Release Date: April 18, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Nick, it sounds like within tools that power tools was the weakest. Could you maybe quantify that how much? And maybe just talk about how the other subsegments like tool storage, diagnostics and hand tools it?
A: Power tools was down. The most interesting thing, power tools, I hate to say tough comparison. They did have a difficult comparison year-over-year. Last year was 1 of the bigger quarter -- it actually was up sequentially. So we saw some movement there in the pivot towards shorter payback items versus where we were in the fourth quarter.
Q: So some of the 2 new power tools that you referred to you said help is on the way. When do you think we'll start seeing this? Is this starting to shift to -- or the (inaudible) channel?
A: Of course Some of that in the quarter or toward the end of the quarter. The way (inaudible) played out, things got better. I think (inaudible) of demand got better as the quarter went on. So we kind of had some momentum. I hate to overplay that because I've seen -- I've been here a while. I see all kinds of calendarizations from quarter-to-quarter. The end did have Easter this year still look pretty good. So I think we're kind of encouraged by that.
: Got it. And just last question. If you were to take out the intercompany pressure in RS&I and C&I, what were the external sales? How did they do in both of those segments in the quarter?
A: Yes. Look, it's -- if you look at it organically without currency and acquisitions, which would raise the numbers actually, with just apples-to-apples, C&I was up 2.2% externally. And I think RS&I was up almost 6%, 5.8%. So RS&I is pretty good right in our -- right where we expect them to be all the time. So RS&I really had a pretty good quarter.
Q: Nick, the nice descriptions on the NPIs. I was actually laughing a bit because had that issue with the, I think, the caliper pins on my Sequoia last time I fixed the brake. So I don't think Sequoia was on your list, but you can add it.
A: These are the kind of things that sell. When we talk about short payback items, these guys can see the tool and say, hey, I'm going to spin (inaudible) fixing these things and this helps. So I think it works out okay for us. Yes.
Q: I was wondering if you could contrast -- share some thoughts on the kind of decent strength from repair shops with an auto repair umbrella versus the technicians having some confidence?
A: Look, we've seen it before. We actually saw in the financial recession, the Great Financial Recession back, what, more than 10 years ago. And the COVID, the COVID that the shops weren't down that much. They were down for a few weeks and then they figure out what to do, and they were humming in both situations. But the technicians were confidence poor, they didn't know where the world was going. So if you remember, I think it's approximately in the beginning of the COVID, we had the recoveries coming out when we had that V-shaped recovery in the third and fourth quarter, that was driven a lot by hand tools. Small payback and power tools -- small payback items, short payback items. And so that's what they do. They kind of say, I don't know -- it's very interesting.
Q: And sticking with those techs, so maybe we're seeing the lag effect of inflation and rates a bit here on small private operators and you're focused on pivoting the focus to match the faster payback. Should we basically figure -- you need a couple of quarters to align that as you (inaudible) the organizational.
A: I don't know. Certainly, On tasking is the Tools Group to do it at light speed, but -- and we are working on it with alacrity it is an unknowable amount because what happens is as you move your capacity around in the factors actually refocus your capacity, no matter how much you start putting that thing, you start you start sticking yourself back, you set up more cash to deliver.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
