PART I - FINANCIAL INFORMATION [Item 1. Financial Statements](index=4&type=section&id=Item%201%2E%20Financial%20Statements) This section presents unaudited consolidated financial statements, including earnings, comprehensive income, balance sheets, cash flows, and shareholders' equity, with detailed notes on accounting policies, segments, inventory, equity, share-based awards, EPS, retirement benefits, receivables, intangible assets, other liabilities, fair value, and recent acquisitions [Consolidated Statements of Earnings](index=4&type=section&id=Consolidated%20Statements%20of%20Earnings) For Q2 2025, Net Sales increased by 3% year-over-year to **$571.8 million**, but Net Earnings decreased by 4% to **$127.6 million** | Metric | Three Months Ended June 27, 2025 (in thousands) | Three Months Ended June 28, 2024 (in thousands) | Six Months Ended June 27, 2025 (in thousands) | Six Months Ended June 28, 2024 (in thousands) | | :----- | :---------------------------------------------- | :---------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Net Sales | $571,806 | $553,243 | $1,100,090 | $1,045,432 | | Gross Profit | $299,530 | $300,854 | $577,263 | $567,051 | | Operating Earnings | $157,484 | $161,359 | $301,497 | $294,355 | | Net Earnings | $127,623 | $132,978 | $251,724 | $255,177 | | Diluted EPS | $0.76 | $0.77 | $1.48 | $1.48 | [Consolidated Statements of Comprehensive Income](index=4&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) Comprehensive income significantly increased for both the three and six months ended June 27, 2025, primarily driven by a positive cumulative translation adjustment | Metric | Three Months Ended June 27, 2025 (in thousands) | Three Months Ended June 28, 2024 (in thousands) | Six Months Ended June 27, 2025 (in thousands) | Six Months Ended June 28, 2024 (in thousands) | | :----- | :---------------------------------------------- | :---------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Net Earnings | $127,623 | $132,978 | $251,724 | $255,177 | | Cumulative translation adjustment | $56,983 | $(811) | $76,886 | $(19,517) | | Other comprehensive income (loss) | $56,703 | $141 | $76,669 | $(17,884) | | Comprehensive Income | $184,326 | $133,119 | $328,393 | $237,293 | [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) As of June 27, 2025, total assets decreased to **$3,046.1 million** from **$3,139.2 million** at December 27, 2024, mainly due to a decrease in cash and cash equivalents | Metric | June 27, 2025 (in thousands) | December 27, 2024 (in thousands) | | :----- | :----------------------------- | :------------------------------- | | Cash and cash equivalents | $534,921 | $675,336 | | Total current assets | $1,380,642 | $1,497,441 | | Total Assets | $3,046,123 | $3,139,212 | | Total current liabilities | $388,580 | $405,808 | | Total shareholders' equity | $2,501,020 | $2,584,135 | [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash provided by operating activities increased to **$308.1 million** for the six months ended June 27, 2025, but significant common stock repurchases led to a net decrease in cash and cash equivalents of **$140.4 million** | Metric | Six Months Ended June 27, 2025 (in thousands) | Six Months Ended June 28, 2024 (in thousands) | | :----- | :-------------------------------------------- | :-------------------------------------------- | | Net cash provided by operating activities | $308,103 | $257,922 | | Net cash used in investing activities | $(30,682) | $(67,881) | | Net cash used in financing activities | $(428,592) | $(60,842) | | Common stock repurchased | $(360,952) | $(17,761) | | Net (decrease) increase in cash and cash equivalents | $(140,415) | $128,055 | | Cash and Cash Equivalents, End of period | $534,921 | $666,006 | [Consolidated Statements of Shareholders' Equity](index=7&type=section&id=Consolidated%20Statements%20of%20Shareholders%27%20Equity) Total shareholders' equity decreased from **$2,584.1 million** to **$2,501.0 million** for the six months ended June 27, 2025, primarily due to **$361.0 million** in share repurchases and **$91.2 million** in dividends | Metric | Six Months Ended June 27, 2025 (in thousands) | Six Months Ended June 28, 2024 (in thousands) | | :----- | :-------------------------------------------- | :-------------------------------------------- | | Balance, December 27, 2024 (2023 for 2024 period) | $2,584,135 | $2,224,225 | | Shares repurchased | $(360,952) | $(17,761) | | Net earnings | $251,724 | $255,177 | | Dividends declared | $(91,178) | $(86,290) | | Other comprehensive income (loss) | $76,669 | $(17,884) | | Balance, June 27, 2025 (2024 for 2024 period) | $2,501,020 | $2,418,485 | [Notes to Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes provide detailed information on financial statement preparation, segment reporting changes, inventory, equity, share-based compensation, EPS, retirement benefits, receivables, intangible assets, other current liabilities, fair value, and recent acquisitions [Basis of Preparation](index=8&type=section&id=Basis%20of%20Preparation) The unaudited consolidated financial statements reflect normal recurring adjustments and should be read with the 2024 Annual Report on Form 10-K - Financial statements are **unaudited** and include only normal recurring adjustments[21](index=21&type=chunk)[22](index=22&type=chunk) - Statements should be read with the **2024 Annual Report on Form 10-K**[23](index=23&type=chunk) - Interim results are not necessarily indicative of full fiscal year results[24](index=24&type=chunk) [Segment Information](index=8&type=section&id=Segment%20Information) Effective January 1, 2025, the Company reclassified its business into three reportable segments: Contractor, Industrial, and Expansion Markets, with prior year information recast for comparability - **New Segment Structure (Effective Jan 1, 2025):** * Contractor (unchanged) * Industrial (newly formed Industrial Division + Powder Division) * Expansion Markets (new division for environmental, semiconductor, high-pressure valves, electric motors, and future ventures/acquisitions)[25](index=25&type=chunk) | Segment | Net Sales (3 Months Ended June 27, 2025, in thousands) | Operating Earnings (3 Months Ended June 27, 2025, in thousands) | Net Sales (6 Months Ended June 27, 2025, in thousands) | Operating Earnings (6 Months Ended June 27, 2025, in thousands) | | :------ | :--------------------------------------- | :------------------------------------------------ | :--------------------------------------- | :------------------------------------------------ | | Contractor | $288,959 | $75,489 | $543,991 | $137,419 | | Industrial | $242,277 | $82,372 | $473,930 | $161,967 | | Expansion Markets | $40,570 | $8,829 | $82,169 | $18,894 | | Total Reportable Segment Operating