Ladies and gentlemen, good day and welcome to the Snap-on Fourth Quarter and Full Year 2019 Results Investor Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Sara Verbsky. Please go ahead, ma'am.

Thank you, Abby, and good morning, everyone. Thank you for joining us today to review Snap-on's fourth quarter results, which are detailed in our press release issued earlier this morning. We have on the call today, Nick Pinchuk, Snap-on's Chief Executive Officer; and Aldo Pagliari, Snap-on's Chief Financial Officer. Nick will kick off our call this morning with his perspective on our performance. Aldo will then provide a more detailed review of our financial results. After Nick provides some closing thoughts, we'll take your questions. As usual, we have provided slides to supplement our discussion. These slides can be accessed under the Downloads tab in the webcast viewer as well as on our website, snapon.com, under the Investors section. These slides will be archived on our website, along with the 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. Finally, this presentation includes non-GAAP measures of financial performance, which are not meant to be considered in isolation or as a substitute for their GAAP counterparts. Additional information, including a reconciliation of non-GAAP measures, is included in our earnings release and in our conference call slides on Pages 14 through 17. Both can be found on our website. With that said, I'd now like to turn the call over to Nick Pinchuk. Nick?

Thanks, Sara. Good morning, everybody. Today I’ll start as usual with a view of our quarter – our fourth quarter, give you an update on the environment and the trends we see. And I'll take you through some of the turbulence we've encountered and the advancements we've made. Aldo will then provide a more detailed review of the financials. The comparative results for the quarter and the full year each include special non-recurring events that affected our as reported levels. So to provide greater clarity, as we have in the past, we’ll refer to the amount excluding the one-time effect as an as adjusted number to make everything comparable. And when you look through it all, similar to the third quarter, Snap-on did see external headwinds in a number of areas. But we met those challenges and moved forward. We did have disparities from group to group and within each group, but overall we're encouraged by our position and our possibilities. The fourth quarter demonstrated elements of progress that were somewhat attenuated by economic turbulence and challenged geographies and by the impact of unfavorable foreign currency. As in the recent past, we show progress in the U.S. with growth across most of our operations in that area. So volume in the U.S. continued it’s upward trajectory, but our operations in Europe, they show countervailing weakness in several major countries. And as I said, there was also a meaningful impact from currency translation and transactions. So we had significant headwinds. But once again, I think our advantages prevailed. Organic sales were up 0.6%, sales gains in critical industries and repair information and independent – and equipment for independent repair shop owners and managers and continued growth at the U.S. van channel. We had advancements in power tools and tool storage and…

Thanks, Nick. Our consolidated operating results are summarized on Slide 6. Net sales of $955.2 million in the quarter were up 0.3%, reflecting a six tenths of 1% organic sales gain, $3.5 million of acquisition-related sales and $6.3 million of unfavorable foreign currency translation. The organic sales gain this quarter reflected low single-digit growth in both the Snap-on Tools and Commercial & Industrial segments, partially offset by a low single digit decline in the Repair Systems & Information group. Similar to the trends, we experienced in Q3 of 2019 overall, on a year-over-year basis, sales to customers in the United States increased, while sales in Europe continued to exhibit weakness. Consolidated gross margin of 47.2% compared to 48% last year. The 80 basis point decrease primarily reflects increased sales and lower gross margin businesses, 10 basis points of unfavorable foreign currency effects, partially offset by savings from RCI initiatives. The operating expense margin of 29.3% increased 40 basis points from 28.9% last year. Q4 of 2018 included a $4.3 million or 40 basis point benefit associated with the legal settlement that Nick mentioned earlier. Operating earnings before financial services of $171.4 million, including $2.5 million of unfavorable foreign currency effects, compared to $182.1 million in 2018, or $177.8 million as adjusted for the legal settlement. As a percentage of net sales, operating margin before financial services of 17.9% of sales, compared to 19.1% last year or 18.7% as adjusted. Financial services revenue of $83.9 million and operating earnings of $62.2 million increased 1.5% and 10.9% respectively from 2018, primarily reflecting year-over-year growth in our financial services portfolio and improved portfolio performance resulting in lower provisions for credit losses. Consolidated operating earnings of $233.6 million, including $2.6 million of unfavorable foreign currency effects, compared to $238.2 million last year, or $233.9…

