Nicholas T. Pinchuk
Chairman and Chief Executive Officer at Snap-on
Thanks, Sara. Good morning, everybody. As usual, I'll start by covering the highlights of the quarter and then I'll provide an update on the general environment and on the trends we see. Aldo will then give you a detailed review of the financials. Thinking about the last three months, I can say without question or qualification we are once again encouraged fortified by the progress along our runways for both growth and improvement. We encountered headwinds and we engaged challenges in a number of geographies. Still, we capitalized on our opportunities wielding our advantage and overcame the potential for disruption.
The franchisee network remained resilient generating positive gains to a broad and sharp rise in critical industries extending what is now consistent upward trajectory enabled by the confluence of a robust market, a growing product line and an effective expansion capacity in that business and that progress was pretty evident in our numbers. They speak for themselves. Reported sales were $1,159 million, up 5.2% from last year, a 4.7% organic rise and $4.4 million in favorable foreign currency effects with growth in every segment. This represents our 13th quarter well above pre pandemic levels.
OpCo operating income OI before financial services were up 9.7% reaching $245.2 million. OpCo operating margin rose 90 basis points to 21.2% with higher sales volumes, the benefits of great new products and the ongoing efficiencies of rapid continuous improvement or RCI, more than offsetting up 50 basis points, a bad news from unfavorable foreign currency effects. 21.2% and 90 basis points, nice.
The operating income for our financial services operations grew $69.4 million from the $66.4 million last year, a 4.5% improvement and that result combined with the OpCo performance to raise our consolidated operating margins to 25.1%, a 70 basis point rise from 2022. And EPS was $4.51, reflecting a 37% or 8.9% increase above last year, strong. Well, those are the numbers, once again strong, signifying our corporation is continuing in advance. See we again believe that Snap-on is stronger now than at any time in our history and the results they say itself.
Now let's review the markets. In vehicle repair, the key metrics continue to be favorable. The average age of vehicles on the road continuing to rise and in turn, the number of takes in the garages and the garage is growing high to mid single-digits maintaining consistently positive trend period-over-period that's clearly upward. And technician wages are robust and continuing to decline. So the market is favorable and the metrics back it up, but more than a quantitative evidence, you get the feeling of optimism and potential when you speak with technicians.
Recently, I had the chance to visit with our customers, franchisee of mechanics in New York and I'm here to tell you the enthusiasm they displayed in the industry and the confidence they expressed, their future was something else. It was contagious. Even in this time of turbulence, the message was clear, they see opportunity and they're looking for more, more innovative solutions that will increase productivity and take advantage of that potential and their confidence on the way forward is palpable. And we believe they see Snap-on products, brands and people as the best way to ensure that positive future.
Vehicle repair is a strong market. We see this confirmed throughout the franchisees network in North America and in our international operations. It's one of the reasons we've expanded capacity. We believe our franchisees and our technicians have never been more prosperous. It all makes sense. The car park increasingly requires more repairs with greater complexity and our customers, the techs, are major participants in that reality and they need new tools to follow the opportunity. Snap-on is positioned to take full advantage of that possibility.
Another important sector for us is the vehicle repair shop owners and managers. These are people who stand right next to the techs, but they buy different cadences. This is where Repair Systems and Information Group or RS&I operates everyday with advantage. The vehicle park is changing. The shops have to keep adjusting model by model new challenges that they have to navigate, electronics to support more features, automotive systems that enhance driver safety, new body materials, increased durability and reduced weight, network of sensors to anticipate traffic and road conditions, new powertrains, enhanced internal combustion engines, EVs and plug-in hybrids to conserve energy and on and on and on.
Each of these trends creates opportunity for garages and they know it, but they also know it requires new more sophisticated equipment. That opportunity we see shines right through political uncertainty or economic turbulence. We see them and their needs every day when we call on the garages, new software to guide repairs or manage the shop, essential programs to accommodate the idiosyncrasies of new vehicles, calibration protocols and advanced systems for sensor rate, advanced undercar equipment to accommodate the position -- the precision that supports sufficient driving. And we see the shop owners and managers eager to take advantage of those trends. Snap-on has the hardware and software to enable that pursuit bringing prosperity to the shops and the results in RS&I are confirming the strength of that market and our strong position in it.
Finally, let's discuss the critical industries. This is where we extend outside the garage solving tests that really matter. This is where Commercial Industrial or C&I lives and where much of our international activity happens. This is the arena of critical application, space declarations, wind tower maintenance, subsea mining, smelting that exceeds 2,300 degrees Fahrenheit, the mobilization of first responders, all critical environments where the penalty for rail gear was high and the need for repeatability and reliability often requires custom tools engineered for a single purpose. In other words tasks that require Snap-on solution. Just like in previous quarters, the market is booming, momentum in multiple sectors like the military, general industry, aerospace, heavy duty and aviation.
