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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Graco Inc | NYSE:GGG | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
-0.39 | -0.47% | 83.02 | 83.55 | 82.46 | 83.55 | 662,812 | 01:00:00 |
GRACO INC.
|
(Exact name of registrant as specified in its charter)
|
Minnesota
|
|
41-0285640
|
(State of incorporation)
|
|
(I.R.S. Employer Identification Number)
|
88 - 11th Avenue N.E.
Minneapolis, Minnesota
|
|
55413
|
(Address of principal executive offices)
|
|
(Zip Code)
|
(612) 623-6000
|
(Registrant’s telephone number, including area code)
|
|
Yes
|
X
|
|
No
|
|
|
|
Yes
|
X
|
|
No
|
|
|
Large accelerated filer
|
X
|
Accelerated filer
|
|
Non-accelerated filer
|
|
Smaller reporting company
|
|
Emerging growth company
|
|
|
|
|
|
|
|
|
Yes
|
|
|
No
|
X
|
|
|
|
|
|
Page
|
PART I - FINANCIAL INFORMATION
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Item 1.
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Item 2.
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Item 3.
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Item 4.
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PART II - OTHER INFORMATION
|
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|||
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|
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Item 1A.
|
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||
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Item 2.
|
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Item 6.
|
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||||
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|||
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|||
EXHIBITS
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 29,
2018 |
|
June 30,
2017 |
|
June 29,
2018 |
|
June 30,
2017 |
||||||||
Net Sales
|
$
|
424,570
|
|
|
$
|
379,483
|
|
|
$
|
830,918
|
|
|
$
|
720,073
|
|
Cost of products sold
|
194,667
|
|
|
174,973
|
|
|
378,594
|
|
|
329,718
|
|
||||
Gross Profit
|
229,903
|
|
|
204,510
|
|
|
452,324
|
|
|
390,355
|
|
||||
Product development
|
16,112
|
|
|
14,662
|
|
|
31,401
|
|
|
28,921
|
|
||||
Selling, marketing and distribution
|
62,949
|
|
|
55,583
|
|
|
125,471
|
|
|
109,972
|
|
||||
General and administrative
|
37,464
|
|
|
33,855
|
|
|
70,378
|
|
|
63,617
|
|
||||
Operating Earnings
|
113,378
|
|
|
100,410
|
|
|
225,074
|
|
|
187,845
|
|
||||
Interest expense
|
3,891
|
|
|
4,154
|
|
|
7,124
|
|
|
8,209
|
|
||||
Other expense, net
|
4,251
|
|
|
652
|
|
|
5,286
|
|
|
2,457
|
|
||||
Earnings Before Income Taxes
|
105,236
|
|
|
95,604
|
|
|
212,664
|
|
|
177,179
|
|
||||
Income taxes
|
16,096
|
|
|
15,776
|
|
|
38,014
|
|
|
36,619
|
|
||||
Net Earnings
|
$
|
89,140
|
|
|
$
|
79,828
|
|
|
$
|
174,650
|
|
|
$
|
140,560
|
|
Per Common Share
|
|
|
|
|
|
|
|
||||||||
Basic net earnings
|
$
|
0.53
|
|
|
$
|
0.48
|
|
|
$
|
1.04
|
|
|
$
|
0.84
|
|
Diluted net earnings
|
$
|
0.51
|
|
|
$
|
0.46
|
|
|
$
|
1.00
|
|
|
$
|
0.81
|
|
Cash dividends declared
|
$
|
0.13
|
|
|
$
|
0.12
|
|
|
$
|
0.27
|
|
|
$
|
0.24
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 29,
2018 |
|
June 30,
2017 |
|
June 29,
2018 |
|
June 30,
2017 |
||||||||
Net Earnings
|
$
|
89,140
|
|
|
$
|
79,828
|
|
|
$
|
174,650
|
|
|
$
|
140,560
|
|
Components of other comprehensive
