearly if you look at the household spending on vehicle repairs. It's up high single digits in the quarter. It's more than vehicle. It's also seen in the world of the shops and the techs. The hours worked are up, and the tech wages are rising. Garages are buzzing, and the need for more skills continues to increase. We believe all these data points say that vehicle repair is stronger than ever, and the prospects, they just keep getting better. With that said, uncertainty is still high across the American grassroots. Tech confidence remains tepid, reticence toward long-term purchases.

Speaker #2: We expedite repairs. We improve productivity. We keep vehicles moving we help techs. And the shop make much more money. We believe it's a great place to be.

Speaker #4: Tech confidence remains tepid. Reticence toward long-term purchases. But they are bullish on shorter payback solutions that make work easier, faster, safer, and helps them beat the clock and move on to the next vehicle.

Speaker #2: Now, let's go to the critical industries. This is where our commercial and industrial group or CNI operates, rolling the Snap-on brand out of the garage and harsh environments where the penalty for failure is high, the work is demanding, and the need for precision and repeatability and reliability are high.

Speaker #4: Now, Sap-on speaks with its franchisees and techs all the time. And my recent conversations with individuals in our van network coast to coast say that green shoots are popping up.

Speaker #2: All conditions that warrant a Snap-on level product. CNI covers a wide range of applications from the from the latest space missions missions to expanding the power grid to extracting natural resources, helping build data centers.

Speaker #4: Even with our tool storage units, they were up this quarter. I'll say that again. Tool storage was up. And as we spoke, the franchisees expressed their excitement about and as I spoke to them, I had an extended conversation, the franchisees were excited about where their position and their enthusiastic about their future.

Speaker #2: This is where we excel with customer connection and innov we excel with customer connection and innovation, observing the work and turning those insights into individual products or custom kits, matching the tools to the s the specific task.

Nicholas Pinchuk: They are bullish on shorter payback solutions that make work easier, faster, safer, and helps them beat the clock and move on to their next vehicle. Now, Snap-on speaks with its franchisees and techs all the time. In my recent conversations with individuals in our VAN network, coast to coast, say that green shoots are popping up. Even with our tool storage revenues, they were up this quarter. I'll say that again. Tool storage was up. As I spoke to them, I had those extended conversations. The franchisees were excited about where they're positioned, and they're enthusiastic about their future. As I said, they see green shoots. Having said that, it still seems that with each day, there's more bad news for breakfast. The hits just keep on coming, risking another rise in uncertainty.

Nick Pinchuk: They are bullish on shorter payback solutions that make work easier, faster, safer, and helps them beat the clock and move on to their next vehicle. Now, Snap-on speaks with its franchisees and techs all the time. In my recent conversations with individuals in our VAN network, coast to coast, say that green shoots are popping up. Even with our tool storage revenues, they were up this quarter. I'll say that again. Tool storage was up. As I spoke to them, I had those extended conversations. The franchisees were excited about where they're positioned, and they're enthusiastic about their future. As I said, they see green shoots. Having said that, it still seems that with each day, there's more bad news for breakfast. The hits just keep on coming, risking another rise in uncertainty.

Nick Pinchuk: As I spoke to them, you know, I had those extended conversations. The franchisees were excited about where they're positioned, and they're enthusiastic about their future. As I said, they see green shoots. Having said that, it still seems that with each day, there's more bad news for breakfast. I mean, the hits just keep on coming, risking another rise in uncertainty. Having said that though, we like where we're standing, rooted in the resilient vehicle repair market, continuously connected with the techs, observing the work, launching great new products, and having the capacity to manufacture them right here in America. In this environment, we're seeing what we think might be an early thaw. Now let's shift to the other half of the automotive segment.

Speaker #2: It's a business rooted in the essential, both domestic and internationally. And with that, and with that, critical industries offer an ongoing and robust opportunity.

Speaker #4: As I said, they see green shoots. But it still seems that with each day having said that, it still seems that with each day, there's more bad news for breakfast.

Speaker #2: And as such, we continue to invest in those possibilities, expanding capacity and building our understanding of the work and it's paying off. Industrial the industrial business, our critical industries operations showed considerable strength in a quarter, growing high single digits with particularly great and broad strides in aviation, heavy-duty, and natural resources.

Speaker #4: I mean, the hits just keep on coming. Risking another rise in uncertainty. Having said that, though, we like where we're standing. Rooted in the resilient vehicle repair market, continuously connected with the techs, observing the work, launching great new products, and having the capacity to manufacture them right here in America.

Speaker #2: So that's our markets—vehicle repair.

Speaker #4: And in this environment, we're seeing what we think might be an early thaw. Now let's shift to the other half of the automotive segment.

Speaker #1: Business booming.

Speaker #2: Not just in this interview, but driven by, continuing secular trends of aging and complexity. And despite the, the uncertain environment of secular trends, keep it moving.

Speaker #4: This is where repair system information or RS&I resides. Service and shop owners and managers. The activity in the sector remains consistent. Although it does at times reflect variations based on new product timing or OEM campaigns.

Nick Pinchuk: This is where Repair Systems & Information, or RS&I, resides, service and shop owners and managers. The activity in this sector remains consistent, although it does at times reflect variations based on new product timing or OEM campaigns. Shop owners and manufacturers see the trends. They know vehicle complexity is rising, and that it drives the need for more sophisticated systems, equipment, and tech assist to manage those changes. As I just said, the drum beat can be influenced by the lumpy nature of the OEM project sector, the owners and managers keep saying they need more techs. The garages are busy, the repair difficulty is increasing, and they need more help in keeping pace. I can tell you, Snap-on is up to that, folks.

Speaker #2: The metrics say being a tech is a great place to be. And Snap-on's keeping up. Provi pivoting to match the current tech preferences preferences with great products.

Nicholas Pinchuk: Having said that, though, we like where we're standing, rooted in the resilient vehicle repair market, continuously connected with the techs, observing the work, launching great new products, and having the capacity to manufacture them right here in America. In this environment, we're seeing what we think might be an early thaw. Now let's shift to the other half of the automotive segment. This is where Repair Systems & Information or RS&I resides, service and shop owners and managers. The activity in this sector remains consistent, although it does at times reflect variations based on new product timing or OEM campaigns. Now, shop owners and manufacturers see the trends. They know vehicle complexity is rising and that it drives the need for more sophisticated systems, equipment, and tech assists to manage those changes.

Nick Pinchuk: Having said that, though, we like where we're standing, rooted in the resilient vehicle repair market, continuously connected with the techs, observing the work, launching great new products, and having the capacity to manufacture them right here in America. In this environment, we're seeing what we think might be an early thaw. Now let's shift to the other half of the automotive segment. This is where Repair Systems & Information or RS&I resides, service and shop owners and managers. The activity in this sector remains consistent, although it does at times reflect variations based on new product timing or OEM campaigns. Now, shop owners and manufacturers see the trends. They know vehicle complexity is rising and that it drives the need for more sophisticated systems, equipment, and tech assists to manage those changes.

Speaker #4: Shop owners and manufacturers see the trends. They know vehicle complexity is rising, and that it drives the need for more sophisticated systems, equipment, and tech assist to manage those changes.

Speaker #2: The shop owners and managers recognize that upgrading i that upgrading is table stakes to cash in, in a in an onro in a to cash in on a on the robust vehicle repair demand that they're seeing.

Speaker #4: As I just said, the drumbeat can be influenced by the lumpy nature of the OEM project sector. But the owners and managers keep saving.

Speaker #2: And, and Snap-on has the equipment, the data, and the systems to put them right on target.

Speaker #4: They need more techs. The garages are busy. The repair difficulties increasing. And they need more help in keeping pace. I can tell you. Snap-on is up to that, folks.

Speaker #1: And we're reaching beyond the garage.

Speaker #2: Taking full advantage. The industrial's quarter says it so. The critical industries are bellwether. The essential is expanding, bringing with it more demand for precision and customization.

Speaker #4: That's why RS&I continues investing in modern equipment and diagnostic platforms that navigate procedures on vehicles new and old with precision and with speed. Now, we do have a strong lineup in undercar and collision equipment in RS&I.

Nick Pinchuk: That's why RS&I continues investing in modern equipment and diagnostic platforms that navigate procedures on vehicles new and old with precision and with speed. Now, we do have a strong lineup in undercar and collision equipment in RS&I, but particularly powerful are our diagnostics and information systems and proprietary databases. We continue investing in that advantage to fortifying our positions by applying new technologies like large language models and natural language translators, those capabilities that enable to expand our datasets more quickly and wield the resulting systems more powerfully. The progress was with systems that search billions of data points, matching a unique vehicle profile and current systems to just the right fit, fix, it all happens in seconds.

Speaker #1: It's all music to our ears.

Speaker #2: And one you know, one fast overall perspective on, on our, on our results, how our res one fast overall perspective is that our results demonstrated once again the power of the Snap-on value creation processes.

Nicholas Pinchuk: As I just said, the drumbeat can be influenced by the lumpy nature of the OEM project sector, but the owners and managers keep saying they need more techs. The garages are busy. The repair difficulty is increasing, and they need more help in keeping pace. I can tell you, Snap-on is up to that task. That's why RS&I continues investing in modern equipment and diagnostic platforms that navigate procedures on vehicles new and old with precision and with speed. Now, we do have a strong lineup in under car and collision equipment in RS&I, but particularly powerful are our diagnostics and information systems and proprietary database. We continue investing in that advantage to fortifying our positions by applying new technologies like large language models and natural language translators. Those capabilities that enable to expand our datasets more quickly and wield the resulting systems more powerfully.

Nick Pinchuk: As I just said, the drumbeat can be influenced by the lumpy nature of the OEM project sector, but the owners and managers keep saying they need more techs. The garages are busy. The repair difficulty is increasing, and they need more help in keeping pace. I can tell you, Snap-on is up to that task. That's why RS&I continues investing in modern equipment and diagnostic platforms that navigate procedures on vehicles new and old with precision and with speed. Now, we do have a strong lineup in under car and collision equipment in RS&I, but particularly powerful are our diagnostics and information systems and proprietary database. We continue investing in that advantage to fortifying our positions by applying new technologies like large language models and natural language translators. Those capabilities that enable to expand our datasets more quickly and wield the resulting systems more powerfully.

Speaker #4: But particularly powerful are our diagnostics and information systems and proprietary databases. We continue and we continue investing in that advantage to fortify our positions by applying new technologies like large language models and natural language translators those capabilities that enable to expand our data sets more quickly and wield the resulting systems more powerfully.

Speaker #2: Safety, quality, customer connection, innovation, and rapid continuous improvement. Developing innovative solutions born out of insight and observations from standing right in the workplace. And those insights in this quarter, combined with our dedication to RCI, enabled us to resist the turbulence of the day.

Speaker #4: The progress of other systems that search billions of data points matching the unique vehicle profile and current systems to just the right fit fix.

Speaker #2: You can see it in the numbers. It's an important and ongoing strength. Well, that's a macro overview. Now let's turn to the segments. And the CNI group, sales were 381.6 million, representing an increase of 37.1 million, or 10.8%.

Speaker #4: And it all great example is our newly launched Stream feature that streamlines the process for confronting job estimates. Kind of a Mitchell one. It's a Mitchell one, Brian.

Nick Pinchuk: A great example is our newly launched, newly launched feature that streamlines the process for confronting job estimates. Kind of a Mitchell 1, it's a Mitchell 1 brand. Estimates are a particularly thorny and time-consuming challenge for any shop, but our new system from Mitchell 1 makes it much easier. We're gonna hear a lot about that later as we go forward. That's vehicle repair, robust for both individual techs and for garage owners and managers, and we believe we have a decisive advantage in both arenas. We expedite repairs, we improve productivity, we keep vehicles moving, we help techs and the shop make much more money. We believe it's a great place to be. Now, let's go to the critical industries.

Speaker #4: And it's a estimates are particularly thorny and time-consuming challenge for any shop. But our new system for Mitchell one makes it much easier. We're going to hear a lot about that later as we go forward.

Speaker #2: And that includes $11.9 million in favorable foreign currency and our organic gain of 7.1%. Gains across all the business groups, but led by the Industrial division with custom toolkits for critical industries and the constant demand for precision torque products.

Nicholas Pinchuk: The progress was the systems that searched billions of data points, matching a unique vehicle profile and current systems to just the right fix, and it all happens in seconds. A great example is our newly launched feature that streamlines the process for confronting job estimates. Kind of a Mitchell 1, it's a Mitchell 1 brand. Estimates are a particularly thorny and time-consuming challenge for any shop, but our new system from Mitchell 1 makes it much easier. We're gonna hear a lot about that later as we go forward. That's vehicle repair, robust for both individual techs and for garage owners and managers. We believe we have a decisive advantage in both arenas. We expedite repairs, we improve productivity, we keep vehicles moving, we help techs in the shop make much more money. We believe it's a great place to be. Now, let's go to the critical industries.

Nick Pinchuk: The progress was the systems that searched billions of data points, matching a unique vehicle profile and current systems to just the right fix, and it all happens in seconds. A great example is our newly launched feature that streamlines the process for confronting job estimates. Kind of a Mitchell 1, it's a Mitchell 1 brand. Estimates are a particularly thorny and time-consuming challenge for any shop, but our new system from Mitchell 1 makes it much easier. We're gonna hear a lot about that later as we go forward. That's vehicle repair, robust for both individual techs and for garage owners and managers. We believe we have a decisive advantage in both arenas. We expedite repairs, we improve productivity, we keep vehicles moving, we help techs in the shop make much more money. We believe it's a great place to be. Now, let's go to the critical industries.

Speaker #4: So that's vehicle repair. Robust for both individual techs and for garage owners and managers. And we believe we have a decisive advantage in both arenas.

Speaker #2: As I said, industrial had a great quarter. High single digit growth that was that was without a significant rise in the military. Gains in almost every other sector with aviation up strong di strong double digits.

Speaker #4: We expedite repairs. We improve productivity. We keep vehicles moving we help techs. And the shop make much more money. We believe it's a great place to be.

Speaker #2: Boom, shakalaka.

Speaker #1: It was a great quarter.

Speaker #2: From an earnings perspective, CNI operating income of 54.9 million was up 3.2%. And the operating margin was 14.4%, down 110 basis points. But the quarter included 50 basis points of headwinds from currency.

Speaker #4: Now, let's go to the critical industries. This is where our commercial and industrial group or C&I operates, rolling the snap-on brand out of the garage and harsh environments where the penalty for failure is high, the work is demanding, and the need for precision and repeatability and reliability are high.

Nick Pinchuk: This is where our Commercial & Industrial Group, or C&I, operates, rolling the Snap-on brand out of the garage in harsh environments where the penalty for failure is high, the work is demanding, and the need for precision and repeatability and reliability are high. All conditions that warrant a Snap-on level product. C&I covers a wide range of applications from the latest space missions to expanding the power grid, to extracting natural resources, helping build data centers. This is where we excel. We excel with customer connection and innovation, observing the work and turning those insights into individual products or custom kits, matching the tools to the specific task. It's a business rooted in the essential, both domestic and internationally.

Speaker #4: All conditions that warrant a snap-on level product. C&I covers a wide range of applications from the latest space missions to expanding the power grid to extracting natural resources, helping build data centers.

Speaker #2: And the impacts from tariffs and rising material costs, which are particularly focused in CNI. Again, the core, again, the quarter for the power tools divisions improved year over year, driven by new products and first-to-market innovations.

Speaker #4: This is where we excel with customer connection and we excel with customer connection and innovation, observing the work and turning those insights into individual products or custom kits, matching the tools to the specific task.

Speaker #2: Our marketing north, a few of these, our Murphy, North Carolina, plant released two new 14.4-volt, three-eighth-inch cordless ratchets that extend, you know, what I think everybody says are already powerful ratchet lineup.

Nicholas Pinchuk: This is where our Commercial & Industrial Group or C&I operates, rolling the Snap-on brand out of the garage in harsh environments where the penalty for failure is high, the work is demanding, and the need for precision, repeatability, and reliability are high. All conditions that warrant a Snap-on level product. C&I covers a wide range of applications from the latest space missions, to expanding the power grid, to extracting natural resources, helping build data centers. This is where we excel. We excel with customer connection and innovation, observing the work and turning those insights into individual products or custom kits, matching the tools to the specific task. It's a business rooted in the essential, both domestic and internationally. With that, critical industries offer an ongoing and robust opportunity.

Nick Pinchuk: This is where our Commercial & Industrial Group or C&I operates, rolling the Snap-on brand out of the garage in harsh environments where the penalty for failure is high, the work is demanding, and the need for precision, repeatability, and reliability are high. All conditions that warrant a Snap-on level product. C&I covers a wide range of applications from the latest space missions, to expanding the power grid, to extracting natural resources, helping build data centers. This is where we excel. We excel with customer connection and innovation, observing the work and turning those insights into individual products or custom kits, matching the tools to the specific task. It's a business rooted in the essential, both domestic and internationally. With that, critical industries offer an ongoing and robust opportunity.

Speaker #4: It's a business rooted in the essential, both domestic and internationally. And with that, and with that, critical industries offer an ongoing and robust opportunity.

Speaker #2: The additions focus on making tasks faster, break it loose, press the trigger, and zip the fastener off, spinning at 550 RPM, which, which doubles which doubles the output of our standard unit.

Nick Pinchuk: With that, critical industries offer an ongoing and robust opportunity, and as such, we continue to invest in those possibilities, expanding capacity and building our understanding of the work, and it's paying off. The industrial business, our critical industries operations showed considerable strength in the quarter, growing high single digits with particularly great and broad strides in aviation, heavy duty, and natural resources. That's our markets. Vehicle repair business is booming, not just in this interlude, but driven by continuing secular trends of aging and complexity. Despite the uncertain environment, those secular trends keep it moving. The metrics say being a tech is a great place to be. Snap-on's keeping up, pivoting to match the current tech preferences with great products.

Speaker #4: And as such, we continue to invest in those possibilities, expanding capacity, and building our understanding of the work. And it's paying off. Industrial business, our critical industries operations showed considerable strength in a quarter, growing high single digits with particularly great and broad strides in aviation, heavy-duty, and natural resources.

Speaker #2: Our new ratchets make a make quick work of the, you know, applications with, with numerous bolts. Great for dealing with timing covers, oil pants, engine rebuilds, and many more applications.

Speaker #1: The garage the garages use them all the time now.

Speaker #4: So that's our markets, vehicle repair. Business woman. Not just in this interview, but driven by continuing secular trends of aging and complexity. And despite the uncertain environment of secular trends, keep it moving.

Speaker #2: We launched two new versions. First, the CTR 887 Long Neck for reaching deep into the engine compartment. And then the compact CTR 881 designed specifically for navigating tight spaces.

Speaker #2: A-enabling access to the workpiece without removing adjacent components, expediting the repair, and saving a lot of time. Remember, the techs feel the need. The need for speed.

Nicholas Pinchuk: As such, we continue to invest in those possibilities, expanding capacity and building our understanding of the work, and it's paying off. The industrial business, our critical industries operations showed considerable strength in the quarter, growing high single digits with particularly great and broad strides in aviation, heavy duty, and natural resources. That's our market. It's vehicle repair. Business is booming. Not just in this interlude, but driven by continuing secular trends of aging and complexity. Despite the uncertain environment, those secular trends keep it moving. The metrics say being a tech is a great place to be. Snap-on's keeping up, pivoting to match the current tech preferences with great products. The shop owners and managers recognize that upgrading is table stakes to cash in on the robust vehicle repair demand that they're seeing.

Nick Pinchuk: As such, we continue to invest in those possibilities, expanding capacity and building our understanding of the work, and it's paying off. The industrial business, our critical industries operations showed considerable strength in the quarter, growing high single digits with particularly great and broad strides in aviation, heavy duty, and natural resources. That's our market. It's vehicle repair. Business is booming. Not just in this interlude, but driven by continuing secular trends of aging and complexity. Despite the uncertain environment, those secular trends keep it moving. The metrics say being a tech is a great place to be. Snap-on's keeping up, pivoting to match the current tech preferences with great products. The shop owners and managers recognize that upgrading is table stakes to cash in on the robust vehicle repair demand that they're seeing.

Speaker #4: The metrics say being a tech is a great place to be. And Sap-on's keeping up. Pivoting to match the current tech preferences with great products.

Speaker #2: And our two new ratchets bring just that. We also expanded on the on the sensational launch last, last quarter of our, you know, all-new Nano Access portfolio.

Speaker #4: The shop owners and managers recognize that upgrading is table stakes to cash in an to cash in on the robust vehicle repair demand that they're seeing.

Nick Pinchuk: The shop owners and managers recognize that upgrading is table stakes to cash in on the robust vehicle repair demand that they're seeing. Snap-on has the equipment, the data, the systems to put them right on target. We're reaching beyond the garage. Taking full advantage, the industrials quarter says it so. The critical industries are a bellwether. The essential is expanding, bringing with it more demand for precision and customization. It's all music to our ears. One, you know, one fast overall perspective on our results. One fast overall perspective is that our results demonstrated once again the power of the Snap-on Value Creation processes. Safety, quality, customer connection, innovation, and rapid continuous improvement.

Speaker #2: Again, we wielded c-customer connection, observing that, trouble—the trouble—there was trouble navigating crowded engine bays and penetrating the vast webs of sensors and wires hidden behind the dash on modern cars.

Speaker #4: And Snap-on has the equipment, the data, and the systems to put them right on target. And we're reaching beyond the garage. Taking full advantage.

Speaker #4: The industrial's quarter says it so. The critical industries are bellwether the essential is expanding, bringing with it more demand for precision and customization. It's all music to our ears.

Speaker #2: So we designed the quarter-inch drive CTN N22040 straight over p straight power driver with a narrow 90-degree 90-degree head. I mean, this baby is small, and it goes everywhere.

Speaker #4: And one fast overall perspective on our one fast overall perspective, is that our results demonstrated once again the power of the snap-on value creation processes.

Speaker #2: And makes the difficult easy. And so and it's loaded with features unique to the Nano a, a variable speed trigger, easy forward and reverse selectors, and 600 fasteners on a single charge, all while operating at a lightning for power to for small power tools of 300 RPMs.

Nicholas Pinchuk: Snap-on has the equipment, the data, the systems to put them right on target. We're reaching beyond the garage, taking full advantage. The industrials quarter says it so. The critical industries are a bellwether. The essential is expanding, bringing with it more demand for precision and customization. It's all music to our ears. One last overall perspective is that our results demonstrated once again the power of the Snap-on value creation processes. Safety, quality, customer connection, innovation, and rapid continuous improvement. Developing innovative solutions born out of insight and observations from standing right in the workplace. Those insights in this quarter, combined with our dedication to RCI, enabled us to resist the turbulence of the day. You can see it in the numbers. It's an important and ongoing strength. Well, that's a macro overview. Now let's turn to the segments.

Nick Pinchuk: Snap-on has the equipment, the data, the systems to put them right on target. We're reaching beyond the garage, taking full advantage. The industrials quarter says it so. The critical industries are a bellwether. The essential is expanding, bringing with it more demand for precision and customization. It's all music to our ears. One last overall perspective is that our results demonstrated once again the power of the Snap-on value creation processes. Safety, quality, customer connection, innovation, and rapid continuous improvement. Developing innovative solutions born out of insight and observations from standing right in the workplace. Those insights in this quarter, combined with our dedication to RCI, enabled us to resist the turbulence of the day. You can see it in the numbers. It's an important and ongoing strength. Well, that's a macro overview. Now let's turn to the segments.

Speaker #2: The techs love the face-ba fast payback solution. And it was another re-record-setting beast. CNI. CNI—a quarter with strong momentum in domestic markets.

Speaker #4: Safety, quality, customer connection, innovation, and rapid continuous improvement. Developing innovative solutions born out of insight and observations from standing right in the workplace. And those insights in this quarter combined with our dedication to RCI enabled us to resist the turbulence of the day.

Nick Pinchuk: Developing innovative solutions born out of insight and observations from standing right in the workplace. Those insights in this quarter, combined with our dedication to RCI, enabled us to resist the turbulence of the day. You can see it in the numbers. It's an important and ongoing strength. Well, that's a macro overview. Now let's turn to the segments. In the C&I group, sales were $381.6 million, representing an increase of $37.1 million or 10.8%. That includes $11.9 million in favorable foreign currency and an organic gain of 7.1%. Gains across all the business groups, but led by the industrial division with custom toolkits for critical industries and the constant demand for precision torque products. As I said, industrial had a great quarter.

Speaker #2: Sales up 10.8%, 7.1% organically, led by critical industry ascending the Snap-on brand out of the garage propelled with strength in quarters power tools and precision torque.

Speaker #4: You can see it in the numbers. It's an important and ongoing strength. Well, that's a macro overview. Now, let's turn to the segments. And the C&I group, sales were 381.6 million, representing an increase of 37.1 million or 10.8%.

Speaker #2: Let's go on to the tools group. It was first quarter sales were 496 million, up organically 3.4%, higher sales in both the US and international networks.

Speaker #4: And that includes 11.9 million in favorable foreign currency and our organic gain of 7.1%. Gains across all the business groups. But led by the industrial division with custom toolkits for critical industries and the constant demand for precision toward products.

Speaker #2: The operating income of $105 million was up 13.6%. And the operating margin of the quarter was 21.6%, up 160 basis points. Notably, notably, the gross margin in the period also rose 140 basis points, reaching 47.7%, overcoming the impact of tariffs and rising material costs.

Speaker #4: As I said, industrial had a great quarter. High single-digit growth that was without a significant rise in the military. Gains in almost every other sector with aviation up strong double digits.

