Graco Inc. (NYSE: GGG) today announced results for the quarter and six months ended June 28, 2013.
$ in millions except per share amounts
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Diluted Net Earnings per Common Share
- Contractor segment sales drove the 7 percent sales increase for the quarter.
- Year-to-date sales increased 11 percent, driven by a 6 percentage point increase from the first quarter impact of the April 2012 acquisition of the Powder Finishing operations and strong Contractor segment sales.
- Gross margin rates remained strong at 55½ percent for the quarter and year-to-date, up from 52 percent for the second quarter last year, which included non-recurring inventory charges related to the acquisition of Powder Finishing.
- All segments generated double-digit percentage growth in operating earnings for the quarter.
- Operating expenses included acquisition and divestiture costs of $1 million, a decrease from the prior year of $7 million for the quarter and $10 million for the year-to-date.
- Other expense (income) included dividend income of $11 million for the quarter and $15 million for the year-to-date, up from $4 million for the quarter and year-to-date last year, received from the Liquid Finishing businesses held as a cost-method investment.
- Changes in currency translation rates did not have a significant effect on operating results.
- Cash flow from operations remained strong, with $91 million applied to reduction of long-term debt since the end of 2012.
"Thanks to the great efforts and dedication of our employees and distributors around the world, Graco achieved new quarterly records in the second quarter for both sales and earnings," said Patrick J. McHale, Graco's President and Chief Executive Officer. "Sales grew at a double-digit pace in the Americas, driven by 28 percent growth in our Contractor segment, which benefitted from an initial stocking of expanded product offerings in the home center channel and the ongoing recovery in the U.S. housing market. The Industrial segment in the Americas returned to growth in the second quarter, reflecting an increase in demand that was broad based throughout product categories. Macroeconomic conditions remained a headwind in the second quarter for regions outside of the Americas, however. In EMEA, sales grew slightly in the second quarter, aided by channel expansion in our Lubrication segment and stronger demand for Contractor segment products in emerging markets. In our Asia Pacific region, sales declined 6 percent in the second quarter, reflecting ongoing weakness in mining and general industrial applications."