income (loss) |
|
|
|
|
|
|
|
||||||||
Cumulative translation adjustment
|
(15,112
|
)
|
|
11,029
|
|
|
(6,366
|
)
|
|
17,347
|
|
||||
Pension and postretirement medical
liability adjustment |
2,705
|
|
|
1,784
|
|
|
4,531
|
|
|
3,784
|
|
||||
Income taxes - pension and postretirement
medical liability adjustment |
(596
|
)
|
|
(717
|
)
|
|
(997
|
)
|
|
(1,483
|
)
|
||||
Other comprehensive income
|
(13,003
|
)
|
|
12,096
|
|
|
(2,832
|
)
|
|
19,648
|
|
||||
Comprehensive Income
|
$
|
76,137
|
|
|
$
|
91,924
|
|
|
$
|
171,818
|
|
|
$
|
160,208
|
|
|
June 29,
2018 |
|
December 29,
2017 |
||||
ASSETS
|
|
|
|
||||
Current Assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
109,854
|
|
|
$
|
103,662
|
|
Accounts receivable, less allowances of $5,300 and $4,300
|
290,946
|
|
|
266,080
|
|
||
Inventories
|
271,729
|
|
|
239,349
|
|
||
Other current assets
|
36,757
|
|
|
34,247
|
|
||
Total current assets
|
709,286
|
|
|
643,338
|
|
||
Property, Plant and Equipment, net
|
214,997
|
|
|
204,298
|
|
||
Goodwill
|
294,343
|
|
|
278,789
|
|
||
Other Intangible Assets, net
|
174,202
|
|
|
183,056
|
|
||
Deferred Income Taxes
|
48,683
|
|
|
50,916
|
|
||
Other Assets
|
31,450
|
|
|
30,220
|
|
||
Total Assets
|
$
|
1,472,961
|
|
|
$
|
1,390,617
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
||||
Current Liabilities
|
|
|
|
||||
Notes payable to banks
|
$
|
6,549
|
|
|
$
|
6,578
|
|
Trade accounts payable
|
54,814
|
|
|
48,748
|
|
||
Salaries and incentives
|
45,647
|
|
|
55,884
|
|
||
Dividends payable
|
22,146
|
|
|
22,260
|
|
||
Other current liabilities
|
138,369
|
|
|
112,368
|
|
||
Total current liabilities
|
267,525
|
|
|
245,838
|
|
||
Long-term Debt
|
297,295
|
|
|
226,035
|
|
||
Retirement Benefits and Deferred Compensation
|
174,856
|
|
|
172,411
|
|
||
Deferred Income Taxes
|
17,080
|
|
|
17,253
|
|
||
Other Non-current Liabilities
|
4,400
|
|
|
6,017
|
|
||
Shareholders’ Equity
|
|
|
|
||||
Common stock
|
167,130
|
|
|
169,319
|
|
||
Additional paid-in-capital
|
505,342
|
|
|
499,934
|
|
||
Retained earnings
|
185,407
|
|
|
181,599
|
|
||
Accumulated other comprehensive income (loss)
|
(146,074
|
)
|
|
(127,789
|
)
|
||
Total shareholders’ equity
|
711,805
|
|
|
723,063
|
|
||
Total Liabilities and Shareholders’ Equity
|
$
|
1,472,961
|
|
|
$
|
1,390,617
|
|
|
Six Months Ended
|
||||||
|
June 29,
2018 |
|
June 30,
2017 |
||||
Cash Flows From Operating Activities
|
|
|
|
||||
Net Earnings
|
$
|
174,650
|
|
|
$
|
140,560
|
|
Adjustments to reconcile net earnings to net cash
provided by operating activities |
|
|
|
||||
Depreciation and amortization
|
23,755
|
|
|
22,362
|
|
||
Deferred income taxes
|
355
|
|
|
(2,653
|
)
|
||
Share-based compensation
|
15,832
|
|
|
13,451
|
|
||
Change in
|
|
|
|
||||
Accounts receivable
|
(26,100
|
)
|
|
(35,455
|
)
|
||
Inventories
|
(17,700
|
)
|
|
(17,103
|
)
|
||
Trade accounts payable
|
2,298
|
|
|
3,175
|
|
||
Salaries and incentives
|
(13,231
|
)
|
|
(1,808
|
)
|
||
Retirement benefits and deferred compensation
|
6,627
|
|
|
6,566
|
|
||
Other accrued liabilities
|
6,493
|
|
|
10,453
|
|
||
Other
|
(2,202
|
)
|
|
(3,857
|
)
|
||
Net cash provided by operating activities
|
170,777
|
|
|
135,691
|
|
||
Cash Flows From Investing Activities
|
|
|
|
||||
Property, plant and equipment additions
|
(27,443
|
)
|
|
(16,621
|
)
