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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Page 3 GRACO


Components of net sales change by geographic region for the Industrial segment were as follows:
 
Three Months Ended   
 
Nine Months Ended
 
Volume and Price
 
Acquisitions
 
Currency
 
Total
 
Volume and Price
 
Acquisitions
 
Currency
 
Total
Americas
11%
 
1%
 
0%
 
12%
 
9%
 
0%
 
0%
 
9%
EMEA
13%
 
0%
 
5%
 
18%
 
10%
 
0%
 
(1)%
 
9%
Asia Pacific
30%
 
1%
 
(1)%
 
30%
 
22%
 
1%
 
(3)%
 
20%
Consolidated
17%
 
0%
 
1%
 
18%
 
12%
 
1%
 
(1)%
 
12%

Sales increased in all Industrial segment product applications. Year-to-date operating margin rate for the Industrial segment increased 3 percentage points compared to last year. Favorable effects of higher sales volume and expense leverage were partially offset by the unfavorable effect of currency translation.

Components of net sales change by geographic region for the Process segment were as follows:
 
Three Months Ended   
 
Nine Months Ended
 
Volume and Price
 
Acquisitions
 
Currency
 
Total
 
Volume and Price
 
Acquisitions
 
Currency
 
Total
Americas
11%
 
0%
 
0%
 
11%
 
12%
 
0%
 
0%
 
12%
EMEA
(3)%
 
0%
 
1%
 
(2)%
 
7%
 
0%
 
(4)%
 
3%
Asia Pacific
17%
 
0%
 
0%
 
17%
 
17%
 
0%
 
(1)%
 
16%
Consolidated
9%
 
0%
 
1%
 
10%
 
12%
 
0%
 
(1)%
 
11%

The Process segment had solid sales growth in legacy product applications, partially offset by the effects of continued weakness in Oil and Natural Gas. Year-to-date operating margin rates for this segment increased 5 percentage points compared to last year due to higher sales volume, favorable expense leverage and a decrease in intangible amortization related to the impairment recorded in the fourth quarter of 2016.

Components of net sales change by geographic region for the Contractor segment were as follows:
 
Three Months Ended   
 
Nine Months Ended
 
Volume and Price
 
Acquisitions
 
Currency
 
Total
 
Volume and Price
 
Acquisitions
 
Currency
 
Total
Americas
12%
 
0%
 
0%
 
12%
 
12%
 
0%
 
0%
 
12%
EMEA
29%
 
0%
 
5%
 
34%
 
20%
 
0%
 
(1)%
 
19%
Asia Pacific
30%
 
0%
 
1%
 
31%
 
13%
 
0%
 
0%
 
13%
Consolidated
16%
 
0%
 
1%
 
17%
 
13%
 
0%
 
0%
 
13%

Contractor segment sales increased in all channels. Operating margin rates for both the quarter and the year to date for the Contractor segment increased 3 percentage points compared to last year due to higher sales volume, improved gross margin rate and favorable expense leverage.

Outlook

“Demand levels remained robust and broad based in the third quarter,” said McHale. “We expect the positive business environment to continue into 2018, however we do note that our fourth quarter represents our most difficult comparable of the year. In addition to the strong fourth quarter last year, we also had 14 weeks compared to only 13 weeks in this year's fourth quarter. Just given the math, we anticipate low single-digit organic, constant currency growth in the fourth quarter. With that outlook we have the possibility to achieve double-digit sales growth for the full year 2017. I'd like to thank our employees, suppliers, distributor partners and end customers for their contribution to our strong 2017 results. We will continue to invest in our core growth strategies as we finish the year, and will be working hard to get 2018 off to a good start."

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