Of course, we do see variations from geography to geography. This is an international business. Areas impacted by external factors that create disruptions, Europe with the uncertainty associated with the Ukraine war and Asia where the remnants of the pandemic are still pretty apparent. There's turbulence in China and the weakening of currencies these days are impacting particular countries. But overall, the critical industries are robust offering us significant potential for taking advantage and making significant gains and in the quarter, we did just that.
So our markets are resilient and are on a positive trajectory and we believe that our runways for growth will present clear and abundant opportunities as we move forward, enhancing the franchise network, expanding repair shop owners and managers, extending to those critical industries and building in emerging markets, rising and going forward by leveraging our broadening product line, wielding our strengthening brand, deploy -- and deploying the increasing understanding of the work that is the hallmark of the Snap-on team. That's the market.
Now let's turn to the segments. In the C&I group, third quarter sales reached $266.4 million, up $9.6 million, which includes $1.6 million of unfavorable currency effects and an organic sales growth of 3.2% above last year. From an earnings perspective, C&I's operating income was $58.1 million, up 11.1% double-digits including $2.9 million of unfavorable foreign currency and the operating margin was 15.9%, an increase of 120 basis points overcoming 70 basis points of negative currency. We did have some variation across the group business units with substantial gains in industrial division, offsetting declines in the Asia operations.
But as usual, the C&I rise showed the power of our Snap-on value creation, particularly in customer connection innovation, also in great new product, solutions that make critical tasks easier, like our new CT9038 power tool. We talked about this tool last quarter, things the franchisees were waiting for its launch. Well, it was worth the wait. It's a special tool, a three HNs [Phonetic] drive, 18 volt impact unit that offers compact housing measuring only 5 inches long. That's why we call it the stubby. The unique silhouette is made possible by engineering the overall housing mechanism to stabilize the electric motor rather than the standard approach of adding a whole independent structure to support the drive components.
It's an innovation that reduces overall body dimensions allowing users to navigate really tight spaces and believe me that's an attractive advantage for engine and suspension work on newer vehicles and it does that while still delivering 520 foot valves of bulk breakaway torque, power capable of blasting even the most stubborn up seized and seized fasteners. It's what you would expect from Snap-on. It's an ergonomically balanced -- it's ergonomically balanced greatly reducing user fatigue. It's equipped with a super bright LED light to clearly illuminate the workplace. It also offers three torque settings in forward and reverse and includes a variable speed trigger enabling techs to apply just that necessary force avoiding the fastener damage that often can happen in tight spaces.
The September launch was big, way oversubscribed, clear testimony the depreciation of the Stubby's compact power and it's still showing great momentum. The orders remain very strong. It was worth waiting. C&I product is encouraging, but there's another story in the group. Our industrial division extending the Snap-on brands with the critical industries. We've said in the past that the opportunity was there. All was needed was more capability to deliver. Well, it played out just that way. We did add capacity for kitting and it drove results.
The expansion came in the fall of last year and this past period was the third straight quarter a clear double-digit growth in a critical industry and that was with strong margins, gangbusters margins, gangbusters growth. It overcame the C&I challenge in Eastern Europe and Asia, and we believe we have much more room to run in the critical industries arena. So we're adding more capable in that business right now to take full advantage. Well, that's C&I. Substantial challenge is overcome by strong products and expanded capacity to drive upward in the critical industries and there's more to come.
Now on to the Tools Group. Sales line was up organically 3.7% over last year reaching $515.4 million in the quarter that finished with great -- and a quarter that finished with great momentum. And the gross operating income continued to move strongly upward to $113.4 million, an 11% increase, double-digit increase over 2022 levels, another in a series of those double-digit increases for the Tools Group. And the operating margin, well, it was 22%, up 140 basis points from last year and that considerable rise was achieved overcoming 50 basis points of unfavorable currency, a great quarter for them, profitability and growth.
Now the third quarter is when we hold our annual Snap-on Franchisee Conference, what we call the SFC. This year the event was in Nashville with 9,000 people attending, franchisees, guests and of course the Snap-on team, all participating in a weekend of special and a great weekend. It was a weekend of special training, hands-on knowledge with our massive product line and for some front -- for some fun special Snap-on celebrations were really good. The attendees had the opportunity to spend time ordering directly from the tool expo floor and I am happy to say orders were up again this year, and that expo spanned a space of over three football fields where our entire portfolio of products was on display, but it had a wide array of demonstrations and that was especially designed to showcase the Snap-on performance advantage.
