Graco Reports Record Fourth Quarter and Annual Sales and Earnings
Organic Growth and Acquisitions Contribute to Solid 2015 Performance
Graco Inc. (NYSE: GGG) today announced results for the quarter
and year ended Dec. 25, 2015.
Summary $ in millions except per share amounts
|
|
Quarter Ended
|
|
Year Ended
|
|
|
Dec 25, 2015
|
|
Dec 26, 2014
|
|
% Change
|
|
Dec 25, 2015
|
|
Dec 26, 2014
|
|
% Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Sales
|
|
$
|
325.6
|
|
|
$
|
306.0
|
|
|
6 %
|
|
$
|
1,286.5
|
|
|
$
|
1,221.1
|
|
|
5
|
%
|
Operating Earnings
|
|
76.1
|
|
|
69.5
|
|
|
10 %
|
|
302.1
|
|
|
308.9
|
|
|
(2
|
)%
|
Net Earnings
|
|
53.5
|
|
|
49.0
|
|
|
9 %
|
|
345.7
|
|
|
225.6
|
|
|
53
|
%
|
Diluted Net Earnings per Common Share
|
|
$
|
0.94
|
|
|
$
|
0.80
|
|
|
18 %
|
|
$
|
5.86
|
|
|
$
|
3.65
|
|
|
61
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
Sales increased 6 percent for the quarter and 5 percent for the year.
At consistent currency translation rates, sales increased 10 percent
for both the quarter and the year, including growth from acquired
operations of 4 percentage points for the quarter and 6 percentage
points for the year, and organic growth of 6 percentage points for the
quarter and 4 percentage points for the year.
-
Changes in currency translation rates reduced sales, operating
earnings and net earnings by approximately $12 million, $7 million and
$5 million, respectively, for the quarter and $58 million, $32 million
and $20 million, respectively, for the year.
-
Non-recurring income tax benefits increased net earnings for the year
by a total of $9 million, or $0.15 per diluted share.
-
In April, the Company sold the Liquid Finishing business assets
acquired in 2012. Net earnings include Liquid Finishing-related
after-tax investment income totaling $1 million ($0.01 per diluted
share) for the quarter (from post-closing adjustments) and $141
million ($2.40 per diluted share) for the year. Net earnings in 2014
included after-tax Liquid Finishing investment income of $4 million
($0.05 per diluted share) for the quarter and $27 million ($0.43 per
diluted share) for the year.
"Graco achieved record performance in 2015 as a result of the efforts of
our employees and channel partners around the world," said Patrick J.
McHale, Graco's President and CEO. "The fourth quarter and full year
2015 were Company records for annual and fourth quarter sales, net
income and diluted earnings per share. In addition, this was the
Company's eighteenth consecutive quarter of record same-quarter sales."
Consolidated Results
Changes in currency translation rates reduced sales by approximately $12
million for the quarter and $58 million for the year, and decreased net
earnings by approximately $5 million for the quarter and $20 million for
the year.
Sales for the quarter increased 6 percent, with increases in all
segments. Sales from operations acquired within the last 12 months
totaled $13 million for the quarter, contributing 4 percentage points of
growth. Organic sales at consistent translation rates increased 6
percent, with a 10 percent increase in the Americas, flat in EMEA and a
1 percent increase in Asia Pacific.
Sales for the year increased 5 percent, including an 11 percent increase
in the Americas, partially offset by a 4 percent decrease in EMEA.
Acquired operations contributed $67 million of incremental sales,
representing 6 percentage points of growth. Organic sales at consistent
translation rates increased 4 percent, driven by a 7 percent increase in
the Americas.
Gross profit margin rates for the quarter and year were lower than rates
in the comparable periods last year due mostly to changes in currency
translation rates. Favorable effects of realized pricing and lower
material costs offset the impact of lower average gross margin rates of
acquired operations.
Total operating expenses for the quarter were flat compared to the
fourth quarter last year and for the year they were $25 million (7
percent) higher than last year. Expenses of acquired operations totaled
$6 million for the quarter and $27 million for the year. Spending
related to regional and product expansion initiatives increased expenses
for the year by approximately $4 million. Unallocated corporate expenses
for the year increased $5 million, mostly from increases in pension,
stock compensation and central warehouse costs. Changes in currency
translation rates reduced operating expenses by approximately $3 million
for the quarter and $16 million for the year.
