This afternoon, really happy to have Snap-on with us. I'm Sherif El-Sabbahy. I work on the U.S. Machinery Engineering Construction and Waste team out of New York. I'll pass it over just to Aldo to give us a—to introduce himself, give us a little bit of color on his background at the firm. Oh, okay. Aldo Pagliari. Snap-on, based in Kenosha, Wisconsin. Started in 1920, so it's our 150th year. I think the value of history is it does somewhat repeat itself. Back in 1920, everyone's thinking about new cars. There's more than 100 different brands in the United States alone. I apologize for having U.S.-centric measurements. Not so different than China today. When you look at China, all the different manufacturers, and everybody's thinking about how to build new cars, build new cars, build new cars. Luckily for us, nobody's thinking about how do you fix cars. These people come up with this idea in 1920, and he says, you know, I have an idea. First off, I'm going to go direct to the technician. I'm going to market direct, not through a distributor, not through a catalog, direct. I'm going to come up with an idea that impresses upon the technician that the work they do is every bit as critical as the work that a surgeon does. I exaggerate not. They lay the tools out, at least the story goes, on green felt, the way a jeweler would lay out a surgeon's scalpels and make them think they're precious. As a result of that, the technician, the mechanic, says, wow, this person really thinks I'm an important person. I welcome their visit. The culture of the company is to make that interaction the highlight of the technician's day. Of course, you need to have a marketing slogan even back then. The guy says, okay, I'm going to come up with five do the work of 50. What does that mean? I'll have, you know, 10 different sockets, and I'll snap them together on a handle of five different configurations, five do the work of 50. Now, the marketing stopped there because that's just the name of the company, Snap-on. That's where the name comes from. Over the 105 years, that has continued to progress. It's gotten to other theaters of life. About 37% of what we do today is direct to technicians. We have, right alongside the technicians, there are other important things that are done, such as the garage shop today. In 1920, the technician, the garage shop, one and the same. Now, a garage shop is much more sophisticated. It could be a classic OEM dealership, like a Toyota, which tends to be big and urban-centric, with maybe 50, 60 mechanics, making big-time durable goods decisions on things like electronic databases, repair information, alignment machines, wheel balancers, lifts, electric car charging stations now in the latest every edition. Yet you still have a lot, actually dominant, the number of shops that are still in the aftermarket selling to get cars repaired. In the United States, for example, there's today about 18,000 OEM dealerships. At their zenith, there was 25,000. Great financial recession occurs in 2010. The number goes down a bit. It hasn't really changed much. The other 250,000 plus shops are all independently owned, and that number has been kind of steady over the years. People like to get their cars fixed close to where they work or close to where they live. This is the fact. If OEMs lust after this work, and they do, they haven't acted that way in terms of setting up more points of service. These are some of the realities, the physicals that exist in life. Then on top of it, Snap-on has catered to service repair, the two segments I just described. There is a need for other critical tools. If you think of Heathrow, if you think of aviation, it's not just Boeing and Airbus, which do need investment in specialty tools. If you look around the world at the MRO participants, how quick I can turn that jet airliner around at Heathrow tonight or tomorrow morning, actually for us, is every bit as important to that flight line manager. We'll be flying on American Airlines, I guess, national pride. I don't know why, but I guess it was the cheapest fare, probably as a finance guy. An on-time departure is a big deal. The person in Dallas, Texas, where American Airlines is headquartered, ain't making that decision. Pardon my English or my corruption of it. That's being made locally. The idea of Snap-on is up close and personal, observing the work, identifying when there's criticality involved. When criticality is involved, whether it be productivity or other fail-safe mechanisms, people are willing to pay for that premium. As a result of that, we sell products on a premium basis, you know, across the scope of our business. We're willing to say things like, we do not like selling on the internet. We do not like selling to do it yourself, because we find that over time, that kind of commoditizes one's offering. We might be wrong in that view, but we're willing to actually declare that we're going to focus on the up close and personal, which comes with higher operating expense, because you have to actually go to the work to see the work. That makes it hard to duplicate. When we go to the field and see what's being