Thanks, Aldo. Snap-on fourth quarter. Near-term uncertainties, unfavorable foreign exchange, a downdraft in Europe, in particular, Brexit difficulties in the UK, but progress against those headwinds, significant progress. Overall advancement hard won against the headwinds. Opco organic sales up 0.6%, OI margin of 17.9%, down 80 basis points from a 2018 as adjusted result impacted by the mix of critical industry sales being more weighted to the lower margin military sector by unfavorable currency and by spending to enhance the franchise network. Overall advances, continuing strength in RS&I and the repair information business, 26% margin. Favorable trends in the industrial business, gains in the U.S. van channel, and there were significant strides in strengthening our product line across the organization, more customization, more sophistication to match the opportunities of the changing repair environment. And a finance company recording gains in the NOI, which combined with opco to reach an OI margin of 22.5% in the quarter compared with an as adjusted 22.6% of last year. EPS for the quarter at $3.08, above the as adjusted $3.03 recorded last year. Overall, we believe firmly that our business is strong, and we’re confident that going forward, we have the opportunity, the position, the product and the team to confront the headwinds and continue on our positive trajectory through 2020 and beyond. Now before I turn the call over to the operator, I’ll speak directly to our associates and franchisees. I know many of you are listening. To the entire Snap-on team, we recognize the results of the quarter and of the year are authored by your individual and collective efforts. For your dedication to our progress and for your commitment to our corporation, you have my thanks. Now I’ll turn the call over to the operator. Operator?

Thank you. [Operator Instructions] And we will take our first question from Curtis Nagle with Merrill Lynch.

Good morning. Thanks very much for taking the questions. So I guess, first, Nick, a question for you. How would you describe, I guess, the operating environment of tools this year versus last in terms of things like relative competition, underlying fundamentals, product rollout for you guys? Would you expect organic growth to be higher, kind of stay the same? And that optimism that you’d mentioned in the call, would you say that’s perhaps higher than, say, a year ago?

I would say so. I think, look, I believe I said it right at the beginning. I believe we leave 2019 stronger than we entered. Our product line is stronger than ever. We are seeing progress in the – not as fast as maybe we would like in the U.S. van channel but it is moving upwards. This was a stronger quarter than in the past on a year-over-year basis. And so we feel pretty positive about that. I think when we talk to our franchisees, we understand, and the technicians, we understand our underlying strength. The simple point is, can we arm our franchisees with enough efficiency to wield the complex products, the sophisticated products to sell in the environment they are as opposed to being capacity bound or time bound? I’ve talked about the time-bound nature of the van business for a long time. That’s why we’re investing in it, and we’re starting to see the results. Against that though, we see turbulence in the UK. The UK was actually a little worse this quarter. On the other hand, Brexit did get signed, and so therefore, without any inside information about the time line, that should make it better going forward. So I feel okay about that.

Great, fair and sure. And then a quick follow-up, I guess, for Aldo. How should we think about the balance of product and customer mix in 2020 in C&I in terms of how this could impact the gross margin? Perhaps we see continued pressure because military seems to be doing well, maybe that’s a one-off. Could that reserve – reverse in terms of that mix impact to gross margin?

Well, the military, Curt, I’d say, in the quarter was probably the highest sales of one particular job in the military that we’ve talked about before. You call it the GMTK, the general mechanics toolkit, so actually, it was up at a double digit in year-over-year comparison as well as sequentially as I mentioned. It will be a significant contributor in Q1, however, not probably to the same level as it was in Q4. And on top of it, what was lacking in Q4 were some of our international sales in the critical industries. They tend to be pretty good margin contributors so if they come back to what I call more normal levels, you get a little bit more cover and get a more traditional gross margin mix. So we welcome the sales to the military, don’t get me wrong. And they’ll move forward over time, but they should have less of a mix effect as you get a little bit more normalized impact in the overall critical industries.

Okay. Fair and sure. Thanks very much.

We’ll take our next question from Christopher Glynn with Oppenheimer.

Thank you, good morning. I had a question about the Snap-on Tools margin and the seasonality. You used to see that always ramp 3Q into 4Q, and last year’s assumed anomaly at the time but that repeated this year into the seasonal volume ramp. So wondering what’s changed there. Is this a new dynamic with kind of sequential gross margin pressure, 3Q to 4Q for SOT?

Actually, it may be a new dynamic for us. It wasn’t just last year. I think there have been two years of this kind of move downwards. Some of that may be driven by, we have robust Christmas promotions, and they – sometimes, they tend to be a little bit lower margin. I think the thing that you might ask, okay, it’s 40%. The gross margin was 40%. 40.2% was flat with last year, and last year, we had significant discounting associated with the Diagnostics business. You might be asking – well, you might ask, why isn’t that up? And I think the story is this. Last year, we had that discounting. We had some effect of currency but not as much, and we had some small effect – some effect of the UK. This year, we got 40 basis points of currency and 20 basis points of the UK effect, and so you put those in and you end up having 60 negative. And so we had margin improvement actually year-over-year in the quarter. It’s just that higher currency impacts in the quarter associated with the Tools Group transaction effect and the UK still being a problem for us. So they overcame that and flattened the gross margin.

Okay. But taking this year in isolation, what caused the decline sequentially?

Well, I think we’ve seen generally a decline sequentially. And what has happened in the decline, what drives the decline, we’re seeing more and more of this is our factories tend to be seeing it like, for example, when you roll into the fourth quarter, especially if – as the hand tool business has risen and become a higher portion of our product, the factories, which is the most integrated product in the United States, you see things like over Thanksgiving and over Christmas, you see the effects, those expanded hand tool factories, the effects of those weighing a little bit more than the third quarter in terms of the days off they have. So you have worse absorption in this quarter. Fundamentally, your sales are going up, but your absorption is going down because of the days worked. That’s, I think, what we’ve seen. If you go back two quarters, when we didn’t have this discounting and this legacy sales in the fourth quarter that was really the effect. And I think we’re going to see that going forward in this kind of calendarization.

Okay. And just wondering if – looking at the inventory increase and the lower turns, wondering if there was any reserving in the quarter for excess or obsolete inventory or if possibly, that’s something that might be an outcropping of the higher inventory levels at some point?

I don’t think anything more than normal, Chris, this is Aldo. The nature of our inventory is such that when you get the lower market cost or market criteria, we feel pretty good about where our levels of scalability are at. I think the biggest increase in inventory actually is new product introduction. And the take-up pace was not as rigorous as we would like for that, and we’re confident looking to the future. But as you know, we keep targeting a higher level of sales growth. And when we don’t achieve it, the product is there and available but it’s in inventory rather than in the sales line.

Okay. And then last one for me. The CFO was down a bit year-over-year from very high levels last year with a fair amount of inventory pressure. Just wondering if that’s a good setup for pretty strong CFO growth in 2020 that we could expect.

Well, certainly, I see there’s no reason that inventory has to grow to the same degree it did in 2019. We try to take a measured look at that. Some unique characteristics in 2019 were that we have more sophisticated kits among our critical industries customers. As I said, we had a heavy dose of new product introductions. We’ll have elements of that in 2020, but as you’re suggesting, there’s no reason that the increase in inventory has to be to the same magnitude as what we saw in 2019.

Great. Thanks, Aldo.

We will take our next question from David Leiker with Baird. And David, your line is open. Please check your mute button. Hearing no response from David, we will move to Bret Jordan with Jefferies.

Hey, good morning, guys. Could you talk a little bit about diagnostics in the U.S. van channel? I know you guys were doing some educational work at the franchise event back in August. And maybe an update as to how we’re doing with ZEUS and Apollo.

Okay. I can give you versions of that. The – we had strong – we’ve had – we continue to train the people and we’re working with our field force, our diagnostic sales developers and the techno vans and so on, the field source to try to, just as you say, try to expand the capabilities associated with that. We had a – it was up double digits and it was up very strongly in the third quarter. Diagnostics was down in the fourth quarter, selling to the franchisees, but the movement from the franchisees to the end user kind of followed more traditional paths. So I would figure that the – if you step back and you look at it and you say, okay, up in the third quarter, kind of down in the fourth quarter, it’s kind of a continuing the same level as before. So therefore, we would say we have more work to do in trying to get our franchisees to understand how to sell this product. It’s kind of moved forward. And ZEUS had a good quarter, by the way, so that was an encouraging data point for us. So with the ZEUS good quarter, we feel that there is some progress because that’s the most difficult thing to sell. So now we’re going to have to make sure we work on Apollo and TRITON to get those stronger. And so I suppose one of the lessons we get out of this is we may have cracked some of the case for ZEUS but we need to do a little bit more on of Apollo and TRITON.

