Graco Inc.

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SEC Filings

10-K
GRACO INC filed this Form 10-K on 02/17/2015
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Table of Contents

Cash Flow. A summary of cash flow follows (in millions):

 

  2014   2013   2012  

Operating Activities

$ 241   $ 243   $ 190  

Investing Activities

  (217   (31   (695

Financing Activities

  (23   (226   233  

Effect of exchange rates on cash

  3     3     -    
  

 

 

    

 

 

    

 

 

 

Net cash provided (used)

  4     (11   (272
  

 

 

    

 

 

    

 

 

 

Cash and cash equivalents at year-end

$ 24   $ 20   $ 31  
  

 

 

    

 

 

    

 

 

 

Cash Flows From Operating Activities. Net cash provided by operating activities was $241 million in 2014 and $243 million in 2013. The increase in accounts receivable and inventories was $20 million higher in 2014 than the increase in the comparable period of 2013. Accounts receivable and inventory balances have increased since the end of 2013 due to increases in business activity.

Net cash provided by operating activities was $243 million in 2013 and $190 million in 2012. During 2013, changes in receivables and inventories increased in line with volume growth. Net cash provided by operating activities in 2013 was driven by net income of $211 million and adjustments for depreciation and amortization and share-based compensation.

Cash Flows Used in Investing Activities. Cash flows used in investing activities totaled $217 million in 2014, compared to $31 million in 2013. During 2014, cash outflows consisted of acquisitions of $185 million and additions to property, plant and equipment of $31 million. During 2013, cash used in investing activities was $31 million compared to $695 million in 2012. During 2013, cash outflows consisted of $23 million of additions to property, plant and equipment, and business acquisitions of $12 million.

Cash Flows Used in Financing Activities. Cash flows used in financing activities totaled $24 million in 2014, compared to $226 million in 2013. Cash inflows were generated by borrowings on outstanding lines of credit of $202 million and share issuances of $30 million. This was offset by share repurchases of $195 million and dividends paid of $66 million. During 2013, cash used in financing activities was $226 million. Net payments on outstanding lines of credit were $148 million, share repurchases totaled $68 million and cash dividends paid were $61 million in 2013. These cash uses were offset by the issuance of stock of $42 million.

In September 2012, the Board of Directors authorized the Company to purchase up to 6 million shares of its outstanding stock, primarily through open-market transactions. This authorization will expire on September 30, 2015. Under the current authorization, 2.5 million shares remain available for purchase as of December 26, 2014.

The Company repurchased and retired 2.6 million shares at a cost of $195 million in 2014, compared to repurchasing nearly 1 million shares at a cost of $68 million in 2013 and $1 million of share repurchases in 2012. Share repurchases are expected to continue in 2015 with a goal of weighted average dilutive shares outstanding at or below 60 million shares.

Off-Balance Sheet Arrangements and Contractual Obligations. As of December 26, 2014, the Company is obligated to make cash payments in connection with its long-term debt, operating leases and purchase obligations in the amounts listed below. The Company has no significant off-balance sheet debt or other unrecorded obligations other than the items noted in the following table. In addition to the commitments noted in the following table, the Company could be obligated to perform under standby letters of credit totaling $2 million at December 26, 2014. The Company has also guaranteed the debt of its subsidiaries up to $9 million. All debt of subsidiaries is reflected in the consolidated balance sheets.

 

  Payments due by period (in millions)  
  Total   Less than
1 year
  1-3
years
  3-5
years
  More than
5 years
 

Long-term debt

$ 615   $ -   $ -   $ 390   $ 225  

Operating leases

  29     6     9     6     8  

Purchase obligations

  112     112     -     -     -  

Interest on long-term debt

  125     18     37     30     40  

Unfunded pension and postretirement medical benefits

  30     2     5     6     17  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

$   911   $   138   $   51   $   432   $   290  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

1  The Company is committed to pay suppliers under the terms of open purchase orders issued in the normal course of business. The Company also has commitments with certain suppliers to purchase minimum quantities, and under the terms of certain agreements, the Company is committed for certain portions of the supplier’s inventory. The Company does not purchase, or commit to purchase, quantities in excess of normal usage or amounts that cannot be used within one year.

 

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