done, it's a lot more relevant than just doing a survey of people. We all get surveys every day online, right? Surveys for everything, from your flight to the hotel to the quality of the B of A presentations. You're going to get it all. When you actually see somebody up front and spend the time with them, they get to see what's really making a difference in your business and how you can be more successful. That's kind of the overview. You have touched on this focus on the technician, these critical roles that they play. There are a lot of tools companies out there, but how is Snap-on unique and how do you see yourself in the competitive landscape? Because I said we don't cater to do it yourself. The one advantage—and disadvantage is you don't get scale. Advantage is you don't have scale. That means you can do more bespoke, unique, smaller lot sizes. You can cater to the more nuanced needs that might exist in different businesses. The example I've been using today, and again, I'm not an engineer, so I don't know this by trade, but the needs of a mining company in Antofagasta, Chile, that's a mile underground in the copper mines, are different than the needs outside of Perth when you're doing open pit mining and moving major large apparatus on the surface of the earth. There's a difference between maintaining or decommissioning the North Sea oil platforms and making sure there's no leakage on the ocean floor as compared to what's needed when you're putting new oil platforms into the Gulf of Mexico or North Sea, which they do not do too much of anymore. Because these nuances exist and because we can survive, we're very vertically integrated. We have a lot of manufacturing capability in-house. We actually have 36 factories around the world, about 15 in the United States and 21 outside the United States. It is not like we're U.S. only. Doing business in 130 different countries. We have the flexibility to adapt. Again, that means you have to command the premium because it costs money to adapt and be in these less than desirable scale opportunities. It's not like we don't like scale for the sake of scale, but when you declare certain strategies, make certain choices, then scale comes with DIY. We don't like that because it commoditizes the product, lower margins, more competition, more me too, requires more advertising, et cetera, et cetera, et cetera. We find that over time we can get more profitability the way we're organized. Makes sense. You also have this sort of unique approach to the market where you've got franchisees, direct-to-customer in other markets. You've also got a financing arm. Could you touch on how that financing arm fits into Snap-on's overall strategy and supports both the franchisee and/or direct market sales? Be careful not to scare everybody. Financing company, if you're following industrials, financing companies are not so common. Snap-on existed in a way, shape, and form really since the 1930s. If you look at the pictures of the trucks in our museum, earn now, pay later. I mean, this is in vogue these days. Everybody's talking about subscription-based services. When you go with a concept, earn now, pay later, and I'm not talking about payday loans, but it's like that, you're selling high-priced tools. How do you sell a $100 wrench in 1930? Maybe it's a little high price point for that time. You sell it by saying it's $5 a week. That's how you get it across. Eventually, the price point gets to a precipice where you need more duration. That's where the financing company comes in. We have a financing company to help enable the franchisees and their customers. They're the actual decision makers as to when to use financing. When price points start to get higher, things like a tool storage box, the median price of a tool storage box at Snap-on with nothing in it is about $8,000. I mean, they're not cheap. You'll find that the poster child of what gets written on extended credit is tool storage boxes. Mix off the back of the van, since we're going down this path and I'm talking a lot. Off the back of the truck, about 70% of what the franchisees sell is financed by themselves with their own working capital. These are the products that are selling X amount per week over up to 15 weeks. 30% of the time, again, more or less, they're selling things that require longer duration. Now, the longest loan that Snap-on Credit offers is up to five years, and the average loan in the portfolio right now is a little bit over four years. That number has been, you know, the five-year duration, that maximum has been in place for 20 + years now. That kind of gives you a little bit of color. What's important about this, I don't want to scare everybody in the room. Before the word subprime was ever invented, that describes a technician. That is the financial profile of a technician. In our databases, 63% of our customers would meet the definition of a FICO score that's in the subprime or lower category. Because of the nature how auto repair work is organized, and until you come into this room, you wouldn't have thought of it, the technician owns their own tools that only exist in certain markets of