Ladies and gentlemen, good day and welcome to the Snap-on First Quarter 2020 Results Investor Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Sara Verbsky, Vice President of Investor Relations. 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 16. 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. Well, as some say, these are interesting times. There's considerable turbulence in business and all across the everyday landscape. But I believe we can be confident that Snap-on will navigate through it all and come out stronger than when it all started, just as we have done in the past. Before we get going, I think it's appropriate for all of you listening in, the investors, associates, franchisees, customers, retirees and analysts. You have our best wishes that you and your families weather these times safely and without harm. Now, let's speak of Snap-on. Firstly, we're keeping our team safe. Snap-on people are working from home and where that's not possible and there are a number of these instances we're proceeding using government prescribed guide lines in the United States those put forward by the Centre for Disease Control the CDC, physical distancing, the use of personal protection equipment, cleaning of facilities deep and often, staggered shifts and break, and quick attention to those who have symptoms. For our franchisees, we're active in helping, providing a playbook for staying safe. The people of the Snap-on team are a great advantage, working hard to preserve them and as we move through this difficulty. Having said that, it's clear our operations are essential. Snap-on plays an important role in the underpinning of our society supporting vital activities, like the military, transportation infrastructure, our critical vehicle repair, the areas we all depend on for emergency services, for food delivery, for distribution of medical supplies, and for a variety of essential needs. Government bodies, including the US Department of Homeland Security and multiple states have deemed it so. And there have been clear examples that critical role from the United States to Italy, to the UK. And as such,…

Thanks Nick. Our consolidated operating results are summarized on Slide 6. Net sales of $852.2 million in the quarter compared to $921.7 million last year, reflecting a 6.9% organic sales decline, $10.3 million of unfavorable foreign currency translation and $3.5 million of acquisition related sales. The organic sales decrease this quarter primarily reflected the impact of economic uncertainty associated with the COVID-19 pandemic, with sales declines and all three operating segments and across most geographies. Through the month of February, with the exception of Asia Pacific and certain European geographies, sales were up on a year-over-year basis, as the effects of COVID-19 spread across Europe and the United States in March and as further government actions were put in place, demand slowed and access to some customers was interrupted, resulting in the lower year-over-year sales for the quarter. During the quarter as a result of the continued economic slowdown in Europe as well as effects of COVID-19, we recorded $7.5 million of restructuring costs for actions primarily associated with our European operations. These costs were recorded in both the commercial industrial group and the repair systems and information group. Consolidated gross margin of 49.5% compared to 51.2% last year, which is one of the highest quarterly gross margins reported in Snap-on's recent history. The 170 basis points decrease primarily reflect 60 basis points from restructuring costs, the impact of lower volumes, cost associated with COVID-19 related operating disruptions and 10 basis points of unfavorable foreign currency effects. The decrease was partially offset by savings from RCI initiatives. Despite the cost of restructurings and the impact of COVID-19 the first quarter, the gross margin rate of 49.5% improved sequentially from 47.2% in the fourth quarter of 2019. The operating expenses margin of 33.2% increased 230 basis points from 30.9% last year.…

Thanks Aldo. Snap-on first quarter, progress interrupted, a time of multiple headwinds, the ongoing economic weakness in Europe, the continuing impact of COVID-19 in Asia and the spread of the virus in Europe and North America, all in this quarter. As I said, our team's experienced. This isn't our first encounter with deep difficulty and in this we are keeping our people safe, working from home and when we can't, distancing, using PPE where appropriate, and cleaning deep and often. What we do is essential to society and we're acting accordingly, maintaining operations to keep the world going, supporting the professionals performing critical tasks. The impact of the virus is mixed across our businesses, some sliding deeper, some flattening, some getting better, all at the same time. But we're confident that the continuing and essential nature of our mission, the advantage of our position, the strength of our balance sheet, the extraordinary experience and capability of our team will carry us through the turmoil. Our long history, navigating disruption, our dividend record, and our performance in the last great recession, all say so. We don't know the timeline or the shape of the disruption. But we do know we'll resume our upward trend with surety and because of that we're confident. Because of that confidence, we're working to preserve our strengths and our advantages. We keep driving the elements of Snap-on value creation, building our capability, expanding our products, nurturing our networks, and we believe we'll emerge from this turbulence stronger than when we entered as we have so often before. Before I turn the call over to the operator, I want to speak directly to our associates and franchisees, the Snap-on front line. I know you're listening today. We will all pass through this challenge together. And in this difficulty, there's no other team I would rather be standing with for your courage in meeting the difficulties you have my admiration, for your capability and navigating the challenges of the day, you have my congratulations, and for your dedication and fulfilling your essential role in supporting our society, you have my thanks. Now I'll turn the call over to up to the operator. Operator?