|
||
Acquisition of businesses, net of cash acquired
|
(10,519
|
)
|
|
(9,905
|
)
|
||
Other
|
(65
|
)
|
|
102
|
|
||
Net cash provided by (used in) investing activities
|
(38,027
|
)
|
|
(26,424
|
)
|
||
Cash Flows From Financing Activities
|
|
|
|
||||
Borrowings (payments) on short-term lines of credit, net
|
112
|
|
|
1,568
|
|
||
Borrowings on long-term line of credit
|
389,340
|
|
|
293,880
|
|
||
Payments on long-term debt and line of credit
|
(320,603
|
)
|
|
(288,550
|
)
|
||
Common stock issued
|
20,052
|
|
|
46,693
|
|
||
Common stock repurchased
|
(155,601
|
)
|
|
(90,160
|
)
|
||
Taxes paid related to net share settlement of equity awards
|
(16,151
|
)
|
|
(10,735
|
)
|
||
Cash dividends paid
|
(44,650
|
)
|
|
(40,115
|
)
|
||
Net cash provided by (used in) financing activities
|
(127,501
|
)
|
|
(87,419
|
)
|
||
Effect of exchange rate changes on cash
|
448
|
|
|
333
|
|
||
Net increase (decrease) in cash and cash equivalents
|
5,697
|
|
|
22,181
|
|
||
Cash, Cash Equivalents and Restricted Cash
|
|
|
|
||||
Beginning of year
|
112,904
|
|
|
61,594
|
|
||
End of period
|
$
|
118,601
|
|
|
$
|
83,775
|
|
Reconciliation to Consolidated Balance Sheets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
109,854
|
|
|
$
|
75,446
|
|
Restricted cash included in other current assets
|
8,747
|
|
|
8,329
|
|
||
Cash, cash equivalents and restricted cash
|
$
|
118,601
|
|
|
$
|
83,775
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 29,
2018 |
|
June 30,
2017 |
|
June 29,
2018 |
|
June 30,
2017 |
||||||||
Net earnings available to common shareholders
|
$
|
89,140
|
|
|
$
|
79,828
|
|
|
$
|
174,650
|
|
|
$
|
140,560
|
|
Weighted average shares outstanding for basic earnings per share
|
167,260
|
|
|
167,404
|
|
|
168,166
|
|
|
167,354
|
|
||||
Dilutive effect of stock options computed using the treasury stock method and the average market price
|
6,005
|
|
|
6,378
|
|
|
6,291
|
|
|
6,105
|
|
||||
Weighted average shares outstanding for diluted earnings per share
|
173,265
|
|
|
173,782
|
|
|
174,457
|
|
|
173,459
|
|
||||
Basic earnings per share
|
$
|
0.53
|
|
|
$
|
0.48
|
|
|
$
|
1.04
|
|
|
$
|
0.84
|
|
Diluted earnings per share
|
$
|
0.51
|
|
|
$
|
0.46
|
|
|
$
|
1.00
|
|
|
$
|
0.81
|
|
|
Option
Shares
|
|
Weighted Average
Exercise Price
|
|
Options
Exercisable
|
|
Weighted Average
Exercise Price
|
||||||
Outstanding, December 29, 2017
|
13,290
|
|
|
$
|
21.99
|
|
|
7,729
|
|
|
$
|
18.33
|
|
Granted
|
1,163
|
|
|
44.05
|
|
|
|
|
|
||||
Exercised
|
(1,745
|
)
|
|
19.25
|
|
|
|
|
|
||||
Canceled
|
(50
|
)
|
|
26.40
|
|
|
|
|
|
||||
Outstanding, June 29, 2018
|
12,658
|
|
|
$
|
24.38
|
|
|
7,616
|
|
|
$
|
19.80
|
|
|
Six Months Ended
|
||||||
|
June 29,
2018 |
|
June 30,
2017 |
||||
Expected life in years
|
7.5
|
|
|
7.0
|
|
||
Interest rate
|
2.8
|
%
|
|
2.2
|
%
|
||
Volatility
|
25.5
|
%
|
|
26.7
|
%
|
||
Dividend yield
|
1.2
|
%
|
|
1.6
|
%
|
||
Weighted average fair value per share
|
$
|
12.84
|
|
|
$
|
8.08
|
|
|
Six Months Ended
|
||||||
|
June 29,
2018 |
|
June 30,
2017 |
||||
Expected life in years
|
1.0
|
|
|
1.0
|
|
||
Interest rate
|
2.1
|
%
|
|
0.9
|
%
|
||
Volatility
|
21.3
|
%
|
|
22.3
|
%
|
||
Dividend yield
|
1.2
|
%
|
|
1.5
|
%
|
||
Weighted average fair value per share
|
$
|
10.28
|
|
|
$
|
7.32
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 29,
