Snap-on Incorporated (SNA) Earnings Call Transcript & Summary

Good morning, everybody. Good morning, and welcome to Snap-on Incorporated's 2025 Annual Meeting of Shareholders. I'm Richard Miller, Vice President, General Counsel and Secretary of Snap-on, and I will serve this today as parliamentarian. [Operator Instructions] Today's meeting is being webcast and recorded. Shortly after the meeting, a replay will be available on snapon.com. I now call the 2025 Annual Meeting of Shareholders to order. We have made the order of business and rules of order available, and I would like to ask that everybody please abide by those rules. It is now 10:03 a.m. on April 24, 2025, and the polls are officially open. If anyone has not yet voted and would like to do so and cast your vote, you can ask Abby Cowart and Fred Papenmeier of Computershare, who are here as our inspectors of election, and they will help you do so they are in the back of the room. All of the members of our Board of Directors are in attendance at today's meeting. If you would please stand when I call your name. David Adams, Director since 2016 and retired Chairman of the Board and Chief Executive Officer of Curtiss-Wright Corporation; Karen Daniel, Director since 2005, and retired Division President and Financial -- Chief Financial Officer of Black & Veatch Corporation. Ruth Ann Gillis, Director since 2014 and retired Executive Vice President and Chief Administrative Officer of Exelon Corporation; James Holden, Director since 2007, Snap-on's Lead Director and retired President and Chief Executive Officer of DaimlerChrysler Corporation; Nathan Jones, Director since 2008 and Retired President, Worldwide Commercial and Consumer Equipment Division of Deere & Company; Henry Knueppel Director since 2011 and Retired Chairman of the Board and Chief Executive Officer of Regal Beloit Corporation; Dudley Lehman, Director since 2003 and Retired Group President of Kimberly-Clark Corporation; Greg Sherrill, Director since 2010, and Retired Chairman of the Board and Chief Executive Officer of Tenneco Inc.; Donald Stebbins, Director since 2015 and retired President and Chief Executive Officer of Superior Industries International, Inc.; and Nick Pinchuk, Director since 2007, Chairman and Chief Executive Officer of Snap-on. Nick will present an update on the company's performance and progress at the end of our meeting. Also here today from Deloitte & Touche LLP, our auditors, is James Stewart and Eric Grundman, they will be available at the end of the meeting to answer any questions. We have an affidavit that notice of the meeting was mailed as required it will be incorporated into the meeting minutes. Since all of the shareholders have had an opportunity to vote, will the inspectors of election please confirm that the ballots have been counted. Thank you, Abby. It is now 10:05 a.m., and the polls are officially closed. 52,417,769 shares of common stock, each having 1 vote on each proposal, are entitled to vote at meeting. I've been advised that 88% of the outstanding shares are present and therefore, we have a quorum. Voting results are stated as a percentage of the stock represented unless otherwise stated. We have 3 items on today's agenda. The first is the election of our directors. The Board nominated the following candidates to serve until the 2026 Annual Meeting: David C. Adams, Karen L. Daniel, Ruth Ann M. Gillis, James P. Holden, Nathan J. Jones, Henry W. Knueppel, W. Dudley Lehman, Nicolas T. Pinchuk, Greg M. Sherrill and Donald J. Stebbins. Each of those directors received at least 76% of the shares represented, and therefore, they have all been elected. Our second item on the agenda is the ratification of the Audit Committee's selection of Deloitte & Touche as the company's independent registered public accounting firm for 2025. Over 87% of the shares represented voted in favor, and therefore, the recommendation of Deloitte & Touche has been ratified. The final item for business is the advisory vote on compensation of Snap-on's named executive officers as presented in the proxy statement. Over 96% of the votes cast were in approval of the compensation of the named executive officers and is thereby approved. This completes the official business today. It is now 10:07 a.m. and the meeting is adjourned. We will now watch a brief video about the company. Enjoy. [Presentation]

Every time I see that video it gives me chills. [indiscernible] Household. We see our equipment or we see our boxes all over it makes me proud, makes me proud. Look, welcome everybody to -- all right, what is it, 2025 Annual Shareholders Meeting. I always love these meetings. It's fun to come here, see old friends, meet new people, and it's always a great event. My job here is to, of course, report to you on the stages of Snap-on. And these are interesting times. I don't think we've seen uncertainty like this in a long time, but I'm here to tell you without equivocation, without qualification, without question, that your company, our company, my company, all of ours company is still strong. It's -- I'm going to tell you about that in the next several minutes. It's a story of unusual uncertainty and angst, I suppose, all over this nation and all over the world. But it's also a tail of the tremendous strength that your company has. It's a tale of the idea of our resilient business models that are rooted in the critical. It's a tale of the -- I guess the extraordinary strengths and advantages that we have, but most of all, it's a tail of the capability and commitment and energy and possibilities of our team. Yes, it's going to take a long time, but I hope for me to speak, but I hope that if you -- when you go away from here, you will carry one thing. If you carry anything, you'll carry this, that Snap-on is a company that is built to prevail in difficulty and because we know of the advantages that we have, and we see the people who sit around us in this room, we proceed with confidence for whatever eventualities may come. Before I do that, I think want to take a moment to recognize a particular strength that we have, which people always don't recognize. It seems structural. But one of our strengths is our Board of Directors. By enlisting their eminence in our enterprise, they demonstrate to the world that this is truly a special company. People know Snap-on is a strong company simply by looking at the array of our Board of Directors. By lending their experience to us on a regular basis to help guide us through any fog. And I think probably the most important thing for the people in this room is by the commitment to all things that means that is Snap-on, they reaffirm to us that we are in a special place, and they're sharing it with us. So ladies and gentlemen, one of our greatest strengths, the Board of Directors. Let's give them a round of applause on here. Before I start to say anything else, I have to show you this cautionary statement here. I've been told by my attorneys to look at it, read it very carefully. That's enough. Okay. Let's go on to the next thing. Did you notice, by the way, that I was asked to show the cautionary statement after I made the comments about the Board of Directors. That means that what I'm saying about them, you can take as absolute truth. Okay. Look, Snap-on, one of the things that distinguishes Snap-on I know a lot of companies, I've been in some great ones in my life. But Snap-on is distinguished by the fact that we know who we are. We actually know really well who we are. And part of the reason why is we remind ourselves every time by placing these placards in almost every major room in the company. And it says, it makes a statement that we make the most value productivity solutions in the world that talks about our belief, and we believe in safety, keeping ourselves safe and our customers safe. It's very important. We believe in quality because people depend on the repeatability and reliability of Snap-on. We believe in customer connection because we have a great advantage because we are in the workplaces for more hours for more days than any other company on this planet, and we take that insight and create innovation, innovations, otherwise known as products that solve critical problems and making work easier -- makes work easier and move the world forward. And most -- probably most important -- among the most important of these things is we believe an improvement, rapid continuous improvement. We get up every day and try to make sure that we do today better than we did yesterday. This is written on the -- in the black letter law of Snap-on and is written on our shorts. Because what we know is that we don't proceed by transformative items by any particular technology that delivers a [indiscernible], we proceed by our own hand applied every day, and we believe in it have certain values. This values, I think, to be part of the human race. We believe in integrity and truth and respect and teamwork, we believe in listening to people. And we have an aspiration. We have we have -- our goals are -- and really, it's about we want to be the partner of choice for all