Nicholas T. Pinchuk
Chairman and Chief Executive Officer at Snap-on
Thanks, Sarah. Good morning, everybody. Hey, I'll start with the highlights of our 4th-quarter. I'll give you my perspective on the results, on the market environment and on our progress. It was considerable. After that, and as usual, Aldo will move into a more detailed review of the financials. These are interesting times. It's filled with uncertainty, but Snap-on is built to prevail even in turbulence. And you know, this ain't our first rodeo. It's our job to confront and to overcome and to proceed with confidence, confidence in the resilience of our market, confidence in the strength of our strategic and tactical advantages and confidence in the insight and energy of our consistent and capable people. And all of that echoed in the numbers. So here they are.
Overall sales in the quarter were $1198.7 million, 0.2% -- up 0.2%, both as-reported and organically, return to positive territory. Profitability was strong with gross margins of 49.7%, a gain of 140 basis-points and the OpCo OI margin was 22.1%, an increase of 50 basis-points over 2023, an all-time high for the 4th-quarter. Financial services earnings of $66.7 million in the quarter were lower by $1.2 million, leading to a consolidated margin, including both OPCO and financial services at 25.5%, an improvement of 30 basis-points. Our EPS for the quarter was $4.82, up $0.07 from the $4.75 recorded last year.
The results show broad gains overcoming the uncertainty, another period of sequential progress brought by record performances by both the commercial and industrial or C&I by the commercial Industrial C&I group or and by repair System Information or the RS&I group, combined with the Tools Group successfully pivoting to match tech preferences and continuing to narrow the gap versus last year. It was an encouraging demonstration of advantage, a resilience and of capability.
But first, let's speak about the markets. We believe the vehicle repair market is robust, a continuing stream of new tools and data to confront the rising complexity of the modern vehicle. The repair shops today, dealerships or independent -- or independents must deal with an expanding array of challenges, multiple powertrains, EVs, plug-in hybrid, super hybrid, advanced combustion and sophisticated digital system and a wide range of autonomous operations, devices like adaptive cruise control, lane departure warnings, collision avoidance sensors, self-parking features. It goes on and on and on. And the list is getting longer. And technicians have to fix it all, addressing a dizzying array of procedures. It's daunting, but this is where Snap-on shines, scanning, diagnosing, guiding and fixing, enabling the text to enabling the text, making the difficult tasks easier.
And when combined with an aging car park that now averages 12.6 years and includes a multitude of technology generations, all needing to be fixed, driving even more complexity and requiring even more tools and more data. It represents even more opportunity. We love it. Vehicle repair is several slices.
So let's start by focusing on shops, the dealerships and the independent shops, adjusting to the complexity often required, often requiring things like-new lifting equipment to handle the increased weight of EVs, tire changes that accommodate larger wheel sizes, software suites for managing the shops, for organizing parts data into streamlined catalogs, for scheduling repairs and customer interfaces and for guiding the text to the most sophisticated or complicated of repairs. This is where RS&I operates.
It's a target-rich environment for our array of undercar and collision equipment, and it's a growing market for our software and data products and Snap-on is well-positioned with our innovative hardware, but especially with our proprietary comprehensive database, billions of insightful records, advantages that we believe there are advantages that we believe make Snap-on the data king in-vehicle repair. A position that I think you'll see was reinforced again by our quarter by our rising gains in that arena.
Now let's shift to the text. The individuals working in the base, under the hood, twirling the wrenches, hitting the touchscreen, applying the skill and making -- and actually making the repair. Again, this quarter, I had the opportunity to meet with a number of franchisees and their customers. And they all expressed their enthusiasm for the strength of vehicle repair and external data confirms that view, milest driven up the car park aging, hospital spending on auto repair -- household spending, on auto repair is higher, hours work increasing. And best of all, tech wages rising.
As I was recently in a garage and the service manager emphatically proclaimed to me that the work just keeps rolling in. We need more techs. Makes sense. Expanding complexity means more time spent on each repair and more trained professionals needed to meet the demand and keep the shops prospering. So it's clear the techs are in a good position, but that doesn't make them immune to the macro uncertainty around them. Ongoing wars, immigration disputes, lingering inflation. And although the elections in the rear mirror and the new team may be more focused on business expansion. There's a rapid-fire of new initiatives, tariff farms, on and off-again actions, impending shake-ups and foreign ventures of many varieties. Up to now, it's hard not to be uncertain about what's up. So the franchisees, they echo that uncertainty. And in the turbulence, the technicians continue to prefer quick payback items, ones that make work easier and cut labor times right away, items like hand tools and mirrage diagnostics that can be paid-off in shorter cycles and they remain cool on big-ticket longer payback items like tool storage.
So the Tools Group is continuing its pivot, focusing its engineering, its manufacturing and its selling to match the shift in those customer preferences. So despite some challenges in automotive, so despite some challenges, automotive repair does remain strong and we believe we're pivoting successfully to take greater advantage.
Now let's talk about critical industries, where C&I takes Snap-on out-of-the garage solving Tesla consequence that require precision, durability, reliability and repeatability, all performed in some of the most demanding and crueling environments from clean rooms to mine pits to assembly lines to building spacecrafts. And this market I can tell you is very promising.
