Graco Inc.

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SEC Filings

10-K
GRACO INC filed this Form 10-K on 02/21/2017
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Non-cash impairment charges in 2016 and investment income from Liquid Finishing businesses sold in 2015 created large fluctuations in financial results. Excluding those items provides a more consistent comparison of ongoing financial results. A calculation of the non-GAAP measurements of adjusted operating earnings, net earnings and diluted earnings per share, excluding non-cash impairment charges in 2016 and investment income in 2015, follows (in millions except per share amounts):
 
2016
 
2015
 
2014
Operating Earnings, as reported
$
113.9

 
$
302.1

 
$
308.9

Impairment
192.0

 

 

Operating Earnings, adjusted
$
305.9

 
$
302.1

 
$
308.9

 
 
 
 
 
 
Net Earnings, as reported
$
40.7

 
$
345.7

 
$
225.6

Impairment
192.0

 

 

Held separate investment (income), net

 
(191.6
)
 

Income tax effect
(30.6
)
 
50.2

 

Net Earnings, adjusted
$
202.1

 
$
204.3

 
$
225.6

 
 
 
 
 
 
Weighted Average Diluted Shares
57.0

 
59.0

 
61.7

Diluted Earnings per Share
 
 
 
 
 
   As reported
$
0.71

 
$
5.86

 
$
3.65

   Adjusted
$
3.55

 
$
3.46

 
$
3.65


The following table presents an overview of components of net earnings as a percentage of net sales:
 
2016
 
2015
 
2014
Net Sales
100.0
 %
 
100.0
 %
 
100.0
 %
Cost of products sold
46.7

 
46.8

 
45.4

Gross profit
53.3

 
53.2

 
54.6

Product development
4.6

 
4.5

 
4.4

Selling, marketing and distribution
16.2

 
15.7

 
16.0

General and administrative
9.5

 
9.5

 
8.9

Impairment
14.4

 

 

Operating earnings
8.6

 
23.5

 
25.3

Interest expense
1.3

 
1.4

 
1.5

Held separate investment (income), net

 
(14.9
)
 
(2.1
)
Other expense (income), net

 
0.1

 
0.1

Earnings before income taxes
7.3

 
36.9

 
25.8

Income taxes
4.2

 
10.0

 
7.3

Net Earnings
3.1
 %
 
26.9
 %
 
18.5
 %

Net Sales

The following table presents net sales by geographic region (in millions):
 
2016
 
2015
 
2014
Americas(1)
$
777.0

 
$
759.9

 
$
684.5

EMEA(2)
311.1

 
291.4

 
304.7

Asia Pacific
241.2

 
235.2

 
231.9

Consolidated
$
1,329.3

 
$
1,286.5

 
$
1,221.1

(1)
North, South and Central America, including the United States. Sales in the United States were $686 million in 2016, $654 million in 2015 and $577 million in 2014.
(2)
Europe, Middle East and Africa

18

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