2018 |
|
June 30,
2017 |
|
June 29,
2018 |
|
June 30,
2017 |
||||||||
Pension Benefits
|
|
|
|
|
|
|
|
||||||||
Service cost
|
$
|
1,998
|
|
|
$
|
1,754
|
|
|
$
|
4,211
|
|
|
$
|
3,815
|
|
Interest cost
|
3,411
|
|
|
3,673
|
|
|
6,845
|
|
|
7,603
|
|
||||
Expected return on assets
|
(4,632
|
)
|
|
(4,112
|
)
|
|
(8,718
|
)
|
|
(8,464
|
)
|
||||
Amortization and other
|
2,080
|
|
|
2,199
|
|
|
4,175
|
|
|
4,524
|
|
||||
Net periodic benefit cost
|
$
|
2,857
|
|
|
$
|
3,514
|
|
|
$
|
6,513
|
|
|
$
|
7,478
|
|
Postretirement Medical
|
|
|
|
|
|
|
|
||||||||
Service cost
|
$
|
175
|
|
|
$
|
126
|
|
|
$
|
350
|
|
|
$
|
301
|
|
Interest cost
|
265
|
|
|
271
|
|
|
529
|
|
|
546
|
|
||||
Amortization
|
136
|
|
|
(55
|
)
|
|
272
|
|
|
(5
|
)
|
||||
Net periodic benefit cost
|
$
|
576
|
|
|
$
|
342
|
|
|
$
|
1,151
|
|
|
$
|
842
|
|
|
Pension and
Postretirement
Medical
|
|
Cumulative
Translation
Adjustment
|
|
Total
|
||||||
Balance, March 31, 2017
|
$
|
(75,192
|
)
|
|
$
|
(59,484
|
)
|
|
$
|
(134,676
|
)
|
Other comprehensive income (loss) before reclassifications
|
—
|
|
|
11,029
|
|
|
11,029
|
|
|||
Reclassified to pension cost and deferred tax
|
1,067
|
|
|
—
|
|
|
1,067
|
|
|||
Balance, June 30, 2017
|
$
|
(74,125
|
)
|
|
$
|
(48,455
|
)
|
|
$
|
(122,580
|
)
|
Balance, March 30, 2018
|
$
|
(92,458
|
)
|
|
$
|
(40,613
|
)
|
|
$
|
(133,071
|
)
|
Other comprehensive income (loss) before reclassifications
|
—
|
|
|
(15,112
|
)
|
|
(15,112
|
)
|
|||
Reclassified to pension cost and deferred tax
|
2,109
|
|
|
—
|
|
|
2,109
|
|
|||
Balance, June 29, 2018
|
$
|
(90,349
|
)
|
|
$
|
(55,725
|
)
|
|
$
|
(146,074
|
)
|
|
Pension and
Postretirement
Medical
|
|
Cumulative
Translation
Adjustment
|
|
Total
|
||||||
Balance, December 30, 2016
|
$
|
(76,426
|
)
|
|
$
|
(65,802
|
)
|
|
$
|
(142,228
|
)
|
Other comprehensive income (loss) before reclassifications
|
—
|
|
|
17,347
|
|
|
17,347
|
|
|||
Reclassified to pension cost and deferred tax
|
2,301
|
|
|
—
|
|
|
2,301
|
|
|||
Balance, June 30, 2017
|
$
|
(74,125
|
)
|
|
$
|
(48,455
|
)
|
|
$
|
(122,580
|
)
|
Balance, December 29, 2017
|
$
|
(78,430
|
)
|
|
$
|
(49,359
|
)
|
|
$
|
(127,789
|
)
|
Other comprehensive income (loss) before reclassifications
|
—
|
|
|
(6,366
|
)
|
|
(6,366
|
)
|
|||
Reclassified to pension cost and deferred tax
|
3,534
|
|
|
—
|
|
|
3,534
|
|
|||
Reclassified to retained earnings
|
(15,453
|
)
|
|
—
|
|
|
(15,453
|
)
|
|||
Balance, June 29, 2018
|
$
|
(90,349
|
)
|
|
$
|
(55,725
|
)
|
|
$
|
(146,074
|
)
|
7.
|
Segment Information
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 29,
2018 |
|
June 30,
2017 |
|
June 29,
2018 |
|
June 30,
2017 |
||||||||
Net Sales
|
|
|
|
|
|
|
|
||||||||
Industrial
|
$
|
190,459
|
|
|
$
|
174,868
|
|
|
$
|
385,655
|
|
|
$
|
331,258
|
|
Process
|
85,059
|
|
|
73,399
|
|
|
165,094
|
|
|
143,428
|
|
||||
Contractor
|
149,052
|
|
|
131,216
|
|
|
280,169
|
|
|
245,387
|
|
||||
Total
|
$
|
424,570
|
|
|
$
|
379,483
|
|
|
$
|
830,918
|
|
|
$
|
720,073
|
|
Operating Earnings
|
|
|
|
|
|
|
|
||||||||
Industrial
|
$
|
67,030
|
|
|
$
|
61,596
|
|
|
$
|
136,155
|
|
|
$
|
115,331
|
|
Process
|
17,065
|
|
|
13,418
|
|
|
34,767
|
|
|
26,881
|
|
||||
Contractor
|
38,382
|
|
|
33,759
|
|
|
69,793
|
|
|
59,778
|
|
||||
Unallocated corporate (expense)
|
(9,099
|
)
|
|
(8,363
|
)
|
|
(15,641
|
)
|
|
