print

Graco Reports Record Sales and Operating Earnings

MINNEAPOLIS–Graco Inc. (NYSE: GGG) announced results for the second quarter ended June 29, 2018.

2nd quarter sales = $424.6 million; 6 month sales =$830.9 million

2nd quarter profit up 13%; 6 month profit up 20% as compared to the same periods in 2017.

Summary

$ in millions except per share amounts
Three Months Ended Six Months Ended
Jun 29, Jun 30, % Jun 29, Jun 30, %
2018 2017 Change 2018 2017 Change
Net Sales $ 424.6 $ 379.5 12 % $ 830.9 $ 720.1 15 %
Operating Earnings 113.4 100.4 13 % 225.1 187.8 20 %
Net Earnings 89.1 79.8 12 % 174.7 140.6 24 %

• Sales for the quarter and year to date increased double-digit percentages with growth in all segments.

• Gross margin rates remained strong, up slightly compared to the comparable periods last year.

• Operating expenses increased 12 percent for the quarter and year to date, including a total of 4 percentage points from currency translation and acquired operations.

• Other expense increased $4 million for the quarter and $3 million year to date, mostly due to exchange losses on net assets of foreign operations.

• The effective income tax rate decreased by 1 percentage point for the quarter and 3 percentage points      for the year to date, as the net benefits of U.S. federal income tax reform were partially offset by the impact of decreases in excess tax benefits from option exercises.

• Excess tax benefits from option exercises decreased compared to last year by $7 million for the quarter and $9 million for the year to date.

“With the help of our employees and channel partners around the world, we again achieved record sales and operating earnings for the quarter, led by growth in the Process and Contractor segments,” said Patrick J. McHale, Graco’s President and CEO.

“Our Industrial segment moderated in the quarter, however their year-to-date results were in line with our expectations. Profitability remained strong in the second quarter, reflecting improved sales volumes, ongoing solid factory performance and good operating expense leverage.”

Sales for the quarter increased 12 percent (9 percent at consistent translation rates), with increases of 11 percent in the Americas, 11 percent in EMEA (4 percent at consistent translation rates) and 15 percent in Asia Pacific (10 percent at consistent translation rates). Sales for the year to date increased 15 percent (12 percent at consistent translation rates), with increases of 11 percent in the Americas, 19 percent in EMEA (9 percent at consistent translation rates) and 25 percent in Asia Pacific (19 percent at consistent translation rates).

Gross profit margin rates improved slightly for the quarter and year to date. Favorable effects from currency translation and realized pricing were mostly offset by the unfavorable effects of lower gross margins from acquired operations and changes in product and channel mix.

Contractor segment sales increased in all channels. Operating margin rates for the quarter and year to date improved slightly compared to the comparable periods last year. Favorable effects of translation and expense leverage were offset by increases in volume and earnings-based incentive costs.

Outlook

“Demand remains broad-based across products and geographies,” stated McHale. “We are holding to our outlook of mid-to-high single-digit organic sales growth on a constant currency basis worldwide for the full year 2018. Although we anticipate second half pressures from tariffs, material costs and currency, we are encouraged by the strong levels of demand in many of our key end markets. As a result, we believe Graco is well positioned to deliver another record year of sales and earnings in 2018.”

PPT has edited this News item for length and content; please go to the link noted below for more detailed information.

http://investors.graco.com/phoenix.zhtml?c=109328&p=RssLanding&cat=news&id=2360031

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.

Contact Information

Graco

Comments

Leave a Reply

Comment

Security Code:


Extension Media websites place cookies on your device to give you the best user experience. By using our websites, you agree to placement of these cookies and to our Privacy Policy. Please click here to accept.