In April, the Company sold the Liquid Finishing business assets acquired
in 2012. Held separate investment income for the year includes the
pre-tax gain on sale of $150 million, net of transaction and other
related expenses, and dividends of $42 million. Net earnings for the
quarter include after-tax net gain on the sale of $1 million ($0.01 per
diluted share) from post-closing adjustments. Net earnings for the year
include after-tax gain and dividends totaling $141 million ($2.40 per
diluted share). Net earnings in 2014 included after-tax net investment
income of $4 million ($0.05 per diluted share) for the quarter and $27
million ($0.43 per diluted share) for the year. No further Liquid
Finishing dividends will be received.
The effective income tax rate of 27 percent for the quarter was
consistent with the fourth quarter rate last year. Favorable effects of
lower tax rates on foreign earnings were offset by the effect of
post-tax dividends received in the fourth quarter of 2014. The federal
R&D credit was reinstated in the fourth quarter and the Company
recognized a full-year benefit of $3 million, consistent with the amount
recognized in the fourth quarter of 2014. The effective income tax rate
of 27 percent for the year was one percentage point lower than last
year. A change in the Company's assertion with respect to reinvestment
of foreign earnings decreased deferred income taxes related to
undistributed foreign earnings by $7 million and reduced the effective
tax rate for the year. Higher post-tax dividend income, favorable
effects of lower tax rates on foreign earnings, and an additional
non-recurring tax benefit of $2 million further reduced the effective
tax rate for the year. Those reductions were partially offset by the tax
rate effects of the gain on the sale of the Liquid Finishing business
assets.
Change in Financial Reporting Segments
Beginning with the first quarter of 2015, the Company revised the
presentation of its financial reporting segments. Operations of the
Process and the Oil and Natural Gas divisions, historically included in
the Industrial segment, are now aggregated with the Lubrication division
(formerly reported as a separate segment) in the newly-formed Process
segment. This change aligns the types of products offered and markets
served within the segments. Prior year segment information has been
restated to conform to 2015 reporting.
A summary of the Company’s three reportable segments (Industrial,
Process and Contractor) follows.
The Industrial segment includes our Industrial Products and Applied
Fluid Technologies divisions. The Industrial segment markets equipment
and pre-engineered packages for moving and applying paints, coatings,
sealants, adhesives and other fluids. Markets served include automotive
and vehicle assembly and components production, wood and metal products,
rail, marine, aerospace, farm, construction, bus, recreational vehicles
and various other industries.
The Process segment includes our Process, Oil and Natural Gas, and
Lubrication divisions. The Process segment markets pumps, valves, meters
and accessories to move and dispense chemicals, oil and natural gas,
water, waste water, petroleum, food, lubricants and other fluids.
Markets served include food and beverage, dairy, oil and natural gas,
pharmaceutical, cosmetics, electronics, waste water, mining, fast oil
change facilities, service garages, fleet service centers, automobile
dealerships and industrial lubrication applications.
The Contractor segment remains unchanged. The Contractor segment markets
sprayers for architectural coatings for painting, corrosion control,
texture and line striping.
Segment Results
Certain measurements of segment operations are summarized below:
|
|
Quarter
|
|
Year
|
|
|
Industrial
|
|
Process
|
|
Contractor
|
|
Industrial
|
|
Process
|
|
Contractor
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales (in millions)
|
|
$
|
167.1
|
|
|
$
|
69.3
|
|
|
$
|
89.1
|
|
|
$
|
616.1
|
|
|
$
|
273.6
|
|
|
$
|
396.8
|
|
Percentage change from last year
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
2
|
%
|
|
11
|
%
|
|
11
|
%
|
|
(1
|
)%
|
|
23
|
%
|
|
6
|
%
|
Operating earnings
|
|
5
|
%
|
|
(6
|
)%
|
|
33
|
%
|
|
(1
|
)%
|
|
(8
|
)%
|
|
6
|
%
|
Operating earnings as a percentage of sales
|
|
|
|
|
|
|
|
|
|
|
|
|
2015
|
|
34
|
%
|
|
13
|
%
|
|
18
|
%
|
|
33
|
%
|
|
16
|
%
|
|
22
|
%
|
2014
|
|
34
|
%
|
|
15
|
%
|
|
15
|
%
|
|
33
|
%
|
|
21
|
%
|
|
22
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Industrial segment sales for the quarter increased 2 percent (7 percent
at consistent translation rates). Sales in this segment increased 10
percent in the Americas, decreased 10 percent in EMEA (1 percent at
consistent translation rates) and increased 4 percent in Asia Pacific (7
percent at consistent translation rates). Sales for the year decreased 1
percent, but increased 5 percent at consistent translation rates. Sales
increased 6 percent in the Americas, decreased 12 percent in EMEA
(increased 1 percent at consistent translation rates) and were flat in
Asia Pacific (increased 4 percent at consistent translation rates).
