Slide 1: 4th Quarter 2012 Earnings Conference Call
4th Quarter 2012 Earnings Conference Call Tuesday January 29, 2013 10 am CT
Slide 2: Safe Harbor
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 anticipate
Slide 3: Conference Call Logistics
Conference Call Logistics The release, accompanying slides and replay web cast are available online at investors.graco.com Telephone replay will be available after 2 p.m. ET, January 29, 2013. The replay by telephone will be available through February 1, 2013. • 800-406-7325 – Conference ID #4587286
Slide 4: Consolidated Financial Results
Consolidated Financial Results $ millions except EPS Fourth Quarter Year-to-Date 2012 2011 Change 2012 2011 Change Sales $ 253.7 $ 215.6 18 % $ 1,012.5 $ 895.3 13 % Gross Profit $ 138.9 117.0 19 % 550.5 500.2 10 % % of Sales 54.7 % 54.3 % 0.4 pts 54.4 % 55.9 % (1.5) pts Operating Earnings $ 57.9 47.
Slide 5: Consolidated Financial Results - Net Sales
Consolidated Financial Results - Net Sales Fourth Quarter Segment Region Industrial Contractor Lubrication Americas Europe Asia Pacific Consolidated Volume and Price 0% 13 % (3)% 14 % 0% (17)% 3% Acquisitions 25 % 0% 0% 5% 42 % 11 % 15 % Currency 0% 0% 0% 1% (3)% 1% 0% Total 25 % 13 % (3)% 20 % 39 %
Slide 6: Consolidated Impact of Acquisition/Divestiture Items
Consolidated Impact of Acquisition/Divestiture Items $ millions except EPS Fourth Quarter 2012 2011 Change Acquisition/Divestiture Related Items Sales $ 253.7 $ 215.6 18 % $32 million Powder Finishing, 15 percentage points (pts) Gross Profit $ 138.9 117.0 19 % Powder lower gross margin percentage re
Slide 7: Consolidated Fourth Quarter Results
Consolidated Fourth Quarter Results Sales Operating Earnings 100 30% 140 $134 120 80 23% $112 22% 100 20% % of Sales $ Millions 60 $ Millions 80 $58 60 $68 40 $55 $52 10% 40 $49 $47 20 20 - - 0% Q4 11 Q4 12 Q4 11 Q4 12 Americas Europe Asia Pacific $M % of Sales • Sales increase of 18% (no impact fro
Slide 8: Consolidated Year-to-Date Results
Consolidated Year-to-Date Results Sales Operating Earnings 350 30% 600 300 25% $537 500 22% $476 250 20% 400 % of Sales 200 $ Millions $ Millions 300 $225 150 $220 $257 200 $211 $208 $219 10% 100 100 50 - - 0% YTD 11 YTD 12 YTD 11 YTD 12 Americas Europe Asia Pacific $M % of Sales • Sales increase of
Slide 9: Consolidated Results: Change in Operating Earnings
Consolidated Results Change in Operating Earnings Fourth Quarter Year-to-Date 2011 Operating Earnings ($M and % of sales) $ 47 22 % $ 220 25 % Translation effect — — (7) — Effect of Powder Finishing Purchase accounting effect on inventory — — (7) (1) Powder Finishing operating earnings leverage 5 (1
Slide 10: Cash Flow and Liquidity
Cash Flow and Liquidity Cash from Operations as % of Net Income Net Earnings and Cash from Operations 80 200% % of Net Earnings 181% 60 $67 150% $ millions $58 137% 120% 40 $42 100% $35 $41 $37 $34 20 $23 50% 66% - 0% Q1 12 Q2 12 Q3 12 Q4 12 Q1 12 Q2 12 Q3 12 Q4 12 Net Earnings Cash flow from Operat
Slide 11: Acquisition of Finishing Businesses
Acquisition of Finishing Businesses • On April 2, 2012, the Company completed the purchase of the finishing businesses of Illinois Tool Works Inc. The acquisition includes Powder Finishing and Liquid Finishing equipment operations, technologies and brands. Results of the Powder Finishing business ha
Slide 12: Other Discussion Items
Other Discussion Items • Total future costs of the divestiture expected to be approximately $10 million, though the timing and final amount may be affected by the sales and regulatory review processes • 2013 annualized tax rate is projected to be approximately 32-33% – Reinstated federal R&D tax cre
Slide 13: Industrial Equipment Results
Industrial Equipment Results 62% Fourth Quarter Industrial Segment Sales as % of Consolidated Fouth Quarter* Year-to-Date* Sales ($ M) 2012 2011 Change 2012 2011 Change Americas $ 69 $ 57 20 % $ 261 $ 220 19 % Europe 50 31 61 184 135 36 Asia Pacific 37 37 1 158 147 8 Total $ 156 $ 125 25 % $ 603 $ 5
Slide 14: Industrial Equipment Results
Industrial Equipment Results Change in Operating Earnings Fouth Quarter Year-to-Date 2011 Operating Earnings ($M and % of sales) $ 41 33 % $ 174 35 % Translation effect — — (5) — Effect of Powder Finishing Purchase accounting effect on inventory — — (7) (1) Powder Finishing operating earnings levera
Slide 15: Contractor Equipment Results
Contractor Equipment Results 27% Fourth Quarter Contractor Sales as % of Consolidated Fourth Quarter Year-to-Date Sales ($ M) 2012 2011 Change 2012 2011 Change Americas $ 45 $ 35 25 % $ 194 $ 184 5% Europe 15 16 (4) 64 68 (5) Asia Pacific 10 11 (6) 41 39 4 Total $ 70 $ 62 13 % $ 299 $ 291 3% Operati
Slide 16: Contractor Equipment Results
Contractor Equipment Results Change in % of sales Fourth Quarter Year-to-Date 2011 Operating Earnings ($M and % of sales) $ 6 10 % $ 51 17 0%% Translation effect — — (2) — Pricing, product cost 6 3 9 1 Effect of product mix and channel inventory realignment — — (3) (1) Expense/volume leverage (1) 3
Slide 17: Lubrication Equipment Results
Lubrication Equipment Results 11% Fourth Quarter Lubrication Sales as % of Consolidated Fourth Quarter Year-to-Date Sales ($ M) 2012 2011 Change 2012 2011 Change Americas $ 21 $ 19 8% $ 81 $ 72 13 % Europe 2 2 16 9 9 2 Asia Pacific 4 7 (39) 20 22 (10) Total $ 27 $ 28 (3)% $ 110 $ 103 7% Operating Ea
Slide 18: Lubrication Equipment Results
Lubrication Equipment Results Change in % of sales Fourth Quarter Year-to-Date 2011 Operating Earnings ($M and % of sales) $ 5 19 % $ 19 18 % Translation effect — — — — Price / Product cost / mix — 1 6 1 Volume effect on expense leverage 1 — (2) 1 2012 Operating Earnings ($M and % of sales) $ 6 20 %
Slide 19: Move – Measure – Control – Dispense – Apply
Move – Measure – Control – Dispense – Apply