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What changed in GRACO INC's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of GRACO INC's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+154 added−165 removedSource: 10-K (2025-02-18) vs 10-K (2024-02-20)

Top changes in GRACO INC's 2024 10-K

154 paragraphs added · 165 removed · 130 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeOur manufacturing capacity is sufficient for current business demand levels. In 2023, we completed an expansion of our Sioux Falls, South Dakota manufacturing facility and the construction of a new manufacturing facility in Sibiu, Romania. We also took possession of our newly constructed worldwide distribution center in Dayton, Minnesota, which we anticipate will first be operational later in 2024.
Biggest changeIn 2024, we completed significant expansion projects, including a worldwide distribution center in Dayton, Minnesota, a manufacturing and distribution facility for our Powder division in Gossau, Switzerland and the expansion of our Anoka, Minnesota facility. In 2023, we completed an expansion of our Sioux Falls, South Dakota manufacturing facility and the construction of a new manufacturing facility in Sibiu, Romania.
Sales of products that refresh and upgrade our product lines are measured and compared with planned results. Sales of products that provide entry into new industries and applications are also measured, with additional focus on commercial resources and activities to build specialized third-party distribution and market acceptance by end users.
Sales of products that refresh and upgrade our product lines are measured and compared with planned results. Sales of products that provide entry into new industries and applications are also measured, with an additional focus on commercial resources and activities to build specialized third-party distribution and market acceptance by end users.
Our product development activities are focused both on upgrades to our current product lines to provide features and benefits that will provide a return on investment to our end-user customers and development of products that will reach into new industries and applications to incrementally grow our sales.
Our product development activities are focused both on upgrades to our current product lines to provide features and benefits that will provide a return on investment to our end-user customers and the development of products that will reach into new industries and applications to incrementally grow our sales.
Spray foam is commonly used for insulating building walls, roofs, water heaters, refrigerators, hot tubs and other items. Polyurea coatings are applied on storage tanks, pipes, roofs, truck beds, concrete and other items. We offer a complete line of pumps and proportioning equipment that sprays specialty coatings on a variety of surfaces for protection and fireproofing.
Spray foam is commonly used for insulating building walls, roofs, water heaters, 5 Table of Contents refrigerators, hot tubs and other items. Polyurea coatings are applied on storage tanks, pipes, roofs, truck beds, concrete and other items. We offer a complete line of pumps and proportioning equipment that sprays specialty coatings on a variety of surfaces for protection and fireproofing.
We refresh our product line and continue development of our distribution channel to stay competitive. We also face competitors who illegally sell counterfeits of our products or otherwise infringe on our intellectual property rights. As this type of unfair competition grows or evolves, we may have to increase our intellectual property and unfair competition enforcement activities.
We refresh our product lines and continue the development of our distribution channel to stay competitive. We also face competitors who illegally sell counterfeits of our products or otherwise infringe on our intellectual property rights. As this type of unfair competition grows or evolves, we may have to increase our intellectual property and unfair competition enforcement activities.
Following completion of these projects, production requirements in the immediate future are expected to be met through existing facilities, the installation of new automatic and semi-automatic machine tools, efficiency and productivity improvements, the use of leased space and available subcontract services. For more details on our facilities, see Item 2, Properties.
Production requirements in the immediate future are expected to be met through existing facilities, the installation of new automatic and semi-automatic machine tools, efficiency and productivity improvements, the use of leased space and available subcontract services. For more details on our facilities, see Item 2, Properties.
Contractor products are also sold through general equipment distributors outside of North America. Industrial Segment The Industrial segment represented approximately 30 percent of our total sales in 2023. It includes the Industrial and Powder divisions. The Industrial segment markets equipment and solutions for moving and applying paints, coatings, sealants, adhesives and other fluids.
Contractor products are also sold through general equipment distributors outside of North America. Industrial Segment The Industrial segment represented approximately 29 percent of our total sales in 2024. It includes the Industrial and Powder divisions. The Industrial segment markets equipment and solutions for moving and applying paints, powder coatings, sealants, adhesives and other fluids.
Total product development expenditures for all segments were $83 million in 2023, $80 million in 2022 and $80 million in 2021. The amounts invested in product development averaged approximately 4 percent of sales over the last three years.
