Graco Inc. this week announced net sales for the full-year 2013 of $1.104 billion, a 9-percent increase from sales of $1.012 for full-year 2012. Net earnings for the year climbed 41 percent to $210.8 million from $149.1 million in the same period a year ago.
Cash flow from operations of $243 million was 28-percent higher than last year. For the year, the company applied $148 million of cash to the reduction of long-term debt and returned $129 million to investors through dividends and company stock repurchases.
Fourth-quarter sales increased in all regions, including double-digit percentage growth in Asia Pacific. Sales for the quarter increased in Contractor and Industrial segments while Lubrication segment sales declined slightly.
"Graco reported record sales and earnings for the full year and in each quarter of 2013, including the fourth quarter," said Patrick McHale, Graco's president and CEO. "Industrial project activity was surprisingly strong in China in the fourth quarter, which lifted our Asia Pacific region to a double-digit performance for the quarter and brought the region back to modest growth for the full year. Contractor segment sales in the Americas approached double-digit growth in the fourth quarter, against a difficult comparison from the prior year."
On April 2, 2012, the company completed the purchase of the finishing businesses of Illinois Tool Works. The acquisition included Powder Finishing and Liquid Finishing equipment operations, technologies and brands. Results of the Powder Finishing business have been included in the Industrial segment since the date of acquisition.
Pursuant to a March 2012 order, the Liquid Finishing businesses were to be held separate from the rest of Graco’s businesses while the United States Federal Trade Commission considered a settlement with Graco and determined which portions of the Liquid Finishing business Graco must divest.
In May 2012, the FTC issued a proposed decision and order that requires Graco to sell the Liquid Finishing business assets, including certain business activities related to the development, manufacture, and sale of products under the Binks, DeVilbiss, Ransburg and BGK brand names, no later than 180 days from the date the order becomes final. The FTC has not yet issued its final decision and order.
The company has retained the services of an investment bank to help it market the Liquid Finishing businesses and identify potential buyers. While it seeks a buyer, Graco must continue to hold the Liquid Finishing business assets separate from its other businesses and maintain them as viable and competitive.
"As stated in the earnings release last quarter, Graco expects to achieve growth in all segments and regions in 2014," McHale said. "We believe that housing starts in the U.S. will easily eclipse one million in 2014, which should help drive our Contractor segment in the Americas to another year of double-digit growth, albeit at a pace slower than 2013. We remain confident in our long-term growth strategies and will work closely with our distributor partners to deliver good performance in 2014."
Minneapolis-based Graco Inc. supplies technology and expertise for the management of fluids and coatings in both industrial and commercial applications.