Server: Netscape-Commerce/1.12 Date: Friday, 21-Nov-97 01:45:23 GMT Last-modified: Thursday, 09-Oct-97 21:42:33 GMT Content-length: 26460 Content-type: text/html Graco Inc. [ 1997 Quarterly Reports ]
GRACO  Quarterly Reports
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[ 1st Quarter, 1997 | 2nd Quarter, 1997 | 3rd Quarter, 1997 ]



FOR IMMEDIATE RELEASE: Monday, April 14, 1997
FOR FURTHER INFORMATION: Mark W. Sheahan (612) 623-6656


GRACO REPORTS FIRST QUARTER RESULTS
SALES INCREASE 2 PERCENT TO $92.1 MILLION
NET EARNINGS INCREASE 11 PERCENT TO $6.2 MILLION


MINNEAPOLIS, MN (April 14) - Graco Inc. (NYSE: GGG) today announced first quarter net sales of $92.1 million, a 2 percent increase from the same period last year (a 4 percent volume increase, and a decline of 2 percent due to exchange rates). Net earnings of $6.2 million, or 35 cents per share, a first quarter record, were up 11 percent over net earnings of $5.6 million, or 32 cents per share in the first quarter of 1996.

"Graco's sales accelerated during the final weeks of the quarter and orders received in March were at all time record levels. While shipments of lower margin Contractor Equipment products in March and unfavorable exchange rates in the quarter reduced our gross margin to 48%, we were still able to record our eleventh consecutive quarter of year-over-year earnings growth," said President and Chief Executive Officer George Aristides.

GRACO INC. AND SUBSIDIARIES
  First Quarter (13 weeks) Ended
(In thousands, except per share amounts)Mar. 28, 1997Mar. 29, 1996
NET SALES$92,099$90,153
NET EARNINGS$6,181$5,585
NET EARNINGS PER COMMON SHARE$0.35$0.32
Weighted Average Number of Common Shares17,50317,553

Worldwide Industrial/Automotive Equipment sales increased 6 percent from last year's first quarter, Contractor Equipment sales decreased 4 percent and Lubrication Equipment sales increased 6 percent. "Although sales in the Contractor Equipment business were slow in the first two months of the year, the month of March was strong and recent order trends support our positive view for the remainder of the year. Our backlog of $26.4 million has grown $7.3 million since the beginning of 1997," said Aristides.

First quarter sales in the Americas increased 1 percent to $62.6 million, while European sales increased 7 percent to $16.9 million (a 12 percent volume increase, and a decline of 5 percent due to exchange rates). In the Asia Pacific region, sales increased 1 percent to $12.6 million (a 9 percent volume increase, and a decline of 8 percent due to exchange rates).

First quarter operating results include income from the sale of Graco's Franklin Park, Illinois facility which completes the relocation of the company's industrial systems engineering and sales expertise to Minneapolis.

Mr. Aristides said, "Despite unfavorable exchange rates in the first quarter of 1997, we remain optimistic about improved financial performance for the year. We are encouraged by our order levels heading into the second quarter. Graco expects to introduce a number of new products in 1997 and our continued investments in product development, marketing, and manufacturing should have a positive impact on the Company in 1997 and our long-term ability to grow profitability."

Graco Inc. supplies technology and expertise for the management of fluids in both industrial and commercial applications. It designs, manufactures and markets systems and equipment to move, measure, control, dispense and apply fluid materials. A recognized leader in its specialties, Minneapolis-based Graco serves customers around the world in the manufacturing, processing, construction and maintenance industries.

