Good day, ladies and gentlemen, and welcome to the 2008 third quarter results conference call hosted by Snap-on Incorporated. At this time all participants are in a listen-only mode. At the conclusion of our remarks we will conduct a question-and-answer session. (Operator Instructions) As a reminder, this call is being recorded. I would now like to introduce your host for today’s conference call, Marty Ellen, Chief Financial Officer.

Thank you Sean, and good morning everyone. Thank you for joining us today to review Snap-on’s third quarter 2008 results. By now you should have seen our press release issued this morning. Despite increased challenges in the economy, we believe that our third quarter results demonstrate our continued progress in our core strategic and operating initiatives. We’ll discuss these with you today. Joining me is Nick Pinchuk, Snap-on’s President and CEO. Nick will kick off our call this morning with his perspective on our business and results. I will then provide a more detailed review of our financial results and afterwards, we’ll take your questions. Consistent with past practice, we will use slides to help illustrate our discussion. You can find a copy of these slides on our website next to the audio icon for this call. These slides will be archived on our website, along with a transcript of today’s call. Any statements made during this call relative to management’s expectations, estimates or beliefs, or otherwise state management’s or the company’s outlook, plans or projections, are forward-looking statements and actual results may differ materially from those made in such statements. Additional information and the factors that could cause our results to differ materially from those in the forward-looking statements are contained in our SEC filings. This call is copyrighted material by Snap-on Incorporated. It is intended solely for the purpose of this audience. Therefore it cannot be recorded, transcribed or rebroadcast by any means without Snap-on’s expressed permission. With that said, I will now turn the call over to Nick.

Thanks, Marty. It appears we live in interesting times. Uncertainty seems to be the order of the day, and of course, Snap-on is not immune. What you can still depend on is that enabling solutions, real products for critical jobs, continue to be in demand, even now, and that’s what Snap-on is all about. What’s also reliable, even in these times, is the strength of our corporation’s business model; the breadth of our customers; the power of our value creating processes, and most importantly, the capability and commitment of our team. In this past quarter, those extraordinary characteristics were on display again. Sales growth was a lot tougher but the strength of our brands and the pull of our new innovative products provided what I think was significant buoyancy. All of that combined to create record earnings for the quarter. Operating margins expanded 170 points to over 12%. The EPS of $0.94 is a record for any third quarter, any time in the history of our corporation, and for the nine months completed so far this year, operating margins reached 13%. Those of you who have been listening to us for some time might recall that this was the very goal we set for ourselves a couple of years ago. It was a goal we thought would be achieved, but we thought it would be achieved in 2010. We’re ahead of our own targets, despite the macroeconomic difficulties. Now I’ll be giving you some more specifics as we go forward, but before I do, I want to note that we could not have accomplished this past quarter’s performance without the extraordinary efforts of all our associates and franchisees. I know many of you are listening in today to what is your call. My congratulations and my thanks to each and…

Thanks, Nick. Turning to slide 9, net sales of $698 million in the quarter were up 2.5% from last year; without currency, sales were up just under 1%. Clearly, this was a much tougher quarter in terms of sales growth. In the U.S., sales were up 1.3%. Our U.S. franchisee business, comprising 26% of this quarter’s sales, was down three tenths of 1%. Our U.S. industrial business grew 2.8% in the quarter, substantially less than the 21% growth last quarter. We believe a substantial amount of this variation over the last two quarters resulted from timing of customer order activity. We believe this business will return to double-digit growth in the fourth quarter. In Asia-Pacific and the developing economies of Eastern Europe, which comprised about 8% of sales, reported growth was relatively robust at 15.3%, and it was 9.1% without currency. However, in Western Europe, which comprised about 27% of this quarter’s sales, our commercial and industrial tools and under-car equipment businesses faced increased head winds due to the slowing economies. Spain and Italy have experienced some of the more severe slowdowns and our SNA Europe tools business does have some concentration of its business in these countries. As many of you already know our equipment business, which sells more expensive capital equipment and has a reasonable presence in Europe, faced the challenges of not only economic slowdown, but tighter credit conditions. A continuing bright spot in Europe is our U.K. franchisee business, which had another solid quarter reporting 13.5% growth without currency. Consolidated gross profit of $312 million represented 44.7% of sales and improved 50 basis points over last year. Higher price realization along with $5.2 million of benefits from RCI initiatives more than covered steel, freight and other product cost inflation. Partially offsetting these improvements in gross margin…