Thank you. [Operator Instructions] And we will take our first question from David Leiker with Baird.

Good morning. This is Erin Welcenbach on for David. So my first question is about the sale of big ticket products. Based on the finance receivable originations and your commentary, it sounds like that held in better than maybe expected. So I guess I'm wondering if you can give any color on how that shaped up I guess throughout the quarter and expectations of that given the weaker economic conditions in Q2?

I think when you talk about looking forward I think we think we're going into a little more turbulence. It's going to be extended. Remember that the first California shelter at home was only done I think March 22. So we're only talking about a relatively short period of time in this kind of situation. So it's hard to make any extrapolations on that. But if you look at the quarter, here's what happened, I think I said it, tool storage held its own, diagnostics is pretty good and so you had the underpinning of those things. But remember that originations and sales – Tools group sales don't necessarily match up, there's a timing difference. And in the quarter the sales of the truck exceeded, were positive actually, exceeding the Tools group sales. So you have some of that mismatch there. But as I said, we were kind of pleased with the tool storage business held its own.

Okay, that's helpful. And then Nick, I think you had mentioned that you were doing some things to support the franchisees during this time, can you provide some more color on some of the actions you're taking?

Well, first and foremost what we're doing is we're trying to give them a playbook. I don't think many people have seen this before. So we're trying to – we did this actually in Superstorm Sandy. That's why I mentioned this stuff and Maria and so on. Each disaster is a little bit differently, what we're trying to tell them how to conduct their business serving essential and serving essential and critical tasks in the atmosphere of distancing. And so we have a playbook to help them and then we're kind of working with them with other things in terms of working with their financials and they're working with their business managers in each of their locations to try to find a path and the particular prescription that will help them and their individual franchisees move forward. Like I said, what I was trying to say is the world is mixed. So we have guys in Iowa who are kicking it. There was a guy in Iowa who had a tough week we couldn't believe and even in New York and in the New Rochelle area we had, but on the other hand, other people are having difficulties, so we try to – we're adjusting to each person, each franchisee.

Okay, and then finally, on Asia Pacific, you mentioned a better trajectory coming on to the end of the quarter and higher miles driven. I'm wondering what do you think is driving the miles driven recovery there, is just some pent up demand or are you seeing some at least anecdotes of a structural shift in terms of consumer behavior or kind of a preference towards private vehicle ownership?

Well, I don't know, this is early days and the thing is, I didn't say necessarily. I said, we see green shoots of recovery there, but do you want to be riding the subway now? I don't know. Right. Do you want to be taking a bus? Do you want to be ride sharing? I think this is a change. It's going to echo for a while. And we're seeing that in Beijing, Beijing snapped back in terms of traffic. I think people can see this in our anecdotal evidence about Shanghai is the same. So I think you're at least temporarily seeing people say I don't want to get sick again.

Okay great, thank you for taking my questions.

So I think actually ownership, I mean, when you go through that is it. I don't know I want to be selling real estate in New York now or for the next – for the future.

And we will take our next question from Gary Prestopino with Barrington.

Good morning, everyone. Hey, could you maybe tell us and if you don't want to do that, that's fine. But what was the slide in sales over the last two weeks of March across all your businesses on an aggregate basis.

I say what you be – let me put it this way. Cut it you Gary, say, look, you could be confident it was double digits for sure. It was – we were down single digits. We said we were up already, we had a reasonable quarter and is going particularly in the Tools group US seemed pretty reasonable for us. So that was a significant slide. But I don't think – look, Gary, I don't think Gary, I don't think you can make a conclusion of that. Because remember, it's only a month. You got individual – franchisees who are trying to figure out how to deal with this, so it's hard to make any conclusions about those weeks I think. That's what we're thinking. It's going to play out in the future. Of course, we're going to live with it longer, but I'm not sure those weeks are extrapolation for the future.