Earnings | $166,690 | N/A | $318,280 | N/A | - **Geographic Net Sales (6 Months Ended June 27, 2025):** * United States: **$587,584 thousand** * Other countries: **$512,506 thousand** * Total: **$1,100,090 thousand**[27](index=27&type=chunk) [Inventories](index=9&type=section&id=Inventories) Total inventories as of June 27, 2025, were **$403.2 million**, a slight decrease from **$404.7 million** at December 27, 2024 | Component | June 27, 2025 (in thousands) | December 27, 2024 (in thousands) | | :-------- | :----------------------------- | :------------------------------- | | Finished products and components | $203,946 | $197,242 | | Products and components in various stages of completion | $109,998 | $114,647 | | Raw materials and purchased components | $210,244 | $214,902 | | Total Inventories | $403,156 | $404,676 | [Shareholders' Equity](index=10&type=section&id=Shareholders%27%20Equity) Accumulated other comprehensive income (loss) shifted from a **$(49.6) million** loss at December 27, 2024, to **$27.1 million** income at June 27, 2025, primarily due to a **$76.9 million** positive cumulative translation adjustment | Component | Balance, December 27, 2024 (in thousands) | Other comprehensive income (loss) before reclassifications (6 Months Ended June 27, 2025, in thousands) | Balance, June 27, 2025 (in thousands) | | :-------- | :---------------------------------------- | :---------------------------------------------------------------------------------------- | :------------------------------------ | | Pension and Post-retirement Medical | $(13,145) | $(217) (reclassified) | $(13,362) | | Cumulative Translation Adjustment | $(36,429) | $76,886 | $40,457 | | Total Accumulated Other Comprehensive Income (Loss) | $(49,574) | $76,669 | $27,095 | [Share-Based Awards](index=10&type=section&id=Share-Based%20Awards) The Company recognized **$17 million** in share-based compensation for the six months ended June 27, 2025, with **$29 million** in unrecognized compensation cost expected to be recognized over 2.8 years - Share-based compensation recognized: **$17 million** (2025 YTD) vs. **$20 million** (2024 YTD)[30](index=30&type=chunk) - Unrecognized compensation cost: **$29 million**, to be recognized over **2.8 years**[30](index=30&type=chunk) | Metric | Six Months Ended June 27, 2025 | Six Months Ended June 28, 2024 | | :----- | :----------------------------- | :----------------------------- | | Weighted average fair value per share (option grants) | $26.80 | $28.03 | | Weighted average fair value per share (ESPP) | $19.65 | $23.16 | [Earnings per Share](index=11&type=section&id=Earnings%20per%20Share) Diluted EPS for the six months ended June 27, 2025, remained flat at **$1.48** compared to the prior year, despite a slight decrease in net earnings, due to a reduction in weighted average diluted shares outstanding | Metric | Three Months Ended June 27, 2025 | Three Months Ended June 28, 2024 | Six Months Ended June 27, 2025 | Six Months Ended June 28, 2024 | | :----- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net earnings available to common shareholders | $127,623 | $132,978 | $251,724 | $255,177 | | Weighted average shares outstanding for basic EPS | 165,785 | 169,100 | 167,173 | 168,795 | | Weighted average shares outstanding for diluted EPS | 168,561 | 172,486 | 170,072 | 172,466 | | Basic earnings per share | $0.77 | $0.79 | $1.51 | $1.51 | | Diluted earnings per share | $0.76 | $0.77 | $1.48 | $1.48 | [Retirement Benefits](index=12&type=section&id=Retirement%20Benefits) Net periodic benefit cost for pension benefits significantly decreased to **$1.6 million** for the six months ended June 27, 2025, primarily due to higher expected return on assets | Metric | Six Months Ended June 27, 2025 (in thousands) | Six Months Ended June 28, 2024 (in thousands) | | :----- | :-------------------------------------------- | :-------------------------------------------- | | Pension Benefits - Net periodic benefit cost | $1,562 | $3,930 | | Postretirement Medical - Net periodic benefit cost | $586 | $670 | [Receivables and Credit Losses](index=12&type=section&id=Receivables%20and%20Credit%20Losses) Accounts receivable increased to **$387.2 million** as of June 27, 2025, while the allowance for credit losses remained stable at **$5.3 million** - Accounts receivable (June 27, 2025): **$387.2 million** ($371 million trade, $16 million other)[34](index=34&type=chunk) - Allowance for credit losses (June 27, 2025): **$5.3 million**[35](index=35&type=chunk) - Net (reversals) additions charged to costs and expenses (3 months ended June 27, 2025): **$(138) thousand**[35](index=35&type=chunk) [Intangible Assets](index=13&type=section&id=Intangible%20Assets) Other intangible assets, net, increased to **$241.5 million** as of June 27, 2025, and goodwill increased to **$516.9 million**, primarily due to foreign currency translation adjustments and business acquisitions | Intangible Asset Type | Book Value (June 27, 2025, in thousands) | Book Value (December 27, 2024, in thousands) | Weighted Average Life (years) | | :-------------------- | :--------------------------------------- | :------------------------------------------- | :---------------------------- | | Customer Relationships | $115,077 | $115,119 | 14 | | Patents and Proprietary Technology | $23,754 | $23,015 | 10 | | Trademarks, Trade Names and Other (Finite Life) | $730 | $2,199 | 3 | | Trade Names (Indefinite Life) | $101,963 | $92,973 | N/A | | Total Other Intangible Assets, net | $241,524 | $233,306 | N/A | | Segment | Goodwill (December 27, 2024, in thousands) | Adjustments from business acquisitions (in thousands) | Foreign currency translation (in thousands) | Goodwill (June 27, 2025, in thousands) | | :------ | :----------------------------------------- | :---------------------------------------------------- | :------------------------------------------ | :--------------------------------------- | | Contractor | $198,038 | $1,164 | $16,568 | $215,770 | | Industrial | $217,698 | — | $11,988 | $229,686 | | Expansion Markets | $71,732 | $(266) | — | $71,466 | | Total Goodwill | $487,468 | $898 | $28,556 | $516,922 | [Other Current Liabilities](index=14&type=section&id=Other%20Current%20Liabilities) Total other current liabilities decreased to **$177.1 million** as of June 27, 2025, from **$211.7 million** at December 27, 2024, mainly due to lower payable for employee stock purchases and other general liabilities | Component | June 27, 2025 (in thousands) | December 27, 2024 (in thousands) | | :-------- | :----------------------------- | :------------------------------- | | Accrued warranty and service liabilities | $19,937 | $18,712 | | Payable for employee stock purchases | $7,814 | $16,767 | | Customer advances and deferred revenue | $59,980 | $52,522 | | Acquisition-related consideration payable | — | $10,339 | | Other | $32,406 | $48,008 | | Total Other Current Liabilities | $177,141 | $211,728 | - Revenue recognized from deferred revenue (6 months ended June 27, 2025): **$46 million**[39](index=39&type=chunk) [Fair Value](index=14&type=section&id=Fair%20Value) Total assets measured at fair value increased to **$26.3 million** as of June 27, 2025, primarily due to an increase in the cash surrender value of life insurance, while liabilities also increased to **$24.1 million** due to higher contingent consideration | Item | Level | June 27, 2025 (in thousands) | December 27, 2024 (in thousands) | | :--- | :---- | :----------------------------- | :------------------------------- | | Assets: Cash surrender value of life insurance | 2 | $26,283 | $24,411 | | Assets: Forward exchange contracts | 2 | — | $116 | | Liabilities: Contingent consideration | 3 | $16,281 | $14,647 | | Liabilities: Deferred compensation | 2 | $7,562 | $8,196 | | Liabilities: Forward exchange contracts | 2 | $207 | — | - Contingent consideration liabilities are estimated using a probability-weighted expected return approach based on future revenues[42](index=42&type=chunk) [Acquisitions](index=15&type=section&id=Acquisitions) The Company acquired Corob S.p.A. on November 4, 2024, for **€230 million** in cash plus up to **€30 million** in contingent consideration, recognizing **$127.3 million** in goodwill - **Corob S.p.A. Acquisition (Nov 4, 2024):** * Total purchase consideration: **$290.7 million** (cash paid **$276.2 million**, contingent consideration **$14.5 million**) * Goodwill recognized: **$127.3 million** (not tax deductible) * Identifiable intangible assets: Trade name (**$32.5 million**, indefinite life), Customer relationship (**$76.2 million**, 15 years), Developed technology (**$20.6 million**, 10 years), Backlog (**$2.1 million**, 0.5 years)[45](index=45&type=chunk)[46](index=46&type=chunk) - **Pro Forma Financials (6 Months Ended June 27, 2025, as if acquired Jan 2023):** * Net sales: **$1,100.1 million** * Net earnings: **$253.3 million** * Diluted EPS: **$1.49**[47](index=47&type=chunk) [Subsequent Event](index=16&type=section&id=Subsequent%20Event) On July 17, 2025, the Company agreed to acquire Color Service s.r.l. for **€63 million**, expected to close in Q3 2025 and be part of the Industrial Segment's Powder Division - **Color Service s.r.l. Acquisition (announced July 17, 2025):** * Purchase price: **€63 million** * Expected completion: **Q3 2025** * Segment: **Industrial Segment (Powder Division)** * Funding: **Cash on hand**[49](index=49&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=17&type=section&id=Item%202%2E%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides an overview of the Company's business, discusses global trade uncertainty, and analyzes consolidated and segment-specific financial results, highlighting a decline in gross profit margin and outlining liquidity [Overview](index=17&type=section&id=Overview) Graco Inc. supplies technology and expertise for fluid and coating management, operating in Contractor, Industrial, and Expansion Markets segments, with strategies focused on new product development, market expansion, global distribution, and strategic acquisitions - Company provides technology and expertise for fluid and coating management[51](index=51&type=chunk) - Business segments: **Contractor, Industrial, and Expansion Markets**[51](index=51&type=chunk) - Key strategies: new product development, market expansion, global distribution, strategic acquisitions[51](index=51&type=chunk) [Global Trade Uncertainty](index=17&type=section&id=Global%20Trade%20Uncertainty) The Company's operations are exposed to risks from evolving global trade policies, tariffs, and geopolitical tensions, which could lead to increased costs, reduced demand, and decreased profitability, with uncertain mitigation effectiveness - Operations, supply chain, and financial performance are impacted by global trade policies, tariffs, and geopolitical tensions[53](index=53&type=chunk) - Risks include inflationary costs, potential price increases, reduced demand, and decreased profitability[53](index=53&type=chunk) - Mitigation strategies (pricing and sourcing) may not fully offset impacts[53](index=53&type=chunk) [Consolidated Results](index=17&type=section&id=Consolidated%20Results) For Q2 2025, net sales increased 3% year-over-year, but operating earnings decreased 2% and net earnings decreased 4% due to a lower gross margin rate and reduced non-operating income | Metric | Three Months Ended June 27, 2025 (in millions) | Three Months Ended June 28, 2024 (in millions) | % Change | Six Months Ended June 27, 2025 (in millions) | Six Months Ended June 28, 2024 (in millions) | % Change | | :----- | :--------------------------------------------- | :--------------------------------------------- | :------- | :------------------------------------------- | :------------------------------------------- | :------- | | Net Sales | $571.8 | $553.2 | 3% | $1,100.1 | $1,045.4 | 5% | | Operating Earnings | $157.5 | $161.4 | (2)% | $301.5 | $294.4 | 2% | | Net Earnings | $127.6 | $133.0 | (4)% | $251.7 | $255.2 | (1)% | | Diluted Net Earnings per Common Share | $0.76 | $0.77 | (1)% | $1.48 | $1.48 | —% | - Gross profit margin rate declined **~2 percentage points** in Q2 due to higher product costs (**$4 million** increased tariff costs) and lower margins from acquired operations[56](index=56&type=chunk)[61](index=61&type=chunk) - Other non-operating income decreased **$3 million** in Q2, primarily due to **$5 million** in exchange losses on foreign operations' net liabilities[57](index=57&type=chunk) | Metric | Three Months Ended June 27, 2025 | Three Months Ended June 28, 2024 | Six Months Ended June 27, 2025 | Six Months Ended June 28, 2024 | | :----- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Gross Profit % | 52.4 % | 54.4 % | 52.5 % | 54.2 % | | Operating Earnings % | 27.5 % | 29.2 % | 27.4 % | 28.2 % | | Net Earnings % | 22.3 % | 24.0 % | 22.9 % | 24.4 % | [Net Sales](index=19&type=section&id=Net%20Sales) Consolidated net sales increased 3% for Q2 and 5% for the six months ended June 27, 2025, with acquired operations contributing 6 percentage points to sales growth, and EMEA and Asia Pacific showing growth | Region | Net Sales (3 Months Ended June 27, 2025, in millions) | Net Sales (3 Months Ended June 28, 2024, in millions) | Net Sales (6 Months Ended June 27, 2025, in millions) | Net Sales (6 Months Ended June 28, 2024, in millions) | | :----- | :---------------------------------------------------- | :---------------------------------------------------- | :---------------------------------------------------- | :---------------------------------------------------- | | Americas | $351.9 | $364.3 | $675.1 | $670.8 | | EMEA | $129.9 | $108.7 | $250.9 | $219.8 | | Asia Pacific | $90.0 | $80.2 | $174.1 | $154.8 | | Consolidated | $571.8 | $553.2 | $1,100.1 | $1,045.4 | | Region | Volume Acquisitions and Price (3 Months) | Currency (3 Months) | Total Change (3 Months) | Volume Acquisitions and Price (6 Months) | Currency (6 Months) | Total Change (6 Months) | | :----- | :------------------------------------- | :------------------ | :---------------------- | :------------------------------------- | :------------------ | :---------------------- | | Americas | (6)% | 0% | (3)% | (2)% | 0% | 1% | | EMEA | 2% | 5% | 19% | 1% | 1% | 14% | | Asia Pacific | 8% | (1)% | 12% | 9% | (2)% | 12% | | Consolidated | 6% | 0% | 3% | 6% | (1)% | 5% | [Gross Profit](index=19&type=section&id=Gross%20Profit) The gross profit margin rate decreased by approximately **2 percentage points** for both the second quarter and year-to-date periods, primarily due to higher product costs, including **$4 million** in increased tariff costs, and lower margins from acquired operations - Gross profit margin rate declined **~2 percentage points** for Q2 and YTD[61](index=61&type=chunk) - Reasons: higher product costs (including **$4 million** increased tariff costs) and unfavorable effects of lower margin rates from acquired operations[61](index=61&type=chunk) [Operating Expenses](index=19&type=section&id=Operating%20Expenses) Total operating expenses increased by **$3 million** (2%) for Q2 and **$3 million** (1%) for the year-to-date, driven by incremental expenses from acquired operations, partially offset by reduced spending in product development, incentives, and share-based compensation - Total operating expenses increased **$3 million** (2%) for Q2 and **$3 million** (1%) for YTD[62](index=62&type=chunk) - Incremental expenses from acquired operations: **$9 million** (Q2), **$19 million** (YTD)[62](index=62&type=chunk) - Offset by decreases in product development, incentives, and share-based compensation[62](index=62&type=chunk) - Prior year periods included **$3 million** in expenses for distribution center relocation[63](index=63&type=chunk) [Other (Income) Expense](index=20&type=section&id=Other%20%28Income%29%20Expense) Other non-operating income decreased by **$3 million** for both Q2 and year-to-date, primarily due to exchange losses on foreign operations' net liabilities, partially offset by favorable market valuation changes on investments and a building sale gain - Other non-operating income decreased **$3 million** for Q2 and YTD[64](index=64&type=chunk) - Primary driver: exchange losses on foreign operations' net liabilities (**$5 million** for Q2, **$8 million** for YTD)[64](index=64&type=chunk) - Partially offset by favorable market valuation changes on retirement benefit investments and a **$5 million** gain from a Q1 building sale[64](index=64&type=chunk) [Income Taxes](index=20&type=section&id=Income%20Taxes) The effective income tax rate was **19%** for both Q2 and year-to-date, with the adjusted effective rate (excluding excess tax benefits from stock option exercises) at **20%**, comparable to the prior year - Effective income tax rate: **19%** for Q2 and YTD[65](index=65&type=chunk) - Adjusted effective income tax rate (excluding excess tax benefits from stock options): **20%** for Q2 and YTD, comparable to prior year[65](index=65&type=chunk) [Segment Results](index=20&type=section&id=Segment%20Results) The Contractor segment experienced sales growth but a decline in operating margin, while the Industrial segment saw flat sales in Q2 but a year-to-date increase with stable margins, and Expansion Markets sales decreased in Q2 but grew year-to-date with improved margins [Contractor Segment](index=20&type=section&id=Contractor%20Segment) Contractor segment net sales increased 7% for Q2 and 9% for the six months ended June 27, 2025, driven by acquisitions, but operating earnings as a percentage of net sales declined by **5 percentage points** due to higher product costs and lower margins from acquired operations | Metric | Net Sales (3 Months Ended June 27, 2025, in millions) | Operating Earnings as % of Net Sales (3 Months Ended June 27, 2025) | Net Sales (6 Months Ended June 27, 2025, in millions) | Operating Earnings as % of Net Sales (6 Months Ended June 27, 2025) | | :----- | :---------------------------------------------------- | :------------------------------------------------------------------ | :---------------------------------------------------- | :------------------------------------------------------------------ | | Total Net Sales | $289.0 | N/A | $544.0 | N/A | | Operating earnings as a percentage of net sales | N/A | 26 % | N/A | 25 % | - Net sales change (3 months): Volume/Acquisitions/Price **(5)%** (negative volume offset by acquisitions), Currency **0%**, Total **7%**[66](index=66&type=chunk) - Operating margin rate declined **5 percentage points** (3 points from higher product costs/tariffs, 2 points from acquired operations' lower margins)[66](index=66&type=chunk) [Industrial Segment](index=20&type=section&id=Industrial%20Segment) Industrial segment net sales were flat for Q2 and increased 2% for the six months ended June 27, 2025, with favorable volumes in EMEA and Asia Pacific offsetting declines in the Americas, and the operating margin rate remained flat for Q2 | Metric | Net Sales (3 Months Ended June 27, 2025, in millions) | Operating Earnings as % of Net Sales (3 Months Ended June 27, 2025) | Net Sales (6 Months Ended June 27, 2025, in millions) | Operating Earnings as % of Net Sales (6 Months Ended June 27, 2025) | | :----- | :---------------------------------------------------- | :------------------------------------------------------------------ | :---------------------------------------------------- | :------------------------------------------------------------------ | | Total Net Sales | $242.2 | N/A | $473.9 | N/A | | Operating earnings as a percentage of net sales | N/A | 34 % | N/A | 34 % | - Net sales change (3 months): Volume/Acquisitions/Price **(1)%**, Currency **1%**, Total **0%**[68](index=68&type=chunk) - Operating margin rate: **flat** for Q2, increased **1 percentage point** YTD[68](index=68&type=chunk) [Expansion Markets Segment](index=21&type=section&id=Expansion%20Markets%20Segment) Expansion Markets net sales decreased for Q2 but increased 4% for the six months ended June 27, 2025, driven by double-digit growth in semiconductor products, with operating margin rates increasing due to higher sales volume and lower expenses | Metric | Net Sales (3 Months Ended June 27, 2025, in millions) | Operating Earnings as % of Net Sales (3 Months Ended June 27, 2025) | Net Sales (6 Months Ended June 27, 2025, in