Operating margin rates for the Industrial segment for the quarter and
year were consistent with last year.
Process segment sales for the quarter increased 11 percent (14 percent
at consistent translation rates). Sales in this segment increased 10
percent in the Americas, 14 percent in EMEA and 9 percent in Asia
Pacific. Sales for the year in this segment increased 23 percent (27
percent at consistent translation rates). Sales increases came from
acquired operations including Alco Valves (acquired in October 2014),
White Knight Fluid Handling and High Pressure Equipment (both acquired
in January 2015). Organic sales at consistent translation rates were
down 2 percent for the quarter and up 1 percent for the year. Lower
average profit margins of acquired operations, changes in currency
translation rates and incremental investment in oil and natural gas
products led to decreases in operating margin rates for this segment.
Contractor segment sales for the quarter increased 11 percent (15
percent at consistent translation rates), with a 20 percent increase in
the Americas partially offset by decreases in EMEA and Asia Pacific.
Sales for the year in this segment increased 6 percent (9 percent at
consistent translation rates). Sales increased 13 percent in the
Americas, decreased 10 percent in EMEA (increased 2 percent at
consistent translation rates) and decreased 14 percent in Asia Pacific
(9 percent at consistent translation rates). Operating margin rate for
the quarter was 3 percentage points higher than the comparable period
last year due to volume leverage. Operating margin rate for the year was
consistent with last year, with the unfavorable impact of currency
translation rates offset by volume-related increases.
In April 2015, the Company sold the Liquid Finishing business assets
acquired in 2012 that were held as a cost-method investment.
Post-closing purchase price adjustments were recorded in the third and
fourth quarters of 2015. The $150 million pre-tax gain on the sale, net
of transaction and other related expenses, was included in investment
income in the Company’s consolidated statements of earnings. Prior to
the sale, income was recognized on dividends received from after-tax
earnings of Liquid Finishing and also included in investment income.
There was no dividend income in the fourth quarter of 2015 compared to
$4 million in 2014. For the year, dividend income was $42 million in
2015 and $28 million in 2014. Results excluding Liquid Finishing
investment income and expense provide a more consistent base of
comparison to future results. A calculation of the non-GAAP measurement
of net earnings excluding investment income and expense follows (in
millions except per share amounts):
|
|
Quarter Ended
|
|
Year Ended
|
|
|
Dec 25, 2015
|
|
Dec 26, 2014
|
|
Dec 25, 2015
|
|
Dec 26, 2014
|
|
|
|
|
|
|
|
|
|
Net Earnings, as reported
|
|
$
|
53.5
|
|
|
$
|
49.0
|
|
|
$
|
345.7
|
|
|
$
|
225.6
|
|
Held separate investment (income), net
|
|
(0.9
|
)
|
|
(3.2
|
)
|
|
(191.6
|
)
|
|
(26.0
|
)
|
Income tax effect
|
|
0.3
|
|
|
(0.3
|
)
|
|
50.2
|
|
|
(0.8
|
)
|
Net Earnings, adjusted
|
|
$
|
52.9
|
|
|
$
|
45.5
|
|
|
$
|
204.3
|
|
|
$
|
198.8
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share
|
|
|
|
|
|
|
|
|
As reported
|
|
$
|
0.94
|
|
|
$
|
0.80
|
|
|
$
|
5.86
|
|
|
$
|
3.65
|
|
Adjusted
|
|
$
|
0.93
|
|
|
$
|
0.75
|
|
|
$
|
3.46
|
|
|
$
|
3.22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outlook
"Throughout 2015, we were focused on achieving our full-year outlook of
mid-single digit organic sales growth on a constant currency basis
worldwide, as well as growth in all geographic regions and reportable
segments. With the exception of a small decline in Asia Pacific, we met
our 2015 outlook," said McHale. "During the fourth quarter of 2015 our
incoming orders were similar to the prior year on an organic constant
currency basis, reflecting a sequential weakening in demand growth. We
continue to invest for long-term growth in our new product development,
geographic expansion and market expansion initiatives. As we enter 2016,
we are cautiously optimistic that our growth initiatives and end market
exposure will help us achieve our outlook of low single digit organic
constant currency growth for the first quarter and low-to-mid single
digit growth for the full year 2016. While worldwide macroeconomic
conditions and currency fluctuations remain a concern, we will drive for
growth in every reportable segment and geography again in 2016. At
current exchange rates, unfavorable changes in foreign currency
translation rates create a full-year headwind of approximately 2 percent
on sales and 5 percent on net income for 2016, with the largest headwind
in the first half."
