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YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
develop and the channel expansions that we make.
Competition - Our success depends upon our ability to develop, market and sell new products that meet our customers’ needs and desires, and anticipate industry changes.
Our profitability will be affected if we do not develop new products and technologies that meet our customers’ needs and desires. Our ability to develop, market and sell products that meet our customers’ needs and desires depends upon a number of factors, including anticipating the features and products that our customers will need or want in the future, identifying and entering into new markets, training our distributors, and anticipating market trends. Changes in industries that we serve, including consolidation of competitors, distributors and customers, could affect our success. Changes in the competitive landscape, increases in the market reach of competitors, and improvements in the quality of competitive products could also affect our success. Price competition and competitor strategies could negatively impact our growth and have an adverse impact on our results of operations.
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Impairment - If acquired businesses do not meet performance expectations, acquired assets could be subject to impairment.
Our total assets reflect goodwill from acquisitions, representing the excess cost over the fair value of the identifiable net assets acquired. We test annually whether goodwill has been impaired, or more frequently if events or changes
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YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
improvements in the quality of competitive products could also affect our success. Price competition and competitor strategies could negatively impact our growth and have an adverse impact on our results of operations.
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Impairment - If acquired businesses do not meet performance expectations, acquired assets could be subject to impairment.
Our total assets reflect goodwill from acquisitions, representing the excess cost over the fair value of the identifiable net assets acquired. We test annually whether goodwill has been impaired, or more frequently if events or changes in circumstances indicate the goodwill may be impaired. If future operating performance at one or more of our operating units were to fall significantly below forecast levels or if market conditions for one or more of our acquired businesses were to decline, we could be required to incur a non-cash charge to operating income for impairment. Any impairment in the value of our goodwill would have an adverse non-cash impact on our results of operations and reduce our net worth.
Major Customers - Our Contractor segment depends on a few large customers for a significant portion of its sales. Significant declines in the level of purchases by these customers could reduce our sales and impact segment profitability.
Our Contractor segment derives a significant amount of revenue from a few large customers. Substantial decreases in purchases by these customers, difficulty in collecting amounts due
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YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
operating income for impairment. Any impairment in the value of our goodwill would have an adverse non-cash impact on our results of operations and reduce our net worth.
Major Customers - Our Contractor segment depends on a few large customers for a significant portion of its sales. Significant declines in the level of purchases by these customers could reduce our sales and impact segment profitability.
Our Contractor segment derives a significant amount of revenue from a few large customers. Substantial decreases in purchases by these customers, difficulty in collecting amounts due or the loss of their business would adversely affect the profitability of this segment. The business of these customers is dependent upon the economic vitality of the construction and home improvement markets. If these markets decline, the business of our customers could be adversely affected and their purchases of our equipment could decrease which could have an adverse impact on our results of operations.
Cyclical Industries - Our success may be affected by variations in the construction, automotive, electronics, aerospace, semiconductor, and agriculture and construction equipment industries.
Our business may be affected by fluctuations in residential, commercial and institutional building and remodeling activity. Changes in construction materials and techniques may also impact our business. Our business may also be affected by fluctuations of activity in the automotive, electronics, aerospace, semiconductor, and agriculture and construction equipment industries.
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YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
which could have an adverse impact on our results of operations.
Cyclical Industries - Our success may be affected by variations in the construction, automotive, electronics, aerospace, semiconductor, and agriculture and construction equipment industries.
Our business may be affected by fluctuations in residential, commercial and institutional building and remodeling activity. Changes in construction materials and techniques may also impact our business. Our business may also be affected by fluctuations of activity in the automotive, electronics, aerospace, semiconductor, and agriculture and construction equipment industries.
Legal, Regulatory and Compliance Risks
Laws and Regulations - Changes in laws and regulations, and the imposition of new or additional laws and regulations, may impact how we can do business and the cost of doing business around the world.
We are subject to many laws and regulations in the jurisdictions where we operate, and as our business grows and expands geographically, we may become subject to additional laws and regulations previously inapplicable to our business. Changes to laws and regulations to which we are currently subject, exposure to additional laws and regulations previously inapplicable to our business, and the imposition of new laws and regulations increase our cost of doing business, may affect the manner in which our products will be produced or delivered, may affect the locations and facilities from which we conduct business,
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YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
the jurisdictions where we operate, and as our business grows and expands geographically, we may become subject to additional laws and regulations previously inapplicable to our business. Changes to laws and regulations to which we are currently subject, exposure to additional laws and regulations previously inapplicable to our business, and the imposition of new laws and regulations increase our cost of doing business, may affect the manner in which our products will be produced or delivered, may affect the locations and facilities from which we conduct business, and may impact our long-term ability to provide returns to our shareholders.
Climate-Related Laws, Regulations and Accords – Climate-related laws, regulations and accords may adversely impact our operations, the industries in which we operate, and increase our cost of doing business.
Growing concerns over climate change has resulted in, and may continue to result in, new laws, regulations and accords intended to reduce emissions of certain greenhouse gases and to require reporting on such emissions and other climate-related matters. Existing and new laws, regulations and accords relating to emissions of certain greenhouse gases and the reporting of such emissions and other climate-related matters may be difficult and costly to comply with, may adversely impact certain aspects of our operations (including but not limited to the manufacture and distribution of our products), may
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YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
climate change has resulted in, and may continue to result in, new laws, regulations and accords intended to reduce emissions of certain greenhouse gases and to require reporting on such emissions and other climate-related matters. Existing and new laws, regulations and accords relating to emissions of certain greenhouse gases and the reporting of such emissions and other climate-related matters may be difficult and costly to comply with, may adversely impact certain aspects of our operations (including but not limited to the manufacture and distribution of our products), may adversely impact certain industries in which we operate, may result in increased energy, input, compliance and other costs, and may decrease demand for certain of our products.
ESG Expectations – Expectations relating to environmental, social and governance (ESG) matters may increase our cost of doing business and expose us to reputational harm and potential liability.
Many regulators, investors, employees, vendors, customers, community members and other stakeholders are increasingly focused on ESG matters such as climate change, greenhouse gas emissions, human capital, and diversity, equity and inclusion. We may make public statements about various ESG-related matters and initiatives from time to time, including on our website, in our press releases, in our ESG report, and in other communications. Addressing stakeholder expectations relating
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YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
doing business and expose us to reputational harm and potential liability.
Many regulators, investors, employees, vendors, customers, community members and other stakeholders are increasingly focused on ESG matters such as climate change, greenhouse gas emissions, human capital, and diversity, equity and inclusion. We may make public statements about various ESG-related matters and initiatives from time to time, including on our website, in our press releases, in our ESG report, and in other communications. Addressing stakeholder expectations relating to ESG matters requires an investment of time, money and other resources, any or all of which may increase our cost of doing business. In addition, as investor and other stakeholder expectations relating to ESG matters change and evolve over time, any failure or perceived failure by us to adequately address those expectations may damage our reputation and adversely affect our business and results of operations. Similarly, any public statements we
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make about ESG-related matters and initiatives may result in legal and regulatory proceedings against us which could adversely affect our business and results of operations.
Anti-Corruption and Trade Laws - We may incur costs and suffer damages if our employees, agents, distributors or suppliers violate anti-bribery, anti-corruption or trade laws and regulations.
As
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YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
to adequately address those expectations may damage our reputation and adversely affect our business and results of operations. Similarly, any public statements we
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make about ESG-related matters and initiatives may result in legal and regulatory proceedings against us which could adversely affect our business and results of operations.
Anti-Corruption and Trade Laws - We may incur costs and suffer damages if our employees, agents, distributors or suppliers violate anti-bribery, anti-corruption or trade laws and regulations.
As a global manufacturer, we are subject to a variety of complex and stringent laws and regulations related to bribery, corruption and trade. The continued geographic expansion of our business increases our exposure to, and cost of complying with, these laws and regulations. If our internal controls and compliance program do not adequately prevent or deter our employees, agents, distributors, suppliers and other third parties with whom we do business from violating anti-bribery, anti-corruption or trade laws and regulations, we may incur defense costs, fines, penalties, reputational damage and business disruptions.
Tax Rates and New Tax Legislation - Changes in tax rates or the adoption of new tax legislation may affect our results of operations, cash flows and financial condition.
GRACO INC is subject to taxes in the U.S. and a number
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YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
not adequately prevent or deter our employees, agents, distributors, suppliers and other third parties with whom we do business from violating anti-bribery, anti-corruption or trade laws and regulations, we may incur defense costs, fines, penalties, reputational damage and business disruptions.
Tax Rates and New Tax Legislation - Changes in tax rates or the adoption of new tax legislation may affect our results of operations, cash flows and financial condition.
GRACO INC is subject to taxes in the U.S. and a number of foreign jurisdictions where it conducts business. GRACO INC’s effective tax rate has been and may continue to be affected by changes in the mix of earnings in jurisdictions with differing statutory tax rates, changes in the valuation of deferred tax assets and liabilities, and changes in tax laws or their interpretation. If the Company’s effective tax rate were to increase, or if the ultimate determination of the Company’s taxes owed is for an amount in excess of amounts previously accrued, the Company’s results of operations, cash flows and financial condition could be adversely affected.
Legal Proceedings - Costs associated with claims, litigation, administrative proceedings and regulatory reviews, and potentially adverse outcomes, may affect our profitability.
As our Company grows, we are at an increased risk of being a target in matters related to the assertion of claims
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YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
. If the Company’s effective tax rate were to increase, or if the ultimate determination of the Company’s taxes owed is for an amount in excess of amounts previously accrued, the Company’s results of operations, cash flows and financial condition could be adversely affected.
Legal Proceedings - Costs associated with claims, litigation, administrative proceedings and regulatory reviews, and potentially adverse outcomes, may affect our profitability.
As our Company grows, we are at an increased risk of being a target in matters related to the assertion of claims and demands, litigation, administrative proceedings and regulatory reviews. We may also need to pursue claims or litigation to protect our interests. The cost of pursuing, defending and insuring against such matters is increasing, particularly in the U.S. Such costs may adversely affect our Company’s profitability. Further, due to adverse changes in costs to insure against such matters, we have increased our self-insured retention and deductibles and procured lower coverage limits under certain policies, which may increase our risk exposure for certain types of claims and adversely affect our profitability if we are ultimately held responsible for such claims. Our businesses expose us to potential toxic tort, product liability, commercial and employment claims. Successful claims against the Company and settlements may adversely affect our results.
Item 1B. Unresolved Staff Comments
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YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
Further, due to adverse changes in costs to insure against such matters, we have increased our self-insured retention and deductibles and procured lower coverage limits under certain policies, which may increase our risk exposure for certain types of claims and adversely affect our profitability if we are ultimately held responsible for such claims. Our businesses expose us to potential toxic tort, product liability, commercial and employment claims. Successful claims against the Company and settlements may adversely affect our results.
Item 1B. Unresolved Staff Comments
None.
Item 2. Properties
Our facilities are in satisfactory condition, suitable for their respective uses, and are generally adequate to meet current needs. A description of our principal facilities as of February 21, 2023, is set forth in the chart below.
