Replies to post #25 on Graco Inc (GGG)

[fung_derf]

Guess I found some of my answers

* Sales increased 12 percent, led by double-digit growth in the Contractor
segment.

* Gross profit margin rate was more than 1 percentage point higher than the
first quarter last year due to realized pricing and higher production volume.

* Operating expenses were slightly lower than the first quarter last year.

* The increase in diluted earnings per share includes $0.05 from a required
change in accounting for stock compensation, and $0.01 from reduced intangible
amortization expense resulting from the impairment charge recorded in the
fourth quarter of 2016.

* The Company executed an accelerated share repurchase plan that reduced
outstanding shares by 850,000 as of February 21, 2017.

"I am pleased with Graco's performance in the first quarter, where we achieved
organic, constant currency growth in every region and reportable segment, as
well as growth within every segment in every region," said Patrick J. McHale,
Graco's President and CEO. "Profitability was strong in the first quarter,
reflecting improved sales volumes, increased gross margin performance and
solid operating expense leverage. I would like to thank our employees, end
users and channel partners around the world for their efforts to get the year
off to a good start."

Consolidated Results

Sales increased 12 percent, with increases of 15 percent in the Americas, 4
percent in EMEA (9 percent at consistent translation rates) and 10 percent in
Asia Pacific (12 percent at consistent translation rates). Changes in currency
translation rates decreased sales by approximately $4 million (1 percentage
point). Incremental sales from operations acquired within the last 12 months
were not significant.

Gross profit margin rate increased by more than 1 percentage point compared to
the first quarter of last year. Favorable effects from realized pricing and
higher production volume were partially offset by unfavorable impacts of
product mix.

Total operating expenses were slightly lower than the first quarter last year.
Reductions from the impact of currency translation, decreased amortization
expense and lower unallocated corporate expenses (mostly stock compensation
and central warehouse) more than offset volume and rate related increases.

The effective income tax rate for the quarter was 26 percent, down from 31
percent last year. Adoption of a new accounting standard, requiring excess tax
benefits related to stock option exercises to be credited to the income tax
provision (formerly credited to equity), reduced the effective tax rate by 4
percentage points. The tax rate benefit from foreign earnings taxed at lower
rates than the U.S. rate was also higher compared to the first quarter last
year.

Segment Results