we touch. See, we know who we are in all of those aspects. Now this is the 105th year of Snap-on and was founded all those years ago, and you've told -- you've heard the story, some of you may not, so I'm going to tell it again because I love telling it. And the idea wasn't -- we were founded in 1920. And in 1920, there were 7.5 million vehicles on the road by for your information. There are like 288 million vehicles on the road today. So it was very different and no one knew what a mechanic skills would be or what tools that we're going to use and comes an engineer from Milwaukee, Wisconsin and he gets the idea to put 5 handles of different dimension, different configurations, a T, an ellipse, a crank and put them together with 10 sockets of different dimensions and fashions them so they Snap-on interchangeably, and they say these 5 tools do the work of 50 and they did and they revolutionized tool sets all over this nation. And then he made them of highest quality steel, you can see them in the museum. And if you picked one up, you'd realize, boy, if you put yourself back in 1920, this would be -- you can imagine this is high-quality steel, but then he did something. He did something that's worthwhile to hush tones. He laid those tools now, those 10 handles -- those 5 handles and 10 sockets on green felt as if they were as precious as surgeons' knives, telling his salesman not to go through distributors, but to go right into the garage, right to the work and lay those tools out on green felt implying that if the technician use those tools he would declare to the world, he's doing something as special as a surgeon. And the idea that Snap-on tools, the use of Snap-on tools or the display of the Snap-on brand is the outward sign of the pride and dignity working men and women taking their professions with us today. You see we say. It really did start with a Spark, the Spark was an idea 5 do the work of 50. And the idea forge to dream, the Snap-on company and the dream shaped lives and it reached across the nation in a world and so it was. We are the stewards of that Spark and the keepers of that dream, and that's part of the theme of the video. It focuses on makers and fixers. This company was founded in 105 years ago. And we still have -- it was founded by 4 men, that were the founders. And one of the cool things about Snap-on is we have living links to our founders, every time we have meetings like this. It's one of the real advantages. Not many companies are able to do this. And so we have the -- a few of them here in our audience, right, with us, so I'd like to introduce some of them to you. One of the founders, the second President of Snap-on was Stanton Palmer. Stanton Palmer is the second President. He was one of the most influential people in the corporation, and he was President for 10 years, and we have his great grand sons with us, Blake and Eden Callahan, and they're right here in the audience, stand-up gentlemen. Let's give them a round of applause. I don't know, the representatives of the founders are getting younger. This is -- I don't know, good. But we have also Joe Johnson, the guy who had the original idea of 5 do the work of 50 and we have his great -- his grandson here with us, who's often with us Greg and Kathy John and his wife Cathy, Greg and Kathy Johnson. Greg was with us for almost 30 years. He worked in Australia for Snap-on after in the United States, came back and was a Vice President and Controller when he left, Greg and Kathy, our old friends stand up. Let's give them a round of applause. Thanks for being with us. And this company was founded on a timeless principle to respect for the dignity of work, enlisted in making work easier for serious professionals and moving the world forward a cause that it was as relevant today as it -- is as relevant today as it was 105 years ago. And that was what the video was about the makers and fixers. You saw all that testimony about what it meant to those people, associates and franchisees and customers to be associated to be part of the Snap-on nation. I love the words of the video. I think it kind of places it in perspective. All we know the lives we live, the homes we built, the choices we make the comforts we enjoy and the ideas we pursue, the hopes we hold and the dreams we dare are all shaped by work. And if there's anything at the bedrock of this company, it's the importance of the makers and fixers. You can see it in the words that are causing us a problem now. But in reality, the idea of building the makers and fixers of America is a gigantic good and it's a gigantic strength. And when you hear this video and you hear these people talk about the idea of the hopes we hold and the dreams we dare, I start to get chills about this. And I think everybody use Snap-on gets chills. This video rings with truth, and it echoes with the motion for all of us. And we do not, as I announce every time at these meetings, we do not make these videos with outside firms. This video was written, directed and produced by the Snap-on production team, and they're here with us. I'd like you to recognize them now Ms. [indiscernible] back here and Sam bottom here. Stand up. We're -- as we proceed and as we live today I talked about the idea we're able to stand tall in a store. And one of the reasons are as we leverage our inherent advantages. And Advantage is built up over the years and advantages in which we keep investing in today. So we leverage our advantages in product and brand and in people. We have advantages in product, and you can see it, it's reaffirmed all the time. We have 85,000 SKUs. Almost no one has that many SKUs as a manufacturer, and we do because we're the masters of small production runs. And you look at this, this year, we were recognized by a number of external publications, Motor magazine recognized our SOLUS+ among other products as one of the top tools of 2020 -- last year, 2024. And the P10, the Professional Tools & Equipment News and Innovation awards recognize our common software. And that same magazine, P10 has a people's choice. And the best of that, we had a dozen of those awards things like our Cloud 9 particular Epic toolbox was awarded. So we have particular strength in product. We also have a strengthened brand. Like I said, Snap-on brand is the outward sign of the product, working men and women use it and taking their profession and you can see it here, it goes throughout life. For example, people put Snap-on on their cakes for their birthdays. You can see it here. I have many of these pictures. People tattoo with Snap-on. Some of our board members have sat next to people with Snap-on tattoos. I know this for a fact. Other people do have Snap-on tattoos that you might not think. And then people put Snap-on in their weddings. They get married on Snap-on trucks in front of Snap-on boxes. And in front of -- we had weddings, not weddings itself, but the bride and groom roll up here and get their picture taken in front of our monument in front here. People put Snap-on wrenches in the hands of their newborns, believing that -- because the family believes that whatever -- whatever the child, the newborn touches first will influence their life for better or worse and they choose Snap-on is the thing that should touch them. And then finally, we have people regularly ask us to give them boxes, smaller boxes so they can shrine their loved ones ashes in them. And we have here one of the latest -- I just got one yesterday actually, but one of the latest is just before that Heather [ Creamer ] of Ocean City, Maryland. I'm going to tell you about her later. But our brand is still strong. And then we have, I would call it a defining brand. It literally defines who are the serious professionals, our product enables people to make work easier and our team is differentiating. This is a picture of -- I think it's the Elizabeth with its 50th anniversary. And we have a terrific group of people and we have people of great -- one of the things about Snap-on, the Snap-on team capable, committed, energetic but also experienced, and we have some of our more experienced people here with us. So I'd like to recognize. First, I'd like to recognize Kai Kazarian, who's the Director of sponsorship and events for the Tools Group. Kai stand up, please. And then I'd like to recognize Lynn Ernst, save it for the end, save it for the end. Okay, you can applaud. Go ahead. Give him some applaud. Okay. Thank you. Thank you. We'll do it this way. Okay Lynn Ernst, who was -- Kai has been with us, by the way, 43 years. Lynn Ernst has been with us 47 years, and she's the Supervisor of ItemMaster, right here in this building. Lynn, please stand up. This is Lynn kind of reminds me of a particular rocky time when I came here because I remember, for the first 6 months, I thought ItemMaster was a person. I didn't realize it was a computer program or something like that. It was pretty embarrassing when I found out. And then we have Mr. Gary Henning, stand up Gary Henning, 51 years with Snap-on. Who had his -- who is basically -- I would characterize him of the metallurgical