millions) | Operating Earnings as % of Net Sales (6 Months Ended June 27, 2025) | | :----- | :---------------------------------------------------- | :------------------------------------------------------------------ | :---------------------------------------------------- | :------------------------------------------------------------------ | | Total Net Sales | $40.6 | N/A | $82.2 | N/A | | Operating earnings as a percentage of net sales | N/A | 22 % | N/A | 23 % | - Net sales change (3 months): Volume/Acquisitions/Price **(3)%**, Currency **0%**, Total **(3)%**[69](index=69&type=chunk) - Sales growth in semiconductor product application offset decreases in environmental product application[70](index=70&type=chunk) - Operating margin rate increased for both Q2 and YTD due to increased sales volume and lower expenses[70](index=70&type=chunk) [Liquidity and Capital Resources](index=22&type=section&id=Liquidity%20and%20Capital%20Resources) Net cash from operating activities increased by **$50 million** to **$308 million** for the first six months of 2025, with significant cash uses including **$361 million** in share repurchases and **$92 million** in dividends, while maintaining strong liquidity - Net cash provided by operating activities (6 months 2025): **$308 million** (up **$50 million** year-over-year)[71](index=71&type=chunk) - Significant cash uses (6 months 2025): Share repurchases (**$361 million**), dividend payments (**$92 million**), plant and equipment additions (**$30 million**)[71](index=71&type=chunk) - Available liquidity (June 27, 2025): **$1,322 million** (including **$535 million** cash and **$787 million** credit facilities)[73](index=73&type=chunk) - 2025 Capital expenditures expected: **$60 to $70 million**[74](index=74&type=chunk) [Outlook](index=22&type=section&id=Outlook) The Company reaffirms its 2025 revenue outlook of low single-digit sales growth on an organic constant-currency basis, supported by pricing actions, upcoming new product launches, and steady incoming order rates - 2025 revenue outlook: **low single-digit sales growth** on an organic constant-currency basis[75](index=75&type=chunk) - Outlook supported by: pricing actions, new product launches, steady order rates[75](index=75&type=chunk) [Cautionary Statement Regarding Forward-Looking Statements](index=22&type=section&id=Cautionary%20Statement%20Regarding%20Forward-Looking%20Statements) Forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially, including global demand, currency rates, geopolitical instability, and supply chain issues - Forward-looking statements are subject to risks and uncertainties[76](index=76&type=chunk) - Risk factors include: demand, currency rates, international/domestic instability, interest rates, global sourcing, information systems, intellectual property, generative AI, international business, catastrophic events, personnel, growth strategies/acquisitions, goodwill impairment, competition, customer/industry dependence, laws/regulations, climate, ESG, anti-corruption/trade laws, tax/tariff rates, legal costs[77](index=77&type=chunk) - Investors should refer to Form 10-K and Form 10-Q for a comprehensive discussion of risk factors[77](index=77&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=24&type=section&id=Item%203%2E%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) There have been no material changes to the Company's market risk disclosures since the 2024 Annual Report on Form 10-K - No material changes to market risk disclosures since the 2024 Annual Report on Form 10-K[79](index=79&type=chunk) [Item 4. Controls and Procedures](index=24&type=section&id=Item%204%2E%20Controls%20and%20Procedures) The Company's President and CEO, along with the CFO and Treasurer, evaluated the effectiveness of disclosure controls and procedures as of the end of the fiscal quarter and concluded they are effective, with no material changes to internal control over financial reporting - Disclosure controls and procedures were evaluated and deemed effective as of the end of the fiscal quarter[80](index=80&type=chunk) - No material changes in internal control over financial reporting during the quarter[81](index=81&type=chunk) PART II - OTHER INFORMATION [Item 1A. Risk Factors](index=25&type=section&id=Item%201A%2E%20Risk%20Factors) There have been no material changes to the Company's risk factors from those disclosed in its 2024 Annual Report on Form 10-K - No material changes to risk factors from the 2024 Annual Report on Form 10-K[82](index=82&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=26&type=section&id=Item%202%2E%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The Board of Directors authorized the repurchase of up to **18 million shares** of common stock, with **8,767,558 shares** remaining under this authorization as of June 27, 2025, and **1,585,715 shares** were repurchased during the period March 29, 2025 - April 25, 2025 - Board authorized repurchase of up to **18 million common shares** (indefinite period)[83](index=83&type=chunk) - Shares remaining under authorization (as of June 27, 2025): **8,767,558**[85](index=85&type=chunk) - Shares purchased (March 29, 2025 - April 25, 2025): **1,585,715** at **$77.37 average price** (not part of publicly announced plans)[85](index=85&type=chunk) [Item 5. Other Information](index=27&type=section&id=Item%205%2E%20Other%20Information) No directors or officers adopted, terminated, or modified a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement during the three months ended June 27, 2025 - No Rule 10b5-1 or non-Rule 10b5-1 trading arrangements adopted, terminated, or modified by directors or officers during the quarter[87](index=87&type=chunk) [Item 6. Exhibits](index=28&type=section&id=Item%206%2E%20Exhibits) This section lists the exhibits filed with the 10-Q report, including restated articles of incorporation and bylaws, certifications from executive officers, a press release for Q2 earnings, and interactive data files in iXBRL format - Exhibits include: Restated Articles of Incorporation, Restated Bylaws, Certifications of CEO, CFO, and Chief Accounting Officer, Q2 Earnings Press Release, and Interactive Data Files (iXBRL)[89](index=89&type=chunk) SIGNATURES [Signatures](index=29&type=section&id=Signatures) The report is duly signed on behalf of Graco Inc. by Mark W. Sheahan (President and CEO), David M. Lowe (CFO and Treasurer), and Christopher D. Knutson (VP, Controller and Chief Accounting Officer) on July 23, 2025 - Report signed by Mark W. Sheahan (President and CEO), David M. Lowe (CFO and Treasurer), and Christopher D. Knutson (VP, Controller and Chief Accounting Officer)[93](index=93&type=chunk) - Date of signing: **July 23, 2025**[93](index=93&type=chunk)

