Good afternoon, everybody. Thanks for joining us for a meeting with Snap-on. With us today is Nick Pinchuk. Also with us is Aldo Pagliari, who's sitting in the front, and Sara Verbsky, head of IR. If anybody's not familiar with me, I've said this a few times already today, but Scott Stember, managing director. I cover the automotive parts and services space. So if anybody has any questions afterwards, they can reach out to me. So, Nick, maybe just give us a quick overview of the business, where you see things right now for the three major end markets, and then I'll jump in with some questions afterwards. Okay. Look, Snap-on is any CEO would say they have an interesting company, but ours is, I think, we're generally focused on critical repair. Our principal value creating mechanism is to be in the garage observing the work, not surveying the technicians. Because when you survey them, you don't get good data. Technicians aren't paid to explain in writing or even orally. So we go in there, we observe it, we take a look at what's particular problems, we translate that insight into some sort of innovation, some sort of solution. And that solution can be a wrench or a piece of software. And that's what we do, fundamentally. The thing that's interesting about this is it rides above industries. It rides above technology. So we'll do it of all kinds. We'll solve things with all kinds of technologies. We'll go into all kinds of industries. The one unifying principle is it has to be critical. That is, the task, the penalties for failure in the tasks are high, and the need for repeatability and reliability justify a Snap-on level product. We're organized into four operating entities facing customers. First is the Tools Group. Everybody talks about this Tools Group when they think about Snap-on. 3,450 vans rolling around the countryside calling on technicians every week. They actually sell directly to the technicians. It's 40% of our business. That business has been the standard business for us over time, and it's driven primarily by the changes in the vehicle market. That's why we think the future is pretty good, because the vehicle market is changing faster than it's ever been. Second is against a customer base that stands right next to the technicians, our Repair Systems & Information Group. This is about 28% of our business, and it sells through a different sales force, direct and through distributors. Not every week. They don't call every week. They call as needed on repair shop owners and managers. They sell semi-capital goods that not a technician would buy, things like you would buy for the shop, like a piece of software to run the shop, electronic parts catalog, a lift to lift those cars up in the air, or tire balancers. And so that's 28% of our business. And we see that business growing right along with vehicle repair as the complexity expands. The other thing about that is our share isn't so big in that it's maybe 25% in that area, so we think we have expansion activities to capture more share there. Then finally, another 28% of our business is rolling the Snap-on brand out of the garage. Snap-on brand is the most powerful brand in America for working men and women. I can assure you that. And we roll it to other industries like aviation, oil and gas, military, education, mining, and so on, and solving the same kinds of problems as we did in the other, in other words, critical problems. And all these things have one unifying principle: the penalty for failure is high if you screw up. And so our advantage there to our opportunity there to expand is we have very small shares. And as we expand our product line, we build that business substantially. The critical industries business grew quite a bit over the last four quarters, and it's starting to come into its own as we've added capacity to that business, and it's paid off, and it's more profitable than our core tools group. Then finally, there's a kind of odd for a mid-cap, a credit company, about a $1.8 billion portfolio. It supports primarily the van business, the franchise business, where technicians buy big-ticket items like a toolbox, believe it or not, $10,000, $12,000. We underwrite that with credit over maybe three, four, five years, boiled down into weekly payments. And that business, I think the portfolio grew about 8% last year. Okay. That's the business. Perfect. With that, I'll get into the questions. In the fourth quarter in the tools group, you saw a little bit of a decline in end demand from the shops. I know that this tied into some comments from O'Reilly and some of the suppliers as well. What do you think happened there, and have you seen a recovery in actual demand? Wow, no one ever knows for sure. But one of the things I'm sure of is the underlying activity in the garages ain't stopping. In fact, I've been in this job 17 years, and I've never seen it stop. In the financial recession, the Journal was writing articles like "Economy's Glum: Repair Shops Hum." In the great pandemic, even while a third of the world was sheltering in place, the mechanics kept working, and the garages kept generating cash for them. Now that's