Slide 1: 1st Quarter 2011 Earnings Conference Call
1st Quarter 2011 Earnings Conference Call Thursday, April 28, 2011, 10 a.m. 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 www.Graco.com (click on “Investors”) Telephone replay available after 2 p.m. ET, April 28, 2011 • 800-406-7325 – Conference ID #4432429 • 303-590-3030 – Conference ID #4432429, for International pa
Slide 4: 2011 1st Quarter Financial Results
2011 1st Quarter Financial Results $ millions except EPS 2011 2010 Change Sales $ 217.7 $ 164.7 32 % Gross Profit 124.4 89.3 39 Rate 57.1 % 54.2 % Operating Expenses 67.3 56.6 19 Operating Earnings 57.1 32.7 74 Interest & Other Expenses 0.6 1.2 Earnings Before Income Taxes 56.5 31.5 79 Income Taxes
Slide 5: Consolidated Results
Consolidated Results First Quarter $ millions 2011 2010 Change Sales Americas $ 116 $ 87 33 % Europe 53 42 27 Asia Pacific 49 36 35 Total $ 218 $ 165 32 Operating Earnings $ 57 $ 33 % of sales 26% 20% Change in % of sales First Quarter 2010 Operating Earnings (percentage of sales) 20 % Translation e
Slide 6: 1st Quarter Summary
1st Quarter Summary • First quarter sales of $218 million and earnings of $37 million – Favorable currency translation effect of $2 million on sales, $1 million on net earnings • Sales increased as compared to prior year in all regions – Americas increased by 33 percent – Europe increased by 27 perc
Slide 7: 1st Quarter Summary
1st Quarter Summary • Operating expenses were up $11 million on higher sales but as a percentage of sales, were 3 percentage points lower than the first quarter 2010 • Tax rate of 34 percent compared to 34½ percent first quarter 2010 • Backlog increased $6 million from year end 7
Slide 8: Cash Flow and Liquidity
Cash Flow and Liquidity • 2011 cash flow from operations of $14 million versus $16 million in 2010 – Cash uses • Capital expenditures $4 million • Dividends $13 million • Working capital – Increase in inventories $11 million • Improved service levels, international distribution – Increase in account
Slide 9: Acquisition of Finishing Businesses from ITW
Acquisition of Finishing Businesses from ITW Entered into a definitive agreement to purchase the finishing business operations of Illinois Tool Works, Inc. (ITW) on April 14, 2011. Closing expected in third quarter, pending regulatory reviews – $650 million cash offer, financed through a new $450 mi
Slide 10: Other Discussion Items
Other Discussion Items • Normal seasonality expected for 2011, especially in Contractor • Material cost pressures for remainder of year • Expenses associated with the pending acquisition are estimated to be $5 million for second quarter and $15 million in total • Interest expense for second quarter,
Slide 11: Industrial Equipment
Industrial Equipment First Quarter $ millions 2011 2010 Change Sales Americas $ 53 $ 42 26 % Europe 34 28 24 Asia Pacific 36 27 31 Total $ 123 $ 97 27 Operating Earnings $ 45 $ 30 % of sales 37% 32% Change in % of sales First Quarter 2010 Operating Earnings (percentage of sales) 32 % Translation eff
Slide 12: Contractor Equipment
Contractor Equipment First Quarter $ millions 2011 2010 Change Sales Americas $ 45 $ 32 41 % Europe 17 13 33 Asia Pacific 8 6 38 Total $ 70 $ 51 38 Operating Earnings $ 11 $ 5 % of sales 16% 10% Change in % of sales First Quarter 2010 Operating Earnings (percentage of sales) 10 % Translation effect
Slide 13: Lubrication Equipment
Lubrication Equipment First Quarter $ millions 2011 2010 Change Sales Americas $ 18 $ 13 39 % Europe 2 1 55 Asia Pacific 5 3 61 Total $ 25 $ 17 44 Operating Earnings $ 5 $ 2 % of sales 21% 10% Change in % of sales First Quarter 2010 Operating Earnings (percentage of sales) 10 % Translation effect 1
Slide 14: Move – Measure – Control – Dispense – Apply
Move – Measure – Control – Dispense – Apply