Graco Inc.

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SEC Filings

10-Q
GRACO INC filed this Form 10-Q on 10/25/2017
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Net Sales

The following table presents net sales by geographic region (in millions):
 
Three Months Ended   
 
Nine Months Ended
 
September 29,
2017
 
September 23,
2016
 
September 29,
2017
 
September 23,
2016
Americas(1)
$
217.7

 
$
194.4

 
$
639.1

 
$
575.3

EMEA(2)
86.7

 
73.6

 
252.8

 
229.4

Asia Pacific
75.4

 
59.2

 
208.0

 
175.5

Consolidated
$
379.8

 
$
327.2

 
$
1,099.9

 
$
980.2

(1)
North, South and Central America, including the United States
(2)
Europe, Middle East and Africa

The following table presents the components of net sales change by geographic region:
 
Three Months Ended   
 
Nine Months Ended
 
Volume and Price
 
Acquisitions
 
Currency
 
Total
 
Volume and Price
 
Acquisitions
 
Currency
 
Total
Americas
11%
 
1%
 
0%
 
12%
 
11%
 
0%
 
0%
 
11%
EMEA
14%
 
0%
 
4%
 
18%
 
12%
 
0%
 
(2)%
 
10%
Asia Pacific
28%
 
0%
 
(1)%
 
27%
 
20%
 
0%
 
(2)%
 
18%
Consolidated
15%
 
0%
 
1%
 
16%
 
13%
 
0%
 
(1)%
 
12%

Gross Profit

Gross profit margin rate decreased by one-half percentage point for the quarter and increased one-half percentage point for the year to date. Favorable effects from higher production volume and realized pricing were offset in varying degrees for the quarter and the year to date by the unfavorable impact of product mix.

Operating Expenses

Total operating expenses for the quarter increased $9 million (9 percent) compared to the third quarter last year. More than half of the increase was from increases in sales and earnings-based incentives and unallocated corporate operating expense (mostly from market-based stock compensation and pension costs). Year-to-date operating expenses increased $6 million (2 percent). Volume and rate-related increases were partially offset by a $3 million decrease in amortization expense and the impact of currency translation.

Income Taxes

The effective income tax rate for the quarter was 22 percent, down from 29 percent last year. The effective income tax rate for the year to date was 21 percent, down from 30 percent last year. Adoption of a new accounting standard, requiring excess tax benefits related to stock option exercises to be credited to the income tax provision (formerly credited to equity), reduced the tax provision by $3.2 million for the quarter and $20.5 million for the year to date, decreasing the effective tax rate for the quarter and year to date by 3 and 7 percentage points, respectively. The effective tax rates for both the quarter and year to date were further reduced by the impacts of tax planning that will not recur in 2018 and foreign earnings taxed at lower rates than the U.S.

 


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