GRACO INC. AND SUBSIDIARIES
Consolidated Statements of Earnings
  First Quarter (13 weeks) Ended
(In thousands, except per share amounts) March 28, 1997 March 29, 1996
NET SALES $92,099 $90,153
Cost of products sold 47,566 45,316
GROSS PROFIT 44,533 44,837
Product development 4,825 4,229
Selling 21,633 19,850
General and administrative 8,555 11,675
OPERATING PROFIT 9,520 9,083
Interest expense 207 232
Other (income)/expense, net (368) 566
EARNINGS BEFORE INCOME TAXES 9,681 8,285
Income taxes _3,500 2,700
NET EARNINGS $6,181 $5,585
NET EARNINGS PER COMMON SHARE $0.35 $0.32
Weighted Average Number of Common Shares 17,503 17,553

All figures are subject to audit and adjustment at the end of the fiscal year.






[ 1st Quarter, 1997 | 2nd Quarter, 1997 | 3rd Quarter, 1997 ]



FOR IMMEDIATE RELEASE: Friday, July 11, 1997
FOR FURTHER INFORMATION: Mark W. Sheahan (612) 623-6656


GRACO REPORTS SECOND QUARTER RESULTS
SALES INCREASE 15 PERCENT, NET EARNINGS INCREASE 4 PERCENT
THE HIGHEST QUARTERLY SALES AND EARNINGS IN COMPANY HISTORY


MINNEAPOLIS, MN (July 11) - Graco Inc. (NYSE: GGG) today announced record second quarter net sales of $111.7 million, a 15 percent increase from the same period last year. Net earnings of $10.4 million, or 60 cents per share, the highest quarterly earnings in Company history, were up 4 percent over net earnings of $10.0 million, or 57 cents per share in the second quarter of 1996. The 1996 earnings included pre-tax income of $1.5 million received by the Company in settlement of a lawsuit.

"The sales momentum that we reported at the end of the first quarter of 1997 continued in the second quarter, leading to record quarterly sales and earnings. While product mix, foreign exchange rates, and engineered system sales reduced our gross margins, we were able to record our twelfth consecutive quarter of year-over-year earnings growth," said Chief Executive Officer George Aristides.

GRACO INC. AND SUBSIDIARIES
  Second Quarter (13 weeks) Ended Six Months (26 weeks) Ended
(In Thousands, except per share amounts) June 27, 1997 June 28, 1996 June 27, 1997 June 28, 1996
NET SALES $111,721 $97,099 $203,820 $187,252
NET EARNINGS $10,418 $10,032 $16,599 $15,617
NET EARNINGS PER COMMON SHARE $0.60 $0.57 $0.95 $0.89
Weighted average number of common shares 17,492 17,588 17,495 17,571

Worldwide, Industrial/Automotive Equipment sales increased 9 percent from last year's second quarter, Contractor Equipment sales increased 27 percent due to strong performance and changes in the timing of marketing promotional programs, and Lubrication Equipment sales increased 9 percent. "With the exception of Japan and worldwide Automotive, we were pleased with business activity during the second quarter. Our backlog of $25.3 million has grown by $6.1 million since the beginning of the year and the current rate of incoming orders is satisfactory. Although we are optimistic about the balance of the year, we do not expect to record double digit sales increases during the third and fourth quarters," said Aristides.

Second quarter sales in the Americas increased 19 percent to $75.9 million, and European sales increased 29 percent to $21.9 million (a 39 percent volume increase, and a 10 percent loss due to exchange rate changes). In Asia Pacific, sales decreased 13 percent from last year's second quarter, to $ 13.9 million (a 5 percent volume decrease, and an 8 percent loss due to exchange rate changes).

The effective tax rate for the year declined from the first quarter to 34.5 percent, reflecting lower effective tax rates on foreign earnings. The year-to-date effective tax rate is 3 percentage points higher than the 1996 rate. At the end of the second quarter, the Company had acquired approximately 200,000 shares during 1997 under its ongoing share repurchase plan.

Sales for the six month period increased 9 percent to $203.8 million (an 11 percent volume increase and a 2 percent loss due to exchange rate changes). In the Americas, sales increased 10 percent to $138.5 million. European sales increased 18 percent to $38.8 million (a volume increase of 26 percent and an 8 percent loss due to exchange rate changes). Sales in Asia Pacific decreased 7 percent to $26.5 million (a 1 percent volume increase, and an 8 percent loss due to exchange rate changes). The decline in Asia Pacific was due to poor sales in Japan.