Okay, like I said, I'm just trying to get an idea of the magnitude here. If you look across your customer base really worldwide, I mean, how much of that do you still have access to?

Well, let's put it this way. I think in the Commercial Industrial group, if you're talking about the people, like the critical industry, generally we have access. Yeah, businesses some of those people are getting hammered like oil and gas or some of the aerospace businesses are getting hammered. So businesses are attenuated bug places. And so when we talk to our people, it's a mix. Some of them are calling directly on the people, some are dealing at a distance through social media or email or things like that or phone calls. If you're talking about the franchisee, same kind of thing, it's a mix, depending on where you live and where you're at and the size of the dealership and their requirements. One of the things that's true is generally we're pretty sure that critical repairs are happening. If somebody needs – if somebody's got a check engine, like they're bringing it in. If somebody going for oil changes, doesn't seem like it's happening. So we can tell that. And so some of the businesses that focused on that are a little less receptive to having people come in, if you're a transmission guy, you're probably doing okay. And you expect or people don't, it's quite a mix.

Okay, and then lastly, could you maybe just go back to 2008, 2009, obviously, every situation is different, but we did have one hell of a recession at that period. What were the indicators to you that the business was coming back? I mean, which segments started to really show significant, I guess lack of a better word green shoots in and that you felt that okay to start to try.

It was a different deal, of course, but big ticket items coming back was the big thing. Generally, it was the attenuation of bad news for breakfast. I think people were getting scared by what they were being told about the banking system that was that was affecting it. So generally, it was big ticket in that situation, because people only were buying. I remember talking about it incessantly. People were only buying short payback items. And if you look at that, when we have recession, if you look at it, we came out of it and by the time you got to 2011 our trajectory was still a healthy double digits and profit growth, including at least us.

Yeah, I do remember that. Okay, thanks.

Sure.

We will take our next question from Bret Jordan with Jefferies.

Hey, good morning, guys.

Good morning.

Good morning.

When you look at the service channel, I mean, independent volume seemed that they were down 30% to 50% here in a pretty short period of time. I guess you're looking at the credit book and a lot of these guys are getting paid on piece work. Do you think that in the short-term, we're going to see delinquencies exceed what you saw in '08, '09 just give the magnitude and the relatively quick speed of the crank? And then I guess a follow up question on franchisee health, I mean, obviously, you hear about a lot of small businesses that didn't have liquidity to go into this type of dramatic contraction in a short period of time as well. I guess, are you doing much across the board, you talked about a couple of franchisees that are doing particularly well, but if you think about average franchisee liquidity, are you going to need to step in and help them a little bit in the second quarter assuming volumes remain down pretty dramatically.

Well, I think first of all, I think that the jury's out on delinquency rates, I'm not so sure how it will behave. I remember that losses improved, went up 100 basis points in the recession last time and delinquencies did go up. I think there is a question of the shock of this all that I think there's going to be sort of like timelines that will work its way through this situation where people get shocked and then figure it out and then deal with it for a while. I don't know what those timelines are. In terms of helping our franchisees, like I said, it depends on the segment of the country. For example, if you look at the Northeast, the franchisees are a little more attenuated. If you look at places like the central region or the North Central region where we're living in, where we're sitting in, now it's not so bad. Northwest seems to be coming back a little bit. If you look at certain indicators, so we would look at franchisee by franchisee and then we would talk about things like well, loan extensions for them and some help in terms of their position. And we did that in the past, we did it in Superstorm Sandy, we did it in Maria, we did it in Harvey and it all worked out very well for us because our business managers highlight those guys who need help. And we get out there and help them. And of course, there are government programs they can access to, although I don't think it's that easy to do it these days. But in general, we've seen this movie before, in a more narrow way. Puerto Rico, in the East Coast and in the Houston area, and our actions around having the business managers deal with the franchisees and help them in some cases giving them extensions of deferral has worked very well for us.

Okay, great, thank you.

Yeah.

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

Good morning and thanks for taking my questions.

Sure.

You talked about how big ticket items such as storage held its own in the quarter, but can you just give us your expectations? I know you don't really guide by month or quarter, but is it safe to assume that we're going to start seeing some elevated declines in big ticket items at least in April.