magician of [indiscernible] who has had his hands on virtually all our operations throughout this organization. So 51 years, I think he deserves another round of applause. give him. Okay. So that's sort of our strengths and what we leverage. Let's talk about moving forward. We will talk about what happened in 2004 -- 2024. And I can tell you it's the tagline there. I think the best description is we prevailed in the difficulty and there was a difficulty. What's up with the new coke? You know what's on here and says, "Dude, have you noticed the new diet cokes, I got do Dude on here. I don't know" what does it mean? All I know is mine says, "Dude, Rich Miller says recycle me. So I don't know what that means. And it's kind of crazy. I don't know what I sold one the other day that said, [ sis ] -- and then the other one said partner, I have to find out about that, maybe we're missing something in terms of marketing. Okay. Anyway, so when we look back -- when we look back to last year, I look back to last year, it was a difficult year. I am telling you this year, before we heard of things called tariffs, there was a lot of uncertainty. There were 2 wars the Middle East and 2 hot wars, by the way, and there was a sort of half war with the hoodies and there was a tick for talk with China. And people were looking at prices and saying, "Hey, beef is up 44% before prepandemic levels, is it ever going to go down." So there was uncertainty and that daunted the idea in our van business, and therefore, technicians were we're reluctant to invest in what we would call bigger ticket items and tie themselves to longer paybacks. So there was a kind of shift. And we -- the tools group pivoted for that and try to pivot toward quicker payback items to match technician preferences, that it did, but they couldn't completely keep up. So there was that kind of downtick, particularly in the Tools Group, C&I and Arsen, I had pretty good years. So we created that balance. But the net of it was that in 2023, our sales were $4.73 billion. That's $4.730 million and last year was $4.71 billion, down slightly. And then you look at -- but if you look at the OI margin, it was a little bit better. The operating income margin, that is the amount of money we made on every dollar of sales in 2023, it was 22%. Last year, it was 22.7%. Now there was some -- there were some things like legal settlement in this situation, but it's still pretty good in terms of the turbulence, and that was contributed and created, I believe. And I know and I'm confident by our management team. So I'd like to introduce them to you now. First, right here in the first row. I can't see that while there's a lot of glare coming out of there. But okay, our Senior Vice President of Finance and Chief Financial Officer and my friend of over 40 years, Mr. Aldo Pagliari, stand up, please. From Scranton, Pennsylvania, by the way, we used to announce that when Joe Biden was President, it's no longer so much case. Okay. So now from South Jersey, the Senior Vice President and President of the Repair Systems & Information Group, Mr. Tom Ward. And now from Kenosha, Wisconsin, a lady who, from this moment on is raised, so the title of Senior Vice President, Human Resources and Chief Development Officer, Ms. Mary Bauerschmidt [indiscernible] and now Mary, stand up again, give her another round of applaud, you become a chief very often. Loud enough louder. Mary, do you have a lunch later? Mary is always out to lunch with somebody. She's kind of the secretary of State for Snap-on, Okay. [indiscernible] You should be hoping we have a little distraction today. All right. Now from parts unknown, which is Iowa, the Senior Vice President of Snap-on and the President of the Tools Group, Mr. Tim Chambers, he was thinking about were in a mass today, so he couldn't be identified. Okay, next to him from the vast country of Spain, President of the Commercial group Mr. Jesus Arregui, rumored to be on the short list for pope since you don't have to be a priest to be that. We're not sure. Okay. And now I always do this every year, I apologize because I am so happy that I can introduce the next guy because for several years, he couldn't come because he was in quarantine in China. So from Shanghai, China, the President of our Asia Pacific operation live from the Forge, Mr. James Ng. And then next to him, the President of our Repair Systems business, Mr. John Wolf, once again, I have to announce or remind everybody holds a all-time record that will stand forever, will stand forever for the Market Warriors basketball team, unbelievably he scored the last points in the decade of the '80s. Of course, I think that might have been the only points he scored. John Wolfe, Please. And I'm not going to ask him to stand but I'm going to roll down we have Sam Bottom, our Chief Marketing Officer, we have June Lemerin, our Chief Information Officer; and then we have Raul Cologne, the master of ceremonies and Vice President of ESG. Let's give them a round of applause. Sam, I was going to stand you up but you only get one in this meeting, right? Okay. So those are the folks of last year. But boy, if you look at it in trend, it looks pretty good. If you go back to 2011, and you look at our sales. Back to 2011, wasn't a long ago. I remember it pretty well. And at that time, our sales were $2.850 million, $2.85 billion. Next year was $2.94 billion, then it was $3.06 billion, then it was $3.28 billion, then it was $3.35 billion, then it was $3.43 billion, then it was $3.69 billion, then it was $3.74 billion that is $3.740 million and it was $3.73 billion. Then the pandemic hit, went down to $3.59 billion, and we roared out of that $4.250 million, $4.49 billion, $4.73 billion and the affirmation $4.71 billion. And then if you look at the profitability, Remember, I said the profitability was 22.7% last year, but it started out all that time ago at 14.5% in 2011. Wasn't that long ago and it went to 15.2% and then to 15.8% and then to 16.6% and then to 18.1%, and then to 19.3%, 19.3% and 19.4% and 19.2%. And then in the pandemic, it went down to 17.6%. But we came roaring out again 20% flat. It sounds like a race track time, 20% flat, then 20.9% and 22.0%, then 22.7%. And, you know, when you think back and you look at this history, you think about those who are here before, and I think sometimes about the presidents, and so we have representatives, we have former presidents or former -- representatives are former Presidents here with us. And let's focus on the seventh President who put us on the New York Stock Exchange, Mr. Norm Lutz, and we have his daughter, Susan Lutz-Kenyon and her husband, Bill Kenyon all the way from Libertyville, Illinois right here, stand up, take a round of applause. And now I have to introduce a man who needs no introduction. The man who gave us and taught us who we are, the man who took the fence down around this campus and changed it physically. The man who coined the name rapid continuous improvement and the man who saved Snap-on when it was at its weakest moment. I'd like to introduce to you my former boss, my current counselor and my ongoing friend. Welcome back, Mr. Jack Duane Michaels, Jack stand up. No change. No change over all these years, Jack. No change at all. Okay. So we talked about those numbers. Let's talk about the earnings per share. Well, the earnings per share in 2022 were $18.76. And last year, they were $19.51, now there was some legal benefit in this, but it's still up. So this was up 4%. And if you look at the trend of earnings per share, again, it looks pretty good. If you go all the way back to that 2011, I think is what we're showing here was $4.71 and it was $5.20. And I think $5. 93, right? Then it was $7.14, then it was $8.10 and it was $11.87, then it was $12.41, then it was $11.44, that was in the pandemic. Then it rolled up to $14.92, $16.82, $18.76, and most recently, as I said, $19.51, $19.51, up 41%. Now people who contributed to this are retirees. We say we stand on their shoulders. And so we have several of them back here. So I'd like to introduce them to you because they've come back, and we always love the retirees to come back. So we owe them so much for the legacy they give us, and so first, let's have them stand up altogether. [ Terry Klingel ], who's been -- who was the Director of HR for the Tools Group. She was with us 37 years. And then we have Rich Sheppard, who is with us 38 years who was with the Diagnostics group. And then we have [ Kurt Sawyer ], another metal magician, stand up everybody and let's give them a round of applause. Thank you all. We stand on your shoulders. Okay. So all of this, all this trend, the trend of sales, the trend of OI margin, the trend of EPS allows us to pay a dividend to return something to our shareholders. So you can see the dividend trend here. If you go back to 2011, it was $1.30, then $1.40, then $1.58, then $1.85, $2.20 and $2.54 and $2.95, then $3.41, $3.93, $4.47, $5.11, $5.88, $6.72 and $7.72, up 15% -- 15.1%. I don't want to miss that 0.1. And so this is a great event. And we have some other people who helped us make