Facility
Owned orLeased
SquareFootage
Facility Activities
Operating Segment
North America
Rogers, Minnesota, United States
Owned
782,000
Manufacturing, warehouse, office and product development
Contractor
Dayton, Minnesota, United States
Owned
538,000
Manufacturing, warehouse, office and product development
Contractor and Process
Minneapolis, Minnesota, United States
Owned
390,000
Manufacturing and office
Industrial
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YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
ility
Owned orLeased
SquareFootage
Facility Activities
Operating Segment
North America
Rogers, Minnesota, United States
Owned
782,000
Manufacturing, warehouse, office and product development
Contractor
Dayton, Minnesota, United States
Owned
538,000
Manufacturing, warehouse, office and product development
Contractor and Process
Minneapolis, Minnesota, United States
Owned
390,000
Manufacturing and office
Industrial
Rogers, Minnesota, United States
Leased
268,000
Distribution center and office
All segments
Anoka, Minnesota, United States
Owned
208,000
Manufacturing, warehouse, office and product development
Process
Sioux Falls, South Dakota, United States
Owned
203,000
Manufacturing, warehouse and office
Industrial and Contractor
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Table of Contents
Minneapolis, Minnesota, United States
Owned
141,000
Worldwide headquarters; office and product development
Corporate and Industrial
North Canton, Ohio, United States
Owned
131,000
Manufacturing, warehouse, office and application laboratory
Industrial
Pompano Beach, Florida, United States
Leased
109,000
Office,
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YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
, United States
Owned
203,000
Manufacturing, warehouse and office
Industrial and Contractor
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Table of Contents
Minneapolis, Minnesota, United States
Owned
141,000
Worldwide headquarters; office and product development
Corporate and Industrial
North Canton, Ohio, United States
Owned
131,000
Manufacturing, warehouse, office and application laboratory
Industrial
Pompano Beach, Florida, United States
Leased
109,000
Office, assembly and warehouse
Contractor
Erie, Pennsylvania, United States
Owned
89,000
Manufacturing, warehouse, office and product development
Process
Minneapolis, Minnesota, United States
Owned
87,000
Assembly
Industrial
Kamas, Utah, United States
Owned
74,000
Manufacturing, warehouse, office, product development and test laboratory
Process
Dexter, Michigan, United States
Owned
65,000
Manufacturing, warehouse, office and product development
Process
Indianapolis, Indiana, United States
Owned
64,000
Warehouse, office, product development and application laboratory
Industrial
Minneapolis, Minnesota, United States
Owned
42,000
Corporate administrative office
All segments
Irvine,
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YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
United States
Owned
74,000
Manufacturing, warehouse, office, product development and test laboratory
Process
Dexter, Michigan, United States
Owned
65,000
Manufacturing, warehouse, office and product development
Process
Indianapolis, Indiana, United States
Owned
64,000
Warehouse, office, product development and application laboratory
Industrial
Minneapolis, Minnesota, United States
Owned
42,000
Corporate administrative office
All segments
Irvine, California, United States
Leased
21,000
Office, assembly and warehouse
Process
Europe
Maasmechelen, Belgium
Owned
210,000
EMEA headquarters, warehouse and assembly
All segments
Verona, Italy
Leased
164,000
Manufacturing and warehouse
Industrial
St. Gallen, Switzerland
Owned
82,000
Manufacturing, warehouse, office, product development and application laboratory
Industrial
Sibiu, Romania
Leased
77,000
Manufacturing
Industrial
Coventry, United Kingdom
Owned
38,000
Office and assembly
Process
Rödermark, Germany
Leased
32,000
Office and warehouse
Industrial
Verona, Italy
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YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
,000
Manufacturing and warehouse
Industrial
St. Gallen, Switzerland
Owned
82,000
Manufacturing, warehouse, office, product development and application laboratory
Industrial
Sibiu, Romania
Leased
77,000
Manufacturing
Industrial
Coventry, United Kingdom
Owned
38,000
Office and assembly
Process
Rödermark, Germany
Leased
32,000
Office and warehouse
Industrial
Verona, Italy
Owned
31,000
Office and warehouse
Industrial
St. Gallen, Switzerland
Leased
26,000
Manufacturing
Industrial
Maasmechelen, Belgium
Leased
25,000
Office and assembly
All segments
Aachen, Germany
Leased
22,000
Office and warehouse
All segments
Asia Pacific
Shanghai, P.R.C.
Leased
80,000
Asia Pacific headquarters
All segments
Suzhou, P.R.C.
Owned
80,000
Manufacturing, warehouse, office and product development
All segments
Gyeonggi-do, South Korea
Leased
33,000
Office
All segments
Shanghai, P.R.C.
Leased
27,
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YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
Germany
Leased
22,000
Office and warehouse
All segments
Asia Pacific
Shanghai, P.R.C.
Leased
80,000
Asia Pacific headquarters
All segments
Suzhou, P.R.C.
Owned
80,000
Manufacturing, warehouse, office and product development
All segments
Gyeonggi-do, South Korea
Leased
33,000
Office
All segments
Shanghai, P.R.C.
Leased
27,000
Office and warehouse
Industrial
Derrimut, Australia
Leased
22,000
Warehouse
All segments
Item 3. Legal Proceedings
Our Company is engaged in routine litigation, administrative proceedings and regulatory reviews incident to our business. It is not possible to predict with certainty the outcome of these unresolved matters, but management believes that they will not have a material effect upon our operations or consolidated financial position.
Item 4. Mine Safety Disclosures
Not applicable.
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Table of Contents
Information About Our Executive Officers
The following are all the executive officers of Graco Inc. as of February 21, 2023:
Mark W. Sheahan, 58,
became President and Chief Executive Officer in June 2021. From June
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YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
to predict with certainty the outcome of these unresolved matters, but management believes that they will not have a material effect upon our operations or consolidated financial position.
Item 4. Mine Safety Disclosures
Not applicable.
15
Table of Contents
Information About Our Executive Officers
The following are all the executive officers of Graco Inc. as of February 21, 2023:
Mark W. Sheahan, 58,
became President and Chief Executive Officer in June 2021. From June 2018 to June 2021, he served as Chief Financial Officer and Treasurer. He was Vice President and General Manager, Applied Fluid Technologies Division from February 2008 until June 2018. He served as Chief Administrative Officer from September 2005 until February 2008, and was Vice President and Treasurer from December 1998 to September 2005. Prior to becoming Treasurer in December 1996, he was Manager, Treasury Services. Mr. Sheahan joined the Company in 1995.
David M. Ahlers, 64,
became Executive Vice President, Human Resources and Corporate Communications in June 2018. From April 2010 to June 2018, he was Vice President, Human Resources and Corporate Communications. From September 200
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YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
8, and was Vice President and Treasurer from December 1998 to September 2005. Prior to becoming Treasurer in December 1996, he was Manager, Treasury Services. Mr. Sheahan joined the Company in 1995.
David M. Ahlers, 64,
became Executive Vice President, Human Resources and Corporate Communications in June 2018. From April 2010 to June 2018, he was Vice President, Human Resources and Corporate Communications. From September 2008 through March 2010, he served as the Company’s Vice President, Human Resources. Prior to joining Graco, Mr. Ahlers held various human resources positions, including, most recently, Chief Human Resources Officer and Senior Managing Director of GMAC Residential Capital from August 2003 to August 2008. Mr. Ahlers joined the Company in 2008.
Caroline M. Chambers, 58,
became President, EMEA, in August 2020. From August 2020 to January 2022, she also held the additional role of Executive Vice President, Information Systems. From June 2018 to August 2020, she served as Executive Vice President, Corporate Controller and Information Systems. She also served as the Company’s principal accounting
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YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
2003 to August 2008. Mr. Ahlers joined the Company in 2008.
Caroline M. Chambers, 58,
became President, EMEA, in August 2020. From August 2020 to January 2022, she also held the additional role of Executive Vice President, Information Systems. From June 2018 to August 2020, she served as Executive Vice President, Corporate Controller and Information Systems. She also served as the Company’s principal accounting officer from September 2007 to August 2020. She was Vice President, Corporate Controller and Information Systems from December 2013 to June 2018. From April 2009 to December 2013, she was Vice President and Corporate Controller. She served as Vice President and Controller from December 2006 to April 2009. She was Corporate Controller from October 2005 to December 2006 and Director of Information Systems from July 2003 through September 2005. Prior to becoming Director of Information Systems, she held various management positions in the internal audit and accounting departments. Prior to joining Graco, she was an auditor with Deloitte & Touche in Minneapolis, Minnesota and Paris, France. Ms. Chambers joined the Company in 199
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YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
President and Controller from December 2006 to April 2009. She was Corporate Controller from October 2005 to December 2006 and Director of Information Systems from July 2003 through September 2005. Prior to becoming Director of Information Systems, she held various management positions in the internal audit and accounting departments. Prior to joining Graco, she was an auditor with Deloitte & Touche in Minneapolis, Minnesota and Paris, France. Ms. Chambers joined the Company in 1992.
Laura L. Evanson, 42,
became Executive Vice President, Marketing in January 2023. From September 2021 to December 2022, she served as Vice President of Marketing for the Lubrication Equipment Division and Vice President of Marketing for South and Central America. From 2017 to 2021, she served as the Director of Marketing for the Lubrication Equipment Division. From 2015 to 2017 she served as a Senior Global Marketing Manager for the Lubrication Equipment Division. From 2010 to 2015, she was a Senior Global Product Marketing Manager for the Lubrication Equipment Division. Prior to that, she worked in various Product Marketing and Channel Marketing roles for the Lubrication Equipment Division and Industrial
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YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
and Central America. From 2017 to 2021, she served as the Director of Marketing for the Lubrication Equipment Division. From 2015 to 2017 she served as a Senior Global Marketing Manager for the Lubrication Equipment Division. From 2010 to 2015, she was a Senior Global Product Marketing Manager for the Lubrication Equipment Division. Prior to that, she worked in various Product Marketing and Channel Marketing roles for the Lubrication Equipment Division and Industrial Products Division. Ms. Evanson joined the Company in 2008.
Anthony J. Gargano, 52,
became President, Asia Pacific in July 2021. From October 2020 to July 2021, he was Vice President of Sales and Marketing for the Advanced Fluid Dispense business segment in Asia Pacific. He served as Vice President of Sales and Marketing for the global High Performance Coatings and Foams business segment from September 2018 until October 2020. From January 2017 to December 2018, he served as President of Global Automotive. He served as Director of Sales and Marketing for the Applied Fluid Technologies Division in Asia Pacific from February 2012 to January 2017. From June 2008 to February 201
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YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
for the Advanced Fluid Dispense business segment in Asia Pacific. He served as Vice President of Sales and Marketing for the global High Performance Coatings and Foams business segment from September 2018 until October 2020. From January 2017 to December 2018, he served as President of Global Automotive. He served as Director of Sales and Marketing for the Applied Fluid Technologies Division in Asia Pacific from February 2012 to January 2017. From June 2008 to February 2012, he was Director of Sales and Marketing for the PMG business in the Lubrication Equipment Division. Prior to becoming Director of Sales and Marketing for the PMG business in the Lubrication Equipment Division, he held various product and sales management positions. Mr. Gargano joined the Company in 2005.
Inge Grasdal, 52,
became Executive Vice President, Corporate Development in January 2022. Prior to joining Graco, he was Vice President Corporate Development at Ecolab Inc., a global provider of water, hygiene and infection prevention solutions and services, from November 2018 to January 2022. Prior to joining Ecolab, he was Senior Director Corporate Development at 3M Company, a diversified global technology company,
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YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
ano joined the Company in 2005.
Inge Grasdal, 52,
became Executive Vice President, Corporate Development in January 2022. Prior to joining Graco, he was Vice President Corporate Development at Ecolab Inc., a global provider of water, hygiene and infection prevention solutions and services, from November 2018 to January 2022. Prior to joining Ecolab, he was Senior Director Corporate Development at 3M Company, a diversified global technology company, from 2012 to October 2018. From 2007 to 2012, he was Vice President Investment Banking at Piper Jaffray & Co. Prior to joining Piper Jaffray, he held various roles in finance, consulting and engineering, including most recently as Director of Finance – Analytics at United Health Group from 2003 to 2007. Mr. Grasdal joined the Company in January 2022.