Nick Pinchuk: High single-digit growth that was without a significant rise in the military. Gains in almost every other sector with aviation up strong double digits. Boom shakalaka. It was a great quarter. From an earnings perspective, C&I operating income of $54.9 million was up 3.2%, and the operating margin was 14.4%, down 110 basis points. The quarter included 50 basis points of headwinds from currency and the impacts from tariffs and rising material costs, which are particularly focused in C&I. Again, the quarter for the power tools divisions improved year over year, driven by new products and first to market innovation.

Nick Pinchuk: High single-digit growth that was without a significant rise in the military. Gains in almost every other sector with aviation up strong double digits. Boom shakalaka. It was a great quarter. From an earnings perspective, C&I operating income of $54.9 million was up 3.2%, and the operating margin was 14.4%, down 110 basis points. The quarter included 50 basis points of headwinds from currency and the impacts from tariffs and rising material costs, which are particularly focused in C&I. Again, the quarter for the power tools divisions improved year-over-year, driven by new products and first to market innovation.

Nicholas Pinchuk: In the C&I group, sales were $381.6 million, representing an increase of $37.1 million or 10.8%, and that includes $11.9 million in favorable foreign currency and an organic gain of 7.1%. Gains across all the business groups, but led by the industrial division with custom toolkits for critical industries and the constant demand for precision torque products. As I said, industrial had a great quarter. High single-digit growth that was without a significant rise in the military. Gains in almost every other sector with aviation up strong double digits. Boom shakalaka. It was a great quarter. From an earnings perspective, C&I operating income of $54.9 million was up 3.2%, and the operating margin was 14.4%, down 110 basis points. The quarter included 50 basis points of headwinds from currency and the impacts from tariffs and rising material costs, which are particularly focused in C&I.

Nick Pinchuk: In the C&I group, sales were $381.6 million, representing an increase of $37.1 million or 10.8%, and that includes $11.9 million in favorable foreign currency and an organic gain of 7.1%. Gains across all the business groups, but led by the industrial division with custom toolkits for critical industries and the constant demand for precision torque products. As I said, industrial had a great quarter. High single-digit growth that was without a significant rise in the military. Gains in almost every other sector with aviation up strong double digits. Boom shakalaka. It was a great quarter. From an earnings perspective, C&I operating income of $54.9 million was up 3.2%, and the operating margin was 14.4%, down 110 basis points. The quarter included 50 basis points of headwinds from currency and the impacts from tariffs and rising material costs, which are particularly focused in C&I.

Speaker #2: Prospering in a day in which cost is a question. During the quarter, we maintained and during the quarter, we maintained our pivot wielding our customer connection, observing the work, and using the insights to develop new products that align with the customer's presence for sh pre-preference for short payback items.

Speaker #4: Boom, shakalaka. It was a great quarter. From an earnings perspective, C&I operating income of 54.9 million was up 3.2%. And the operating margin was 14.4%, down 110 basis points.

Speaker #2: And that we made, you know, you wanna bring out short payback items that also make tedious and the tedious and the complex easy. We think we've done that.

Speaker #4: But the quarter included 50 basis points of headwinds from currency. And the impacts from tariffs and rising material costs, which are particularly focused in C&I.

Speaker #2: That was demonstrated by two new products, forged in our Milwaukee plant. First, the Glow Plug. Glow Plug socket. Diesel Glow Plugs are, are essential for preheating cylinders to the optimal temperature that supports ignition.

Speaker #4: Again, the quarter for the power tools divisions improved year over year, driven by new products and first-to-market innovations. Our Murphy North, a few of these, our Murphy North Carolina plant released two new 14.4-volt, 3-8-inch cordless ratchets that extend what I think everybody says are already powerful ratchet lineup.

Speaker #2: But replacing these common common components in is so simple. For example, on the 2006 to 2016 models, of the popular GM Duramax engines, accessing these components is really cumbersome.

Nick Pinchuk: Our Murphy, North Carolina plant released 2 new 14.4 volt 3/8 inch cordless ratchets that extend, you know, what I think everybody says, our already powerful ratchet lineup. The additions focus on making tasks faster. Break it loose, press the trigger, and zip the fastener off. Spinning at 550 RPM, which doubles the output of our standard unit. Our new ratchets make quick work of, you know, applications with numerous bolts. Great for dealing with timing covers, oil pans, engine rebuilds, and many more applications. The garage, the garages use them all the time now. We launched 2 new versions. First, the CTR887 Longneck for reaching deep into the engine compartment.

Speaker #2: And quite frequently, the, the plugs are seized from exposure to harsh environments. I-it takes considerable power to break them loose. Especially in tight quarters.

Speaker #4: The additions focus on making tasks faster, break it loose, press the trigger, and zip the fastener off. Spinning at 550 RPM, which doubles the output of our standard unit.

Nicholas Pinchuk: Again, the quarter for the power tools division improved year over year, driven by new products and first-to-market innovation. A few of these, our Murphy, North Carolina plant released two new 14.4-volt three-eighths cordless ratchets that extend what I think everybody says is our already powerful ratchet lineup. The additions focus on making tasks faster. Break it loose, press the trigger, and zip the fastener off. Spinning at 550 RPM, which doubles the output of our standard unit. Our new ratchets make quick work of applications with numerous bolts. Great for dealing with timing covers, oil pans, engine rebuilds, and many more applications. The garages use them all the time now. We launched two new versions.

Nick Pinchuk: Again, the quarter for the power tools division improved year over year, driven by new products and first-to-market innovation. A few of these, our Murphy, North Carolina plant released two new 14.4-volt three-eighths cordless ratchets that extend what I think everybody says is our already powerful ratchet lineup. The additions focus on making tasks faster. Break it loose, press the trigger, and zip the fastener off. Spinning at 550 RPM, which doubles the output of our standard unit. Our new ratchets make quick work of applications with numerous bolts. Great for dealing with timing covers, oil pans, engine rebuilds, and many more applications. The garages use them all the time now. We launched two new versions.

Speaker #2: Standard tools won't reach without removing blocking parts. And both of those conditions—the seizing and the tightness of the compartments—make a routine job complicated.

Speaker #4: Our new ratchets make quick work of applications with numerous bolts. Great for dealing with timing covers, oil pans, engine rebuilds, and many more applications.

Speaker #2: So our team went to work developing the new, IPS TML 12, a, a quarter-inch drive, 12 millimeters swivel socket. It's 52% longer than, than our regular oil bearing.

Speaker #4: The garages use them all the time now. We launched two new versions. First, the CTR 887 Longneck for reaching deep into the engine compartment.

Speaker #2: And its swivel joints pivots 30 degrees, features that combine to reach the overall, reach the workpiece with general ease. And the uni new unit is also designed with our flank drive geometry.

Speaker #4: And then the compact CTR 881 designed specifically for navigating tight spaces. Enabling access to the workpiece without removing adjacent components, expediting the repair, and saving a lot of time.

Nick Pinchuk: The compact CTR887, designed specifically for navigating tight spaces, enabling access to the workpiece without removing adjacent components, expediting the repair and saving a lot of time. Remember, the techs feel the need, the need for speed, and our two new ratchets bring just that. We also expanded on the sensational launch last quarter of our, you know, own NanoAxcess portfolio. Again, we wielded customer connection, observing that there was trouble navigating crowded engine bays and penetrating the vast webs of sensors and wires hidden behind the dash on modern cars. We designed the quarter-inch drive CTNN2040 straight power driver with a narrow 90-degree head. I mean, this baby is small, and it goes everywhere and makes the difficult easy.

Speaker #4: Remember, the techs feel the need. The need for speed. And our two new ratchets bring just that. We also expanded on the sensational launch last quarter of our all-new Nano Access portfolio.

Speaker #2: That, that feature directs the force to the flats of the fastener. And away from the corners, maximizing the torque, bringing the needed power while pre-preventing rounding.

Speaker #2: Efficiently complete efficiently completing the ca the, the repair without damaging the components because of the power you had to apply. Another example of customer connection released in the back half of the year is a new socket configuration that matches up with our with our great Nano Access cordless products.

Nicholas Pinchuk: First, the CTR887 long neck for reaching deep into the engine compartment, and then the compact CTR881, designed specifically for navigating tight spaces, enabling access to the workpiece without removing adjacent components, expediting the repair and saving a lot of time. Remember, the techs feel the need, the need for speed. Our two new ratchets bring just that. We also expanded on the sensational launch last quarter of our own NanoAxcess portfolio. Again, we wield customer connection, observing that there was trouble navigating crowded engine bays and penetrating the vast webs of sensors and wires hidden behind the dash on modern cars. We designed the quarter-inch drive CTNN2040 straight power driver with a narrow 90-degree head. I mean, this baby is small, and it goes everywhere and makes the difficult easy.

Nick Pinchuk: First, the CTR887 long neck for reaching deep into the engine compartment, and then the compact CTR881, designed specifically for navigating tight spaces, enabling access to the workpiece without removing adjacent components, expediting the repair and saving a lot of time. Remember, the techs feel the need, the need for speed. Our two new ratchets bring just that. We also expanded on the sensational launch last quarter of our own NanoAxcess portfolio. Again, we wield customer connection, observing that there was trouble navigating crowded engine bays and penetrating the vast webs of sensors and wires hidden behind the dash on modern cars. We designed the quarter-inch drive CTNN2040 straight power driver with a narrow 90-degree head. I mean, this baby is small, and it goes everywhere and makes the difficult easy.

Speaker #4: Again, we wielded customer connection observing that trouble there was trouble navigating crowded engine bays and penetrating the vast webs of sensors and wires hidden behind the dash on modern cars.

Speaker #2: Developing a power tool small enough to fit in your pocket was a great idea. But we took it a little further. We designed an entirely new set of sockets to make the old the overall common combination even smaller.

Speaker #4: So we designed the quarter-inch drive CTN N2040 straight over straight power driver with a narrow 90-degree head. I mean, this baby is small, and it goes everywhere.

Speaker #2: It's called the 1119 NTMLE. It's a 19-piece quarter-inch tool set, and it consists of 10 metric and 7 imperial size sockets that are 22% shorter and 8% narrower than the standard offering.

Speaker #4: And makes the difficult easy. And it's loaded with features unique to the Nano of variable speed trigger, easy forward and reverse selectors, and 600 fasteners on a single charge.

Nick Pinchuk: It's loaded with features unique to the NanoAxcess, a variable speed trigger, easy forward and reverse selectors, and 600 fasteners on a single charge, all while operating at a lightning for small power tools of 300 RPM. The techs love the fast payback solution. You know, it was another record-setting release. C&I. C&I, a quarter with strong momentum in domestic markets. Sales up 10.8%, 7.1% organically, led by critical industries sending the Snap-on brand out of the garage, propelled with strength in cordless power tools and Specialty Torque. Now let's go on to the Snap-on Tools Group. Snap-on Tools Group Q1 sales were $486 million, up organically 3.4%. Higher sales in both the US and international networks.

Speaker #4: All while operating at a lightning power to small power tools of 300 RPMs. The techs love the fast-payback solution. And it was another record-setting release.

Speaker #2: And each item is, secured in a foam palette for foam palette for good storage of the of these, these products. The techs value the accessibility and love the new sets.

Speaker #2: Really amplified the success of our Nano product. Now, tool storage in a quarter generated some momentum. Backed by the ongoing development of fast payback storage alternatives, new items like our KSC, 40 KRSC 46, that's a roll card that un was unveiled last summer.

Speaker #4: C&I, C&I a quarter with strong momentum in domestic markets. Sales up 10.8%, 7.1% organically, led by critical industry sending the snap-on brand out of the garage propelled with strength and quarters power tools and precision torque.

Nicholas Pinchuk: It's loaded with features unique to the Nano, a variable speed trigger, easy forward and reverse selectors, and 600 fasteners on a single charge, all while operating at a lightning-fast speed for small power tools of 300 RPM. The techs love the fast payback solution, and it was another record-setting piece for C&I. C&I Q1 with strong momentum in the domestic markets. Sales up 10.8%, 7.1% organically, led by critical industries sending the Snap-on brand out of the garage, propelled with strength in cordless power tools and precision torque. Let's go on to the Tools Group. Tools Group Q1 sales were $486 million, up organically 3.4%. Higher sales in both the US and international networks. The operating income of $105 million was up 13.6%, and the operating margin of the Q1 was 21.6%, up 160 basis points.

Nick Pinchuk: It's loaded with features unique to the Nano, a variable speed trigger, easy forward and reverse selectors, and 600 fasteners on a single charge, all while operating at a lightning-fast speed for small power tools of 300 RPM. The techs love the fast payback solution, and it was another record-setting piece for C&I. C&I Q1 with strong momentum in the domestic markets. Sales up 10.8%, 7.1% organically, led by critical industries sending the Snap-on brand out of the garage, propelled with strength in cordless power tools and precision torque. Let's go on to the Tools Group. Tools Group Q1 sales were $486 million, up organically 3.4%. Higher sales in both the US and international networks. The operating income of $105 million was up 13.6%, and the operating margin of the Q1 was 21.6%, up 160 basis points.

Speaker #2: Built in our Aldona, Iowa plant. It's, one piece, fully welded body setup, which includes six drawers, each with 120-pound load capacity. Pretty high. And with and an 11-inch deep flip-top compartment, ideal for storing power tools.

Speaker #4: Let's go on to the tools group. Those first quarter sales were 496 million, up organically 3.4%. Higher sales in both the US and international networks.

Speaker #4: The operating income of 105 million was up 13.6%. And the operating margin of the quarter was 21.6%, up 160 basis points. Notably, the gross margin in the period also rose, 140 basis points, reaching 47.7%, overcoming the impact of tariffs and rising material costs.

Nick Pinchuk: The operating income of $105 million was up 13.6%, and the operating margin of the quarter was 21.6%, up 160 basis points. Notably, the gross margin in the period also rose 140 basis points, reaching 47.7%, overcoming the impact of tariffs and rising material costs, prospering in a day in which cost is the question. During the quarter, we maintained our pivot, wielding our customer connection, observing the work, and using the insights to develop new products that align with the customer's presence for preference for short payback items. We made, you know, you wanna bring out short payback items that also make tedious and the complex easy. We think we've done that.

Speaker #2: And the thing that's important for a card, because people want them the technicians want to match them up with their all the boxes they've already purchased, it's available in multiple paint and trim colors.

Speaker #2: And it's capable of matching any full-size box. So the unit provides and that isn't always the case with roll cards. The unit provides ample space for the techs looking to expand but, but it's been designed to an enable functionality.

Speaker #4: Prospering in a day in which cost is a question. During the quarter, we maintained and during the quarter, we maintained our pivot wielding our customer connection, observing the work, and using the insights to develop new products that align with the customer's presence for preference for short payback items.

Speaker #2: Without taking the leap into long-term payments. And that combination worked. And in the quarter, also hot were accessories such as lockers and side cabinets and work centers, options that increase storage space for existing boxes, all at a lower entry point than a new roll cab.

Speaker #4: And we made you want to bring out short payback items that also make tedious and the tedious and the complex easy. We think we've done that.

Nicholas Pinchuk: Notably, the gross margin in the period also rose 140 basis points, reaching 47.7%, overcoming the impact of tariffs and rising material costs, prospering in a day and age in which cost is a question. During the quarter, we maintained our pivot, wielding our customer connection, observing the work, and using the insights to develop new products that align with the customer's preference for short payback items. You want to bring out short payback items that also make the tedious and the complex easy. We think we've done that. That was demonstrated by two new products forged in our Milwaukee plant. First, the glow plug socket. Diesel glow plugs are essential for preheating cylinders to the optimal temperature that supports ignition. But replacing these common components isn't so simple. For example, on the 2006 to 2016 models of the popular GM Duramax engines, accessing these components is really cumbersome.

Nick Pinchuk: Notably, the gross margin in the period also rose 140 basis points, reaching 47.7%, overcoming the impact of tariffs and rising material costs, prospering in a day and age in which cost is a question. During the quarter, we maintained our pivot, wielding our customer connection, observing the work, and using the insights to develop new products that align with the customer's preference for short payback items. You want to bring out short payback items that also make the tedious and the complex easy. We think we've done that. That was demonstrated by two new products forged in our Milwaukee plant. First, the glow plug socket. Diesel glow plugs are essential for preheating cylinders to the optimal temperature that supports ignition. But replacing these common components isn't so simple. For example, on the 2006 to 2016 models of the popular GM Duramax engines, accessing these components is really cumbersome.

Speaker #4: That was demonstrated by two new products, forged in our Milwaukee plant. First, the Glow Plug. Glow Plug sockets. Diesel Glow Plugs are essential for preheating cylinders to the optimal temperature that supports ignition.

Nick Pinchuk: That was demonstrated by two new products forged in our Milwaukee plant. First, the glow plug socket. Diesel glow plugs are essential for preheating cylinders to the optimal temperature that supports ignition. Replacing these common components isn't so simple. For example, on the 2006 to 2016 models of the popular GM Duramax engines, accessing these components is really cumbersome, and quite frequently the plugs are seized from exposure to harsh environments. It takes considerable power to break them loose, especially in tight quarters. Standard tools won't reach without removing blocking parts. Both of those conditions, the seizing and the tightness of the compartments, make a routine job complicated. Our team went to work developing the new IPTM12, a 1/4-inch drive, 12 millimeters swivel socket.

Speaker #2: Speaking of roll cabs, full-size roll cabs, we did release in the quarter in the quarter a commemorative box celebrating our nation's 250th anniversary entitled A Tribute to America.

Speaker #2: The 84-inch Epic is a beauty. I-it's gloss-backed case with white drawers and red trim. And the 12-inch power drawer and, and at the top left corner had a had a blue panel overlay with 50 laser-cut stars.

Speaker #4: But replacing these common components in is so simple. For example, on the 2006 to 2016 model of the popular GM Duramax engines, accessing these components is really cumbersome.

Speaker #2: The red, white, and blue setup, you know, kind of conjures the view of the American flag when back from it. And the work center door displays its own symbolic images, synonymous with the U.S. history of the Statue of Liberty.

Speaker #4: And quite frequently, the plugs are seized from exposure to harsh environments. It takes considerable power to break them loose. Especially in tight quarters. Standard tools won't reach without removing blocking parts.

Speaker #4: And both of those conditions, the seizing and the tightness of the compartments make a routine job complicated. So our team went to work developing the new IPS TML 12, a quarter-inch drive, 12-millimeter swivel socket.

Speaker #2: Mount Rushmore. The iconic image of the Marines raising a flag in the air with Jim. And the first moon landing. Each and each model, each model has a serious, serialized medallion.

Speaker #2: Numbered 1 to 1,776. It overcame the big-ticket reticence in the quarter, becoming a highly covered box—A—epitomizing both the Snap-on US presence and the birth of our great nation.

Speaker #4: It's 52% longer than our regular oil bearing. And its swivel joints pivots 30 degrees, features that combine to reach the overall reach the workpiece with general ease.

Nick Pinchuk: It's 52% longer than our regular offering, and it swivel joints pivot 30 degrees, features that combine to reach the workpiece with general ease. The new unit is also designed with our Flank Drive geometry. That feature directs the force to the flats of the fastener and away from the corners, maximizing the torque, bringing the needed power while preventing rounding, efficiently completing the repair without damaging the components because of the power you had to apply. Another example of customer connection released in the back half of the year is a new socket configuration that matches up with our great NanoAxcess cordless products. Developing a power tool small enough to fit in your pocket was a great idea, but we took it a little further.

Nicholas Pinchuk: Quite frequently, the plugs are seized from exposure to harsh environments. It takes considerable power to break them loose, especially in tight quarters. Standard tools won't reach without removing blocking parts. Both of those conditions, the seizing and the tightness of the compartments, make a routine job complicated. Our team went to work developing the new IPSTML12, a quarter-inch drive, 12-millimeter swivel socket. It's 52% longer than our regular offering, and its swivel joints pivot 30 degrees, features that combine to reach the workpiece with general ease. The new unit is also designed with our Flank Drive geometry. That feature directs the force to the flats of the fastener and away from the corners, maximizing the torque, bringing the needed power while preventing rounding, efficiently completing the repair without damaging the components because of the power you had to apply.

Nick Pinchuk: Quite frequently, the plugs are seized from exposure to harsh environments. It takes considerable power to break them loose, especially in tight quarters. Standard tools won't reach without removing blocking parts. Both of those conditions, the seizing and the tightness of the compartments, make a routine job complicated. Our team went to work developing the new IPSTML12, a quarter-inch drive, 12-millimeter swivel socket. It's 52% longer than our regular offering, and its swivel joints pivot 30 degrees, features that combine to reach the workpiece with general ease. The new unit is also designed with our Flank Drive geometry. That feature directs the force to the flats of the fastener and away from the corners, maximizing the torque, bringing the needed power while preventing rounding, efficiently completing the repair without damaging the components because of the power you had to apply.

Speaker #4: And the new unit is also designed with our flank drive geometry. That feature directs the force to the flats of the fastener. And away from the corners, maximizing the torque, bringing the needed power while preventing rounding.

Speaker #2: You know, some products are too exciting to pass up, even in the turbulence. Well, that's the tools group. Pivoting to match the technician the technicians' current needs and preferences.

Speaker #2: Wielding manufacturing solutions right here in the US that improve is, efficiency, by making the tasks easier. Now on to our side. Sales in a quarter were 485.3 million, up 2%, including 9.1 m 9.1 million in favorable currency effects, organic sales were up only slightly to last year.

Speaker #4: Efficiently complete efficiently completing the repair without damaging the components because of the power you had to apply. Another example of customer connection released in the back half of the year is a new socket configuration that matches up with our great Nano Access cordless products.

Speaker #4: Developing a power tool small enough to fit in your pocket was a great idea. But we took it a little further. We designed an entirely new set of sockets to make the overall combination even smaller.

Speaker #2: But it was still enough to be the highest ever quarter, the highest ever sales quarter for the group. The volume reflects increases in our diagnostic and repair information products to independent repair shop owners and managers, offset by lower sales to OEM dealerships.

Nick Pinchuk: We designed an entirely new set of sockets to make the overall combination even smaller. It's called the 119NTMLE. It's a 19-piece quarter-inch tool set, and it consists of 10 metric and 7 imperial-size sockets that are 22% shorter and 8% narrower than the standard offering. Each item is secured in a foam pallet for good storage of these products. The techs value the accessibility and the love of the new sets really amplified the success of our NanoAxcess product. Now, tool storage in Q4 generated some momentum, backed by the ongoing development of fast payback storage alternatives. New items like our KRSC46, that's a roll cart that was unveiled last summer.

Speaker #4: It's called the 1119 NTMLE. It's a 19-piece quarter tool quarter-inch tool set. And it consists of 10 metric and 7 imperial size sockets that are 22% shorter and 8% narrower than the standard offering.

Speaker #2: In short, the EQS product business hit a flat spot. Operating earnings for the quarter were 119.5 million, representing a decrease of 2.6 million or 2.1% versus 2025 levels.

Nicholas Pinchuk: Another example of customer connection released in the back half of the year is a new socket configuration that matches up with our great NanoAxcess cordless product. Developing a power tool small enough to fit in your pocket was a great idea, but we took it a little further. We designed an entirely new set of sockets to make the overall combination even smaller. It's called the 119NTMLE. It's a 19-piece quarter-inch tool set, and it consists of 10 metric and 7 imperial-size sockets that are 22% shorter and 8% narrower than the standard offering. Each item is secured in a foam pallet for good storage of these products. The techs value the accessibility and love the new set. Really amplified the success of our NanoAxcess product. Now, tool storage in the quarter generated some momentum, backed by the ongoing development of fast payback storage alternatives.

Nick Pinchuk: Another example of customer connection released in the back half of the year is a new socket configuration that matches up with our great NanoAxcess cordless product. Developing a power tool small enough to fit in your pocket was a great idea, but we took it a little further. We designed an entirely new set of sockets to make the overall combination even smaller. It's called the 119NTMLE. It's a 19-piece quarter-inch tool set, and it consists of 10 metric and 7 imperial-size sockets that are 22% shorter and 8% narrower than the standard offering. Each item is secured in a foam pallet for good storage of these products. The techs value the accessibility and love the new set. Really amplified the success of our NanoAxcess product. Now, tool storage in the quarter generated some momentum, backed by the ongoing development of fast payback storage alternatives.

Speaker #4: And each item is secured in a foam palette foam palette for good storage of these products. The techs value the accessibility and love the new sets.

Speaker #2: The operating income margin of 24.6% included 60 basis points of unfavorable currency and compared to the 25.7% recorded last year. The gross margins were 46%.

Speaker #4: Really amplified the success of our Nano product. Now, tool storage in a quarter generated some momentum. Backed by the ongoing development of fast payback storage alternatives, new items like our KSC KRSC 46, that's a roll cart that was unveiled last summer, built in our Aldona, Iowa plant.

Speaker #2: Up 30 basis points. Despite the unfavorable currency effects and the impact of tariffs, and the impact of tariffs and higher material costs. So the lower ROI margin reflects, primarily, the unfavorable currency and our investments fortifying our proprietary database by enhancing them with large language activities.

Nick Pinchuk: Built in our Algona, Iowa plant, it's a 1-piece, fully welded body setup, which includes 6 drawers, each with a 120 pound load capacity. Pretty high. It also features an 11-inch deep flip-top compartment, ideal for storing power tools. The thing that's important for a cart, because people wanna match them up with their boxes they've already purchased. It's available in multiple paint and trim colors, and it's capable of matching any full-size box. That is always the case with roll carts. The unit provides ample space for the techs looking to expand, but it's been designed to enable functionality without taking the leap into long-term payments. That combination worked.