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,
our Form 10Qs and Form 8-Ks, and other disclosures, including our 2014
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 currency translation rates;
changes in laws and regulations; compliance with anti-corruption 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; political
instability; results of and costs associated with, litigation,
administrative proceedings and regulatory reviews incident to our
business as well as indemnification claims under our asset purchase
agreement with Carlisle Companies Incorporated, Carlisle Fluid
Technologies, Inc., and Finishing Brands Holdings Inc.; the possibility
of decline in purchases from few large customers of the Contractor
segment; variations in activity in the construction and automotive
industries; and natural disasters. Please refer to Item 1A of our Annual
Report on Form 10-K for fiscal year 2014 (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. 26,
2016, at 10:00 a.m. CT, 11:00 a.m. ET, 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 on 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 on Graco’s website, or by telephone
beginning at approximately 1:00 p.m. CT on Jan. 26, 2016, by dialing
888-203-1112, Conference ID #2790548, 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 Jan. 30, 2016.
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 Statement of Earnings (Unaudited)
|
|
|
|
|
|
|
|
Quarter Ended
|
|
Year Ended
|
(in thousands, except per share amounts)
|
|
Dec 25,
|
|
Dec 26,
|
|
Dec 25,
|
|
Dec 26,
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Net Sales
|
|
$
|
325,557
|
|
|
$
|
306,005
|
|
|
$
|
1,286,485
|
|
|
$
|
1,221,130
|
|
Cost of products sold
|
|
153,805
|
|
|
141,245
|
|
|
601,785
|
|
|
554,394
|
|
Gross Profit
|
|
171,752
|
|
|
164,760
|
|
|
684,700
|
|
|
666,736
|
|
Product development
|
|
13,579
|
|
|
13,897
|
|
|
58,559
|
|
|
54,246
|
|
Selling, marketing and distribution
|
|
51,931
|
|
|
51,440
|
|
|
201,855
|
|
|
194,751
|
|
General and administrative
|
|
30,166
|
|
|
29,958
|
|
|
122,161
|
|
|
108,814
|
|
Operating Earnings
|
|
76,076
|
|
|
69,465
|
|
|
302,125
|
|
|
308,925
|
|
Interest expense
|
|
4,190
|
|
|
4,903
|
|
|
17,643
|
|
|
18,733
|
|
Held separate investment (income), net
|
|
(891
|
)
|
|
(3,194
|
)
|
|
(191,635
|
)
|
|
(25,951
|
)
|
Other expense (income), net
|
|
(257
|
)
|
|
715
|
|
|
1,404
|
|
|
1,070
|
|
Earnings Before Income Taxes
|
|
73,034
|
|
|
67,041
|
|
|
474,713
|
|
|
315,073
|
|
Income taxes
|
|
19,490
|
|
|
18,000
|
|
|
129,000
|
|
|
89,500
|
|
Net Earnings
|
|
$
|
53,544
|
|
|
$
|
49,041
|
|
|
$
|
345,713
|
|
|
$
|
225,573
|
|
Net Earnings per Common Share
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.96
|
|
|
$
|
0.83
|
|
|
$
|
6.00
|
|
|
$
|
3.75
|
|
Diluted
|
|
$
|
0.94
|
|
|
$
|
0.80
|
|
|
$
|
5.86
|
|
|
$
|
3.65
|
|
Weighted Average Number of Shares
|
