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 4 GRACO


Financial Results Adjusted for Comparability

Adoption of a new stock compensation accounting standard and recognition of certain tax planning benefits in 2017 created large fluctuations in financial results compared to prior periods. Excluding the excess tax benefits on exercised stock options and other tax planning benefits recognized as reductions of income taxes in 2017 presents a more consistent comparison of financial results. A calculation of the non-GAAP measurements of adjusted income taxes, net earnings and diluted earnings per share follows (in millions except per share amounts):
 
Three Months Ended
 
Nine Months Ended
 
Sep 29,
2017
 
Sep 23,
2016
 
Sep 29,
2017
 
Sep 23,
2016
Income taxes, as reported
$
20.9

 
$
22.2

 
$
57.6

 
$
62.7

Excess tax benefit from option exercises
3.2

 

 
20.5

 

Tax planning benefit
5.5

 

 
5.5

 

Income taxes, adjusted
$
29.6

 
$
22.2

 
$
83.6

 
$
62.7

 
 
 
 
 
 
 
 
Effective income tax rate
 
 
 
 
 
 
 
   As reported
22
%
 
29
%
 
21
%
 
30
%
   Adjusted
31
%
 
29
%
 
31
%
 
30
%
 
 
 
 
 
 
 
 
Net Earnings, as reported
$
75.5

 
$
54.4

 
$
216.0

 
$
144.9

Excess tax benefit from option exercises
(3.2
)
 

 
(20.5
)
 

Tax planning benefit
(5.5
)
 

 
(5.5
)
 

Net Earnings, adjusted
$
66.8

 
$
54.4

 
$
190.0

 
$
144.9

 
 
 
 
 
 
 
 
Weighted Average Diluted Shares
58.2

 
57.0

 
57.9

 
56.9

Diluted Earnings per Share
 
 
 
 
 
 
 
   As reported
$
1.30

 
$
0.95

 
$
3.73

 
$
2.55

   Adjusted
$
1.15

 
$
0.95

 
$
3.28

 
$
2.55


Cautionary Statement Regarding Forward-Looking Statements

The Company desires to take advantage of the “safe harbor” provisions regarding forward-looking statements of the Private Securities Litigation Reform Act of 1995 and is filing this Cautionary Statement in order to do so. From time to time various forms filed by our Company with the Securities and Exchange Commission, including our Form 10-K, Form 10-Qs and Form 8-Ks, and other disclosures, including our 2016 Overview report, press releases, earnings releases, analyst briefings, conference calls and other written documents or oral statements released by our Company, may contain forward-looking statements. Forward-looking statements generally use words such as “expect,” “foresee,” “anticipate,” “believe,” “project,” “should,” “estimate,” “will,” and similar expressions, and reflect our Company’s expectations concerning the future. All forecasts and projections are forward-looking statements. Forward-looking statements are based upon currently available information, but various risks and uncertainties may cause our Company’s actual results to differ materially from those expressed in these statements. The Company undertakes no obligation to update these statements in light of new information or future events.

Future results could differ materially from those expressed due to the impact of changes in various factors. These risk factors include, but are not limited to: our Company’s growth strategies, which include making acquisitions, investing in new products, expanding geographically and targeting new industries; economic conditions in the United States and other major world economies; changes in currency translation rates; changes in laws and regulations; compliance with anti-corruption and trade laws; new entrants who copy our

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