Graco Reports Record Sales and Operating Earnings
Fourth Quarter and Annual Sales Growth in All Segments and Regions
Graco Inc. (NYSE: GGG) today announced results for the quarter and year ended December 28, 2018.
Summary
$ in millions except per share amounts
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Three Months Ended |
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Twelve Months Ended |
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Dec 28,
2018 |
|
Dec 29,
2017 |
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%
Change
|
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Dec 28,
2018 |
|
Dec 29,
2017 |
|
%
Change
|
Net Sales |
|
$ |
406.4 |
|
|
$ |
374.9 |
|
|
8 % |
|
$ |
1,653.3 |
|
|
$ |
1,474.7 |
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12 % |
Operating Earnings |
|
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96.6 |
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|
89.5 |
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8 % |
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436.4 |
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378.7 |
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15 % |
Net Earnings |
|
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73.7 |
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|
36.4 |
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103 % |
|
|
341.1 |
|
|
|
252.4 |
|
|
35 % |
Diluted Net Earnings per Common Share |
|
$ |
0.43 |
|
|
$ |
0.21 |
|
|
105 % |
|
$ |
1.97 |
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$ |
1.45 |
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36 % |
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Adjusted (non-GAAP): (1) |
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Net Earnings, adjusted |
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$ |
73.5 |
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$ |
59.4 |
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24 % |
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$ |
326.1 |
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$ |
249.4 |
|
|
31 % |
Diluted Net Earnings per Common Share, adjusted |
|
$ |
0.43 |
|
|
$ |
0.34 |
|
|
26 % |
|
$ |
1.88 |
|
|
$ |
1.43 |
|
|
31 % |
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(1) Excludes impacts of excess tax benefits from stock option exercises, certain tax provision
adjustments and pension restructuring. See Financial Results Adjusted for Comparability below for a reconciliation of
adjusted non-GAAP financial measures to GAAP.
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- Graco achieved its stated revenue growth target for the year, as sales for the quarter increased in
all segments and regions. Effects of currency translation reduced sales growth for the quarter by 2 percentage points and
increased growth for the year by 1 percentage point. Acquired operations contributed 2 percentage points of growth to the quarter
and 3 percentage points to the year.
- Gross margin rate for the quarter decreased by 2 percentage points compared to the comparable period
last year mostly due to the effects of product mix and higher material costs.
- Operating expense increased 1 percent for the quarter and 7 percent for the year. Expenses of
acquired operations accounted for 2 percentage points of the annual increase.
- Other expense decreased $9 million for the quarter and $4 million for the year. The fourth quarter
last year included $12 million related to pension plan restructuring. Exchange losses on net assets of foreign operations
increased other expense by $5 million for the year, and market-based pension cost increased by $2 million for both the quarter
and the year.
- In the fourth quarter, the Company purchased 2.2 million of its common shares in open market
transactions at an average price under $40 per share. Purchases for the year totaled $245 million and reduced share count by 5.7
million.
- The effective income tax rate decreased 32 percentage points for the quarter and 10 percentage points
for the year. The effects of U.S. federal income tax reform were partially offset by the impacts of decreases in excess tax
benefits from option exercises and other non-recurring tax changes.
“2018 was another record setting year, reflecting both the strong demand from our customers and the outstanding efforts of our
employees, distributors and suppliers,” said Patrick J. McHale, Graco’s President and CEO. “On an organic, constant currency basis
for the year, we grew our sales 8 percent and operating earnings 11 percent, achieving our stated target of mid-to-high
single-digit revenue growth for the year. This growth occurred in every region and every segment, demonstrating the solid and
consistent performance by our teams throughout the year.”
Consolidated Results
Sales for the quarter increased 8 percent, with increases of 6 percent in the Americas, 11 percent in EMEA (14 percent at
consistent translation rates) and 13 percent in Asia Pacific (16 percent at consistent translation rates). Sales for the year
increased 12 percent (11 percent at consistent translation rates), with increases of 9 percent in the Americas, 15 percent in EMEA
(11 percent at consistent translation rates) and 19 percent in Asia Pacific (17 percent at consistent translation rates).
For the quarter, changes in currency translation decreased sales by approximately $5 million (2 percentage points). For the
year, changes in currency translation increased sales by approximately $15 million (1 percentage point). Acquired operations
contributed 2 percentage points of sales growth for the quarter and 3 percentage points for the year.
