SNA
#Thanks, <UNK>
Good morning, everyone
I’ll start the call with some highlights of our second quarter
I’ll speak about the general environment, the trends we see, some of the headwinds we’ve encountered and the progress we’ve made
Then <UNK> will move into a more detailed review of the financial
On an overall basis, our second quarter was encouraging, we believe that once again offered evidence of advancement along our runways for both growth and for improvement
Reported sales were up 5.6% to $921.4 million and that included unfavorable foreign currency translation this quarter an impact of $12.5 million
It also reflected an incremental $38.4 million from acquisition last years Car-O-Liner and Sturtevant Richmont operations and this year is BTC and Norbar business
Our organic sales for the quarter rose 2.7% with varying increases recorded by every group
The opco operating margin reached 19.9% up from 19.1% in 2016, and that 80 basis point increase reflects the higher sales but it also represents the power of Snap-on value creation to driver earnings growth
For financial services operating income grew to $54.6 million from last year’s $49.5 million, combining with opco to offer our consolidated operating margin of 23.9%, up 100 basis point
Our earnings per share they reached $2.60, up from the $2.36 of last year a rise of 10.2%
Those are the numbers
Now for the market, from an overall macro perspective, we do believe the automotive repair arena remains favorable
The Tools Group organic activity was up slightly, smaller again then the previous period
That said, we don’t believe the second quarter results indicate a softening marketplace
We’re not hearing or seeing that rather it reflects the specific headwinds like sales decrease around our tool storage product line
On the other side of automotive, our automotive repair operations RS&I had strong volume in the second quarter
Organic sales growth with both independent repair shop owners and managers and with OEM dealerships, this marks RS&I’s third straight quarter of high single digit progress in organic sales
Representing what we believe to be an affirmation of the positive auto repair environment
Now for the Commercial & Industrial Group or C&I, organic sales were up mid single digit the highest for some time with progress across most of the industrial sectors and geographies and critical industries, gains posted in nearly every second – segment
and internationally, strengthen sectors like natural resources, heavy duty fleet, and particular progress in places like the UK and Mexico
Also positive for C&I was SNA Europe
SNA Europe, our European hand tools business delivering another quarter of solid results in places like Spain, France, Denmark and Sweden more gains across the core of Europe
So overall the results remain favorable
Growth was slim in the Tools Group, but advancements with auto repair shops was strong in RS&I
There was a clear recovery in critical industries, and there were continued gains in Europe
Opportunities still outweighing the challenges and the sales growth confirms it, and the operating income demonstrated – they demonstrated once again, the leverage and the power of Snap-on value creation, safety, quality, customer connection, innovation and rapid continuous improvement
Innovation and customer connection, the principles that guiding our organization in the ongoing development of productivity solution, borne out of the insights and observations gathered out of customers workplace and together with RCI once again this quarter helping to drive an 80 basis point OI margin gain
Well that’s the sort of macro overview
Now let’s move to the groups
Let’s start with tools
Organic sales were up 0.5%, there were two primary drivers that attenuating tool activity tool storage sales and destock
Tool storage was simply not the ever upward spring it’s been in the past
We believe there are still abundant market opportunity the segment isn’t saturated, however, our product line it wasn’t as compelling as we’ve had in recent periods
The second quarter enhancements we tried, they were somewhat but they weren’t enough, we need to do more in the upcoming Snap-on franchisee conference will be the initial venue for around of that new product
Also it appears that the Rock ‘N Roll Cabs are special tool storage vans, have lost some of their excitement
We’ll have to retool them
We’ll have to retool them to get the customer attention, and we will
And finally we regularly refine our credit programs to match franchisee practice and performance, this time we re-stripped our credit platinum levels and that change had some initial effect on tool storage
So we saw a weaker tool storage activity in both our sales and in the franchisees volume the sales off the truck
We’re aiming to recover with new product and with a revitalized set of Rock ‘N Roll vans
The other product line, our tool storage
Sales off the van, sales from the franchisees to technicians are up nicely for products besides tool storage, they were near the top of our targeted rates
Our sales of those product, that is the Tools Group sales of those products to franchisees were mixed and tepid in total
It appears that the traditional de-stocking that proceeds the buying opportunities of the Snap-on franchisee conference SFC and always take place in July and early August, well that contraction crap into part of June
The franchisees were selling robustly off the van with those products but drawing down their positions and ordering less new product
The reason that that these have been bigger than ever, offering more exciting products