Our activity in critical industries continued rising across multiple sectors. Aviation, natural general industry were all-up nicely. The arena also represents our most significant international presence and those markets were mixed. In Europe, UK and Southern Europe up, Germany, down. In Asia -- in Asia -- in Asia-Pacific, China weaker, but gains in Japan and South Asia, despite -- in Southeast Asia, despite unfavorable currency and gains in South Korea as well. I'll add that to that situation despite the favorable currency. So C&I does have its challenges across the geographies and the segments, but we have made significant advantages, advancements and do see substantial opportunities for tomorrow, leveraging our advantages in-product, in our brand, in our people. And you know, I think when you see the results, you realize it's working.
So both the auto repair and critical industries market remain positive and we're ready and well-positioned to advance on those right runways. At the same time, it's clear, it's clear to us and I hope it's clear to you that we have more potential along our runways for improvement. And as we proceed, we're fortified by our step-on value-creation process of safety, quality, customer protection, innovation, rapid continuous improvement or and rapid continuous improvement or RCI. They've never been more important, helping overcome the turbulence and authoring our resilience.
Especially important is customer connection and innovation. That's our unique advantage standing next to working men and women observing each task, matching the insights gained with technology master, developing new and innovative products that makes that makes work easier and it's considerable strength and our team is committed to continue to wield it with determination.
Now let's talk about the operating groups. Let's start with C&I. 4th-quarter sales of $379.2 million was an all-time high, representing an increase of $15.3 million versus last year and included $2.1 million in acquisition-related sales, $1 million in unfavorable foreign currency and our organic rise of 3.9%, driven by -- driven by gains with customers in critical industries. Strong sales of our customized kits led the way, meeting the rising demand for solutions that matches that match specific tasks, our specialty torque division was also a clear -- a clear positive, a clear positive.
Precision is becoming more essential every day and our broad torque offering puts C&I right on-target and you can see it clearly in the numbers. OI for C&I was $63.5 million in the quarter, up $9.4 million or 17.4% from 2023. And the Group gross margin, it was up 180 basis-points and the operating margin was 16.7%, that was also up 180 basis-points. Wow C&I just keeps getting better. It's a great indication of our ability to roll-out of the garage.
The specialty torque business C&Is is really making strides. Torque is hot now. And Snap-on is at the party with growing away with a growing away array of new products like our heavy-duty cordless torque multiplier, we Call-IT the CTM 800, delivering torque from 160 foot pounds all the way up to 800 foot pound, just what's needed to meet the broad challenge of mine -- across mining and oil and gas and rail and heavy-duty. It's a tool that it was a tool that was made possible by our expansion in torque, combining the efficiencies of a Norbar gear design with the compact operation of a snap-on power tool, authoring the wide range, making the delivery of high torque levels easy and safe. Safe, enabling easy access to tight spots.
The new unit is also equipped with specially designed transducer control for applying just the precise force, a breakthrough and it benefits from our advanced power tool coal cooling system that makes it much more durable. The CTM 800 torque packs a lot into one compact tool, improvement in versatility, safety, access, durability and precision, it has it all and where the tasks are critical, it's already a big hit. C&I sales up, customized kits and precision torque, rising to new levels, all with record profitability, a high point profitability with much more room to grow and improve.
Now on to the Tools Group. Quarterly sales of $506.6 million, down, but representing progress on narrowing the gap versus 2023. The progress is evident, but uncertainties -- uncertainty still lingers. And O&I for the Tools Group was $106.9 million, $4.1 million below 2023 with an operating margin of 21.1%, but despite the turbulence, we remain steadfast in supporting our van network, keeping it strong, spending on it. And that profitability was recently acknowledged by multiple publications.
The Franchise Business Review recognized us in its latest rankings for franchise satisfaction, listing Snap-on as a top-50 franchise for the 18th consecutive year. We were named number-one among all franchisees in Entrepreneur Magazine's 2024 list of top franchises for Veterans. And was ranked by the UK Elite Franchise Magazine as the number-one franchise in that country, a distinction we've held for three consecutive years. Now these types of rakings confirm the fundamental strengths of our franchisees individually and of our van business in general. And I can tell you that this would not have been achieved without a continuous stream of new products developed through our strong customer connections, insight and experience transformed an innovation for a significant advantage in the rapidly changing world that's vehicle repair.
One of the latest of those additions is our Milwaukee manufactured special hex driver, specifically designed for modern vehicles equipped with advanced driver assist systems like adaptive cruise control in the base, standing side-by-side with the text, making the actual repairs, we saw the difficulty in aligning the radar sensors that enable that autonomous control, enable the adaptive control. And the work was difficult. Techs were removing the bumpers and the grills, dismantling the front-end of the car just to reach the workplace, a very time-consuming and non-value added exercise that risks damage to nearby -- that also damaged to nearby parking components all just to clear the pathway for the eventual repair. That observation drove the design of our new NDM35, a 3.5 millimeter hex driver featuring an extra long 5 and 3/4 inch shaft and an enhanced reach that bypasses the obstructions with ease, allowing the necessary adjustments without dismantling anything. And that newly-launched tool also includes our instinct ergonomic handle design, providing superior control, making it easier to execute the work with the precision required for the very sensitive radar brackets new NWD35 -- M35 makes repairs faster, easier and more profitable and the techs have noticed it.