Okay, great. And then on the UK, you talked about it being turbulent but may be getting better with Brexit. Is there any change in the van count over there, given the challenges that those distributors are seeing?

Yes, there has been a change, but not – it’s very small actually. It moves up and down. I think in the middle of the downturn, it was down a little bit but would bounce right back up. So I would say not more than ordinary motion really. It hasn’t really changed that much. I mean, the UK has been a headache for us really, and it punches above its weight in terms of – on the margins of our performance. But we’re working hard to try to get it under control. We’re working with the products. We’re trying to train the franchisees so they can make the most of things. Generally, it’s short payback items they’re selling. It’s the big payback items that tend to come down in uncertainty. With Brexit being signed, I don’t know. But I think as people understand what’s going to happen in post-Brexit, the certainty returns and the automotive repair market snaps back in the UK. I pretty much believe that’s the way it’s going to play out. We’re just happy that they signed Brexit on January 31.

Yes. And Aldo, one question, I guess, around the credit book. Are the loan terms, as the credit quality is going up and obviously reflected in lower rates, are you seeing shorter loan terms as well?

No. With the – generally speaking, with the higher price point of products, generally speaking across the board, the franchisees elect up to five-year terms. And I don’t see that – that actually has trended slightly upward. The migration has been more to a little bit north of four years is the average in the overall portfolio. So I haven’t seen really much of a change in that.

Okay, great. Thank you.

We’ll take our next question from David Leiker with Baird.

Good morning, can you hear me?

Good morning, we can hear you, yes.

Let’s just chuck that one up to user air. Two things. If we look at the Snap-on tools field support spending, I think we’re probably on two full years of that right now. Is that fair?

No, I don’t think so. I think we started it maybe in the fourth quarter of last year. I don’t think it’s two full years actually. That’s my memory about it, yes. And we’ve kind of ramped it up here. So…

So how do you – can you talk a little bit about how you determine, calculate if that’s working and driving incremental returns of kind of return on investment or some kind of metrics of how do you gauge the success and executing and delivering on that?

Well, there’s – I think there are twin axes on this, David. I think one is the overall – we’re focused on the U.S. really, of course. And this – I think we made that clear. There’s a separate effort going on to remediate in the UK. I think our number one effort is what happens with sales in the U.S. van channel and it’s been moving upwards. So this quarter was better than the last in terms of a year-over-year basis. So we can feel it moving upwards, maybe not as fast as everybody would like and maybe not as fast as we would like, but that’s an indication that we’re moving the boulder upwards. We’re expanding the capacity to sell. And that’s one issue. Then there are the local issues, just like question recently, if we’re focused on diagnostics, what happens with the individual diagnostic platforms? Because after all, this training gets done platform by platform by platform by platform, and types of customer by types of customer and types of customers. So we kind of segment it that way, platforms by customer. And so the success in those nodules or how we evaluate it. And it’s not just training. It’s also things like we’re adding a new set of vans, we call the Total Shop Solutions. We’ve been expanding and we were at nine last quarter and 15 this quarter, not associated with diagnostics, but this is associated with other more longer payback sales like hand-spin tire balancers and diagnostic workstations, which include full storage box and so on. So we evaluate how those things are occurring in each of the territories. So I think I’ve said for a long time that one of the boundaries of the tools – the van business is the time and so what we’re doing is trying to make the time more effective. Best thing is the sales. You figure that happens. If the sales goes up, that’s the best thing to do. But we also have a sub-analysis. So that’s how we do it. And we think it’s working. I sure like to see it work faster, but we believe it’s a way forward because we – go ahead, sorry.

Well, as I say, so if you look at that in terms of the absolute spend versus the driving through of revenues, is there a point – where is the breakpoint where you get revenues growing faster than the spend in that? And is there a point in time that, that spend actually can come back down at all? So how do you see that playing out?

Well, look, I see it playing out. When we start to get up around our target, we start to experiment about cutting back. I think the way the world works for us, and it’s always worked this way, is we spend to capture sales growth. And then as we establish ourselves in that sales growth level and that sales growth level is defined by capacity, the capacity of the franchisees to sell, once we hit that, we try to improve and become more efficient in supporting that behind that wave of capture. So once we get to like x percent growth, we say, "Okay, we’re there. That’s our level." We kind of try to figure out how to do it more efficient. So we’d like to be in the territory where we feel comfortable that that’s an acceptable growth that’s commensurate with the market, with the opportunities. Once we do that, we bring it back.