|
|
|
|
|
|
|
|
Basic
|
|
55,898
|
|
|
59,388
|
|
|
57,610
|
|
|
60,148
|
|
Diluted
|
|
57,257
|
|
|
60,973
|
|
|
59,007
|
|
|
61,745
|
|
|
|
|
|
|
Segment Information (Unaudited)
|
(In thousands)
|
|
|
|
|
|
|
|
Quarter Ended
|
|
Year Ended
|
|
|
Dec 25,
|
|
Dec 26,
|
|
Dec 25,
|
|
Dec 26,
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Net Sales
|
|
|
|
|
|
|
|
|
Industrial
|
|
$
|
167,137
|
|
|
$
|
163,239
|
|
|
$
|
616,069
|
|
|
$
|
622,343
|
|
Process
|
|
69,294
|
|
|
62,634
|
|
|
273,631
|
|
|
223,213
|
|
Contractor
|
|
89,126
|
|
|
80,132
|
|
|
396,785
|
|
|
375,574
|
|
Total
|
|
$
|
325,557
|
|
|
$
|
306,005
|
|
|
$
|
1,286,485
|
|
|
$
|
1,221,130
|
|
Operating Earnings
|
|
|
|
|
|
|
|
|
Industrial
|
|
$
|
57,249
|
|
|
$
|
54,746
|
|
|
$
|
201,749
|
|
|
$
|
203,910
|
|
Process
|
|
8,910
|
|
|
9,454
|
|
|
43,833
|
|
|
47,830
|
|
Contractor
|
|
15,897
|
|
|
11,995
|
|
|
86,447
|
|
|
81,892
|
|
Unallocated corporate (expense)
|
|
(5,980
|
)
|
|
(6,730
|
)
|
|
(29,904
|
)
|
|
(24,707
|
)
|
Total
|
|
$
|
76,076
|
|
|
$
|
69,465
|
|
|
$
|
302,125
|
|
|
$
|
308,925
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GRACO INC. AND SUBSIDIARIES
|
CONSOLIDATED BALANCE SHEETS (Unaudited)
|
(In thousands)
|
|
|
|
|
|
|
|
Dec 25,
|
|
Dec 26,
|
|
|
2015
|
|
2014
|
ASSETS
|
|
|
|
|
Current Assets
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
52,295
|
|
|
$
|
23,656
|
|
Accounts receivable, less allowances of $10,400 and $8,100
|
|
225,509
|
|
|
214,944
|
|
Inventories
|
|
202,136
|
|
|
159,797
|
|
Investment in businesses held separate
|
|
—
|
|
|
421,767
|
|
Other current assets
|
|
29,077
|
|
|
19,374
|
|
Total current assets
|
|
509,017
|
|
|
839,538
|
|
Property, Plant and Equipment, net
|
|
178,437
|
|
|
161,230
|
|
Goodwill
|
|
394,488
|
|
|
292,574
|
|
Other Intangible Assets, net
|
|
227,987
|
|
|
176,278
|
|
Deferred Income Taxes
|
|
56,976
|
|
|
48,951
|
|
Other Assets
|
|
24,447
|
|
|
26,207
|
|
Total Assets
|
|
$
|
1,391,352
|
|
|
$
|
1,544,778
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
|
Current Liabilities
|
|
|
|
|
Notes payable to banks
|
|
$
|
15,901
|
|
|
$
|
5,016
|
|
Trade accounts payable
|
|
40,505
|
|
|
39,306
|
|
Salaries and incentives
|
|
44,673
|
|
|
40,775
|
|
Dividends payable
|
|
18,447
|
|
|
17,790
|
|
Other current liabilities
|
|
75,090
|
|
|
69,850
|
|
Total current liabilities
|
|
194,616
|
|
|
172,737
|
|
Long-term Debt
|
|
392,695
|
|
|
615,000
|
|
Retirement Benefits and Deferred Compensation
|
|
137,457
|
|
|
136,812
|
|
Deferred Income Taxes
|
|
22,303
|
|
|
24,197
|
|
Other non-current liabilities
|
|
8,730
|
|
|
—
|
|
Shareholders’ Equity
|
|
|
|
|
Common stock
|
|
55,766
|
|
|
59,199
|
|
Additional paid-in-capital
|
|
398,774
|
|
|
384,704
|
|
Retained earnings
|
|
285,508
|
|
|
252,865
|
|
Accumulated other comprehensive income (loss)
|
|
(104,497
|
)
|
|
(100,736
|
)
|
Total shareholders’ equity