(14,145
|
)
|
||||
Total
|
$
|
113,378
|
|
|
$
|
100,410
|
|
|
$
|
225,074
|
|
|
$
|
187,845
|
|
|
June 29,
2018 |
|
December 29,
2017 |
||||
Industrial
|
$
|
627,490
|
|
|
$
|
572,436
|
|
Process
|
341,272
|
|
|
345,572
|
|
||
Contractor
|
298,431
|
|
|
255,615
|
|
||
Unallocated corporate
|
205,768
|
|
|
216,994
|
|
||
Total
|
$
|
1,472,961
|
|
|
$
|
1,390,617
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 29,
2018 |
|
June 30,
2017 |
|
June 29,
2018 |
|
June 30,
2017 |
||||||||
Net Sales (based on customer location)
|
|
|
|
|
|
|
|
||||||||
United States
|
$
|
212,541
|
|
|
$
|
194,619
|
|
|
$
|
406,323
|
|
|
$
|
369,473
|
|
Other countries
|
212,029
|
|
|
184,864
|
|
|
424,595
|
|
|
350,600
|
|
||||
Total
|
$
|
424,570
|
|
|
$
|
379,483
|
|
|
$
|
830,918
|
|
|
$
|
720,073
|
|
|
June 29,
2018 |
|
December 29,
2017 |
||||
Long-lived Assets
|
|
|
|
||||
United States
|
$
|
165,818
|
|
|
$
|
163,416
|
|
Other countries
|
49,179
|
|
|
40,882
|
|
||
Total
|
$
|
214,997
|
|
|
$
|
204,298
|
|
|
June 29,
2018 |
|
December 29,
2017 |
||||
Finished products and components
|
$
|
141,101
|
|
|
$
|
124,327
|
|
Products and components in various stages of completion
|
73,900
|
|
|
61,274
|
|
||
Raw materials and purchased components
|
108,083
|
|
|
103,407
|
|
||
Subtotal
|
323,084
|
|
|
289,008
|
|
||
Reduction to LIFO cost
|
(51,355
|
)
|
|
(49,659
|
)
|
||
Total
|
$
|
271,729
|
|
|
$
|
239,349
|
|
|
Finite Life
|
|
Indefinite Life
|
|
|
||||||||||||||
|
Customer
Relationships |
|
Patents and
Proprietary Technology |
|
Trademarks,
Trade Names and Other |
|
Trade
Names |
|
Total
|
||||||||||
As of June 29, 2018
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost
|
$
|
179,444
|
|
|
$
|
19,371
|
|
|
$
|
1,070
|
|
|
$
|
59,937
|
|
|
$
|
259,822
|
|
Accumulated amortization
|
(60,872
|
)
|
|
(8,515
|
)
|
|
(674
|
)
|
|
—
|
|
|
(70,061
|
)
|
|||||
Foreign currency translation
|
(10,427
|
)
|
|
(860
|
)
|
|
(72
|
)
|
|
(4,200
|
)
|
|
(15,559
|
)
|
|||||
Book value
|
$
|
108,145
|
|
|
$
|
9,996
|
|
|
$
|
324
|
|
|
$
|
55,737
|
|
|
$
|
174,202
|
|
Weighted average life in years
|
13
|
|
|
10
|
|
|
4
|
|
|
N/A
|
|
|
|
As of December 29, 2017
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost
|
$
|
179,826
|
|
|
$
|
18,479
|
|
|
$
|
1,071
|
|
|
$
|
59,553
|
|
|
$
|
258,929
|
|
Accumulated amortization
|
(54,076
|
)
|
|
(7,795
|
)
|
|
(542
|
)
|
|
—
|
|
|
(62,413
|
)
|
|||||
Foreign currency translation
|
(9,186
|
)
|
|
(727
|
)
|
|
(61
|
)
|
|
(3,486
|
)
|
|
(13,460
|
)
|
|||||
Book value
|
$
|
116,564
|
|
|
$
|
9,957
|
|
|
$
|
468
|
|
|
$
|
56,067
|
|
|
$
|
183,056
|
|
Weighted average life in years
|
13
|
|
|
10
|
|
|
4
|
|
|
N/A
|
|
|
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
Thereafter
|
||||||||||||
Estimated Amortization Expense
|
$
|
15,540
|
|
|
$
|
15,014
|
|
|
$
|
14,798
|
|
|
$
|
14,602
|
|
|
$
|
14,617
|
|
|
$
|
51,862
|
|
|
Industrial
|
|
Process
|
|
Contractor
|
|
Total
|
||||||||
Balance, December 29, 2017
|
$
|
161,673
|
|
|
$
|
97,971
|
|
|
$
|
19,145
|
|
|
$
|
278,789
|
|
Additions, adjustments from business acquisitions
|
17,544
|
|
|
170
|
|
|
409
|
|
|
18,123
|
|
||||
Foreign currency translation
|
(2,141
|
)
|
|
(428
|
)
|
|
—
|
|
|
(2,569
|
)
|
||||
Balance, June 29, 2018
|
$
|
177,076
|
|
|
$
|
97,713
|
|
|
$
|
19,554
|
|
|
$
|
294,343
|
|
10.