So with that running at low single digits in the U.S., you’re getting close to that growth metric then?

Yes, but not as close as I’d like. Yes, close, closer. Yes, yes, yes. Yes, that’s true. Yes, it’s hard but that’s our method, David. We capture territory and then we make it more efficient.

And then just one item for you, Aldo. You didn’t mention it and we’ve had some conversations on this, but is there any update on the bad debt provision, the change in accounting there? Any framework you can give us to have a sense of what that’s going to mean when you adopt it in Q1?

Well, I’ll say this, the official and final reporting of that will be in our K, which is not so far away. I mean, we plan on releasing our K at the – before the end of next week, actually. So I’ll leave that out there as a statement. But I’ll say this, the workaround, it’s been fairly intense and well done. And I’m pleased with the energy we put into it so far. And you’re talking about CECL. For others on the call, it’s a reference to the adoption of CECL, which becomes effective for the corporation in January of 2020. So in essence, the true reporting of it occurs at the end of the quarter, actually. But I’ll say this, is that right now, David, I’m expecting that our overall adjustment will be something less than $10 million will be that order of magnitude. But the final number will be solidified within about a week.

Okay. Great. Thank you much.

We’ll take our next question from Scott Stember with CL King.

Good morning, guys.

Good morning.

Could you guys give a little bit more color on some of the other areas within tools as far as growth, like power tools and hand tools?

Sure, sure. This quarter, hand tools was down some, power tools up double digits. So like I said, power tools had a terrific quarter. And principally, tool storage up, diagnostics down some. So by the way, I encourage people not to get too overheated about these quarterly numbers because they move up and down, depending on what happened last quarter and what – when the new products hit. For example, power tools is strong this quarter because we have a great new product and everybody has been waiting for it. And so it rolls out. And so that’s one of the reasons why it’s strong now. Because remember, our view of the world is the franchisees are capacity limited. We’re building up. That’s why the franchise business in the U.S. is growing again. But it’s kind of a – you get a new product, it tends to squeeze out some of the other products. But that’s the rollout. Hand tools’ down this quarter after up for the year, but power tools up fairly robustly. Tool storage up again, diagnostics down. It’s sort of the story this quarter. It was a different story last quarter.

Got it. And moving over to RS&I, I know that we’ve had a few really good quarters of sales comps. Part of it was the OEM business was coming back, but we see a return of choppiness there. How did you do in RS&I for the full year, again, on an organic basis? And given your commentary about some of the reluctance of some of the dealerships because of the weaker car sales, do you expect to get back to positive comps in 2020?

I think we’re not sure what happens with the OEM dealership business. That’s the thing that we say, well, that’s a lumpy business. And having worked for Ford myself, I can tell you that they – this is a business that changes cash flow every month for five year. They change their attitudes every month. So we’re not sure. If I look out and looking at the IHS forecast, they’re forecasting down 1% to 2% next year. I would think we’d kind of see the same kind of stuff out for a little while. Now RS&I was up low single digits for the year. I think interestingly though, 26% for RS&I, I think, is the highest-ever gross OI margin, so they had an okay quarter from that perspective. It’s just the sales were down because of that OEM business. But the information business, so where independent repair shops was up again, which was what drove that 26% because it’s high-margin business, and Mitchell 1 is a – has been a consistent grower for us. So if you look at the RS&I businesses, I’ll step back and talk about them, Mitchell 1 seems to grow consistently. We just invested in a new building. We didn’t do so without thought. And therefore, we think that’s got a great future. Diagnostics tends to go up and down but we’re training the franchisees to be more comfortable with the new groundbreaking product of intelligent diagnostics. We expect that to go forward. The OEM businesses, which is about a third of the businesses, it’s hard to predict, it can be lumpy. And significantly, lost in the sway here is the equipment business showed a positive this quarter for RS&I, and it hasn’t been positive for a while. So we view that as a fairly – even in a turbulent quarter, we view that as one sign of good news. So going forward, I think – we think the OEM business, uncertain. Maybe it will be the same as this quarter for a while. But the rest of the businesses have good opportunity.

All right. And just last question. Your view of the business longer term, are you maintaining your expectation that the company, longer term, could be a mid-single-digit grower on an organic sales basis?