Speaker #4: It's a one-piece fully welded body setup, which includes six drawers, each with 120-pound load capacity. Pretty high. And an 11-inch deep flip-top compartment, ideal for storing power tools.

Speaker #4: And the thing that's important for a card, because people want them the technicians want to match them up with their boxes they've already purchased, it's available in multiple paint and trim colors.

Speaker #2: Investments that we strongly believe will strengthen our advantages going forward. We know the complexity of today will only grow. And we'll continue investing in software and, and, and equipment, empowering shop owners and managers with the resources required to confront that trend.

Speaker #4: And it's capable of matching any full-size box. So the unit provides and that isn't always the case with roll carts. The unit provides ample space for the techs looking to expand, but it's been designed to enable functionality.

Nicholas Pinchuk: New items like our KRSC46. That's a roll cart that was unveiled last summer. Built in our Algona, Iowa plant, it's a one-piece, fully welded body setup, which includes six drawers, each with 120-pound load capacity, pretty high, and an 11-inch deep flip-top compartment ideal for storing power tools. The thing that's important for a cart, because the technicians want to match them up with these boxes they've already purchased. It's available in multiple paint and trim colors, and it's capable of matching any full-size box. That is always the case with roll carts. The unit provides ample space for the techs looking to expand, but it's been designed to enable functionality without taking the leap into long-term payments. That combination worked.

Nick Pinchuk: New items like our KRSC46. That's a roll cart that was unveiled last summer. Built in our Algona, Iowa plant, it's a one-piece, fully welded body setup, which includes six drawers, each with 120-pound load capacity, pretty high, and an 11-inch deep flip-top compartment ideal for storing power tools. The thing that's important for a cart, because the technicians want to match them up with these boxes they've already purchased. It's available in multiple paint and trim colors, and it's capable of matching any full-size box. That is always the case with roll carts. The unit provides ample space for the techs looking to expand, but it's been designed to enable functionality without taking the leap into long-term payments. That combination worked.

Speaker #2: And to make more money. Case in point, air conditioning systems have have evolved. Now they're not just for climate, climate control, but they're they're for supporting overall vehicle performance and EV battery maintenance.

Speaker #4: Without taking the leap into long-term payments. And that combination worked. And in the quarter, also hot, were accessories such as lockers and side cabinets and work centers, options that increased storage space for existing boxes all at a lower entry point than a new roll cab.

Speaker #2: As an example is an example is our Polartek AC recyclers, rolling out of our facilities in Conway, Arkansas. It during the quarter, RS&I released the new Pro Series Protec.

Nick Pinchuk: In the quarter, also hot were accessories such as lockers, side cabinets, and work centers, options that increased storage space for existing boxes, all at a lower entry point than a new roll cab. Speaking of roll cabs, full-size roll cabs, we did release in the quarter a commemorative box celebrating our nation's 250th anniversary titled A Tribute to America. The 84-inch EPIQ is a beauty. It has a gloss back case with white drawers and red trim, and the 12-inch power drawer at the top left corner had a blue panel overlay with 50 laser cut stars. The red, white, and blue setup, you know, kinda conjures the view of the American flag when you step back from it.

Speaker #2: That was, as I said, produced in our, facility in Conway, Arkansas. One machine, new Pro new Pro Series Polartek, one machine for both popular re-refrigerants types, R134A and R1234YF.

Speaker #4: Speaking of roll cabs, full-size roll cabs, we did release in the quarter in the quarter a commemorative box celebrating our nation's 250th anniversary entitled A Tribute to America.

Speaker #4: The 84-inch epic is a beauty. It's gloss-backed case with white drawers and red trim. And the 12-inch power drawer at the top left corner had a blue panel overlay with 50 laser-cut stars.

Speaker #2: The Pro models are also loaded with features for managing a wide variety of vehicles. A large filter allowing for extended runtime. Nitrogen leak testing for faster diagnostics.

Nicholas Pinchuk: In the quarter, also hot were accessories such as lockers, side cabinets, and work centers, options that increased storage space for existing boxes, all at a lower entry point than a new roll cab. Speaking of roll cabs, full-size roll cabs, we did release in the quarter a commemorative box celebrating our nation's 250th anniversary, titled, "A Tribute to America." The 84-inch EPIQ is a beauty. Its gloss black case with white drawers and red trim, and the 12-inch power drawer at the top left corner had a blue panel overlay with 50 laser cut stars. The red, white, and blue setup kind of conjures the view of the American flag when you step back from it. The work center door displays its own symbolic images synonymous with US history.

Nick Pinchuk: In the quarter, also hot were accessories such as lockers, side cabinets, and work centers, options that increased storage space for existing boxes, all at a lower entry point than a new roll cab. Speaking of roll cabs, full-size roll cabs, we did release in the quarter a commemorative box celebrating our nation's 250th anniversary, titled, "A Tribute to America." The 84-inch EPIQ is a beauty. Its gloss black case with white drawers and red trim, and the 12-inch power drawer at the top left corner had a blue panel overlay with 50 laser cut stars. The red, white, and blue setup kind of conjures the view of the American flag when you step back from it. The work center door displays its own symbolic images synonymous with US history.

Speaker #4: The red, white, and blue setup kind of conjures the view of the American flag when you step back from it. And the work center door displays on its own symbolic images of synonymous with the US history of the Statue of Liberty.

Speaker #2: A two-stage vacuum necessary for supporting systems on small civics to large suburbans. And a 12-inch touchscreen for easy navigation, even with gloves. The unit and the units have, this is one of the best features, I think.

Nick Pinchuk: The work center door displays on its own symbolic images synonymous with the US history. The Statue of Liberty, Mount Rushmore, the iconic image of the Marines raising a flag at Iwo Jima, and the first moon landing. Each model has a serious, serialized medallion numbered 1 to 1776. It overcame the big ticket reticence in the quarter, becoming a highly coveted box, epitomizing both Snap-on's US presence and the birth of our great nation. You know, some products are too exciting to pass up, even in the turbulence. Snap-on tools pivoting to match the technician's current needs and preferences, wielding manufacturing solutions right here in the US that improve his efficiency by making the tasks easier. Now on to R&I.

Speaker #2: The units have automatic functionality. Techs can tackle another job while the recycling goes on. And a and a bright, status light or a or an audible signal notifies the user when the when they're inter when their intervention is, is required.

Speaker #4: Mount Rushmore. The iconic image of the Marines raising a flag in Iwo Jima and the first moon landing. And each model each model has a serious serialized medallion.

Speaker #4: Numbered 1 to 1776. It overcame the big-ticket reticence in the quarter, becoming a highly coveted box. Epitomizing both the snap-on US presence and the birth of our great nations.

Speaker #2: It makes recycling particularly more efficient. And the onboard database is terrific. It, it identifies the VIN and presets the unit with the with the OE with OEM vehicles, specifications.

Speaker #2: Pre-preventing the time often wasted manually looking up the stats. Our new Pro Series is a great example for helping shop owners and managers navigate the complexity of new cars, hook it up, enter the VIN, and the machine takes over, improving both productivity and airing-proof air-proofing the process.

Speaker #4: Some products are too exciting to pass up, even in the turbulence. Well, that's the tools group. Pivoting to match the technician's current needs and preferences.

Nicholas Pinchuk: The Statue of Liberty, Mount Rushmore, the iconic image of the Marines raising a flag at Iwo Jima, and the first moon landing. Each model has a serialized medallion numbered 1 to 1776. It overcame the big ticket reticence in the quarter, becoming a highly coveted box, epitomizing both Snap-on's US presence and the birth of our great nation. Some products are too exciting to pass up, even in the turbulence. Snap-on tools pivoting to match the technician's current needs and preferences, with lean manufacturing solutions right here in the US that improve his efficiency by making the tasks easier. Now on to RS&I. Sales in the quarter were $485.3 million, up 2%, including $9.1 million in favorable currency effects. Organic sales were up only slightly to last year, but it was still enough to be the highest ever quarter, the highest ever sales quarter for the group.

Nick Pinchuk: The Statue of Liberty, Mount Rushmore, the iconic image of the Marines raising a flag at Iwo Jima, and the first moon landing. Each model has a serialized medallion numbered 1 to 1776. It overcame the big ticket reticence in the quarter, becoming a highly coveted box, epitomizing both Snap-on's US presence and the birth of our great nation. Some products are too exciting to pass up, even in the turbulence. Snap-on tools pivoting to match the technician's current needs and preferences, with lean manufacturing solutions right here in the US that improve his efficiency by making the tasks easier. Now on to RS&I. Sales in the quarter were $485.3 million, up 2%, including $9.1 million in favorable currency effects. Organic sales were up only slightly to last year, but it was still enough to be the highest ever quarter, the highest ever sales quarter for the group.

Speaker #4: Wielding manufacturing solutions right here in the US that improve his efficiency, by making the tasks easier. Now on to RSNI. Sales in a quarter were 485.3 million, up 2%, including 9.1 million in favorable currency effects, organic sales were up only slightly to last year.

Speaker #2: You know, we're confident in the strength of RS&I. We keep investing to expand its position by making work easier with great products and pro and with proprietary information.

Nick Pinchuk: Sales in the quarter were $485.3 million, up 2%, including $9.1 million in favorable currency effects. Organic sales were up only slightly to last year, it was still enough to be the highest ever quarter. The highest ever sales quarter for the group. The volume reflects increases in our diagnostic and repair information products to independent repair shop owners and managers, offset by lower sales to OEM dealerships. In short, the EQS product business hit a flat spot. Operating earnings for the quarter were $119.5 million, representing a decrease of $2.6 million or 2.1% versus 2025 levels. The operating income margin of 24.6% included 60 basis points of unfavorable currency and compared to the 25.7% recorded last year.

Speaker #2: Well, that's the Snap-on first quarter. Corporation's overall sales: $2 billion, $1 billion 207.2 million. The highest first quarter—3.4%. Opco operating income up, and gross margins holding firm.

Speaker #4: But it was still enough to be the highest-ever quarter, the highest-ever sales quarter for the group. The volume reflects increases in our diagnostic and repair information products to independent repair shop owners and managers, offset by lower sales to OEM dealerships.

Speaker #2: The CNI Group's organic sales were up 7.1%. The Critical Industries recorded a baffled quarter. The Tools Group's organic sales were up 3.4%. Gross margins were up 140 basis points, and operating margins were up 160 basis points.

Speaker #4: In short, the EQS product business hit a flat spot. Operating earnings for the quarter were $119.5 million, representing a decrease of 2.6 million or 2.1% versus 2025 levels.

Speaker #2: RSD organic sales up slightly. But still the highest ever. Gross margins up 30 basis points. Investments across the group to fortify our advantages in product and brand and in people.

Speaker #4: The operating income margin of 24.6% included 60 basis points of unfavorable currency and compared to the 25.7% recorded last year. The gross margins were 46%.

Nicholas Pinchuk: The volume reflects increases in our diagnostic and repair information products to independent repair shop owners and managers, offset by lower sales to OEM dealerships. In short, the EQS product business hit a flat spot. Operating earnings for the quarter were $119.5 million, representing a decrease of $2.6 million or 2.1% versus 2025 levels. The operating income margin of 24.6% included 60 basis points of unfavorable currency, and compared to the 25.7% recorded last year. The gross margins were 46%, up 30 basis points, despite the unfavorable currency effects and the impact of tariffs and higher material costs. The lower RS&I margin reflected primarily the unfavorable currency and our investments fortifying our proprietary database by enhancing them with large language activities, investments that we strongly believe will strengthen our advantages going forward.

Nick Pinchuk: The volume reflects increases in our diagnostic and repair information products to independent repair shop owners and managers, offset by lower sales to OEM dealerships. In short, the EQS product business hit a flat spot. Operating earnings for the quarter were $119.5 million, representing a decrease of $2.6 million or 2.1% versus 2025 levels. The operating income margin of 24.6% included 60 basis points of unfavorable currency, and compared to the 25.7% recorded last year. The gross margins were 46%, up 30 basis points, despite the unfavorable currency effects and the impact of tariffs and higher material costs. The lower RS&I margin reflected primarily the unfavorable currency and our investments fortifying our proprietary database by enhancing them with large language activities, investments that we strongly believe will strengthen our advantages going forward.

Speaker #2: And the corporate's EPS 469. Up again over 2025. We had strong results that overcame the headset. CNI extending the brand out of the garage.

Nick Pinchuk: The gross margins were 46%, up 30 basis points despite the unfavorable currency effects and the impact of tariffs and higher material costs. The lower RM margin reflected primarily the unfavorable currency and our investments fortifying our proprietary database by enhancing them with large language models activities. Investments that we strongly believe will strengthen our advantages going forward. We know the complexity of today will only grow, we'll continue investing in software and equipment, empowering shop owners and managers with the resources required to confront that trend and to make more money. Case in point, air conditioning systems have evolved. Now they're not just for climate control, but they're for supporting overall vehicle performance and EV battery maintenance.

Speaker #4: Up 30 basis points despite the unfavorable currency effects and the impact of tariffs and the impact of tariffs and higher material costs. So the lower RM margin reflects it primarily the unfavorable currency and our investments fortifying our proprietary database by enhancing them with large language activities.

Speaker #2: Tools Group successfully pivoting to customer pre-preferences and RS&I leveraging our proprietary off offering to solve the complex. It was an encouraging quarter. Now I'll turn the call over to Aldo.

Speaker #2: Aldo, thanks, Nick. Our consolidated operating results for the first quarter are summarized on slide 6. Net sales of $1,207.2 million in the quarter represented an increase of 5.8% from 2025 levels.

Speaker #4: Investments that we strongly believe will strengthen our advantages going forward. We know the complexity of today will only grow. And we'll continue investing in software and equipment, empowering shop owners and managers with the resources required to confront that trend.

Speaker #2: Reflecting a 3.4% organic sales gain and 26.9 million of favorable foreign currency translation. Sales in our commercial and industrial sector are the CNI Group increased year over year, led by strong performances with critical industry customers and robust sales by our specialty torque operation.

Speaker #4: And to make more money. Case in point, air conditioning systems have evolved. Now they're not just for climate control, but they're for supporting overall vehicle performance and EV battery maintenance.

Speaker #4: As an example, is our Polartek AC recyclers, rolling out of our facilities in Conway, Arkansas. During the quarter, RSNI released the new Pro Series Protec.

Speaker #2: In our automotive repair markets, sales gains were achieved through our franchise van channel, while activity with repair shop owners and managers was essentially flat.

Nick Pinchuk: An example is our Polartek A/C Recycler is rolling out of our facilities in Conway, Arkansas. During the quarter, RS&I released the new Pro series Polartek. That was, as I said, produced in our facility in Conway, Arkansas. 1 machine, new Pro series Polartek. 1 machine for both popular refrigerant types, R-134a and R-1234yf. The Pro models are also loaded with features for managing a wide variety of vehicles. A large filter allowing for extended runtime, nitrogen leak testing for faster diagnostics, a 2-stage vacuum necessary for supporting systems on small Honda Civics to large Suburbans, and a 12-inch touchscreen for easy navigation, even with gloves. The units have, this is one of the best features, I think, automatic functionality. Techs can tackle another job while the recycling goes on.

Speaker #2: From a geographic perspective, consolidated sales were up across all regions. In say gross margin of 50.4% compared to 50.7% in the first quarter last year.

Nicholas Pinchuk: We know the complexity of today will only grow, and we'll continue investing in software and equipment, empowering shop owners and managers with the resources required to confront that trend and to make more money. Case in point, air conditioning systems have evolved. Now they're not just for climate control, but they're for supporting overall vehicle performance and EV battery maintenance. An example is our Polartek AC recyclers rolling out of our facilities in Conway, Arkansas. During the quarter, RS&I released the new Pro Series Polartek. That was, as I said, produced in our facility in Conway, Arkansas. One machine, the new Pro Series Polartek. One machine for both popular refrigerant types, R134a, and R1234yf. The Pro models are also loaded with features for managing a wide variety of vehicles.

Nick Pinchuk: We know the complexity of today will only grow, and we'll continue investing in software and equipment, empowering shop owners and managers with the resources required to confront that trend and to make more money. Case in point, air conditioning systems have evolved. Now they're not just for climate control, but they're for supporting overall vehicle performance and EV battery maintenance. An example is our Polartek AC recyclers rolling out of our facilities in Conway, Arkansas. During the quarter, RS&I released the new Pro Series Polartek. That was, as I said, produced in our facility in Conway, Arkansas. One machine, the new Pro Series Polartek. One machine for both popular refrigerant types, R134a, and R1234yf. The Pro models are also loaded with features for managing a wide variety of vehicles.

Speaker #4: That was, as I said, produced in our facility in Conway, Arkansas. One machine, new Pro Series Polartek, one machine for both popular refrigerant types, R134A and R1234YF.

Speaker #2: The decline of 30 basis points primarily reflected 40 basis points of unfavorable foreign currency effects. In addition, the benefit of increased volume and savings from the company's RCI initiatives were largely offset by higher tariffs and other material costs.

Speaker #4: The Pro models are also loaded with features for managing a wide variety of vehicles. A large filter allowing for extended runtime. Nitrogen leak testing for faster diagnostics.

Speaker #2: As you may recall, many of the incremental tariffs did not go into effect until the second quarter of 2025. And as such, the first quarter last year, did not include those additional costs.

Speaker #4: A two-stage vacuum necessary for supporting systems on small civics to large suburbans. And a 12-inch touchscreen for easy navigation, even with gloves. And the units have this is one of the best features, I think.

Speaker #2: That being said, snap-on is relatively advantaged in the current tariff environment by principally manufacturing in the markets where it sells, however, our costs can be somewhat impacted by trade policies.

Speaker #4: The units have automatic functionality. Techs can tackle another job while the recycling goes on. And a bright status light or an audible signal notifies the user when their intervention is required.

Speaker #2: Operating expenses is a percentage of net sales of 29.6% compared to 29.4% in 2025, primarily due to increased personnel costs and expanded technology investments.

Nick Pinchuk: A bright status light or an audible signal notifies the user when their intervention is required. It makes recycling particularly more efficient. The onboard database is terrific. It identifies the VIN and presets the unit with OEM vehicle specifications, preventing the time often wasted manually looking up the stats. Our new Pro Series is a great example for helping shop owners and managers navigate the complexity of new cars, hook it up, enter the VIN, and the machine takes over, improving both productivity and error-proofing the process. You know, we're confident in the strength of RS&I. We keep investing to expand its position by making work easier with great products and with proprietary information. That's a Snap-on first quarter. Corporation overall sales, $2 billion.

Speaker #2: Partially offset by the favorable effects of sales volume. Our technology investments include further strengthening of our core infrastructure, as well as broadening the use of large language models across key business functions to improve productivity.

Nicholas Pinchuk: A large filter allowing for extended runtime, nitrogen leak testing for faster diagnostics, a 2-stage vacuum necessary for supporting systems on small Honda Civics to large suburbans, and a 12-inch touchscreen for easy navigation, even with gloves. The units have automatic functionality. This is one of the best features, I think. Techs can tackle another job while the recycling goes on. A bright status light or an audible signal notifies the user when their intervention is required. It makes recycling particularly more efficient. The onboard database is terrific. It identifies the VIN and presets the unit with OEM vehicle specifications, preventing the time often wasted manually looking up the stats. Our new Pro series is a great example for helping shop owners and managers navigate the complexity of new cars.

Nick Pinchuk: A large filter allowing for extended runtime, nitrogen leak testing for faster diagnostics, a 2-stage vacuum necessary for supporting systems on small Honda Civics to large suburbans, and a 12-inch touchscreen for easy navigation, even with gloves. The units have automatic functionality. This is one of the best features, I think. Techs can tackle another job while the recycling goes on. A bright status light or an audible signal notifies the user when their intervention is required. It makes recycling particularly more efficient. The onboard database is terrific. It identifies the VIN and presets the unit with OEM vehicle specifications, preventing the time often wasted manually looking up the stats. Our new Pro series is a great example for helping shop owners and managers navigate the complexity of new cars.

Speaker #4: It makes recycling particularly more efficient. And the onboard database is terrific. It identifies the VIN and presets the unit with the OEM vehicle specifications.

Speaker #2: Operating earnings before financial services of 250.8 million in the quarter, compared to 243.1 million last year. As a percentage of net sales, operating margin before financial services of 20.8%, unfavorable foreign currency effects, compared to 21.3% reported in 2025.

Speaker #4: Preventing the time often wasted manually looking up the stats. Our new Pro Series is a great example for helping shop owners and managers navigate the complexity of new cars, hook it up, enter the VIN, and the machine takes over, improving both productivity and airproofing the process.

Speaker #2: Financial services revenue of 101.1 million in the first quarter, compared to 102.1 million last year, while operating earnings of 68 million compared to 70.3 million in 2025.

Speaker #4: We're confident in the strength of RSNI. We keep investing to expand its position by making work easier with great products and with proprietary information.

Speaker #2: Consolidated operating earnings of $318.8 million compared to $313.4 million last year. As a percentage of revenues, the operating earnings margin of 24.4% included 40 basis points of unfavorable foreign currency effects, compared to 25.2% in 2025.

Speaker #4: Well, that's the snap-on first quarter. Corporation overall sales 2 billion, 1 billion, 207.2 million. The highest first quarter ever. Organic sales up 3.4%. OPCO operating income up and gross margins holding firm.

Nick Pinchuk: $1.2072 billion, the highest Q1 ever. Organic sales up 3.4%. OPCO operating income up and gross margins holding firm. The C&I Group's organic sales up 7.1%. The Critical Industries recording a bountiful quarter. Tools Group organic sales up 3.4%. Gross margins up 140 basis points, operating margins up 160 basis points. RS&I organic sales up slightly, still the highest ever. Gross margins up 30 basis points. Investments across the group to fortify our advantages in product and brand and in people. The corporate EPS, $4.69, up again over 2025. We had strong results that overcame the headwinds. C&I extending the brand out of the garage.

Nicholas Pinchuk: Hook it up, enter the VIN, and the machine takes over, improving both productivity and error-proofing the process. We're confident in the strength of RS&I. We keep investing to expand its position by making work easier with great products and with proprietary information. That's a Snap-on Q1. Snap-on Corporation overall sales $1,207.2 million, the highest Q1 ever. Organic sales up 3.4%. Overall operating income up and gross margins holding firm. The C&I Group's organic sales up 7.1%. The C&I is recording a banner quarter. Tools Group organic sales up 3.4%. Gross margins up 140 basis points and operating margins up 160 basis points. RS&I organic sales up slightly, but still the highest ever. Gross margins up 30 basis points. Investments across the group to fortify our advantages in product, brand, and people. The corporate EPS $4.69, up again over 2025.

Nick Pinchuk: Hook it up, enter the VIN, and the machine takes over, improving both productivity and error-proofing the process. We're confident in the strength of RS&I. We keep investing to expand its position by making work easier with great products and with proprietary information. That's a Snap-on Q1. Snap-on Corporation overall sales $1,207.2 million, the highest Q1 ever. Organic sales up 3.4%. Overall operating income up and gross margins holding firm. The C&I Group's organic sales up 7.1%. The C&I is recording a banner quarter. Tools Group organic sales up 3.4%. Gross margins up 140 basis points and operating margins up 160 basis points. RS&I organic sales up slightly, but still the highest ever. Gross margins up 30 basis points. Investments across the group to fortify our advantages in product, brand, and people. The corporate EPS $4.69, up again over 2025.

Speaker #2: Our first quarter effective income tax rate was 22% in 2026 and 22.2% last year. Net earnings of 247 million or $4.69 per diluted share, compared to 240.5 million or $4.51 per diluted share in 2025.

Speaker #4: The CNI Group's organic sales up 7.1%. The critical industries recording a baffled quarter. Tools Group organic sales up 3.4%. Gross margins up 140 basis points and operating margins up 160 basis points.

Speaker #4: RSC organic sales up slightly. But still the highest ever. Gross margins up 30 basis points. Investments across the group to fortify our advantages in product and brand and in people.

Speaker #2: Now let's turn to our segment results for the quarter. Starting with the CNI Group on slide 7, sales of 381 million rose 37.1 million compared to 2025 levels.

Speaker #4: And the corporate's EPS 469. Up again over 2025. We had strong results that overcame the headset. CNI extending the brand out of the garage.

Speaker #2: Reflecting a 7.1% organic sales gain and 11.9 million of favorable foreign currency translation. The organic increase includes gains in each of the segments' operations, including a high single-digit improvement with customers and critical industries and a rise in the specialty torque business.

Speaker #4: Tools Group successfully pivoting to customer preferences and RSNI leveraging our proprietary offering to solve the complex. It was an encouraging quarter. Now I'll turn the call over to Aldo.

Nick Pinchuk: Tools Group successfully pivoting to customer pre-preferences, and RS&I leveraging our proprietary offering to solve the complex. It was an encouraging quarter. Now I'll turn the call over to Aldo. Aldo?

Speaker #2: The strong demand in critical industries includes higher sales in the quarter to customers in the United States and internationally—aviation, heavy-duty, and natural resources.

Speaker #4: Aldo, thanks, Nick, our consolidated operating results for the first quarter. I summarized on slide six. Net sales of $1,207.2 million in the quarter represented an increase of 5.8% from 2025 levels.