the same. And so all the time in which people on Wall Street were saying, I said this on Bloomberg several times, or CNBC several times, that analysts were saying a recession is coming, a recession is coming, like so many Paul Reveres, modern-day Paul Reveres. The technicians were very positive because they had survived the pandemic when they didn't even have masks, and the garages were filled. What happened coming into the year, we've seen this happen several times before. They are driven not by interest rates. As long as the garages are filled, and they always are, it's their view of the future. What happened coming into the fall was an amount of bad news tended to grow. For example, okay, you already had a conflict in Ukraine. It was still on. Then the Middle East happens. Then the Red Sea occurs. Then more attention on the border. It looks like chaos. The CPI print is presenting itself every month at the quarter. And you started to look, they started to see inflation. Even though people were saying it was abating, the prices were still higher to them. They don't track the second derivative of prices. And finally, the election. The election is a source of a lot of uncertainty among the people of work. And what happens, we saw in the great financial recession and in this period, in the pandemic, that they start to get they are cash-rich anyway, but they get confidence-poor, and they tend to pivot towards shorter payback items. They're not as dumb as some people think they are. They're not getting themselves tied to debt, to longer-term debt. They tend to look at shorter-term payback items, things for us, in our parlance, like power tools and hand tools and smaller diagnostic units and smaller boxes. And that's what we saw. So the pivot, you saw a reduction in their overall volume, but you also saw our own problem. Because when they pivot, we were already up to here in capacity. We're right on the edge of capacity. When you pivot, it tends to put strikes, difficulties in your capacity, and you have to pivot your design, your manufacturing, and your selling to what they really want. And that's what you saw at 5.7% down in the fourth quarter, off a pretty tough, pretty good quarter. The previous quarter grew at the prior year quarter grew at about 9%. So that's what you see. So what are you guys doing to pivot? I think on the last call, you talked about shorter payback types of products. Yeah, like power tools and hand tools and wrenches and stuff. These are the things, one, they don't have to pay for them over four years. They pay for them over. They're still on credit, but they pay for them over 12 weeks or 15 weeks. Their confidence is such that I think I can last for 15 weeks. I don't think things are going to screw up, but I don't know what the next, who knows what's going to happen in the election. 80% of Americans think the election is going to be bad, could be bad for them. Not that it isn't going to be bad, but 80% of the Americans think poorly about this election, and they worry about the uncertainty. And so you see that. And so what we've done is try to bring out, put more attention to bringing out those shorter payback categories quicker. We've adjusted our manufacturing capacity. Not an easy task. Because what it does is, if you think about it, you got this manufacturing that's wide. We have 85,000 SKUs, and now you're going to focus on half of that. That puts a little pressure where you're already pressured, and you have to do that. And then in selling, our programs, every week in a Snap-on van, there's a new program, a new promotion. Well, we kind of focused our promotions on the smaller ticket items and try to help them sell those things. So we'll see how that works out. We think it will. When do you think that you'll be fully up and running on these? Heck if I know. I don't know, really. I mean, the thing is, certainly, I don't know how fast we can make the adjustments in manufacturing. I know we're making great progress, but we're not that smart. You launch a new product, you think it's going to be great. Sometimes it ain't. And so I'm not sure. I do know we're doing the right things because we've seen exactly the same thing happen in the great financial recession when everybody was putting dollars in a mattress, and in the pandemic, when nobody thought what was going to happen. Even as the pandemic was assuaging a little bit, they were still focused on hand tools and power tools. And then when they got more confidence, they started to spread out. We'll see how this works in this situation. We ought to be able to impact this as we go forward, I think. I can't give you any timeline. First of all, we don't give any guidance, but I can't give you any timeline. So you have two things going to happen. One is we're going to get better at the short payback items. We're going to fill up our bucket in that situation. And then secondly, as time goes on, people get used to the fact that, well, you got two wars going on. Nothing happened. The world didn't fall. So therefore, they get a little more comfortable. As you were saying, nothing has structurally changed in the