Total product development expenditures for all segments were $87 million in 2024, $83 million in 2023 and $80 million in 2022. The amounts invested in product development averaged approximately 4 percent of sales over the last three years.
Our Company also owns a number of trademarks in the U.S. and foreign countries, including registered trademarks for “GRACO,” “Gema,” several forms of a capital “G,” and various product trademarks that are material to our business, inasmuch as they identify Graco and our products to our customers.
Our Company also owns a number of trademarks in the U.S. and foreign countries, including registered trademarks for "GRACO," "Gema," "Corob," several forms of a capital “G,” and various product trademarks that are material to our business, inasmuch as they identify Graco and our products to our customers.
Of this total, approximately 1,400 were employees based outside of the U.S., and 1,300 were hourly factory workers in the U.S. None of our U.S. employees are covered by a collective bargaining agreement. Various national industry-wide labor agreements apply to certain employees in various countries outside of the U.S.
Of this total, approximately 1,900 were employees based outside of the U.S., and 1,200 were hourly factory workers in the U.S. None of our U.S. employees are covered by a collective bargaining agreement. Various national industry-wide labor agreements apply to certain employees in various countries outside of the U.S.
We also manufacture products in Switzerland (Industrial segment), Italy (Industrial segment), the United Kingdom (Process segment), the People’s Republic of China (“P.R.C.”, or "China") (all segments), Belgium (all segments) and Romania (Industrial segment). Our manufacturing is aligned with our business segments and is co-located with product development to accelerate technology improvements and improve our cost structure.
We also manufacture products in Switzerland (Industrial segment), Italy (Industrial and Contractor segments), the People’s Republic of China (“P.R.C.”, or "China") (all segments), India (Contractor segment), Belgium (all segments) and Romania (Industrial segment). Our manufacturing is aligned with our business segments and is co-located with product development to accelerate technology improvements and improve our cost structure.
Environmental Protection Our compliance with federal, state and local laws and regulations did not have a material effect upon our capital expenditures, earnings or competitive position during the fiscal year ended December 29, 2023. Human Capital Resources As of December 29, 2023, we employed approximately 4,000 persons.
Environmental Protection Our compliance with federal, state and local laws and regulations did not have a material effect upon our capital expenditures, earnings or competitive position during the fiscal year ended December 27, 2024. Human Capital Resources As of December 27, 2024, we employed approximately 4,300 persons.
This approach has helped create among our employees an in-depth understanding of our business, products, competition and customers, while also adding new employee ideas and perspectives in support of our continuous improvement initiatives. As of December 29, 2023, our executive officers responsible for setting overall strategy averaged nearly 21 years of tenure with us.
This approach has helped create among our employees an in-depth understanding of our business, products, competition and customers, while also adding new employee ideas and perspectives in support of our continuous improvement initiatives. As of December 27, 2024, our executive officers responsible for setting overall strategy averaged nearly 23 years of tenure.
Contractor equipment also includes sprayers that apply texture to walls and ceilings, highly viscous coatings to roofs, and markings on roads, parking lots, athletic fields and floors. This segment also manufactures two-component proportioning systems that are used to spray polyurethane foam ("spray foam") and polyurea coatings.
Contractor equipment also includes sprayers that apply texture to walls and ceilings, highly viscous coatings to roofs, and markings on roads, parking lots, athletic fields and floors as well as high-performance volumetric and gravimetric dispense, mixing, and shaking equipment. This segment also manufactures two-component proportioning systems that are used to spray polyurethane foam ("spray foam") and polyurea coatings.
Product Development Our primary product development efforts are carried out in facilities located in Minneapolis, Anoka, Dayton and Rogers, Minnesota; North Canton, Ohio; St. Gallen, Switzerland; Barcelona, Spain; Aachen, Germany; Suzhou, Shanghai and Dongguan City, P.R.C.; Dexter, Michigan; Erie, Pennsylvania; and Kamas, Utah.
Product Development Our primary product development efforts are carried out in facilities located in Minneapolis, Anoka, Dayton and Rogers, Minnesota; North Canton, Ohio; Gossau, Switzerland; Modena, Italy; Barcelona, Spain; Suzhou, Shanghai, P.R.C.; Dexter, Michigan; Erie, Pennsylvania; and Kamas, Utah.
The completion of these projects, which we expect to occur in 2024, represents the culmination of a period of significant investment in expansion and modernization of our key manufacturing and distribution facilities.