Also in the quarter, we launched a new lineup of hand tools based on another customer connection, witnessing the difficulty of applying leverage to the -- to the open-end of a standard combination wrench, the box end-of-the tool was great for engaging a faceter in a crowded engine bay, just slide it right in there. But when extreme force was needed and a grip at the opposite far end was necessary, the task was extremely uncomfortable because the open-end of the wrench digs into your hand. To solve the problem, our engineers designed our new XDSGM, a series that combines a box-in low-profile head with a soft grip ratchet handle, providing the access technicians need, but enabling the maximum force to be applied comfortably with the ergonomically and contoured cushion grip handle, breaking bolts free without winsing in pain or slipping off under load.
The new XD SGM, I talk about it here because it's a prime example of a fast payback item, a simple but powerful innovation that makes work safer, faster and easier, and the techs have loved it, making the wrench one of our million dollar hit products just since it launched a few months ago. Well, that's the Tools group. Customer connection, producing innovative products, operations continuing to pivot, meeting the customer's for fast payback items and making progress in narrowing of the gap, all while keeping the network strong in the turbulent.
Now for RS&I. Volume in the 4th-quarter was $456.6 million, up organically 1.6%, gains with both OEM dealerships and with independent shop owners for diagnostic platforms and repair information products, partially offset by lower activity in undercar equipment. RS&I operating earnings in the quarter were of $121.4 million, representing an increase of $8.1 million or 7.1%. Gross margins were up 200 basis-points and the operating margin -- the operating margin, operating margin was a strong 26.6%, up 150 basis-points from last year from the prior year, the highest-ever. A record -- and the record reflects a rise in software, but it's also evidence of -- rise in software, which is a great thing. But it's also evidence of strong and broad RCI with the great majority of RCI RS&I businesses, software and hardware, increasing margins by well over 100 basis-points, boom. We really love that kind of thing because it makes our profitability sore.
And our Mitchell 1 specialty -- speaking of profitability, our Mitchell 1 specialty software division provides software to independent shops, continued its incandescent success, expanding its database, big data, reaching 3 billion repair records and 500 billion data points, a powerful and proprietary advantage that fuels our intelligent diagnostics platform, communicating directly with vehicles, translating the trouble code, supplying complex inductive wieldings, complex inductive models, identifying the problem and guiding technicians through the repair process, all with unprecedented speed, productivity and profitability.
Now we can't talk about that without talking about the Apollo Plus, the newest member of the Intelligent Diagnostic -- Intelligent Diagnostic lineup released in the late 3rd-quarter and it continues to shine, surpassing previous generations and very importantly, expanding the number of software subscriptions. It's easy, fast and smart. And for this day and age, at this time, it represents a tech's quickest payback access to the power of Intelligent Diagnostics. We expected it to be a winner and it is.
Also in the quarter, Undercar Equipment division released the new V4400 commander wheel alignment machine. It's a game-changer for shops because of its unique flexibility. A lot of shops don't have space and they don't do alignments at all. They send them out. Garages today need new equipment for matching the equipment of that kind for matching the rising vehicle complexity. For example, alignment has never been more important. But where do you fit the new units without a costly expansion? And in many -- in many cases, the buildings are already landlocked and shop owners can't sacrifice an everyday repair bay for periodic but necessary profitable and profitable alignment procedures. So the answer is the V4400, a versatile smart and modular system. It's got an innovative design with a control center house in a small toolbox that wirelessly connects with the -- with the two twin independent mobile towers that hold sophisticated camera -- that hold a sophisticated forced camera setup.
The sections can easily be stored out-of-the way while not in action and can be assembled anywhere in the shop quickly, delivering an alignment capability as-needed and on command regardless of the layout, whether your shop is short or wide or deep or narrow, it doesn't matter. Our -- and our proprietary software with our -- based on our four camera systems enables a very quick setup. So therefore, setting it up is pretty easy and quick. And no shop is perfect. So our system also automatically eliminates imperfections like unlevel lifts or uneven floors, ensuring an accurate straight as an arrow alignment. The V40 -- the V4400 alignment -- aligner is nimble, versatile, quick and smart and it makes profitable alignment possible in many more shops. It's a great product.
We keep driving to expand RS&I's position with peer shop owners and managers, offering more new products, all developed by our value-creation processes and we're confident it's a winning formula. And the Q4 results say it's so. Well, that's the quarter. Sales up 2.2% back to level. OpCo operating margin of 22.1%, up 50 basis-points, a new all-time high for the 4th-quarter. The Tools Group down, but narrowing the gap, the pivot is working. RS&I operating margin 26.6%, up 150 basis-points, another profit high for an already high-margin group, C&I operating margins up 17 -- operating earnings up 17.4%, operating margin 16.7%, up 180 basis-points, also at a high resilience, balance, advantage and results. It was an encouraging quarter.
Now I'll turn the call over to Aldo. Aldo?