Aldo Pagliari: Thanks, Nick. Our consolidated operating results for the Q1 are summarized on slide 6. Net sales of $1,207.2 million in the quarter represented an increase of 5.8% from 2025 levels, reflecting a 3.4% organic sales gain and $26.9 million of favorable foreign currency translation. Sales in our Commercial & Industrial Group or C&I group increased year-over-year, led by strong performances with Critical Industry customers and robust sales by our Specialty Torque operation. In our automotive repair markets, sales gains were achieved through our franchise van channel, while activity with repair shop owners and managers was essentially flat. From a geographic perspective, consolidated sales were up across all regions. Consolidated gross margin of 50.4% compared to 50.7% in the Q1 last year.

Speaker #2: Shipments serving military applications, however, were essentially flat year over year, but reflected an improving trend from activity in 2025. Additionally, our European-based hand tools business also contributed to sales growth in the period.

Speaker #4: Reflecting a 3.4% organic sales gain and 26.9 million of favorable foreign currency translation. Sales in our commercial and industrial sector are the CNI Group increased year over year, led by strong performances with critical industry customers and robust sales by our specialty torque operation.

Nicholas Pinchuk: We had strong results that overcame the headwinds, C&I extending the brand out of the garage, Tools Group successfully pivoting to customer preferences, and RS&I leveraging our proprietary offering to solve the conflicts. It was an encouraging quarter. Now I'll turn the call over to Aldo. Aldo?

Nick Pinchuk: We had strong results that overcame the headwinds, C&I extending the brand out of the garage, Tools Group successfully pivoting to customer preferences, and RS&I leveraging our proprietary offering to solve the conflicts. It was an encouraging quarter. Now I'll turn the call over to Aldo. Aldo?

Speaker #2: Gross margin of 40.3%, compared to 42.6% in 2025. This decline is primarily due to higher tariffs and material costs, and 50 basis points of unfavorable foreign currency effects.

Speaker #4: In our automotive repair markets, sales gains were achieved through our franchise van channel, while activity with repair shop owners and managers was essentially flat.

Aldo Pagliari: Thanks, Nick. Our consolidated operating results for Q1 are summarized on Slide 6. Net sales of $1,207.2 million in the quarter represented an increase of 5.8% from 2024 levels, reflecting a 3.4% organic sales gain and $26.9 million of favorable foreign currency translation. Sales in our commercial and industrial sector or C&I Group increased year-over-year, led by strong performances with critical industry customers and robust sales by our specialty torque operation. In our automotive repair markets, sales gains were achieved through our franchise van channel, while activity with repair shop owners and managers was essentially flat. From a geographic perspective, consolidated sales were up across all regions. Consolidated gross margin of 50.4% compared to 50.7% in Q1 last year. The decline of 30 basis points primarily reflected 40 basis points of unfavorable foreign currency effects.

Speaker #2: Partially offset by benefits from the increased sales volume. Operating expenses as a percentage of sales of 25.9% in the quarter improved 120 basis points from last year, primarily reflecting the higher sales volume.

Speaker #4: From a geographic perspective, consolidated sales were up across all regions. Consolidated gross margin of 50.4% compared to 50.7% in the first quarter last year.

Speaker #2: Operating earnings for the CNI Group were $54.9 million, compared to $53.2 million in 2025, and the operating margin was 14.4%, including 50 basis points of unfavorable currency, compared to 15.5% last year.

Speaker #4: The decline of 30 basis points primarily reflected 40 basis points of unfavorable foreign currency effects. In addition, the benefit of increased volume and savings from the company's RCI initiatives were largely offset by higher tariffs and other material costs.

Aldo Pagliari: The decline of 30 basis points primarily reflected 40 basis points of unfavorable foreign currency effects. The benefit of increased volume and savings from the company's RCI initiatives were largely offset by higher tariffs and other material costs. As you may recall, many of the incremental tariffs did not go into effect until Q2 2025, and as such, the Q1 last year did not include those additional costs. That being said, Snap-on is relatively advantaged in the current tariff environment by principally manufacturing in the markets where it sells. Our costs can be somewhat impacted by trade policies. Operating expenses as a percentage of net sales of 29.6% compared to 29.4% in 2025, primarily due to increased personnel costs and expanded technology investments, partially offset by the favorable effects of sales volume.

Speaker #2: Turning now to slide 8, sales in the Snap-on Tools Group of $486 million compared to $462.9 million last year, reflecting a gain and $7.2 million of favorable foreign currency translation.

Speaker #4: As you may recall, many of the incremental tariffs did not go into effect until the second quarter of 2025. And as such, the first quarter last year did not include those additional costs.

Speaker #4: That being said, snap-on is relatively advantaged in the current tariff environment by principally manufacturing in the markets where it sells. However, our costs can be somewhat impacted by trade policies.

Speaker #2: The organic rise was due to low single-digit gains both in the US and in the segments international operations. During the quarter, while we had some success with featured tool storage products, we believe our ongoing pivot to shorter payback items continued to temper the persistent uncertainty of technician customers in the current environment.

Speaker #4: Operating expenses is a percentage of net sales of 29.6% compared to 29.4% in 2025, primarily due to increased personnel costs and expanded technology investments, partially offset by the favorable effects of sales volume.

Aldo Pagliari: In addition, the benefit of increased volume and savings from the company's RCI initiatives were largely offset by higher tariffs and other material costs. As you may recall, many of the incremental tariffs did not go into effect until Q2 2025, and as such, Q1 last year did not include those additional costs. That being said, Snap-on is relatively advantaged in the current tariff environment by principally manufacturing in the markets where it sells. However, our costs can be somewhat impacted by trade policies. Operating expenses as a percentage of net sales of 29.6% compared to 29.4% in 2025, primarily due to increased personnel costs and expanded technology investments, partially offset by the favorable effects of sales volume. Our technology investments include further strengthening of our core infrastructure, as well as broadening the use of large language models across key business functions to improve productivity.

Speaker #2: Having said that, we were pleased to see the positive uptake of tool storage products during the period. Gross margin improved 140 basis points to 47.7% in the quarter, from 46.3% last year, mostly due to increased sales and savings from the segment's RCI initiatives, partially offset by higher material and other costs.

Speaker #4: Our technology investments include further strengthening of our core infrastructure, as well as broadening the use of large language models across key business functions to improve productivity.

Aldo Pagliari: Our technology investments include further strengthening of our core infrastructure as well as broadening the use of large language models across key business functions to improve productivity. Operating earnings before financial services of $250.8 billion in Q1 compared to $243.1 billion last year. As a percentage of net sales, operating margin before financial services of 20.8%, including 40 basis points of unfavorable foreign currency effects compared to 21.3% reported in 2025. Financial services revenue of $101.1 million in Q1 compared to $102.1 million last year, while operating earnings of $68 million compared to $70.3 million in 2025.

Speaker #4: Operating earnings before financial services of $250.8 million in the quarter, compared to $243.1 million last year. As a percentage of net sales, operating margin before financial services of 20.8%, including 40 basis points of unfavorable foreign currency effects, compared to 21.3% reported in 2025.

Speaker #2: Operating expenses as a percentage of sales were 26.1%, compared to 26.3% in 2025. Operating earnings for the Snap-on Tools Group were $105 million, compared to $92.4 million in 2025. The operating margin of 21.6% improved 160 basis points from last year.

Speaker #4: Financial services revenue of $101.1 million in the first quarter, compared to $102.1 million last year, while operating earnings of $68 million compared to $70.3 million in 2025.

Speaker #2: Turning to the RS&I Group shown on slide 9, sales of 485.3 million compared to 475.9 million a year ago, primarily reflecting a 9.1 million of favorable foreign currency translation.

Speaker #4: Consolidated operating earnings of $318.8 million compared to $313.4 million last year, as a percentage of revenues, the operating earnings margin of 24.4% included 40 basis points of unfavorable foreign currency effects, compared to 25.2% in 2025.

Aldo Pagliari: Consolidated operating earnings of $318.8 million compared to $313.4 million last year. As a percentage of revenues, the operating earnings margin of 24.4% included 40 basis points of unfavorable foreign currency effects compared to 25.2% in 2025. Our Q1 effective income tax rate was 22% in 2026 and 22.2% last year. Net earnings of $247 million or $4.69 per diluted share compared to $240.5 million or $4.51 per diluted share in 2025. Let's turn to our segment results for the quarter. Starting with the C&I Group on slide 7.

Aldo Pagliari: Operating earnings before financial services of $250.8 million in the quarter compared to $243.1 million last year. As a percentage of net sales, operating margin before financial services of 20.8%, including 40 basis points of unfavorable foreign currency effects compared to 21.3% reported in 2025. Financial services revenue of $101.1 million in Q1 compared to $102.1 million last year, while operating earnings of $68 million compared to $70.3 million in 2025. Consolidated operating earnings of $318.8 million compared to $313.4 million last year. As a percentage of revenues, the operating earnings margin of 24.4% included 40 basis points of unfavorable foreign currency effects compared to 25.2% in 2025. Our Q1 effective income tax rate was 22% in 2026, and 22.2% last year. Net earnings of $247 million, or $4.69 per diluted share, compared to $240.5 million, or $4.51 per diluted share in 2025.

Speaker #2: On an organic basis, a low single-digit increase in sales of diagnostic and repair information products to independent repair shop owners was offset by decreased activity with OEM dealerships and managers.

Speaker #4: Our first quarter effective income tax rate was 22% in 2026 and 22.2% last year. Net earnings of $247 million or $4.69 per diluted share, compared to $240.5 million or $4.51 per diluted share in 2025.

Speaker #2: This decline primarily reflected lower sales associated with OEM programs in North America which more than offset higher revenues with OEMs in Europe. In addition, sales of undercar equipment in the quarter were essentially the same as last year.

Speaker #2: Gross margin for the RS&I Group of 46% compared to 45.7% last year, primarily due to the favorable business mix and savings from RCI, partially offset by higher tariffs and material costs.

Speaker #4: Now let's turn to our segment results for the quarter. Starting with the CNI Group on slide seven, sales of $381 million rose 37.1 million compared to 2025 levels.

Aldo Pagliari: Sales of $381 million rose $37.1 million compared to 2025 levels, reflecting a 7.1% organic sales gain and $11.9 million of favorable foreign currency translation. The organic increase includes gains in each of the segment's operations, including a high single-digit improvement with customers in critical industries and a rise in the Specialty Torque business. The strong demand in critical industries includes higher sales in the quarter to customers in the United States and international aviation, heavy duty, and natural resources. Shipments serving military applications, however, were essentially flat year over year, but reflected an improving trend from activity in 2025. Additionally, our European-based handhelds business also contributed to sales growth in the period. Gross margin of 40.3% compared to 42.6% in 2025.

Aldo Pagliari: Sales of $381 million rose $37.1 million compared to 2025 levels, reflecting a 7.1% organic sales gain and $11.9 million of favorable foreign currency translation. The organic increase includes gains in each of the segment's operations, including a high single-digit improvement with customers in critical industries and a rise in the Specialty Torque business. The strong demand in critical industries includes higher sales in the quarter to customers in the United States and international aviation, heavy duty, and natural resources. Shipments serving military applications, however, were essentially flat year-over-year, but reflected an improving trend from activity in 2025. Additionally, our European-based handhelds business also contributed to sales growth in the period. Gross margin of 40.3% compared to 42.6% in 2025.

Speaker #2: Operating expenses as a percentage of sales of 21.4% compared to 20% in 2025. This increase is largely due to 20 basis points of unfavorable foreign currency effects, higher personnel costs, and expanded technology investments, including those in support of the segment's growing software-based businesses.

Speaker #4: Reflecting a 7.1% organic sales gain and 11.9 million of favorable foreign currency translation. The organic increase includes gains in each of the segments' operations, including a high single-digit improvement with customers and critical industries and a rise in the specialty torque business.

Speaker #2: Operating earnings of $119.5 million compared to $122.1 million last year. The operating margin was 24.6%, including 60 basis points of unfavorable currency effects, compared to 25.7% reported in the prior year.

Speaker #4: The strong demand in critical industries includes higher sales in the quarter to customers in the United States and international aviation. Heavy-duty and natural resources.

Aldo Pagliari: Now let's turn to our segment results for the quarter. Starting with the C&I group on slide seven. Sales of $381 million rose $37.1 million compared to 2025 levels, reflecting a 7.1% organic sales gain and $11.9 million of favorable foreign currency translation. The organic increase includes gains in each of the segment's operations, including a high single-digit improvement with customers in critical industries and a rise in the specialty torque business. The strong demand in critical industries includes higher sales in the quarter to customers in the United States and international aviation, heavy duty, and natural resources. Shipments serving military applications, however, were essentially flat year over year, but reflected an improving trend from activity in 2025. Additionally, our European-based handheld business also contributed to sales growth in the period. Gross margin of 40.3% compared to 42.6% in 2025.

Speaker #4: Shipments serving military applications, however, were essentially flat year over year, but reflected an improving trend from activity in 2025. Additionally, our European-based hand tools business also contributed to sales growth in the period.

Speaker #1: 2025 . Now turning to slide ten . Revenue from Financial services of $101.1 million decreased $1 million from last year , primarily due to lower interest income resulting from a year over year decrease in the size of the average portfolio in the period Financial service expenses of $33.1 million increased from $31.8 million in 2025 .

Speaker #4: Gross margin of 40.3% compared to 42.6% in 2025. This decline is primarily due to higher tariffs and material costs and 50 basis points of unfavorable foreign currency effects, partially offset by benefits from the increased sales volume.

Aldo Pagliari: This decline is primarily due to higher tariffs and material costs and 50 basis points of unfavorable foreign currency effects, partially offset by benefits from the increased sales volume. Operating expenses as a percentage of sales of 25.9% in the quarter improved 120 basis points from last year, primarily reflecting the higher sales volume. Operating earnings for the C&I Group of $54.9 million compared to $53.2 million in 2025, and the operating margin of 14.4%, including 50 basis points of unfavorable currency compared to 15.5% last year. Turning now to slide 8.

Speaker #1: However, provisions for bad debts improved by $300,000 from those recorded in the first quarter of last year. As a result, financial services operating earnings of $68 million decreased $2.3 million from last year's levels.

Speaker #4: Operating expenses as a percentage of sales of 25.9% in the quarter improved 120 basis points from last year, primarily reflecting the higher sales volume.

Speaker #1: In the first quarter . The average yield on finance receivables was 17.6% in both 2026 and in 2025 , while the average yield on contract receivables was 9.1% in each year .

Speaker #4: Operating earnings for the CNI Group of $54.9 million compared to $53.2 million in 2025, and the operating margin of 14.4%, including 50 basis points of unfavorable currency, compared to 15.5% last year.

Speaker #1: Loan originations of $264.6 million in the first quarter represented a decrease of $4.1 million , or 1.5% . 2025 levels . Moving to slide 11 , our quarter end balance sheet includes approximately $2.5 billion of gross financing receivables , with 2.1 billion from our US operations for extended credit or finance receivables .

Aldo Pagliari: This decline is primarily due to higher tariffs, material costs, and 50 basis points of unfavorable foreign currency effects, partially offset by benefits from the increased sales volume. Operating expenses as a percentage of sales of 25.9% in the quarter improved 120 basis points from last year, primarily reflecting the higher sales volume. Operating earnings for the C&I group of $54.9 million compared to $53.2 million in 2025 and the operating margin of 14.4%, including 50 basis points of unfavorable currency compared to 15.5% last year. Turning now to slide eight. Sales in the Snap-on Tools Group of $486 million compared to $462.9 million last year, reflecting a 3.4% organic sales gain and $7.2 million of favorable foreign currency translation. The organic rise is due to low single-digit gains both in the US and in the segment's international operations.

Speaker #4: Turning now to slide eight, sales on the snap-on Tools Group of $486 million compared to $462.9 million last year, reflecting a 3.4% organic sales gain and 7.2 million of favorable foreign currency translation.

Aldo Pagliari: Sales in the Snap-on Tools Group of $486 million compared to $462.9 million last year, reflecting a 3.4% organic sales gain and $7.2 million of favorable foreign currency translation. The organic rise was due to low single-digit gains both in the US and in the segment's international operations. During the quarter, while we had some success with featured tool storage products, we believe our ongoing pivot to shorter payback items continued to temper the persistent uncertainty of technician customers in the current environment. Having said that, we were pleased to see the positive uptake of tool storage products during the period.

Speaker #4: The organic rise was due to low single-digit gains both in the US and in the segments international operations. During the quarter, while we had some success with featured tool storage products, we believe our ongoing pivot to shorter payback items continued to temper the persistent uncertainty of technician customers in the current environment.

Speaker #1: The US 60 day plus delinquency rate of 1.9% is down ten basis points from the first quarter of 2025 . Additionally , the rate is down 20 basis points from last quarter , reflecting the typical seasonal decrease between the fourth and first quarters .

Speaker #1: Trailing 12 month net losses for the overall extended credit 85% of net earnings , compared to $298.5 million last year . The improvement of $70.2 million , or 23.5% , from comparable 2025 levels , largely reflects decreases in working investment versus increases last year , and higher year over year net earnings Net cash used by investing activities .

Speaker #4: Having said that, we were pleased to see the positive uptake of tool storage products during the period. Gross margin improved 140 basis points to 47.7% in the quarter, 46.3% last year, mostly due to increased sales and saving from the segments' RCI initiatives, partially offset by higher material and other costs.

Aldo Pagliari: Gross margin improved 140 basis points to 47.7% in the quarter, 46.3% last year, mostly due to increased sales and saving from the segment's RCI initiatives, partially offset by higher material and other costs. Operating expenses as a percentage of sales of 26.1% compared to 26.3% in 2025. Operating earnings for the Snap-on Tools Group of $105 million compared to $92.4 million in 2025. The operating margin of 21.6% improved 160 basis points from last year. Turning to the R&I Group shown on slide 9. Sales of $485.3 million compared to $475.9 million a year ago, primarily reflecting a $9.1 million of favorable foreign currency translation.

Speaker #4: Operating expenses as a percentage of sales of 26.1% compared to 26.3% in 2025. Operating earnings for the snap-on Tools Group of $105 million compared to 92.4 million in 2025.

Aldo Pagliari: During the quarter, while we had some success with featured tool storage products, we believe our ongoing pivot to shorter payback items continued to temper the persistent uncertainty of technician customers in the current environment. Having said that, we were pleased to see the positive uptake of tool storage products during the period. Gross margin improved 140 basis points to 47.7% in the quarter, 46.3% last year, mostly due to increased sales and savings from the segment's RCI initiatives, partially offset by higher material and other costs. Operating expenses as a percentage of sales of 26.1% compared to 26.3% in 2025. Operating earnings for the Snap-on Tools Group of $105 million, compared to $92.4 million in 2025. The operating margin of 21.6% improved 160 basis points from last year. Turning to the RCI Group, shown on slide 9.

Speaker #4: The operating margin of 21.6% improved 160 basis points from last year. Turning to the RS&I Group shown on slide nine, sales of $485.3 million compared to $475.9 million a year ago.

Speaker #1: $28.6 million, mostly reflected capital expenditures of $21.2 million, and $5.1 million for the acquisition of a former independent car liner collision distributor in Australia. Net cash used by financing activities was $211.1 million, including cash dividends of $126.8 million and the repurchase of 267,000 shares of common stock for $99.9 million.

Speaker #4: Primarily reflecting a 9.1 million of favorable foreign currency translation. On an organic basis, a low single-digit increase in sales of diagnostic and repair information products to independent repair shop owners was offset by decreased activity with OEM dealerships and managers.

Aldo Pagliari: On an organic basis, a low single-digit increase in sales of diagnostic and repair information products to independent repair shop owners was offset by decreased activity with OEM dealerships and managers. This decline primarily reflected lower sales associated with OEM programs in North America, which more than offset higher revenues with OEMs in Europe. In addition, sales of undercar equipment in the quarter were essentially the same as last year. Gross margin for the R&I Group of 46% compared to 45.7% last year, primarily due to the favorable business mix and savings from RCI, partially offset by higher tariffs and material costs. Operating expenses as a percentage of sales of 21.4% compared to 20% in 2025.

Speaker #1: Under our existing share repurchase programs, as of quarter end, we had remaining availability to repurchase up to an additional $234.1 million of common stock under our existing authorizations. Turning to slide 13.

Speaker #4: This decline primarily reflected lower sales associated with OEM programs in North America which more than offset higher revenues with OEMs in Europe. In addition, sales of undercar equipment in the quarter were essentially the same as last year.

Aldo Pagliari: Sales of $485.3 million compared to $475.9 million a year ago, primarily reflecting a $9.1 million of favorable foreign currency translation. On an organic basis, a low single-digit increase in sales of diagnostic and repair information products to independent repair shop owners was offset by decreased activity with OEM dealerships and managers. This decline primarily reflected lower sales associated with OEM programs in North America, which more than offset higher revenues with OEMs in Europe. In addition, sales of undercar equipment in the quarter were essentially the same as last year. Gross margin for the RCI group of 46% compared to 45.7% last year, primarily due to the favorable business mix and savings from RCI, partially offset by higher tariffs and material costs. Operating expenses as a percentage of sales of 21.4% compared to 20% in 2025.

Speaker #1: Trade and other accounts receivable of $890.7 million represented an increase of $9.3 million from 2025 year end levels due to the higher sales volumes Dave , sales outstanding were 67 days in both periods .

Speaker #4: Gross margin for the RS&I Group of 46% compared to 45.7% last year, primarily due to the favorable business mix and savings from RCI, partially offset by higher tariffs and material costs.

Speaker #4: Operating expenses as a percentage of sales of 21.4% compared to 20% in 2025. This increase is largely due to 20 basis points of unfavorable foreign currency effects, higher personnel costs, and expanded technology investments, including those in support of the segment's growing software-based businesses.

Speaker #1: Inventories decreased by $4.7 million from 2025 year end , primarily due to $5.6 million of foreign currency translation . On a trailing 12 month basis .

Aldo Pagliari: This increase is largely due to 20 basis points of unfavorable foreign currency effects, higher personnel costs, and expanded technology investments, including those in support of the segment's growing software-based businesses. Operating earnings of $119.5 million compared to $122.1 million last year. The operating margin of 24.6%, including 60 basis points of unfavorable currency effects, compared to 25.7% reported in 2025. Turning to slide 10. Revenue from Financial Services of $101.1 million decreased $1 million from last year, primarily due to lower interest income resulting from a year-over-year decrease in the size of the average portfolio in the period. Financial Services expenses of $33.1 million increased from $31.8 million in 2025.

Speaker #1: Inventory turns of 2.4 were the same in both periods . Our quarter end cash position of $1,000,000,753.3 million , compared to $1,000,000,624.5 million at the end of 2025 .

Speaker #4: Operating earnings of $119.5 million compared to $122.1 million last year. The operating margin of 24.6%, including 60 basis points of unfavorable currency effects, compared to 25.7% reported in 2025.

Speaker #1: In addition to our existing cash and expected cash flow from operations, we have more than $900 million available under our credit facilities.

Speaker #1: There were no amounts borrowed or outstanding under the credit facilities during the quarter , nor was any commercial paper issued or outstanding in the period with respect to our outstanding debt , notes payable and current maturities of long term debt increased by $300 million , reflecting the reclassification of our March 2027 unsecured 3.25% notes to current status .

Speaker #4: Now turning to slide 10, revenue from financial services of $101.1 million decreased $1 million from last year, primarily due to lower interest income resulting from a year-over-year decrease in the size of the average portfolio in the period.

Aldo Pagliari: This increase is largely due to 20 basis points of unfavorable foreign currency effects, higher personnel costs, and expanded technology investments, including those in support of the segment's growing software-based businesses. Operating earnings of $119.5 million compared to $122.1 million last year. The operating margin of 24.6%, including 60 basis points of unfavorable currency effects, compared to 25.7% reported in 2025. Now, turning to slide 10. Revenue from financial services of $101.1 million decreased $1 million from last year, primarily due to lower interest income resulting from a year-over-year decrease in the size of the average portfolio in the period. Financial services expenses of $33.1 million increased from $31.8 million in 2025. However, provisions for bad debts improved by $300,000 from those recorded in Q1 of last year. As a result, financial services operating earnings of $68 million decreased by $2.3 million from last year's levels.

Speaker #4: Financial service expenses of $33.1 million increased from $31.8 million in 2025. However, provisions for bad debts improved by $300,000 from those recorded in the first quarter of last year.

Speaker #1: That concludes my remarks on our first quarter performance . I'll now review a few outlook items for the remainder of 2026 . With respect to costs , we currently believe that expenses will approximate $28 million each quarter As a reminder , in the third quarter of 2025 , earnings per share included a 30 $0.01 non-recurring one time benefit from the SNI group legal settlement .

Aldo Pagliari: However, provisions for bad debts improved by $300,000 from those recorded in Q1 of last year. As a result, financial services operating earnings of $68 million decreased $2.3 million from last year's levels. In Q1, the average yield on finance receivables was 17.6% in both 2026 and in 2025, while the average yield on contract receivables was 9.1% in each year. Loan originations of $264.6 million in Q1 represented a decrease of $4.1 million or 1.5% 2025 levels. Moving to slide 11. Our quarter-end balance sheet includes approximately $2.5 billion of gross financing receivables, with $2.1 billion from our US operation.

Speaker #4: As a result, financial services operating earnings of $68 million decreased 2.3 million from last year's levels. In the first quarter, the average yield on financial receivables was 17.6% in both 2026 and in 2025, while the average yield on contract receivables was 9.1% in each year.

Speaker #1: We expect that capital expenditures for the year will approximate $100 million , and we currently anticipate that our full year 2026 effective income tax rate will be in a range of 22 to 23% .

Speaker #4: Loan originations of $264.6 million in the first quarter represented a decrease of 4.1 million or 1.5% in 2025 levels. Moving to slide 11, our quarter-end balance sheet includes approximately $2.5 billion of gross financing receivables with $2.1 billion from our US operations.