Joseph J. Humke, 52,
became Executive Vice President, General Counsel and Corporate Secretary in July 2021. Before joining Graco, he was an equity partner in the Mergers & Acquisitions and Private Equity practice groups at Ballard Spahr LLP and Lindquist & Vennum LLP (which combined in January 201
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YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
Director of Finance – Analytics at United Health Group from 2003 to 2007. Mr. Grasdal joined the Company in January 2022.
Joseph J. Humke, 52,
became Executive Vice President, General Counsel and Corporate Secretary in July 2021. Before joining Graco, he was an equity partner in the Mergers & Acquisitions and Private Equity practice groups at Ballard Spahr LLP and Lindquist & Vennum LLP (which combined in January 2018) from 2004 to June 2021, and an associate from 2001 to 2003. Prior to joining Lindquist & Vennum, he worked as an associate in the Corporate & Securities practice group of Mayer Brown LLP in Chicago from 1998 to 2001, and served as a law clerk to the Honorable John L. Coffey on the United States Court of Appeals for the Seventh Circuit from 1997 to 1998. Mr. Humke joined the Company in July 2021.
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Dale D. Johnson, 68,
became President, Worldwide Contractor Equipment Division in February 2017. From April 2001 through January 2017, he served as Vice President and General Manager
|
YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
2001, and served as a law clerk to the Honorable John L. Coffey on the United States Court of Appeals for the Seventh Circuit from 1997 to 1998. Mr. Humke joined the Company in July 2021.
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Dale D. Johnson, 68,
became President, Worldwide Contractor Equipment Division in February 2017. From April 2001 through January 2017, he served as Vice President and General Manager, Contractor Equipment Division. From January 2000 through March 2001, he served as President and Chief Operating Officer. From December 1996 to January 2000, he was Vice President, Contractor Equipment Division. Prior to becoming Director of Marketing, Contractor Equipment Division in June 1996, he held various marketing and sales positions in the Contractor Equipment Division and the Industrial Equipment Division. Mr. Johnson joined the Company in 1976.
Jeffrey P. Johnson, 63,
became President, Electric Motor Division in April 2020. From December 2018 to April 2020, he was President, New Ventures. From June 2018 to December 2018, he was President, EMEA. He served as Vice President and General Manager
|
YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
June 1996, he held various marketing and sales positions in the Contractor Equipment Division and the Industrial Equipment Division. Mr. Johnson joined the Company in 1976.
Jeffrey P. Johnson, 63,
became President, Electric Motor Division in April 2020. From December 2018 to April 2020, he was President, New Ventures. From June 2018 to December 2018, he was President, EMEA. He served as Vice President and General Manager, EMEA from January 2013 to June 2018. From February 2008 to December 2012, he was Vice President and General Manager, Asia Pacific. He served as Director of Sales and Marketing, Applied Fluid Technologies Division, from June 2006 until February 2008. Prior to joining Graco, he held various sales and marketing positions, including, most recently, President of Johnson Krumwiede Roads, a full-service advertising agency, and European sales manager at General Motors Corp. Mr. Johnson joined the Company in 2006.
David M. Lowe, 67,
became Chief Financial Officer and Treasurer in June 2021. From April 2020 until June 2021, he served as President, Worldwide Process Division
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YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
February 2008. Prior to joining Graco, he held various sales and marketing positions, including, most recently, President of Johnson Krumwiede Roads, a full-service advertising agency, and European sales manager at General Motors Corp. Mr. Johnson joined the Company in 2006.
David M. Lowe, 67,
became Chief Financial Officer and Treasurer in June 2021. From April 2020 until June 2021, he served as President, Worldwide Process Division. He was President, Worldwide Industrial Products Division from June 2018 to April 2020. From April 2012 to June 2018, he was Executive Vice President, Industrial Products Division. From February 2005 to April 2012, he was Vice President and General Manager, Industrial Products Division. He was Vice President and General Manager, European Operations from September 1999 to February 2005. Prior to becoming Vice President, Lubrication Equipment Division in December 1996, he was Treasurer. Mr. Lowe joined the Company in 1995.
Claudio Merengo, 53,
became President, Worldwide Gema in 2007. During this time, he also served as Group President, ITW Finishing from 2010
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YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
and General Manager, Industrial Products Division. He was Vice President and General Manager, European Operations from September 1999 to February 2005. Prior to becoming Vice President, Lubrication Equipment Division in December 1996, he was Treasurer. Mr. Lowe joined the Company in 1995.
Claudio Merengo, 53,
became President, Worldwide Gema in 2007. During this time, he also served as Group President, ITW Finishing from 2010 to 2012 and Group President, ITW Dynatec from 2008 to 2009. From 2004 to 2007, he was President, Gema Europe. From 1999 to 2004, he was Managing Director, Gema Italy. From 1994 to 1999, he held different positions in R&D, Sales and After Sales for Gema. He joined Gema in 1994. Gema has been part of Graco since the acquisition of the ITW Finishing Group in 2012. Mr. Merengo became an executive officer of Graco in 2023.
Peter J. O’Shea, 58,
became President, Worldwide Lubrication Equipment Division, and President, South
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YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
. From 1994 to 1999, he held different positions in R&D, Sales and After Sales for Gema. He joined Gema in 1994. Gema has been part of Graco since the acquisition of the ITW Finishing Group in 2012. Mr. Merengo became an executive officer of Graco in 2023.
Peter J. O’Shea, 58,
became President, Worldwide Lubrication Equipment Division, and President, South and Central America in January 2022. From July 2021 to January 2022, he was President, Worldwide Industrial Products Division, and President, South and Central America. From April 2020 to January 2022, he was President, Worldwide Lubrication Equipment Division. He was Vice President and General Manager, Lubrication Equipment Division from January 2016 to June 2018. From January 2013 to December 2015, he was Vice President and General Manager, Asia Pacific. From January 2012 until December 2012, he was Director of Sales and Marketing, Industrial Products Division, and from 2008 to 2012, he was Director of Sales and Marketing, Industrial Products Division and Applied Fluid Technologies Division. He
|
YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
Equipment Division. He was Vice President and General Manager, Lubrication Equipment Division from January 2016 to June 2018. From January 2013 to December 2015, he was Vice President and General Manager, Asia Pacific. From January 2012 until December 2012, he was Director of Sales and Marketing, Industrial Products Division, and from 2008 to 2012, he was Director of Sales and Marketing, Industrial Products Division and Applied Fluid Technologies Division. He was Country Manager, Australia - New Zealand from 2005 to 2008, and from 2002 to 2005 he served as Business Development Manager, Australia - New Zealand. Prior to becoming Business Development Manager, Australia - New Zealand, he worked in various Graco sales management positions. Mr. O’Shea joined the Company in 1995.
Christian E. Rothe, 49,
became President, Worldwide Industrial Division in January 2022. From June 2018 to January 2022, he was President, Worldwide Applied Fluid Technologies Division. He was Chief Financial Officer and Treasurer from September 2015 to June 2018. From June 2011 through August 2015, he was Vice President and Treasurer. Prior to joining
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YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
sales management positions. Mr. O’Shea joined the Company in 1995.
Christian E. Rothe, 49,
became President, Worldwide Industrial Division in January 2022. From June 2018 to January 2022, he was President, Worldwide Applied Fluid Technologies Division. He was Chief Financial Officer and Treasurer from September 2015 to June 2018. From June 2011 through August 2015, he was Vice President and Treasurer. Prior to joining Graco, he held various positions in business development, accounting and finance, including, most recently, at Gardner Denver, Inc. as Vice President, Treasurer from January 2011 to June 2011, Vice President - Finance, Industrial Products Group from October 2008 to January 2011, and Director, Strategic Planning and Development from October 2006 to October 2008. Mr. Rothe joined the Company in 2011.
Kathryn L. Schoenrock, 45,
became Executive Vice President, Corporate Controller and Information Systems in January 2022. From August 2020 to January 2022, she was Executive Vice President, Corporate Controller. She has served as the Company’s principal accounting officer since August 2020.
|
YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
January 2011, and Director, Strategic Planning and Development from October 2006 to October 2008. Mr. Rothe joined the Company in 2011.
Kathryn L. Schoenrock, 45,
became Executive Vice President, Corporate Controller and Information Systems in January 2022. From August 2020 to January 2022, she was Executive Vice President, Corporate Controller. She has served as the Company’s principal accounting officer since August 2020. From December 2018 to August 2020, she served as Director of Corporate Finance. She served as Director of Financial Reporting from August 2012 to December 2018. Prior to joining Graco, she served as a Senior Manager in the audit practice of Deloitte & Touche LLP from 2008 to 2012, and held various positions in the audit practice of Deloitte & Touche LLP from 2002 to 2008 and in the audit practice of Arthur Andersen LLP from 2000 to 2002. Ms. Schoenrock joined the Company in 2012.
Timothy R. White, 53,
became President, Worldwide Process Division in June 2021. From August 2020 to June 202
|
YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
te & Touche LLP from 2008 to 2012, and held various positions in the audit practice of Deloitte & Touche LLP from 2002 to 2008 and in the audit practice of Arthur Andersen LLP from 2000 to 2002. Ms. Schoenrock joined the Company in 2012.
Timothy R. White, 53,
became President, Worldwide Process Division in June 2021. From August 2020 to June 2021, he served as President, White Knight and QED Environmental Systems. From December 2018 to August 2020, he served as President, EMEA. From August 2015 to December 2018, he was President of Q.E.D. Environmental Systems, Inc., a Graco subsidiary. He served as Director of Sales and Marketing, Applied Fluid Technologies Division, from April 2012 to August 2015. From May 2011 to April 2012, he was North American Sales Manager, Applied Fluid Technologies Division.
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From January 2008 until April 2011, he was Operations Director, Contractor Equipment Division. Prior to January 2008, he held various manufacturing management positions. Mr. White joined the
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YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
Inc., a Graco subsidiary. He served as Director of Sales and Marketing, Applied Fluid Technologies Division, from April 2012 to August 2015. From May 2011 to April 2012, he was North American Sales Manager, Applied Fluid Technologies Division.
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From January 2008 until April 2011, he was Operations Director, Contractor Equipment Division. Prior to January 2008, he held various manufacturing management positions. Mr. White joined the Company in 1992.
Angela F. Wordell, 51,
became Executive Vice President, Operations in January 2022. From April 2020 to January 2022, she was Executive Vice President, Operations, and President, Worldwide Oil & Natural Gas Division. From December 2018 to April 2020, she was Executive Vice President, Operations. From April 2017 to December 2018, she was Purchasing Director. From January 2017 to April 2017, she served as Strategic Sourcing Director. From March 2010 until January 2017, she was Operations Director, Industrial Products Division and China Factory. From February 2008 until March 2010, she was Operations Manager, Industrial Products Division.
|
YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
Division. From December 2018 to April 2020, she was Executive Vice President, Operations. From April 2017 to December 2018, she was Purchasing Director. From January 2017 to April 2017, she served as Strategic Sourcing Director. From March 2010 until January 2017, she was Operations Director, Industrial Products Division and China Factory. From February 2008 until March 2010, she was Operations Manager, Industrial Products Division. Prior to February 2008, she held various manufacturing management and engineering positions. Ms. Wordell joined the Company in 1993.
