Nicholas T. Pinchuk
Chairman and Chief Executive Officer at Snap-on
Thanks, Sara. Good morning, everybody. Today, I'll start the call by -- as usual, by covering the highlights of the second quarter and I'll give you my perspective on the environment and the trends we're seeing. Along the way, we'll cover the markets, they are encouraging actually. And then I'll take you through the segments and the advancements we've made. Then Aldo will provide a detailed review of the financials.
We see the second quarter as a period of significance. Sometimes you see a performance, where you breakthrough to new heights, and this is one of those times. I'm going to tell you why we believe that to be true. In some ways, though it was similar -- this period was similar to many periods we've seen over time. We continue to have significant headwinds and there's always turbulence, variation from market to market, but we believe it's our job to confront and overcome these obstacles and we did just that in the second quarter by wielding the strength of our advantages, executing on our strategic runways for growth, making the most of our runways for improvement, and by relying on the skills and dedication of our people. And once again, it paid off. The numbers scream its soul, because they are.
As reported, the second quarter sales of $1,191.3 million were up 4.8% from 2022, including the impacts of $8.3 million of unfavorable foreign currency translation. Organic activity was up 5.6%, the 12th straight quarter of year-over-year expansion beyond pre-pandemic levels. That's a trend that demonstrates we believe the solid consistency during pretty uncertain times.
Now, let's talk about the earnings. OpCo operating income for the quarter, including the effects of unfavorable foreign currency was $277 million, up 12.3%. And our OpCo operating margin, the operating margin, it was 23.3%, up 160 basis points from last year, baffled. When I said new levels, I meant it. For financial services, the OI of $66.9 million represented an increase of $1.6 million and it all combined to a [Technical Issues] an overall consolidated operating margin of 26.8%, up 130 basis points from last year. And the second quarter EPS, it was $4.89, up $0.62 or 14.5% from last year's $4.27. I think, I'll say it again, $4.89, up 14.5%, the productivity and profitability of Snap-on operations shining through as the supply chain viscosity diminished. We believe Snap-on is stronger now than ever before and the quarter's profitability makes that crystal clear. Well, those are the overall numbers.
Now, let's speak to the markets. Auto repair; again this quarter it's favorable. Miles driven are up. Spending on vehicle maintenance, up. Technician count, up. Technician wages, up. Consistently positive year-over-year -- consistently positive year-over-year trajectory across all essential categories. Drivers in vehicle repair are fairly understood. Car parks are growing; getting older every year and every year the tests involve the maintain and repair the vehicle parts get increasingly complex, requiring more hours, greater scale, increased wages, and more sophisticated tools hands or power or data-driven tools.
There is a significant need for more technicians and greater capabilities. The competition for that talent is growing and it's being reflected in the rising wages. At an everyday level, I think, you can see this demand when you're trying to schedule a maintenance appointment or just by visually seeing the abundance of cars and trucks in the repair base were parked outside, crowded around the shops, waiting for their turn to get in. And in fact, just this month I was with a group of franchisees and customers in Bristol, Tennessee at the NHRA Thunder Nationals, the drag races and they energetically expressed their enthusiasm during our conversations. You could feel their optimism resonating with an appreciation for our products, our solutions, and how we make work easier.
So we expect the trajectory of vehicle repair is solid and we'll continue through the quarters, and on into the years ahead. We expect that vehicle repair is -- we believe that vehicle repair is a great place to operate and repair -- and the repair information -- our repair information group and our Tools Group are well-positioned to take advantage of that.
Now on to the critical industries, where our Commercial & Industrial Group or C&I takes our business out of the garage and solves paths of consequence where the penalty for failure is high in a wide range of sectors, where custom tools are often required to get the job done. This is also the segment where we have the most significant international presence and the attendant variations from country to country with many versions of economic and social headwinds. In the US landscape actually, it is pretty positive. We see progress across a number of sectors. Aerospace is strong. Increased demand in commercial aviation and momentum within space exploration. The military business with another strong quarter of growth.
Now better matching the actual needs. Natural resources continues to advance. In oil and gas and wind after the uncertainty of the last fall, energy repair is a positive place to be. Also being in the period was industrial transportation. Supply chain turbulence, I think, has raised the attention on rail and heavy-duty fleets. Society now more than ever sees the essential need to keep commercial supply moving. And it's accruing positively for us.
Now, there are tepid spots across the globe, places traumatized by the Ukrainian war. We see that. Weak business in some of the Asia-Pacific operations. But one of the clear and large positives in the period is the general rise of critical industries and our industrial division is well-positioned and it's taking advantage with this capability to customize products to a large number of applications and it's working. Our critical industry teams are on an upward trajectory, utilizing its capability and the enhanced capacity to capture -- their enhanced capacity to capture significant gains.