Speaker #1: I'll now turn the call back to Nick for his closing thoughts . Nick .

Speaker #2: Well , thanks , Aldo for quarter . Our markets are resilient and strong , and it's a strength not dependent on the ups and downs of the economic cycle .

Speaker #4: For extended credit or finance receivables, the US 60-day plus delinquency rate of 1.9% is down 10 basis points from the first quarter of 2025.

Aldo Pagliari: For extended credit or finance receivables, the US 60-day-plus delinquency rate of 1.9% is down 10 basis points from Q1 2025. Additionally, the rate is down 20 basis points from last quarter, reflecting the typical seasonal decrease between Q4 and Q1. Trailing 12-month net losses for the overall extended credit portfolio of $72.9 million represented 3.75% of outstandings at quarter end. We believe that these portfolio performance metrics remain relatively balanced considering the current environment. Now, turning to slide 12. Cash provided by operating activities of $368.7 million in the quarter represented 145% of net earnings, and compared to $298.5 million last year.

Speaker #2: They are rather driven by the solid secular trends of aging , rising complexity and expanding criticality . There are , of course , these are , of course , turbulent times .

Aldo Pagliari: In Q1, the average yield on finance receivables was 17.6% in both 2026 and in 2025, while the average yield on contract receivables was 9.1% in each year. Loan originations of $264.6 million in Q1 represented a decrease of $4.1 million or 1.5% from 2025 levels. Moving to slide 11. Our quarter-end balance sheet includes approximately $2.5 billion of gross financing receivables, with $2.1 billion from our US operations. For extended credit or finance receivables, the US 60-day plus delinquency rate of 1.9% is down 10 basis points from Q1 2025. Additionally, the rate is down 20 basis points from last quarter, reflecting the typical seasonal decrease between Q4 and Q1. Trailing 12-month net losses for the overall extended credit portfolio of $72.9 million represented 3.75% of outstandings at quarter end.

Speaker #4: Additionally, the rate is down 20 basis points from last quarter, reflecting the typical seasonal decrease between the fourth and first quarters. Trailing 12-month net losses for the overall extended credit portfolio of 72.9 million represented 3.75% of outstandings at quarter end.

Speaker #2: So the hits do just keep on coming: continuing tech uncertainty, unfavorable currency diluting our margins, the impacts of inflation, and the fluctuation in government policies.

Speaker #2: They all serve to cloud the horizon . Wei on consumers . But we see some green . We see some green shoots in our general volume and our overall sales gains .

Speaker #4: We believe that these portfolio performance metrics remain relatively balanced, considering the current environment. Now turning to slide 12, cash provided by operating activities of $368.7 million in the quarter represented 145% of net earnings.

Speaker #2: And in our nascent increases in tool storage , we do see encouraging signs and we believe we believe our future is quite positive .

Speaker #2: And as such, we continue to expand our investments in what we believe are Snap-on corridors of decisive advantage. You can see it in the numbers across the face of the quarter as progress along our runway for growth and for improvement.

Speaker #4: And compared to $298.5 million last year, the improvement of 70.2 million or 23.5% from comparable 2025 levels largely reflects decreases in working investment versus increases last year, and higher year-over-year net earnings.

Aldo Pagliari: The improvement of $70.2 million at 23.5% from comparable 2025 levels largely reflects decreases in working investment versus increases last year and higher year-over-year net earnings. Net cash used by investing activities, $28.6 million, mostly reflected capital expenditures of $21.2 million and $5.1 million for acquisition of a former independent Car-O-Liner collision distributor in Australia. Net cash used by financing activities of $211.1 million, including cash dividends of $126.8 million and the repurchase of 267,000 shares of common stock for $99.9 million under our existing share repurchase programs.

Speaker #2: We are enhancing our franchise network and we are extending further into critical industries , growing substantially even while a military is flat . And we have we are wielding our snap on value creation processes with effect launching great new products and customer with customer connection and innovation .

Speaker #4: Net cash used by investing activities of $28.6 million mostly reflected capital expenditures of $21.2 million and $5.1 million for acquisition of a former independent car liner collision distributor in Australia.

Aldo Pagliari: We believe that these portfolio performance metrics remain relatively balanced considering the current environment. Now, turning to slide 12. Cash provided by operating activities of $368.7 million in the quarter represented 145% of net earnings and compared to $298.5 million last year. The improvement of $70.2 million or 23.5% from comparable 2025 levels largely reflects decreases in working investment versus increases last year and higher year-over-year net earnings. Net cash used by investing activities, $28.6 million, mostly reflected capital expenditures of $21.2 million and $5.1 million for acquisition of a former independent Car-O-Liner collision distributor in Australia. Net cash used by financing activities of $211.1 million, including cash dividends of $126.8 million and the repurchase of 267,000 shares of common stock for $99.9 million under our existing share repurchase programs.

Speaker #2: And we are effectively bringing RCI to bear on the major challenges of the day. Keeping gross margins strong against the winds. Let me just say it all—and sales are up 10.8% as reported, and 7.1% organically, with the critical industries leading the way with high single digits. The Tools Group is back to positivity with increases of 5%.

Speaker #4: Net cash used by financing activities of $211.1 million included cash dividends of $126.8 million and the repurchase of $267,000 shares of common stock for 99.9 million under our existing share repurchase programs.

Speaker #4: As a quarter end, we had remaining availability to repurchase up to an additional $234.1 million of common stock under our existing authorizations. Turning to slide 13, trade and other accounts receivable of $890.7 million represented an increase of 9.3 million from 2025 year-end levels due to the higher sales volumes.

Aldo Pagliari: As a quarter end, we had remaining availability to repurchase up to an additional $234.1 million of common stock under our existing authorizations. Turning to slide 13. Trade and other accounts receivable of $890.7 million represented an increase of $9.3 million from 2025 year-end levels due to the higher sales volumes. Days sales outstanding were 67 days in both periods. Inventories decreased by $4.7 million from 2025 year-end, primarily due to $5.6 million of foreign currency translation. On a trailing 12-month basis, inventory turns of 2.4 were the same in both periods. Our quarter-end cash position of $1,753.3 million compared to $1,624.5 million at the end of 2025.

Speaker #2: As reported , 3.4% organically , gross margins strong at 47.7% , up 140 basis points . Oh , margins 21.6% , 160 basis points and SNI volume up slightly in the quarter , but still enough to record the highest sales ever in the period in a quarter .

Speaker #2: And our gross margin of 46% are up 30 basis points against 40 basis points of unfavorable currency effects . While margins are still robust at 24.6% , but 110 down from last year .

Speaker #4: Dave's sales outstanding were $67 days in both periods, inventories decreased by 4.7 million from 2025 year-end, primarily due to 5.6 million of foreign currency translation.

Speaker #2: And that reflects the currency and the continuing . But what we believe are powerful investments and the overall corporation sales up 5.8% as reported , 3.4% organically , making it the highest first quarter ever .

Aldo Pagliari: As of quarter end, we had remaining availability to repurchase up to an additional $234.1 million of common stock under our existing authorizations. Turning to Slide 13. Trade and other accounts receivable of $890.7 million represented an increase of $9.3 million from 2023 year-end levels due to the higher sales volumes. Days sales outstanding were 67 days in both periods. Inventories decreased by $4.7 million from 2023 year-end, primarily due to $5.6 million of foreign currency translation. On a trailing 12-month basis, inventory turns of 2.4 were the same in both periods. Our quarter-end cash position of $1,753,300,000 compared to $1,624,500,000 at the end of 2023. In addition to our existing cash and expected cash flow from operations, we have more than $900 million available under our credit facilities.

Speaker #4: On a trailing 12-month basis, inventory turns of 2.4 were the same in both periods. Our quarter-end cash position of $1,753.3 million compared to $1,624.5 million at the end of 2025.

Speaker #2: And the second highest of all . Our quarter's gross margins , 50.4% strong against the wind , Omarj is 20.8% . Also strong , but down 50 basis points due to 40 basis points .

Speaker #4: In addition to our existing cash and expected cash flow from operations, we have more than $900 million available under our credit facilities. There were no amounts borrowed or outstanding under the credit facilities during the quarter, nor was any commercial paper issued or outstanding in the period.

Aldo Pagliari: In addition to our existing cash and expected cash flow from operations, we have more than $900 million available under our credit facilities. There were no amounts borrowed or outstanding under the credit facilities during the quarter, nor was any commercial paper issued or outstanding in the period. With respect to our outstanding debt, notes payable and current maturities of long-term debt increased by $300 million, reflecting the reclassification of our March 2027 unsecured 3.25% notes to current status. That concludes my remarks on our Q1 performance. I'll now review a few outlook items for the remainder of 2026. With respect to corporate costs, we currently believe that expenses will approximate $28 million each quarter.

Speaker #2: Unfavorable currency effects and reflecting the decisive investments and the EPS $4.60 up again . And this period up again , this period was a demonstration of the resilience of our , the power of our model and the skills of our team making progress in the blizzard and still investing in our future Looking forward like I started this , we proceed with confidence and we are confident and convinced regarding positive future and we are confident because we know the special nature of our markets driven by powerful secular trends .

Speaker #4: With respect to our outstanding debt, notes payable and current maturities of long-term debt increased by $300 million, reflecting the reclassification of our March 2027 unsecured $3.25% notes to current status.

Speaker #4: That concludes my remarks on our first quarter performance. I'll now review a few outlook items for the remainder of 2026. With respect to corporate cause, we currently believe that expenses will approximate $28 million each quarter.

Aldo Pagliari: There were no amounts borrowed or outstanding under the credit facilities during the quarter, nor was any commercial paper issued or outstanding in the period. With respect to our outstanding debt, notes payable and current maturities of long-term debt increased by $300 million, reflecting the reclassification of our March 2027 unsecured 3.25% notes to current status. That concludes my remarks on our Q1 performance. I'll now review a few outlook items for the remainder of 2026. With respect to corporate costs, we currently believe that expenses will approximate $28 million each quarter. As a reminder, in Q3 2025, earnings per share included a $0.31 non-recurring one-time benefit from the RS&I Group legal settlement. We expect that capital expenditures for the year will approximate $100 million, and we currently anticipate that our full-year 2026 effective income tax rate will be in a range of 22% to 23%.

Speaker #4: As a reminder, in the third quarter of 2025, earnings per share included a $31 cent non-recurring, one-time benefit from the RS&I Group Legal Settlement.

Aldo Pagliari: As a reminder, in Q3 2025, earnings per share included a $0.31 non-recurring one-time benefit from the RS&I Group legal settlement. We expect that capital expenditures for the year will approximate $100 million, we currently anticipate that our full year 2026 effective income tax rate will be in a range of 22% to 23%. I'll now turn the call back to Nick for his closing thoughts. Nick?

Speaker #2: We know the strength of our advantages in product Snap-on Inc does make a critical work easier , and we know the our advantages in brand snap on stands alone .

Speaker #4: We expect that capital expenditures for the year will approximate $100 million, and we currently anticipate that our full year 2026 effective income tax rate will be in a range of 22 to 23 percent.

Speaker #2: Snap-on name really is the singular sign of the pride and dignity working men and women take in their professions, and we are confident because we know advantages in our people.

Speaker #4: I'll now turn the call back to Nick for his closing thoughts. Nick, well, thanks, Aldo. Answer quarter. Our markets are resilient and strong. And it's a strength not dependent on the ups and downs of the economic cycle.

Nick Pinchuk: Well, thanks, Aldo. That's our quarter. Our markets are resilient and strong, and it's a strength not dependent on the ups and downs of the economic cycle. They are rather driven by the solid secular trends of aging, rising complexity, and expanding criticality. These are, of course, turbulent times. The ifs do just keep on coming. Continuing tech uncertainty, unfavorable currency diluting our margins, the impacts of inflation, and the fluctuation in government policies, they all serve the cloud that arrives and weigh on consumers. We see some green shoots in our general volume, in our overall sales gains, and in our nascent increases in tool storage.

Speaker #2: Our team is committed , capable , battle tested . Our team just doesn't aim to succeed . Snap on expects to succeed as such , we believe that that propelled by these advantages , Snap On will continue to move forward positively throughout 2026 and well beyond .

Speaker #4: They are rather driven by the solid secular trends of aging, rising complexity, and expanding criticality. There are, of course, these are, of course, turbulent times.

Speaker #4: The hits do just keep on coming. Continuing tech uncertainty, unfavorable currency, diluting our margins, the impacts of inflation, and the fluctuation in government policies.

Aldo Pagliari: I'll now turn the call back to Nick for his closing thoughts. Nick?

Speaker #2: Now , before I turn the call over to the operator , I'll speak . Directly to our franchisees and associates . I know many of you are listening or will be hearing this later .

Speaker #4: They all serve to cloud the horizon way on consumers, but we see some green we see some green shoots. In our general volume. And our overall sales gains.

Nicholas Pinchuk: Well, thanks, Aldo. That's our quarter. Our markets are resilient and strong, and it's a strength not dependent on the ups and downs of the economic cycle. They are rather driven by the solid secular trends of aging, rising complexity, and expanding criticality. These are, of course, turbulent times. The hits do just keep on coming. Continuing tech uncertainty, unfavorable currency diluting our margins, the impacts of inflation, and the fluctuation in government policies. They all serve to cloud the horizon and weigh on consumers. We see some green shoots in our general volume, in our overall sales gain, and in our nascent increases in tool storage. We do see encouraging signs, and we believe our future is quite positive. As such, we continue to expand our investments in what we believe are, for Snap-on, corridors of decisive advantage. You can see it in the numbers.

Nick Pinchuk: Well, thanks, Aldo. That's our quarter. Our markets are resilient and strong, and it's a strength not dependent on the ups and downs of the economic cycle. They are rather driven by the solid secular trends of aging, rising complexity, and expanding criticality. These are, of course, turbulent times. The hits do just keep on coming. Continuing tech uncertainty, unfavorable currency diluting our margins, the impacts of inflation, and the fluctuation in government policies. They all serve to cloud the horizon and weigh on consumers. We see some green shoots in our general volume, in our overall sales gain, and in our nascent increases in tool storage. We do see encouraging signs, and we believe our future is quite positive. As such, we continue to expand our investments in what we believe are, for Snap-on, corridors of decisive advantage. You can see it in the numbers.

Speaker #2: Our progress in the period, strong sales, and holding firm against the challenges of the day has been a result of your efforts. For your performance in the quarter, you have my congratulations for the energy and capability you bring to the enterprise every day. You have my admiration, and for enlisting your future, your dedication, and your confidence in our team.

Speaker #4: And in our nascent increases in tool storage. We do see encouraging signs, and we believe our future is quite positive and as such, we continue to expand our investments in what we believe are for snap-on corridors of decisive advantage.

Nick Pinchuk: We do see encouraging signs, and we believe our future is quite positive, and as such, we continue to expand our investments in what we believe are, for Snap-on, corridors of decisive advantage. You can see the numbers. Spread across the face of the quarter is progress along our runways for growth and for improvement. We are enhancing our franchise network, and we are extending further into critical industries, growing substantially even while the military's flat. We are wielding our Snap-on Value Creation processes with effect, launching great new products and with customer connection and innovation. We are effectively bringing RCI to bear on the major challenges of the day, keeping gross margins strong against the wind. Let me not say it all.

Speaker #4: You can see it in the numbers. Right across the face of the quarter is progress along our runways for growth and for improvement. We are enhancing our franchise network, and we are extending further into critical industries, growing substantially, even while a military is flat.

Speaker #2: You have my thanks Now I'll turn the call over to the operator . Operator ?

Speaker #4: And we are wielding our snap-on value creation processes with effect, launching great new products and customer with customer connection and innovation. And we are effectively bringing RCI to bear on the major challenges of the day.

Speaker #3: We will now begin the question and answer session . To ask a question , you may press star . Then one on your touchtone phone If you are using a speakerphone , please pick up your handset before pressing the keys If at any time your question has been addressed and you would like to withdraw your question , please press star .

Speaker #4: Keeping gross margins strong. Against the wind. Let me all say it all. CNI sales up 10.8% as reported. And 7.1% organically, with the critical industries leading the way with high single digits.

Nick Pinchuk: C&I sales up 10.8% as reported, and 7.1% organically, with the critical industries leading the way with high single digits. The Tools Group back to positivity with increases of 5% as reported, 3.4% organically. Gross margin's strong at 47.7%, up 140 basis points. OI margin's 21.6%, up 160 basis points. RS&I volume up slightly in the quarter, but still enough to record the highest sales ever in the period, in a quarter. RS&I gross margin is 46% or up 30 basis points against 40 basis points of unfavorable currency effects. OI margins are still robust at 24.6%, 110 down from last year.

Nicholas Pinchuk: Theme across the face of the quarter is progress along our runways for growth, and for improvement. We are enhancing our franchise network, and we are extending further into critical industries, growing substantially even while the military's flat. We are wielding our Snap-on value creation processes with effect, launching great new products with customer connection and innovation. We are effectively bringing RCI to bear on the major challenges of the day, keeping gross margins strong against the wind. Let me not say it all. C&I sales up 10.8% as reported, and 7.1% organically, with the critical industries leading the way with high single digits. The Tools Group, back to positivity with increases of 5% as reported, 3.4% organically. Gross margins strong at 47.7%, up 140 basis points. OI margin's 21.6%, up 160 basis points.

Nick Pinchuk: Theme across the face of the quarter is progress along our runways for growth, and for improvement. We are enhancing our franchise network, and we are extending further into critical industries, growing substantially even while the military's flat. We are wielding our Snap-on value creation processes with effect, launching great new products with customer connection and innovation. We are effectively bringing RCI to bear on the major challenges of the day, keeping gross margins strong against the wind. Let me not say it all. C&I sales up 10.8% as reported, and 7.1% organically, with the critical industries leading the way with high single digits. The Tools Group, back to positivity with increases of 5% as reported, 3.4% organically. Gross margins strong at 47.7%, up 140 basis points. OI margin's 21.6%, up 160 basis points.

Speaker #3: Then, too. At this time, we will pause momentarily to assemble our roster. The first question today comes from Brett Jordan with Jefferies.

Speaker #4: The tools group back to positivity with increases of 5% as reported, 3.4% organically. Gross margins strong at 47.7%, up 140 basis points. OI margins 21.6%, up 160 basis points.

Speaker #3: Please go ahead

Speaker #4: Hey , good morning guys .

Speaker #1: Good morning .

Speaker #4: In the prepared remarks on CNI , you talked about heavy duty sort of specifically within that that the sort of the stronger categories .

Speaker #4: And RS&I volume up slightly. In the quarter, but still enough to record the highest sales ever in the period. In a quarter. And RS&I gross margins, 46%, are up 30 basis points against 40 basis points of unfavorable currency effects.

Speaker #4: Do you think you're seeing a cyclical trend there that , you know , after a long softness in the heavy duty market , there's some improvement ?

Speaker #4: Or is this sort of a product or , you know , short term ?

Speaker #5: You know , I think I think it has to do with that . We .

Speaker #4: OI margins are still robust at 24.6%, but 110 down from last year. And that reflects the currency and the continuing, but what we believe are powerful investments.

Speaker #2: Didn't see so much softness in heavy duty , but so I don't think it's so , you know , I can't say that it isn't part of that .

Nick Pinchuk: That reflects the currency and the continuing, but what we believe are powerful investments in the overall corporation. Sales up 5.8% as reported, 3.4% organically, making it the highest Q1 ever and the second highest of all our quarters. Gross margins 50.4% strong against the wind. OI margin's 20.8%, also strong, but down 50 basis points due to 40 basis points unfavorable currency effects, reflecting the decisive investments. The EPS, $4.60, up again. This period, up again. This period was a demonstration of the resilience of our markets, the power of our model, and the skills of our team. Making progress in the blizzards and still investing in our future.

Speaker #2: Some sort of macro trend . But we believe it's because we are understanding the work around heavy duty , more every day . And this leads to more effective , complex and customized solutions which people are signing up for .

Speaker #4: And the overall corporation sales up 5.8% as reported, 3.4% organically, making it the highest first quarter ever and the second highest of all our quarters.

Nicholas Pinchuk: RS&I volume up slightly in the quarter, but still enough to record the highest sales ever in a quarter. RS&I gross margin is 46%, up 30 basis points against 40 basis points of unfavorable currency effects. OI margins are still robust at 24.6%, but down 110 basis points from last year, and that reflects the currency and the continuing, but what we believe are powerful investments in the overall corporation. Sales up 5.8% as reported, 3.4% organically, making it the highest Q1 ever and the second highest of all our quarters. Gross margins 50.4% strong against the wind. OI margins 20.8%, also strong, but down 50 basis points due to 40 basis points unfavorable currency effects and reflecting the decisive investments. The EPS $4.60, up again this period.

Nick Pinchuk: RS&I volume up slightly in the quarter, but still enough to record the highest sales ever in a quarter. RS&I gross margin is 46%, up 30 basis points against 40 basis points of unfavorable currency effects. OI margins are still robust at 24.6%, but down 110 basis points from last year, and that reflects the currency and the continuing, but what we believe are powerful investments in the overall corporation. Sales up 5.8% as reported, 3.4% organically, making it the highest Q1 ever and the second highest of all our quarters. Gross margins 50.4% strong against the wind. OI margins 20.8%, also strong, but down 50 basis points due to 40 basis points unfavorable currency effects and reflecting the decisive investments. The EPS $4.60, up again this period.

Speaker #2: So we think when we do this . Yeah , we're following the markets , but we're also capturing some share in our business .

Speaker #4: Gross margins 50.4% strong against the wind. OI margins 20.8%, also strong. But down 50 basis points due to 40 basis points unfavorable currency effects.

Speaker #4: And I guess also in the prepared remarks , you talked , I think restarted momentum and you talked about green shoots a couple of times .

Speaker #4: Could you talk about maybe the cadence of the quarter ? I mean , obviously the last month had some pretty significant geopolitical events going on , but , you know , the underlying trend , are you seeing that the volumes in the garages are picking up that's driving this green shoot or .

Speaker #4: And reflecting the decisive investments. And the EPS $4.60. Up again. And this period up demonstration of the resilience of our markets. The power of our model.

Speaker #4: Well .

Speaker #6: The volumes in the garage , the volumes .

Speaker #2: And I think a couple of things . I think there's a couple of things . I mean , it's hard for us a month isn't isn't a isn't a really significant progress .

Speaker #4: And the skills of our team. Making progress in the blizzard and still investing in our future. Looking forward, like I started this, we proceed with confidence.

Nick Pinchuk: Looking forward, like I started this, we proceed with confidence, and we are confident and convinced regarding a positive future. We are confident because we know the special nature of our markets driven by powerful secular trends. We know the strength of our advantages and products. Snap-on really does make a piece of critical work easier. We know our advantages in brand. Snap-on stands alone. The Snap-on name really is the singular sign of the pride and dignity working men and women take in their professions. We are confident because we know the advantages in our people. Our team is committed, capable, battle-tested. Our team just doesn't aim to succeed. Snap-on expects to succeed. As such, we believe that propelled by these advantages, Snap-on will continue to move forward positively throughout 2026 and well beyond.

Speaker #2: And so when we looked at it , I think when we look at the quarter , we can make no conclusions about the effect of the the war on , on where the world is going .

Speaker #4: And we are confident and convinced regarding positive future. And we own our confidence because we know the special nature of our markets driven by powerful secular trends.

Speaker #2: But I'll tell you , this , is that the green shoots were associated with with the principally , you know , like we saw that tool storage and the sales of the growth sales of the item .

Speaker #4: We know the strength of our advantages in product. Snap-on really does make a critical work easier. And we know the advantages in brand. Snap-on stands alone.

Speaker #2: And I just talked to these , these conversations with the franchisees aren't , aren't they aren't long ago . Their recent and I talked to people trying to find out how they felt .

Nicholas Pinchuk: This period was a demonstration of the resilience of our markets, the power of our model, and the skills of our team. Making progress in the blizzards and still investing in our future. Looking forward, like I started this, we proceed with confidence, and we are confident and convinced regarding a positive future. We are confident because we know the special nature of our markets driven by powerful secular trends. We know the strength of our advantages and product. Snap-on really does make a critical work easier. We know our advantages in brand. Snap-on stands alone. The Snap-on name really is the singular sign of the pride and dignity working men and women take in their professions. We are confident because we know advantages in our people. Our team is committed, capable, battle-tested. Our team just doesn't aim to succeed. Snap-on expects to succeed.

Nick Pinchuk: This period was a demonstration of the resilience of our markets, the power of our model, and the skills of our team. Making progress in the blizzards and still investing in our future. Looking forward, like I started this, we proceed with confidence, and we are confident and convinced regarding a positive future. We are confident because we know the special nature of our markets driven by powerful secular trends. We know the strength of our advantages and product. Snap-on really does make a critical work easier. We know our advantages in brand. Snap-on stands alone. The Snap-on name really is the singular sign of the pride and dignity working men and women take in their professions. We are confident because we know advantages in our people. Our team is committed, capable, battle-tested. Our team just doesn't aim to succeed. Snap-on expects to succeed.

Speaker #4: Snap-on name really is the singular sign of the pride and dignity working men and women taking their professions. And we are confident because we know the advantages in our people.

Speaker #2: And they sounded pretty optimistic to me , you know , so you could see and all of them , you know , I talked about that big box that was that wasn't cheap .

Speaker #2: The epic box , you know , with the red , white and blue flag on the front , they were all talking proudly about the idea .