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Table of Contents
PART II
Item 5. Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities
Graco Common Stock
Graco common stock is traded on the New York Stock Exchange under the ticker symbol “GGG.” As of January 11, 2023, the share price was $70.36 and there were 167,776,564 shares outstanding and 1,686 common shareholders of record, which includes nominees or broker dealers holding stock on behalf of an estimated 128,202 beneficial owners.
The graph below compares the cumulative total shareholder return
|
YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
uer Purchases of Equity Securities
Graco Common Stock
Graco common stock is traded on the New York Stock Exchange under the ticker symbol “GGG.” As of January 11, 2023, the share price was $70.36 and there were 167,776,564 shares outstanding and 1,686 common shareholders of record, which includes nominees or broker dealers holding stock on behalf of an estimated 128,202 beneficial owners.
The graph below compares the cumulative total shareholder return on the common stock of the Company for the last five fiscal years with the cumulative total return of the S&P 500 Index and the Dow Jones U.S. Industrial Machinery Index over the same period (assuming the value of the investment in Graco common stock and each index was $100 on December 31, 2017, and all dividends were reinvested).
2017
2018
2019
2020
2021
2022
Dow Jones U.S. Industrial Machinery
100
86
117
136
168
147
S&P 500
100
96
126
149
192
157
Graco Inc.
100
92
118
167
187
158
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Table of Contents
Issuer Purchases of
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YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
100 on December 31, 2017, and all dividends were reinvested).
2017
2018
2019
2020
2021
2022
Dow Jones U.S. Industrial Machinery
100
86
117
136
168
147
S&P 500
100
96
126
149
192
157
Graco Inc.
100
92
118
167
187
158
19
Table of Contents
Issuer Purchases of Equity Securities
On April 24, 2015, the Board of Directors authorized the Company to purchase up to 18 million shares of its outstanding common stock, primarily through open-market transactions. There were approximately 3.3 million shares remaining under the authorization on December 7, 2018, when the Board of Directors authorized the purchase of up to an additional 18 million shares. The authorizations are for an indefinite period of time or until terminated by the Board. Shares available for purchase under the April 2015 authorization were exhausted in the first quarter of 2022. Therefore, all remaining purchases during 2022 were made under the December 2018 authorization.
In addition to shares purchased under the Board authorization, the Company purchases shares of common stock held by
|
YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
, 2018, when the Board of Directors authorized the purchase of up to an additional 18 million shares. The authorizations are for an indefinite period of time or until terminated by the Board. Shares available for purchase under the April 2015 authorization were exhausted in the first quarter of 2022. Therefore, all remaining purchases during 2022 were made under the December 2018 authorization.
In addition to shares purchased under the Board authorization, the Company purchases shares of common stock held by employees who wish to tender owned shares to satisfy the exercise price or tax due upon exercise of stock options or vesting of restricted stock.
Information on issuer purchases of equity securities follows:
Period
TotalNumberof SharesPurchased
Average PricePaid perShare
Total Number ofShares Purchasedas Part of PubliclyAnnounced Plansor Programs
Maximum Numberof Shares that MayYet Be PurchasedUnder the Plansor Programs(at end of period)
Oct 01, 2022 - Oct 28, 2022
1,078,199
61.34
14,971,377
Oct 29, 2022 - Nov 25, 2022
14,971,377
Nov 26,
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YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
Shares Purchasedas Part of PubliclyAnnounced Plansor Programs
Maximum Numberof Shares that MayYet Be PurchasedUnder the Plansor Programs(at end of period)
Oct 01, 2022 - Oct 28, 2022
1,078,199
61.34
14,971,377
Oct 29, 2022 - Nov 25, 2022
14,971,377
Nov 26, 2022 - Dec 30, 2022
14,971,377
Item 6. [Reserved]
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Table of Contents
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following Management’s Discussion and Analysis reviews significant factors affecting the Company’s consolidated results of operations, financial condition and liquidity. This discussion should be read in conjunction with our financial statements and the accompanying notes to the financial statements. A discussion of changes in our financial condition and the results of operations from the year ended December 31, 2021 to December 25, 2020 can be found in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations of our Annual Report on Form 10-K
|
YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
significant factors affecting the Company’s consolidated results of operations, financial condition and liquidity. This discussion should be read in conjunction with our financial statements and the accompanying notes to the financial statements. A discussion of changes in our financial condition and the results of operations from the year ended December 31, 2021 to December 25, 2020 can be found in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations of our Annual Report on Form 10-K for the year ended December 31, 2021. Certain prior year disclosures have been revised to conform with current year reporting. The discussion is organized in the following sections:
Overview
Results of Operations
Segment Results
Financial Condition and Cash Flow
Critical Accounting Estimates
Overview
Graco designs, manufactures and markets systems and equipment used to move, measure, control, dispense and spray fluid and powder materials. GRACO INC specializes in equipment for applications that involve difficult-to-handle materials with high viscosities, materials with abrasive or corrosive properties and multiple-component materials that require precise ratio control. Graco sells primarily through independent third-party distributors worldwide to industrial and contractor end users. Graco’s business is classified by management into three reportable segments: Industrial, Process and Contractor.
|
YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
Graco designs, manufactures and markets systems and equipment used to move, measure, control, dispense and spray fluid and powder materials. GRACO INC specializes in equipment for applications that involve difficult-to-handle materials with high viscosities, materials with abrasive or corrosive properties and multiple-component materials that require precise ratio control. Graco sells primarily through independent third-party distributors worldwide to industrial and contractor end users. Graco’s business is classified by management into three reportable segments: Industrial, Process and Contractor. Each segment is responsible for product development, manufacturing, marketing and sales of their products.
Graco’s key strategies include developing and marketing new products, leveraging products and technologies into additional, growing end-user markets, expanding distribution globally and completing strategic acquisitions that provide additional channel and technologies. Long-term financial growth targets accompany these strategies, including our objectives of 10 percent revenue growth and 12 percent consolidated net earnings growth per annum. We continue to develop new products in each operating division that are expected to drive incremental sales growth, as well as continued refreshes and upgrades of existing product lines. Graco has made a number of strategic acquisitions that expand and complement organically developed products and provide new market and channel opportunities.
Manufacturing is a key competency of the Company. Our management team in Minneapolis
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YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
-term financial growth targets accompany these strategies, including our objectives of 10 percent revenue growth and 12 percent consolidated net earnings growth per annum. We continue to develop new products in each operating division that are expected to drive incremental sales growth, as well as continued refreshes and upgrades of existing product lines. Graco has made a number of strategic acquisitions that expand and complement organically developed products and provide new market and channel opportunities.
Manufacturing is a key competency of the Company. Our management team in Minneapolis provides strategic manufacturing expertise, and is also responsible for factories not fully aligned with a single division. Our largest manufacturing facilities are in the U.S. We also manufacture some of our products in Switzerland (Industrial segment), Italy (Industrial segment), the United Kingdom (Process segment), the People’s Republic of China (“P.R.C.”) (all segments), Belgium (all segments) and Romania (Industrial segment). Our primary distribution facilities are located in the U.S., Belgium, Switzerland, United Kingdom, P.R.C., Japan, Italy, Korea, India, Australia and Brazil.
Russia's Invasion of Ukraine
GRACO INC has historically sold products to customers located in or associated with Russia and Belarus. In response to Russia's invasion of Ukraine, the United States, the United Kingdom, the
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YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
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cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
’s Republic of China (“P.R.C.”) (all segments), Belgium (all segments) and Romania (Industrial segment). Our primary distribution facilities are located in the U.S., Belgium, Switzerland, United Kingdom, P.R.C., Japan, Italy, Korea, India, Australia and Brazil.
Russia's Invasion of Ukraine
GRACO INC has historically sold products to customers located in or associated with Russia and Belarus. In response to Russia's invasion of Ukraine, the United States, the United Kingdom, the European Union, Switzerland and others have implemented sanctions and export controls targeting Russia and Belarus and entities associated with those countries, which significantly limits our ability to sell certain products, serve certain customers and collect on our outstanding receivables in those countries. In April of 2022, we decided to suspend sales into Russia and Belarus indefinitely. Sales to Russia and Belarus accounted for approximately 1.5% of our 2021 net sales and were not material for 2022. In connection with the effect of these sanctions and export controls, we recognized $3 million of allowances for credit losses on customer receivables in Russia in 2022. The duration and extent to which trade sanctions against Russia and Belarus affect the Company's business will depend on future developments, which still remain uncertain
|
YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
decided to suspend sales into Russia and Belarus indefinitely. Sales to Russia and Belarus accounted for approximately 1.5% of our 2021 net sales and were not material for 2022. In connection with the effect of these sanctions and export controls, we recognized $3 million of allowances for credit losses on customer receivables in Russia in 2022. The duration and extent to which trade sanctions against Russia and Belarus affect the Company's business will depend on future developments, which still remain uncertain.
Supply Chain and Inflation
In 2022, the Company experienced logistical and production constraints due to limited raw material and component availability, reduced freight capacity, shipping delays, labor shortages and other supply chain disruptions. These supply chain disruptions have increased the Company's product costs and extended lead times. GRACO INC has undertaken steps to mitigate these impacts, including implementing interim price increases, maintaining higher inventory levels,
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Table of Contents
qualifying additional suppliers and making strategic component purchases. While freight capacity and shipping delays improved by the end of 2022, we expect these other challenges to continue into 2023.
In connection with the supply chain disruptions described above, the Company has also experienced the effects of inflation related to raw materials, components and other expenses, including freight, labor
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YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
lead times. GRACO INC has undertaken steps to mitigate these impacts, including implementing interim price increases, maintaining higher inventory levels,
21
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qualifying additional suppliers and making strategic component purchases. While freight capacity and shipping delays improved by the end of 2022, we expect these other challenges to continue into 2023.
In connection with the supply chain disruptions described above, the Company has also experienced the effects of inflation related to raw materials, components and other expenses, including freight, labor and energy. In 2022, the cost of raw materials and components was significantly higher compared to the cost of raw materials and components in 2021. We expect cost increases from purchases of raw materials and components to moderate in 2023.
The supply chain disruptions and associated effects of inflation have adversely impacted profitability in the near-term and limited our ability to satisfy customer demand. To the extent our pricing actions are unable to offset these supply chain disruptions and effects of inflation, our profitability could continue to be adversely impacted in 2023.
Results of Operations
A summary of financial results follows (in millions except per share amounts):
2022
2021
Net Sales
2,143.5
1,987.6
Operating Earnings
572.7
531
|
YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
effects of inflation have adversely impacted profitability in the near-term and limited our ability to satisfy customer demand. To the extent our pricing actions are unable to offset these supply chain disruptions and effects of inflation, our profitability could continue to be adversely impacted in 2023.
Results of Operations
A summary of financial results follows (in millions except per share amounts):
2022
2021
Net Sales
2,143.5
1,987.6
Operating Earnings
572.7
531.3
Net Earnings
460.6
439.9
Diluted Net Earnings per Common Share
2.66
2.52
Adjusted (non-GAAP)(1):
Net Earnings, adjusted
455.5
425.7
Diluted Net Earnings per Common Share, adjusted
2.63
2.44
(1)
Excludes impacts of excess tax benefits from stock option exercises, prior year non-recurring tax provision adjustments and a prior year pension settlement loss. See Financial Results Adjusted for Comparability below for a reconciliation of adjusted non-GAAP financial measures to GAAP.
22
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Multiple events in the last two years caused fluctuations in financial results. Excess tax benefits related to stock option
|
YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
iluted Net Earnings per Common Share, adjusted
2.63
2.44
(1)
Excludes impacts of excess tax benefits from stock option exercises, prior year non-recurring tax provision adjustments and a prior year pension settlement loss. See Financial Results Adjusted for Comparability below for a reconciliation of adjusted non-GAAP financial measures to GAAP.