the world, unfortunately, United States, Canada, United Kingdom, and Australia. Common theme is the British Empire is in there somewhere. In those markets, the technician owns their own tools. Everywhere else in the world, China, France, Germany, Italy, Brazil, the employer provides the tools. Because the technician owns their own tools, you have the pride of ownership. You have the weekly in-person collection agent, the franchisee, who's simultaneously trying to collect the $5 - $20 per week or whatever the amount is, and at the same time sell some new trinket or gadget or more importantly, a productivity-solving solution to them. They're pretty artful at this. By the way, you're doing it with all your friends around you. If I'm repossessing your tool, everybody else in the garage can see that. By the way, you need the tool because your employer doesn't provide it to be productive. Odds are you're paid more by the job, not by the hour. If I can squeeze in one extra job, whether it be putting in a brake, putting in windshield washer componentry, and I can get it done faster, that benefit accrues to myself. I get more pay. Therefore, the productivity resonates. On top of it, these people love adding to their collection of tools. We find on average, again, averages could be misleading, but on average, people are spending $2,500-$3,000 a year on tools. Over their career, they're amassing more than $45,000 worth of tools and a tool storage unit. Broadly speaking, these are people that after tax might be making $50,000, $60,000, $70,000. What other job in the universe do you have to take an annual salary to work to make a living? It is a very unique business, but people just never stop and think of the nuances of it. Over the past year or so, we've seen organic growth be impacted in tool settlement a little bit. Despite sentiment being fairly positive, the shops are full, there's a lot of work to be done. Technicians have been pulling back on spend for those big ticket items. Have you seen any change with that with regards to the backdrop, anything in terms of purchasing attitudes, just given some of the. I'll talk more at the macro level. Again, I'm not ducking the question. We don't give current guidance. I love that fact, actually, that we don't give current guidance. We give long-term guidance. You could see that in the fourth quarter, and you can ask yourself, how have things changed since the end of the fourth quarter? Technician confidence was weak. When things are weak and you're talking to your friends that are attending the Bank of America conference, if they're giving you bullish interpretations and signals, you're more apt to make major investments. If your friends from Bank of America say, I don't know, I don't know what this saber rattling is, and 200 and some people died today in Gaza, and the war is no closer to resolution, and now you're firing at Yemen, and I don't know if that's indiscriminate firing or it's targeted firing, the world is still a little unstable, is the point I'm getting at. Confidence has probably not gotten better over recent times from a macro perspective. The good news is that there's plenty of work. You can go to any skilled labor application, whether it be at a factory, whether it be welders, machine operators, CNC machine maintenance people, or technicians in an auto garage or at the tarmac at Heathrow. There's a need across the board for more skilled people. The governments of the world are starting to talk about this more surgically, saying, we need to have more technical education. We have to make technical education and trades more popular for people to go into it. Everybody wanted their children once in time to go to academia. They all want to go out and become investment bankers and things of that nature. Not everybody can do that. Not everybody can be an art historian. There is nothing wrong with being an art historian. You need a certain number of people that actually know how to work the trades. You have to make it popular and have it full of pride, like it did back in 1920, when people would be surgical felt, green tools, whatever you want to call it, and take pride in what they do. That's kind of our calling to make that popular again. Now, the question on confidence, I'll let the audience be judges of that at this point in time. The demand, the market is there and is needing people to make further investments because the number of cars are getting accretive. There's not less cars on the road. There's more. They've gotten a year older. There's more complexity being introduced each and every day, whether it be vehicles, whether it be getting the astronauts back with SpaceX versus Boeing, whether it be, I think there's one of the CEOs of one of the airlines today declared that there won't be any improvement in at least their expectations on delivery of aircraft for four years or more. That means whatever Boeing makes, whatever Airbus makes is not enough. That means whatever the install base of aviation is today, you have to keep them all online and running. The need is there. I feel pretty good about that. It's not like your demand has dried up. I