Speaker #4: Our team is committed. Capable. Battle-tested. Our team just doesn't aim to succeed. Snap-on expects to succeed. As such, we believe that propelled by these advantages, Snap-on will continue to move forward positively throughout 2026 and well beyond.

Speaker #2: Well , I saw I had I was able to get two of them or one of them , you know , so they seem pretty positive .

Speaker #2: And I can tell you, franchisees do not hold back when they talk to me. I get a lot of complaints. And these, these, these conversations were pretty positive.

Speaker #2: So I think I put that together with the sort of nascent tool storage increase and say that's a kind of green shoot. Plus our total, total sales.

Speaker #4: Now, before I turn the call over to the operator, I'll speak directly to our franchisees and associates. I know many of you are listening or will be hearing this later.

Nick Pinchuk: Now before I turn the call over to the operator, I'll speak directly to our franchisees and associates. I know many of you are listening or will be hearing this later. Our progress in the period, strong sales and holding firm against the challenges of the day, has been a result of your efforts. For your performance in the quarter, you have my congratulations. For the energy and capability you bring to the enterprise every day, you have my admiration. For enlisting your future, your dedication, and in your confidence in our team, you have my thanks. Now, I'll turn the call over to the operator. Operator?

Speaker #2: But you know , it's one quarter . You know , you never know really . We don't give guidance , but you never really know .

Speaker #2: But I it's better than a poke in the eye with a sharp stick . What we got .

Speaker #4: Our progress in the period, strong sales and holding firm against the challenges of the day, has been a result of your efforts. For your performance in the quarter.

Speaker #4: Yeah . All right . Thanks

Speaker #7: Sure

Speaker #3: The next question comes from Scott Stember with Roth . Please go ahead .

Speaker #4: You have my congratulations. For the energy and capability you bring to the enterprise every day. You have my admiration. And for enlisting your future.

Nicholas Pinchuk: As such, we believe that propelled by these advantages, Snap-on will continue to move forward positively throughout 2026 and well beyond. Now, before I turn the call over to the operator, I'll speak directly to our franchisees and associates. I know many of you are listening or will be hearing this later. Our progress in the period, strong sales and holding firm against the challenges of the day, has been a result of your efforts. For your performance in the quarter, you have my congratulations. For the energy and capability you bring to the enterprise every day, you have my admiration. And for enlisting your future, your dedication, and in your confidence in our team, you have my thanks. Now, I'll turn the call over to the operator. Operator?

Nick Pinchuk: As such, we believe that propelled by these advantages, Snap-on will continue to move forward positively throughout 2026 and well beyond. Now, before I turn the call over to the operator, I'll speak directly to our franchisees and associates. I know many of you are listening or will be hearing this later. Our progress in the period, strong sales and holding firm against the challenges of the day, has been a result of your efforts. For your performance in the quarter, you have my congratulations. For the energy and capability you bring to the enterprise every day, you have my admiration. And for enlisting your future, your dedication, and in your confidence in our team, you have my thanks. Now, I'll turn the call over to the operator. Operator?

Speaker #8: Good morning , and thanks for taking my questions .

Speaker #2: Sure , Scott .

Speaker #4: Your dedication. And in your confidence in our team. You have my thanks. Now, I'll turn the call over to the operator. Operator, we will now begin the question and answer session.

Speaker #8: Nick , can you talk about how some of the other subcategories and tools did , whether it's a hand tools , power tools , diagnostics

Speaker #1: Sure .

Speaker #2: Look , I think tools and tools was up . Power tools was up . Diagnostics was tepid , you know , in fact , it was , it was , it was challenged in this period , but had some difficult comparisons last year .

Speaker #4: To ask a question, you may press star, then one on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys.

Speaker #4: If at any time your question has been addressed and you would like to withdraw your question, please press star, then two. At this time, we will pause momentarily to assemble our roster.

Speaker #2: So that's the way it went . Pretty much most things were up except for diagnostics was a little weak in this period .

Speaker #8: Okay. And as far as cell into the van, channel versus cell off of the channel, any meaningful differences?

Speaker #4: The first question today comes from Brett Jordan with Jefferies. Please go ahead.

Operator: The first question today comes from Bret Jordan with Jefferies. Please go ahead.

Speaker #2: Yeah . No , look , I don't think I'll tell you the truth . I don't think one quarter is meaningful in this kind of thing , but it's in the same zip code as the as the growth of the 3.4% , you know , for example , the 3.4% .

Operator: We will now begin the question-and-answer session. To ask a question, you may press star, then one on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two.

Speaker #1: Hey, good morning, guys. In the prepare remarks on CNI, you talked about heavy duty, sort of specifically within that the sort of the stronger categories.

Bret Jordan: Hey, good morning, guys.

Nick Pinchuk: Morning.

Bret Jordan: In the prepared remarks on C&I, you talked about heavy duty sort of, specifically within that, the sort of, the stronger categories. Do you think you're seeing a cyclical trend there that, you know, after a long softness in the heavy duty market, there's some improvement? Or is this sort of a product or, you know, short term?

Speaker #2: That totally was also what happened in the United States. And so, the sales off the van were in that same ballpark. It's never exactly the same, but over.

Speaker #1: Do you think you're seeing a cyclical trend there that after a long softness in the heavy duty market, there's some improvement, or is this sort of a product or short-term.

Speaker #2: As you know , because you study it so well , you know , it's so well , it kind of rolls off over the years .

Speaker #2: You know, I think it has to do with the we didn't see so much softness in heavy duty, Brett, but so I don't think it's so I can't say that it isn't part of that, some sort of macro trend.

Operator: At this time, we will pause momentarily to assemble our roster. The first question today comes from Bret Jordan with Jefferies. Please go ahead.

Speaker #2: So we felt pretty good about the sell off the van this quarter .

Nick Pinchuk: We didn't see so much softness in heavy duty, Bret, but so I don't think it's so cyclical. You know, I can't say that it isn't part of that, some sort of macro trend, but we believe it's because we are understanding the work around heavy duty more every day, and this leads to more effective, complex, and customized solutions which people are signing up for. We think when we do this, yeah, we're following the markets, but we're also capturing some share in our business.

Speaker #8: All right . Just that last question on tariffs . I know that you guys have done a great job of being relatively insulated .

Speaker #2: But we believe it's because we are understanding the work around heavy duty more every day. And this leads to more effective complex and customized solutions, which people are signing up for.

Bret Jordan: Hey, good morning, guys.

Nicholas Pinchuk: Morning.

Nick Pinchuk: Morning.

Speaker #8: But some of the recent changes that we saw is there going to be any changes to that narrative and to the extent that you've had some you know , the payments that you've made , are you guys looking for to pursue some rebates with the EPA's going away ?

Bret Jordan: In the prepared remarks on C&I, you talked about heavy duty sort of specifically within the sort of the stronger categories. Do you think you're seeing a cyclical trend there that after a long softness in the heavy duty market, there's some improvement? Or is this sort of a product or short-term?

Speaker #2: So we think when we do this, yeah, we're following the markets, but we're also capturing some share in our business.

Speaker #1: And I guess also in the prepare remarks, you talked about restarted momentum, and then you talked about green shoots a couple of times. Could you talk about maybe the cadence of the quarter?

Bret Jordan: I guess also in the prepared remarks, you talked about it restarted momentum, and then you talked about green shoots a couple times. Could you talk about maybe the cadence of the quarter? I mean, obviously, the last month had some pretty significant geopolitical events going on. Are you know, the underlying trend, are you seeing that the volumes in the garages are picking up that's driving this green shoot?

Nicholas Pinchuk: I think it has to do with. We didn't see so much softness in heavy duty, Brett. I don't think it's so cyclical. I can't say that it isn't part of that, some sort of macro trend, but we believe it's because we are understanding the workaround heavy duty more every day, and this leads to more effective, complex, and customized solutions which people are signing up for. We think when we do this, yeah, we're following the markets, but we're also capturing some share in our business.

Nick Pinchuk: I think it has to do with. We didn't see so much softness in heavy duty, Brett. I don't think it's so cyclical. I can't say that it isn't part of that, some sort of macro trend, but we believe it's because we are understanding the workaround heavy duty more every day, and this leads to more effective, complex, and customized solutions which people are signing up for. We think when we do this, yeah, we're following the markets, but we're also capturing some share in our business.

Speaker #2: Yeah . Okay . Look , I , you know , tell you what tariffs these days are blizzard , you know , they got rid of the apron and they changed the 232 rules and they added 122 .

Speaker #1: I mean, obviously, the last month had some pretty significant geopolitical events going on, but the underlying trend, are you seeing that the volumes in the garages are picking up that's driving this green shoot, or?

Speaker #2: It's like it's like miracle salad . We don't think tariffs are going to change very much actually going forward . We're not planning or expecting some changes now in terms of refund .

Speaker #2: Well, the volumes in the garage, I think a couple of things. I think there are a couple of things. I mean, it's hard for us a month is in a really significant progress.

Nick Pinchuk: Well, the volume's going to grow. The volume's going to grow. I think a couple of things. I think there's a couple of things. I mean, it's hard for us, a month isn't a really significant progress. When we looked at it, I think when we look at the quarter, we can make no conclusions about the effect of the war on where the world is going. I'll tell you this, is that the green shoots were associated with the principally, you know, like we saw that tool storage and the sales of the item. I just talked to. These conversations with the franchisees aren't long ago. They are recent.

Speaker #2: I got to tell you algo has been rehearsing his answer for like three weeks here . So I'm going to ask him to answer this question .

Speaker #2: And so when we looked at it, I think when we look at the quarter, we can make no conclusions about the effect of the war on where the world is going.

Bret Jordan: I guess also in the prepared remarks, you talked about restarted momentum, and then you talked about green shoots a couple of times. Could you talk about maybe the cadence of the quarter? I mean, obviously, the last month had some pretty significant geopolitical events going on, but the underlying trend, are you seeing that the volumes in the garages are picking up, that's driving this green shoot or-

Speaker #2: Aldo . Go ahead .

Speaker #1: Well , actually I've only been rehearsing since April 20th . Scott . They opened the portal for people to apply for refunds . Our view is first , I want to emphasize tariffs are not as significant to snap on as they might be to many other companies out there in the universe , where we play .

Speaker #2: But I'll tell you this. Is that the green shoots were associated with the principally, like we saw that tool storage and the sales of the growth, sales of the item.

Speaker #1: That's one thing to keep in mind, but our strategy is to protect the fact that we don't want anything to expire. And if you don't file for rebate through the portal, you run the risk that things go past what they call a liquidation date.

Speaker #2: And I just talked to these conversations with the franchisees aren't they aren't long ago. They're recent. And I talked to people trying to find out how they felt and they sounded pretty optimistic to me.

Nicholas Pinchuk: Well, the volumes in the garage, I think there are a couple of things. I mean, it's hard for us, a month isn't a really significant progress. When we looked at it, I think when we look at the quarter, we can make no conclusions about the effect of the war on where the world is going. I'll tell you this, is that the green shoots were associated with the principally, like we saw that tool storage and the sales of the item. I just talked to, these conversations with the franchisees, they aren't long ago, they are recent. I talked to people trying to find out how they felt, and they sounded pretty optimistic to me. You could see. All of them, I talked about that big box. That wasn't cheap.

Nick Pinchuk: Well, the volumes in the garage, I think there are a couple of things. I mean, it's hard for us, a month isn't a really significant progress. When we looked at it, I think when we look at the quarter, we can make no conclusions about the effect of the war on where the world is going. I'll tell you this, is that the green shoots were associated with the principally, like we saw that tool storage and the sales of the item. I just talked to, these conversations with the franchisees, they aren't long ago, they are recent. I talked to people trying to find out how they felt, and they sounded pretty optimistic to me. You could see. All of them, I talked about that big box. That wasn't cheap.

Nick Pinchuk: I talked to people trying to find out how they felt, and they sounded pretty optimistic to me. You know, you could see. All of them, you know, I talked about that big box. That wasn't cheap. The EPIQ box, you know, with the red, white, and blue flag on the front. They were all talking proudly about the IG. Well, I saw, I had I was able to get two of them or one of them. You know? They seem pretty positive. I can tell you, franchisees do not hold back when they talk to me. I get a lot of complaints. These conversations were pretty positive. I think I put that together with the sort of nascent tool storage increase and say, that's a kinda green shoot. Plus our total sales.

Speaker #1: And then you can never challenge it , even if one wanted to . So that's our strategy right now . So why not significant ?

Speaker #2: So you could see and all of them, I talked about that big box. That wasn't cheap. The epic box with the red, white, and blue flag on the front.

Speaker #1: We're protecting our rights so they don't expire unchallenged .

Speaker #2: I think , you know I think I just add a little we're not depending on anything out of this . I'm not sure what's going to happen .

Speaker #2: They were all talking proudly about the idea. Well, I was able to get two of them or one of them. So they seem pretty positive.

Speaker #2: So I think it's it's unsure what will happen with tariff refunds and when they'll be paid . How it will all work . So for us , we're just trying to make sure we keep ourselves in the game and not depend on anything .

Speaker #2: And I can tell you, franchisees do not hold back when they talk to me. I get a lot of complaints. And these conversations were pretty positive.

Speaker #2: So I think I put that together with the sort of nascent tool storage increase and say, that's the kind of green shoot. Plus our total sales.

Speaker #8: Got it. That's all I have. Thank you.

Speaker #2: Okay .

Speaker #3: The next question comes from Luke Young with Baird. Please go ahead.

Speaker #2: But Brett, it's one quarter. You never know really. We don't give guidance, but you never really know. But it's better than a poking an eye with a sharp stick, what we got.

Nick Pinchuk: You know, Bret, it's one quarter. You know, you never know really. We don't give guidance, but you never really know. It's better than a poke in the eye with a sharp stick, what we got.

Speaker #9: Good morning Nick . Maybe to kick it off here . Curious . There's been a lot of chatter about an increased level of tax rebates this year in the US .

Nicholas Pinchuk: The EPIQ box with the red, white, and blue flag on the front. They were all talking proudly about the idea. Well, I saw. I was able to get 2 of them or 1 of them. They seem pretty positive. I can tell you, franchisees do not hold back when they talk to me. I get a lot of complaints. These conversations were pretty positive. I think I put that together with the sort of nascent tool storage increase and say, That's a kind of green shoot plus our total sales. Bret, it's 1 quarter. You never know, really. We don't give guidance, but you never really know. It's better than a poke in the eye with a sharp stick, what we got.

Nick Pinchuk: The EPIQ box with the red, white, and blue flag on the front. They were all talking proudly about the idea. Well, I saw. I was able to get 2 of them or 1 of them. They seem pretty positive. I can tell you, franchisees do not hold back when they talk to me. I get a lot of complaints. These conversations were pretty positive. I think I put that together with the sort of nascent tool storage increase and say, That's a kind of green shoot plus our total sales. Bret, it's 1 quarter. You never know, really. We don't give guidance, but you never really know. It's better than a poke in the eye with a sharp stick, what we got.

Speaker #1: Yeah. All right. Thanks.

Bret Jordan: Yeah. All right. Thanks.

Speaker #9: Just curious if you saw any impact from that in the Tools group or maybe the Finance company. And if so, any links to that?

Speaker #3: The next question comes from Scott Stember with Roth. Please go ahead.

Operator: The next question comes from Scott Stember with Roth. Please go ahead.

Speaker #2: Well , you know , it's hard to say . I have a lot of things to say about that . First of all , the finance company you did point out , the finance company .

Speaker #1: Good morning and thanks for taking my questions.

Scott Stember: Good morning, and thanks for taking my questions.

Speaker #2: Sure, Scott.

Nick Pinchuk: Sure, Scott.

Speaker #2: Yeah . Or originations were kind of flattish . You know , the losses did creep up a little bit , but the 60 day delinquencies are better .

Speaker #1: Nick, can you talk subcategories and tools did, whether it's hand tools, power tools, diagnostics?

Scott Stember: Nick, can you talk about how some of the other subcategories in tools did, whether it's hand tools, power tools, diagnostics?

Speaker #2: Both sequentially and and , you know , year over year . So that's a pretty good thing . What the result of that is , it's not clear , but I will tell you that our guys were talking about improvement in that area before we thought about the tax returns were at play .

Speaker #2: Sure. Look, I think tools, hand tools, was up. Power tools was up. Diagnostics was tepid. In fact, it was challenged in this period, but had some difficult comparisons last year.

Nick Pinchuk: Sure. Look, I think tools, hand tools was up. Power tools was up. Diagnostics was tepid, you know? In fact, it was challenged in this period, but had some difficult comparisons last year. That's the way it went. Pretty much most things were up except for diagnostics was a little weak in this period.

Bret Jordan: Yeah. All right. Thanks.

Operator: The next question comes from Scott Stember with Roth. Please go ahead.

Speaker #2: Now . So I never know . But I'll tell you when I go through the garages , unlike the standard story about people who at the grassroots , most of these people don't let this money burn a hole in their pocket , you know , they tend to say it happened to happened during the pandemic with the with the , what they call stimulus numbers .

Speaker #2: So that's the way it went. Pretty much most things were up except for diagnostics was a little weak in this period.

Scott Stember: Good morning, and thanks for taking my questions.

Nicholas Pinchuk: Sure, Scott.

Nick Pinchuk: Sure, Scott.

Speaker #1: Okay. And as far as sell into the van channel versus sell off of the channel, any meaningful differences?

Scott Stember: Okay. As far as sell into the van channel versus sell off of the channel, any meaningful.

Scott Stember: Nick, can you talk about how some of the other subcategories and tools did, whether it's hand tools, power tools, diagnostics?

Nick Pinchuk: You know.

Scott Stember: -differences?

Speaker #2: Yeah. No, look, I don't think I'll tell you the truth, I don't think one quarter is meaningful in this kind of thing. But it's in the same zip code as the growth of the 3.4%.

Nick Pinchuk: No, Look, Tell you the truth, I don't think one quarter is meaningful in this kind of thing. It's in the same zip code as the growth of the 3.4%. You know, for example, the 3.4% totally was also what happened in the United States. The sales off the van were in that same ballpark. It's never exactly the same, over, as you know, 'cause you study it so well, you know it so well, it kind of rolls off over the years. We felt pretty good about the sell off the van this quarter.

Nicholas Pinchuk: Sure. Look, I think tools, hand tools was up. Power tools was up. Diagnostics was tepid. In fact, it was challenged in this period, but had some difficult comparisons last year. That's the way it went. Pretty much most things were up except for diagnostics was a little weak in this period.

Nick Pinchuk: Sure. Look, I think tools, hand tools was up. Power tools was up. Diagnostics was tepid. In fact, it was challenged in this period, but had some difficult comparisons last year. That's the way it went. Pretty much most things were up except for diagnostics was a little weak in this period.

Speaker #2: They were saying , I'm putting it in a bank or I'm going to pay off some debt . So maybe , maybe that could have worked , that paying off the debt .

Speaker #2: so sure . I will say that none of the franchisees I talked to mentioned that . Now , I didn't prompt them or asked the question directly .

Speaker #2: For example, the 3.4% totally was also what happened in the United States. And so the sales off the van were in that same ballpark.

Speaker #2: And maybe if I had , they would have said , yeah , it's great for us , but I don't I don't think so .

Speaker #2: It's never exactly the same, but as you know, because you study it so well, you know it so well, it kind of rolls off over the years.

Speaker #2: Normally they , they bring in this kind of thing up . So I don't think we're seeing it as a big factor . But that's hard to say .

Scott Stember: Okay. As far as sell into the van channel versus sell off of the channel, any meaningful differences?

Speaker #2: So we felt pretty good about the sell off the van this quarter.

Speaker #1: All right. Just last question on tariffs. I know that you guys have done a great job of being relatively insulated. But some of the recent changes that we saw, is there going to be any changes to that narrative?

Scott Stember: All right, just a last question on tariffs. I know that you guys have done a great job of being relatively insulated. Some of the recent changes that we saw, is there going to be any changes to that narrative? To the extent that you've had some, you know, the payments that you've made, are you guys looking for to pursue some rebates with the IEEPA's going away?

Speaker #2: You know , it's kind of an uncertain thing .

Nicholas Pinchuk: No. Look, to tell you the truth, I don't think one quarter is meaningful in this kind of thing, but it's in the same ZIP code as the growth of the 3.4%. For example, the 3.4% total was also what happened in the United States. The sales off the van were in that same ballpark. It's never exactly the same, but over, as you know, because you study it so well, you know it so well, it kind of rolls off over the years. We felt pretty good about the sales off the van this quarter.

Nick Pinchuk: No. Look, to tell you the truth, I don't think one quarter is meaningful in this kind of thing, but it's in the same ZIP code as the growth of the 3.4%. For example, the 3.4% total was also what happened in the United States. The sales off the van were in that same ballpark. It's never exactly the same, but over, as you know, because you study it so well, you know it so well, it kind of rolls off over the years. We felt pretty good about the sales off the van this quarter.

Speaker #9: Got it . Switching gears to to see and could you just remind us on the military exposure within critical industries , specifically ? And you mentioned not seeing a lot of growth , right there right now , but just in terms of past experience , what what you've seen in terms of an impact that tends to be , I think , a little lagged when military activity picks up .

Speaker #1: And to the extent that you've had made, are you guys looking for to pursue some rebates with the IEPAs going away?

Speaker #2: Yeah . Well , military , you know , the and I business is a pretty good business . I mean , it's , you know , it's well over $100 million in a quarter , you know , but , but , but the thing is , is that militaries , one of it's broken into maybe six different segments and militaries at toward the top of that list , you know , so you can figure that out in terms of the amount lately , the military has been down last year , military was down double digits and , and , you know , sort of we kind of got a little bit back in the fourth quarter .

Speaker #2: Yeah. Okay. Look, I'll tell you what. Tariffs these days are blizzards. They got rid of the IEPA and they changed the 232 rules and they added 122.

Nick Pinchuk: Yeah. Okay. Look, You know, tell you what, tariffs these days are blizzards, you know? They got rid of IEEPA, and they changed the Section 232 rules, and they added Section 122. It's like numerical salad. We don't think tariffs are going to change very much, actually, going forward. We're not planning or expecting some changes. Now, in terms of refund, I gotta tell you, Aldo has been rehearsing his answer for, like, three weeks here. I'm gonna ask him to answer this question. Aldo, go ahead.

Scott Stember: All right. Just a last question on tariffs. I know that you guys have done a great job of being relatively insulated. Some of the recent changes that we saw, is there going to be any changes to that narrative? To the extent that you've had some payments that you've made, are you guys looking to pursue some rebates with the IEEPA going away?

Speaker #2: It's like the miracle salad. We don't think tariffs are going to change very much actually going forward. We're not planning or expecting some changes.

Speaker #2: Now, in terms of refund, I got to tell you, Aldo has been rehearsing his answer for like three weeks here. So I'm going to ask him to answer this question.

Speaker #2: Aldo, go ahead.

Speaker #1: Well, actually, I've only been rehearsing since April 20th, Scott. They opened the portal for people to apply for refunds. Our view is, first, I want to emphasize tariffs are not as significant to snap on as they might be to many other companies out there in the universe where we play.

Aldo Pagliari: Well, actually, I've only been rehearsing since April 20th, Scott. They opened a portal for people to apply for refunds. Our view is, first, I wanna emphasize, tariffs are not as significant to Snap-on as they might be to many other companies out there in the universe where we play. That's one thing to keep in mind. Our strategy is to protect the fact that we don't want anything to expire. If you don't file for a rebate through the portal, you run the risk that things go past what they call the liquidation date, and then you can never challenge it, even if one wanted to. That's our strategy right now. While not significant, we're protecting our rights so they don't expire unchallenged.

Speaker #2: And this year it stayed flat . So it was improved some . We expect the military to improve going forward . We we truly do .

Nicholas Pinchuk: Okay. Look, tell you what. Tariffs these days are blizzards. They got rid of IEEPA, and they changed the Section 232 rules, and they added Section 122. It's like numerical salad. We don't think tariffs are going to change very much actually going forward. We're not planning or expecting some changes. Now, in terms of refund, I got to tell you, Aldo has been rehearsing his answer for like three weeks here, so I'm going to ask him to answer this question. Aldo, go ahead.

Nick Pinchuk: Okay. Look, tell you what. Tariffs these days are blizzards. They got rid of IEEPA, and they changed the Section 232 rules, and they added Section 122. It's like numerical salad. We don't think tariffs are going to change very much actually going forward. We're not planning or expecting some changes. Now, in terms of refund, I got to tell you, Aldo has been rehearsing his answer for like three weeks here, so I'm going to ask him to answer this question. Aldo, go ahead.

Speaker #2: I think that's that's one of the things that you would expect when you look at the situation . I mean , could there be any more situation where you'd need the military if nothing else , history , history says that when conflicts like this are over , refurbishment becomes important .

Speaker #1: That's one thing to keep in mind. But our strategy is to protect the fact that we don't want anything to expire. And if you don't file for a rebate through the portal, you run the risk that things go past what they call the liquidation date, and then you can never challenge it even if one wanted to.

Speaker #2: They restock and refurbish . So we usually get good business out of that , on top of which we kind of , I don't know , your view , but I think the the nation is kind of saying , well , given the environment , we got to stock up a little bit more on military .

Speaker #1: So that's our strategy right now. So we're not significant. We're protecting our rights so they don't expire unchallenged.

Aldo Pagliari: Well, actually, I've only been rehearsing since 20 April, Scott. They opened a portal for people to apply for refunds. Our view is, first, I want to emphasize tariffs are not as significant to Snap-on as they might be to many other companies out there in the universe where we play. That's one thing to keep in mind. Our strategy is to protect the fact that we don't want anything to expire. If you don't file for a rebate through the portal, you run the risk that things go past what they call the liquidation date, and then you can never challenge it, even if one wanted to. That's our strategy right now. While not significant, we're protecting our rights so they don't expire unchallenged.