industry. Maybe talk about what you're hearing about the health of the independent repair shops as well as the mechanics. Wow, they're smoking. I think the independent repair shops are doing pretty well. And one of the things that's happening is that if you look at repair, vehicle repair, vehicle repair, at least from our perspective, and the dependence on repair technicians, a lot of it depends on how complicated the cars get. We've seen this happen for decades. The cars started with 20 years ago, 1990s. Cars had maybe you could measure the number of electronic trouble codes in dozens. Now you can measure them in tens of thousands. But the cars have only gotten more complicated as you've gotten more fly-by-wire. And interestingly, the demand for hand tools has gotten higher. So that keeps going. And what's happened now is you have an overlay on top of that drive for wire. You have increased variance in propulsion, electric vehicles, plug-in hybrids, new hybrids, which people are talking about now. Plug-in hybrids, for example, I think are underrated in terms of how popular they're going to be. In China last year, which is electric vehicle headquarters, really, BYD is the biggest electric vehicle maker in America, and world, last year, plug-in hybrids increased by greater numbers than electric vehicles. They came from a smaller base. So if you think about it, plug-in hybrids, if it starts to get traction, you're going to see internal combustion, electric vehicles, plug-in hybrids, because the people who are worried about range anxiety don't have to worry about it with plug-ins. So that's going to drive things upwards. Then you have autonomous vehicles. You're not going to be able to take your hands off the wheel or anything. If you think that's going to happen, ask the guys on the 737 MAX. But if you bought, you're going to need a lot more advanced driver assist system. Get an electric vehicle and look at the size of the pillars. So you need those big pillars because if you flip the vehicle, that battery is going to crush you like a pancake unless you have robust pillars. And that takes visibility away. So you're going to need more advanced driver assist systems. And that's music to our ears because they need different tools. So this is happening in garages. And you see it in the DOL data. The number of technicians are growing. My first 15 years in this job, technicians grew at 1% a year. Now they're growing at 4% a year. The wages are up 6% because this is a much more difficult thing to do these days. A technician has to be half an electrical engineer to do things. If you think about the task of a technician, it's one thing if you're in a dealer. A dealer, you walk into a Chevy dealer, you look up on the lifts, it's all Chevys. They're all new because the minute the car gets off a warranty and you get a bill, you think you've encountered a descendant of Jesse James. So therefore, people move into. There are 18,000 dealerships. There are 260,000 independent repair shops, and they're getting more and more business. The only problem is, as the cars get more complex, they need help fixing them, and we'll put them on target. Let's talk about the loan portfolio a little bit. I think it's a little. The loan portfolio. It's a little misunderstood. I don't think people appreciate how really it drives sales and tools and your ability to really keep the delinquency rates really quite low. Yeah. Well, one of the things I can understand, if you follow mid-cap companies, how many credit companies do you see? But our credit company really isn't a credit company. It's a strategic arm of the tools group, the van business. And so they basically write loans to the same person over and over, a vehicle repair mechanic. Compare that to most credit companies. They're getting people from all walks of life, all kinds of different. So So we have special customized credit analysis that talks to just a mechanic. We know when they're in trouble and when they're not. Secondly, the van drivers are calling on those people, the same 250 people, every week. So when a guy gets on a van or a gal gets on a van and says, "I want to buy this box," and we look at the credits, we listen to the van driver because they'll go yes or no on the credit, even if the credit bureaus don't show how bad they are. Because these people know that sometimes they know that this guy is not a good risk because his daughter's going to college next week, and I'm not sure he can make the payment when he's going to make payments. And so that does happen. So the van drivers involved in the credit, by the way, he's on the hook for 25% if it goes bad. And he makes the collections every week. Now, the interesting thing about that is those underwritten sales of the van are 35% of the van sales. So in those, the franchisee is involved as a collection guy and a credit guy. But the other 65% are smaller ticket items like power tools and so on. And they tend to say, "Okay, $600 power tool, pay me $50 a week for 12 weeks." That's the franchisee's nickel. And sometimes the franchisee, when the guy wants to buy the power tool, will say, "I don't think it's your