The completion of these projects represents the culmination of a period of significant investment in expansion and modernization of our key manufacturing and distribution facilities.
Our Company measures the results of acquired businesses as compared to historical results and projections made at the time of acquisition. We will invest in engineering, manufacturing and commercial resources for these businesses based on expected return on investment.
Our Company measures the results of acquired businesses as compared to historical results and projections made at the time of acquisition. We will invest in engineering, manufacturing and commercial resources for these businesses based on expected return on investment. Business Segments Contractor Segment The Contractor segment represented approximately 47 percent of our total sales in 2024.
Some products are sold directly to end users, particularly in the oil and natural gas and semiconductor industries. Process The Process division makes pumps of various technologies that move chemicals, water, wastewater, petroleum, food and other fluids.
Most Process segment equipment is sold worldwide through third-party distributors and original equipment manufacturers. Some products are sold directly to end users, particularly in the oil and natural gas and semiconductor industries. Process The Process division makes pumps of various technologies that move chemicals, water, wastewater, petroleum, food and other fluids.
We provide marketing and product design in each of these geographic regions. Our Company also provides application assistance to distributors and employs sales personnel in each of these geographic regions.
Sales in EMEA represented approximately 21 percent and sales in Asia Pacific represented approximately 16 percent. We provide marketing and product design in each of these geographic regions. Our Company also provides application assistance to distributors and employs sales personnel in each of these geographic regions.
Advanced fluid dispense equipment includes gel-coat equipment, chop and wet-out systems, resin transfer molding systems and applicators and precision dispensing solutions. This precision 6 Table of Contents dispense equipment bonds, molds, seals, vacuum encapsulates and laminates parts and devices in a wide variety of industrial applications.
Advanced fluid dispense equipment includes gel-coat equipment, chop and wet-out systems, resin transfer molding systems and applicators and precision dispensing solutions. This precision dispense equipment bonds, molds, seals, vacuum encapsulates and laminates parts and devices in a wide variety of industrial applications. Powder The Powder division makes powder finishing products and complete powder finishing systems that coat powder on metals.
We perform critical machining, assembly and testing in-house for most of our products to control quality, improve response time and maximize cost-effectiveness. We make our products in focused factories and product cells.
We perform critical machining, assembly and testing in-house for most of our products to 4 Table of Contents control quality, improve response time and maximize cost-effectiveness. We make our products in focused factories and product cells. We source raw materials and components from suppliers around the world.
The materials and components that we use are generally available through multiple sources of supply. To manage cost, we source significant amounts of materials and components from outside the U.S., primarily in the Asia Pacific region. In 2023, the Company's supply chain stabilized, and the associated effects of inflation largely subsided.
The materials and components that we use are generally available through multiple sources of supply. To manage cost, we source significant amounts of materials and components from outside the U.S., primarily in the Asia Pacific region. In 2024, the Company's global supply chain continued to stabilize, including improved lead times and lower inflationary effects.
We source raw materials and components from suppliers around the world. 4 Table of Contents For all segments, we primarily sell our equipment through third-party distributors worldwide, positioned throughout our geographic regions, and through selected retailers. Our products are sold from our warehouse to our third-party distributors or retailers who sell our products to end users.
For all segments, we primarily sell our equipment through third-party distributors worldwide, positioned throughout our geographic regions, and through selected retailers. Our products are sold from our warehouse to our third-party distributors or retailers who sell our products to end users. Certain of our businesses sell their products directly to end-user customers and have direct relationships with customers.
Each segment sells its products in North, Central and South America (the “Americas”), Europe, Middle East and Africa (“EMEA”), and Asia Pacific. For 2023, sales in the Americas represented approximately 61 percent of our Company’s total sales. Sales in EMEA represented approximately 21 percent and sales in Asia Pacific represented approximately 18 percent.
In 2024, we classified our business into three reportable segments, each with a worldwide focus: Contractor, Industrial and Process. Each segment sells its products in North, Central and South America (the “Americas”), Europe, Middle East and Africa (“EMEA”), and Asia Pacific. For 2024, sales in the Americas represented approximately 63 percent of our Company’s total sales.