Core Viewpoint - Graco Inc. is experiencing growth driven by strong performance in its Industrial and Expansion Markets segments, improved order rates, product innovations, and strategic acquisitions, alongside a commitment to rewarding shareholders [1][9]. Business Strength - The Industrial segment is seeing solid momentum, particularly in powder and liquid finishing systems, with a year-over-year sales increase of 3% in Q1 2025 [4]. - The Expansion Markets segment is benefiting from robust activity in groundwater testing and gas analyzers, with a year-over-year sales increase of 12% in Q1 2025 [5]. Product Innovation - Graco is enhancing its performance through new product launches, including the QUANTM electric double diaphragm pump line, which is more energy-efficient and safer for modern factories. The company invested $19.4 million in product development in Q1 2025 and $87.2 million in 2024 [6]. Expansion Efforts - Graco is focused on expanding its market presence through acquisitions, which contributed 6% to sales in Q1 2025. Notable acquisitions include Corob S.p.A. and PCT System, which have strengthened its product offerings in the paint and coating machinery and semiconductor markets [7][8]. Rewards to Shareholders - The company is committed to rewarding shareholders, having distributed $46.6 million in dividends (up 8.7% year-over-year) and repurchased shares worth $238.1 million in Q1 2025. In 2024, total dividend payments were $172.1 million, with a quarterly dividend rate increase of 7.8% in December 2024 [9]. Near-Term Concerns - The Contractor segment is facing challenges due to reduced activity in the professional paint channel, with core sales declining by 1% year-over-year in Q1 2025 [10]. - Graco is also dealing with high operating costs, with the cost of sales increasing by 10.9% year-over-year in Q1 2025, impacting overall profitability [11].

Financial Data and Key Metrics Changes - Graco reported first-quarter sales of $528 million, a 7% increase from the previous year, with 6% growth attributed to acquisitions and 3% organic growth, while currency translation reduced sales by 2% [6][7] - Net earnings increased by 2% to $124 million or $0.72 per diluted share, with adjusted non-GAAP net earnings rising 8% to $120 million or $0.70 per diluted share [7][11] - The gross margin rate decreased by 150 basis points, primarily due to acquisitions and higher product costs from lower factory volume [7][8] - Operating earnings increased by 8% to $11 million, maintaining an operating margin of 27% [9] Business Line Data and Key Metrics Changes - The Contractor segment experienced a 1% sales decline due to softness in the home center business and challenging EMEA construction markets, despite strong performance in the North America propane channel [22][24] - The Industrial segment saw a 5% sales increase across all regions, with strong activity in powder finishing systems and vehicle services [24][25] - Expansion markets segment sales increased by 12%, driven by positive momentum in the semiconductor market and growth in environmental businesses [25][26] Market Data and Key Metrics Changes - Contractor segment sales in Asia Pacific increased by 35%, primarily driven by strong business in Australia and New Zealand, offsetting sluggish performance in China [116] - China accounted for nearly 6% of global revenue and cost of goods sold, with ongoing plans to mitigate tariff impacts through sourcing and manufacturing adjustments [18][19][85] Company Strategy and Development Direction - Graco maintains full-year revenue guidance of low single-digit growth on an organic constant currency basis, with potential revenue impact from evolving trade policies and tariffs estimated at 1% to 2% [27] - The company is focused on integrating Corab and leveraging its US manufacturing footprint to gain a competitive advantage [15][24] - Strategic initiatives include qualifying additional suppliers, moving component manufacturing to US factories, and redesigning products to mitigate tariff impacts [19][43] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in long-term success despite near-term challenges, emphasizing the importance of patience and understanding market dynamics before making pricing decisions [50][56] - The company is closely monitoring economic conditions and customer confidence, particularly in the industrial sector, which is not typically characterized by short-cycle buying [127][128] Other Important Information - Cash provided by operations totaled $125 million, with significant cash uses including share repurchases of $238 million and dividends of $47 million [11][12] - The company has about three months of finished goods inventory in China, which will help limit exposure to tariff impacts in the second quarter [20] Q&A Session Summary Question: Clarification on tariff impacts and inventory positioning - Management noted that while there was some pre-positioning of inventory ahead of tariffs, the exact quantification of this impact is challenging [30][34] Question: Impact of tariffs on revenue and cost of goods sold - Management estimated a 1% to 2% revenue headwind from China, with ongoing efforts to mitigate costs through alternative sourcing and product redesign [40][43] Question: Margin management and pricing strategy - Management emphasized a balanced approach to managing margins and customer service, with the ability to adjust pricing if necessary [50][56] Question: Order trends pre and post-tariff implementation - Order intake in Q1 was consistent with revenue, with no significant degradation in order trends observed in April [74] Question: Update on Corab integration and M&A activity - Management reported positive early integration efforts with Corab and a strong pipeline for potential acquisitions [78][138]

2025.04.24 FIRST QUARTER EARNINGS CALL SAFE HARBOR Today's presentation includes forward-looking statements that reflect management's current expectations about the Company's future business and financial performance. These statements are subject to certain risks and uncertainties that could cause actual results to differ from anticipated results. Factors that could cause actual results to differ from anticipated results are identified in Item 1A of the Company's Form 10-K, and Item 1A of the most recent Qu ...

Graco Inc.’s (GGG) first-quarter 2025 adjusted earnings of 70 cents per share beat the Zacks Consensus Estimate of 68 cents. The bottom line increased 8% year over year.The company’s net sales of $528.3 million beat the consensus estimate of $525 million. The top line increased 7% year over year due to higher demand in all the segments.On a regional basis, quarterly sales generated from the Americas increased 5% year over year. In Europe, the Middle East and Africa, sales increased 9% year over year. Sales ...