|
Other Current Liabilities
|
|
June 29,
2018 |
|
December 29,
2017 |
||||
Accrued self-insurance retentions
|
$
|
7,853
|
|
|
$
|
7,956
|
|
Accrued warranty and service liabilities
|
10,956
|
|
|
10,535
|
|
||
Accrued trade promotions
|
9,064
|
|
|
10,588
|
|
||
Payable for employee stock purchases
|
5,666
|
|
|
10,053
|
|
||
Customer advances and deferred revenue
|
46,881
|
|
|
22,632
|
|
||
Income taxes payable
|
12,554
|
|
|
7,564
|
|
||
Right of return refund liability
|
12,119
|
|
|
11,412
|
|
||
Other
|
33,276
|
|
|
31,628
|
|
||
Total
|
$
|
138,369
|
|
|
$
|
112,368
|
|
Balance, December 29, 2017
|
$
|
10,535
|
|
Charged to expense
|
3,917
|
|
|
Margin on parts sales reversed
|
1,440
|
|
|
Reductions for claims settled
|
(4,936
|
)
|
|
Balance, June 29, 2018
|
$
|
10,956
|
|
|
Level
|
|
June 29,
2018 |
|
December 29,
2017 |
||||
Assets
|
|
|
|
|
|
||||
Cash surrender value of life insurance
|
2
|
|
$
|
16,000
|
|
|
$
|
16,128
|
|
Forward exchange contracts
|
2
|
|
677
|
|
|
—
|
|
||
Total assets at fair value
|
|
|
$
|
16,677
|
|
|
$
|
16,128
|
|
Liabilities
|
|
|
|
|
|
||||
Contingent consideration
|
3
|
|
$
|
5,300
|
|
|
$
|
4,081
|
|
Deferred compensation
|
2
|
|
4,257
|
|
|
3,836
|
|
||
Forward exchange contracts
|
2
|
|
—
|
|
|
517
|
|
||
Total liabilities at fair value
|
|
|
$
|
9,557
|
|
|
$
|
8,434
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||||
|
June 29,
2018 |
|
June 30,
2017 |
|
%
Change
|
|
June 29,
2018 |
|
June 30,
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
|
%
|
||||
Net Earnings, adjusted
(1)
|
82.7
|
|
|
66.2
|
|
|
25
|
%
|
|
166.8
|
|
|
123.4
|
|
|
35
|
%
|
||||
Diluted Net Earnings per Common Share
|
$
|
0.51
|
|
|
$
|
0.46
|
|
|
11
|
%
|
|
$
|
1.00
|
|
|
$
|
0.81
|
|
|
23
|
%
|
Diluted Net Earnings per Common Share, adjusted
(1)
|
$
|
0.48
|
|
|
$
|
0.38
|
|
|
26
|
%
|
|
$
|
0.96
|
|
|
$
|
0.71
|
|
|
35
|
%
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
Jun 29,
2018 |
|
Jun 30,
2017 |
|
Jun 29,
2018 |
|
Jun 30,
2017 |
||||||||
Earnings before income taxes
|
$
|
105.2
|
|
|
$
|
95.6
|
|
|
$
|
212.7
|
|
|
$
|
177.2
|
|
|
|
|
|
|
|
|
|
||||||||
Income taxes, as reported
|
$
|
16.1
|
|
|
$
|
15.8
|
|
|
$
|
38.0
|
|
|
$
|
36.6
|
|
Excess tax benefit from option exercises
|
6.4
|
|
|
13.6
|
|
|
7.9
|
|
|
17.2
|
|
||||
Income taxes, adjusted
|
$
|
22.5
|
|
|
$
|
29.4
|
|
|
$
|
45.9
|
|
|
$
|
53.8
|
|
|
|
|
|
|
|
|
|
||||||||
Effective income tax rate
|
|
|
|
|
|
|
|
||||||||
As reported
|
15.3
|
%
|
|
16.5
|
%
|
|
17.9
|
%
|
|
20.7
|
%
|
||||
Adjusted
|
21.4
|
%
|
|
30.7
|
%
|
|
21.6
|
%
|
|
30.4
|
%
|
||||
|
|
|
|
|
|
|
|
||||||||
Net Earnings, as reported
|
$
|
89.1
|
|
|
$
|
79.8
|
|
|
$
|
174.7
|
|
|
$
|
140.6
|
|
Excess tax benefit from option exercises
|
(6.4
|
)
|
|
(13.6
|
)
|
|
(7.9
|
)
|
|
(17.2
|
)
|
||||
Net Earnings, adjusted
|
$
|
82.7
|
|
|
$
|
66.2
|
|
|
$
|
166.8
|
|
|
$
|
123.4
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted Average Diluted Shares
|
173.3
|
|
|
173.8
|
|
|
174.5
|
|
|
173.5
|
|
||||
Diluted Earnings per Share
|
|
|
|
|
|
|
|
||||||||
As reported
|
$
|
0.51
|
|
|
$
|
0.46
|
|
|
$
|
1.00
|
|
|
$
|
0.81
|
|
Adjusted
|
$
|
0.48
|
|
|
$
|
0.38
|
|
|
$
|
0.96
|
|
|
$
|
0.71
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||
|
June 29,
2018 |
|
June 30,
2017 |
|
June 29,
2018 |
|
June 30,
2017 |
||||
Net Sales
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