Certain of our businesses sell their products directly to end-user customers and have direct relationships with customers. Outside of the U.S., our subsidiaries located in Australia, Belgium, Spain, Japan, Italy, Korea, India, the P.R.C., the United Kingdom and Brazil distribute our Company’s products. Operations in Maasmechelen, Belgium, St. Gallen, Switzerland, and Shanghai, P.R.C. reinforce our commitment to those regions.
Outside of the U.S., our subsidiaries located in Australia, Belgium, Spain, Japan, Italy, Korea, India, the P.R.C., the United Kingdom and Brazil distribute our Company’s products. Operations in Maasmechelen, Belgium, Gossau, Switzerland, Modena, Italy, Gujarat, India and Shanghai, P.R.C. reinforce our commitment to those regions. Our manufacturing capacity is sufficient for current business demand levels.
The division also has a line of chemical injection pumping solutions for precise injection of chemicals into producing oil wells and pipelines. 7 Table of Contents Raw Materials The primary materials and components in our products are steel of various alloys, sizes and hardness; specialty stainless steel and aluminum bar stock, tubing and castings; tungsten carbide; electric and gas motors; injection molded plastics; sheet metal; forgings; powdered metal; hoses; electronic components and high-performance plastics, such as polytetrafluoroethylene ("PTFE").
Segment information recast to conform to the new organizational structure is available as unaudited supplemental financial information on the Company’s website at www.graco.com. 7 Table of Contents Raw Materials The primary materials and components in our products are steel of various alloys, sizes and hardness; specialty stainless steel and aluminum bar stock, tubing and castings; tungsten carbide; electric and gas motors; injection molded plastics; sheet metal; forgings; powdered metal; hoses; electronic components and high-performance plastics, such as polytetrafluoroethylene ("PTFE").
Markets served include food and beverage, dairy, oil and natural gas, pharmaceutical, cosmetics, semiconductor, electronics, wastewater, mining, fast oil change facilities, service garages, fleet service centers, automobile dealerships and industrial lubrication applications. Most Process segment equipment is sold worldwide through third-party distributors and original equipment manufacturers.
The Process segment markets pumps, valves, meters and accessories to move and dispense chemicals, oil and natural gas, water, wastewater, petroleum, food, lubricants and other fluids. Markets served include food and beverage, dairy, oil and natural gas, pharmaceutical, cosmetics, semiconductor, electronics, wastewater, mining, fast oil change facilities, service garages, fleet service centers, automobile dealerships and industrial lubrication applications.
Primary end users of our powder finishing products include manufacturers in the construction, home appliance, automotive component and custom project coater industries. We strive to provide innovative solutions in powder coating for end users in emerging and developed markets. Process Segment The Process segment represented approximately 25 percent of our total sales in 2023.
We strive to provide innovative solutions in powder coating for end users in emerging and developed markets. Process Segment The Process segment represented approximately 24 percent of our total sales in 2024. It includes the Process and Lubrication divisions.
Prior year segment information has been restated to conform to the current organizational structure. 5 Table of Contents Contractor Segment The Contractor segment represented approximately 45 percent of our total sales in 2023. Through this segment, we offer sprayers that apply paint to walls and other structures, with product models for users ranging from do-it-yourself homeowners to professional contractors.
Through this segment, we offer sprayers that apply paint to walls and other structures, with product models for users ranging from do-it-yourself homeowners to professional contractors.
We have particularly strong manufacturing, engineering and customer service capabilities that enhance our ability to provide premium customer experience, produce high-quality and reliable products and drive ongoing cost savings. Our investment in new products, targeted acquisitions and strong manufacturing, engineering and customer service capabilities comprise our long-term growth strategies, which we coordinate and drive across our geographic regions.
Our investment in new products, targeted acquisitions and strong manufacturing, engineering and customer service capabilities comprise our long-term growth strategies, which we coordinate and drive across our geographic regions. Values central to our identity - growth, product innovation, premium customer service, quality and continuous improvement - are leveraged to integrate and expand the capabilities of acquired businesses.
Powder The Powder division makes powder finishing products and complete powder finishing systems that coat powder on metals. These products are sold under the Gema® and SAT™ brands. Gema powder systems coat window frames, metallic furniture, automotive components and sheet metal.
These products are sold under the Gema® and SAT™ brands. Gema powder systems coat window frames, metallic furniture, automotive components and sheet metal. Primary end users of our powder finishing products include 6 Table of Contents manufacturers in the construction, home appliance, automotive component and custom project coater industries.