What I'm trying to say Scott is sure, I think, if you're going to – if we're to lay bets now, I'd lay bets that the second quarter is worse than last year. And I lay bets that we have more weeks of eggs in the second quarter than we had in the first quarter. The shape of that is what I don't know because I don't know I think there was a lot of experience. I think – if you think about it in a practical sense, okay, you've got guys who are working on essential. Everybody recognize what we do is essential. Everybody recognizes this. The Department of Homeland Security talks about automotive repair. So every state proclamation says that, but our people are worried about how they deal with the customers. The customers are trying to figure out how they ply their essential trade. And our people are trying to figure out how to deal with them. And so it's hard to figure out how that's going to play out. I don't know. I'm not sure. But we see a lot of variation in our situation. Yeah, big ticket, if you say, look, a recession creates eggs, and people are worried about uncertainty. Big ticket tends to go down like it did in the last environment because people say I don't want it. I got to hasten my own cash. But my suggestion is what's going to happen eventually is people come out of the woodwork to give their cars repaired. It's one of the first things that happen. Now, I don't know the timeline for that. But that's why I'm being a little bit I can't really predict so much about the second quarter, except that we're going to manage – I can't tell you anything that you don't know, really, these kinds of things.

No, that's fair enough. And just – maybe just give us a little bit more commentary what you're hearing from the van channel, what they're seeing at the repair shop level as far as the help, the employment picture with their mechanics and just – and I know that we're milestone have been off obviously a lot, but just the general commentary about what they're seeing?

Yeah, generally – again, I'm sorry, it's like – it's mixed. Some are sliding papers, some are flattening, some are getting better. That's what I hear, but I will tell you this, I think, now, if you look at the BLS data, the BLS data says that the nominal spending of households on automotive repair in February, year-over-year was up 8% and change. So I would suggest that just like our franchisees, the garage has entered it, not bad shape. So I think the resilience is probably pretty good in this situation, so I don't – some are probably – we know some are closed, some are operating at reduced hours, some are going gangbusters. So it just depends I think in this situation. I can't say. I know that's not very helpful to building a model or anything, but I can't really give you anything like that. I think the one piece of data, I do think is worthwhile is that both the nominal repairs and that the household spending and the technician wages were up in February year-over-year. So I think they entered pretty good.

Got it and last question, just remind us what – just going back to '08 through 2010, what the 60 day delinquency numbers went up to from a percentage standpoint and the losses – the total losses in the portfolio on a trailing 12 month basis. Thanks.

I'll let Aldo answer that.

Scott. I don't have the exact delinquency numbers in front of me. But they would be not so dissimilar to what you're seeing today. But the losses went up about 100 basis points. I think I mentioned earlier on the call, they hit a peak in a negative sense in Q4 of '09, and then moved from around 3% over the portfolio to around 4%. And then they declined back to below 3% until recent times, so that gives you a range I guess or a feel for what it might be like.

Got it, thank you.

Sure.

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

Thanks, good morning. A lot's been asked, but just around the outlook lacking guidance. So I was curious, what your sense is of what among your three operating segments might see the biggest pain as you look at it? Should we use the 1Q magnitudes as a guide?

Look, I think my own view is Europe is sick. It was weak going – it was weak coming in here. About 18% of our business in Europe, that's the big – it's got a big dollop in C&I and so that's probably the place I think is going to be tougher. If you look at Spain and Italy, the pre-book of Milan asked us to get back in business in Italy because we were essential in that place. But I just think Europe's going to have a tougher time coming out of this. Asia. It's spreading through the – I think China starts to come back. Japan I think is resilient. I think Southeast Asia, I don't know your Indonesia seems to be sinking, Philippines seems to be in trouble and India has completely shut down. So I don't know about the southern Asia. I think China and Korea, and maybe Japan start to excel. United States, you guys know as best as I do, I kind of think so that in our business, our people will learn, will adjust to this, the garages will adjust and it'll kind of – they'll be adapting to this and we're going to help them. The question is how quickly does that happen? And we know it's going to be four more weeks in a second quarter. So I can't give you much more guidance than that. But I think we're better off in the United States and Europe for sure.

Okay, and then I was just curious on the costs to manage supply chains, people safety through the COVID experience. What is that layer of cost like in terms of magnitude or what do you have to spend for continuity?