Speaker #2: I think I'd just add a little we're not depending on anything out of this. I'm not sure what's going to happen. So I think it's unsure what will happen with tariff refunds and when they'll be paid.

Nick Pinchuk: I think, you know, I think, just to add a little, we're not depending on anything out of this. I'm not sure what's gonna happen. I think it's unsure what will happen with tariff refunds and when they will be paid, how it will all work. For us, we're just trying to make sure we keep ourselves in the game and not depend on anything.

Speaker #2: So we kind of expect that to expand . What I loved about the quarter was though , the military didn't help us . And boy , some of those other areas , you know , like aviation gangbusters .

Speaker #2: How it will all work. So for us, we're just trying to make sure we keep ourselves in the game and not depend on anything.

Speaker #2: And so , and it's pretty profitable . So I meant it when I said that industrial had a terrific quarter . We always eye the industrial business .

Speaker #1: Got it. That's all I have. Thank you.

Scott Stember: Got it. That's all I have. Thank you.

Speaker #2: Okay.

Speaker #2: Seems pretty good to us . We think it keeps expanding and it's mostly because we keep understanding the work better . And each one of those places that's our principal value creating mechanism to understand the work , create products that are irresistible to customers .

Nick Pinchuk: Okay.

Speaker #3: The next question comes from Luke Young with Baird. Please go ahead.

Operator: The next question comes from Luke Junk with Baird. Please go ahead.

Speaker #4: Good morning, Nick. Maybe to kick it off here, curious there's been a lot of chatter about an increased level of tax rebates this year in the US.

Luke Junk: Good morning, Nick.

Nick Pinchuk: Hi, Luke.

Luke Junk: Kick it off here, curious, there's been a lot of chatter about an increased level of tax rebates this year in the US. Just curious if you saw any impact from that in the tools group or maybe the finance company, and if so, any looks to that?

Nicholas Pinchuk: I think, just to add a little, we're not depending on anything out here. I'm not sure what's going to happen. I think it's unsure what will happen with tariff refunds and when they will be paid, how it will all work. For us, we're just trying to make sure we keep ourselves in the game and not depend on anything.

Nick Pinchuk: I think, just to add a little, we're not depending on anything out here. I'm not sure what's going to happen. I think it's unsure what will happen with tariff refunds and when they will be paid, how it will all work. For us, we're just trying to make sure we keep ourselves in the game and not depend on anything.

Speaker #2: In that way , whether they're customized or not . And as you get as you understand the work better , you get a bigger product line .

Speaker #4: Just curious if you saw any impact from that in the tools group or maybe the finance company? And if so, any links to that?

Speaker #2: That's what we're doing. It seems to be working.

Speaker #9: Got it . I'll leave it there . Thank you .

Speaker #2: Well, it's hard to say. I have a lot of things to say about that. First of all, the finance company, you did point out, the finance company, yeah, originations were kind of flattish.

Speaker #7: Okay .

Nick Pinchuk: Well, you know, it's hard to say. I got a lot of things to say about that. First of all, the finance company, you did point out. The finance company, yeah, our originations were kind of flattish, you know, and the losses did creep up a little bit. The 60-day delinquencies are better, both sequentially and, you know, year over year. That's a pretty good thing. What the result of that is is not clear. I will tell you that our guys were talking about improvement in that area before we thought about the tax returns were in play. Now, I never know. I'll tell you, when I go through the garages, unlike the standard story about people who are at the grassroots, most of these people don't let this money burn a hole in their pocket.

Nick Pinchuk: Well, you know, it's hard to say. I got a lot of things to say about that. First of all, the finance company, you did point out. The finance company, yeah, our originations were kind of flattish, you know, and the losses did creep up a little bit. The 60-day delinquencies are better, both sequentially and, you know, year-over-year. That's a pretty good thing. What the result of that is is not clear. I will tell you that our guys were talking about improvement in that area before we thought about the tax returns were in play. Now, I never know. I'll tell you, when I go through the garages, unlike the standard story about people who are at the grassroots, most of these people don't let this money burn a hole in their pocket.

Speaker #3: The next question comes from Christopher Glynn with Oppenheimer. Please go ahead.

Scott Stember: Got it. That's all I have. Thank you.

Speaker #2: And the losses did creep up a little bit. But the 60-day delinquencies are better both sequentially and year over year. So that's a pretty good thing.

Nicholas Pinchuk: Okay.

Nick Pinchuk: Okay.

Speaker #10: Yeah . Thanks . Hello , everyone . Just wanted to keep going on the CNI things you just talked about . Nick , because that the comments you just made kind of reinforce some of the stuff in your prepared remarks .

Operator: The next question comes from Luke Junk with Baird. Please go ahead.

Luke Junk: Good morning, Nick. Maybe to kick it off here, curious, there's been a lot of chatter about an increased level of tax rebates this year in the US. Just curious if you saw any impact from that in the Tools Group or maybe the finance company, and if so, any looks to that?

Speaker #2: What the result of that is, it's not clear, but I will tell you that our guys were talking about improvement in that area before we thought about the tax returns were in play.

Speaker #10: You know, CNI growth historically has been pretty intermittent rather than, you know, hitting a growth cycle and a consolidation cycle.

Speaker #2: So I never know. But I'll tell you, when I go through the garages, unlike the standard story about people who have the grassroots, most of these people don't let this money burn a hole in their pocket.

Speaker #10: So , you know , I'm wondering if you suggesting something just culturally and in the bones is gotten better about identifying the work , kind of like , you know , s o t really hits stride with social media and bandwidth enhancing tools out of the pandemic .

Nicholas Pinchuk: Well, it's hard to say. I got a lot of things to say about that. First of all, there's the finance company you did point out. The finance company, yeah, our originations were kind of flat-ish, and the losses did creep up a little bit, but the 60-day delinquencies are better, both sequentially and year over year. That's a pretty good thing. What the result of that is not clear, but I will tell you that our guys were talking about improvement in that area before we thought about the tax returns were in play. Now, I never know. I'll tell you, when I go through the garages, unlike the standard story about people who are at the grassroots, most of these people don't let this money burn a hole in their pocket.

Nick Pinchuk: Well, it's hard to say. I got a lot of things to say about that. First of all, there's the finance company you did point out. The finance company, yeah, our originations were kind of flat-ish, and the losses did creep up a little bit, but the 60-day delinquencies are better, both sequentially and year over year. That's a pretty good thing. What the result of that is not clear, but I will tell you that our guys were talking about improvement in that area before we thought about the tax returns were in play. Now, I never know. I'll tell you, when I go through the garages, unlike the standard story about people who are at the grassroots, most of these people don't let this money burn a hole in their pocket.

Speaker #2: They tend to say it happened during the pandemic with the what do you call it? Stimulus numbers. They were saying, "I'm putting it in a bank or I'm going to pay off some debt." So maybe that could have worked at paying off the debt.

Nick Pinchuk: You know? They tend to say it happened during the pandemic with the what do you call it? Stimulus numbers. They were saying, I'm putting it in a bank, or, I'm gonna pay off some debt. Maybe that could have worked at paying off the debt. I'm not so sure. I will say that none of the franchisees I talked to mentioned that. Now, I didn't prompt them or ask the question directly. Maybe if I had, they would've said, Yeah, it's been great for us. I don't think so. Normally, they bring this kind of thing up. I don't think we're seeing it as a big factor. But that's hard to say. You know, it's kind of a uncertain thing.

Speaker #2: Yeah .

Speaker #10: I think that's .

Speaker #2: I think that's , yeah , I think you're right about that . I think it happened . We've seen it happen a couple times .

Speaker #2: You know , back in by the way , how do you know my remarks were prepared ? Maybe maybe I didn't prepare at all .

Speaker #2: I'm not so sure. I will say that none of the franchisees I talked to mentioned that. Now, I didn't prompt them or ask the questions directly.

Speaker #2: You know . Anyway , the , the , the we saw this happen before . You know , we were going along , trundling along and in critical industries .

Speaker #2: And maybe if I had, they would have said, "Yeah, it's great for us." But I don't think so. Normally, they bring in this kind of thing up.

Speaker #2: And then we expanded capacity here in Snap-on. We added a whole building that allowed us to build more customized kits and expand on that.

Speaker #2: So I don't think we're seeing it as a big factor. But that's hard to say. It's kind of an uncertain thing.

Speaker #2: And it shot up. And then it hit a little bit of a pause when the military started spitting up blood. And then it's coming back.

Nicholas Pinchuk: They tend to say it happened during the pandemic with their, what do you call it, stimulus numbers. They were saying, "I'm putting it in a bank," or, "I'm going to pay off some debt." Maybe that could've worked at paying off the debt. I'm not so sure. I will say that none of the franchisees I talked to mentioned that. Now, I didn't prompt them or ask the question directly, and maybe if I had, they would've said, "Yeah, it's great for us," but I don't think so. Normally, they bring this kind of thing up. I don't think we're seeing it as a big factor. That's hard to say. It's kind of an uncertain thing.

Nick Pinchuk: They tend to say it happened during the pandemic with their, what do you call it, stimulus numbers. They were saying, "I'm putting it in a bank," or, "I'm going to pay off some debt." Maybe that could've worked at paying off the debt. I'm not so sure. I will say that none of the franchisees I talked to mentioned that. Now, I didn't prompt them or ask the question directly, and maybe if I had, they would've said, "Yeah, it's great for us," but I don't think so. Normally, they bring this kind of thing up. I don't think we're seeing it as a big factor. That's hard to say. It's kind of an uncertain thing.

Speaker #4: Got it. Switching gears to CNI, could you just remind us on the military exposure within critical industries specifically? I know you mentioned that. Seeing a lot of growth right there.

Luke Junk: Got it. Switching gears to C&I, could you just remind us on the military exposure within critical industries specifically? I know you mentioned not seeing a lot of growth right there, right now, just in terms of past experience, what you've seen in terms of an impact that tends to be, I think, a little lagged when military activity picks up.

Speaker #2: And I think behind all this is the idea that I really do believe we're gaining share because our products are getting better . It's hard to it's hard to talk about any one product because most of them are kits , but in those kits , we're configuring them such that they meet the problems .

Speaker #4: Right now, but just in terms of past experience, what you've seen in terms of an impact that tends to be, I think, a little lagged when military activity picks up?

Speaker #2: You know , for , you know , if you have a particular jet aircraft you want to deal with in terms of maintenance or manufacturing , we'll put you right on target .

Speaker #2: Yeah. Well, the CNI business is a pretty good business. I mean, it's well over $100 million in a quarter. But the thing is that the military is one of its broken into maybe six different segments.

Nick Pinchuk: Well, military, you know, the C&I business is a pretty good business. I mean, it's, you know, it's well over $100 million in a quarter, you know. The thing is that the military's broken into maybe six different segments, and military's at, toward the top of that list. You know, you can figure that out in terms of the amounts. Lately, the military has been down. Last year, military was down double digits. You know, we kind of got a little bit back in Q4. This year it stayed flat, it's improved some. We expect the military to improve going forward. We truly do. I think that's one of the things that you would expect when you look at the situation.

Speaker #2: And we have some of those . So I think that's what's happening now . I'm not saying we're immune to cycles because it's it certainly has proven not to be .

Speaker #10: What has elevated the game . Have you instituted , you know , new new organizational layers or structures or realignments ?

Luke Junk: Got it. Switching gears to C&I, could you just remind us on the military exposure within critical industries specifically? I know you mentioned not seeing a lot of growth right there right now. Just in terms of past experience, what you've seen in terms of an impact that tends to be, I think, a little lagged when military activity picks up?

Speaker #2: And militaries at toward the top of that list, so you can figure that out in terms of the amount, lately, the military has been down.

Speaker #2: No capacity . You know what I mean ? In other words , we're learning how to wield the capacity better . Like I said , we have we have added people in the field .

Speaker #2: Last year, military was down double digits. And it's sort of we kind of got a little bit back in the fourth quarter. And this year, it stayed flat.

Speaker #2: We have learned more about the more about the , the work , you know , like you say , but also we've created a capacity situation where we can deliver quicker and more effectively .

Nicholas Pinchuk: Yeah. Well, military, the C&I business is a pretty good business. It's well over $100 million in a quarter. The thing is, that the military is one of its. It's broken into maybe six different segments, and military's toward the top of that list. You can figure that out in terms of the amounts. Lately, the military has been down. Last year, military was down double digits. We kind of got a little bit back in Q4, and this year it stayed flat. It's improved some. We expect the military to improve going forward. We truly do. I think that's one of the things that you would expect when you look at the situation. Could there be any more situation where you'd need the military? If nothing else, history says that when conflicts like this are over, refurbishment becomes important.

Nick Pinchuk: Yeah. Well, military, the C&I business is a pretty good business. It's well over $100 million in a quarter. The thing is, that the military is one of its. It's broken into maybe six different segments, and military's toward the top of that list. You can figure that out in terms of the amounts. Lately, the military has been down. Last year, military was down double digits. We kind of got a little bit back in Q4, and this year it stayed flat. It's improved some. We expect the military to improve going forward. We truly do. I think that's one of the things that you would expect when you look at the situation. Could there be any more situation where you'd need the military? If nothing else, history says that when conflicts like this are over, refurbishment becomes important.

Speaker #2: So it was improved some. We expect the military to improve going forward. We truly do. I think that's one of the things that you would expect.

Speaker #2: When you look at the situation, I mean, could there have been any more situation where you'd need the military? If nothing else, history says that when conflicts like this are over, refurbishment becomes important.

Speaker #2: And so those kinds of things have combined to give us some acceleration . And as you what happens in these kinds of things , you add something and you learn how to do better and better with it .

Nick Pinchuk: I mean, could there be any more situation where you'd need the military? If nothing else, history says that when conflicts like this are over, refurbishment becomes important. They restock and refurbish. We usually get good business out of that. On top of which, we kind of, I don't know your view, but I think the nation is kind of saying, Well, given the environment, we got to stock up a little bit more on military. We kind of expect that to expand. What I loved about the quarter was, though, the military didn't help us. Boy, some of those other areas, you know, like aviation, gangbusters. It's pretty profitable. I meant it when I said that industrial had a terrific quarter. The industrial business seems pretty good to us.

Speaker #2: You know , when you start up something , you kind of kind of helps you and then you realize what you got , you kind of work on it .

Speaker #2: They restock and refurbish. So we usually get good business out of that. On top of which, we kind of I don't know your view, but I think the nation is kind of saying, "Well, given the environment, we got to stock up a little bit more." On military.

Speaker #2: It's sort of the essence of RCI. So what you're seeing there is in the bones of Snap-on value creation, figuring out how to have more improvement.

Speaker #2: And secondly, around just having a better product. I believe that's the situation.

Speaker #2: So we kind of expect that to expand. What I loved about the quarter was, though, the military didn't help us. And boy, some of those other areas, like aviation, gangbusters.

Speaker #10: Appreciate that . And then my other one , just on SoC originations , you know , sounds like storage might be turning a corner and , you know , pretty good comparison backdrop for a while there .

Speaker #2: And so it's pretty profitable. So I meant it when I said that industrial had a terrific business seems pretty good to us. We think it keeps expanding.

Speaker #10: And diagnostics was off in the quarter a little bit, but not at the C level. And even SOT had a couple really nice diagnostic quarters in the middle of last year.

Nicholas Pinchuk: They restock and refurbish. We usually get good business out of that. On top of which, I don't know your view, but I think the nation is kind of saying, "Well, given the environment, we got to stock up a little bit more on military." We kind of expect that to expand. What I loved about the quarter was, though, the military didn't help us, and boy, some of those other areas like aviation, gangbusters. It's pretty profitable. I meant it when I said that industrial had a terrific quarter. The industrial business seems pretty good to us. We think it keeps expanding, and it's mostly because we keep understanding the work better in each one of those places. That's our principal value-creating mechanism, to understand the work, create products that are irresistible to customers in that way, whether they're customized or not.

Nick Pinchuk: They restock and refurbish. We usually get good business out of that. On top of which, I don't know your view, but I think the nation is kind of saying, "Well, given the environment, we got to stock up a little bit more on military." We kind of expect that to expand. What I loved about the quarter was, though, the military didn't help us, and boy, some of those other areas like aviation, gangbusters. It's pretty profitable. I meant it when I said that industrial had a terrific quarter. The industrial business seems pretty good to us. We think it keeps expanding, and it's mostly because we keep understanding the work better in each one of those places. That's our principal value-creating mechanism, to understand the work, create products that are irresistible to customers in that way, whether they're customized or not.

Nick Pinchuk: We think it keeps expanding, and it's mostly because we keep understanding the work better in each one of those places. That's our principal value-creating mechanism, to understand the work, create products that are irresistible to customers in that way, whether they're customized or not. As you understand the work better, you get a bigger product line. That's what we're doing, and it seems to be working.

Speaker #2: And it's mostly because we keep understanding the work better in each one of those places. That's our principal value-creating mechanism, to understand the work, create products that are irresistible to customers in that way, whether they're customized or not, and as you understand the work better, you get a bigger product line.

Speaker #10: So , you know , it seems like maybe the ingredients are in place for innovations to start to grow . And the , you know , commemorative unit in particular sounds really cool .

Speaker #10: And hitting some stride at a high price point . So , you know , do you feel like SoC originations ?

Speaker #2: That's what we're doing. It seems to be working.

Speaker #4: Got it. I'll leave it there. Thank you.

Luke Junk: Got it. I'll leave it there. Thank you.

Speaker #2: Well , the originations were flat in the quarter . I think roughly for government work . You know , but I use the word green shoots particularly .

Speaker #2: Okay.

Nick Pinchuk: Okay.

Speaker #3: The next question comes from Christopher Glynn with Oppenheimer. Please go ahead.

Operator: The next question comes from Christopher Glynn with Oppenheimer. Please go ahead.

Speaker #2: I chose that particularly because I'm not sure what the increase in tool storage means. I do think, though, it shows some floor we couldn't get arrested before with big boxes and stuff like that.

Speaker #5: Yeah. Thanks. Hello, everyone. Just wanted to keep going on the CNI themes you just talked about, Nick, because the comments you just made kind of reinforce some of the stuff in your prepared remarks.

Christopher Glynn: Yeah, thanks. Hello, everyone. Just wanted to keep going on the C&I themes you just talked about, Nick, because the comments you just made kind of reinforce some of the stuff in your prepared remarks. You know, C&I growth historically has been pretty intermittent rather than, you know, hitting a growth cycle and a consolidation cycle. You know, I'm wondering if you're suggesting something just culturally and in the bones has gotten better about identifying the work. Kind of like, you know, SOT really hit stride with social media and bandwidth enhancing tools out of the pandemic.

Chris Glynn: Yeah, thanks. Hello, everyone. Just wanted to keep going on the C&I themes you just talked about, Nick, because the comments you just made kind of reinforce some of the stuff in your prepared remarks. You know, C&I growth historically has been pretty intermittent rather than, you know, hitting a growth cycle and a consolidation cycle. You know, I'm wondering if you're suggesting something just culturally and in the bones has gotten better about identifying the work. Kind of like, you know, SOT really hit stride with social media and bandwidth enhancing tools out of the pandemic.

Speaker #5: CNI growth historically has been pretty intermittent rather than hitting a growth cycle and a consolidation cycle. So I'm wondering if you're suggesting something just culturally and in the bones has gotten better about identifying the work, kind of like SOT really hit stride with social media and bandwidth-enhancing tools out of the pandemic.

Speaker #2: And now you saw the you saw the the tribute to America . And I just have the feeling that it sold well , not only because it's a compelling offering , you know , but also because maybe the hurdles were a little bit lower .

Nicholas Pinchuk: As you understand the work better, you get a bigger product line. That's what we're doing, and it seems to be working.

Nick Pinchuk: As you understand the work better, you get a bigger product line. That's what we're doing, and it seems to be working.

Luke Junk: Got it. I'll leave it there. Thank you.

Nicholas Pinchuk: Okay.

Nick Pinchuk: Okay.

Operator: The next question comes from Christopher Glynn with Oppenheimer. Please go ahead.

Speaker #2: So we'll see how that plays out . I think , look , I think our insurance is a favorable thing . It shows that , you know , tool stories are completely dead .

Christopher Glynn: Yeah, thanks. Hello, everyone. Just wanted to keep going on the C&I themes you just talked about, Nick, because the comments you just made kind of reinforce some of the stuff in your prepared remarks. C&I growth historically has been pretty intermittent rather than hitting a growth cycle and a consolidation cycle. I'm wondering if you're suggesting something just culturally and in the bones has gotten better about identifying the work, kind of like SOT really hit stride with social media and bandwidth-enhancing tools out of the pandemic.

Speaker #2: You know , in fact it's pretty strong . It's a nice strong quarter for tool storage

Speaker #2: Yeah. I think that's yeah. I think you're right about that. I think it happens. We've seen it happen a couple of times. Back in by the way, how do you know my remarks were prepared?

Nick Pinchuk: Yeah, I think.

Christopher Glynn: You, you-

Chris Glynn: You, you-

Nick Pinchuk: I think that's, yeah, I think you're right about that. I think it happened. We've seen it happen a couple times. You know, back in. By the way, how do you know my remarks were prepared? Maybe I didn't prepare at all. You know, anyway, the, the, we saw this happen before. You know, we're going along, turning along in critical industries, and then we expanded capacity here in Snap-on. We added a whole building that allowed us to build more customized kits and expand on that. It shot up. Then it hit a little bit of a pause when the military started spitting up blood. Then it's coming back. I think behind all this is the idea that I really do believe we're gaining share because our products are getting better.

Speaker #10: Cool. Thanks for the color.

Speaker #7: Sure

Speaker #2: Maybe I didn't prepare at all. Anyway, the we saw this happen before. We were going along, trending along, and critical industries. And then we expanded capacity here in Snap-on.

Speaker #3: The next question comes from Gary Prestopino with Barrington Research . Please go ahead .

Speaker #11: Good morning , all . I'm . Or maybe I missed this , but nobody asked this . Could you maybe just talk about .

Speaker #2: We added a whole building. That allowed us to build more customized kits and expand on that. And it shot up. And then it hit a little bit of a pause when the military started spitting up blood.

Speaker #11: You know , how much tool storage was up year over year

Speaker #2: Well , I don't like to get involved in get big . You know , I think that's across . I don't want to nail myself too .

Nicholas Pinchuk: Yeah. I think you're right about that. I think it happened. We've seen it happen a couple of times. By the way, how do you know my remarks were prepared? Maybe I didn't prepare at all. Anyway, we saw this happen before. We're going along, churning along in critical industries, and then we expanded capacity here in Snap-on. We added a whole building that allowed us to build more customized kits and expand on that, and it shot up. Then it hit a little bit of a pause when the military started spitting up blood, and then it's coming back. I think behind all this is the idea that I really do believe we're gaining share because our products are getting better. It's hard to talk about any one product because most of them are kits. In those kits, we're configuring them such that they meet the problems.

Nick Pinchuk: Yeah. I think you're right about that. I think it happened. We've seen it happen a couple of times. By the way, how do you know my remarks were prepared? Maybe I didn't prepare at all. Anyway, we saw this happen before. We're going along, churning along in critical industries, and then we expanded capacity here in Snap-on. We added a whole building that allowed us to build more customized kits and expand on that, and it shot up. Then it hit a little bit of a pause when the military started spitting up blood, and then it's coming back. I think behind all this is the idea that I really do believe we're gaining share because our products are getting better. It's hard to talk about any one product because most of them are kits. In those kits, we're configuring them such that they meet the problems.

Speaker #2: And then it's coming back. And I think behind all this is the idea that I really do believe we're gaining share because our products are getting better.

Speaker #2: You know what I mean ? But but tool storage was up more than the average in in in you know what I mean ?

Speaker #2: It's hard to talk about any one product because most of them are kits. But in those kits, we're configuring them such that they meet the problems.

Nick Pinchuk: It's hard to talk about any one product because most of them are kits. In those kits, we're configuring them such that they meet the problems, you know? You know, if you have a particular jet aircraft you want to deal with in terms of maintenance or manufacturing, we'll put you right on target. We have some of those. I think that's what's happening now. I'm not saying we're immune to cycles because it's certainly has proven not to be the case.

Speaker #2: It was up . It was it was one of the leading items , that's all . But I don't , you know , Gary , a quarter who knows what a quarter means .

Speaker #2: For if you have a particular jet aircraft, you want to deal with in terms of maintenance or manufacturing, we'll put you right on target.

Speaker #2: I mean it's not definitive , but I still feel pretty good about it . I'm not here to declare victory . And you know , we're on the you know , the big wide highway to to victory now .

Speaker #2: And we have some of those. So I think that's what's happening now. I'm not saying we're immune to cycles. Because it certainly has proven not to be.

Speaker #2: But I feel good about it

Speaker #5: Right. What has elevated the game? Have you instituted new organizational layers or structures or a talent realignment?

Speaker #11: So so I guess if I ask this another way , I mean , it , a lot of that due to this new lower point product that you put out .

Christopher Glynn: Right. You know, what has elevated the game? Have you instituted, you know, new organizational layers or structures or talent realignments?

Chris Glynn: Right. You know, what has elevated the game? Have you instituted, you know, new organizational layers or structures or talent realignments?

Speaker #11: No , no , no for the text .

Speaker #2: Yeah , sure . Some of it was due to that . It's hard to say , but you know , I talked about the new role card , you know , that came out and we made it .