this, and I want to point out they are here with us my old friends over here, the former General Counsel of Snap-on, Mr. Irwin Shur, Mr. I M Shur, please stand up. Let's give him a round of applause. And a friend of mine also for 40 years, the former President of the Tools Group, a guy who knows that whatever happens, it will be good for Snap-on, Mr. Tom Kassouf. So these are the numbers in the past. So let's look out for a minute here. I think we can say here that the -- one of the things that gives us opportunity in the future is the fact that, that dividend was uninterrupted and unreduced. We have paid a dividend since 1939. And we have paid one every quarter since 1939, and we have never reduced it, which means it's the most -- it's the longest. We believe it's the longest record of unreduced, uninterrupted dividends on the New York Stock Exchange. And if anything gives people confidence in the future of Snap-on, it's looking back in the past and seeing that dividend because we're able to do that from heck or high water, this is high water, so they have to have confidence in us. Now let's look at where we think we're going in the future. And I think this is it because we have certain strengths because we have these strengths, we believe we proceed with great confidence. One of the strengths we have actually is the support of our communities. You might not think of that, but we have great support for our communities, and we have community leaders here with us. We have David Bogdala, who is the mayor of Kenosha. We have John Morrissey, who was the City Manager, we have Samantha Kirkland, who is the county executive. We have [ Stella ] who is Head of [indiscernible]. We have John Swallow from the President of Carthage. We have John Hill -- Jeff Hill from Herzing. And we have Lynn Akey from Parkside, the President of Parkside. So let's give them a round of applause. Thank you all for your support. Thank you all for your support. So when we move forward, we like to say we have runways for growth and run ways for improvement. And one of our runway for improvement has to do with the -- what we call Snap-on value creation. These are a set of processes, which we believe when we invest our energy and our capital in, we will move forward. Safety, quality, customer connection, innovation and rapid continuous improvement. And so let's talk about safety. People -- investors ask me all the time, well, what do you worry about safety "Oh, you do worry about set because if you keep your people safe." This is good for the corporation. And if you make tools for working men and women and you can't keep your own people safe, what does it say about their own safety when they use your tools. And so we think this is important. And our safety record has been pretty good. You look over -- since 2005, people at Snap-on are 90% less likely to have accident than they were then. And last year, 92 of our 121 locations had no lost time accidents. We think of quality. Quality is important for Snap-on because it's a company that inherently is about repeatability and reliability. This is an important thing for us. And so we think about that, and there's a lot of ways to measure quality. You could do factory-critical defects, assembly critical defects, a lot of different things. We like to ask the actual customers, and we sent Frost & Sullivan an independent agency out to ask the customers again this year, and they ask them questions about, well, what's your first choice for a tool, which tool do you think is -- which tool company do you think is the most innovative, which has the highest quality and which will make work easier. In each one of these cases, the #1 company with Snap-on at around 60% of the people choosing us first and the #2 company was in the 10, 11, 12, 13 range. So quality is still alive and well here. But one of the most important things we have in this is customer connection. I said we're in the garage, observing the work. And this is one of our key principal value-creating mechanisms. And we have so many ways to do this. We have 4,700 franchisees who call on working and women every day. And in fact, we call on almost 1 million technicians, vehicle mechanics and mechanics do repair work every week. 1 million every week, that's why we're always asked about the economy because we're right in touch with this, but it's not being in touch with the economy. It's being touch with the work. We have several direct sales force that add forces that add to those vans. We have a database, which of 3 billion repair events by which we can guide technicians in terms of big data analysis. So when they're looking at a car and they say the car is saying this, what's wrong, they don't have to spend a lot of time thinking about it. They only have to refer to our database, and we'll tell them what the likely problems are. We call on -- we're in a 3,700 technical or vocational schools. And this place, the innovation work gets 4,000 -- more than 4,000 visitors every year. So this is touching the customer. It's being connecting with the customer and that creates insight, which allows us to be innovative and bring out new tools. So by that observation of the work, we say, what can we help? How can we help people, whether it's a piece of software or a wrench and Snap-on has a -- let's look at innovation. Where innovation shows a bunch of different products, and it comes back to engineering. So back here, I have some of our engineers. I have Jordan Krebs, stand up Jordan Krebs from Conway Arkansas. He's a product manager down there and he helped design the V 4400 here. And then I have Mark Darcy, the Director of Engineering for the diagnostic groups who helped design the -- worked on the Apollo+ another -- the quickest payback entry to the intelligent diagnostic or, in other words, the use of that database I just described. We have Matt Webber from Milwaukee, Wisconsin, who's an engineering manager at Milwaukee and the 3 physician slip joint pliers, which they helped design and Milwaukee has been a great place and then I have Nick Gabby, who is the advanced research administrator and has helped a number of things in the Tools Group when we have up here the flip-top toolbox. Now all 4 of you stand up. Let's give them a round of applause. Engineers are the life blood. And then safety, quality, customer connection, innovation and rapid continuous improvement. Let's talk about rapid continuous improvement. If you doubt the value of this, look at this range, why don't we come from 6.5% in 2006 or 2005 to 22.7% last year. This is 1,620 basis points. In other words, Snap-on has improved. It's operating income, its profit margins, 85 basis points every year in this period. Something is going on -- and the thing that's going on is people getting up every day and working on rapid continuous improvement, figuring out how to do their job better, this is what creates this. And I have some people here who are rapid continuous improvement, the devotes in the audience first -- and by the way, they're also in the video their video starts, Mr. Mark Gordon, who is here from the industrial business, which is a hot bed of our rapid continuous improvement and a great advancement saying it's profitability going up. And you might remember in the video, he says, "Oh, tools that get lost present a great risk to foreign object damage." Yes, you know what it means. You don't want to leave a bolt or a wrench in an aircraft engine after you fix it, bad things happen. And he says that our ATC products fix that difficulty. And then we have from Milwaukee, the Milwaukee plant, Ms. Frito Warrior, who says, we get together in RCI teams and really make it happen. I'm proud that we create our own path. Mark and Frito stand up. Let's give them a round of applause because there's a soul of Snap-on. Thanks for coming, everybody. Thank you guys for coming. Thank you. Now looking forward, I think it's worthwhile to pause here for a minute and think about what Snap-on -- Snap-on heritage because Snap-on has been a great company for a long time. And you can see it here that we were a company that made great hand tools, sold them through vans to vehicle mechanics. We did it well. Great. We did it great. But if you step back, you could see greater possibility Snap-on more broadly defined is a place, which just as I described to you, observes work and figures out from those insights from those observations, how to make it easier. And we do that, whether it's a wrench or a piece of software. We know we can do it using the vans, but we can also use it through distributors, our direct sales force, and it doesn't have to be a vehicle mechanic, but it has to be somewhat who is working on things that are critical. And what's the definition of things that are critical that the penalty for failure is high and the need for repeatability and reliability justifies a Snap-on level product. This is the basis on which we go forward. We've grown forward for years. And you look at now you say, "Well, what's happening now, and you can see it right here" It's shown in these numbers. I said before that last