Thanks Marty. I’d just like to end by once again noting that the third quarter represented a significant increase in earnings and it was a record despite the difficult environment. I want to once again thank our associates and franchisees for making that happen. Congratulations. I’d also like to end by saying that we’re confident of our business models, of our runway and of our people. Having said that, it’s clear that the current economic volatility has rendered projection I think less certain and so as befits such situations we’re taking action now to reduce costs, to restructure and to accelerate productivity. As I’ve said on practically every call, the opportunities for such improvement on Snap-on are abundant and we’re increasing our emphasis on cost. It’s helped us so far; it will continue to help us in the future. But at the same time, we also continue to see opportunity. Opportunity in emerging markets, in innovative products, and in critical industries; places where working people need real solutions to crucial tasks. So we’re continuing to pursue those opportunities even in these difficult times. As we move into the fourth quarter, we know no one has great visibility in this environment. But for Snap-on, we’ll maintain our core strategic initiatives but at the same time, we’re confident we have the flexibility and the options to balance among the areas of sales growth, cost reduction, working capital utilization, and capital investment. We’re confident our operations can create a focus appropriate to the economic and business environment as it unfolds. As a result, we believe that Snap-on can continue its trend of encouraging progress as we go forward to the days and the years ahead. Now I’ll turn the call over to the operator.

(Operator Instructions). Our first question is from Jim Lucas - Janney Montgomery Scott.

First question, could you expand a little bit on restructuring? That’s going to come in just a little bit lower than anticipated earlier in the year. How you’re going to approach restructuring as you think about what’s clearly becoming an even more challenging environment?

A couple of things. One is, we’ve said all along that, yes, our formal restructuring numbers are lower year-over-year but we have a number of smaller actions which have served us well in productivity and cost reduction that don’t necessarily qualify for restructuring in the classical sense and that’s driven our cost reduction going forward. If you look at our numbers going into the fourth quarter, we’re going to look hard at the capacity of our facilities and improving administration in terms of productivity. I think it’s just doing Jim, what we’ve been doing all along. If you look at our numbers, we’ve been making some pretty good headway out of – I don’t want to say flat sales, but modest sales increases. I think you’re going to see us doing that forward and I think going forward, I think the only thing about this current situation is we kind of got our alert up about trying to make sure that we match our capacity and our capabilities to the volumes as we see them.

Okay. Fair enough; that’s exactly the point I was looking for …

I think you’re going to see us taking a look at plants; you’re going to see us look at lot of things, but it’s not so much different than we’ve done before, maybe we ratcheted it up because of the current economic uncertainty. I think we stand on our record of improving costs over the last several quarters.

Okay. And you made a comment in your closing remark about working people seeking solutions to real tasks and you know specifically one of the areas that’s gotten a lot of focus through earnings season was the credit crunch and what’s happened over the last, essentially, month. When you look at your industrial markets and you look on both the tools and the equipment side, what impact has credit or lack of credit access had on that business and just any commentary about near-term trends there.

Let me parse between it. We haven’t really seen a lot of impact in the industrial business. Generally we’re in industries where these are critical industries that seem to be going forward and I think I’ve stated that with the order rates have remained strong. So we feel pretty good about that runway. If you want to expand it to some of the other businesses, I think we said the equipment business; they have some challenges associated with the capital investments in some of their areas. They were down, I think, excluding currency, 5% in the quarter and that’s directly traceable to this. In the tools business, we see the same kinds of things with big-ticket items: big tool storage equipment, big diagnostics. Having said that, though, the message of the call I think was for equipment and for the tool side, innovation is selling; those two power tools are great tools and they are selling. The Prism new aligner is selling; the imaging aligner business is up substantially because of that. Some of our other product is off, you might say even further, but in fact we believe as we see our new products roll out and we look at our pipeline and feel pretty good about it, it impels purchase even in this difficult time.