22
Table of Contents
Multiple events in the last two years caused fluctuations in financial results. Excess tax benefits related to stock option exercises reduced income taxes by $5 million in 2022 and $12 million in 2021. Other expense for 2021 included a $12 million non-cash pension settlement loss. Other benefits from tax planning activities further reduced income taxes in 2021. Excluding the impacts of those items presents a more consistent basis for comparison of financial results. A calculation of the non-GAAP measurements of earnings before income taxes, income taxes, effective income tax rates, net earnings and diluted earnings per share follows (in millions except per share amounts):
2022
2021
Earnings before income taxes, as reported
565.7
508.5
Pension settlement loss
12.0
Earnings before income taxes, adjusted
565.7
520.
|
YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
the impacts of those items presents a more consistent basis for comparison of financial results. A calculation of the non-GAAP measurements of earnings before income taxes, income taxes, effective income tax rates, net earnings and diluted earnings per share follows (in millions except per share amounts):
2022
2021
Earnings before income taxes, as reported
565.7
508.5
Pension settlement loss
12.0
Earnings before income taxes, adjusted
565.7
520.5
Income taxes, as reported
105.1
68.6
Pension settlement tax effect
2.5
Excess tax benefit from option exercises
5.1
11.5
Other non-recurring tax benefit
12.2
Income taxes, adjusted
110.2
94.8
Effective income tax rate
As reported
18.6
13.5
Adjusted
19.5
18.2
Net Earnings, as reported
460.6
439.9
Pension settlement loss, net
9.5
Excess tax benefit from option exercises
(5.1)
(11.5)
Other non-recurring tax benefit
(12.2)
Net Earnings, adjusted
455.
|
YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
adjusted
110.2
94.8
Effective income tax rate
As reported
18.6
13.5
Adjusted
19.5
18.2
Net Earnings, as reported
460.6
439.9
Pension settlement loss, net
9.5
Excess tax benefit from option exercises
(5.1)
(11.5)
Other non-recurring tax benefit
(12.2)
Net Earnings, adjusted
455.5
425.7
Weighted Average Diluted Shares
172.9
174.5
Diluted Net Earnings per Share
As reported
2.66
2.52
Adjusted
2.63
2.44
23
Table of Contents
Components of Net Earnings as a Percentage of Sales:
The following table presents an overview of components of net earnings as a percentage of net sales:
2022
2021
Net Sales
100.0
100.0
Cost of products sold
50.7
48.0
Gross profit
49.3
52.0
Product development
3.7
4.0
Selling, marketing and distribution
11.7
13.7
General and
|
YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
Components of Net Earnings as a Percentage of Sales:
The following table presents an overview of components of net earnings as a percentage of net sales:
2022
2021
Net Sales
100.0
100.0
Cost of products sold
50.7
48.0
Gross profit
49.3
52.0
Product development
3.7
4.0
Selling, marketing and distribution
11.7
13.7
General and administrative
7.2
7.6
Operating earnings
26.7
26.7
Interest expense
0.4
0.5
Other expense, net
(0.1)
0.6
Earnings before income taxes
26.4
25.6
Income taxes
4.9
3.5
Net Earnings
21.5
22.1
Net Earnings, adjusted (see non-GAAP measurements above)
21.3
21.4
Net Sales
The following table presents net sales by geographic region (in millions):
2022
2021
Americas(1)
1,281.9
1,150.2
EMEA(2)
451.8
464.1
|
YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
25.6
Income taxes
4.9
3.5
Net Earnings
21.5
22.1
Net Earnings, adjusted (see non-GAAP measurements above)
21.3
21.4
Net Sales
The following table presents net sales by geographic region (in millions):
2022
2021
Americas(1)
1,281.9
1,150.2
EMEA(2)
451.8
464.1
Asia Pacific
409.8
373.3
Consolidated
2,143.5
1,987.6
(1)
North, Central and South America, including the U.S. Sales in the U.S. were $1,116 million in 2022 and $1,004 million in 2021.
(2)
Europe, Middle East and Africa
The following table presents the components of net sales change by geographic region:
2022
2021
Volume and Price
Acquisitions
Currency
Total
Volume and Price
Acquisitions/Divestitures
Currency
Total
Americas
11%
1%
(1)%
11%
15%
0%
0%
15%
EMEA
7%
0%
(10)
|
YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
2022 and $1,004 million in 2021.
(2)
Europe, Middle East and Africa
The following table presents the components of net sales change by geographic region:
2022
2021
Volume and Price
Acquisitions
Currency
Total
Volume and Price
Acquisitions/Divestitures
Currency
Total
Americas
11%
1%
(1)%
11%
15%
0%
0%
15%
EMEA
7%
0%
(10)%
(3)%
21%
0%
4%
25%
Asia Pacific
16%
0%
(6)%
10%
30%
(3)%
6%
33%
Consolidated
11%
1%
(4)%
8%
19%
0%
1%
20%
Sales in the Americas were up solidly again in 2022, as economic conditions in North America remained broadly favorable. Sales growth in EMEA varied between products and countries in 2022, as the region experienced unfavorable geopolitical conditions. Solid sales growth to customers in Western Europe and emerging countries was partially offset by fewer sales to customers in Russia and Belarus. Sales growth in Asia Pacific was more broadly based across products and countries, as pandemic-related restrictions eased in 2022 compared to 202
|
YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
20%
Sales in the Americas were up solidly again in 2022, as economic conditions in North America remained broadly favorable. Sales growth in EMEA varied between products and countries in 2022, as the region experienced unfavorable geopolitical conditions. Solid sales growth to customers in Western Europe and emerging countries was partially offset by fewer sales to customers in Russia and Belarus. Sales growth in Asia Pacific was more broadly based across products and countries, as pandemic-related restrictions eased in 2022 compared to 2021.
There were 52 weeks in 2022, compared to 53 weeks in 2021.
Gross Profit
24
Table of Contents
Gross profit margin rate for 2022 decreased approximately 3 percentage points compared to 2021, as realized pricing was unable to offset higher product costs and the adverse impacts of changes in currency translation rates.
Operating Expenses
Total operating expenses for 2022 decreased $18 million compared to 2021. Reductions of $16 million from lower sales and earnings-based expenses and $14 million from the impact of currency translation were partially offset by $3 million of allowances for credit losses on customer receivables in Russia and volume and rate related increases. Investment in new product development in 2022 was $80 million
|
YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
was unable to offset higher product costs and the adverse impacts of changes in currency translation rates.
Operating Expenses
Total operating expenses for 2022 decreased $18 million compared to 2021. Reductions of $16 million from lower sales and earnings-based expenses and $14 million from the impact of currency translation were partially offset by $3 million of allowances for credit losses on customer receivables in Russia and volume and rate related increases. Investment in new product development in 2022 was $80 million, approximately 4 percent of sales.
Operating Earnings
Sales growth led to an 8 percent increase in operating earnings. Operating earnings as a percentage of sales in 2022 was flat compared to 2021 as higher product costs and unfavorable changes in currency translation rates were offset by lower sales and earnings-based costs and the effects of expense leverage.
Other Expense
Other expense decreased $16 million for 2022. Other expense in 2021 included a non-cash pension settlement loss of $12 million in connection with the transfer of certain pension obligations to an insurance company. Increased investment income in 2022 further reduced other expense by $4 million.
Income Taxes
The effective income tax rate for 2022 was 19 percent, up 6 percentage points from
|
YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
by lower sales and earnings-based costs and the effects of expense leverage.
Other Expense
Other expense decreased $16 million for 2022. Other expense in 2021 included a non-cash pension settlement loss of $12 million in connection with the transfer of certain pension obligations to an insurance company. Increased investment income in 2022 further reduced other expense by $4 million.
Income Taxes
The effective income tax rate for 2022 was 19 percent, up 6 percentage points from 2021. The increase was due to non-recurring foreign-related tax benefits in 2021, a decrease in excess tax benefits from stock option exercises and the unfavorable effects of foreign earnings taxed at higher rates than the U.S.
Segment Results
GRACO INC has five operating segments which are aggregated into three reportable segments: Contractor, Industrial and Process. Refer to Part I Item 1. Business, for a description of the Company’s three reportable segments. Management assesses performance of segments by reference to operating earnings excluding unallocated corporate expenses and asset impairments.
The following table presents net sales and operating earnings by reporting segment (in millions):
2022
2021
Sales
Contractor
999.1
987.6
Industrial
649.3
602.
|
YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
are aggregated into three reportable segments: Contractor, Industrial and Process. Refer to Part I Item 1. Business, for a description of the Company’s three reportable segments. Management assesses performance of segments by reference to operating earnings excluding unallocated corporate expenses and asset impairments.
The following table presents net sales and operating earnings by reporting segment (in millions):
2022
2021
Sales
Contractor
999.1
987.6
Industrial
649.3
602.4
Process
495.1
397.6
Total
2,143.5
1,987.6
Operating Earnings
Contractor
249.9
266.2
Industrial
231.3
199.8
Process
122.3
91.0
Unallocated corporate (expense) (1)
(30.8)
(25.7)
Total
572.7
531.3
(1)
Unallocated corporate (expense) includes such items as stock compensation, certain acquisition transaction items, bad debt expense, charitable contributions, and certain facility expenses.
25
Table of Contents
Contractor Segment
The following table presents net sales and operating earnings as a percentage of sales for the Contractor segment (dollars in millions
|
YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
91.0
Unallocated corporate (expense) (1)
(30.8)
(25.7)
Total
572.7
531.3
(1)
Unallocated corporate (expense) includes such items as stock compensation, certain acquisition transaction items, bad debt expense, charitable contributions, and certain facility expenses.
25
Table of Contents
Contractor Segment
The following table presents net sales and operating earnings as a percentage of sales for the Contractor segment (dollars in millions):
2022
2021
Sales
Americas
739.1
694.1
EMEA
176.8
204.6
Asia Pacific
83.2
88.9
Total
999.1
987.6
Operating Earnings as a Percentage of Sales
25
27
The following table presents the components of net sales change by geographic region for the Contractor segment:
2022
2021
Volume and Price
Acquisitions
Currency
Total
Volume and Price
Acquisitions
Currency
Total
Americas
7%
0%
(1)%
6%
12%
0%
0%
12%
EMEA
(6)%
1%
(9)%
(14)%
26%
3%
4%
33
|
YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
a Percentage of Sales
25
27
The following table presents the components of net sales change by geographic region for the Contractor segment:
2022
2021
Volume and Price
Acquisitions
Currency
Total
Volume and Price
Acquisitions
Currency
Total
Americas
7%
0%
(1)%
6%
12%
0%
0%
12%
EMEA
(6)%
1%
(9)%
(14)%
26%
3%
4%
33%
Asia Pacific
0%
0%
(6)%
(6)%
23%
0%
5%
28%
Segment Total
4%
0%
(3)%
1%
15%
1%
1%
17%
Contractor segment sales growth slowed in 2022, as the on-going favorable construction market environment in North America moderated due to increases in interest rates and lower levels of new construction activity. The operating margin rate decreased 2 percentage points in 2022 primarily due to higher product costs and the adverse impacts of currency translation.
Sales in the Americas represents the substantial majority of sales for the Contractor segment. Management regularly reviews economic and financial indicators in North America, including levels of residential, commercial and institutional construction, remodeling rates and interest rates. Management also reviews gross domestic
|
YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
as the on-going favorable construction market environment in North America moderated due to increases in interest rates and lower levels of new construction activity. The operating margin rate decreased 2 percentage points in 2022 primarily due to higher product costs and the adverse impacts of currency translation.
