Graco Inc. (NYSE: GGG) today announced results for the quarter and nine months ended September 28, 2012.
$ in millions except per share amounts
|Thirteen Weeks Ended||Thirty-nine Weeks Ended|
|Sep 28,||Sep 30,||%||Sep 28,||Sep 30,||%|
|Diluted Net Earnings|
|per Common Share||$||0.60||$||0.60||
- Sales for the quarter increased 13 percent, all from the addition of Powder Finishing operations. Year-to-date sales increased 12 percent, with 9 percentage points from Powder Finishing.
- Changes in currency translation rates decreased sales by approximately $6 million for the quarter and $14 million year-to-date, and decreased net earnings by approximately $2 million for the quarter and $5 million year-to-date.
- For the quarter, sales at consistent translation rates and before acquisitions were up 5 percent in the Americas, up 4 percent in Europe and down 10 percent in Asia Pacific. On the same basis, year-to-date sales were up 7 percent in the Americas, up 3 percent in Europe and down 1 percent in Asia Pacific.
- On April 2, 2012, the Company completed the purchase of the finishing businesses of Illinois Tool Works Inc., including Powder Finishing and Liquid Finishing equipment operations. Costs and expenses related to the acquisition included:
- Acquisition and divestiture-related expenses included in operating expenses were $4 million for the quarter and $15 million year-to-date, compared to $3 million and $6 million for the comparable periods last year, respectively.
- Interest expense increased $2 million for the quarter and $9 million year-to-date.
- Non-recurring charges totaling $7 million related to inventory that reduced gross margin percentages for the year-to-date.
- Other expense (income) includes dividend income of $4 million for the quarter and $8 million year-to-date, received from the Liquid Finishing business held as a cost-method investment.
"Worldwide demand held steady in the third quarter as organic sales grew slightly compared with the previous year,” stated Patrick J. McHale, Graco's President and Chief Executive Officer. “We continued to see high variability in demand across products and geographies. On an organic basis, excluding the recently acquired Powder Finishing operations, sales in the Americas grew 5 percent, driven by double-digit growth in the Industrial and Lubrication segments. Contractor segment sales in the Americas were down 5 percent, negatively impacted by product mix and channel inventory realignment. On a constant currency basis, Graco's legacy European sales increased 4 percent, with increases posted in all segments, led by double-digit growth in Lubrication sales and a 9 percent increase in Contractor sales. In Asia Pacific, Graco’s legacy sales declined in every segment as business conditions during the quarter were more difficult than anticipated. The acquired Powder business is performing to expectations, and our overall factory performance was strong during the quarter, contributing to nice gross margin results. We remain committed to staying the course and executing our long-term growth initiatives."
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