Okay. And two final unrelated questions. First, any commentary on pension as you look at that going forward and secondly with the strengthening dollar, you’ve had a nice tailwind on translation for quite some time; what impact do you see FX have going forward?

First of all on pension, I can give you the data we have as of the end of September. Given pension asset values mark-to-market as of September 30, and everybody should recall that our funding policy over the past years has pretty much been and our cash flow has allowed us to fund to the PBO level, our biggest funded plan being in the U.S. But given current asset values, but at the same time, an increase in the liability discount rate, again, looking at that rate at the end of September all these valuations will have to be redone at the end of December, but if we just take that point in time, we are modestly over funded on a PBO basis; meaning we don’t foresee making any pension contributions. Second question on currency rates; no question the dollar has strengthened. I’ll just pick the euro for example, last year in the fourth quarter, the average rate that drove our P&L was about $1.45. I think yesterday I’ll say $1.32, so clearly the dollar strengthened and you see that across the Pound and in the Canadian Dollar and the Swedish Kroner which are the more important currencies for us. That being said, when you look at the overall impact of both translation, which by the way added very little to this quarter, a few hundred thousand dollars; but also the transactional exposures that result from us having, for various of our businesses, the cost base in, say, Europe and in sales in dollars outside Europe, or vice versa like in the tools group that makes a lot of product in the U.S., that gets exported into markets in Europe. The effect has been relatively neutral, in fact in this quarter, when you take translation and transaction, I think the effect on operating income was negative, about $1.5 million. The effect of the strengthening dollar, will it erode reported dollar sales vis-à-vis last year? Not clear to us it’s going to have a significant impact given our global model in terms of operating profits.

Okay. Great. Thank you for the clarity.

Our next question is from Alexander Paris - Barrington Research.

Hi, good morning, nice quarter again.

Thanks Alex.

You’re doing a great job on costs obviously, and sales is still dragging a bit and I would imagine that even though you’ve got some good potential ahead for more cost-cutting, I’m just wondering, you want to get your sales up; it sounds like Eastern Europe and China are the expectations for the biggest source of growth, is that right?

Well, no. Those are two places which are very strong for us, but I think I would also offer that the whole industrial sector is a big area. We see that being pretty strong. That rides on two things, I think Alex: one is the critical industries that we refer to, things like aerospace, oil and gas, and natural resources and the like are continuing to be reasonably robust and there is demand. Secondly, we’re gaining share because pretty much the Snap-on brand was trapped in the garage for a long time. So we’re rolling it out of the garage and it’s capturing the attention of quite a few users. We believe pretty clearly that we continue to gain share in that sector. You could say the four big drivers would be, sure the emerging markets, Eastern Europe and Asia-Pacific; two, critical industries; and three – and I want to emphasize this – innovation, because in this market, innovation is still selling. To our customers, innovation is still selling. We saw that with the 2000 franchisees in August and we saw a number of activities in this past quarter, the Prism is one of them. I could also add based on innovation, we haven’t really unleashed our diagnostics product in Europe yet. The sales there have been relatively small and over the last quarter, we’re starting to unlock some of that potential. I might add diagnostics in Europe to that play. No one can predict where we’re going in this volatility. I think you guys read the same articles and see the same papers that we see. No one can predict it. But I’ve been around the block and there is no group of businesses, no group of business models, no brands, no pipeline of products that I’d rather go to war with than the hand we’re sitting on right now.

Part of the strength in the commercial and industrial, is you’ve added more direct sales ...