Gross profit margin rate for the quarter decreased from the comparable period last year due to changes in product mix, factory
spending, tariffs and material costs. Gross margin rate for the year was slightly lower than the rate for last year. The
unfavorable effects of lower margin rates of acquired operations and higher factory spending and material costs more than offset
the favorable effects of currency translation and realized pricing.
Total operating expenses for the quarter increased $1 million (1 percent) compared to the fourth quarter last year, including
approximately $3 million (3 percentage points) from acquired operations. Operating expenses for the year increased $30 million (7
percent) compared to last year. The increase includes $8 million from acquired operations, approximately $3 million related to
currency translation, $5 million of increases directly based on volume and earnings, and $2 million of incremental share-based
compensation.
Other expense in the fourth quarter of 2017 included a $12 million loss related to the restructuring of the Company's funded
U.S. pension plan. Other expense for 2018 included $3 million of exchange losses on net assets of foreign operations, compared to
$2 million of gains last year. Market-based pension cost included in other expense increased by $2 million for both the quarter and
the year.
The effective income tax rate was 18 percent for the quarter and 17 percent for the year, down 32 percentage points and 10
percentage points from the comparable periods last year, respectively. Adjusted to exclude the impacts of excess tax benefits
related to stock option exercises, the 2017 provisions totaling $36 million related to tax reform legislation, the benefit from a
$40 million contribution to a pension plan in 2018, and the benefits from other tax planning activities (see Financial Results
Adjusted for Comparability below), the effective income tax rate was 18.4 percent for the quarter and 20.6 percent for the year,
compared to 31 percent for both of the comparable periods last year. The adjusted rates were lower in 2018 due to the net effects
of U.S. federal income tax reform legislation passed at the end of 2017.
Segment Results
Management assesses performance of segments by reference to operating earnings excluding unallocated corporate expenses. For a
reconciliation of segment operating earnings to consolidated operating earnings, refer to the Segment Information table included in
the financial statement section of this release. Certain measurements of segment operations are summarized below:
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Three Months |
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Twelve Months |
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Industrial |
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Process |
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Contractor |
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Industrial |
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Process |
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Contractor |
Net Sales (in millions) |
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$ |
199.5 |
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$ |
88.3 |
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$ |
118.6 |
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$ |
781.0 |
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$ |
338.0 |
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$ |
534.3 |
|
Percentage change from last year |
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Sales |
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9 |
% |
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14 |
% |
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3 |
% |
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13 |
% |
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|
15 |
% |
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9 |
% |
Operating earnings |
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|
7 |
% |
|
|
20 |
% |
|
|
(11 |
)% |
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|
14 |
% |
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|
31 |
% |
|
|
6 |
% |
Operating earnings as a percentage of sales |
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2018
|
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|
32 |
% |
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18 |
% |
|
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15 |
% |
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35 |
% |
|
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20 |
% |
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23 |
% |
2017
|
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|
33 |
% |
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17 |
% |
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18 |
% |
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|
34 |
% |
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18 |
% |
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23 |
% |
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Components of net sales change by geographic region for the Industrial segment were as follows:
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Three Months |
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Twelve Months |
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Volume
and Price
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Acquisitions |
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Currency |
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Total |
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Volume
and Price
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Acquisitions |
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Currency |
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Total |
Americas |
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4% |
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0% |
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0% |
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4% |
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5% |
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0% |
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0% |
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5% |
EMEA |
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5% |
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10% |
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(3)% |
|
12% |
|
3% |
|
11% |
|
4% |
|
18% |
Asia Pacific |
|
13% |
|
6% |
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(3)% |
|
16% |
|
12% |
|
6% |
|
2% |
|
20% |
Consolidated |
|
7% |
|
4% |
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(2)% |
|
9% |
|
6% |
|
5% |
|
2% |
|
13% |
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Industrial segment sales growth included $8 million for the quarter and $35 million for the year from acquired operations.
Increases in finishing systems sales at lower margin rates pushed operating earnings as a percentage of sales down in the fourth
quarter. Favorable expense leverage in the quarter helped mitigate the unfavorable effects of product mix and acquired operations
on operating returns. For the year, the favorable effects of translation and volume more than offset the effects of purchase
accounting and lower operating margins in acquired operations.
