Graco(US:GGG)2022-02-21 16:00Financial Performance - Graco's total product development expenditures were $80 million in 2021, $72 million in 2020, and $68 million in 2019, averaging approximately 4% of sales over the last three years[26]. - The Industrial segment represented approximately 42% of total sales in 2021, focusing on equipment for moving and applying paints, coatings, and other fluids[28]. - The Process segment accounted for approximately 20% of total sales in 2021, marketing pumps, valves, and meters for various industries including food and beverage, oil and natural gas, and pharmaceuticals[36]. - The Contractor segment represented approximately 38% of total sales in 2021, offering sprayers for both DIY homeowners and professional contractors[43]. - Sales in the Americas accounted for approximately 58% of total sales, with EMEA at 23% and Asia Pacific at 19%[18]. Strategic Initiatives - Graco aims to expand into new geographic markets by adding commercial and technical resources and third-party distribution in growing markets[13]. - The company has ongoing facility expansion projects in Sioux Falls, South Dakota; St. Gallen, Switzerland; and Sibiu, Romania, expected to begin in 2022[24]. - Graco's investment in new products and targeted acquisitions is part of its long-term growth strategy, focusing on product innovation and premium customer service[16]. - The company has made targeted acquisitions in recent years to broaden its product offerings and enhance capabilities, although these acquisitions were not material to consolidated financial statements[14]. - Significant investments in new products are ongoing, with a focus on automation and configurability to enhance customer efficiency and sustainability initiatives[25]. Operational Challenges - The company experienced logistical and production constraints in 2021 due to limited component availability and labor shortages, which increased lead times and affected the ability to meet demand[49]. - Price inflation was particularly pronounced for motors, electronics, and materials such as aluminum and copper, impacting overall costs[49]. - In 2021, logistical and production constraints were experienced due to limited component availability and shipping delays, impacting the ability to meet demand[49]. - The company is addressing fluctuations in raw material prices through supplier management and risk assessments[50]. Workforce and Culture - The company employs approximately 3,800 individuals, with 1,400 based outside the U.S. and 1,600 hourly factory workers in the U.S.[54]. - The average tenure of executive officers responsible for setting overall strategy is nearly 21 years[61]. - The average tenure of all employees is nearly 10 years, indicating a positive workplace culture[61]. - Employee referrals for open positions are encouraged and rewarded, enhancing recruitment efforts[61]. - A biennial survey is conducted to assess company culture and benchmark against industry leaders[62]. - Continuous improvement programs with financial incentives are in place to encourage employee ideas for profitability and quality[62]. - Regular ethics training is required for all employees to maintain a culture of trust[62]. - The company aims to attract and retain qualified personnel through internal development and external hiring[60]. Community Engagement - The Graco Foundation focuses on educational programs, particularly STEM, and supports community needs through grants[63]. - The Graco Foundation emphasizes workforce development and youth development programs[63]. - The company supports volunteerism through dollar-for-dollar gift matching and grants[63].