print

Graco Reports Record Sales & Earnings

Graco Inc. (NYSE: GGG) announced results for the second quarter and six months ended June 30, 2017.

Strong Sales Growth in All Segments and Regions
Raises Full-Year Outlook
Summary
$ in millions except per share amounts
Three Months Ended Six Months Ended
Jun 30, Jun 24, % Jun 30, Jun 24, %
2017 2016 Change 2017 2016 Change
Net Sales $ 379.5 $ 348.1 9 % $ 720.1 $ 653.0 10 %
Operating Earnings 98.8 78.3 26 % 184.6 139.3 33 %
Net Earnings 79.8 50.9 57 % 140.6 90.5 55 %
Diluted Net Earnings per Common Share $ 1.38 $ 0.89 55 % $ 2.43 $ 1.59 53 %

Gross profit margin rates for the quarter and year to date increased due to higher production volume and realized pricing.

Solid sales growth combined with improved gross margins and lower operating expenses levered operating earnings to increases of 26 percent and 33 percent for the quarter and year to date, respectively.

“I am pleased with Graco’s second quarter performance, where we achieved our second consecutive quarter of record sales on double-digit growth on an organic, constant currency basis. This is also the second consecutive quarter where we have achieved growth in every region and reportable segment, as well as growth within every segment in every region,” said Patrick J. McHale, Graco’s President and CEO.

“Profitability remained strong in the second quarter, reflecting similar trends from the first quarter of improved sales volumes, increased gross margin performance and solid operating expense leverage. Our employees, end users and channel partners around the world were instrumental to our performance through the first half and I thank them all for their hard work.”

Consolidated Results

Sales for the quarter increased 9 percent, with increases of

7 percent in the Americas,

9 percent in EMEA (12 percent at consistent translation rates) and

18 percent in Asia Pacific (20 percent at consistent translation rates).

Sales for the year to date increased 10 percent, with increases of

11 percent in the Americas,

7 percent in EMEA (11 percent at consistent translation rates) and

14 percent in Asia Pacific (16 percent at consistent translation rates).

Segment Results

Certain measurements of segment operations are summarized below:

Three Months Ended Six Months Ended
Industrial Process Contractor Industrial Process Contractor
Net sales (in millions) $ 174.9 $ 73.4 $ 131.2 $ 331.3 $ 143.4 $ 245.4
Percentage change from last year
Sales 11 % 13 % 4 % 9 % 11 % 12 %
Operating earnings 21 % 76 % 15 % 19 % 80 % 30 %
Operating earnings as a percentage of sales
2017 35 % 18 % 26 % 35 % 19 % 24 %
2016 33 % 12 % 23 % 32 % 12 % 21 %


Contractor segment
sales increased 4 percent compared to second quarter last year, which included new product launches that created a tough comparable for this year. Operating margin rates for the Contractor segment increased 3 percentage points compared to last year due to higher sales volume, improved gross margin rate and favorable expense leverage.

Outlook

“Demand in the second quarter remained broad-based across products and geographies and continues to exceed our expectations,” stated McHale. “As a result, we are raising our full-year 2017 outlook to mid-to-high single-digit organic sales growth on a constant currency basis worldwide, from a prior outlook of mid single-digit growth. We expect to achieve mid-to-high single-digit growth in each geographic region for the full year 2017.”

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 & Subsidiaries
Consolidated Statements of Earnings (Unaudited)
(In thousands except per share amounts)
Three Months Ended Six Months Ended
Jun 30, Jun 24, Jun 30, Jun 24,
2017 2016 2017 2016
Net Sales $ 379,483 $ 348,126 $ 720,073 $ 653,038
Cost of products sold 175,542 162,985 330,859 306,101
Gross Profit 203,941 185,141 389,214 346,937
Product development 14,901 15,607 29,400 30,293
Selling, marketing and distribution 56,060 56,136 110,971 108,837
General and administrative 34,211 35,056 64,253 68,516
Operating Earnings 98,769 78,342 184,590 139,291
Interest expense 4,154 4,543 8,209 9,036
Other expense (income), net (989 ) 392 (798 ) (754 )
Earnings Before Income Taxes 95,604 73,407 177,179 131,009
Income taxes 15,776 22,460 36,619 40,510
Net Earnings $ 79,828 $ 50,947 $ 140,560 $ 90,499
Net Earnings per Common Share
Basic $ 1.43 $ 0.92 $ 2.52 $ 1.63
Diluted $ 1.38 $ 0.89 $ 2.43 $ 1.59
Weighted Average Number of Shares
Basic 55,801 55,634 55,785 55,514
Diluted 57,927 57,040 57,820 56,875

The Consolidated Balance Sheets, Consolidated Statements of Cash Flows and Management’s Discussion and Analysis are available in our Quarterly Report on Form 10-Q on our website at www.graco.com.

Source: http://investors.graco.com/phoenix.zhtml?c=109328&p=RssLanding&cat=news&id=2289103

Contact Information

Graco

Comments

Leave a Reply

Comment

Security Code: