Nicholas Pinchuk: Well, look I think this a first of all, I would say that we haven’t plumbed the complete ceiling of the first capacity expansion. By the way, just as a commercial, if you want to, if you want to behold the capacity expansion, you could look at it and I think the back page of our annual report this year. So, it’s right there. Pretty, pretty sizable thing. And so we’re still figuring out how to wheel that. That’s how it works. You start out and it’s pretty good and then you do better, better and better. So I think we have some, some ways to go there. What I’m talking about adding is, we just added a new machine shop, just for the critical industries in that space. And so that’s a particular product where we used to have to outsource them.
They took longer to do and we weren’t as effective in getting them out. And so we decided to do it ourselves in-house. And so we see that will match up one, we can we can be more efficient in sourcing, which is a big factor for us and two, we can be more creative and actually matching the direct demands that customers want. So that’s what I meant.
Christopher Glenn: Great. And then, cash is approaching $1 billion. Now, not sure what level you are comfortable holding but that will kind of keep piling up unless you accelerate some sort of deployment. So I am wondering how you are thinking about that cash balance?
Nicholas Pinchuk: Well, look, I think, I think this, first of all, we are very working capital intense. So, as we move upwards, you tend to use some of that cash for working capital. Although, we’re in an era where we were, we used working capital to cushion ourselves against the difficulties of the pandemic. So, some of that go way out. We look hard at our dividends, which we have paid every quarter since 1939. And I love to say at this point have never reduced it any quarter since 1939. And so, perpetuity is our guiding line on dividend. So we’ll look at that again, we’ll look at that. And then, you have things like pension and you have, you have things like acquisitions, which are important to us. So, we have a landscape of acquisitions, which will constantly look at.
Like, I always say, some are big, some are small and we’re not afraid to make a big one. So I kind of like having a war chest for that, especially in these tides when the when the interest rates are pretty high. And then finally we look at buying back opportunistically shares.
Christopher Glenn: Yeah, following up on the pipeline, are you seeing any changes in availability actionability of some of the larger prospects?
Nicholas Pinchuk: I’m not seeing any. I guess we see a little bit more availability. I’m not sure actionability is any better or not. I think there’s been a lot of discussion of that. I think bankers – every bank that you see wants to talk about that. But I don’t see much difference in that regard. You would think prices would be coming down with the maybe with interest rates rising. I don’t know but – I don’t see that. We see a little more availability, though. Little more availability.
Christopher Glenn: Okay, great. Sorry last point for me. I think you said technician concept meant to high-single-digits. I imagine there’s some lag effect to seeing that benefit. Is that fair to think about that as a lead indicator and driver during that ‘24?
Nicholas Pinchuk: I think that is fair to look, I think, especially sense there’s an accelerator there, Christian. I’ve been in a shop I am ten1years. And for most of the years technicians were growing at 1%, 1.1%, that was just this. It was really like, a metronome. 1.1%, 1.1% , 1.1% And now it’s growing mid single digits. And so, this has got to come in and accelerate for us because one, they’ll be more technicians and two, the new guys need to tool up. Now, of course that tool up takes on different shapes. So, for example, they may not be buying the top of line boxes right away. They may be focused on cards, which in fact if you looked at our tool storage business in the past quarter, it was heavily guided to cards. And so, we’re seeing some of that effect right now.
What they do need to tool up and one of the great things about it is, we spent, I think we’re like thousands of schools around the country trying to make sure that people understand that the Snap-on brand is the most powerful brand that repair making students Snap-on customers for life. And I think we see that as they come out into the marketplace. So growing Texas music to warriors.
Christopher Glenn: Thanks for all the color.
Nicholas Pinchuk: Sure.
Operator: Thank you. And our next question today comes from Scott Stember with Roth MKM. Please go ahead.
Scott Stember: Good morning guys. Thanks for taking my questions.
Nicholas Pinchuk: Hey Scott.
Scott Stember: Hey. Within the tools, could you just tell us how some of the sub segments did, hand tools versus tool storage versus diagnostics in power tools?
Nicholas Pinchuk: Yeah. Look, I think the big the big cohonent this month was hand tools, just not last quarter, it was hand tools sold very well in the quarter. And so that, that was pretty strong. Diagnostics was off certainly after three good quarters and they didn’t have a new installation here. And power tools was down somewhat because the stubby wasn’t launched for sale until after the SFC. So that was really a back-end phenomena given part of the great momentum in that situation. If you look at the back end, you would see power tools being a big factor in that situation because it’s sold like wildfire. Like I said, the wait was worth it but we demonstrated at SFC people were crowding around it, but we weren’t selling it.
We just wanted to create more pent-up demand in that situation. Tool storage was down somewhat, but that was pretty much a substitution of as I just said, of got the carts which are lower, lower value per unit than the bigger units. And they take up a little more, a little more manufacturing space. So that, that kind of thing is what was in was in tool storage. Units were pretty good, but revenues were a little lower because of the mix.
Scott Stember: Got it. And as far as the sales after van versus into the van.
Nicholas Pinchuk: Sales off the van probably follows the, you can say they pretty much follow the tools group, in terms of the numbers you saw in the tools group in general overall and the rise at the end of the quarter. I think one of the things this time, I think we saw a lot of vacations in some cases, like we always do that’s why I say these quarters were squirrely.
