Question-and-Answer Session
Operator
Thank you Mr. Pinchuk. (Operator Instructions) Your first question comes from James Lucas - Janney Montgomery Scott LLC.
James Lucas - Janney Montgomery Scott LLC
Nick, I don’t necessarily want to belabor this but could we dig a little bit deeper into what you’re seeing in Europe since clearly that’s an important area and a lot of the indicators show that that is lagging some of the stabilization that we’re beginning to see in North America. And in particular, even if it’s anecdotal, color or evidence you can provide on what you’re seeing in terms of the inventory levels and de-stocking levels.
Nicholas T. Pinchuk
Sure Jim. You know I was just there about 10 days ago. What we saw was some moderation of de-stocking but it still continues. You might remember in the second quarter we said you know something like half our year-over-year reduction was due to de-stocking. And that’s moderated somewhat. And so we did get an improvement on a year-over-year basis, though modest. So we saw some narrowing of that. I think for the Hand Tools business the on-the-street positioning is still pretty weak. So the improvement we saw, and it was small, but the improvement we saw had to do with some ending of that de-stocking.
We should see that continue, but you know I predicted I thought in the first quarter it would end quicker than it did. So we still see the shrinkage. I’m not sure when it’s going to end but logically it has to. If you look at the distributor base, one encouraging thing for us is we actually don’t see many of our direct customers going away. So that’s why we’re actually not doing much in the way of capacity reduction. We believe the market will come back once the economies become more robust. And most of my comments here have to do with SNA Europe, the Hand Tools business, the sort of on-the-street business. One small sign of good news we saw was that the equipment business, the infrastructure business around equipment and garage infrastructure, did show some improvement in this quarter. And so in places where you have strong technology argument, strong productivity demonstration, we saw in this quarter for the first time this year we were making inroads in selling. So that might also be a positive.
But these are very weak indicators. Like I said in my remarks, I hate to make any judgments based on third quarters in Europe. So what we’re saying going forward is mild encouragement out of Europe.
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