Graco Inc.

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SEC Filings

10-Q
GRACO INC filed this Form 10-Q on 04/26/2017
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The following table presents the components of net sales change by geographic region for the Process segment:
 
Three Months Ended   
 
Volume and Price
 
Acquisitions
 
Currency
 
Total
Americas
11%
 
0%
 
1%
 
12%
EMEA
15%
 
0%
 
(8)%
 
7%
Asia Pacific
3%
 
0%
 
(2)%
 
1%
Segment Total
11%
 
0%
 
(2)%
 
9%

The Process segment had solid sales growth across most product applications. Operating margin rates for this segment increased 8 percentage points compared to last year due to higher sales volume, favorable expense leverage and a decrease in intangible amortization related to the non-cash impairment recorded in the fourth quarter of 2016.

Contractor Segment

The following table presents net sales and operating earnings as a percentage of sales for the Contractor segment (dollars in millions):
 
Three Months Ended   
 
March 31,
2017
 
March 25,
2016
Net sales
 
 
 
Americas
$
86.4

 
$
68.3

EMEA
20.1

 
17.6

Asia Pacific
7.7

 
7.6

Total
$
114.2

 
$
93.5

Operating earnings as a percentage of net sales
23
%
 
18
%

The following table presents the components of net sales change by geographic region for the Contractor segment:
 
Three Months Ended   
 
Volume and Price
 
Acquisitions
 
Currency
 
Total
Americas
26%
 
0%
 
0%
 
26%
EMEA
18%
 
0%
 
(4)%
 
14%
Asia Pacific
1%
 
0%
 
0%
 
1%
Segment Total
23%
 
0%
 
(1)%
 
22%

New product launches and strong customer out-the-door sales drove double-digit percentage growth in both Paint and Home Center channels in North America. Operating margin rates for the Contractor segment increased 5 percentage points compared to last year due to higher sales volume, improved gross margin rate and favorable expense leverage.

Liquidity and Capital Resources

Net cash provided by operating activities of $50 million increased $21 million compared to the first quarter last year, corresponding to the increase in net earnings. Increases in accounts receivable, inventories and other accrued liabilities reflect growth in business activity in the first quarter of 2017. The Company used cash of $10 million in 2017 and $49 million in 2016 to acquire businesses that were not material to the consolidated financial statements. Other significant uses of cash in 2016 included share repurchases of $90 million (partially offset by $30 million of proceeds from shares issued), cash dividends of $20 million and property, plant and equipment additions of $8 million.

At March 31, 2017, cash balances of $9 million were restricted to funding of certain self-insured loss reserves. Restricted cash is included within other current assets on the Company's consolidated balance sheet.


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