Components of net sales change by geographic region for the Process segment were as follows:
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Three Months |
|
Twelve Months |
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|
Volume
and Price
|
|
Acquisitions |
|
Currency |
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Total |
|
Volume
and Price
|
|
Acquisitions |
|
Currency |
|
Total |
Americas |
|
17% |
|
0% |
|
(1)% |
|
16% |
|
14% |
|
1% |
|
0% |
|
15% |
EMEA |
|
5% |
|
0% |
|
(2)% |
|
3% |
|
1% |
|
0% |
|
3% |
|
4% |
Asia Pacific |
|
19% |
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0% |
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(3)% |
|
16% |
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23% |
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1% |
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1% |
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25% |
Consolidated |
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15% |
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0% |
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(1)% |
|
14% |
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13% |
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1% |
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1% |
|
15% |
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The Process segment had strong sales growth in all product applications for both the quarter and the year. Operating margin
rates for this segment improved by 1 percentage point for the quarter and 2 percentage points for the year, driven by higher sales
volume and expense leverage.
Components of net sales change by geographic region for the Contractor segment were as follows:
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Three Months |
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Twelve Months |
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|
Volume
and Price
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|
Acquisitions |
|
Currency |
|
Total |
|
Volume
and Price
|
|
Acquisitions |
|
Currency |
|
Total |
Americas |
|
1% |
|
0% |
|
0% |
|
1% |
|
8% |
|
1% |
|
0% |
|
9% |
EMEA |
|
18% |
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0% |
|
(3)% |
|
15% |
|
10% |
|
0% |
|
4% |
|
14% |
Asia Pacific |
|
(5)% |
|
0% |
|
(3)% |
|
(8)% |
|
4% |
|
0% |
|
1% |
|
5% |
Consolidated |
|
4% |
|
0% |
|
(1)% |
|
3% |
|
8% |
|
1% |
|
0% |
|
9% |
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Contractor segment sales growth for the quarter flattened in the Americas against a strong fourth quarter last year, where sales
were up 10 percent over the previous year. A lower gross margin rate driven by product and channel mix and higher factory spending,
tariffs and material costs led to a 3 percentage point decrease in operating margin rate for the quarter. Operating margin rates
for the year were flat compared to last year. Favorable effects of currency translation offset the effects of lower gross margin
rate and increases in product development costs.
Outlook
“Heading into a new year, the business is performing well and demand levels worldwide remain solid. As a result, we are
initiating a revenue growth outlook for the full-year 2019 of mid single-digits on an organic, constant currency basis, with growth
expected in every region and reportable segment,” said McHale.
Financial Results Adjusted for Comparability
Multiple events in the last two years caused significant fluctuations in financial results. The restructuring of the Company's
funded U.S. pension plan resulted in a $12 million settlement loss in 2017. U.S. federal income tax reform legislation passed at
the end of 2017 required a revaluation of net deferred tax assets and instituted a toll charge on unrepatriated foreign earnings
that together increased income taxes by a total of $36 million in 2017. Excess tax benefits related to stock option exercises
reduced income taxes by $10 million in 2018 and $36 million in 2017. Other benefits from tax planning activities further reduced
income taxes in 2018 and 2017.