Mr. Aristides said, "We are satisfied by the level of business activity that the Company is experiencing. Our marketing strategies, new products, and packages are being well accepted in the marketplace and we believe that the investments being made in these areas will have a favorable impact on our long term profitability."

In a separate matter, Graco responded to the patent infringement lawsuit filed against the Company by Nordson Corporation (NASDAQ:NDSN). "We believe the facts clearly demonstrate that our PrecisionFlo product does not infringe on Nordson's patent and we will vigorously defend this case. The PrecisionFlo product is a very small portion of our overall sales," said Aristides.

Graco Inc. supplies technology and expertise for the management of fluids in both industrial and commercial applications. It designs, manufactures and markets systems and equipment to move, measure, control, dispense and apply fluid materials. A recognized leader in its specialties, Minneapolis-based Graco serves customers around the world in the manufacturing, processing, construction and maintenance industries.

GRACO INC. AND SUBSIDIARIES
Consolidated Statements of Earnings
  Second Quarter (13 weeks) Ended Six Months (26 weeks) Ended
(In thousands, except per share amounts) June 28, 1996 June 30, 1995 June 28, 1996 June 30, 1995
NET SALES $111,721 $97,099 $203,820 $187,252
Cost of products sold 58,322 47,677 105,888 92,993
GROSS PROFIT 53,399 49,422 97,932 94,259
Product development 4,828 4,623 9,653 8,852
Selling 23,764 21,240 45,397 41,090
General and administrative 8,284 10,005 16,839 21,680
OPERATING PROFIT 16,523 13,554 26,043 22,637
Interest expense 240 345 447 577
Other (income) expense, net 615 (1,323) 247 (757)
EARNINGS BEFORE INCOME TAXES 15,668 14,532 25,349 22,817
Income taxes 5,250 4,500 8,750 7,200
NET EARNINGS $10,418 $10,032 $16,599 $15,617
NET EARNINGS PER COMMON SHARE $0.60 $0.57 $0.95 $0.89
Weighted average number of common shares 17,492 17,588 17,495 17,571

All figures are subject to audit and adjustment at the end of the fiscal year.



[ 1st Quarter, 1997 | 2nd Quarter, 1997 | 3rd Quarter, 1997 ]


FOR IMMEDIATE RELEASE: Wednesday, October 8, 1997
FOR FURTHER INFORMATION: Mark W. Sheahan (612) 623-6656

GRACO REPORTS RECORD THIRD QUARTER RESULTS
RECORD THIRD QUARTER NET EARNINGS INCREASE 27 PERCENT TO $12.9 MILLION
RECORD THIRD QUARTER NET SALES INCREASE 4 PERCENT TO $102 MILLION

MINNEAPOLIS, MN (October 8) - Graco Inc. (NYSE: GGG) today announced record third quarter net earnings of $12.9 million, or 74 cents per share, up 27 percent over net earnings of $10.2 million, or 58 cents per share in the third quarter of 1996. Third quarter net sales of $101.9 million increased 4 percent from the same period last year, an 8 percent volume increase and a 4 percent reduction due to exchange. The 1997 third quarter earnings include net income of approximately $450,000 from settlement of a lawsuit. On a year-to-date basis, net sales increased 7 percent to $305.7 million and net earnings increased 14 percent to $29.5 million.

"We are pleased with our year-to-date sales volume and the improvement in gross profit margin. With the exception of North American Automotive, we continue to experience good demand for our products in all divisions. In addition, our backlog of $30 million has grown by $11 million since the beginning of the year and we have recorded our thirteenth consecutive quarter of year-over-year earnings growth," said Chief Executive Officer George Aristides.

