Graco Inc.

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SEC Filings

8-K
GRACO INC filed this Form 8-K on 01/30/2017
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Exhibit

Exhibit 99.1
 
 
GRACO INC.
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P.O. Box 1441
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Minneapolis, MN
55440-1441
NYSE: GGG
FOR IMMEDIATE RELEASE:
FOR FURTHER INFORMATION:
Monday, January 30, 2017
Financial Contact: Christian Rothe, 612-623-6205
Media Contact: Charlotte Boyd, 612-623-6153
Charlotte_M_Boyd@graco.com
Graco Reports Record Fourth Quarter and Full-Year Sales
Non-cash Impairment Charge of $192 million

MINNEAPOLIS (January 30, 2017) - Graco Inc. (NYSE: GGG) today announced results for the quarter and year ended December 30, 2016.
Summary
$ in millions except per share amounts
 
Quarter Ended
 
Year Ended
 
Dec 30,
2016
 
Dec 25,
2015
 
% Change
 
Dec 30,
2016
 
Dec 25,
2015
 
% Change
Net Sales
$
349.1

 
$
325.6

 
7
 %
 
$
1,329.3

 
$
1,286.5

 
3
 %
Operating Earnings (Loss)
(106.9
)
 
76.1

 
(240)
 %
 
113.9

 
302.1

 
(62)
 %
Net Earnings (Loss)
(104.2
)
 
53.5

 
(295)
 %
 
40.7

 
345.7

 
(88)
 %
Diluted Net Earnings (Loss) per Common Share
$
(1.83
)
 
$
0.94

 
(295)
 %
 
$
0.71

 
$
5.86

 
(88)
 %
Diluted Net Earnings per Common Share, adjusted (1)
$
1.00

 
$
0.93

 
8
 %
 
$
3.55

 
$
3.46

 
3
 %
(1) Excludes effects of non-cash impairment charges recorded in the fourth quarter of 2016 and the net investment income from the Liquid Finishing businesses sold in the second quarter of 2015. See adjusted financial results below for a reconciliation of the adjusted non-GAAP financial measures to GAAP.
Earnings (loss) for the quarter and year included non-cash impairment charges of $192 million ($161 million after tax effects) related to assets of businesses acquired in 2014 and 2015 that have significant exposure to oil and natural gas markets.
Sales for the quarter increased 7 percent. The fiscal fourth quarter of 2016 included 14 weeks compared to 13 weeks in 2015.
Gross margin rates remained strong, consistent with last year's rates.
Operating earnings before non-cash impairment charges were up 12 percent for the quarter compared to the fourth quarter last year.
Earnings for the year 2015 included net investment income of $192 million ($141 million after tax effects) from Liquid Finishing businesses sold in the second quarter of 2015.
Net earnings for the year 2015 included non-recurring income tax benefits totaling $9 million, or $0.15 per diluted share.
“The Company posted the highest quarterly sales growth rate of the year in the 14-week fourth quarter, with double-digit performance from our Contractor segment and high single-digit growth from our EMEA region,” said Patrick J. McHale, Graco’s President and Chief Executive Officer. “On an organic, constant currency basis we achieved growth in every region and reportable segment for the quarter and the full year, with the exception of our Process segment, which continues to experience headwinds from ongoing weakness in the oil and natural gas market. The large impairment charge in our Oil and Natural Gas business this quarter is a disappointment, but we remain committed to the long-term potential of this business. We continue to invest in commercial resources to expand geographic coverage, drive innovation, grow our channel, and increase market share. As the market recovers, we expect to benefit from these actions and will strive to turn this business into a solid performer for Graco.”

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