Excluding the impacts of those items presents a more consistent basis for comparison of financial results. A calculation of the
non-GAAP measurements of adjusted earnings before income taxes, income taxes, effective income tax rates, net earnings and diluted
earnings per share follows (in millions except per share amounts):
|
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|
|
Three Months Ended |
|
Twelve Months Ended |
|
|
Dec 28,
2018
|
|
Dec 29,
2017
|
|
Dec 28,
2018 |
|
Dec 29,
2017 |
Earnings before income taxes |
|
$ |
90.0 |
|
|
$ |
73.5 |
|
|
$ |
410.8 |
|
|
$ |
347.1 |
|
Pension settlement loss |
|
|
— |
|
|
|
12.1 |
|
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|
— |
|
|
|
12.1 |
|
Earnings before income taxes, adjusted |
|
$ |
90.0 |
|
|
$ |
85.6 |
|
|
$ |
410.8 |
|
|
$ |
359.2 |
|
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|
|
|
|
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|
|
Income taxes, as reported |
|
$ |
16.3 |
|
|
$ |
37.1 |
|
|
$ |
69.7 |
|
|
$ |
94.7 |
|
Excess tax benefit from option exercises |
|
|
0.2 |
|
|
|
15.8 |
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|
10.0 |
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|
36.3 |
|
Income tax reform |
|
|
— |
|
|
|
(35.6 |
) |
|
|
— |
|
|
|
(35.6 |
) |
Other non-recurring tax changes |
|
|
— |
|
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|
4.5 |
|
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|
5.0 |
|
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|
10.0 |
|
Tax effects of adjustments |
|
|
— |
|
|
|
4.4 |
|
|
|
— |
|
|
|
4.4 |
|
Income taxes, adjusted |
|
$ |
16.5 |
|
|
$ |
26.2 |
|
|
$ |
84.7 |
|
|
$ |
109.8 |
|
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|
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|
Effective income tax rate |
|
|
|
|
|
|
|
|
As reported |
|
|
18.1 |
% |
|
|
50.5 |
% |
|
|
17.0 |
% |
|
|
27.3 |
% |
Adjusted |
|
|
18.4 |
% |
|
|
30.7 |
% |
|
|
20.6 |
% |
|
|
30.6 |
% |
|
|
|
|
|
|
|
|
|
Net Earnings, as reported |
|
$ |
73.7 |
|
|
$ |
36.4 |
|
|
$ |
341.1 |
|
|
$ |
252.4 |
|
Pension settlement loss, net |
|
|
— |
|
|
|
7.7 |
|
|
|
— |
|
|
|
7.7 |
|
Excess tax benefit from option exercises |
|
|
(0.2 |
) |
|
|
(15.8 |
) |
|
|
(10.0 |
) |
|
|
(36.3 |
) |
Income tax reform |
|
|
— |
|
|
|
35.6 |
|
|
|
— |
|
|
|
35.6 |
|
Other non-recurring tax changes |
|
|
— |
|
|
|
(4.5 |
) |
|
|
(5.0 |
) |
|
|
(10.0 |
) |
Net Earnings, adjusted |
|
$ |
73.5 |
|
|
$ |
59.4 |
|
|
$ |
326.1 |
|
|
$ |
249.4 |
|
|
|
|
|
|
|
|
|
|
Weighted Average Diluted Shares |
|
|
170.9 |
|
|
|
175.7 |
|
|
|
173.2 |
|
|
|
174.3 |
|
Diluted Earnings per Share |
|
|
|
|
|
|
|
|
As reported |
|
$ |
0.43 |
|
|
$ |
0.21 |
|
|
$ |
1.97 |
|
|
$ |
1.45 |
|
Adjusted |
|
$ |
0.43 |
|
|
$ |
0.34 |
|
|
$ |
1.88 |
|
|
$ |
1.43 |
|
|
|
|
|
|
|
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Cautionary Statement Regarding Forward-Looking Statements
The Company 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 our Form 10-K, Form 10-Qs and Form 8-Ks, and other
disclosures, including our 2017 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. The Company 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: our Company’s growth strategies, which include making acquisitions, investing in new products,
expanding geographically and targeting new industries; economic conditions in the United States and other major world economies;
changes in tax rates or the adoption of new tax legislation; changes in currency translation rates; changes in laws and
regulations; compliance with anti-corruption and trade laws; new entrants who copy our products or infringe on our intellectual
property; risks incident to conducting business internationally; the ability to meet our customers’ needs and changes in product
demand; supply interruptions or delays; security breaches; the possibility of asset impairments if acquired businesses do not meet
performance expectations; political instability; results of and costs associated with litigation, administrative proceedings and
regulatory reviews incident to our business; the possibility of decline in purchases from a few large customers of the Contractor
segment; variations in activity in the construction, automotive, mining and oil and natural gas industries; our ability to attract,
develop and retain qualified personnel; and catastrophic events. Please refer to Item 1A of our Annual Report on Form 10-K for
fiscal year 2017 (and most recent Form 10-Q) for a more comprehensive discussion of these and other risk factors. These reports are
available on the Company’s website at
www.graco.com and the Securities and Exchange Commission’s website at
www.sec.gov. 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 above and 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.