Well, I don't think so much about continuity. You have lower volumes, so you have more people on the payroll and so on. I think the question is, what do you do about that as you go forward as the lower volumes get smaller? I think I've said in many forum that we're looking at this carefully. We have two sets of what we call profit assurance actions that will take actions depending on how long things go and so on. But we're not going to take precipitous action based on a few weeks. We have of course done the standard stuff like reduce travel and done other things. I would expect that on the other hand, working from home tends to be a little less efficient, I think. And so you have that floating. I would – I don't think we have a real number on the cost to clean and so on. Generally, though, our cases I'd say knock on wood seem to be stabilizing. So we seem to be in reasonable shape in that area. So I don't think we have – you can look at the first quarter make any conclusions about extrapolating those costs going forward because if it gets worse, we'll have to take other actions to reduce our costs.

Okay, thank you.

Sure.

We'll take our next question from Curtis Nagle with Bank of America.

Good morning. Thanks very much.

Good morning.

Good morning Nick, how you doing?

Okay.

Good. Okay, so turning just quickly back to the Tools group and then franchise network. I guess how many of the 3,500 or so in the fleet, how many are actually operating right now or are there any that are mandated not to run because of social distancing and things like that?

Look, we pretty much by phone talk to every franchisee every day and I would say a relatively small number, pretty small number are not running. But there's variations of that all the way up. we would say a lion's share of them are operating on a relatively normal, but attenuated activity because if they spend an hour, they're not getting as much return from some of the people because maybe they're not buying big ticket items or it's taken longer to get to people or they're have to set up an organization. And in between there there's a bunch of gradations. People might be working. Small number may be working on partial shifts or partial days. Some people are not even taken out their trucks. They're putting their stuff in the car and they're driving around. Other people are spending half their day setting up appointments and then going out, but the lion's share of the business and way over the majority is working as normal, maybe not getting the returns as normal. Now, when I say working as normal, I'm not saying they're rolling into every garage or anything like that. Some garages are going into, other garages are putting the stuff on the outside, other people are bringing them on the van one by one. We had a guy who had a customer event, really, he brought people on he had tea and had food on the van, but he limited the number of people on and forced distancing. I had a great day.

Got it, okay, understood. And then kind of thinking about – so again, vehicle repairs is an essential service we'll get cars back in the road to some normalized at some point, but I would think, at least in the kind of a shorter, maybe a medium term, there might be some negative impact on repair demand, just because cars are being driven at the moment. Have you guys done any work trying to figure out is that – could be the case, what to tell them that can be able to be a residual impact of the distance not just related to –

Well, I think – look, I think – like I said, I think a couple of things I can tell you, first of all trucks are being repaired. I'm right in 94, I-94 out here, it seems like there's as many trucks on I-94 as it ever was. And it kind of makes sense, right? People are getting deliveries, maybe more deliveries now than before. So trucks are – while they – well, I'm sure that truck shops – because the lighter trucks, maybe are attenuated a lot of these trucks are still rolling. So I think that they're probably doing okay, continuing. You're talking about regular vehicles, like I said I think are monitoring and we get a pretty good monitor of this is that generally maintenance is drying up and repairs continuing at a somewhat reduced rate, but still at a reasonable rate. I would expect that after this starts to play out, you're going to get a rush on the garages with maintenance, there's going to be a snapback as maintenance tends to come like death and taxes. You need to have your oil changed every once in a while, so that's going to happen.

Okay, fair enough. Good luck to you guys and thanks.

Alright, thanks a lot Curtis.

Take care.

And we will take our next question from David MacGregor with Longbow Research.

Good morning, everyone.

Good morning.

Nick, good morning. It's just a couple of questions on credit, I guess, we've got mid teens unemployment in this country, small businesses are on the ropes. The $500,000 provision seems a little light. I wonder although if you could just discuss the key assumptions that were underlying that your provision decision and particularly in light of the fact that you're calling the second half of March down double digits, which would have relatively negative implications for what might happen in the second quarter. We've got to understand some of the key assumptions underlying that provision decision.