Franchisees have been ordering more in that one being weekend and this year, we’re getting ready earlier clearing the decks
That’s said, even with a modest volume increase Tools Group operating margins rose 120 basis points to 19.5%
That 120 basis point improvement demonstrates clear progress to benefit the Snap-on value creation, more effective higher margin product, streamline product development and nice volume leverage internationally
Advancements in the Tools Group are evident in the overall OI improvement, and they are apparent in our franchisee health metrics
The financial and physical indicators we monitor and evaluate continuously
They remain favorable an important categories like franchisee turnover
We believe our van network is growing stronger, I just visited several franchisees in the field and I can assure you that the confidence of those entrepreneurs was quite encouraging and besides those interactions during more formal discussions like our National Franchisee Advisory Council meetings, I heard similar comments
The people I spoke to are upbeat very confident of their opportunity going forward, that’s the Tools Group
Now onto C&I
A 4.7% organic sales rise with higher critical industry activity and increased volumes at SNA Europe and at our Asia-Pacific operations
For several quarters now the C&I businesses have demonstrated sales acceleration
C&I operating margin was 13.8% flat versus 2016 with volume and RCI gains being more or less to offset by the impact of our recent acquisition
Importantly, the industrial division showed strength, broad – showed strong broad-based progress across the critical industries with most of those sectors advancing in the quarter
We believe the improving macroeconomic conditions coupled with our array of great new products and that’s solving critical path is driving those favorable results
Speaking of new products in the C&I Group, in the quarter C&I acquired Norbar Torque Tools headquartered in the UK, Norbar is a leading manufacturer of torque product offering a full range of wrenches, multipliers and calibrator that acquisition complements and expands our existing torque line by extending our range up all the way to 220,000 foot panels, more for the C&I team to sell to our customers and critical industries
Norbar offers both power torque and strong line up of manual torque multipliers
The latest in that line introduced in the second quarter is the MTMB740 compact manual torque multiplier, this tool, it features compact design with a multiplier head just 2.6 inches in diameter enabling excellent access and easy handling, while still providing 5:1 multiplication ratio up to 740-foot panels, and that’s Norbar tradition the construction is robust delivering a long life and minimal maintenance and its ideal for using tough environments like oil and gas, mining, power generation, railroad and heavy duty fleets in a range of critical industries
Now C&I has been in Torque for sometime, with our manufacturing facilities in City of Industry, California more recently with our Sturtevant Richmont acquisition and Carol Stream, Illinois producing great products, selling to automotive, aerospace and other industrial customers
And in the second quarter, our City of Industry team launched it’s ATech micro TechAngle quarter inch drive torque wrench, the smallest electronic torque wrench in the market, compact steel body, less than a foot in length and less than an inch in diameter and it weighed just under a pound
That compares with our – by comparison to our standard ATech quarter inch wrench, at 16.5 inches in length and 1.9 inches in diameter and weighing nearly 2 pound
Engine compartments they continue to get smaller and tighter with each model year limiting the access and reducing the workspace
The slim design of our new ATech allows technicians to reach fasteners that are resource obstructed, reducing the need to remove components and saving considerable time in the repair shop
And the products short overall length enables a compact swingarm
That’s very important in a tight space of modern machinery
We’re excited about the compact quarter inch ATech access and accuracy in one package, we believe it’s a clear winner and early results support that view
Now let’s speak about SNA Europe, positive trends and the uncertainty that is Europe
SNA Europe registered it’s 15th straight quarter of year-over-year sales growth and profit quarter to mark the 17th straight quarter of margin improvement defining the challenges over multiple geographies roughly four straight years of favorable performance, helping the C&I Group advance in both sales and profitability
And in the quarter Asia-Pacific operations, sales growth in countries like China and Taiwan lower volume in places like India, mixed results by country but positive result overall
C&I, turning in a promising quarter on broad gains and accelerating sales
Now onto RS&I, organic sales rose 8.3%, high single digit gains of diagnostic and repair information products, the independent repair shop owners and managers a high single digit increase with OEM dealerships and a mid single digit in advanced in undercar equipment, growth across the board
And on a reported basis, including RS&I’s $22.5 million of acquisition related sales volume grew 14.5% in the second quarter
Operating earnings of $81.9 million increased $7.4 million
The operating margin of 24.2% was down 100 basis points but that was impacted by 120 basis points of lower margin in the acquisition
The broad organic growth was strong with independent and with dealerships
And innovation and new product paved the way