business. It's not quite fits you. Maybe you ought to wait till the new one." Really, what he's saying is, "I don't want to lend you the money." And then so he makes that decision, that credit decision on the small ticket items, the 65% sold, and he collects every week. So for the franchisees, we have a credit company, but that is enabled by a group of people, 4,350 of them, 3,450 of them in the United States, who every sale is a credit decision, big or small. Every interaction is a collection. This is one of the most powerful, at least, credit and collection force in the United States. As such, the delinquencies pretty much stay in line. In the great financial recession, where everybody was spitting up blood and defaulting on your mortgages seemed to be okay, our all-in losses moved up 100 basis points. Now, on a portfolio of 1.8 million, this is $18 million. But we have more punishment some years because of currency than that. So really, it's quite manageable. The credit company is very solid, and it's had, in my time, two huge stress tests, the financial recession and the pandemic, and it didn't waver. Let's talk EVs. I know you guys have had some business dealings with Tesla recently and a few other guys. But how is Snap-on positioned to take advantage of this in the eventuality that it becomes a much bigger piece of the vehicle population? Sure. Look, what we're doing is, of course, we're already working with Tesla. We're working with Tesla as a corporation, providing them things for all their shops. Then we're selling to the individual shops certain things like lift tables and battery chargers and other things. And then we're selling to their technicians items that are good for them, regular items, by the way. Electric car is not that much different to repair than a regular vehicle. Already, 80% of the repairs on a car aren't on the powertrain. But they'll be buying stuff like insulating tools. So believe me, you don't want to be poking around the battery without an insulated tool. You're going to fry yourself. So those kinds of things, we're selling to those people. On top of this, there aren't that many electric vehicles on the road. What drives our business is actually the car park, not new car sales. There are 285 million cars on the road. The electric vehicles today are a drop in the ocean. So garages aren't seeing that many of them. So our worry is, well, what is going to happen with electric vehicles? How are they going to certainly, Hertz said it's 40% more repair, and Norway says that it costs more to repair them and so on. But we bought a company called Dealer-FX, which provides repair shop management systems. In other words, it sees all the repair orders in the dealerships which had that software. So this allows us to superintend and scan those repair orders and therefore understand, as new electric vehicles make their way into the system, where are the likely problems? Now, that gives us an early warning. Of course, problems develop all through the life cycle. Actually, that's what drives our business. So if you look at that, that's what we've done for this kind of business. We've kind of gotten an early warning system in place. We're playing with Tesla. And then every time a new car comes out, believe me, the auto companies don't design what? Are they designed for? They're designed for appearance. I used to be an engineer there. Engineer, they design for appearance, performance, cost, reliability, safety, emissions, and maybe accommodate new electronics. And by the time they're finished designing for that, they have no room left over to design for repairability. So every time a new vehicle comes out, they say, "Holy shmoly. This thing, you can't get to this. You have to have a special tool to repair it." And they contract us to do this. So we've had a number of different programs with OEMs to say, "I brought out this electric vehicle, but we can't actually repair it without new stuff." And so they get us to put it in the vehicle, put it in the dealerships right away. But what happens actually is, as I said, after they get it off a warranty, they get into the 260,000 independent repair shops. And that's when you really find all these things come out that people can't repair. We're going to be in those shops to know what's going on. It's an interesting phenomenon. If you don't think about don't realize the difficulty of repair, like I said, Chevys, the Chevys, they're in Chevy dealerships. But if you go to independent repair shops, they're probably repairing one of 45 possible badges of cars over years, not just a new car. The repair task in an independent shop is humongous because of the variation and complexity, the growing complexity and the variation they have to deal with. We provide them the keys to doing this. Got it. We're just about out of time, but we have a few minutes left. Take some questions if anybody has anything. Yeah. So the net of charge loss, what kind of? Credit portfolio, the yield's about 17% given today. I think it's 16.8% last year. So that can go up and down slightly depending on the mix. Actually, we make quite good money on our credit company