Cost of products sold
|
45.9
|
|
|
46.1
|
|
|
45.6
|
|
|
45.8
|
|
Gross Profit
|
54.1
|
|
|
53.9
|
|
|
54.4
|
|
|
54.2
|
|
Product development
|
3.8
|
|
|
3.9
|
|
|
3.8
|
|
|
4.0
|
|
Selling, marketing and distribution
|
14.8
|
|
|
14.6
|
|
|
15.1
|
|
|
15.3
|
|
General and administrative
|
8.8
|
|
|
8.9
|
|
|
8.4
|
|
|
8.8
|
|
Operating Earnings
|
26.7
|
|
|
26.5
|
|
|
27.1
|
|
|
26.1
|
|
Interest expense
|
0.9
|
|
|
1.1
|
|
|
0.9
|
|
|
1.1
|
|
Other expense, net
|
1.0
|
|
|
0.2
|
|
|
0.6
|
|
|
0.4
|
|
Earnings Before Income Taxes
|
24.8
|
|
|
25.2
|
|
|
25.6
|
|
|
24.6
|
|
Income taxes
|
3.8
|
|
|
4.2
|
|
|
4.6
|
|
|
5.1
|
|
Net Earnings
|
21.0
|
%
|
|
21.0
|
%
|
|
21.0
|
%
|
|
19.5
|
%
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 29,
2018 |
|
June 30,
2017 |
|
June 29,
2018 |
|
June 30,
2017 |
||||||||
Americas
(1)
|
$
|
245.7
|
|
|
$
|
221.4
|
|
|
$
|
467.1
|
|
|
$
|
421.4
|
|
EMEA
(2)
|
96.8
|
|
|
87.0
|
|
|
198.2
|
|
|
166.1
|
|
||||
Asia Pacific
|
82.1
|
|
|
71.1
|
|
|
165.6
|
|
|
132.6
|
|
||||
Consolidated
|
$
|
424.6
|
|
|
$
|
379.5
|
|
|
$
|
830.9
|
|
|
$
|
720.1
|
|
(1)
|
North, South and Central America, including the United States
|
(2)
|
Europe, Middle East and Africa
|
|
Three Months
|
|
Six Months
|
||||||||||||
|
Volume and Price
|
|
Acquisitions
|
|
Currency
|
|
Total
|
|
Volume and Price
|
|
Acquisitions
|
|
Currency
|
|
Total
|
Americas
|
10%
|
|
1%
|
|
0%
|
|
11%
|
|
10%
|
|
1%
|
|
0%
|
|
11%
|
EMEA
|
(2)%
|
|
6%
|
|
7%
|
|
11%
|
|
3%
|
|
6%
|
|
10%
|
|
19%
|
Asia Pacific
|
7%
|
|
3%
|
|
5%
|
|
15%
|
|
15%
|
|
4%
|
|
6%
|
|
25%
|
Consolidated
|
6%
|
|
3%
|
|
3%
|
|
12%
|
|
9%
|
|
3%
|
|
3%
|
|
15%
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 29,
2018 |
|
June 30,
2017 |
|
June 29,
2018 |
|
June 30,
2017 |
||||||||
Net Sales
|
|
|
|
|
|
|
|
||||||||
Americas
|
$
|
79.3
|
|
|
$
|
75.9
|
|
|
$
|
153.5
|
|
|
$
|
144.9
|
|
EMEA
|
56.5
|
|
|
49.9
|
|
|
116.7
|
|
|
94.0
|
|
||||
Asia Pacific
|
54.7
|
|
|
49.1
|
|
|
115.5
|
|
|
92.4
|
|
||||
Total
|
$
|
190.5
|
|
|
$
|
174.9
|
|
|
$
|
385.7
|
|
|
$
|
331.3
|
|
Operating earnings as a percentage of net sales
|
35
|
%
|
|
35
|
%
|
|
35
|
%
|
|
35
|
%
|
|
Three Months
|
|
Six Months
|
||||||||||||
|
Volume and Price
|
|
Acquisitions
|
|
Currency
|
|
Total
|
|
Volume and Price
|
|
Acquisitions
|
|
Currency
|
|
Total
|
Americas
|
4%
|
|
0%
|
|
0%
|
|
4%
|
|
6%
|
|
0%
|
|
0%
|
|
6%
|
EMEA
|
(5)%
|
|
11%
|
|
7%
|
|
13%
|
|
2%
|
|
11%
|
|
11%
|
|
24%
|
Asia Pacific
|
2%
|
|
5%
|
|
5%
|
|
12%
|
|
12%
|
|
6%
|
|
7%
|
|
25%
|
Segment Total
|
1%
|
|
4%
|
|
4%
|
|
9%
|
|
6%
|
|
5%
|
|
5%
|
|
16%
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 29,
2018 |
|
June 30,
2017 |
|
June 29,
2018 |
|
June 30,
2017 |
||||||||
Net Sales
|
|
|
|
|
|
|
|
||||||||
Americas
|
$
|
54.8
|
|
|
$
|
46.6
|
|
|
$
|
106.1
|
|
|
$
|
91.2
|
|
EMEA
|
14.4
|
|
|
13.9
|
|
|
29.4
|
|
|
28.8
|
|
||||
Asia Pacific
|
15.9
|
|
|
12.9
|
|
|
29.6
|
|
|
23.4
|
|
||||
Total
|
$
|
85.1
|
|
|
$
|
73.4
|
|
|
$
|
165.1
|
|
|
$
|
143.4
|
|
Operating earnings as a percentage of net sales
|
20
|
%
|
|
18
|
%
|
|
21
|
%
|
|
19
|
%
|
|
Three Months
|
|
Six Months
|
||||||||||||
|
Volume and Price
|
|
Acquisitions
|
|
Currency
|
|
Total
|
|
Volume and Price
|
|
Acquisitions
|
|
Currency
|
|
Total
|
Americas
|
16%
|
|
2%
|
|
0%
|
|
18%
|
|
14%
|
|
2%
|
|
0%
|
|
16%
|
EMEA
|
(2)%
|
|
1%
|
|
5%
|