From the diagnostics division, our newest handheld offering ETHOS Edge enhanced industrial design, faster response time, configure to match specifically the needs of new tech, those just starting out and working on a more routine maintenance test and light repair
The initial feedback on the ETHOS Edge is quite enthusiastic and early sales they’ve exceeded our expectation
For the OEM dealership, in the quarter RS&I introduced a new – latest version of the next brand Electronic Data Link or EDL3, it is specifically designed for the needs of agricultural repair technicians across the service network of a large OEM
This essential tool responded to a need to connect ag equipment in the field to the OEM’s diagnostic software, to access repair information in any environment Snap-on solve the problem and made it happen
The EDL3 is just one example of our essential diagnostic program aimed at OEM dealerships, and those were nice part of RS&I’s quarter
And undercar equipment, it was also up, mid single digit with particular strength internationally, solid growth in Europe and broad gains in lifts and balances, undercar equipment another positive quarter
So to wrap up RS&I, substantial achievement across the division, improving our position with repair shop owners and mangers continuing a very favorable trend
So that’s the highlights of our quarter
Tools Group lagging in sales but C&I and RS&I both recorded strong performance progress along our runways for coherent growth and clear advancement than our runways for improving
Overall sales increasing organically 2.7%, opco operating income margin of 19.9% up 80 basis points
EPS $2.60 arise of 10.2%
It was another encouraging quarter
Now I’ll turn the call over to <UNK>
Thanks, <UNK>
Snap-on second quarter Tools Group, tepid growth, but having the advantages going forward of a strong franchise network and a robust market
C&I accelerating growth, up mid single-digit, broad gains in the critical industries and the continuing upward march of SNA Europe and RS&I, another high single-digit quarter, up 8.3% organically each division contributing to that rise, confirming both the opportunities in automotive repair and our progress with repair shop owners and managers
The positives of C&I and RS&I combining to overcome the challenges in tools, making for overall organic growth of 2.7% and Snap-on Value Creation, driving improvement, customer connection, innovation in RCI, authoring margin progress again
Opco OI margins of 19.9%, a rise of 80 basis points against currency and acquisitions
And acquisition, presenting near-term margin dilution, but offering further landscapes for Snap-on Value Creation and margin improvement going forward, it was a quarter in which we saw a challenges, but overall, we overcame and demonstrated growth and improvement again
EPS of $2.60, up 10.2%
It was an encouraging quarter
And we’re confident
We’re market that our markets have the opportunity, our businesses have the position and our team has the capability to continue our ongoing positive trend and performance going forward
Now before I turn the call over to the operator, I’d speak to our franchisees and associates listening to the call
The encouraging result to the second quarter reflect your capability and your commitment, for your ongoing achievement and your commitment
For your ongoing achievements, you have my congratulation
And for your extraordinary dedication to our team, you have my thanks
Now I’ll turn the call over to the operator
Operator? Question-and-Answer Session
Good morning, <UNK>
Well, we don’t like to give away the secrets that we’re going to rollout say at the SFC or so because we like to electrify the people who go there
I just talked to our franchisee in California who said, he likes to get the fever when he goes on the floor
So we want to have that, but look, our thermal imagers are still selling well
That still got legs, that’s the new category that’s going well
Overall in the Tools Group, the diagnostics category was up, I think mid single digits in the U.S
numbers, have those
So if that was in part of that statement raise, and even in that we saw a destocking so it would have been up bigger without what we perceived to be destock, so you have that and then you have the ETHOS, which is the next level
We keep refreshing the platform
Remember, there are four levels of platform
ETHOS, for the entry-level tech; SOLIS for the guy who kind of worked on breaks, and there’s a whole bunch of the other little bit, more sophisticated jobs; MODIS for the guy who really works on the more complicated jobs and VERUS for the guy who works on those things that only happen on money
So we rolled out the ETHOS and we’re doing out some new wrinkles in the SFC, but the ETHOS has just come out, very early days
We have it in the script here, but that’s only been selling for a little while, but the first numbers are pretty good
It was up nicely in the second quarter
Sure
One of the things that when we saw these results, I decided to talk to a bunch of franchisees
So in the last couple of weeks, I don’t know when we got the results, but I’d say a couple of weeks ago
Right away I met with guys from Illinois, Wisconsin, Indiana, rode some vans in Arkansas and Texas told the guys in New Hampshire, Florida and California and almost everybody said that the Rock ‘N Roll Cab had lost some of its excitement
So it’s a matter of – it’s not really the function, <UNK>, it’s having people get on the van and saying, oh this is something different, an experience
I want to get on the van and experience because that’s what they did before
So we’ll do stuffs like rapid differently with some of our new facilities
We’ll reorganize the tool boxes