year, we had a lot of uncertainty and it was uncertainty there were 2 hot wars. There was the half war with the hoodies. There was the tick for talk with China. There was the -- there was the prices that didn't seem to want to come down. But then after the first of the year, there was the rapid fire initiatives from Washington, the tariffs, we would call them lately talked about in tariffs. The hits just keep on coming, every day you get up and you look at your newspaper or so on and you figure something's going to happen today. Now look, I think it's not for me to say national policy or anything like that. That's not what we're here for. We're here to adjust to whatever happens, and we do. We do. But these are particularly uncertain times. And you can see it in the consumer sentiment. Consumer sentiment is an index that's been done for a decades. And since December, which was already uncertain, which was already below prepandemic levels by a lot, it came down 30% to the second lowest all time. So we are in a particularly turbulent environment, particularly turbulent. So if you go forward, the biggest thing today is tariffs. Now we don't think tariffs is important or on everybody's mind, let me just give you a little view. Last Friday in the Wall Street Journal -- or sorry, 2 weeks ago from tomorrow, we looked at the Wall Street Journal. And tariffs were mentioned 254 times in that newspaper, this is a loss. It's a lot it's mentioned 20 times. If anything as mentioned 254 times. So everybody is obsessed with tariffs. And you look at these numbers and you say, "Wow, Canada is 25%. But you look at China 147% and 130% and some things are going to be tariff that 270%. And then you don't know what's going to happen in Mexico or Taiwan or Vietnam or a number of other countries. So this is a level of uncertainty that we haven't seen. But what I want to tell you is, we aren't shaking in our boots. A lot of people are, but Snap-on has some inherent advantages for this. Go ahead. So you can see this here. One is our principal value-creating mechanism. And that is we are in markets everywhere. And we do that because the way we make money, the way we do things for people is that we're in the -- at the workplace. So you have to be there observing the work and figuring out how to make it better. This is really the whole thing, how to make it easier. So our principal value creating mechanism gives us a distributed activity, which makes us particularly resilient in this. And we have multiple brands. You can see the brands we have. Our brands are very significant now. We all know Snap-on. Snap-on is a non-apparel brand. It's a great brand. I always said it's so we're trying to prodding working men and women take in their profession. But we have Back in Europe. Back in Europe, if you want an adjustable wrench. If you want a pipe wrench, they say, they don't say give me the pipe wrench, they said, "Give me the [indiscernible] you look at Norbar, Norbar is the top name in large bolting across the world. You look at Carline, it's the #1 lane in name and collision and equipment and so on. So we have a lot of areas where we have different positions, which we can adjust to and mix and match. And then finally, we make in the markets where we sell, so we have factories all over the place. We have factories everywhere. We have 36 factories around the world and 15 are right here in America. And most of what we make here in America, most of what we sell here in America, we make here, we make in the markets where we sell. But what's important about that is whatever the array of tariffs that gets applied, we can adjust. A lot of people -- a lot of companies can worry about this because they're dependent on a far away factory. We are dependent on no far away factory. We may have to adjust, we may buy from sometimes from far away factories. But everything we sell in the United States, we're making a version of it here already. So we have a know-how gap. So when people say, it's going to take us 3 to 5 years to relocate to the United States, that and us, we can do it. So in the -- I would say -- I would call this period the fog of tariffs. It's sort of like the flag of wars. Klaus Woods talked about the flag of war. And what he said was so many independent variables that are unknown. It's hard to say what's going on. And that's true for us, but what we know is we have a fundamental infrastructure with our principal value creating mechanisms, our wide range of brands and our factories so that we have facilities in the United States that can do everything, and we have people in the United States that know how to do everything, doesn't mean we're immune to impact from the tariffs, but we are certainly resistant and advantaged versus others. So we aren't shaking in our boots in this situation. We're on alert, but we're ready. Okay, let's keep going. So I talked about runways for improvement. And having said that, we're resistant to the tariffs, let's talk about our runways for growth. And the runways for growth are 4, enhance the van channel, expand with repair shop owners and managers, extend the critical industries and build an emerging markets. Let's talk about enhance the van channel. Everybody knows the van channel. We have about 3,500 vans in the United States, 4,700 worldwide, and it's the business model that fell from Saturn, not doing so well now because it's suffering, it's marked by the uncertainty today, but this is a strong channel. So what our goal here is to make sure that our franchisees are healthy, to work with them to become more productive so they can do more business with the same hours that they have to make sure they have the right product lines to make sure they understand the products that are going to meet the complexity of the ever-changing vehicle market. And we have another video star with us, Mr. Kevin Rill and his wife, Melanie, who in the video, he says, I enjoy my work. I get up every day with a positive view because I know that more often than not, I'm going to make a customer's day. You may remember that Kevin Rill from Somerset, New Hampshire, who's mother -- was stepmother, who's father and 3 uncles were also Snap-on people. He is -- he's a Snap-on guy through and through. And I think you probably enjoyed his comments in the video. So let's have him and his wife stand up, and let's give them a round of applause. Stand up Kevin. Stand up again. You're looking good, boy. Fantastic. Make sure we get a picture later. I want this memorialized. Thanks for coming. Coming from New Hampshire. So okay, enhance the van channel, expand with repair shop owners and managers. This is selling to a customer that stands right to the technicians. The van drivers sell to technicians. They're the guys who tore the wrenches and punch the keys. But there's another customer who loves this just as much as the technician that stands right next to them. It's the repair shop owners and managers. This is where RS&I, repair system information plays. They had a great year last year. They had a great first quarter. And this is a business where we're trying to leverage our understanding of repair, which we've developed for decades and decades and getting stronger with it. Expand our product line to help these managers and owners to be able to deal with the complexity of the current cars and to teach them a little bit more about both technical and business aspects of the business. And that business is doing pretty well. This was John Wolf and Mr. Tom Ward, the business that we talked about, they had a great quarter -- great quarter and a great year. Now let's extend the critical industries. This is the commercial business and the Asia Pacific business. And this is about sort of rolling a Snap-on brand out of the garage to other places, where it's still critical where the penalties for failure is high. And we don't know as much about this as we do auto repair. So we need to expand our understanding of this. We need to build out a product line and we need to develop the relationship -- and it's happening because that business also had a fairly good year and a reasonable quarter in which they set record level of profitability, in other words, OI margin. And then build in emerging markets. Everybody would say, Well, what are you doing to in emerging market these days is in China embargoed. Yes, well, maybe it is. Maybe there's 147% tariffs on China. Yes, but we still sell in China, and we still have 1,500 people in China working for us and they are a great advantage to them, and we are going to wheel them in any weather to our greatest possibilities. So those are the 4 runways for growth. Now if we look at, well, should we be positive about the future, what's positive about our future. And so you can take a look at this. And one of the things that's really positive about the future as we roll forward for growth is the fact that we operate in the critical, so what does that mean? The need for repeatability and reliability is necessary, justifies a Snap-on level product. But it also means that it has to happen. People need their cars repaired. People need