Core Insights - Graco Inc. reported revenue of $528.28 million for the quarter ended March 2025, reflecting a year-over-year increase of 7.3% and exceeding the Zacks Consensus Estimate by 0.66% [1] - The company's EPS for the quarter was $0.70, up from $0.65 in the same quarter last year, also surpassing the consensus estimate of $0.68 by 2.94% [1] Financial Performance Metrics - Contractor net sales reached $255.03 million, a 10.9% increase year-over-year, but fell short of the average estimate of $259.10 million [4] - Expansion Markets net sales were reported at $41.60 million, exceeding the average estimate of $38.83 million [4] - Industrial net sales amounted to $231.65 million, representing a significant year-over-year increase of 63.2%, surpassing the estimated $227.10 million [4] - Operating earnings for Contractor were $61.93 million, below the average estimate of $70.37 million [4] - Unallocated corporate expenses were reported at -$7.58 million, better than the average estimate of -$9.18 million [4] - Operating earnings for Expansion Markets were $10.07 million, exceeding the average estimate of $7.88 million [4] - Industrial operating earnings were $79.60 million, above the estimated $74.93 million [4] Stock Performance - Graco's shares have returned -6.3% over the past month, slightly outperforming the Zacks S&P 500 composite's -6.6% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]

Graco Inc. (GGG) came out with quarterly earnings of $0.70 per share, beating the Zacks Consensus Estimate of $0.68 per share. This compares to earnings of $0.65 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 2.94%. A quarter ago, it was expected that this company would post earnings of $0.76 per share when it actually produced earnings of $0.64, delivering a surprise of -15.79%.Over the last four quarters, the company has su ...

[PART I - FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents Graco Inc.'s unaudited consolidated financial statements for Q1 2025, covering earnings, comprehensive income, balance sheets, cash flows, and shareholders' equity [Consolidated Statements of Earnings](index=4&type=section&id=Consolidated%20Statements%20of%20Earnings) Graco reported a 7.3% increase in Q1 2025 Net Sales to $528.3 million, with Operating Earnings up 8.3% to $144.0 million and Net Earnings up 1.6% to $124.1 million Q1 2025 vs Q1 2024 Earnings Summary (In thousands, except per share amounts) | Metric | Q1 2025 (ended Mar 28) | Q1 2024 (ended Mar 29) | YoY Change | | :--- | :--- | :--- | :--- | | **Net Sales** | $528,284 | $492,189 | +7.3% | | **Gross Profit** | $277,733 | $266,197 | +4.3% | | **Operating Earnings** | $144,013 | $132,996 | +8.3% | | **Net Earnings** | $124,101 | $122,199 | +1.6% | | **Diluted EPS** | $0.72 | $0.71 | +1.4% | [Consolidated Statements of Comprehensive Income](index=4&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) Q1 2025 comprehensive income significantly increased to $144.1 million, primarily due to a positive cumulative translation adjustment of $19.9 million Q1 Comprehensive Income (In thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **Net Earnings** | $124,101 | $122,199 | | **Cumulative translation adjustment** | $19,903 | $(18,706) | | **Comprehensive Income** | $144,067 | $104,174 | [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) Total assets decreased to $3.01 billion as of March 28, 2025, from $3.14 billion at year-end 2024, primarily due to reduced cash and cash equivalents Balance Sheet Summary (In thousands) | Metric | March 28, 2025 | December 27, 2024 | | :--- | :--- | :--- | | **Cash and cash equivalents** | $536,138 | $675,336 | | **Total current assets** | $1,369,000 | $1,497,441 | | **Total Assets** | $3,008,314 | $3,139,212 | | **Total current liabilities** | $379,644 | $405,808 | | **Total shareholders' equity** | $2,477,720 | $2,584,135 | [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Q1 2025 net cash from operations was $125.4 million, with significant uses in financing activities, leading to a $139.2 million net decrease in cash Q1 Cash Flow Summary (In thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $125,416 | $118,923 | | **Net cash used in investing activities** | $(10,486) | $(31,620) | | **Net cash used in financing activities** | $(258,083) | $(1,864) | | **Net (decrease) increase in cash** | $(139,198) | $84,777 | - Significant uses of cash in Q1 2025 included **$238.1 million** for common stock repurchases and **$46.6 million** for cash dividends[17](index=17&type=chunk) [Consolidated Statements of Shareholders' Equity](index=7&type=section&id=Consolidated%20Statements%20of%20Shareholders%27%20Equity) Shareholders' equity decreased to $2.48 billion in Q1 2025, primarily due to $238.1 million in share repurchases and $46.4 million in dividends Q1 2025 Changes in Shareholders' Equity (In thousands) | Description | Amount | | :--- | :--- | | **Balance, December 27, 2024** | $2,584,135 | | Shares repurchased | $(238,089) | | Net earnings | $124,101 | | Dividends declared | $(46,393) | | Other comprehensive income | $19,966 | | **Balance, March 28, 2025** | $2,477,720 | [Notes to Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes detail a Q1 2025 business reorganization into three segments and provide preliminary purchase price allocation for the Corob S.p.A. acquisition - Effective January 1, 2025, the company reorganized into three reportable segments: Contractor, Industrial, and Expansion Markets, with prior year information recast to conform[27](index=27&type=chunk) - The company acquired Corob S.p.A. on November 4, 2024, for **€230 million** in cash plus up to **€30 million** in contingent consideration, with the purchase price allocation remaining preliminary[48](index=48&type=chunk) Q1 2025 Segment Net Sales (In thousands) | Segment | Q1 2025 Net Sales | Q1 2024 Net Sales | | :--- | :--- | :--- | | **Contractor** | $255,032 | $230,042 | | **Industrial** | $231,653 | $224,860 | | **Expansion Markets** | $41,599 | $37,287 | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=16&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses a 7% Q1 net sales increase, 8% operating earnings growth, segment performance, and maintains full-year guidance despite potential China tariff impacts [Consolidated Results](index=16&type=section&id=Consolidated%20Results) Q1 2025 net sales increased 7% to $528.3 million, operating earnings rose 8% to $144.0 million, while net earnings grew 2% to $124.1 million Q1 Consolidated Financial Results (In millions) | Metric | Q1 2025 | Q1 2024 | % Change | | :--- | :--- | :--- | :--- | | **Net Sales** | $528.3 | $492.2 | 7% | | **Operating Earnings** | $144.0 | $133.0 | 8% | | **Net Earnings** | $124.1 | $122.2 | 2% | | **Diluted EPS** | $0.72 | $0.71 | 1% | - Sales growth of **7%** was driven by a **6 percentage point** contribution from acquired operations and a **3 percentage point** increase from volume and price, offset by a **2 percentage point** negative impact from currency translation[58](index=58&type=chunk)[63](index=63&type=chunk) - The