We’ll try to put some more spiffier and stuff on in terms of the box as on the van
So I’d like to say, it’s a matter of this, when the technicians were getting on, they – they get feedback on them and they, think I saw this
Now some of the guys have bought because they look at the boxes, but other guys were kind of saying, I done that, so we’re going to try to make it a different experience, move around some of the floor plan, maybe kind of put on some a little better computer aid, things like that
So I think it’s really to change the – I want to say the cosmetics of it more than anything else, so people feel as though they’re getting a different experience
Good morning, <UNK>
Well, look
I don’t think we want to get pinning down that variable, but what I’ll tell you is sort of like this
You think about it this way
Tool storage was down fairly significantly even off the trucks, but less so than we had, okay
So that’s why we say tool storage, the product line
We believe it needs to refresh
We need the marketing, the Rock ‘N Roll vans need something that helps and so we’re working on that
If you look at everything else, if you take everything else, like this, two type you are very familiar with this, it’s easy that the finance stuff and the RA stuff, the stuff that what we know is the stuff that the franchisee sells on his own credit like hand tools and power tools and shop and pack, and in some portions of diagnostics
That was up fairly significantly, towards the top of the ranges that we expect to see from the Tools Group
So we would have classified that it as a fairly robust quarter, looking at the sales off the van, that didn’t translate into our sales though
Our sales were quite mixed in those categories and a quite tepid
So what we – and you talk to the franchisees and what they said was it makes sense is that always July is the lowest quarter because people are getting ready
But what happened over the years is more and more the ordering is taking place in these burst
That doesn’t mean the second quarter becomes incandescent, but they’re taking place at these bursts and so I think they’ll be more aware of the need to kind of get ready for these orders
Last year, the orders in the SFC were up quite strongly in the before as well
So what’s happening is, is that they’re bleeding out – out of July into June, that’s what happened
We saw a significantly weaker tail end of June than we have seen in the past
We make them pretty much every year, some kind of changes and I think since 2009 or 2010 we’ve made significant changes in most of the years, in a lot of years so that happens
What you do is you look at how people are performing
You say how is the business? How are the franchisees? Who are big active parts? You try to restructure the program so it guides them to get the best out of their opportunity, and that’s what we did
And so that had some initial impact because we identified some customers who are weaker and we said some of the franchisees are having some of the greatest results, and that’s where we strip them
So those franchisees would be focused on those guys and really couldn’t deal with them as much
Whereas other guys, we have lots of faith and we let them deal with that same category, that’s the restriking pretty much
Look, I don’t know
Look, I don’t think we ever think we have easy comparisons
I think we kind of look – I mean, okay
The comparisons are easier, but they’re up 0.5%
This is the best second quarter ever in terms of sales
I mean, the increase wasn’t the best, and the profitability is the best ever
So I don’t think we think in those terms
I think the question is how you are going to restart, it’s clear to us that the primary factor in the sale slim situation in tools was tool storage
Tool storage is among the most discretionary things
You’ve got excite people they got to want it, they got to aspire to have it
We’re working the SFC will come up in early August will be launching a whole bunch of new product that the SFC to try to roll people and excite them
We tried some of that in the second quarter, some of it worked and it wasn’t enough and then the tool storage and the van, the Rock ‘N Roll Cab, there are I think 67 of them
So what we will do over the next, say, quarter, we’ll be developing – in this quarter, let’s say, we’ll be developing possibilities for the new van
We’ll probably test some of them and then we’ll roll them out whatever works best
So it will be a test period, development period, a test period and then a rollout period
And you tend to roll them out, so you should start seeing some of that as, well, I don’t know, toward the later end of the year, things like that
But first is product
The first factor is product
First factor is product
Okay
I’d say that Snap-on should grow at 4% to 6%
I’ve said this for a dog’s age
That’s my range
So I’m talking to the end of that range
That’s the kind of thing we talk about, right? Okay
Good morning, <UNK>
Look, natural resources was up
Natural resources, in general, that sort of natural resource segment was up
International aerospace, which had been a laggard, was up
We’re very pleased to see that
Military, actually, was flat
I kind of viewed that – kind of flat, it was up a little bit
I kind of view that as a positive, <UNK>, because the thing is military, as you know, it’s kind of lumpy and it had been dominating our quarters
So actually, last quarter was sort of the same kind of thing, we had broad growth
This time with military, not as much a factor in the growth situation
And this time, the same thing was the case
So this was a very healthy quarter and you’re seeing acceleration in industrial