jet engines fixed. People need oil to flow. And so that's an important thing. And so I think this is one of the things rooted in the critical, markets are relatively resilient not completely immune to change or uncertainty or so on, but they are relatively resilient. And if you look at further, if you look at vehicle repair here, if you look at the whole thing about vehicle repair, the car park is getting bigger. Now it's up to 288 and change in terms of size. And if you look at the age of the car park, it went from 9.5 years all the way up recently to 12.6 and 12.6 years and it's getting older every day. And then you look at the metrics for our main customers that is in -- one of our main customer base as those technicians. And the metrics are pretty good the number of technicians. It's been off. It was flattish in the last 2 months, but it's been up for a long time. You look at the wages, the wages are up mid-single digits, which is high. I think they were up 14% -- no not 14%, 4.7% year-over-year in the last rolling 12 months, and the household investment in vehicle repair went up 10% year-over-year, which means this is a good place to be. We really like being in a situation. And then one of the things that drives our business really is change. And if anything is changing, you may not realize if you just look at casual, but anything's changed in its cars. There are so many vehicle technologies that are rolling out there. So if you think about this, okay, we got electric cars, yes, different powertrain. But electric cars are sometimes, I think [ Hertz ] had a study that said they needed 48% more maintenance for electric cars than anything else. And I'm not surprised because already 80% of the repairs on a car are not made on the powertrain. They're made on some of the electrical components, and then you have plug-in hybrids and super hybrids. So a bunch -- and that goes together with internal combustion engine. So this multiplies the need for tools. So that's a good thing for us. And then if you think further about the whole idea of autonomy of a car, you press a button, okay, let's press a button and have self-parked, that's autonomy. If the car is out of alignment, bad things are going to happen. And so you need more precision in this thing. So this all means that our future is in terms of the markets where we play, it's going to be by and large, positive, and we are ready and structured to take advantage from hacker high water. So this is our 105th anniversary. And I introduced an awful lot of people here to you, but I'd like to introduce one more group at some of the newer people who came to us are going to be with us, I think, for the 150th anniversary, I hope. And so let's introduce some of those. There's some interesting characters in this group over here, Mr. Andrew Sparks, who's been with us just over a year. He's from South Africa. And he's one of our industrial designers, stand up, Andrew. Okay. And then next to him, we have Morgan Stoll, who's from Kenosha and he is in our custom kitting -- he is a custom kitting designer for us there. She's been with us just over 3 years, just new. And then we have Evan Fry, who came to us from Crystal Lake and is at the national accounts in the industrial business, and he's been with us a couple of years. And then we have Nick great name, by the way. great name. Nick Diplaris, who is the Tools Group, one of the product managers of the Tools Group been with us a couple of years, and he came from the south side of Chicago. And then finally, we have [indiscernible], who's a homegrown lady from Kenosha, who's been with us 1.2 years, I think, and is with EQS as a marketing person. Let's give the future Snap-on round of applause. Thank you all. Okay. So 105 years. Let's talk about the first quarter. First quarter wasn't our best. But again, we weren't withered by this, we weren't happy. The sales in the first quarter were down 2.3%. I think it was $1.41 billion, down 2.3% and the profitability. Overall profitability was 21.3%, down 160 basis points, but about 90 of those basis points were due to the legal benefit we got last year. So 21.3% wasn't bad. It's not chopped liver, as they would say in New York. And the thing about 21.3% I want to tell you that I was on TV 18 months ago, and I got a lot of accolades for our performance in that quarter, and it was lower than 21.3%. So this is a step back but not a thing that should cause us a lot of [ x ] and there was we're on alert. Now the positive thing about this is I want to decode this a little bit for you. If you look at the gross margin, which is really the gross margin is what you sell and how much you make on it. Gross margin was [ 15.7% ], that was up 20 basis points. Out of Heck is that up 20 basis points. We're down 160 basis points at the bottom line. The reason is we kept investing. The most companies, when the volume goes down 2.3%, they cut back on the investments, what we believe in tomorrow, so we kept investing because we proceed with confidence. So that's my message. This is -- these are turbulent times. We were talking about uncertainty last year before anybody talked about it because we saw it in the technicians. We were sort of like the canary in the coal mine. We were out there calling on 1 million technicians every week. And that uncertainty, I hope that's an order. Okay. So is it okay, we can use it. All right. So the last year, and you think about this, once the last time we had 2 active wars, and we were involved. One is the last time we were bombing another group of people outside like the [indiscernible], it seems like the drumbeat with China has gotten bigger and bigger. People have reasonable worries about the cost, the cost of eggs and the cost of beef. I'm not saying it's something they need to just abandon all hope, but it has some information. And that problem. And then what happened is, we got a new administration and a new administration has a bunch of ideas about things. And every day you get up, and it hits just keep on coming, like they used to say in the 60s radio station, every day, you get something new. It's almost like the -- we've entered some area where we're on Space Mountain. And you ever go on Space Mountain, you get other thing, you're in the dark. But I think when you walk through the garages, a lot of people think we're going to the right place. Our technicians think we're going for the right place. We're going to let the right, left and right. That's a space mountain, right? You're going to let the right, you think you may go off the rails. And the off-the-rails worry for people of work who don't have a lot of cushion makes them very uncertain. And so it has been very uncertain. And so you see the drop in the consumer sentiment. Down 30% since December. 30% since December an all-time low. Yet we know we're pretty okay with that. We're not hemorrhaging over this, we bear the marks of this, but we know that we have certain advantages. We have an advantage in the resilience of our models rooted in the critical. We have an advantage in our strengths that are enabling and defining and differentiating. And so we know when we go forward, we should feel pretty good about proceeding with confidence. And something that people talk about the tariffs and as a particular situation, it creates an atmosphere which is hard to figure out, the chess board has all changed in terms of sourcing. But what we know, I said we should have confidence because we are advantaged in this fog of tariffs. We're advantaged because whatever happens, we have the facilities everywhere to react, and we have the people who know how to make things when you don't have people who know how to make things, you have to take a long time locally to shift production and make it. We don't have to worry about that. So the thing is in the fog of tariffs, we are not immune, but we are resistant and we are advantaged. So we should be confident about that. But the most important thing we should be confident about, which is the real message of this presentation. As I hope when you look left and right, and you hear me recognize people all over this room, you realize our real strength. And that is in the people of this company, the people of this company who are committed, the people of this company who are capable, the people of this company who are energetic and the people of this company who get up every day and figure out how to make our business better, be able to do what we do better, create trends like I showed you from 6.5% to 22.7%, 85 basis points in an environment where people will sell their souls for 10 basis points improvement. We have advantage, and we should be confident by looking left and right and realize that these people are going to work for our collective like the words of the video every day, every day, every day, every day, every day. I'm confident that you will do just that. So for that, I thank you all. We're going to take questions. I will accept no questions on the Milwaukee Bucks. Enter those and enter the [indiscernible] forum, those who have abandoned all hope. Okay. Questions? All right.

