Graco Inc. Reports Record Third Quarter Results; Earnings Per Share Increase 22 Percent Net Sales Increase 10 Percent
17 October 2000
Graco Inc. Reports Record Third Quarter Results; Earnings Per Share Increase 22 Percent Net Sales Increase 10 Percent
MINNEAPOLIS--Oct. 17, 2000--Graco Inc. today announced record sales, net earnings and earnings per share for the three months ended September 29, 2000. On a diluted basis, earnings per share for the third quarter were $0.88 compared with $0.72 for the same period last year, a 22 percent increase. Net sales of $120.8 million were 10 percent higher than the $110.1 million recorded in the third quarter of 1999.Graco's Chief Executive Officer George Aristides said, "Overall we are pleased with Graco's results. This is our 25th consecutive quarter of year-to-year earnings per share growth and it is our third consecutive quarter of double-digit sales growth. So far this year we have reported increases in our net sales and net earnings of 13 percent and 16 percent, respectively. These figures are very good given the weakness of the dollar. Our reported net sales and net earnings this year would have been 15 percent and 21 percent higher than the same period last year at consistent exchange rates."
GRACO INC. AND SUBSIDIARIES
Third Quarter Nine Months
(13 weeks) Ended (39 weeks) Ended
------------------ -------------------
(In Thousands, except
per share amounts) Sept. 29, Sept. 24, Sept. 29, Sept. 24,
2000 1999 2000 1999
--------- -------- -------- --------
NET SALES $120,800 $110,076 $371,195 $328,020
NET EARNINGS $18,073 $15,043 $51,379 $44,205
BASIC NET EARNINGS
PER COMMON SHARE $0.89 $0.74 $2.53 $2.19
Basic weighted average number
of common shares 20,212 20,338 20,284 20,194
DILUTED NET EARNINGS
PER COMMON SHARE $0.88 $0.72 $2.49 $2.12
Diluted weighted average
number of common shares 20,551 21,016 20,611 20,823
Worldwide, Industrial/Automotive Equipment sales declined 2 percent from last year's third quarter, Contractor Equipment sales increased 26 percent, and Lubrication Equipment sales increased 3 percent.
Third quarter sales in the Americas of $87.9 million were 17 percent higher when compared to the same period last year. European sales declined 13 percent to $20.9 million, and would have been 1 percent lower than last year's third quarter with consistent exchange rates. In the Asia Pacific region, third quarter sales increased 7 percent to $12.0 million, and would have been 3 percent higher than last year with consistent exchange rates.
Sales for the nine-month period of $371.2 million were 13 percent higher than last year, and would have been 15 percent higher with consistent exchange rates. In the Americas, sales increased 18 percent to $273.5 million. European sales decreased 1 percent to $63.1 million, and would have increased 10 percent with consistent exchange rates. Sales in Asia Pacific increased 5 percent to $34.6 million, and would have been flat compared to the same period last year with consistent exchange rates.
Mr. Aristides said, "While we remain cautious about the uncertain direction of the economy, we are committed to enhancing shareholder value through our key strategies of introducing new and innovative products, adding and developing distributors, and entering new markets where Graco can add value."
SAFE HARBOR CAUTIONARY STATEMENT
The information in this press release contains "forward-looking statements" about the Company's expectations of the future, which are subject to certain risk factors that could cause actual results to differ materially from those expectations. These factors include economic conditions in the United States and other major world economies, currency exchange fluctuations, and additional factors identified in Exhibit 99 to the Company's Annual Report on Form 10-K for fiscal year 1999.
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 spray fluid 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.
GRACO INC. AND SUBSIDIARIES
Consolidated Statements of Earnings
(In thousands, except Third Quarter Nine Months
per share amounts) (13 weeks) Ended (39 weeks) Ended
------------------- --------------------
Sept. 29, Sept. 24, Sept. 29, Sept. 24,
2000 1999 2000 1999
------------------- --------------------
NET SALES $120,800 $110,076 $371,195 $328,020
Cost of products sold 57,851 52,566 180,015 158,034
--------- -------- --------- ---------
GROSS PROFIT 62,949 57,510 191,180 169,986
Product development 5,324 4,845 15,244 14,370
Selling, marketing
and distribution 20,569 19,049 66,743 57,289
General and administrative 8,531 9,599 25,985 28,729
--------- -------- --------- ---------
OPERATING PROFIT 28,525 24,017 83,208 69,598
Interest expense 985 1,661 3,522 5,472
Other (income)/expense, net 267 (187) 1,507 (2,579)
--------- -------- --------- ---------
EARNINGS BEFORE INCOME TAXES 27,273 22,543 78,179 66,705
Income taxes 9,200 7,500 26,800 22,500
--------- -------- --------- ---------
NET EARNINGS $18,073 $15,043 $51,379 $44,205
--------- -------- --------- ---------
BASIC NET EARNINGS
PER COMMON SHARE $ 0.89 $ 0.74 $ 2.53 $ 2.19
--------- -------- --------- ---------
Basic weighted average
number of common shares 20,212 20,338 20,284 20,194
DILUTED NET EARNINGS
PER COMMON SHARE $ 0.88 $ 0.72 $ 2.49 $ 2.12
Diluted weighted average
number of common shares 20,551 21,016 20,611 20,823
All figures are subject to audit and adjustment at the end of the fiscal year.