C&I’s numbers, if you go back and look at them, you’ll see that we threw, four quarters ago, 1.5%, 2.4%, 3% and 4.7%
So people, if you look at this, other people have looked at the segment and say, well, there’s some deceleration
Well, this is acceleration
And so that’s pretty positive, and the nature of that’s been pretty good
And industrial has been up higher than that
There’s a – I don’t want to short change some other factors in there
But if you look at the diagnostics, it’s a great tailwind
The increasing need for diagnostics to create repair, you know it as well as I do, is that 40%, 50% of repairs on cars today require diagnostic
But new cars, that’s all the cars 11.5-year-old average car fleet, but if you look at new cars it’s 80% of the repairs
So there’s an increasing demand
You hear it in the shops when you go around
We have the best goal alternatives
So you see our new products rolling out, exciting customers, solving their problems against the backdrop of their needs, that’s partially what you’re seeing, and diagnostics was up nicely in that quarter
But I wouldn’t want to short change Mitchell, which is a purely short, purely software business, which provides repair shop management and provide repair shop – repair information, our Sure Track database with the 1 billion record that only we have of repair, shortcutting repairs
That was up big in the – nicely in the quarter
So you take those two things, I think diagnostics is in – I mean, RS&I, in general, is in a situation where the tailwinds are only intensifying and where the best game in town
I don’t know
We didn’t refresh
We launched the tool storage vans and this is – you got the first – when you launch, you probably – I think it’s fair to say we had some periods where we’re adjusting
But really, they’ve been pretty much the same since we launched like five years ago
So we haven’t had that information in this kind of fleet
We haven’t had this kind of fleet
This was a brand new idea
You remember I said it’s the kind of idea that came to the Tools Group guys
It accelerated tool storage sales
But now, it’s kind run out of mojo
Now we’re still generating some sales, but franchisees are telling me that what they used to generate is now half of what they generated when they get these guys in a route, so we need to pump them up
But this is why we have managers to figure this out, that’s what we do
No, I think we try to – what happens is, <UNK>, we try to roll out new product at the SFC or the kickoffs every year
This year, we’re particularly energized to do it
So you can see sales, you can see ordering pretty quickly from the franchisees
I didn’t get a feeling for that pretty quickly at how good that worked
The question is, is it going to play out into the marketplace? So there are two levels, getting the franchisees interested and then having the technicians look at it and say, "Hey, I got to have that box
I already got a box, but I got to replace mine
We’re doing more and we’re certainly going to do more in tool storage at the SFC this year than we have been in the past
So think about the SFC though, no matter how much the SFC orders are, remember, they’re ordering for like six months, so it doesn’t happen immediately, right? Okay
But we’re doing more
Sure, this is the whole thing
We think the product line is weak
If it’s not doing, we got to pump it up
Thanks, <UNK>
We don’t think it’s that
We think the credit is – while the destocking is something completely different
The destocking is, we think – I think I try to – this is my view, <UNK>, is that, look, and I think it’s our view here
There are two factors we’re talking about on the Tools Group, destocking and the weakness in tool storage
Destocking is a completely different thing
The destocking is there driven by the size of the orders that are occurring in the SFC and the feeling that our people want to clear the decks
This is happening in every product line, not just tool storage
So from our perspective, that’s not really a factor there
If you come back to the tool storage sales, you could argue – and I think I did say that it’s a tertiary effect, so we don’t believe it’s the primary driver
But re-striping had some initial effect on this, for sure, but we don’t think it’s the primary driver when we look at the numbers
I think a couple of things are in there
The first is that if you go back and you look at our numbers, it’s not – if you look at our numbers by division, it’s not unusual to see that kind of growth
It isn’t necessarily directly proportional to the volume
I mean, we have RCI products and new products that rollout that are a lot more, a lot more capable and a lot more value, and therefore, higher margins as they rollout to the industry
So it really plays out how long those new products and how many new ones we rollout, and how effective they are
And then in this particular – so in this quarter, in that area, we have things like the PT850. I think I talked about it last time, our new half inch impact wrench, very, very popular product
In the atmosphere of tepid sales, that one sold very well, nice margins
I talked about the long handle ratchet’s that have the flex heads and were – gave great leverage and also gave great access, that sold better than – great margins
And these margins transformed our categories in terms of margins
What happened in the destocking in a lot of situation is some of the more standard and core product didn’t sell as much because they were products that we’re already on the van
And so that was, perhaps, lower margin so it’s skews the thing towards there
And then we had good leverage in the way our businesses were stronger internationally than they were in the U.S