For a long time, Snap-on has been advocating for upskilling the American workforce. How do you see that progressing?

Well, I think it's getting better. I think we're winning the battle for this. I mean we have Snap-on certification programs. In other words, we have a Snap-on branded curriculum in almost 1,000 technical schools. And they're doing that because we say that part of upscaling is to match not to create -- it's funny when I talk to -- I apologize to the universities. And Roger here. Are you here, [indiscernible] there she is. Okay, right? And Matt Janison are you here? Okay. This is for you. All right. These are for you. I've been saving you for this. Okay. Look, I think the thing -- no, these are our friends, and we love Gateway, they're from Gateway. And part of the tenancy is to try to say we want to educate our students for the jobs of tomorrow, wrong. You don't want to educate for the jobs for tomorrow, you want to educate. We need people who can do the jobs today. Tomorrow, we'll take care of itself, people will learn on the job, we'll teach the people to do those jobs. And so that's one of the most important things. That's why we like the curriculum. We like to match the curriculum to what companies like us or not even us, we could train our own, in fact, but for smaller companies that really need in this interlude. And so that's one of the most important thing. I do think that the importance of skilled workers are rising I mean you can see it in the rhetoric that comes out of Washington, said we want to bring manufacturing home and we want to bring technical capabilities home, and that's all true. I believe this is imminently possible. If you didn't think that was true, think about the post pandemic, where we had a Shanghai out of 1 week closed [ Xi Jinping ] out of on we closed Shanghai for 6 weeks and closed the ports and interrupted supply chains all over the world, and that is the inflation we're still dealing with. And what we realized then, I think, as a country is that we couldn't depend on such long supply chains. We needed more manufacturing here. Stores I've said this, for example, we won I talked to Mark Mill and he said we won World War II because we had an industrial substrate that allowed us to outgun our opposition, well, we don't have that anymore, and we need to build it up. And so I think this has become more clear. And it has been underlying recently, where people say, well, the tariffs, if you put a lot of tariffs on China, it's going to take us 3 to 5 years to adjust. Well, if you're doing things, if some of that orb that's in China already or other places that would take 3 to 5 years to build up here is important is essential -- what happens when by natural disaster or by conflict, that gets interrupted. It takes 3 to 5 years, you don't want to be in that position. So I think the IND of skilled labor has become more important. I do believe that, one, the post pandemic -- the post pandemic view of the world should have taught that. And I think it did teach it to many industries in the United States. Two, this interlude with the tariffs in a funny way, as much angst as it's cause and as much as I disagree with general tariffs. It has brought to bear the idea that it isn't easy to duplicate manufacturing in a flash. And so I think this says you got to have upskilling. At the same time, one of the things about one of the barriers to bringing jobs back is we don't have enough skilled workers. There are 500,000 jobs open now in manufacturing. So unless we upskill the American workforce, it doesn't matter what tariffs we put on. We're not going to be able to bring the jobs back anyway. So I do think that technical education is in the crosshairs right now and it's going to be more important in the future. So I think we'll win in the war.

Anna [indiscernible] Corporate Treasury Department, Mr. Pinchuk, in your opinion, what do you think the future of new technology vehicles will be?

Anna. It's kind of floored me there because I think no one's called me Mr. Pinchuk, since Sister Francis [indiscernible] in the first grade, and I feel that her tone was somewhat different in that time. But okay, the future of new energy vehicles. Look, I think I would suggest this that the trajectory anticipated for electric vehicles that battery-only vehicles is somewhat diminished. I'm not saying they're not going to happen, but I think people are realizing now that there are great barriers to wide adoption of it, not to mention the infrastructure, are they good cars? I personally don't think right now the way designed, they're very good cars. And I don't think people are going to -- people who aren't first movers who want to put up with it. That doesn't mean they won't be adopted over time. It was an article today that said that 5-minute charging was now available in certain markets. It wasn't available in the United States. So okay. I do think though, if you look at China, everybody says China, all these new energy vehicles, but last year in China, BYD, which is the big doona in China, most of it -- a big portion of its sales last year were plug-in hybrids not battery vehicles. So I do think a plug-in hybrid is liable to be -- start to be effective because when you have those, I don't know if you realize this, but -- so you can you can plug in your battery and it gives you 50 miles. So you can drive 50 miles, saved lot of gas. Most people don't drive 50 miles in a day, but you don't have to worry about running out of battery charge, which is the big thing when you have a battery you can drive on the internal combustion, and it's very popular in China, and I think you'll see it other places. So I think you'll see that. I think you'll see super hybrids. I also think you'll still see internal combustion engines because people like those cars. And in any case, there's $288 million of amount or $287 million of them on the road now. And so it's going to take a long time for them to go away. So I do believe new energy vehicles -- electric vehicles will roll into the car park, but at much lower growth rates than was anticipated. By the way, this is all good time to so. This is all good for Snap-on, as you know, right? So the thing is -- because even if it's 10% battery electric vehicles, technicians are going to need the tools to deal with that. They're going to need the lift to deal with the batteries. They're going to need with a whole bunch of things. They're going to need special air conditioning monitoring so that the battery doesn't get too hot and therefore go down in miles. So it opens up a whole range. The idea of change for us is good. So I welcome those changes. I just don't think they're going to happen as fast and as broadly as people first estimated. Anything else? What else do we got?

Morgan Matthew, Snap-on tools. My question is, given our current environment, do we plan on building more factories in the United States?

Maybe. I think we've talked about that. I kind of like expanding factories because here's -- Morgan, you probably noticed is that you like to expand factories because you already know the community. This comes back to community, you already trust the community, so you like to build up in those places. Sometimes, you're landlocked, you can't get land or sometimes. You figure there aren't enough workers in that particular community, and so we have to go to someplace else. So we're kind of in that situation where we're wondering if we can expand. If we could, we'll expand rather than rather than build a new one. And I know Tim and I have had discussions about building the new one, he thinks we should. I'm not sure we'll think about that. But I will just say, I'll just simply say that if you look at our biggest factories in the United States, the largest ones of the 15, we expanded them all in the last 2 years just now. So we've just added capacity, so we're kind of propitious in that situation. So we have some substantial capacity left over, so we're able to do that. However, I'd be happy if we had a enough demand that says, okay, we need to expand a factory -- guy like me loves to expand things. All right. Anything else?

Joe Barabe, Snap-on Credit. What are you doing with the company's Chinese factories?