We added in fact in the quarter; I don’t know the exact number, but we’ve added like 25 in the quarter. So other people are contracting, we’re adding, because we believe in that business. Now that may prove to be wrong. But I think that should emphasize some confidence.

One other question. In the North American dealer, you didn’t give the account. How many vans do you have at the end of the quarter?

Alex, at the end of the quarter in round numbers we had about 3450.

It’s up very slightly, but we think it’s a major departure year-over-year from what we’ve been living with.

But the territories that you have uncovered, if you were very successful in covering them with new people, what would that add?

Roughly 10% of our territories are uncovered and that’s come down a little bit, because we increased a little bit here, but 10% is a good number.

So you could get another 10% vans without any growth overall in terms of [inaudible]?

We think so and I like our positioning versus our competitors in this marketplace. If you look at the balance between OEM dealerships and independents, our share is stronger in independents. Our franchisees depend less on OEM dealerships than others. So if you think, as some people do – I’m not prognosticating because that’s difficult in this environment – if you think that the OEMs are going to reduce by say 800 or 900 rooftops over a period of time, then I think that shifts in our favor. By the way, over that same period of time, U.S. household spending on auto repairs continues to increase; it increased again in August. The repair is going to go some place.

Right.

And as the OEMs contract, we see the independents ascendant somewhat. We like our positioning in that.

Lower new car sales is a negative in terms of warranty work and so forth but again, that’s probably more than offset by the aging car population?

Sure.

And more of that goes to the independent dealers than the OEM?

Yes, and by the way, if you think about it, our data tells us this, the independent dealerships per bay buy more equipment and tools than the OEMs.

Now that you’ve hit your operating margin at 13% a year earlier, do have a new target now?

Actually I think it’s two years early, isn’t it? But anyway, I had to take full credit for something. I think we’ve talked about targeting in these calls from time to time, but I think in this environment I don’t want to get into prediction basis, I think saying that we are going to be up in the fourth quarter in earnings is enough for me.

Okay. Thanks a lot and again great job.

(Operator Instructions). Our next question is from David Leiker - Robert W. Baird.

Hi, good morning. This is Keith on the line for David. I just have two quick questions here. If we look at the pace of demand as you exited the quarter, a lot of people are talking about Europe slowing meaningfully towards the end of the quarter. I was just wondering if you could you talk about the pace of each of the businesses as we exited the quarter.

I’ll try to give you some overview. Basically on an overview basis, we had a pretty strong September, actually. The tools group in the United States had a terrific September and they were up year-over-year nicely. So they had a good September; they had a weaker July and August. In this business you get little bit of calendarization around that. But they exited very well. Equipment had an average September; average to the quarter; they had a September that was about the same. If you look at Europe they exited weaker than they entered. I’m talking about SNA Europe now, and the SNA Europe business exited weaker. Asia Pacific and Eastern Europe were both up substantially in September. So they continue to go sort of excelsior, ever upward. Diagnostics and Information had a good September. I think in a broad sense tools was strong; diagnostics was pretty good; international tools was also strong; the C&I group was mixed; SNA Europe was down and industrial had a good September.

Perfect. And then if we look to the fourth quarter, with the year-over-year increase in earnings, is this going to be driven more by revenue growth with what’s coming in the normalization in the C&I business or is this more of a margin story in the fourth quarter?

I don’t think I really want to specify between that. As I said I think in my remarks, I think we have confidence in our ability to balance between sales growth and cost reduction. We feel pretty good about the cost reductions we see going forward. If we get some revenue growth that will be nice as well, but I think it is very difficult to predict the way in which such a thing that might eventuate in this environment. So I don’t think I will.

Okay. Thank you very much.

And it appears we have no further questions on the phone at this time. I would like to turn the call back over to Marty Ellen for any additional or closing remarks.

Thank you again everyone for joining us this morning. We appreciate your interest in Snap-on. Good day.

Ladies and gentlemen we thank you for your participation. You may disconnect at this time.