Speaker #2: No. Capacity. You know what I mean? In other words, we're learning how to wield the capacity better. Like I said, we have added people in the fields.

Nick Pinchuk: No. Capacity. You know what I mean? In other words, we're learning how to wield the capacity better. Like I said, we have added people in the field. We have learned more about the work, you know, like you say. Also, we've created a capacity situation where we can deliver quicker and more effectively. Those kinds of things have combined to give us some acceleration. What happens in these kinds of things, you add something, and you learn how to do better and better with it, you know? When you start up something, it kind of helps you, and then you realize what you got, and you kind of work on it. It's sort of the essence of RCI.

Nicholas Pinchuk: If you have a particular jet aircraft you want to deal with in terms of maintenance or manufacturing, we'll put you right on target. We have some of those. I think that's what's happening now. I'm not saying we're immune to cycles, because it certainly has proven not to be the case.

Nick Pinchuk: If you have a particular jet aircraft you want to deal with in terms of maintenance or manufacturing, we'll put you right on target. We have some of those. I think that's what's happening now. I'm not saying we're immune to cycles, because it certainly has proven not to be the case.

Speaker #2: You know , one of the things we did , we smartened up , we made it in . We made it available in all these colors .

Speaker #2: We have learned more about the work. Like you say, but also we've created a capacity situation where we can deliver quicker and more effectively.

Speaker #2: You might think that's trivial , but it isn't . You know , because people want to buy something like a role card . They want it to match their box .

Speaker #2: If they got a , if they got a candy apple red box with , you know , carbon trim , you want the , the want the , the role cab to look like that .

Speaker #2: And so those kinds of things have combined to give us some acceleration. And as you what happens in these kinds of things, you add something, and you learn how to do better and better with it.

Christopher Glynn: Right. What has elevated the game? Have you instituted new organizational layers or structures or talent realignments?

Speaker #2: And if you, if you make that available, then it tends to sell more. So, that was one of the big breakthroughs here.

Speaker #2: When you start up something, you kind of helps you. And then you realize what you got. You kind of work on it. It's sort of the essence of RCI.

Nicholas Pinchuk: No. Capacity. You know what I mean? In other words, we're learning how to wield the capacity better. Like I said, we have added people in the field. We have learned more about the work, like you say, but also, we've created a capacity situation where we can deliver quicker and more effectively. Those kinds of things have combined to give us some acceleration. What happens in these kinds of things, you add something, and you learn how to do better and better with it. When you start up something, it kind of helps you, and then you realize what you got, and you kind of work on it. It's sort of the essence of RCI. What you're seeing there is in the bones of Snap-on value creation, figuring out how to have more improvement, and secondly, around just having better products.

Nick Pinchuk: No. Capacity. You know what I mean? In other words, we're learning how to wield the capacity better. Like I said, we have added people in the field. We have learned more about the work, like you say, but also, we've created a capacity situation where we can deliver quicker and more effectively. Those kinds of things have combined to give us some acceleration. What happens in these kinds of things, you add something, and you learn how to do better and better with it. When you start up something, it kind of helps you, and then you realize what you got, and you kind of work on it. It's sort of the essence of RCI. What you're seeing there is in the bones of Snap-on value creation, figuring out how to have more improvement, and secondly, around just having better products.

Speaker #2: It sounds , it sounds so simple , but in fact , it worked for us . And the all is pretty sturdy . So that was another contributor .

Speaker #2: So what you're saying there is in the bones of Snap-on value creation, figuring out how to have more improvement. And secondly, around just having better product.

Speaker #2: Yes . The , the , the tribute to America was , was a good contributor too , but it didn't account for everything .

Nick Pinchuk: What you're seeing there is in the bones of Snap-on Value Creation, figuring out how to have more improvement and secondly, around just having better products. I believe that's the situation.

Speaker #11: Okay . And then just a couple more questions here . You said the franchisees are , you know , a little more optimistic than they had been .

Speaker #2: I believe that's the situation.

Speaker #5: Appreciate that. And then my other one just on SOC originations. Sounds like storage might be turning a corner and pretty good comparison backdrop for a while there.

Christopher Glynn: Appreciate that. My other one just on SFC originations. You know, sounds like storage might be turning a corner and, you know, pretty good comparison backdrop for a while there. Diagnostics was off in the quarter a little bit, but not at the RS&I level. Even SOT had a couple really nice diagnostic quarters in the middle of last year. You know, it seems like maybe the ingredients are in place for originations to start to grow and the commemorative unit in particular sounds really cool and hitting some stride at a high price point. You know.

Chris Glynn: Appreciate that. My other one just on SFC originations. You know, sounds like storage might be turning a corner and, you know, pretty good comparison backdrop for a while there. Diagnostics was off in the quarter a little bit, but not at the RS&I level. Even SOT had a couple really nice diagnostic quarters in the middle of last year. You know, it seems like maybe the ingredients are in place for originations to start to grow and the commemorative unit in particular sounds really cool and hitting some stride at a high price point. You know.

Speaker #11: You attribute that to some of what you've done strategically with shorter payback products , or are they really starting to see a turn in in the appetite for technician purchases of tools ?

Speaker #5: And diagnostics was off in the quarter a little bit, but not at the IRS and I level. And even SOT had a couple of really nice diagnostic quarters in the middle last year.

Speaker #11: I mean , you know , you did all sorts of of issues with uncertainty for the last couple of quarters . Has that changed a little bit here ?

Speaker #5: So it seems like maybe the ingredients are in place for originations to start to grow. And the commemorative unit in particular sounds really cool.

Speaker #11: You think ?

Speaker #2: Well , look , I think it's this way . I think it's probably some of both . But franchisees usually talk to me about two things products they don't like or something like that or something in the system or how easy it is to sell or hard to sell .

Nicholas Pinchuk: I believe that's the situation.

Nick Pinchuk: I believe that's the situation.

Christopher Glynn: Appreciate that. Then my other one, just on SFC originations. Sounds like storage might be turning a corner and pretty good comparison backdrop for a while there. Diagnostics was off in the quarter a little bit, but not at the RS&I level, and even SOT had a couple really nice diagnostic quarters in the middle of last year. It seems like maybe the ingredients are in place for originations to start to grow and the commemorative unit in particular sounds really cool and hitting some stride at a high price point. Do you feel like SFC originations?

Speaker #5: And hitting some stride at a high price point. So do you feel like SOC originations?

Nick Pinchuk: Yeah.

Christopher Glynn: Do you feel like this is the originations?

Chris Glynn: Do you feel like this is the originations?

Speaker #2: Well, the originations were flat in the quarter, I think, roughly. For government work. But I use the word green shoots particularly. I chose that particularly because I'm not sure what the increase in tool storage means.

Nick Pinchuk: Well, the originations were flat in the quarter, I think, roughly, but for government work, you know. I use the word green shoots particularly. I chose that particularly because I'm not sure what the increase in tool storage means. I do think, though, it shows some thaw. We couldn't get arrested before with big boxes and stuff like that. Now you saw the Tribute to America, and I just have the feeling that it sold well, not only because it's a compelling offering, you know, it's one, but also because maybe the hurdles were a little bit lower. We'll see how that plays out. I think. Look, I think on our instances, it's a favorable thing. It shows that, you know, tool storage isn't completely dead. You know, in fact, it's pretty strong.

Speaker #2: That's it's not exclusively . And so when I say they were positive , they were , they weren't saying it was hard to sell .

Speaker #2: And they have said that before now . I didn't talk to every franchisee . You know , it was it was a windshield survey .

Speaker #2: I do think, though, it shows some flaw we couldn't get arrested before. With big boxes and stuff like that. And now you saw the tribute to America and I just had the feeling that it sold well.

Speaker #2: But the guys I talked to seemed pretty positive . And but I do think it makes it easier to sell if we have tools , if we have offerings that are matching the preferences .

Speaker #2: So hard to make a difference . I , I guess the answer is , I think both things are in play .

Nicholas Pinchuk: Well, the originations were flat in the quarter, I think, roughly, but for government work. I use the word green shoots particularly. I chose that particularly because I'm not sure what the increase in tool storage means. I do think, though, it shows some thaw. We couldn't get arrested before with big boxes and stuff like that. Now you saw the A Tribute to America, and I just had the feeling that it sold well, not only because it's a compelling offering, but also because maybe the hurdles were a little bit lower. We'll see how that plays out. Look, I think on our end, certainly it's a favorable thing. It shows that tool storage isn't completely dead. In fact, it's pretty strong. It's a nice, strong quarter for tool storage.

Nick Pinchuk: Well, the originations were flat in the quarter, I think, roughly, but for government work. I use the word green shoots particularly. I chose that particularly because I'm not sure what the increase in tool storage means. I do think, though, it shows some thaw. We couldn't get arrested before with big boxes and stuff like that. Now you saw the A Tribute to America, and I just had the feeling that it sold well, not only because it's a compelling offering, but also because maybe the hurdles were a little bit lower. We'll see how that plays out. Look, I think on our end, certainly it's a favorable thing. It shows that tool storage isn't completely dead. In fact, it's pretty strong. It's a nice, strong quarter for tool storage.

Speaker #2: Not only because it's a compelling offering and so on, but also because maybe the hurdles were a little bit lower. So we'll see how that plays out.

Speaker #11: Okay. Then two more quick questions here in the CNI segment: are you seeing, you know, increased demand from the data center market for specific tool kits?

Speaker #2: I think, look, I think our circumstances are favorable thing. It shows that tool storage isn't completely dead. In fact, it's pretty strong. It's a nice strong quarter for tool storage.

Nick Pinchuk: It's a nice, strong quarter for tool storage.

Speaker #2: Yeah , we're seeing increased demand for specific products for the data center market . You know , in terms of the construction of the data center .

Speaker #5: Cool. Thanks for the color.

Christopher Glynn: Cool. Thanks for the color.

Chris Glynn: Cool. Thanks for the color.

Speaker #2: Sure.

Nick Pinchuk: Sure.

Speaker #2: So we're seeing that , you know , I don't I don't know where that's going , but we are being asked to quote , and we find we find business in those areas .

Speaker #3: The next question comes from Gary Prestopino with Barrington Research. Please go ahead.

Operator: The next question comes from Gary Prestopino with Barrington Research. Please go ahead.

Speaker #6: Good morning, all. I'm sorry that maybe I missed this, but nobody asked this. Could you maybe just talk about how much tool storage was up year over year?

Gary Prestopino: Good morning, all.

Speaker #11: Okay . And then last question , what was the FX impact EPS , although

Nick Pinchuk: Morning, Gary.

Gary Prestopino: maybe I missed this. Nobody asked this. Could you maybe just talk about, you know, how much tool storage was up year over year?

Gary Prestopino: maybe I missed this. Nobody asked this. Could you maybe just talk about, you know, how much tool storage was up year-over-year?

Speaker #1: Good , $0.02 of good news when it came to operating income . When you look at the unfavorable currency remarks throughout the deck , that has to do with transaction negative variances .

Speaker #2: Well, I don't like to get involved and get big I think that's a cross. I don't want to nail myself too. You know what I mean?

Nick Pinchuk: Well, I don't like to get involved and get big. You know, I think that's a cross I don't wanna nail myself to. You know what I mean? Tool storage was up more than the average in.

Speaker #1: And that largely is associated with our factories emanating out of Sweden . And actually , the United Kingdom , to some extent .

Christopher Glynn: Cool. Thanks for the color.

Speaker #2: But tool storage was up more than the average in you know what I mean? It was one of the leading items. That's all. But you know, Gary, a quarter?

Nicholas Pinchuk: Sure.

Nick Pinchuk: Sure.

Speaker #7: Yeah , basically screws up the ratio $0.02 of good news , I think , is what you're asking for . Operating income positive .

Operator: The next question comes from Gary Prestopino with Barrington Research. Please go ahead.

Gary Prestopino: Okay

Nick Pinchuk: ... in, you know what I mean? It was up. It was a, it was one of the leading items, that's all. You know, Gary, a quarter, who knows what a quarter means? I mean, it's not definitive, but I still feel pretty good about it. I'm not here to declare victory and, you know, we're on the, you know, the big wide highway to victory now, but I feel good about it.

Gary Prestopino: Okay

Speaker #2: The reason why we talk about the negative .

Speaker #7: Is .

Speaker #2: Yeah , he says that's one of the conundrums of this of this period . It was positive on the EPS , but negative on the margins because it added sales and it did not add profits in any kind of proportion to that .

Gary Prestopino: Good morning, all.

Nicholas Pinchuk: Morning, Gary.

Nick Pinchuk: Morning, Gary.

Speaker #2: Who knows what a quarter means? I mean, it's not definitive, but I still feel pretty good about it. I'm not here to declare victory and we're on the big wide highway to victory now.

Gary Prestopino: I'm surprised, or maybe I missed this, but nobody asked this. Could you maybe just talk about how much tool storage was up year over year?

Speaker #2: But I feel good about it.

Speaker #2: They added a lot of sales and almost no profit .

Nicholas Pinchuk: Well, I don't like to get involved and get big. I think that's a cross I don't want to nail myself to. You know what I mean? Tool storage was up more than the average-

Nick Pinchuk: Well, I don't like to get involved and get big. I think that's a cross I don't want to nail myself to. You know what I mean? Tool storage was up more than the average-

Speaker #11: Okay . Thank you

Speaker #6: So I guess if I ask this another way, I mean, was a lot of that due to this new lower point product that you put out there for the techs?

Gary Prestopino: I guess if I ask this another way, I mean, was a lot of that due to this new lower pro-point product that you put out there?

Speaker #3: This concludes our question and answer session . I would like to turn the conference back over to Sara Verbsky for any closing remarks .

Nick Pinchuk: No. No, no

Gary Prestopino: ... for the techs?

Speaker #2: No, no, no. Yeah. Sure. Some of it was due to that. It's hard to say, but I talked about the new roll card that came out and we made it one of the things we did was smartened up.

Nick Pinchuk: Yeah, sure. Some of it was due to that.

Gary Prestopino: Okay

Gary Prestopino: Mm-hmm.

Nick Pinchuk: It's hard to say, you know, I talked about the new roll cart, you know, that came out, and we made it. You know, one of the things we did was smarten it up. We made it available in all these colors. You might think that's trivial, huh? It isn't, you know, because people wanna buy something like a roll cart, and they want it to match their box. If they got a candy apple red box with, you know, carbon trim, they'll want the roll cab to look like that. If you make that available, then it tends to sell more. That was one of the big breakthroughs here. It sounds so simple, in fact, it worked for us.

Nicholas Pinchuk: you know what I mean? It was one of the leading items, that's all. Gary, a quarter, who knows what a quarter means? It's not definitive, but I still feel pretty good about it. I'm not here to declare victory and we're on the big wide highway to victory now, but I feel good about it.

Nick Pinchuk: you know what I mean? It was one of the leading items, that's all. Gary, a quarter, who knows what a quarter means? It's not definitive, but I still feel pretty good about it. I'm not here to declare victory and we're on the big wide highway to victory now, but I feel good about it.

Speaker #12: Thank you all for joining us today . A replay of this call will be available shortly on Snap-on Inc . Com as always , we appreciate your interest in Snap-on Inc .

Speaker #2: We made it in we made it available in all these colors. You might think that's trivial. But it isn't. Because people want to buy something like a roll card, they want it to match their box.

Speaker #12: Good day

Speaker #13: Goodbye .

Speaker #2: So they got to if they got a candy apple red box with carbon trim, they'll want the roll cap to look like that. And if you make that available, then it tends to sell more.

Gary Prestopino: I guess if I ask this another way, was a lot of that due to this new lower point product that you put out there for the techs?

Nicholas Pinchuk: No. Yeah, sure. Some of it was due to that.

Nick Pinchuk: No. Yeah, sure. Some of it was due to that.

Speaker #2: So that was one of the big breakthroughs here. It sounds so simple. But in fact, it worked for us. And the roll cap's pretty sturdy.

Gary Prestopino: Mm-hmm.

Gary Prestopino: It's hard to say, but I talked about the new roll cart that came out, and one of the things we did was smarten it up. We made it available in all these colors. You might think that's trivial, huh? It isn't, because people want to buy something like a roll cart, and they want it to match their box. If they got a candy apple red box with carbon trim, they'll want the roll cab to look like that. If you make that available, then it tends to sell more. That was one of the big breakthroughs. It sounds so simple, but in fact, it worked for us. The roll cab's pretty sturdy, so that was another contributor. Yes, the Tribute to America was a good contributor, too, but it didn't account for everything.

Nick Pinchuk: It's hard to say, but I talked about the new roll cart that came out, and one of the things we did was smarten it up. We made it available in all these colors. You might think that's trivial, huh? It isn't, because people want to buy something like a roll cart, and they want it to match their box. If they got a candy apple red box with carbon trim, they'll want the roll cab to look like that. If you make that available, then it tends to sell more. That was one of the big breakthroughs. It sounds so simple, but in fact, it worked for us. The roll cab's pretty sturdy, so that was another contributor. Yes, the Tribute to America was a good contributor, too, but it didn't account for everything.

Nick Pinchuk: The roll cab's pretty sturdy, so that was another contributor. Yes, the Tribute to America was a good contributor too, but it didn't account for everything.

Speaker #2: So that was another contributor. Yes, the tribute to America was a good contributor too, but it didn't account for everything.

Speaker #5: Okay. And then just a couple more questions here. You said the franchisees are a little more optimistic than they had been. Do you attribute that to some of what you've done strategically with shorter payback products, or are they really starting to see a turn in the appetite for technician purchases of tools?

Gary Prestopino: Okay. Just a couple more questions here. You said the franchisees are, you know, a little more optimistic than they had been. Do you attribute that to some of what you've done strategically with shorter payback products, or are they really starting to see a turn in the appetite for technician purchases of tools? I mean, you know, you cited all sorts of issues with uncertainty for the last couple of quarters. Has that changed a little bit here, you think?

Speaker #5: I mean, you had cited all sorts of issues with uncertainty for the last couple of quarters. Has that changed a little bit here, you think?

Speaker #2: Well, look, I think it's this way. I think it's probably some of both. But franchisees usually talk to me about two things. Products they don't like, or something like that, or something in the system, or how easy it is to sell or hard to sell.

Nick Pinchuk: Well, look, I think it's this way. I think it's probably some of both.

Gary Prestopino: Okay, just a couple more questions here. You said the franchisees are a little more optimistic than they had been. Do you attribute that to some of what you've done strategically with shorter payback products, or are they really starting to see a turn in the appetite for technician purchases of tools? You had cited all sorts of issues with uncertainty for the last couple of quarters. Has that changed a little bit here, you think?

Gary Prestopino: Mm-hmm.

Nick Pinchuk: Franchisees usually talk to me about two things, products they don't like or something like that, or something in the system, or how easy it is to sell or hard to sell. That's. It's not exclusively. When I say they were positive, they weren't saying it was hard to sell, and they have said that before. Now, I didn't talk to every franchisee, you know. It was a windshield survey. The guys I talked to seemed pretty positive. I do think it makes it easier to sell if we have tools, if we have offerings that are matching the preference. Hard to make a difference. I guess the answer is, I think both things are in play.

Speaker #2: It's not exclusively. And so when I say they were positive, they weren't saying it was hard to sell. And they have said that before.

Speaker #2: Now, I didn't talk to every franchisee. It was a windshield survey. But the guys I talked to seemed pretty positive. And what I do think it makes it easier to sell if we have tools that if we have offerings that are matching the preference.

Nicholas Pinchuk: Well, look, I think it's this way. I think it's probably some of both.

Nick Pinchuk: Well, look, I think it's this way. I think it's probably some of both.

Gary Prestopino: Mm-hmm.

Gary Prestopino: Franchisees usually talk to me about two things, products they don't like or something like that, or something in the system, or how easy it is to sell or hard to sell. It's not exclusively. When I say they were positive, they weren't saying it was hard to sell, and they have said that before. Now, I didn't talk to every franchisee. It was a windshield survey, but the guys I talked to seemed pretty positive. I do think it makes it easier to sell if we have tools, if we have offerings that are matching the preference. Hard to make a difference. I guess the answer is, I think both things are in play.

Nick Pinchuk: Franchisees usually talk to me about two things, products they don't like or something like that, or something in the system, or how easy it is to sell or hard to sell. It's not exclusively. When I say they were positive, they weren't saying it was hard to sell, and they have said that before. Now, I didn't talk to every franchisee. It was a windshield survey, but the guys I talked to seemed pretty positive. I do think it makes it easier to sell if we have tools, if we have offerings that are matching the preference. Hard to make a difference. I guess the answer is, I think both things are in play.

Speaker #2: So hard to make a difference. I guess the answer is I think both things are in play.

Speaker #5: Okay. And then two more quick questions here. In the C&I segment, are you seeing increased demand from the data center market for specific toolkits?

Gary Prestopino: Okay. Two more quick questions here. In the C&I segment, are you seeing, you know, increased demand from the data center market for specific toolkits?

Speaker #2: Yeah. We're seeing increased demand for specific products for the data center market. In terms of the construction of the data center. So yeah, we're seeing that.

Nick Pinchuk: Yeah. We're seeing increased demand for specific products for the data center market, you know.

Gary Prestopino: Okay

Nick Pinchuk: ... in terms of the construction of the data center. Yeah, we're seeing that. You know, I don't know where that's going, but we are being asked to quote, and we find business in those areas.

Speaker #2: I don't know where that's going, but we are being asked to quote, and we find business in those areas.

Speaker #5: Okay. And then last question. What was the FX impact EPS, Aldo?

Gary Prestopino: Okay. Two more quick questions here. In the C&I segment, are you seeing increased demand from the data center market for specific toolkits?

Gary Prestopino: Okay. Last question, what was the FX impact to EPS, Aldo?

Speaker #4: And two cents of good news when it came to operating income. When you look at the unfavorable currency remarks throughout the deck, that has to do with transaction negative variances and that largely is associated with our factories emanating out of Sweden and actually the United Kingdom to some extent.

Aldo Pagliari: It, $0.02 of good news when it came to operating income. When you look at the unfavorable currency remarks throughout the deck, that has to do with transaction negative variances, that largely is associated with our factories emanating out of Sweden and, actually the United Kingdom to some extent.

Gary Prestopino: Yeah. We're seeing increased demand for specific products for the data center market, in terms of the construction of the data center. Yeah, we're seeing that. I don't know where that's going, but we are being asked to quote, and we find business in those areas.

Nick Pinchuk: Yeah. We're seeing increased demand for specific products for the data center market, in terms of the construction of the data center. Yeah, we're seeing that. I don't know where that's going, but we are being asked to quote, and we find business in those areas.

Speaker #2: Yeah, basically it's just the ratio.

Nick Pinchuk: Yeah, basically it screws up the ratio.

Speaker #4: Two cents of good news, Gary, I think is what you're asking for operating income.

Gary Prestopino: So-

Aldo Pagliari: $0.02 of good news.

Nick Pinchuk: It was positive.

Aldo Pagliari: Gary, I think is when you're gonna think the operating income is positive.

Speaker #2: Two cents positive. The reason why we talk about the negative is yeah, he says that's one of the conundrums of this period. It was positive on the EPS.

Nick Pinchuk: +$0.02. The reason why we talk about the negative.

Gary Prestopino: +$0.02.

Nick Pinchuk: Yeah, That's one of the conundrums of this, of this period. It was positive on the EPS, but negative on the margins because it added sales, and it did not add profits in any kind of proportion to that. It added a lot of sales and almost no profit.

Gary Prestopino: +$0.02.

Gary Prestopino: Okay. Last question, what was the FX impact to EPS, Aldo?

Speaker #2: But negative on the margins. Because it added sales and it did not add profits in any kind of proportion to that. It added a lot of sales and almost no profit.

Aldo Pagliari: We had 2 cents of good news when it came to operating income. When you look at the unfavorable currency remarks throughout the deck, that has to do with transaction negative variances, and that largely is associated with our factories operating out of Sweden and actually the United Kingdom to some extent.

Speaker #5: Okay. Thank you.

Gary Prestopino: Okay. Thank you.

Nicholas Pinchuk: Yeah, basically it screws up the ratio.

Nick Pinchuk: Yeah, basically it screws up the ratio.

Speaker #3: This concludes our question and answer session. I would like to turn the conference back over to Sarah Verbsky for any closing remarks.

Operator: This concludes our question and answer session. I would like to turn the conference back over to Sara Verbsky for any closing remarks.

Aldo Pagliari: Two cents of good news, Gary, I think, when you're looking at operating income.

Nicholas Pinchuk: +$0.02. The reason why we talk about the negative is-

Aldo Pagliari: +$0.02.

Nick Pinchuk: The reason why we talk about the negative is-

Gary Prestopino: He says positive.

Gary Prestopino: Yeah, he says positive. That's one of the conundrums of this period. It was positive on the EPS, but negative on the margins because it added sales, and it did not add profits in any kind of proportion to that. It added a lot of sales and almost no profit.

Nick Pinchuk: Yeah, he says positive. That's one of the conundrums of this period. It was positive on the EPS, but negative on the margins because it added sales, and it did not add profits in any kind of proportion to that. It added a lot of sales and almost no profit.

Speaker #1: Thank you all for joining us today. A replay of this call will be available shortly on snap-on.com. As always, we appreciate your interest in Snap-On.

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

Speaker #1: Good day.

Speaker #7: Goodbye.

Operator: Goodbye. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.

Gary Prestopino: Okay. Thank you.

Operator: This concludes our question and answer session. I would like to turn the conference back over to Sara Verbsky for any closing remarks.

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

Operator: Goodbye. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.

Q1 2026 Snap-on Inc Earnings Call

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