Yes, yes. I think the market is there. I think we got the product and stake. I think we’re capacity-bound. I’ve said it – if you listen to us, for years, we’ve said that one of the boundaries associated with the van channel, space and time, we’re up against a time boundary. It’s clear. You can see it, the way the world works. And so we have to break through that like we did in previous years. We had to come up with ways to make those franchisees use their time better, and we can do that, we think. And then in the C&I business, if you’ve 13 straight quarters for industrial and with 5,700 new products, now that gets more and more complex and it drives inventory, but the dogs are buying the dog food there. The only thing is, in this particular quarter, one of the big businesses was low margin. That’s not going to happen forever.

Got it. Thanks a lot.

We’ll take our next question from David MacGregor with Longbow Research.

Good morning, everyone. A couple of questions. First of all, just given the amount of time we’ve spent talking about the field support, can we at least put a number on what the impact was to margins, Aldo?

Well, I don’t recall all the field support specifically. Obviously, it’s an investment that we make along with other internal metrics that we have, David. But you could see the drag that it creates in the OE section of the financial – of the Snap-on Tools Group. But we’re not going to dimension it exactly.

So you can’t give us some order of magnitude or any quant on that?

No, I don’t think so.

Okay. I guess, what percentage of your franchisees are up year-over-year in the fourth quarter?

What?

What percentage of your franchisees would have seen growth in the fourth quarter?

I don’t think we know that necessarily directly.

Yes. The U.S. is up low single digit, as we’ve said, and you’ll get a mix within that portfolio. Some, of course, will be higher, some will be lower than that. But we’re not going to parse among the number of franchisees that are up or the number that are down.

Generally, we parse them by quintiles. And if you see the business up, it generally tends to be uniform across that. So what you find is, is that roughly 60% of the – 60% to 65%, maybe two-thirds of the franchisees will be sort of in the same direction as the overall business. That’s usually what happens in any one quarter. And those numbers swap in and out. It doesn’t change that much from quarter-to-quarter, really.

Okay. And then it seems like we’ve got to a point in our world where people are buying online, and I’m sure that technicians are no exception to that rule. You’re selling tools on your website. Can you just talk about it? And maybe this is a way to sort of tie in with the whole notion of the time boundary you referenced in answering the last caller’s question. But what’s the opportunity to develop online sales here? Maybe find a way to pass the credit back to the appropriate franchisees that customers registered to. But talk a little bit about the opportunity to grow online as…

I think our customers don’t – we offer them online. But generally, our customers value the presence, the face-to-face presence of the franchisees. That is – I think that is the point. The idea of providing up close and personal counseling and guidance on how the explanation of the tool, which are getting more, I guess, more complicated, more sophisticated and the guidance on how to use it, then the idea of providing credit up close and personal, and then the idea of having a replacement right there is what our franchisees and our customers seem to like. They could go online but they don’t necessarily avail themselves of that. Now if we thought we were getting pushed by that, we would be looking at it a little bit more, but hand tools are up and you would think that would be the number one product line that would be bought online since it’s less complicated than people tend to know hand tools. But the hand tools are up for the year. In fact, they’ve been more robust over the past couple of years. So that’s our kind of view of it. We try to use the online capabilities to enhance. It’s one of the things we try to do to enhance the efficiency of the franchisees in terms of their collections, in terms of the way they communicate with their customers on specials and those kinds of things. Those are the opportunities we see. We see the connection either through social media or traditional online, either Twitter, either Facebook or Twitter or in fact, texting or just email, not that many people use e-mail anymore. And for our franchisees to communicate and make our customers aware of things, that’s part of our view of online and enabling the franchisees to be more efficient.

So how would online growth look for you right now?

Well, I think it’s not.

Off a small base, obviously. But I’m just trying to get a sense of what…

It’s probably up some but not very significant. It’s not very significant because online for us, our customers are looking at the idea, the support they get from the franchisees. So what we try to do is keep that franchisee supported in place because it’s part of our advantage, and secondly, try to use whatever the electronic media is to enable the franchisees more, just as I said.

Okay. Well, maybe I could follow up offline with you, it’s an interesting topic. Thank you.

Sure.

And at this time, I would like to turn the conference back to Sara Verbsky for any additional or closing remarks.

Thank you all for joining us today. A replay of this call will be available shortly on snapon.com. As always, we appreciate your interest in Snap-on. Good day.

Ladies and gentlemen, this concludes today’s call, and we thank you for your participation. You may now disconnect.