We own a number of patents across our segments and have patent applications pending both in the United States and in other countries, license our patents to
others, and are a licensee of patents owned by others. In our opinion, our business is not materially dependent upon any one or more of these patents or licenses. Our Company also owns a number of trademarks in the United States and foreign
countries, including registered trademarks for GRACO, Gema, several forms of a capital G, and various product trademarks that are material to our business, inasmuch as they identify Graco and our products to our
We encounter a wide variety
of competitors that vary by product, industry and geographic area. Each of our segments generally has several competitors. Our competitors are both U.S. and foreign companies and range in size. We believe that our ability to compete depends upon
product quality, product reliability, innovation, design, customer support and service, personal relationships, specialized engineering and competitive pricing. Although no competitor duplicates all of our products, some competitors are larger than
our Company, both in terms of sales of directly competing products and in terms of total sales and financial resources. We also face competitors with different cost structures and expectations of profitability and these companies may offer
competitive products at lower prices. We may have to refresh our product line and continue development of our distribution channel to stay competitive. We are also facing competitors who illegally sell counterfeits of our products or otherwise
infringe on our intellectual property rights. We may have to increase our intellectual property enforcement activities.
Our compliance with federal, state and local environmental laws and regulations did not have a material effect upon our capital expenditures,
earnings or competitive position during the fiscal year ended December 26, 2014.
As of December 26, 2014, we employed approximately 3,100 persons, excluding the employees of the held separate Liquid Finishing businesses (see below).
Of this total, approximately 1,050 were employees based outside the United States, and 900 were hourly factory workers in the United States. None of our Companys United States employees are covered by a collective bargaining agreement. Various
national industry-wide labor agreements apply to certain employees in various countries outside the United States. Compliance with such agreements has no material effect on our Company or our operations.
Acquisition and Planned Divestiture of ITW Liquid Finishing Businesses
In April 2012, we purchased the finishing businesses of Illinois Tool Works Inc. (ITW). The acquisition included powder finishing and liquid
finishing equipment operations, technologies and brands (separately, the Powder Finishing and Liquid Finishing businesses). Results of the Powder Finishing businesses have been included in the Industrial segment since the
date of acquisition. In March 2012, the United States Federal Trade Commission (FTC) issued an order for our Company to hold the Liquid Finishing assets separate from our other businesses. In May 2012, the FTC issued a proposed decision
and order that required us to sell the held separate Liquid Finishing business assets no later than 180 days from the date the order becomes final. The FTC approved a final decision and order that became effective on October 9, 2014.
Pursuant to the final order, Graco must sell the Liquid Finishing business assets within 180 days of the effective date. On October 8, 2014, the Company
announced it had signed a definitive agreement to sell the Liquid Finishing business assets for $590 million cash, subject to regulatory approval and other customary closing conditions. The sale transaction is expected to close in the first half of
2015. Graco will continue to hold the Liquid Finishing businesses separate and maintain them as viable and competitive until the sale process is complete.
Item 1A. Risk Factors
Growth Strategies and Acquisitions Our growth strategies may not provide the return on investment desired if we are not successful in implementation
of these strategies.
Making acquisitions, investing in new products, expanding geographically and targeting new industries are among our growth
strategies. We may not obtain the return on investment desired if we are not successful in implementing these growth strategies. Suitable acquisitions must be located, completed and effectively integrated into or added to our existing businesses or
corporate structure for this growth strategy to be successful. We may not be able to obtain financing at a reasonable cost. We may be unsuccessful in acquiring and effectively integrating into or adding businesses to our current operations or
corporate structure. We