Conference Call
Graco management will hold a conference call, including slides via webcast, with analysts and institutional investors on
Tuesday, Jan. 29, 2019, at 11 a.m. ET, 10 a.m. CT, to discuss Graco’s fourth quarter results.
A real-time webcast of the conference call will be broadcast live over the internet. Individuals wanting to listen and view
slides can access the call at the Company’s website at
www.graco.com. Listeners should go to the website at least 15 minutes prior to the live conference call to install any
necessary audio software.
For those unable to listen to the live event, a replay will be available soon after the conference call at Graco’s website, or
by telephone beginning at approximately 2 p.m. ET on Tuesday, Jan. 29, 2019, by dialing 888-203-1112, Conference ID #5631887, if
calling within the U.S. or Canada. The dial-in number for international participants is 719-457-0820, with the same Conference ID
#. The replay by telephone will be available through 2 p.m. ET Saturday, Feb. 2, 2019.
About Graco
Graco Inc. supplies technology and expertise for the management of fluids and coatings in both industrial and commercial
applications. It designs, manufactures and markets systems and equipment to move, measure, control, dispense and spray fluid and
powder materials. A recognized leader in its specialties, Minneapolis-based Graco serves customers around the world in the
manufacturing, processing, construction and maintenance industries. For additional information about Graco Inc., please visit us at
www.graco.com or on Twitter @GracoInc.
|
GRACO INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited)
(In thousands except per share amounts)
|
|
|
|
|
|
|
|
Three Months Ended |
|
Twelve Months Ended |
|
|
Dec 28,
2018 |
|
Dec 29,
2017 |
|
Dec 28,
2018 |
|
Dec 29,
2017 |
Net Sales |
|
$ |
406,438 |
|
|
$ |
374,859 |
|
|
$ |
1,653,292 |
|
|
$ |
1,474,744 |
|
Cost of products sold |
|
|
197,682 |
|
|
|
174,092 |
|
|
|
770,753 |
|
|
|
679,542 |
|
Gross Profit |
|
|
208,756 |
|
|
|
200,767 |
|
|
|
882,539 |
|
|
|
795,202 |
|
Product development |
|
|
15,989 |
|
|
|
15,744 |
|
|
|
63,124 |
|
|
|
59,217 |
|
Selling, marketing and distribution |
|
|
62,732 |
|
|
|
64,011 |
|
|
|
245,473 |
|
|
|
231,364 |
|
General and administrative |
|
|
33,461 |
|
|
|
31,547 |
|
|
|
137,515 |
|
|
|
125,876 |
|
Operating Earnings |
|
|
96,574 |
|
|
|
89,465 |
|
|
|
436,427 |
|
|
|
378,745 |
|
Interest expense |
|
|
3,678 |
|
|
|
4,092 |
|
|
|
14,385 |
|
|
|
16,202 |
|
Other expense, net |
|
|
2,851 |
|
|
|
11,850 |
|
|
|
11,276 |
|
|
|
15,449 |
|
Earnings Before Income Taxes |
|
|
90,045 |
|
|
|
73,523 |
|
|
|
410,766 |
|
|
|
347,094 |
|
Income taxes |
|
|
16,322 |
|
|
|
37,131 |
|
|
|
69,712 |
|
|
|
94,682 |
|
Net Earnings |
|
$ |
73,723 |
|
|
$ |
36,392 |
|
|
$ |
341,054 |
|
|
$ |
252,412 |
|
Net Earnings (Loss) per Common Share |
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.44 |
|
|
$ |
0.22 |
|
|
$ |
2.04 |
|
|
$ |
1.50 |
|
Diluted |
|
$ |
0.43 |
|
|
$ |
0.21 |
|
|
$ |
1.97 |
