Graco Inc.

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SEC Filings

10-K
GRACO INC filed this Form 10-K on 02/16/2016
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Process

The following table presents net sales, components of net sales change and operating earnings as a percentage of sales for the Process segment (dollars in millions):
 
2015
 
2014
 
2013
Sales
 
 
 
 
 
Americas
$
172

 
$
147

 
$
111

EMEA
55

 
38

 
32

Asia Pacific
46

 
38

 
37

Total
$
273

 
$
223

 
$
180

Components of Net Sales Change
 
 
 
 
 
Volume and Price
1
 %
 
8
 %
 
1
 %
Acquisitions
26
 %
 
17
 %
 
 %
Currency
(4
)%
 
(1
)%
 
(1
)%
Total
23
 %
 
24
 %
 
 %
Operating Earnings as a Percentage of Sales
16
 %
 
21
 %
 
25
 %

In 2015, sales in the Process segment totaled $273 million, an increase of 23 percent from the prior year. Sales increased 17 percent in the Americas, 43 percent in EMEA (57 percent at consistent translation rates) and 22 percent in Asia Pacific (30 percent at consistent translation rates). Acquired operations contributed $56 million (26 percentage points of growth) to the Process segment for the year. Results for 2015 included the operations of HiP and White Knight, both acquired in January 2015, and full-year operations of Alco, acquired in October 2014. Operating earnings decreased by 5 percentage points in 2015 due mostly to currency translation, lower margins from acquired operations and incremental investment in product development.

In 2014, sales in the Process segment totaled $223 million, an increase of 24 percent from the prior year. Sales increased 31 percent in the Americas, 20 percent in EMEA and 5 percent in Asia Pacific. Results for 2014 included the operations from the date of acquisition of QED, acquired at the beginning of 2014 and Alco, acquired in October 2014. Acquired operations contributed $30 million (17 percentage points) of growth in the Process segment for the year. Operating earnings decreased by 4 percentage points in 2014 due mostly to lower margins from acquired operations.

Although the Americas represent the substantial majority of sales for the Process segment, and indicators in that region are the most significant, management monitors indicators such as levels of gross domestic product, capital investment, industrial production, oil and natural gas markets and mining activity worldwide.

Contractor

The following table presents net sales, components of net sales change and operating earnings as a percentage of sales for the Contractor segment (dollars in millions):
 
2015
 
2014
 
2013
Sales
 
 
 
 
 
Americas
$
299

 
$
265

 
$
237

EMEA
63

 
71

 
67

Asia Pacific
35

 
40

 
39

Total
$
397

 
$
376

 
$
343

Components of Net Sales Change
 
 
 
 
 
Volume and Price
9
 %
 
10
%
 
14
%
Currency
(3
)%
 
%
 
1
%
Total
6
 %
 
10
%
 
15
%
Operating Earnings as a Percentage of Sales
22
 %
 
22
%
 
21
%

In 2015, sales in the Contractor segment totaled $397 million, an increase of 6 percent from the prior year. Sales increased 13 percent in the Americas, decreased 10 percent in EMEA (increased 2 percent at consistent translation rates) and decreased 14 percent in Asia Pacific (9 percent at consistent translation rates). Strong U.S. residential and commercial construction markets continued to drive

22

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