Sales in the Americas represents the substantial majority of sales for the Contractor segment. Management regularly reviews economic and financial indicators in North America, including levels of residential, commercial and institutional construction, remodeling rates and interest rates. Management also reviews gross domestic product for the regions and the level of the U.S. dollar versus the euro and other currencies.
Industrial Segment
The following table presents net sales and operating earnings as a percentage of sales for the Industrial segment (dollars in millions):
2022
2021
Sales
Americas
239.3
213.4
EMEA
205.7
199.4
Asia Pacific
204.3
189.6
Total
649.3
602.4
Operating Earnings as a Percentage of Sales
36
33
26
Table of Contents
The following table presents the components of net sales change by geographic region for the Industrial segment:
2022
2021
Volume and Price
Acquisitions
Currency
Total
Volume and Price
|
YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
as
239.3
213.4
EMEA
205.7
199.4
Asia Pacific
204.3
189.6
Total
649.3
602.4
Operating Earnings as a Percentage of Sales
36
33
26
Table of Contents
The following table presents the components of net sales change by geographic region for the Industrial segment:
2022
2021
Volume and Price
Acquisitions
Currency
Total
Volume and Price
Acquisitions
Currency
Total
Americas
13%
0%
(1)%
12%
24%
0%
1%
25%
EMEA
15%
0%
(12)%
3%
18%
0%
3%
21%
Asia Pacific
14%
0%
(6)%
8%
25%
0%
5%
30%
Segment Total
14%
0%
(6)%
8%
22%
0%
3%
25%
The Industrial segment experienced solid sales growth in all regions for the year. Generally favorable economic activity across many end markets, including general industry, automotive, electrical equipment and alternative energy drove demand in all regions. Finishing system sales contributed to sales growth in the Americas and EMEA, while improvement in automotive end markets contributed to sales growth
|
YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
(6)%
8%
25%
0%
5%
30%
Segment Total
14%
0%
(6)%
8%
22%
0%
3%
25%
The Industrial segment experienced solid sales growth in all regions for the year. Generally favorable economic activity across many end markets, including general industry, automotive, electrical equipment and alternative energy drove demand in all regions. Finishing system sales contributed to sales growth in the Americas and EMEA, while improvement in automotive end markets contributed to sales growth in Asia Pacific. The operating margin rate increased for the year as strong realized pricing and expense leverage more than offset higher product costs and the adverse impacts of currency translation.
In this segment, sales in each geographic region are significant and management looks at economic and financial indicators in each region, including gross domestic product, industrial production, capital investment rates, automobile production, building construction and the level of the U.S. dollar versus the euro, the Swiss franc, the Canadian dollar, the Chinese renminbi and various other Asian currencies.
Process Segment
The following table presents net sales and operating earnings as a percentage of sales for the Process segment (dollars in millions):
2022
2021
Sales
Americas
303.5
242.7
EMEA
69.
|
YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
including gross domestic product, industrial production, capital investment rates, automobile production, building construction and the level of the U.S. dollar versus the euro, the Swiss franc, the Canadian dollar, the Chinese renminbi and various other Asian currencies.
Process Segment
The following table presents net sales and operating earnings as a percentage of sales for the Process segment (dollars in millions):
2022
2021
Sales
Americas
303.5
242.7
EMEA
69.3
60.1
Asia Pacific
122.3
94.8
Total
495.1
397.6
Operating Earnings as a Percentage of Sales
25
23
The following table presents the components of net sales change by geographic region for the Process segment:
2022
2021
Volume and Price
Acquisitions
Currency
Total
Volume and Price
Acquisitions/Divestitures
Currency
Total
Americas
22%
3%
0%
25%
17%
0%
1%
18%
EMEA
22%
1%
(8)%
15%
14%
(5)%
4%
13%
Asia Pacific
34%
0%
(5)%
29%
48%
(11)%
6%
43%
Segment
|
YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
segment:
2022
2021
Volume and Price
Acquisitions
Currency
Total
Volume and Price
Acquisitions/Divestitures
Currency
Total
Americas
22%
3%
0%
25%
17%
0%
1%
18%
EMEA
22%
1%
(8)%
15%
14%
(5)%
4%
13%
Asia Pacific
34%
0%
(5)%
29%
48%
(11)%
6%
43%
Segment Total
25%
2%
(2)%
25%
23%
(3)%
2%
22%
The Process segment had double-digit sales growth in all product applications in 2022, reflecting favorable conditions in many end markets, such as vehicle services, industrial pumps, oil and gas, mining, industrial lubrication and semi-conductors. Sales from acquired operations contributed approximately $9 million of growth in the Process segment. The operating margin rate for this segment increased 2 percentage points for the year as increased volume and expense leverage offset higher product costs and the adverse impacts of currency translation.
Although the Americas represent the substantial majority of sales for the Process segment, and indicators in that region are the most significant, management monitors indicators such as levels of gross domestic product, capital investment
|
YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
and gas, mining, industrial lubrication and semi-conductors. Sales from acquired operations contributed approximately $9 million of growth in the Process segment. The operating margin rate for this segment increased 2 percentage points for the year as increased volume and expense leverage offset higher product costs and the adverse impacts of currency translation.
Although the Americas represent the substantial majority of sales for the Process segment, and indicators in that region are the most significant, management monitors indicators such as levels of gross domestic product, capital investment, industrial production, oil and natural gas markets and mining activity worldwide.
27
Table of Contents
Financial Condition and Cash Flow
Working Capital.
The following table highlights several key measures of asset performance (dollars in millions):
2022
2021
Working capital
805.7
856.8
Current ratio
3.0
2.7
Days of sales in receivables outstanding
57
60
Inventory turnover (LIFO)
2.5
2.8
Lower cash and cash equivalent balances primarily drove decreases in working capital in 2022. Changes in
receivables were consistent with higher sales levels. Inventories increased to meet higher demand and service levels and to accommodate for disruptions in the supply chain. The current ratio increased in
|
YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
7
856.8
Current ratio
3.0
2.7
Days of sales in receivables outstanding
57
60
Inventory turnover (LIFO)
2.5
2.8
Lower cash and cash equivalent balances primarily drove decreases in working capital in 2022. Changes in
receivables were consistent with higher sales levels. Inventories increased to meet higher demand and service levels and to accommodate for disruptions in the supply chain. The current ratio increased in 2022 due to increases in receivables and inventories as well as lower sales and earnings based accruals. The repayment of a current debt obligation in 2022 partially offset the increase in the current ratio.
Capital Structure.
At December 30, 2022,
the Company’s capital structure included current notes payable of $21 million, long-term debt of $75 million and shareholders’ equity of $1,860 million. At December 31, 2021, the Company’s capital structure included current notes payable of $43 million, long-term debt, including current portion, of $150 million and shareholders’ equity of $1,709 million.
Shareholders’ equity increased by $150 million in 2022. The increase from current year earnings of
|
YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
the Company’s capital structure included current notes payable of $21 million, long-term debt of $75 million and shareholders’ equity of $1,860 million. At December 31, 2021, the Company’s capital structure included current notes payable of $43 million, long-term debt, including current portion, of $150 million and shareholders’ equity of $1,709 million.
Shareholders’ equity increased by $150 million in 2022. The increase from current year earnings of $461 million was offset by share repurchases of $233 million and dividends of $146 million. Increases related to shares issued, stock compensation and other comprehensive income totaled $69 million.
Liquidity and Capital Resources
. GRACO INC evaluates liquidity as its ability to generate cash to fund its operating, investing and financing activities. Historically the Company has funded cash requirements for working capital, capital expenditures, businesses acquisitions, repayment of debt obligations, retirement plans, dividends, and common stock repurchases, all as applicable, through cash provided by its operations. GRACO INC's other primary source of liquidity includes funds available through various debt financing arrangements.
As of December 30, 2022, the Company had available liquidity of $884 million, including cash held in deposit accounts of $
|
YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
fund its operating, investing and financing activities. Historically the Company has funded cash requirements for working capital, capital expenditures, businesses acquisitions, repayment of debt obligations, retirement plans, dividends, and common stock repurchases, all as applicable, through cash provided by its operations. GRACO INC's other primary source of liquidity includes funds available through various debt financing arrangements.
As of December 30, 2022, the Company had available liquidity of $884 million, including cash held in deposit accounts of $339 million, of which $111 million was held outside of the U.S., and available credit under existing committed credit facilities of $545 million.
Internally generated funds and unused financing sources are expected to provide the Company with the flexibility to meet its liquidity needs in 2023, including its capital expenditure plan of approximately $200 million, including $130 million for building projects to expand production capacity, planned dividends estimated at $158 million, share repurchases and acquisitions. If acquisition opportunities increase, the Company believes that reasonable financing alternatives are available for the Company to execute on those opportunities. GRACO INC has no significant off-balance sheet debt or other unrecorded obligations. GRACO INC believes it has the ability to meet its long-term cash requirements by using available cash and internally generated funds and
|
YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
including its capital expenditure plan of approximately $200 million, including $130 million for building projects to expand production capacity, planned dividends estimated at $158 million, share repurchases and acquisitions. If acquisition opportunities increase, the Company believes that reasonable financing alternatives are available for the Company to execute on those opportunities. GRACO INC has no significant off-balance sheet debt or other unrecorded obligations. GRACO INC believes it has the ability to meet its long-term cash requirements by using available cash and internally generated funds and to borrow under its committed and uncommitted credit facilities.
In December 2022, the Board of Directors increased the Company’s regular quarterly dividend to $0.235 from $0.21 per share, an increase of 12 percent.
28
Table of Contents
Cash Flow.
A summary of cash flow follows (in millions):
2022
2021
Operating activities
377.4
456.9
Investing activities
(226.8)
(153.3)
Financing activities
(434.4)
(57.1)
Effect of exchange rates on cash
(1.3)
(1.1)
Net cash provided
(285.1)
245.4
Cash and cash equivalents at end of year
339.2
624
|
YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
.
A summary of cash flow follows (in millions):
2022
2021
Operating activities
377.4
456.9
Investing activities
(226.8)
(153.3)
Financing activities
(434.4)
(57.1)
Effect of exchange rates on cash
(1.3)
(1.1)
Net cash provided
(285.1)
245.4
Cash and cash equivalents at end of year
339.2
624.3
Cash Flows From Operating Activities
. Net cash provided by operating activities was $377 million in 2022, down $80 million compared to 2021. The impact of the increase in net earnings in 2022 was offset by increases in working capital that reflect growth in business activity.
Cash Flows Used in Investing Activities.
Cash flows used in investing activities totaled $227 million in 2022, including $201 million for capital additions and $25 million for business acquisitions. Cash flows used in investing activities totaled $153 million in 2021 including $134 million for capital additions and $19 million for business acquisitions.
Cash Flows Used in Financing Activities
Cash flows used in financing activities totaled $434 million in 2022 and included share repurchases
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YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
reflect growth in business activity.
Cash Flows Used in Investing Activities.
Cash flows used in investing activities totaled $227 million in 2022, including $201 million for capital additions and $25 million for business acquisitions. Cash flows used in investing activities totaled $153 million in 2021 including $134 million for capital additions and $19 million for business acquisitions.
Cash Flows Used in Financing Activities
Cash flows used in financing activities totaled $434 million in 2022 and included share repurchases of $233 million (partially offset by net proceeds from share issuances of $36 million), dividends of $142 million, and net payments on long-term debt and outstanding lines of credit of $93 million.
Cash flows used in financing activities totaled $57 million in 2021 and included dividends of $127 million and net proceeds from share issuances totaling $51 million.