What am I doing with them? Okay. Well, the first thing is, is that the short answer is we are -- remember that I think the short answer is, we're simply trying to make sure we manage over the next couple of months because things are changing so fast. It will be wrong to take immediate action based on the current situation. I mean, 2 days ago, they were talking about we're doing a deal with China. And then yesterday, Xi Jinping or somebody in China is we're not talking to people. So who knows what's going to happen. So it's kind of -- it's kind of -- what we're trying to do now is reduce our exposure to high tariffs that is 147%. Anger paying to that stuff. And so we're slowing down our Chinese factories ramping up our other ones. But that's a temporary situation. We positioned inventory. So we've got inventory that has gotten here before the tariffs took effect. And after that, we're going to try to mix the math such that we don't pay any of those territories, doing things like, okay, things that China used to ship here, we're going to ship -- we're going to build here in the United States, and we can do it quickly. And then we're going to substitute that volume in the Chinese factories by saying things we used to build in the United States that went to England and Australia and other places, we're going to build in the Chinese factories. Remember I said we have know-how everywhere. This is one of the great advantages of Snap-on. We know how to build everything almost everywhere. And so we don't -- we can do that. In the long run, our view is like this. I look at it through the lens of this. We said here that we have differentiating people, differentiating teams. And you know what? I actually believe it. And so one of the disadvantages of saying that you believe your people are among your most important strengths is on occasion, you should act like it. And so if you extend that principle, we have 1,500 people in China. They are good people. So I don't easily want to abandon their capabilities. I want to use their capabilities for the corporation. It's just how do we figure that out? And that's what we're going to do. My job is to, one, try to get people that are great people, upskill them or make them capable and list them in the corporation, make them believe in the corporation and then use them to the maximum no matter where they are. This is the idea. If -- I've closed 5 factories in my time, I've started up 17. And one of the things I'll tell you about closing a factory, it's kind of a shame of a manager because what it says is the leader of the company wasn't smart enough to figure out how to use the capabilities of the people. That's really it. And so I refuse to accept that with the people in China. So we'll figure out how to use them. I mean there are a lot of big markets in Asia. There are markets in Europe that don't have tariffs on China. That's what we're going to use them for. And we'll build up the United States markets through the other stuff. This is why Snap-on is advantaged in this situation because unlike most other people, most other companies, we have the capability to do this. Okay. I think. All right. Remember [indiscernible], used to have a hook. Sam bottoms over there with a virtual hook. He's telling me to get off this stage. Okay, they can know off that easy. Okay. I'd just like to finish -- if something -- maybe a little personal. I feel quite fortunate to be here. I feel privileged to be part of Snap-on. I feel lucky to have come to this position and to have worked with you all. When you think about this kind of thing, sometimes you think about, I think, of Robert Frost, number or a Polman and the name of Polman was the road less traveled. And it ignites a whole bunch of thought about what would have happened if you had gone the other way, but I never think about that. But sometimes, I never think about those kinds of things. But what I think about is how do I go this way. How did I get the special providence, how did the Lord guide me to be here. A lot of things, I say ended up at Snap-on because I went to Vietnam and so there's some truth to this. But when you think about these things, you think about the things that inhabited your life, the chances you had the chance for my case. The chance to live in an everyday neighborhood, but where character met more than money. The chance to have a great wonderful family and great friends. The chance to go to good schools, even though you know in your heart that you're only admitted under some university outreach program to the massively unsophisticated. The chance to live and work in different places and see where culture and literature influence the basic decision-making axioms of a people or a nation. But among the most, those are the chances in my life. But among the most unlooked for and probably unexpected chance was to come here to Snap-on to work with all of you, this was an extraordinary chance in my life. I think going for it every day. It's tremendous to be in this corporation. You say to yourself, what's so special about the corporation? Well, we say that we are advantaged and I say this, we prevailed in difficulty -- we did prevail in difficulty. We had filed last year and the Tools Group was marked, but C&I and RS&I brought us on through. We talked about the idea of the tariffs and how difficult that was and how difficult -- what kind of difficulty it presents to everybody, but we know that with our position in facilities and our know-how and our people, we are advantaged in this. In fact, it makes the most of those things. So we feel pretty good about that. What's the basis of a corporation. Why do we have corporations? Why do we invent this. And I said this many times all of you. Corporation is place where together to create a value for themselves and most importantly, to others that they could not achieve individually. And we talked about all the people in this video that came together over this, and we think about Snap-on is such a place where we bring together a whole bunch of constituencies, and we enjoy things from those constituencies. We enjoy the confidence of our investors, the conviction of our franchisees. The commitment of our associates, the faith of our customers, the support of our communities, and of course, the legacies of our retirees on whose shoulders we stand as we reach forward to go forward. And that's an important thing. So for all of us, we believe -- I hope that you can all see in these trends a value for all those constituents and for each and every one of you. And I do believe there is indication of that. For example, if you saw on the video, you saw a Jean Householder, which I said, we see our equipment our boxes everywhere, and I'm proud. I go to a drag race in Washington and a customer, a technician comes up to me and says, Snap-on saved my life. I talked to Denny Sears, a franchisee in Indianapolis, Indiana, and he said, Snap-on is my life. We see, I think, based on those data that we are, that date of those testimonies that we are creating a value for ourselves that makes a difference, but what about others? And you saw in the brand slide, the people of the cakes and the weddings and the babies and the boxes and Heather creamer, picture of Heather Creamer. Heather Creamer sends us a note and says, can you make a special box for my father. And this is the kind of thing that does something for others. When you do things for others, eminence of all over the world. In fact, once I had a chance to talk here, John Paul, a second speak in person, I was I met him and he said -- he talked about the idea of doing things for others is the fabric of a life well lived. And so it is -- and Heather Kramer tends to reinforce that for all of you. She asked for the box, and we sent it to her. I get many of these requests, and we often send them. And then she writes me a letter back. Here's what she said. She says, "Thank you for the box. I wanted something for the best, my dad from the best Snap-on." You helped heal a broken family, you help give her dead, give a little girl a part of her dad back. I hope you like it to add. This is something special. Value for ourselves and others makes this an incredible company. Not many companies get letters like that. In fact, I know of none -- so I feel privileged to be here and to be with all of you. And I am proceeding with confidence and I hope you are confident because I am confident in the strengths we have I am confident in the structure we have against any difficulty. But most of all, I'm confident of all of you. Because what I know about all of you is that you may not realize this, but this is absolutely true about the critical we talk about without you, vehicles don't roll, oil doesn't flow, cities don't rise, planes don't fly, and I dare say, freedom doesn't ring. And so when you look to the right and the left, as I do, I hope you see that this is a special place. So I'm here, and I believe that I feel quite fortunate to be here. I feel privileged to be here. And I believe I've achieved my dream because my dream has always been to work with people that I like that I admire and that I can count on. You have worked together retirees community and a number of -- all the constituencies here to prevail in difficulty, and we've done it as a Snap-on company for 150 years. And I can tell you as we proceed to the future, we should proceed with confidence, and I'm doing so because I know all of you, and I know that you are Snap-on and you make the way now and for many years to come. Thank you all for the day. I see you next year. Thank you all.