|
|
635,551
|
|
|
596,032
|
|
Total Liabilities and Shareholders’ Equity
|
|
$
|
1,391,352
|
|
|
$
|
1,544,778
|
|
|
|
|
|
|
|
|
|
|
GRACO INC. AND SUBSIDIARIES
|
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
|
(In thousands)
|
|
|
|
|
|
Year Ended
|
|
|
Dec 25,
|
|
Dec 26,
|
|
|
2015
|
|
2014
|
Cash Flows From Operating Activities
|
|
|
|
|
Net earnings
|
|
$
|
345,713
|
|
|
$
|
225,573
|
|
Adjustments to reconcile net earnings to net cash provided by
operating activities
|
|
|
|
|
Depreciation and amortization
|
|
44,607
|
|
|
35,515
|
|
Deferred income taxes
|
|
(11,585
|
)
|
|
329
|
|
Share-based compensation
|
|
19,224
|
|
|
17,249
|
|
Excess tax benefit related to share-based payment arrangements
|
|
(1,775
|
)
|
|
(6,634
|
)
|
Gain on sale of business
|
|
(149,894
|
)
|
|
—
|
|
Change in
|
|
|
|
|
Accounts receivable
|
|
(18,276
|
)
|
|
(26,557
|
)
|
Inventories
|
|
(34,109
|
)
|
|
(15,079
|
)
|
Trade accounts payable
|
|
4,305
|
|
|
450
|
|
Salaries and incentives
|
|
(1,385
|
)
|
|
1,520
|
|
Retirement benefits and deferred compensation
|
|
11,870
|
|
|
5,052
|
|
Other accrued liabilities
|
|
1,645
|
|
|
6,151
|
|
Other
|
|
(20,701
|
)
|
|
(2,314
|
)
|
Net cash from operating activities
|
|
189,639
|
|
|
241,255
|
|
Cash Flows From Investing Activities
|
|
|
|
|
Property, plant and equipment additions
|
|
(41,749
|
)
|
|
(30,636
|
)
|
Acquisition of businesses, net of cash acquired
|
|
(189,017
|
)
|
|
(185,462
|
)
|
Investment in businesses held separate
|
|
—
|
|
|
530
|
|
Proceeds from sale of assets
|
|
610,162
|
|
|
—
|
|
Investment in restricted assets
|
|
(9,518
|
)
|
|
—
|
|
Other
|
|
61
|
|
|
(1,163
|
)
|
Net cash used in investing activities
|
|
369,939
|
|
|
(216,731
|
)
|
Cash Flows From Financing Activities
|
|
|
|
|
Borrowings (payments) on short-term lines of credit, net
|
|
11,216
|
|
|
(4,459
|
)
|
Borrowings on notes and long-term line of credit
|
|
720,605
|
|
|
717,845
|
|
Payments on long-term line of credit
|
|
(942,910
|
)
|
|
(511,215
|
)
|
Payments of debt issuance costs
|
|
—
|
|
|
(890
|
)
|
Excess tax benefit related to share-based payment arrangements
|
|
1,775
|
|
|
6,634
|
|
Common stock issued
|
|
18,835
|
|
|
30,199
|
|
Common stock repurchased
|
|
(274,503
|
)
|
|
(195,326
|
)
|
Cash dividends paid
|
|
(69,429
|
)
|
|
(66,362
|
)
|
Net cash from (used in) financing activities
|
|
(534,411
|
)
|
|
(23,574
|
)
|
Effect of exchange rate changes on cash
|
|
3,472
|
|
|
2,950
|
|
Net increase (decrease) in cash and cash equivalents
|
|
28,639
|
|
|
3,900
|
|
Cash and Cash Equivalents
|
|
|
|
|
Beginning of year
|
|
23,656
|
|
|
19,756
|
|
End of year
|
|
$
|
52,295
|
|
|
$
|
23,656
|
|
|
|
|
|
|
|
|
|
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20160125006451/en/ Copyright Business Wire 2016
Source: Business Wire
(January 25, 2016 - 4:10 PM EST)
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