GRACO INC. AND SUBSIDIARIES
Third Quarter (13 weeks) Ended Nine Months (39 weeks) Ended
(In Thousands, except per share amounts) Sept. 26,1997 Sept. 27, 1996 Sept. 26, 1997 Sept. 27, 1996
NET SALES $101,920 $97,680 $305,740 $284,932
NET EARNINGS $12,879 $10,157 $29,478 $25,774
NET EARNINGS PER COMMON SHARE $ 0.74 $0.58 $1.69 $1.47
Weighted average number of common shares 17,455 17,410 17,482 17,518

Worldwide, Industrial/Automotive Equipment sales decreased 5 percent from last year's third quarter, a 1 percent volume decrease and a 4 percent reduction due to exchange. Contractor Equipment sales increased 22 percent, and Lubrication Equipment sales increased 3 percent.

Third quarter sales in the Americas increased 12 percent to $69.3 million >from last year's third quarter, and European sales decreased 15 percent to $18.5 million, a 6 percent volume decrease and a 9 percent reduction due to exchange. In Asia Pacific, sales increased 2 percent to $14.1 million, a 7 percent volume increase and a 5 percent reduction due to exchange.

Sales for the nine month period of $305.7 million were up 10 percent on volume, while reported sales are 7 percent higher net of negative exchange rates. In the Americas, sales increased 11 percent to $207.8 million. European sales increased 5 percent to $57.3 million, a volume increase of 13 percent and an 8 percent reduction due to exchange. Sales in Asia Pacific decreased 4 percent to $40.7 million, a volume increase of 3 percent and a 7 percent reduction due to exchange.

During the third quarter, the gross profit margin increased 2.3 percentage points from the first half of 1997 due to improved manufacturing efficiencies, lower costs and higher volume. The operating margin expanded by 4.6 percentage points from the first half of 1997 due substantially to disciplined resource management. The effective tax rate for the year declined from the second quarter to 31 percent, reflecting the previously unrecognized foreign tax benefits. The year-to-date effective tax rate is slightly lower than the 1996 rate.

Mr. Aristides said, "We are pleased with Graco's improved profitability in the third quarter versus the first half of 1997 and despite continued unfavorable foreign exchange rates, we were able to record another record quarter. The year-to-date sales growth of 7 percent and our continued focus on profitability make us optimistic about improved performance for the duration of the year."

Graco Inc. supplies technology and expertise for the management of fluids in both industrial and commercial applications. It designs, manufactures and markets systems and equipment to move, measure, control, dispense and apply fluid materials. A recognized leader in its specialties, Minneapolis-based Graco serves customers around the world in the manufacturing, processing, construction and maintenance industries.

GRACO INC. AND SUBSIDIARIES
Consolidated Statements of Earnings
Third Quarter (13 weeks) Ended Nine Months (39 weeks) Ended
(In thousands, except per share amounts) Sept. 26, 1997 Sept. 27, 1996 Sept. 26, 1997 Sept. 27, 1996
NET SALES $101,920 $97,680 $305,740 $284,932
Cost of products sold 50,558 47,704 156,446 140,697
GROSS PROFIT 51,362 49,976 149,294 144,235
Product development 4,167 4,714 13,820 13,566
Selling 21,051 21,624 66,448 62,714
General and administrative 8,425 8,316 25,264 29,996
OPERATING PROFIT 17,719 15,322 43,762 37,959
Interest expense 216 155 663 732
Other (income) expense, net 124 310 371 (447)
EARNINGS BEFORE INCOME TAXES 17,379 14,857 42,728 37,674
Income taxes 4,500 4,700 13,250 11,900
NET EARNINGS $12,879 $10,157 $29,478 $25,774
NET EARNINGS PER COMMON SHARE $0.74 $0.58 $1.69 $1.47
Weighted average number of common shares 17,455 17,410 17,482 17,518

All figures are subject to audit and adjustment at the end of the fiscal year.


[ 1st Quarter, 1997 | 2nd Quarter, 1997 | 3rd Quarter, 1997 ]
[ 1996 Quarterly Reports ]


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