|
|
$ |
1.45 |
|
Weighted Average Number of Shares |
|
|
|
|
|
|
|
|
Basic |
|
|
165,875 |
|
|
|
168,924 |
|
|
|
167,364 |
|
|
|
167,925 |
|
Diluted |
|
|
170,899 |
|
|
|
175,738 |
|
|
|
173,213 |
|
|
|
174,318 |
|
|
|
|
|
|
SEGMENT INFORMATION (Unaudited)
(In thousands)
|
|
|
|
|
|
|
|
Three Months Ended |
|
Twelve Months Ended |
|
|
Dec 28,
2018 |
|
Dec 29,
2017 |
|
Dec 28,
2018 |
|
Dec 29,
2017 |
Net Sales |
|
|
|
|
|
|
|
|
Industrial |
|
$ |
199,519 |
|
|
$ |
182,259 |
|
|
$ |
781,029 |
|
|
$ |
691,978 |
|
Process |
|
|
88,303 |
|
|
|
77,568 |
|
|
|
337,953 |
|
|
|
294,652 |
|
Contractor |
|
|
118,616 |
|
|
|
115,032 |
|
|
|
534,310 |
|
|
|
488,114 |
|
Total |
|
$ |
406,438 |
|
|
$ |
374,859 |
|
|
$ |
1,653,292 |
|
|
$ |
1,474,744 |
|
Operating Earnings |
|
|
|
|
|
|
|
|
Industrial |
|
$ |
64,580 |
|
|
$ |
60,579 |
|
|
$ |
271,307 |
|
|
$ |
237,700 |
|
Process |
|
|
15,885 |
|
|
|
13,247 |
|
|
|
68,514 |
|
|
|
52,216 |
|
Contractor |
|
|
18,373 |
|
|
|
20,649 |
|
|
|
120,905 |
|
|
|
113,898 |
|
Unallocated corporate (expense) |
|
|
(2,264 |
) |
|
|
(5,010 |
) |
|
|
(24,299 |
) |
|
|
(25,069 |
) |
Total |
|
$ |
96,574 |
|
|
$ |
89,465 |
|
|
$ |
436,427 |
|
|
$ |
378,745 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GRACO INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (Unaudited)
(In thousands)
|
|
|
|
|
|
|
|
Dec 28,
2018 |
|
Dec 29,
2017 |
ASSETS |
|
|
|
|
Current Assets |
|
|
|
|
Cash and cash equivalents |
|
$ |
132,118 |
|
|
$ |
103,662 |
|
Accounts receivable, less allowances of $5,300 and $4,300 |
|
|
274,608 |
|
|
|
266,080 |
|
Inventories |
|
|
283,982 |
|
|
|
239,349 |
|
Other current assets |
|
|
32,508 |
|
|
|
34,247 |
|
Total current assets |
|
|
723,216 |
|
|
|
643,338 |
|
Property, Plant and Equipment, net |
|
|
229,295 |
|
|
|
204,298 |
|
Goodwill |
|
|
293,846 |
|
|
|
278,789 |
|
Other Intangible Assets, net |
|
|
166,310 |
|
|
|
183,056 |
|
Deferred Income Taxes |
|
|
32,055 |
|
|
|
50,916 |
|
Other Assets |
|
|
28,019 |
|
|
|
30,220 |
|
Total Assets |
|
$ |
1,472,741 |
|
|
$ |
1,390,617 |
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
Current Liabilities |
|
|
|
|
Notes payable to banks |
|
$ |
11,083 |
|
|
$ |
6,578 |
|
Trade accounts payable |
|
|
56,902 |
|
|
|
48,748 |
|
Salaries and incentives |
|
|
62,297 |
|
|
|
55,884 |
|
Dividends payable |
|
|
26,480 |
|
|
|
22,260 |
|
Other current liabilities |
|
|
143,041 |
|
|
|
112,368 |
|
Total current liabilities |
|
|
299,803 |
|
|
|
245,838 |
|
Long-term Debt |
|
|
266,391 |
|
|
|
226,035 |
|
Retirement Benefits and Deferred Compensation |
|
|
133,388 |
|
|
|
172,411 |
|
Deferred Income Taxes |
|
|
16,586 |
|
|
|
17,253 |
|
Other Non-current Liabilities |
|
|
4,700 |
|
|
|
6,017 |
|
Shareholders’ Equity |
|
|
|
|
Common stock |
|
|
165,171 |
|
|
|
169,319 |
|
Additional paid-in-capital |
|
|
510,825 |
|
|
|
499,934 |
|
Retained earnings |
|
|
220,734 |
|
|
|
181,599 |
|
Accumulated other comprehensive income (loss) |
|
|
(144,857 |
) |
|
|
(127,789 |
) |
Total shareholders’ equity |
|
|
