The following information is being provided under Item 12, Results of Operations and Financial Condition. It is being furnished under Item 9 of this Form 8-K in accordance with interim guidance issued by the SEC in Release No. 33-8216. Such information, including the Exhibit attached hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934.

        On April 16, 2003, Graco Inc. issued a press release to report the Company’s results of operations and financial condition for the completed fiscal quarter ended March 28, 2003. The release is furnished as Exhibit 99 hereto and is incorporated herein by reference.

Signature

        Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Exhibit 99

GRACO REPORTS FIRST QUARTER 2003 RESULTS
NET EARNINGS INCREASE 17 PERCENT
NET SALES INCREASE 11 PERCENT

MINNEAPOLIS, MN (April 16) — Graco Inc. (NYSE: GGG) today announced first quarter net earnings of $18.2 million on net sales of $119.7 million – increases over the prior year of 17 percent and 11 percent, respectively. Diluted net earnings per share were $0.38 versus $0.32 last year, a 19 percent increase.

When compared to 2002 results, the weaker U.S. dollar versus foreign currencies helped to increase first quarter net earnings and net sales. Translated at consistent exchange rates, first quarter net earnings and net sales increased by 4 percent and 7 percent, respectively.

When compared to the first quarter of 2002, worldwide Contractor Equipment Division sales of $54.9 million increased 7 percent. In the Americas, sales were higher in the professional paint store channel and slightly lower in the home center channel. Successful new product launches in the paint store channel more than offset the impact of poor weather conditions and a weak commercial construction market in the United States. Sales increased in both Europe and Asia as both regions posted volume gains and benefited from favorable currency translations.

First quarter Industrial/Automotive Equipment Division sales of $52.4 million increased 14 percent versus the same period last year. Volume was virtually flat in the Americas and Europe, but strong demand for products in Asia, and favorable currency conditions in both Europe and Asia, led to the double-digit reported sales growth.

First quarter sales for the Lubrication Equipment Division were $12.4 million, up 17 percent from last year. Successful new product introductions and a February sales promotion were primarily responsible for the revenue growth in the quarter.

First quarter sales in the Americas increased 5 percent to $82.2 million. In Europe, net sales of $23.6 million were 19 percent higher than the first quarter of 2002, but measured in local currencies sales were flat. In Asia Pacific , net sales of $13.9 million were 47 percent higher than the first quarter of 2002, and sales measured in local currencies increased 40 percent. The large increase in Asia Pacific was characterized by higher sales in every region except Japan.

Graco’s gross profit margin, expressed as a percentage of sales, was 52.7 percent for the quarter versus 51.1 percent for the same period last year. The higher gross margin was due to favorable exchange rates.

Graco’s operating profit margin, expressed as a percentage of sales, was 22.7 percent for the first quarter versus 21.8 percent last year. Higher sales and an improved gross profit margin offset increased operating expenses to result in improved profitability.

“We are pleased to report double-digit increases in both sales and net earnings this quarter, especially in this environment of global uncertainty,” said President and Chief Executive Officer David A. Roberts. “This is the first quarter where all three divisions have reported sales growth since the fourth quarter of 1999. While we continue to believe that 2003 will be a year of modest underlying growth for the major industrialized countries, Graco is aggressively pursuing its growth strategies to increase its revenues and earnings at a faster rate. Our new products, distribution initiatives, new market activities and strategic acquisitions, including the recent acquisition of Sharpe Manufacturing operations, should add revenues and earnings for the balance of this year.”

Forward-Looking Statements

A forward-looking statement is any statement made in this earnings release and other reports that the Company files periodically with the Securities and Exchange Commission, as well as in press releases, analyst briefings, conference calls and the Company’s Annual Report to shareholders which reflects the Company’s current thinking on market trends and the Company’s future financial performance at the time they are made. All forecasts and projections are forward-looking statements.

The Company desires to take advantage of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 by making cautionary statements concerning any forward-looking statements made by or on behalf of the Company. The Company cannot give any assurance that the results forecasted in any forward-looking statement will actually be achieved. 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: economic conditions in the United States and other major world economies, currency fluctuations, political instability, changes in laws and regulations, and changes in product demand. Please refer to Exhibit 99 to the Company’s Annual Report on Form 10-K for fiscal year 2002 for a more comprehensive discussion of these and other risk factors.

Investors should realize that factors other than those identified above and in Exhibit 99 might prove important to the Company’s future results. It is not possible for management to identify each and every factor that may have an impact on the Company’s operations in the future as new factors can develop from time to time.

Conference Call

A conference call for analysts and institutional investors will be held Thursday, April 17, 2003, at 11:00 a.m. EDT to discuss Graco’s first quarter results. Graco management will host the call.

A real-time, listen-only Webcast of the conference call will be broadcast live over the Internet. Individuals wanting to listen can access the call at the Company’s website at www.graco.com. Listeners should go to the website at least 15 minutes prior to the live conference call to install any necessary audio software.

For those unable to listen to the live event, a replay will be available soon after the conference call at Graco’s website, or by telephone beginning at approximately 1:00 p.m. EDT on April 17, 2003, by dialing 800.428.6051, passcode 288274, if calling within the U.S. or Canada. The dial-in number for international participants is 973.709.2089, with the same passcode. The replay by telephone will be available through April 20, 2003.

Graco Inc. supplies technology and expertise for the management of fluids in both industrial and commercial applications. It designs, manufactures and markets systems and equipment to move, measure, control, dispense and spray fluid materials. A recognized leader in its specialties, Minneapolis-based Graco serves customers around the world in the manufacturing, processing, construction and maintenance industries. For additional information about Graco Inc., please visit us at www.graco.com.