For sure, if you actually go Dave, remember, we're making our accounting adjustments effective at the end of the fiscal quarter, so that's March, so you have to keep that in mind as well and performance off the back of the van – performance for extended credit originations in general were pretty good. Yes, they were stronger at the beginning of the month than they were at the end of the month. But the performance was pretty good. And the performance of collection activity was pretty good. So it wasn't quite as good as Q1 of last year, which we actually saw lower levels of provisions in charge offs. But there was actually a better performance than what you would – had seen as a normal run rate. So we took that into account when we increase the reserve and then on top of it, we have to take a forward look, under CECL. This gets to be a little bit more judgmental, certainly, because we've pressure tested the portfolio idea of circumstances of preparing for CECL's adoption. And actually, there's not any single variable that correlates so perfectly with it. So we look at a myriad of different things, and we have to apply some judgment. Having said all of that, we came to a conclusion that we thought it was appropriate to increase reserve by about $2.6 million. I'd say it's more specifically for the forward look. So it's not like it was nothing of dispensing the 500,000, just in reference to the sequential movement. But the CECL adjustment actually within the quarter was about 2.6 million and if you look at the level of reserves at the end of March as compared to the end of December, actually roughly 15% in total, so it's not like it's nothing.

Right, I guess just further on the credit. I didn't hear you mentioned in your prepared remarks about the 90 day payment deferral plan that began in March and we saw a rather parabolic upturn in UCC filings and I'm guessing although if you guys have you confirm it one way or the other if this was just technicians refinancing and franchisees rolling their IRA balances in DC? But can you just – I guess, under this 90 day deferral plan, how much forbearance has been granted at this point to end customers and franchisees?

Well, people think first off the – its early days. It was launched on March 23. We've had programs like this before, so timing is even better with the advent of CECL, you could look at this as not at CECL with the COVID-19. So you can look at this as a form of being able to help customers out. But we've done programs like this in the past. So it's not like it's something radical in any way, shape or form. So we'll see what the uptake is. But as of the end of March, it was only in the in the field for about the less than seven days, I guess, given our fiscal cut off, I think was March 29, so you have that. Now, you have a separate program, where we grant forbearance or can allow extensions to certain people that's on a case by case basis. It is for a limited number of weeks. We try to work – one thing I'd snap on this it's personal, and that's not a bad word. Some people shy away from the word personal these days with the pandemic, but we're pretty intimate with our customers and we know our customers, both our franchisees and they know their end mechanics and we have to reach out and help them, but it was a relatively small percentage. I think it will increase going into Q2, but geez, I think at the end of the quarter, it might have been less than 5% of people had asked for some type of forbearance if you want to use that word.

Right and so this originations growth of 1.2%, does that include refinancing of VC and revolving cash balances? And if so, can you say what originations growth might have been based purely on purchases of merchandise unrelated to the deferred payment offer?

We measure origination to the same each and every quarter. It doesn't change because of what's going on. So extending credit can include both add-ons as well as sale of brand new products. But to be able to do so customers have to be in good standing. So in other words, if you want to add on to a contract, you've to be a customer that one has additional credit capacity, so we measure people's credit limits in that regard. And then it's got to be a minimum dollar sale in addition, which is typically I think, $300 and up. If you remember the cut off usually is more dollars than that, but that would be at least 300. So that's one of the determinants as to when people add on and add on to a contract they already have in place.

Right and finally, you mentioned you got $300 million left on your share repurchase authorization program, I guess with the stock haven't been sold off here rather hard. What would be your plans? Or how would you think about capital allocation here and maybe the priority of share purchase authorizations within that?

Well, first and foremost, you want to support the ongoing operations. And that's kind of obvious. You're in a mode here where I think people will be careful with their cash. I think no one has perfect visibility when you look forward. So the forecast with precision is not easy in normal times, let alone rockier times. So you're going to want to keep an eye on cash inflows, and of course, cash outflows. And one of the more discretionary items actually would be share repurchase. When we look at share repurchase, I would put that on the list of one of the more discretionary items. So first and foremost, I look at what's the cash position to the corporation, and how does that fit into the equation. I thought that Snap-on was a great bargain at $150 per share is even a better bargain today. Does that mean I can't buy it at a lower price tomorrow? I just don't know with certainty, so again, we have to apply judgment.

Alright, well, thanks for taking the questions and good luck everyone.

Thank you.

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 snap-on.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.