think it's people's confidence that has to, again, mature. Our job is to make them feel confident that if they make an investment in Snap-on products, their chances of success are going to be higher. When we think about these larger ticket items that technicians might be putting off, typically everyone thinks of storage. What else might be included in that? As a technician, from their standpoint, when in their careers are they purchasing larger things like storage? How often can they, or how long can they really put it off for given the need to in the interim? Snap-on stuff lasts a long time. In fact, our tools are guaranteed for life. The hard iron, sockets, wrenches, pliers, screwdrivers, those are guaranteed for life. Unless you lose it, you're going to get that replaced for free. When it comes to power tools, there's, again, variations on power tools, and there's specialty items. If you're doing more work, and a lot of these cars, as the more they get computerized, you're working sometimes under dashboards. You're working on more frail componentry. You need smaller power tools that get into nooks and crannies and work in a controlled torque environment so you don't strip the fasteners that you cannot even see sometimes. You're getting variations. If you get into battery operator vehicles, I think there's 90% more fasteners. It's mostly associated with the battery pack. All these items require a wider array of nuanced tools that you do not even really need. I can postpone it because I came to work this morning thinking I could fix every car that came into my shop, more or less. Snap-on shows up with some new ideas, some new inventions, and says, you could do this more productively. If I only see a certain vehicle once a month, I might say, you know, I will struggle through it. I will take the extra 15 minutes, an hour or two, whatever it is. If I see this vehicle with regularity, I say, wow, this could be a real time saver. I will get an investment return on this. Plus, I like to add to my collection of tools. I think you meet with success. You need to have one, the person convinced that your tool delivers the productivity that you promise. I think we're pretty good at being able to demonstrate that, but it takes shoe leather to get out there in front of people and show them the difference. You need to have people have a reasonable level of confidence to say, I think that demand is going to keep coming into my shop or out at the tarmac or wherever it would be. Therefore, I'll get a return on this. It's not going to be all of a sudden I bought this and I don't need it. Makes sense. Just over the long term, Snap-on has been able to grow earnings high teens outside the pandemic on, call it, mid to high single-digit revenue growth. Investor expectations seem to be well below that historical range. Today, where do you see the most opportunity for growth and what verticals are you most excited about? It's hard to read as to how people arrive at, I think the PE ratio is what it is because of the mathematics. I don't know if people can target a PE ratio. I think sometimes Snap-on can get lumped in with a more casual observation that's associated with auto manufacturing. Autos, broadly speaking, usually are assigned lower multiples because they have such cyclicality. We are really not so dependent on new car manufacturing. Actually, we are not really at all. We do not make parts. Even if people say in the world of electric vehicles, there are less parts and components, really, it's time. Where we can save people time becomes more relevant. The important thing, though, that you touched on a very good point, we actually shrank last year by 9/10 of 1% with our overall growth rate for the year, but our margins expanded. We believe, and this becomes a little bit more doable when you're vertically integrated, there's always things that behind the scenes can be improved. You can't do it necessarily linearly every quarter. My boss, our CEO, would expect that. We aspire to that, but it's hard to do it every quarter. If you look at the tunnel of time, since 2005, Snap-on had an operating income as a percent of 6.5%. This past year was 22.7%. That's without the financial services. It would be actually higher if you had financial services on top of that. We think there's ways to improve. I think people see the absolutes, and they might wonder, is that as good as it gets? Can it be better? We think it can. We don't have a declared final target, but we think we have a great brand. We've got a great history, great culture. Not just a Snap-on brand, but some of the brands we acquired over the years, like Bohco, which is very big in the European theater and in emerging markets, and Carliner when it comes to collision, and John Bean and Hofman, which are brands that are known in the world of alignment. We think they all bring unique characteristics. Why should we not aspire to have margins equal or better than the highest industrials? We do not have a declared benchmark, but we know there are certain industrials that have in the high 20s. I think some people look at the 22% or so and say, man, maybe it's maxed