if you compare it to other credit companies. So even if it goes down a little bit, we usually do okay in this situation. So there's a lot of balance between that yield and sometimes the losses, but it generally stays in that category. We already charge in most cases the max for the local situation. So people always ask me, "Well, if rates go up, are you going to do better?" We aren't because we're already charging at the largest. Rates go down, we're not going to change anything. So generally, it is an interest rate vulnerable. Yes. I wouldn't say that. I'm a wild man. That's why I'm here, because it's a hard business. First thing, first is we operate in critical industries. You can't put us in an industry and compare us to anyone else. There is no comparison. Snap-on, no one does what we do. It's a great business. Every CEO would say that. Secondly, the Snap-on brand is the most powerful brand among working men and women. It is the outward sign that working men and women take in their profession. People send me pictures of their babies with Snap-on wrenches in their hand, newborns, and people carve their tombstones in the name in the image of a Snap-on box. It is the most powerful brand in working men and women in America, but its power decays exponentially as you go off the first floor of any building. When you show up at J.P. Morgan on Park Avenue and you walk in, the security guards go wild because you're from Snap-on. You go upstairs, you talk to the bankers, and they say, "What do you do again?" And then finally, we're mid-cap with a credit company. So we're a tough follow. So why I'm here is to get everybody to follow us and appreciate the very power of the business, and therefore our multiple go up. Yeah. You're not concerned about EVs or sort of macroeconomic trends? I am concerned about macroeconomic trends, but they're different than the financial community is concerned about. I'm concerned about the balance between confidence and worry in the technicians. I worry about that. I've talked about that a lot. But generally, the interest rates, when people are talking about the interest rates of the Fed, the people of work go, "Pfft." So what am I concerned about? My board asked me once, "What keeps me up at night?" I told them, "MTV and ESPN." I almost got fired over that, by the way. But actually, I don't I think what I worry about is our ability to execute. I see the opportunities. Can we keep executing? Our margins went from 6% in 2006 to 22%, and we have a lot more runway because we have such a complex business and inherent and 85,000 SKUs in a vertically integrated business. There's huge inefficiencies in the intricacies of that business, and therefore our ability to take advantage of it is what I have to pay attention to. The macros, yeah, it could affect a quarter or two, stuff like that. But I'm pretty sure and if you go back and look at our trends, you sort of believe it, don't you? Yeah. Yeah. How do you get at? It's table stakes at Snap-on. Every division, we review the divisions once a quarter, and their task is to raise sales, raise OI margin, raise return on assets, full stop. What we do do is we have a program we call Rapid Continuous Improvement. So we have people you might call it Kaizen or Lean or something like that. We have people at every site whose job it is to get up every day and urge the people on to improve. We don't have big movements. We expect our cells in every factory to think about how they're going to get better, and they believe it. So we expect them to get better every period, just keep getting better. And it has to do with events in those cells. We try to teach them to do that. Then we have a couple of dozen times a year, we bring in consultants, Shingijutsu. They supposedly were with Toyota at the beginning. And you see their ages, you kind of believe it's true. It might be true. And so they come to a plant, and we bring people from all over Snap-on to attack a certain, particularly thorny problem where they sit at the feet of the experts and learn new things about Kaizen. And then we have once a year, the management team, myself, Aldo, and Sara, go to these events and have an executive RCI where we sit, we work with the people on the floor. And then once a year, we have an RCI conference where we just did it. You bring people, the best teams, the best events from all over the corporation. They have a fair demonstrating their event, and then we judge the winners in a gala dinner, and they win the traveling trophy for the best, and they get a $10,000 prize for having a party, not for improving the business, not for doing anything in the factory. We publicize that all over. So it's part of our DNA. DNA is kind of overworked. It's part of what we try to do. We expect the people to do. If you go to any of our factories, you'll hear our people say this. We're trying to improve every day. I don't see you could talk about robots or AI or anything else. We don't view the world as a bunch of singularities. Nothing will ever deliver us from evil. We improve every day. That's how we do it. All right. That's it. Thank you, everybody, for joining us.