The conference also provided a number of training sessions, helping franchisees expand their business, seminars and special breakouts, highlighting our product features and unique advantages in critical categories like power tools and diagnostics. And we topped off that multi day event. This is the celebration with an amount of coach buses transporting the team to downtown Nashville for unique Snap-on evening, Boom Shaka Laka was the word of the day. It was another memorable SFC, insightful education, great new product and the special fellowship, a special fellowship that reinforces our unique bond with our franchisees.
From my perspective, our van drivers at Nashville spoke enthusiastically about their current businesses and radiated firm confidence in their future with Snap-on. And if you were there, you would have seen it too. During the tool expo, franchisees were able to spend time interacting with some of the new innovative products derived from our customer connections, insight gained directly in the workplace. Hand tools were big at the SFC in the quarter. And the demand was driven by special new products like our 12 millimeter 6.6 liter Duramax glow plug sockets.
This product was inspired by a franchisee observing the technicians removing blocking components one by one from a diesel vehicle, center will, special intake lines and sterling shifts. These items create access bears increasing the difficulty of executing the very basic repair of just changing diesel glow plugs, a routine tests that was made difficult because of a crowded engine compartment designed with minimal regard for servicing. We listened to the franchisee feedback, went to work, and designed a new socket longer than the standard to reach the glow plugs from a distance and with a flex mechanism to guide around the blockers, making it unnecessary to remove them.
Technicians immediately recognized the considerable time savings and it made the socket new very popular. It's another customer connection transformed the laborious process making work easier, freeing up time and increasing tech capacity and therefore tech income. Also on display was another example of customer connection, the new FHC72MPRR. These product terminations are multiple, triples, but we call it a triple function ratchet, three tools in one, again borne out of customer connection directly in the worst place. First, the ratchet head can be secured parallel to the handle serving as traditional ratchet.
Next that head can be adjusted to take any one of 16 available positions, 240 degrees around the handle center line enabling the tool to work while reaching around obstacles. Finally, the unit can be placed in a free spin mode providing the tech with 360 degrees of continuous rotation greatly reducing work time and low torque situations. Our customers, the technicians again saw the great benefit of that improved productivity and that recognition made the triple function ratchet $1 million hit product in just the first month of selling, was another win for customer connection and a driver for the Tools Group. The Tools Group whose third quarter achievement and momentum fueled by customer connection, innovative insight, anchoring great new products and with the Group's continuous dedication to Snap-on value creation, we believe the hits and the progress will just keep on coming.
Turning to the RS&I. Sales of $431.8 million in the third quarter were up as reported by 4.3% with an organic improvement of 3.1%. Expansions in the undercar equipment and our diagnostics and information portfolio continued to offset the OEM businesses, which finished down slightly in a traditionally lumpy arena. OI for RS&I was $104.9 million, up 10%, again double-digits from 2022 and the operating margin was 24.3%, which represented an improvement of 130 basis points against 20 basis points of unfavorable foreign currency. We have great confidence in our RS&I business. Our customers and industry partners feel the same and that confidence was demonstrated in the latest public recognitions. Recently, MOTOR Magazine chose our ZEUS+ Fastrack Intelligent Diagnostic platform as a top tool in 2023.
Our premium handheld unit was recognized for simplifying the repairs, guiding technicians through the troubleshooting procedures, avoiding unnecessary steps along the way and improving solution accuracy and most importantly reducing the time to identify the proper fix. The ZEUS+ is the top of the line for vehicle repair and the publications know it, recognizing our handheld new prominent bright screen increasing the ease of use in-direct sunlight. It's faster processor with more onboard memory enabling greater task efficiency and it's improved lab scope making component testing much more accurate.
And when professional tools and equipment news, they asked this reasons to choose the best new tools as recipient of that publications People's Choice Awards, the tech selected seven Snap-on products led by the ZEUS+, top of the line in hardware, software, shaped by customer connection, another in a long line of distinctive and decisive RS&I products driving the group upward and onward. We're quite proud positive about the RS&I's possibilities with repair shop owners and managers as the vehicle industry evolves and the quarter supports that confidence.
So those are the highlights of the quarter, continued strong progress, the 13th straight quarter above pre pandemic levels, C&I margins up, year-over-year volume growth and strong, strong OI margins. The Tools Group, great products, confident franchisees and strong momentum. RS&I, undercar and repair information activity leading the charge, enabling the repair shops and the challenges of today's vehicles and the overall corporation. Sales up 5.2% as reported, 4.7% organically, Opco operating margin 21.2% up 90 basis points overcoming 50 basis points of currency headwinds and an EPS of $4.51 rising 8.9% versus last year. It was an encouraging quarter.
Now I will turn the call over to Aldo. Aldo?