out, so I got to go with strictly growth. Snap-on and auto repair or MRO is never going to be as sexy as the next AI invention. Yet, behind the scenes, there are elements of machine learning that go into the products and the tools and the things that we do for a living. I don't want to get too dramatic and playing the AI card, but we use machine learning and sophistication when it comes to databases that are used to predict what might be the most likely root cause of a problem on a car. We have the buy the book steps, 1, 2, 3, 4, 5, 6, 7, 8 that the OEM might prescribe. You get predictive failures. We have, and I call that more machine learning than anything else. I don't think we have the sexy growth story necessarily. I think it's a consistent story. Even in the great financial recession, if you look at our margin performance back just before we entered, it was 12.2%. Yes, it declined during the great financial recession to 9.9%. While that was a disappointment, especially going below 10%, my boss was not happy with that. It was not end of life. We think we know how to deal with these traumas that are going to present themselves over time, and they will. Again, MRO repair criticality is enduring. Therefore, we think there is going to be a continuous demand for the products and our services. You've touched on some of these data products and other items. Turning to RS&I that sells into the dealers, lots of those larger repair systems. Have you seen a change in the backdrop there in terms of dealers willing to spend on systems, just given the more volatile backdrop? They've actually been, sometimes it's prescribed and related to new car platforms that roll out. When there's a lot of new activity, it forces, for lack of a better word, dealers to make investments. For example, when a Cadillac declares we're going to have X amount of sales are going to be electric, I think I have a charging station in the front of the dealership for their customers. They have to have at least one in the back for their technicians. We don't make charging stations, but we might facilitate the industries that sell into that and help dealerships remodel, for lack of a better word, their bays, their appearance, and the investments that go along with them. Some of those programs have been quite dynamic of late in our equipment services division. It had a very strong 2024. That still seems to have a good order book as we enter 2025. You can get variations. Still, the need to deal with the ever-complex array of cars that are coming is, there's no signs it's going to abate, you know, because cars keep getting more complicated. Understood. Okay, turning sort of to the commercial industrial side of things. We have seen a few years of really strong machinery fleet sales, notable replacement the last few years, and what looks to be several strong years ahead for some end markets in terms of repair. Are you seeing any variation in those markets? How should we think about your sales sell-through versus some of the replacement demand and upkeep for these fleets? Fleet sales directly are not so big a piece of the business to Snap-on itself. It's more you have fleets in different places that you might make spot buys on different vehicles. Selling the repair information to the fleets is important. Selling products that are unique, such as the diagnostic products that are used to service heavy truck. Snap-on, I think, still has a lot more upside yet in heavy-duty applications. Even though we've been around for 105 years, we're far more penetrated on the light vehicle and truck side than we are in the heavy-duty. I think that you have opportunities that still exist on that side. Criticality is important. Trucks are not, they're very valuable assets when they're on the road, not so much when they're not running. Same I'd say extends into agriculture. I think we're still in early days of penetrating agriculture. If you get into the number of variations of what's needed to service the agricultural fleet, there's as many repair stations, I think, in Europe and the United States as there are actually for cars. It's just not something that's been top of mind so much. It's a growing important sector, I think, for us to pursue. I think you get whenever there's criticality involved, and these trucks and tractors are getting more computerized, more complicated, more nuanced, I think there's a need for the people that service those to add to their repertoire of products and services. You mentioned you touched on the fact that you've historically had a bit more limited penetration in some of these commercial markets. You know, going forward, how does Snap-on look to expand and maybe why were those barriers there versus the other? The pacing element is observation of the work, just like it was back in 1920. How do you get out and actually observe the work? Anybody, as I said, can survey people. You really, to see what's really wrong, you have to be at the workplace. You have to invest the time and effort and energy. How can you take back to your engineering capabilities the problem that you observed in the field and what you might do to remedy