Overall, the story of Snap-on outside the garage looks quite promising. And as we move forward, we'll continue to capitalize on our abundant potential. And as part of that, we will keep engaging Snap-on value-creation, customer connection and innovation developing profitable new -- profitable new products and solutions delivered by the insights and knowledge gained standing next to the customers right in the workplace and will drive RCI all over the enterprise including in the Tools Group. We will keep working to increase our franchisee's selling capacity with efficient processes, with advanced training programs, with social media and digital content and expanded manufacturing capacity to meet the rising demand. All combining to take full advantage of the opportunities and continue the positive trends we've seen into the future. Well, that's the market overview.
Now, let's move to the segments. For the C&I Group, as-reported sales rose 1.4%, including $5.6 million of unfavorable foreign currency. Organic volume was up by 3%. A quite strong performance in the Industrial division was attenuated by shortfalls in some of our more challenged areas. Power tools had smaller volumes as customers anticipated the arrival of new products in the third quarter. Our European-based hand tool business, SNA Europe and our Asia-Pacific operation demonstrated growth in several markets, but softness in Eastern Europe, and currency pressure in Japan, yeah, the yen was weak was some offset. But our industrial vision isn't just growing in volume. The margins are strong and rising.
Customized products is a wonderful thing. So C&I OI was $58.1 million, a 12.4% increase over last year. And the operating margin was 16%, one of the highest ever for the Group, representing a gain of 160 basis points over the second quarter last year. The Industrial division wielding the capacity provided by our new building in Kenosha registered significant sales progress.
In April, we discussed the recovery of the military business -- in the military segment. In this quarter, we continued that momentum, capturing significant long-term contracts. Our product line wide and effective produced in the US made the difference. So we believe things look promising for the military business and for all our Industrial sectors -- segments.
Beyond the Industrial division in C&I, our Specialty Tools operation continued to advance, meeting the need for precision with new torque products, covering a vast spectrum of clamping forces for challenging applications. Torque accuracy is rising in importance and Snap-on is ready to capitalize. We are confident and committed to extending in critical industries.
And that conviction is anchored by the ongoing expansion of our lineup of innovative products explicitly designed for particular tasks, offerings like our Automated Tool Control or ATC, enabled by proprietary digital imaging technology that scans toolbox drawers recording in real-time which tools required or removed or replaced. It's an increasingly crucial feature for aerospace, for industrial manufacturing, and for commercial transportation operations. Imagine working on a plant of a locomotive engine and unknowingly leaving a tool behind in the workplace. Not good. Not good. This is a mistake that could result in a failure in any tight tolerance mechanism. One small item can be a huge problem.
Well, ATC has an answer. Keeping track of the tools, identifying missing items, tracing who signed them out and where those to be used, and giving the all-clear when every things return. So the plans can take off. Snap-on critical industries are on the rise and ATC is part of the reason. In another quarter, we released our next-generation of ATC, a larger touchscreen to improve the shop productivity and upgraded processes with the latest technology for seamless integration with any central IT system. And as you might expect, our customers were enthusiastic, sophisticated products for complex products. It's a winning combination for C&I and you can see it in the quarter's results.
Now on to the Tools Group. Organic sales grew 1.1%, which includes 60 basis points of unfavorable foreign currency. Growth in the international markets and a slight improvement in the US network. Based on our franchisees and customer feedback, like I said already, vehicle repair is robust, but in the period our record demand net capacity constraints before our plant expansions we're fully operational, limiting some of the potential possibilities and somewhat attenuating the volumes.
But for operating earnings, they rose in the quarter by $13.3 million or 10.7%, reaching $137.7 million. That's almost double, double the pre-pandemic level. The operating margin was 26.3%, a rise of 240 basis points against 50 basis points of negative currency. Let me say that again. Tools Group OI margin was 26.3%, boomshakalaka. This is a high-popping number. So for the Tools Group -- so the Tools Group had another positive quarter with substantial profitability. We are confident in the strength of our van network and I believe is borne out of quantitative evidence. Franchisee health metrics, we monitor them regularly every quarter, and again this quarter they remained strong.
So whether you're talking about -- talking to the franchisees at Thunder Valley or looking at the numbers, vehicle repair does appear robust and continues to be strong. Now, when you think of the Tools Group's profitability, which is pretty important subject this time, you think about hand tools. That high-margin lineup was -- they were -- that was up in the period and new products led the way.
One example of successful innovation that came from another customer connection was a number of franchisees observed that diesel technicians struggling to access sensors on Class 8 semi-trucks, they were struggling to do that. So to change the part without risking damage, the path had to be cleared by removing several other blocking components. Believe me, that's a time-consuming process. And so, armed with customer connection insights those customer connection insights, our engineers developed an innovative design quickly produced a 3D prototype and confirmed that it solved the problem and that new tool the SWR5 90-degree special crowfoot wrench is being made right now at our Elizabethton, Tennessee plant and it's getting a lot of attention. It really does make truck repair easier. The techs love it and we kind of like the margins.