On December 7, 2018, the Board of Directors authorized the purchase of up to 18 million shares of common stock, primarily through open market transactions. The authorization is for an indefinite period of time or until terminated by the Board. As of December 30, 2022, approximately 15 million shares remain available for purchase under the authorization.
GRACO INC repurchased and retired 3
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YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
1 and included dividends of $127 million and net proceeds from share issuances totaling $51 million.
On December 7, 2018, the Board of Directors authorized the purchase of up to 18 million shares of common stock, primarily through open market transactions. The authorization is for an indefinite period of time or until terminated by the Board. As of December 30, 2022, approximately 15 million shares remain available for purchase under the authorization.
GRACO INC repurchased and retired 3.6 million shares in 2022. GRACO INC did not repurchase and retire shares in 2021, and repurchased and retired 2.3 million shares in 2020. GRACO INC has made and may continue to make opportunistic share repurchases in 2023 via open market transactions or short-dated accelerated share repurchase (“ASR”) programs.
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Critical Accounting Estimates
GRACO INC prepares its consolidated financial statements in conformity with generally accepted accounting principles in the United States of America (“U.S. GAAP”). GRACO INC’s most significant accounting policies are disclosed in Note A (Summary of Significant Accounting Policies) to the consolidated financial statements. The preparation of the consolidated financial statements, in conformity with U.S. GAAP, requires management
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YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
3 via open market transactions or short-dated accelerated share repurchase (“ASR”) programs.
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Critical Accounting Estimates
GRACO INC prepares its consolidated financial statements in conformity with generally accepted accounting principles in the United States of America (“U.S. GAAP”). GRACO INC’s most significant accounting policies are disclosed in Note A (Summary of Significant Accounting Policies) to the consolidated financial statements. The preparation of the consolidated financial statements, in conformity with U.S. GAAP, requires management to make estimates and judgments that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual amounts will differ from those estimates. GRACO INC considers the following policies to involve the most judgment in the preparation of the Company’s consolidated financial statements.
Retirement Benefits.
The measurements of the Company’s pension and postretirement medical obligations are dependent on a number of assumptions including estimates of the present value of projected future payments, taking into consideration future events such as salary increases and demographic experience. These assumptions may have an impact on the expense and timing of future contributions.
The assumptions used in developing the required estimates for pension obligations include discount rate, inflation, salary increases, retirement rates, expected return on plan assets and mortality rates. The assumptions used in developing the required estimates for postretirement
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YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
the Company’s pension and postretirement medical obligations are dependent on a number of assumptions including estimates of the present value of projected future payments, taking into consideration future events such as salary increases and demographic experience. These assumptions may have an impact on the expense and timing of future contributions.
The assumptions used in developing the required estimates for pension obligations include discount rate, inflation, salary increases, retirement rates, expected return on plan assets and mortality rates. The assumptions used in developing the required estimates for postretirement medical obligations include discount rates, rate of future increase in medical costs and participation rates.
For U.S. plans, the Company establishes its discount rate assumption by reference to a yield curve published by an actuary and projected plan cash flows. For plans outside the U.S., the Company establishes a rate by country by reference to highly rated corporate bonds. These reference points have been determined to adequately match expected plan cash flows. GRACO INC bases its inflation assumption on an evaluation of external market indicators. The salary assumptions are based on actual historical experience, the near-term outlook and assumed inflation. Retirement rates are based on experience. The investment return assumption is based on the expected long-term performance of plan assets. In setting this number, the Company considers the input of actuaries and investment advisers, its
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YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
establishes a rate by country by reference to highly rated corporate bonds. These reference points have been determined to adequately match expected plan cash flows. GRACO INC bases its inflation assumption on an evaluation of external market indicators. The salary assumptions are based on actual historical experience, the near-term outlook and assumed inflation. Retirement rates are based on experience. The investment return assumption is based on the expected long-term performance of plan assets. In setting this number, the Company considers the input of actuaries and investment advisers, its long-term historical returns, the allocation of plan assets and projected returns on plan assets. For 2023, the Company will use an investment return assumption of 7.60 percent for the funded U.S. plan, up 1.35 percentage points from the rate assumed for 2022. Mortality rates are based on current common group mortality tables for males and females.
At December 30, 2022, a one-half percentage point decrease in the indicated assumptions would have the following effects (in millions):
Assumption
Funded Status
Expense
Discount rate
(18.4)
3.3
Expected return on assets
1.6
Goodwill and Other Intangible Assets.
GRACO INC performs impairment testing for goodwill annually in the fourth quarter or
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YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
2022. Mortality rates are based on current common group mortality tables for males and females.
At December 30, 2022, a one-half percentage point decrease in the indicated assumptions would have the following effects (in millions):
Assumption
Funded Status
Expense
Discount rate
(18.4)
3.3
Expected return on assets
1.6
Goodwill and Other Intangible Assets.
GRACO INC performs impairment testing for goodwill annually in the fourth quarter or more frequently if events or changes in circumstances indicate that the asset might be impaired. GRACO INC estimates the fair value of the reporting units using a present value of future cash flows calculation cross-checked by an allocation of market capitalization approach. The impairment test is performed using a two-step process. In the first step, the fair value of each reporting unit is compared with the carrying amount of the reporting unit. If the estimated fair value exceeds its carrying value, step two of the impairment analysis is not required. If the estimated fair value is less than its carrying amount, impairment is indicated and the second step must be completed in order to determine the amount, if any, of the impairment. In the second step, an impairment loss is recognized for the difference between the implied value of goodwill and
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YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
. In the first step, the fair value of each reporting unit is compared with the carrying amount of the reporting unit. If the estimated fair value exceeds its carrying value, step two of the impairment analysis is not required. If the estimated fair value is less than its carrying amount, impairment is indicated and the second step must be completed in order to determine the amount, if any, of the impairment. In the second step, an impairment loss is recognized for the difference between the implied value of goodwill and the carrying value.
GRACO INC’s primary identifiable intangible assets include customer relationships, trademarks, trade names, proprietary technology and patents. Finite lived intangibles are amortized and are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Indefinite lived intangibles are reviewed for impairment annually in the fourth quarter, or more frequently if events or changes in circumstances indicate the asset might be impaired.
A considerable amount of management judgment and assumptions are required in performing the impairment tests. Management makes several assumptions, including earnings and cash flow projections, discount rate, product offerings and market strategies, customer attrition, and royalty rates, each of which have a significant impact on the estimated fair
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values. Though management
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YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
Indefinite lived intangibles are reviewed for impairment annually in the fourth quarter, or more frequently if events or changes in circumstances indicate the asset might be impaired.
A considerable amount of management judgment and assumptions are required in performing the impairment tests. Management makes several assumptions, including earnings and cash flow projections, discount rate, product offerings and market strategies, customer attrition, and royalty rates, each of which have a significant impact on the estimated fair
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values. Though management considers its judgments and assumptions to be reasonable, changes in these assumptions could impact the estimated fair value.
In 2022, we completed our annual impairment testing of goodwill and other intangible assets in the fourth quarter. No impairment charges were recorded as a result of that test.
Income Taxes.
In the preparation of the Company’s consolidated financial statements, management calculates income taxes. This includes estimating current tax liability as well as assessing temporary differences resulting from different treatment of items for tax and financial statement purposes. These differences result in deferred tax assets and liabilities, which are recorded on the balance sheet using statutory rates in effect for the year in which the differences are expected to reverse. These assets and liabilities are analyzed regularly, and management assesses the likelihood that deferred tax assets will be recoverable from
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YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
Taxes.
In the preparation of the Company’s consolidated financial statements, management calculates income taxes. This includes estimating current tax liability as well as assessing temporary differences resulting from different treatment of items for tax and financial statement purposes. These differences result in deferred tax assets and liabilities, which are recorded on the balance sheet using statutory rates in effect for the year in which the differences are expected to reverse. These assets and liabilities are analyzed regularly, and management assesses the likelihood that deferred tax assets will be recoverable from future taxable income. A valuation allowance is established to the extent that management believes that recovery is not likely. Liabilities for uncertain tax positions are also established for potential and ongoing audits of federal, state and international issues. GRACO INC routinely monitors the potential impact of such situations and believes that liabilities are properly stated. Valuations related to amounts owed and tax rates could be impacted by changes to tax codes and the Company’s interpretation thereof, changes in statutory rates, the Company’s future taxable income levels and the results of tax audits.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
GRACO INC sells and purchases products and services in currencies other than the U.S. dollar and pays variable interest rates on borrowings under certain credit facilities. Consequently, the Company is subject
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YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
liabilities are properly stated. Valuations related to amounts owed and tax rates could be impacted by changes to tax codes and the Company’s interpretation thereof, changes in statutory rates, the Company’s future taxable income levels and the results of tax audits.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
GRACO INC sells and purchases products and services in currencies other than the U.S. dollar and pays variable interest rates on borrowings under certain credit facilities. Consequently, the Company is subject to profitability risk arising from exchange and interest rate movements. GRACO INC may use a variety of financial and derivative instruments to manage foreign currency and interest rate risks. GRACO INC does not enter into any of these instruments for trading purposes to generate revenue. Rather, the Company’s objective in managing these risks is to reduce fluctuations in earnings and cash flows associated with changes in foreign currency exchange and interest rates.
GRACO INC may use forward exchange contracts, options and other hedging activities to hedge the U.S. dollar value resulting from anticipated currency transactions and net monetary asset and liability positions. At December 30, 2022, the currencies to which the Company had the most significant balance sheet exchange rate exposure were the euro, Swiss franc, Canadian dollar, British pound, Japanese yen, Australian dollar,
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YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
these risks is to reduce fluctuations in earnings and cash flows associated with changes in foreign currency exchange and interest rates.
GRACO INC may use forward exchange contracts, options and other hedging activities to hedge the U.S. dollar value resulting from anticipated currency transactions and net monetary asset and liability positions. At December 30, 2022, the currencies to which the Company had the most significant balance sheet exchange rate exposure were the euro, Swiss franc, Canadian dollar, British pound, Japanese yen, Australian dollar, Chinese renminbi, South Korean won and Indian rupee. It is not possible to determine the true impact of currency rate changes; however, the direct translation effect on net sales and net earnings can be estimated. In 2022, changes in currency translation rates reduced sales by approximately $66 million and reduced net earnings by approximately $31 million. In 2021, changes in currency translation rates increased sales by approximately $26 million and increased net earnings by approximately $12 million.
2023 Outlook
GRACO INC expects its core growth strategies of developing new products, expanding distribution, seeking adjacent markets and pursuing strategic acquisitions will help growth prospects in the future. As a result, the Company's outlook for 2023 is low single-digit revenue growth on an organic, constant currency basis
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YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
approximately $66 million and reduced net earnings by approximately $31 million. In 2021, changes in currency translation rates increased sales by approximately $26 million and increased net earnings by approximately $12 million.
2023 Outlook
GRACO INC expects its core growth strategies of developing new products, expanding distribution, seeking adjacent markets and pursuing strategic acquisitions will help growth prospects in the future. As a result, the Company's outlook for 2023 is low single-digit revenue growth on an organic, constant currency basis.
At January 31, 2023 exchange rates, assuming the same volumes, mix of products and mix of business by currency as in 2022, the movement in foreign currencies would have a favorable impact of approximately 1 percent on sales and 1 percent on net earnings in 2023.
GRACO INC’s backlog is not a good indicator of future long-term business levels. In addition to economic growth, the successful launch of new products and expanded distribution coverage, the sales outlook is dependent on many factors, including realization of price increases and stable foreign currency exchange rates.