it? That's a solution. You save on heavy duty. It's a matter of not treating the segment as a byproduct. Oh, I have some products that overlap. Let me sell here. That'll take you a ways. That'll take you even to, oh, I have wrenches that are used. They can repair a car. Oh, look, they can repair an aircraft up to this extent. If you really want to get serious about it and build the segment, you have to approach it more surgically and structurally and cater then to those nuances. Again, servicing a truck is different than servicing a tractor. Servicing, as I mentioned, a mine in country A versus country B can be different. Catering to those variations is what Snap-on does. Even though our absolute level of sales is one third of the size of some others in the industry, we might have three, four times the stock keeping units. When you look to expand in these areas, is it mostly an organic process, developing those tools internally, or are there bolt-on opportunities? Both. Organic is obviously the first choice, and that's where you have the most comfort. It's got more predictability because you've been doing it. You have people on staff. When supply chains get disrupted, sometimes you have to devote your engineering talent to qualifying new suppliers versus coming up with new products. When you don't have supply chain dynamics that are accruing, you have more engineering talent to deploy. M&A certainly has its role. The example I like to use is right up the road here in Oxford. There's a company that Snap-on acquired maybe back in 2016, 2017 or so, Norbar. Norbar was created at the end of World War II because there were not torque companies in the United Kingdom that were capable of servicing Rolls-Royce engines for the aircraft that were used in World War II. They had to get a license from someone in the U.S. Norbar eventually got the direct ability to license it and perfected their own products. Over time, that company progressed and became very well known in the industry if you're in torque circles. At the same time, it was a GBP 50 million company. Their know-how was extremely gifted. Therefore, if you marry it up with a Snap-on that has maybe a bigger balance sheet, more geographic dispersion, and also power tools capability, you could start to marry the technologies of torque with the technologies of power tools and other industry sale capabilities. You get that long sought-after word, synergy. Synergy is very hard to find. Sometimes you have to be very skeptical as a finance person, I think, in judging it, because sometimes synergy doesn't. In this case, we look for opportunities where the company has a strong brand. Family had a great reputation. The family, the owner of that company recently retired. He spent a good seven plus years with us. It goes to show that Snap-on is a company that values culture and legacy. As a result of that, it makes it possible to attract other potential M&A candidates because you can point to examples where you bought family-owned or smaller operations and their legacy can live on. We try to find things that are kind of a cultural fit. Doesn't mean we don't make changes, but we're not looking to make rash changes. We're not the type of company that when you look at M&A, you're going to put two things together and get a huge cost synergies because you're blowing up the corporate headquarters. There's a time and place for that, but that's not Snap-on's approach. Not that we don't look for cost savings, but foremost, what's the reputation of the company? What are the unique characteristics? What are the products? What's the talent? Will the talent stay or will the talent walk out the door? These are all things that we think very highly of first and foremost. How can you amplify their capabilities? When you take the entirety of Snap-on and presence in certain geographies that they might not be otherwise, how do you amplify what they already do well? You touched on balance sheet. You have got a really strong balance sheet that affords you quite a bit of optionality. The last few years, you have seen quite a bit of cash flow build. You have been consistent on the dividend in terms of growth. Outside of that, what do you see as the priorities for use of cash? Has that changed at all these last few years? We're very working capital intensive. Number one, I mentioned organic growth. That's what most companies strive to the most because they're most comfortable with it. Today, Snap-on invests about 32% of working capital. 