|
4%
|
|
(5)%
|
|
1%
|
|
6%
|
|
2%
|
Asia Pacific
|
18%
|
|
1%
|
|
4%
|
|
23%
|
|
21%
|
|
1%
|
|
5%
|
|
27%
|
Segment Total
|
13%
|
|
1%
|
|
2%
|
|
16%
|
|
11%
|
|
1%
|
|
3%
|
|
15%
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 29,
2018 |
|
June 30,
2017 |
|
June 29,
2018 |
|
June 30,
2017 |
||||||||
Net Sales
|
|
|
|
|
|
|
|
||||||||
Americas
|
$
|
111.6
|
|
|
$
|
98.9
|
|
|
$
|
207.5
|
|
|
$
|
185.3
|
|
EMEA
|
26.0
|
|
|
23.2
|
|
|
52.2
|
|
|
43.3
|
|
||||
Asia Pacific
|
11.5
|
|
|
9.1
|
|
|
20.5
|
|
|
16.8
|
|
||||
Total
|
$
|
149.1
|
|
|
$
|
131.2
|
|
|
$
|
280.2
|
|
|
$
|
245.4
|
|
Operating earnings as a percentage of net sales
|
26
|
%
|
|
26
|
%
|
|
25
|
%
|
|
24
|
%
|
|
Three Months
|
|
Six Months
|
||||||||||||
|
Volume and Price
|
|
Acquisitions
|
|
Currency
|
|
Total
|
|
Volume and Price
|
|
Acquisitions
|
|
Currency
|
|
Total
|
Americas
|
11%
|
|
2%
|
|
0%
|
|
13%
|
|
10%
|
|
2%
|
|
0%
|
|
12%
|
EMEA
|
4%
|
|
0%
|
|
8%
|
|
12%
|
|
10%
|
|
0%
|
|
11%
|
|
21%
|
Asia Pacific
|
22%
|
|
0%
|
|
4%
|
|
26%
|
|
17%
|
|
0%
|
|
5%
|
|
22%
|
Segment Total
|
11%
|
|
1%
|
|
2%
|
|
14%
|
|
11%
|
|
1%
|
|
2%
|
|
14%
|
Period
|
|
Total Number
of Shares Purchased
|
|
Average Price
Paid per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
|
Maximum Number of Shares that May Yet Be
Purchased Under the Plans or Programs
(at end of period)
|
|||||
Mar 31, 2018 - Apr 27, 2018
|
|
768,078
|
|
|
$
|
44.87
|
|
|
768,078
|
|
|
5,988,729
|
|
Apr 28, 2018 - May 25, 2018
(1)
|
|
683,188
|
|
|
$
|
43.36
|
|
|
683,188
|
|
|
5,305,541
|
|
May 26, 2018 - June 29, 2018
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
5,305,541
|
|
3.1
|
|
|
Restated Articles of Incorporation as amended December 8, 2017. (
Incorporated by reference to Exhibit 3.1 to the Company's Report on Form 8-K filed December 8, 2017.
)
|
|
|
|
|
3.2
|
|
|
Restated Bylaws as amended February 14, 2014.
(Incorporated by reference to Exhibit 3.2 to the Company’s 2013 Annual Report on Form 10-K.)
|
|
|
|
|
10.1
|
|
|
Stock Repurchase Agreement, dated April 30, 2018, by and between Graco Inc. and Patrick J. McHale.
(Incorporated by reference to Exhibit 10.1 to the Company's Report on Form 8-K filed May 1, 2018.)
|
|
|
|
|
|
|
Certification of President and Chief Executive Officer pursuant to Rule 13a-14(a).
|
|
|
|
|
|
|
|
Certification of Chief Financial Officer and Treasurer pursuant to Rule 13a-14(a).
|
|
|
|
|
|
|
|
Certification of President and Chief Executive Officer and Chief Financial Officer and Treasurer pursuant to Section 1350 of Title 18, U.S.C.
|
|
|
|
|
|
|
|
Press Release Reporting Second Quarter Earnings dated July 25, 2018.
|
|
|
|
|
|
101
|
|
|
Interactive Data File.
|
|
|
|
|
|
|
|
Date:
|
|
July 25, 2018
|
|
By:
|
|
/s/ Patrick J. McHale
|
|
|
|
|
|
|
Patrick J. McHale
|
|
|
|
|
|
|
President and Chief Executive Officer
|
|
|
|
|
|
|
(Principal Executive Officer)
|
|
|
|
|
|||
Date:
|
|
July 25, 2018
|
|
By:
|
|
/s/ Mark W. Sheahan
|
|
|
|
|
|
|
Mark W. Sheahan
|
|
|
|
|
|
|
Chief Financial Officer and Treasurer
|
|
|
|
|
|
|
(Principal Financial Officer)
|
|
|
|
|
|||
Date:
|
|
July 25, 2018
|
|
By:
|
|
/s/ Caroline M. Chambers
|
|
|
|
|
|
|
Caroline M. Chambers
|
|
|
|
|
|
|
Vice President, Corporate Controller
and Information Systems
|
|
|
|
|
|
|
(Principal Accounting Officer)
|
1 Year Graco Chart |
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