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Forward-Looking Statements
GRACO INC desires to take advantage of the “safe harbor” provisions regarding forward-looking statements of the Private Securities Litigation Reform Act of 1995
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YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
in 2023.
GRACO INC’s backlog is not a good indicator of future long-term business levels. In addition to economic growth, the successful launch of new products and expanded distribution coverage, the sales outlook is dependent on many factors, including realization of price increases and stable foreign currency exchange rates.
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Forward-Looking Statements
GRACO INC desires to take advantage of the “safe harbor” provisions regarding forward-looking statements of the Private Securities Litigation Reform Act of 1995 and is filing this Cautionary Statement in order to do so. From time to time various forms filed by our Company with the Securities and Exchange Commission, including this Annual Report on Form 10-K and our Form 10-Qs and Form 8-Ks, and other disclosures, including our overview report, press releases, earnings releases, analyst briefings, conference calls and other written documents or oral statements released by our Company, may contain forward-looking statements. Forward-looking statements generally use words such as “expect,” “foresee,” “anticipate,” “believe,” “project,” “should,” “estimate,” “will,” and similar expressions, and reflect our Company’s expectations concerning the future. All forecasts and projections are forward-looking statements. Forward-looking statements are
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YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
disclosures, including our overview report, press releases, earnings releases, analyst briefings, conference calls and other written documents or oral statements released by our Company, may contain forward-looking statements. Forward-looking statements generally use words such as “expect,” “foresee,” “anticipate,” “believe,” “project,” “should,” “estimate,” “will,” and similar expressions, and reflect our Company’s expectations concerning the future. All forecasts and projections are forward-looking statements. Forward-looking statements are based upon currently available information, but various risks and uncertainties may cause our Company’s actual results to differ materially from those expressed in these statements. GRACO INC undertakes no obligation to update these statements in light of new information or future events.
Future results could differ materially from those expressed, due to the impact of changes in various factors. These risk factors include, but are not limited to, the factors discussed in Item 1A of this Annual Report on Form 10-K. Shareholders, potential investors and other readers are urged to consider these factors in evaluating forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements.
Investors should realize that factors other than those identified in Item 1A might prove important to the Company’s future results. It is not
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YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
due to the impact of changes in various factors. These risk factors include, but are not limited to, the factors discussed in Item 1A of this Annual Report on Form 10-K. Shareholders, potential investors and other readers are urged to consider these factors in evaluating forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements.
Investors should realize that factors other than those identified in Item 1A might prove important to the Company’s future results. It is not possible for management to identify each and every factor that may have an impact on the Company’s operations in the future as new factors can develop from time to time.
Item 8. Financial Statements and Supplementary Data
Management’s Report on Internal Control Over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting. The internal control system was designed to provide reasonable assurance to management and the board of directors regarding the reliability of financial reporting and preparation of financial statements in accordance with generally accepted accounting principles.
Management assessed the effectiveness of the Company’s internal control over financial reporting as of December 30, 2022. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in
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YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
establishing and maintaining adequate internal control over financial reporting. The internal control system was designed to provide reasonable assurance to management and the board of directors regarding the reliability of financial reporting and preparation of financial statements in accordance with generally accepted accounting principles.
Management assessed the effectiveness of the Company’s internal control over financial reporting as of December 30, 2022. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in
Internal Control-Integrated Framework
(2013).
Based on our assessment and those criteria, management believes the Company’s internal control over financial reporting is effective as of December 30, 2022.
GRACO INC’s independent auditors have issued an attestation report on the Company’s internal control over financial reporting. That report appears in this Annual Report on Form 10-K.
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the shareholders and the Board of Directors of Graco Inc.
Opinion on Internal Control over Financial Reporting
We have audited the internal control over financial reporting of Graco Inc. and subsidiaries (the “Company”) as of December 30, 2022, based on criteria established in
Internal
|
YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
’s internal control over financial reporting. That report appears in this Annual Report on Form 10-K.
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the shareholders and the Board of Directors of Graco Inc.
Opinion on Internal Control over Financial Reporting
We have audited the internal control over financial reporting of Graco Inc. and subsidiaries (the “Company”) as of December 30, 2022, based on criteria established in
Internal Control — Integrated Framework (2013)
issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 30, 2022, based on criteria established in
Internal Control — Integrated Framework (2013)
issued by COSO.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 30, 2022, of the Company and our report dated February 21, 2023, expressed an unqualified opinion on those financial statements.
Basis for Opinion
GRACO INC’s
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YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
, based on criteria established in
Internal Control — Integrated Framework (2013)
issued by COSO.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 30, 2022, of the Company and our report dated February 21, 2023, expressed an unqualified opinion on those financial statements.
Basis for Opinion
GRACO INC’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining
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YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company
|
YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
basis for our opinion.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ DELOITTE &
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YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ DELOITTE & TOUCHE LLP
Minneapolis, Minnesota
February 21, 2023
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the shareholders and the Board of Directors of Graco Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Graco Inc. and subsidiaries (the "Company") as of December 30, 2022 and December 31, 2021, the related consolidated statements of earnings, comprehensive income, shareholders' equity, and cash flows, for each of the three years in the period ended December 30, 2022, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly
|
YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
We have audited the accompanying consolidated balance sheets of Graco Inc. and subsidiaries (the "Company") as of December 30, 2022 and December 31, 2021, the related consolidated statements of earnings, comprehensive income, shareholders' equity, and cash flows, for each of the three years in the period ended December 30, 2022, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 30, 2022 and December 31, 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 30, 2022, in conformity with accounting principles generally accepted in the United States of America.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 30, 2022, based on criteria established in
Internal Control — Integrated Framework (2013)
issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 21,
|
YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
2, in conformity with accounting principles generally accepted in the United States of America.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 30, 2022, based on criteria established in
Internal Control — Integrated Framework (2013)
issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 21, 2023, expressed an unqualified opinion on the Company's internal control over financial reporting.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess
|
YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.
|
YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Retirement Benefits – U.S. Pension Benefit Obligation – Refer to Note J to the financial statements
Critical Audit Matter Description
GRACO INC has both funded and unfunded defined benefit pension plans. As of December 30, 2022, the pension benefit obligation balance was $315.8 million. The actuarial determination of the present value of the pension obligation on an annual basis requires management to make significant assumptions related to the selection of the discount rates used in the calculation of the net
|
YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
.
Retirement Benefits – U.S. Pension Benefit Obligation – Refer to Note J to the financial statements
Critical Audit Matter Description
GRACO INC has both funded and unfunded defined benefit pension plans. As of December 30, 2022, the pension benefit obligation balance was $315.8 million. The actuarial determination of the present value of the pension obligation on an annual basis requires management to make significant assumptions related to the selection of the discount rates used in the calculation of the net present value of future pension benefits. GRACO INC establishes the discount rate assumptions for the U.S. pension plans by reference to a yield curve published by an actuary based on yields of highly rated corporate bonds and projected plan cash flows.
Given the significance of the U.S. pension obligation and the requirement of management to make significant assumptions related to the selection of the discount rates, performing audit procedures to evaluate the reasonableness of the discount rates selected for the U.S. pension plans required a high degree of auditor judgment and an increased extent of effort, including the need to involve our actuarial specialists.
34
Table of Contents
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to selection of the discount rates for the U.S. pension obligation included
|
YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
and the requirement of management to make significant assumptions related to the selection of the discount rates, performing audit procedures to evaluate the reasonableness of the discount rates selected for the U.S. pension plans required a high degree of auditor judgment and an increased extent of effort, including the need to involve our actuarial specialists.
34
Table of Contents
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to selection of the discount rates for the U.S. pension obligation included the following, among others:
a. We tested the effectiveness of internal controls over the valuation of the pension obligation, including management’s controls over selection of the discount rates.
b. With the assistance of our actuarial specialists, we evaluated the reasonableness of the discount rates by:
Evaluating the methodology utilized to select the discount rates for conformity with applicable accounting guidance.
Testing the source information underlying the determination of the discount rates, including the methodology used to construct the yield curve, the characteristics of the bonds underlying the yield curve analysis, and the mathematical accuracy of the calculation.
Developing independent estimates using external published yield curves and comparing them to the discount rates selected by management.
/s/ DELOITTE & TOUCHE LLP
Minneapolis, Minnesota
|
YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
discount rates by:
Evaluating the methodology utilized to select the discount rates for conformity with applicable accounting guidance.
Testing the source information underlying the determination of the discount rates, including the methodology used to construct the yield curve, the characteristics of the bonds underlying the yield curve analysis, and the mathematical accuracy of the calculation.
Developing independent estimates using external published yield curves and comparing them to the discount rates selected by management.
/s/ DELOITTE & TOUCHE LLP
Minneapolis, Minnesota
February 21, 2023
We have served as the Company’s auditor since at least 1969, however, an earlier year could not be readily determined.
35
Table of Contents
GRACO INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(In thousands, except per share amounts)
Years Ended
December 30,2022
December 31,2021
December 25,2020
Net Sales
2,143,521
1,987,608
1,650,115
Cost of products sold
1,086,082
953,659
795,178
Gross Profit
1,057,439
1,033,949
854,937
Product
|
YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
STATEMENTS OF EARNINGS
(In thousands, except per share amounts)
Years Ended
December 30,2022
December 31,2021
December 25,2020
Net Sales
2,143,521
1,987,608
1,650,115
Cost of products sold
1,086,082
953,659
795,178
Gross Profit
1,057,439
1,033,949
854,937
Product development
80,008
79,651
72,194
Selling, marketing and distribution
250,948
271,526
220,271
General and administrative
153,783
151,449
135,525
Impairment
35,229
Operating Earnings
572,700
531,323
391,718
Interest expense
9,897
10,215
11,280
Other expense (income), net
(2,921)
12,643
5,787
Earnings Before Income Taxes
565,724
508,465
374,651
Income taxes
105,079
68,599
44,195
Net Earnings
460,645
439,866
330,456
|
YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
Operating Earnings
572,700
531,323
391,718
Interest expense
9,897
10,215
11,280
Other expense (income), net
(2,921)
12,643
5,787
Earnings Before Income Taxes
565,724
508,465
374,651
Income taxes
105,079
68,599
44,195
Net Earnings
460,645
439,866
330,456
Basic Net Earnings per Common Share
2.73
2.59
1.97
Diluted Net Earnings per Common Share
2.66
2.52
1.92
See notes to consolidated financial statements.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands)
Years Ended
December 30,2022
December 31,2021
December 25,2020
Net Earnings
460,645
439,866
330,456
Components of other comprehensive income (loss)
Cumulative translation adjustment
(9,582)
(10,026)
46,030
Pension and postretirement medical liability adjustment
25,630
68,669
(645)
Income
|
YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Source:
cik:42888
ticker:GGG
name:GRACO INC
exchange:NYSE
filing_type:10-K
Text:
COMPREHENSIVE INCOME
(In thousands)
Years Ended
December 30,2022
December 31,2021
December 25,2020
Net Earnings
460,645
439,866
330,456
Components of other comprehensive income (loss)
Cumulative translation adjustment
(9,582)
(10,026)
46,030
Pension and postretirement medical liability adjustment
25,630
68,669
(645)
Income taxes - pension and postretirement medical liability
(5,257)
(14,647)
237
Other comprehensive income
10,791
43,996
45,622
Comprehensive Income
471,436
483,862
376,078
See notes to consolidated financial statements.
36
Table of Contents
GRACO INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts)
December 30,2022
December 31,2021
ASSETS
Current Assets
Cash and cash equivalents
339,196
624,302
Accounts receivable, less allowances of $7,000 and $3,900
346,010
325,132
In
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