32% of sales is in working capital. There's not like a law that says it should be that high. I tell people, can it be better? Yes, but I ask you not to model it so. Yes, you can do projections that cash flow could be better, but we get compensated on our operating income in relation to return on that operating asset. When we make an investment in inventory in particular or sales terms, we look at the returns that they generate. We're comfortable that our product doesn't obsolescence quite the way many other industries do. We're not subject to the expression I use fashion sense. Our product doesn't go out of style. The iron lasts forever. As I said, it's guaranteed forever. Sockets, wrenches, pliers, I can put those on the shelves and not really worry too much about them. Electronics will deteriorate over time. Batteries will become weaker over a one, two, three year period. Electronics, you always have to look at what's the next great invention that's coming because you can supersede your own offering. There you got to be a little bit more mindful of it. Working capital has been a pretty safe bet. In times like these, when people are threatening tariff A versus tariff B, you want to be flexible and nimble and have second sources of supply. The world learned that following COVID, the value of not being just in time inventory techniques. While we're not against any of those principles, we find by maximizing working capital turnover is not necessarily a way of maximizing profitability. That's one, organic growth. Number two, M&A. That'd be the second most desirable way to grow in the type of industries that are coherent to what we do. We're not looking to reinvent the company. We're not looking to add diversification. We're trying to go to what the industry might call bolt-on acquisitions. We use the word coherent acquisitions. That'd be the next objective. You mentioned the dividend. Yeah, dividend unreduced and uninterrupted since 1939. There's no right or wrong to that. That's our philosophy. You can probably guess fairly with fair certainty that the current management team is still endorsing that strategy. That means every time we increase the dividend, we have to think of it as a perpetuity, which means we model cash flow. It's not guaranteed, but we model it. If you look at the dividend increase, it was 15% dividend increase most recently, 15.1%, I think to be exact. If you look over the last five years, I think you have consistent double-digit increases in the dividend. I'm not guaranteeing that going forward, but we kind of feel, if we look internally, our confidence in the type of businesses that we have continued to be pretty good in terms of cash flow generation. Share repurchase, there's a rule for share repurchase. Certainly, we avoid dilution. You get varying levels of share issuance. When stock prices go up, you tend to have more option exercise. We have employee stock purchase programs. We have franchisee stock purchase programs. The more stocks rise, the more people participate. You get some variation there. We eat into the outstanding share count a bit each and every year. Again, are we declaring any type of accelerated share repurchase? No. No. No right or wrong answer, but we're not big believers in dramatic use of our cash for share repurchase. We have outstanding at the end of the quarter, we had $429 million worth of outstanding share repurchase authorization. We always feel if there was a need to do more, we can always go to the board in a proper fashion and get more if needed. I'm not telegraphing anything like that now. How should we think about Snap-on's product development cycle? You've touched on every new generation of vehicle having new problems that need to be solved and Snap-on developing the tools to solve those. How should we think about just the refresh of the portfolio and maybe how development varies between hand tools and power tools? We retire some products over time, but more or less we're growing consistently our number of SKUs. We're not looking to skinny down the line for cost savings. We've found that we have gotten a return on variation. The nice thing is that when you're vertically integrated, a lot of the technologies of the world are coming your way and enabling companies to make more rapid changeover of tools, dies, products that allow you to more cost-effectively run smaller batch sizes. Scale helps everybody. If you can make a thousand of one thing, the factories always love it, even at Snap-on. How do you make things in units of five or ten or one? Even how do you do that cost-effectively? We try to look at that. Technology is going our way in terms of enabling factories to be more flexible, capable. Not only do you get raw capacity expansion when you make investments in new tools and machinery, but you also get more flexibility where operators can run maybe five machines in a cell where before you'd have classically one operator, one machine, one operator, very redundant work, very boring work. Now it's a little bit more intriguing. The skill level of the person has to be higher. We do a lot of that teaching internally, but it makes the job more interesting. When jobs are more interesting, people are more productive, more creative, and you get better quality, I think. I think. We try to approach it in that fashion. The need for new tools and the ideas, incubation period, six months typically, but if there's immediate and acute need, can you do things more rapidly? Some things take longer to develop, yes. Like everybody else, when it comes to our diagnostic line of electronics, we have things on the back shelf and you try to say, well, when should I release that? If I announce it too soon, do I dry hole my current offering? We try to be cognizant of that and have some logic to