Profitable customer connection is one of the drivers behind the Tools Group's success. And another example relative this quarter is our two-piece horizontal pushing adapter set, the BGP1BKS2, these names or something. Techs at a super dealership with. They were taking a lot of time to remove and install control arm bushings from suspension setups on the newer models.
Our team assessed the procedure and designed two new adapters to integrate with our existing ball joint press and that enabled us to fit for the new -- good fit for the new super suspension say and say two hours in repair time per procedure. That's a big savings in the garage generated by customer connection and innovation.
SNL -- a while ago SNL's Roseanne Roseannadanna said, it's always something, and it's true, there are always new repair challenges, whether it's the powertrain, it's internal combustion, plug-in hybrids or EV platforms, vehicle architectures getting tighter, packs more devices, creating additional accessibility constraints. It's all music to our ears. Our franchisees and engineers observe the work, identify complications and simplify the complex and multifaceted paths to raise efficiency and keep the world moving. And the attendant value is considerable. You can see that in the Tools Group profits.
Now, one of the highlights for the quarter was the continuing growth of our big-ticket sales. A sign of technician's confidence in the vehicle repair shop. Driving some of that trend was our latest tool storage unit, the KMP1023ZLT7, a 72-inch master series roll cab painted with a unique apparent scheme we call Green Envy, a bright green body paired with black trim. It stands out and makes the statement at any repair shop. But beyond the eye-popping optics, the boxes also productivity enhancing powerhouse equipment, 14 drawers including three spanning the full width of the unit putting the most important tools of any size right at hand. It also offers our popular power drawer, a dedicated space for equipments. I guess, five power outlets and two USB ports for charging a full array of correlated accessories. And for the hard-to-manage small parts, our 2-inch speed drawer makes for easy organization with Green Envy color coordinated dividers, custom slots for components of various sizes. The box is already one of our hit products. It really energize franchisees and was well-received by our customers. And as I said, it helps to keep the big-ticket train moving.
Well, that's the Tools Group, strong profitability, built on solid foundations of innovative products and franchisees' success mixed with a considerable portion of RCI gain. Now visible as supplied that RCI gain is now clearly visible as a supply chain turbulence we see.
And now let's go on to RS&I. Sales as-reported reached $452 million. That represented a $35.2 million or 8.4% increase. Gains in the equipment and OEM essential programs paired with -- gains in equipment on OEM paired with our successful rollout of our new handheld diagnostic platform. The OI in the period was $110.4 million, up 14.7% or 15.4% -- up $14.7 million or 15.4% and the operating margin was 24.4%, a rise of 140 basis points, nice.
As we said, the vehicle repair environment is strong, offering significant opportunity in the second quarter results for C&I, says it so. And the recent launch of our new SOLUS+ diagnostic platform was a big key to that success. Great new features including a two-second boot up, the fastest in the industry and an eight-inch color touchscreen with 60% higher resolution, making it much easier for technicians to view in brighter lighting. It supports the latest communication protocols and it offers access to SureTrack. That's our library of vehicle-specific real fixes and repair kits and commonly replaced parts that we use our proprietary database of 2.5 billion repair records and 325 billion vehicle events. SOLUS+, the franchisees are the positive, the customers have been excited and the sales have been robust.
New powertrains are driving a need for expanding product lines, including vehicle lifts, enabling independent shops and dealerships to accommodate the new models. So -- and in meeting this opportunity with advantage part of RS&I's success has been our undercar equipment division. It's one of the drivers between -- behind RS&I's strong growth. Take our challenger lift operation in Louisville. The plant offers thousands of SKUs match the separate lifting tasks and the numbers have been growing to meet the specific challenges of EV lifting. And in the quarter that facility hosted Chief Executive Magazine's Smart Manufacturing Design. And the event underlined the power of product customization in driving expansion and the extraordinary ability of RCI to render that low-volume production quite profitable. It's that approach that drove RCI's gains. OI, up 140 basis points in the quarter and we expect that we'll keep doing just that as we go forward throughout the Group and all across Snap-on.
RS&I, improving position of repair shop owners and managers, growing OEM relationships, expanding the product offerings, wielding the RCI everywhere and it all combined to deliver substantial growth and strong profitability. The Snap-on second quarter continued opportunities in vehicle repair in critical industries, progress along our runways for coherent growth, and advancements down our runways for improvement. Overall sales increasing organically 5.6%, margin is strong in every segment. OpCo OI margin 23.3%, up 160 basis points, overcoming unfavorable currency, and EPS $4.89, up versus all comparisons. It was another encouraging quarter.
Now, I'll turn the call over to Aldo. Aldo?