and the compensation in the international is a little bit different
So we tend to get a little bit more leverage and drop through volume leverage out of the volume, so that’s what made for that
I think it’s hard to say what the sustainability is of this, but we believe, I’ve said this over and over and over and over again, that we believe we can drive margins up, absent volume increases
And if you look at our numbers, 19.9% ain’t chopped liver
It’s our highest ever
And so you go back and you look at this quarter, for example, this quarter is very similar to last 20 quarters, 9 quarters were similar to this and we grew 100 basis points or more
So I really believe maybe the 19.5% isn’t sustainable every quarter, but it’s an indication we can reach that level and we keep going off those levels, that’s our history
No
Storage is down more than that
Well, storage is down double digits
I don’t want to get confused here because I spoke probably for the first time on this call about sales off the van
Don’t get confused about sales off – I’m talking about our sales
Storage was down double digits
And so that played out into a different lower originations
But remember, in originations, originations are the franchisee sales
Their storage was down but not as much
And then you also have in that, you have other products like diagnostic units and other things like that so it’s hard to make that characterization
But I just thought tool storage was painful
I think we’re always discussing the use of cash and we’ve always said, I think, that you have investment in your business and you have acquisitions and you have dividend, and of course share repurchase is part of that
So we always consider that in the context of the cash availability, the authorizations we have from the board and the attractiveness of the pricing
Look, I think this, I think we’re going to see destocking through July then they’re going to come up to the SFC
This destocking, I don’t think – it wasn’t – I don’t think it was driven so much by people saying, I got too much inventory
It was driven more by the idea, that the ordering patterns are migrating toward big orders – more toward big orders at the buy, twice a year events
And they order these things because they, like I said, the franchisers get on the floor and they get the fever and are able to – for the first time, touch the product and they order the packages, they see the new product and they tend to order more and these things get delivered for like six, eight months after that
So the lower they are – the better – the more stabilized they are going into that, they’re starting to realize, the better off they’re to manage that six, eight month delivery pattern that they’ve signed up for when they go into these places
That’s was happening so there’s a little bit more ordering happening at the big events and less maybe on whatever the monthly events are
We have monthly events and so, I think, that’s what you’re saying
And because the SFC has been sold, I think that’s what I’m hearing because the SFC has been sold successful, people are bringing it down
I don’t think they’re thinking that, oh, I’m joking on inventory
Yes
The answer is for both of those
Look, I think we saw it some destock, but we’re kind of confident that – as the SFC rolls out, that inventory is going to be quite useful that’s we’re building toward
The RS&I business, hey, it’s smoking
It went well
I mean, the thing is in RS&I, in some cases, we can sell – we want to have inventory because we have quite good demand and even in the Tools Group, really
I mean, we sold – I believe, we sold every PT850 we could build this quarter
So I mean, the thing is you do have this kind of things, so we’re happy to have some inventory going to the SFC for that kind of thing
We’ve rolled it out and it worked, but didn’t have enough effect
We rolled out a special call and we had a couple of split with top boxes, with the couple of minor changes
We did it as quick as we could because we – second quarter, we weren’t quite ready for it
So we rolled that out and it worked pretty well
It was a purple box
Now, we have a number of different things like different mechanisms for the box, different power configurations for different product lines, different in array of more colors that come out in like an SFC
So it’s a much more comprehensive thing
Well, you’ll have – I think we have two months worth in this quarter
You’ll have three months then
On the other hand, you’re offsetting that
Anytime you make a change in credit, people tend to be take a little time to try to understand the new rules more with more clarity
This is just a fact
So I don’t know
You could because you got one more month
On the other hand, you’ll have people operating with more clarity
So I’m not so sure
In any case, we don’t expect the huge impact
Well, I can never comment
I hate to do that because many times, I’ve been humiliated by saying I thought that things were over, but look, we’re not – this is a very slim quarter for the Tools Group, but I know they’re going to work pretty hard to try to energize this tool storage business and we think the market is strong
So we’ll see how that plays out
I guess, I can’t make any predictions, but I think this is what we do
We revitalize products
We change marketing
This is the kind of thing that Tools Group does and over the years, we’ve been pretty good at it
So I’m confident in them
But I can’t make any predictions on a quarter-to-quarter basis
That’s difficult to say
I’m pretty confident
So that the Tools Group is over time is at – in that range of 4% to 6%, I’m very confident of that