what we do. It does not mean we are perfect by any means, but we have a lot of ideas. We get a lot of ideas from our customers. We get a lot of ideas from our people that go into the field. It is a very iterative process. The way we kind of measure it is the number of what we call million dollar products. That is a product that sells $1 million in its first 12 months of existence. It does not mean it is only a million. Sometimes it could be much more. It takes a lot of million dollar products to add up to $4.8 billion. We have more than a hundred of those in recent times. That compares to if I go back 10 plus years, it might have been 20 or so. We are getting rough numbers. Just having a targeted vitality rate, while it sounds great and a lot of people will talk about that, you have to put more context around the vitality. You have to say, what is the purpose and what is it you are going to try to do with it? Because if you just try to manage any given metric, I sometimes find you sub-maximize the performance of a company. You try to look at everything and balance it. I believe the biggest challenge in business is every day you walk into 1,000 problems. Usually on their own, each one is solvable. The problem is figuring out what are the top three you got to solve today. That has been my experience. Trying to focus on the top three because you cannot do everything. You cannot do everything well. You cannot do it. Some people are afraid to declare that. I said at the beginning, strategy is about choice. You have to try to get your operating management team to identify what are the couple of things that are really going to make a difference. Thinking high level, you know something that's been in the news quite a bit in front of mind for investors has been tariffs. The landscape's been shifting quite rapidly. Really? How should we think about their impact to Snap-on, if any? Oh, first off, I'm not a fan of tariffs per se. I believe tariffs, broadly speaking, as an economist by training, it undermines what any given country, prefect, or state does well, right? The whole concept of joint economic world trade is you do this really well, you do that, I'll do this and we'll help each other out. Tariffs get in the way of that. It creates inflation in some way, shape, or form. Now, that's theory one. Theory two is being vertically integrated, I think, gives companies more flexibility to deal with it. Snap-on is not so dependent on buying and resell. What's that source of supply? Are they going to have declared componentry that's going to be subject to the tariff or not? If I have to get a second source, how do I control that? When you get a second source in the last coming out of COVID period, you know, you want to make sure you get a quality second source. You just do not get a second source. You have to qualify the product and make sure it meets up to your reputation, particularly if you are selling premium products. The more vertically integrated one is, the more I believe you are resistant, not immune, but resistant to the effects of tariffs and trade. As I mentioned in some parties, I know I am talking a lot, but we do have 36 factories, 15 in the U.S., you know, the remainder 21 outside the U.S. We try to manufacture close to where we sell. There is national pride everywhere in the world. U.S. technicians love buying U.S. stuff. Italian technicians love buying Italian stuff. The practicality is we sell 80,000 SKUs. You try to get them proximate to your major market because it costs a lot of money to transport things across oceans and then the freight time and coordinating the deliveries. There is a certain practicality to being vertically integrated. I think that helps with respect to tariffs. Now, having said that, the thing that no one can predict in this room, I suggest, is what's going to be the follow-up? Is there going to be, as you've seen in the newspapers, don't buy American whiskey, right? The Canadians are, you see that, you saw that hockey teams got into a fight. Is that going to be enduring and permanent? Will that have a negative effect? Because we sell products in Canada, as do others. There is not a lot of manufacturing of tools in Canada. It is not like there is an immediate exposure there. Then how do I know a Canadian customer might not be prone to say, well, I'll get something from Europe. I'll get something from Asia. These are all risks that are unquantifiable at this point in time. Now, we don't think that's going to be the case. We think people are looking at Snap-on as a product that they're married to, to a point in time. But you never know what happens when emotions run high. Tariffs, a concern, unpredictable, uncodified until you get more direction. I mean, are we stocking up on Champagne that comes from France right now? Not me, but certain people might say, I want to avoid a 200% tariff. We try to position inventories creatively to try to mitigate, but you don't know the full rules yet. It's hard to really predict with accuracy. Not a fan of tariffs. Thank you. With that, I think we're just about out of time. Thank you so much for joining us today. Okay. Thank you.