Graco Inc, USA

Graco Inc, USA

Pump Industry Analyst August 2003 Graco Inc, USA COMPANY PROFILE Profile Graco Inc supplies technology and expertise for the management of fluids ...

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Pump Industry Analyst

August 2003

Graco Inc, USA

COMPANY PROFILE

Profile Graco Inc supplies technology and expertise for the management of fluids in both industrial and commercial applications. The company has three operating segments: Industrial/Automotive Equipment; Contractor Equipment and Lubrication Equipment. Industrial/Automotive focuses on four key areas of application: sealants and adhesives, process, liquid finishing and protective coatings. Products offered include air, electric and hydraulic-powered pumps. The Contractor Equipment segment’s product range includes airless paint sprayers and accessories. Pumps powered by electricity, air and gasoline are also available. Lubrication Equipment designs and markets products for the lubrication and maintenance of vehicles and other equipment. Analysis Graco’s Industrial/Automotive Equipment segment saw sales increase 2% in 2002 reflecting continuing economic uncertainty in the US and the low growth in European markets. In Asia Pacific, new product introductions, higher demand for technology products and new automotive installations helped to drive sales gains. The Contractor Equipment segment had a slow start to 2002 but had gained some ground by March when sales began to increase. For the full year, Contractor Equipment posted a 6% rise in sales. Lubrication Equipment suffered a 7% decline in 2002 revenues, largely as a result of some large equipment installations in 2001 that were not repeated in 2002.

COMMENT To achieve Graco’s vision of 10% annual revenue growth and 12% net earnings gains per year, the company continues to pursue four growth strategies: developing new products, expanding distribution, entering new markets and making strategic acquisitions. With 41% of 2002’s sales coming from products introduced within the last 36 months, Graco has comfortably exceeded its ambitious objective of generating at least 30% of each year’s sales from products introduced in the last three years. ■

Key Figures (US$ million) Graco Inc

Year ended 27.12.2002

28.12.2001

29.12.2000

31.12.1999

25.12.1998

Net Sales Of Which: Industrial/Automotive Contractor Lubrication

487.0

472.8

494.4

450.5

440.6

204.2 238.0 44.8

199.5 225.1 48.2

228.0 221.5 44.9

– – –

– – –

Cost of Goods Sold

236.9

238.1

243.5





Gross Profit

250.2

234.8

250.9

231.1

219.4

Product Development

18.2

20.8

20.0





Research & Development

18.0

21.0

20.0





112.8

100.2

111.2

93.2

76.9

54.2 53.8 9.6

48.8 47.3 12.1

57.8 47.9 10.6

– – –

– – –

75.6

65.3

70.1

59.3

47.3

Operating Earnings Of Which: Industrial/Automotive Contractor Lubrication Net Earnings Contact Details President & CEO: Address:

David Roberts PO Box 1441 Minneapolis MN 55440-1441 USA

Tel: +1 612 623 6000 Web: www.graco.com

Recent Events • A line of Husky air-operated diaphragm pumps was released in 2002 for use in the food industry. These stainless steel pumps, which are FDA-compliant, represent the company’s entry into the market for food-grade diaphragm pumps. • During 2002 Graco created separate manufacturing organizations for the Industrial/Automotive and Lubrication segments. • In 2002, Graco upgraded the entire GMax line of gas-powered airless sprayers. Among other features, the sprayer line now has a Watchdog Pump Protection System, which automatically shuts down the pump when material runs out.

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