751,873 |
|
|
|
723,063 |
|
Total Liabilities and Shareholders’ Equity |
|
$ |
1,472,741 |
|
|
$ |
1,390,617 |
|
|
|
|
|
|
|
|
|
|
|
|
|
GRACO INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In thousands)
|
|
|
|
|
|
Year Ended |
|
|
Dec 28,
2018 |
|
Dec 29,
2017 |
Cash Flows From Operating Activities |
|
|
|
|
Net Earnings |
|
$ |
341,054 |
|
|
$ |
252,412 |
|
Adjustments to reconcile net earnings to net cash
provided by operating activities |
|
|
|
|
Depreciation and amortization |
|
|
47,754 |
|
|
|
45,583 |
|
Deferred income taxes |
|
|
15,405 |
|
|
|
34,446 |
|
Share-based compensation |
|
|
25,565 |
|
|
|
23,652 |
|
Change in |
|
|
|
|
Accounts receivable |
|
|
(12,402 |
) |
|
|
(37,669 |
) |
Inventories |
|
|
(30,719 |
) |
|
|
(32,011 |
) |
Trade accounts payable |
|
|
(1,976
|
) |
|
|
4,588 |
|
Salaries and incentives |
|
|
2,336 |
|
|
|
11,431 |
|
Retirement benefits and deferred compensation |
|
|
(27,237 |
) |
|
|
6,920 |
|
Other accrued liabilities |
|
|
7,517 |
|
|
|
35,321 |
|
Other |
|
|
688 |
|
|
|
(6,808 |
) |
Net cash provided by operating activities |
|
|
367,985
|
|
|
|
337,865 |
|
Cash Flows From Investing Activities |
|
|
|
|
Property, plant and equipment additions |
|
|
(53,854 |
) |
|
|
(40,194 |
) |
Acquisition of businesses, net of cash acquired |
|
|
(10,769 |
) |
|
|
(27,905 |
) |
Other |
|
|
(1,624 |
) |
|
|
(348 |
) |
Net cash provided by (used in) investing activities |
|
|
(66,247 |
) |
|
|
(68,447 |
) |
Cash Flows From Financing Activities |
|
|
|
|
Borrowings (payments) on short-term lines of credit, net |
|
|
4,931 |
|
|
|
(3,026 |
) |
Borrowings on long-term lines of credit |
|
|
620,746 |
|
|
|
315,920 |
|
Payments on long-term debt and lines of credit |
|
|
(583,212 |
) |
|
|
(395,570 |
) |
Common stock issued |
|
|
24,634 |
|
|
|
60,685 |
|
Common stock repurchased |
|
|
(244,814
|
) |
|
|
(90,160 |
) |
Taxes paid related to net share settlement of equity awards |
|
|
(16,151 |
) |
|
|
(24,448 |
) |
Cash dividends paid |
|
|
(88,845 |
) |
|
|
(80,477 |
) |
Net cash provided by (used in) financing activities |
|
|
(282,711
|
) |
|
|
(217,076 |
) |
Effect of exchange rate changes on cash |
|
|
187 |
|
|
|
(1,032 |
) |
Net increase (decrease) in cash and cash equivalents |
|
|
19,214 |
|
|
|
51,310 |
|
Cash, Cash Equivalents and Restricted Cash |
|
|
|
|
Beginning of year |
|
|
112,904 |
|
|
|
61,594 |
|
End of year |
|
$ |
132,118 |
|
|
$ |
112,904 |
|
Reconciliation to Consolidated Balance Sheets |
|
|
|
|
Cash and cash equivalents |
|
$ |
132,118 |
|
|
$ |
103,662 |
|
Restricted cash included in other current assets |
|
|
— |
|
|
|
9,242 |
|
Cash, cash equivalents and restricted cash |
|
$ |
132,118 |
|
|
$ |
112,904 |
|
|
|
|
|
|
|
|
|
|
![](http://cts.businesswire.com/ct/CT?id=bwnews&sty=20190128005704r1&sid=mstr3&distro=nx&lang=en)
Financial Contact: Mark Sheahan, 612-623-6656
Media Contact: Charlotte Boyd, 612-623-6153
Charlotte_M_Boyd@graco.com
View source version on businesswire.com: https://www.businesswire.com/news/home/20190128005704/en/