gross profit margin rate declined by approximately **2 percentage points** due to unfavorable effects from acquired operations and higher product costs[64](index=64&type=chunk) [Segment Results](index=19&type=section&id=Segment%20Results) Contractor segment sales grew 11% with a 5-point margin decrease, Industrial sales rose 3% with a 1-point margin improvement, and Expansion Markets sales increased 12% with a 6-point margin increase - **Contractor Segment:** Sales increased **11%** to **$255.0 million**, including a **13%** contribution from acquisitions, with the operating margin rate decreasing **5 percentage points** to **24%**[68](index=68&type=chunk) - **Industrial Segment:** Sales grew **3%** to **$231.7 million**, with increases in all regions, and the operating margin rate improved by **1 percentage point** to **34%**[69](index=69&type=chunk) - **Expansion Markets Segment:** Sales rose **12%** to **$41.6 million**, driven by semiconductor product applications, and the operating margin rate increased significantly by **6 percentage points** to **24%**[70](index=70&type=chunk) [Liquidity and Capital Resources](index=22&type=section&id=Liquidity%20and%20Capital%20Resources) Q1 2025 net cash from operations was $125 million, with $238 million used for share repurchases, and total available liquidity stood at $1.32 billion - Significant uses of cash in Q1 2025 were share repurchases of **$238 million** and dividend payments of **$47 million**[71](index=71&type=chunk) - Total available liquidity was **$1,322 million** as of March 28, 2025, consisting of **$536 million** in cash and **$786 million** in available credit[72](index=72&type=chunk) - Projected capital expenditures for the full year 2025 are expected to be approximately **$50 to $60 million**[73](index=73&type=chunk) [Outlook](index=23&type=section&id=Outlook) Graco maintains its full-year low-single-digit organic revenue growth guidance, but warns of potential 1-2% negative impact from China tariffs - The company maintains its full-year revenue guidance of low-single-digit growth on an organic constant currency basis[74](index=74&type=chunk) - Management warns that economic uncertainty from China tariffs could negatively impact full-year revenue guidance by **1% to 2%**[74](index=74&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=23&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No material changes to market risk disclosures have occurred since the 2024 Annual Report on Form 10-K - There have been no material changes in market risk since the 2024 Annual Report on Form 10-K[78](index=78&type=chunk) [Item 4. Controls and Procedures](index=23&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls and procedures were deemed effective, with no material changes to internal control over financial reporting during the quarter - The President and CEO, along with the CFO, concluded that the company's disclosure controls and procedures are effective as of the end of the fiscal quarter[79](index=79&type=chunk) - No changes occurred during the quarter that materially affected or are likely to materially affect the company's internal control over financial reporting[80](index=80&type=chunk) [PART II - OTHER INFORMATION](index=26&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) [Item 1A. Risk Factors](index=26&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the company's risk factors have occurred since the 2024 Annual Report on Form 10-K - There have been no material changes to the risk factors previously disclosed in the 2024 Annual Report on Form 10-K[81](index=81&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=27&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased approximately 2.8 million shares in Q1 2025, with 10.35 million shares remaining under the authorization plan Issuer Purchases of Equity Securities (Q1 2025) | Period | Shares Purchased | Average Price Paid | | :--- | :--- | :--- | | Jan 25 - Feb 21, 2025 | 1,470,567 | $85.17 | | Feb 22 - Mar 28, 2025 | 1,327,169 | $85.02 | - As of March 28, 2025, a maximum of **10,353,273 shares** may still be purchased under the existing Board authorization[84](index=84&type=chunk) [Item 5. Other Information](index=28&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted, terminated, or modified Rule 10b5-1 trading arrangements during Q1 2025 - No directors or officers adopted, terminated, or modified a Rule 10b5-1 trading arrangement during the three months ended March 28, 2025[85](index=85&type=chunk) [Item 6. Exhibits](index=29&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with Form 10-Q, including CEO/CFO certifications, the Q1 earnings press release, and iXBRL data files - Exhibits filed include CEO and CFO certifications (31.1, 31.2, 32), the Q1 earnings press release (99.1), and interactive data files (101)[87](index=87&type=chunk)

Graco Inc. (GGG) recently unveiled an expansion to the QUANTM Electric Double Diaphragm (EODD) Pumps portfolio. This product is used for various industrial and hygienic applications in modern factories.The new EODD pump features an XTREME TORQUE motor, which reduces the product’s size and weight. It also comes with an added 480V power range, which lowers the operating cost and can be swapped in place of older pumps without requiring any major changes.The GGG solution can save approximately 80% of energy and ...

Core Viewpoint - Graco Inc. is experiencing growth driven by improving order rates, product innovations, and strategic acquisitions, alongside efforts to enhance shareholder value [1][3]. Group 1: Growth Catalysts - Product Innovation: Graco has launched several new products in 2024, including the PowerShot XT electronic-powered airless paint gun and the Stellair ACE, contributing positively to its performance. In 2023, the company introduced the InvisiPac HM10 hot melt adhesive dispense system and other innovative products [4][5]. - Acquisitions: The acquisition of Corob S.p.A. in November 2024 and PCT System in August 2024 has strengthened Graco's product offerings and market presence, particularly in the paint and coating machinery and semiconductor markets [6]. - Shareholder Rewards: In 2024, Graco paid $172.1 million in dividends, an increase of 8.7% year over year, and repurchased shares worth $31.4 million. The quarterly dividend was raised by 7.8% to 27.5 cents per share [7]. Group 2: Headwinds - Business Weakness: The company faces challenges in its Industrial segment due to reduced demand for sealants and adhesives in China, as well as decreased demand for semiconductor products in EMEA and Asia Pacific. The Contractor segment is also struggling due to softness in the U.S. housing and remodeling markets [8]. - High Costs: Graco is dealing with increased selling, marketing, and distribution costs, which rose by 5% and 11.6% year over year in 2024. These costs have also increased as a percentage of net sales, with selling and marketing costs up by 110 basis points and general and administrative expenses up by 130 basis points [9].