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These acquisitions may be integrated into existing Graco operations or may be managed as stand-alone operations. We completed business acquisitions in 2022 and 2021 that were not material to our consolidated financial statements.
Added
These acquisitions may be integrated into existing Graco operations or may be managed as stand-alone operations. In 2024, we completed acquisitions in the Contractor and Process segments. These acquisitions provide new product offerings, such as high-performance volumetric and gravimetric dispense, mixing, and shaking equipment, as well as additional channel partners and manufacturing capabilities.
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Values central to our identity - growth, product innovation, premium customer service, quality and continuous improvement - are leveraged to integrate and expand the capabilities of acquired businesses. We classify our business into three reportable segments, each with a worldwide focus: Contractor, Industrial and Process.
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Note L (Acquisitions) to the Consolidated Financial Statements of this Form 10-K has additional information on recent acquisitions. We have particularly strong manufacturing, engineering and customer service capabilities that enhance our ability to provide premium customer experience, produce high-quality and reliable products and drive ongoing cost savings.
Removed
In addition, in 2023, we continued construction of a new facility in St. Gallen, Switzerland that will contain manufacturing operations for our Powder division, as well as began an expansion of our Anoka, Minnesota facility.
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The division also has a line of chemical injection pumping solutions for precise injection of chemicals into producing oil wells and pipelines. 2025 Change in Organizational Structure As previously announced, effective January 1, 2025, the Company has classified its business into three reportable segments: Contractor, Industrial and Expansion Markets. • The Industrial segment consists of the newly formed Industrial Division and the Powder Division.
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Business Segments Effective January 1, 2022, our high performance coatings and foam product offerings previously included within the Applied Fluid Technologies division of the Industrial segment were realigned and are now managed under the Contractor segment. This change aligns the types of products offered and markets served within the segments.
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The Company’s former Industrial and Lubrication Equipment Divisions, along with the Process Transfer Equipment business that was part of the Company’s former Process Division, were combined to form the new global Industrial Division.
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It includes the Process and Lubrication divisions. The Process segment markets pumps, valves, meters and accessories to move and dispense chemicals, oil and natural gas, water, wastewater, petroleum, food, lubricants and other fluids.
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The Powder Division remains unchanged. • The Expansion Markets segment consists of the Expansion Markets Division and will focus on driving inorganic growth in new and adjacent markets.
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While the Company experienced isolated supply chain disruptions in 2023, the impact was not as significant as compared to previous years in 2022 and 2021. We are generally able to find alternative suppliers to source raw materials and components for our products in the event of isolated disruptions.
Added
The Company’s environmental, semiconductor, high-pressure valves and electric motors businesses, together with select future ventures and acquisitions, reside within this division. • The Contractor segment remains unchanged as a reporting segment relative to prior periods. Segment operating results will be reported under the new organizational structure for the first quarter of 2025.
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Our efforts to identify alternative suppliers to source raw materials and components for our products as a result of the COVID-19 pandemic and other geopolitical tensions have improved our ability to mitigate isolated supply chain disruptions.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeHowever, these measures may not be effective against all eventualities, and there is a possibility that our information systems, networks, and those of our third-party service providers may be exposed to risks, including unauthorized access, operational errors, fraudulent activities, system failures, poor password management, and other potential irregularities.
Biggest changeWe also face the risk that the measures we have implemented to secure our information systems and networks and prevent unauthorized access to or loss of sensitive data are not effective and our information systems, networks, and those of our third-party service providers may be exposed to risks, including unauthorized access, operational errors, fraudulent activities, system failures, poor password management, and other potential irregularities.
As a 11 Table of Contents manufacturer, our operating technology assets and systems are susceptible to disruption through cyberattacks. We anticipate that meaningful investments in our operating technology infrastructure will be necessary as we continue to assess our operating technology posture and respond to the increasingly-pronounced risks posed by third-party cyber actors.
As a manufacturer, our operating technology assets and systems are susceptible to disruption through cyberattacks. We anticipate that meaningful investments in our operating technology infrastructure will be necessary as we continue to 11 Table of Contents assess our operating technology posture and respond to the increasingly-pronounced risks posed by third-party cyber actors.
Any insurance coverage we do have may be inadequate to compensate us for losses arising from any security breach or cybersecurity incident, and may in the future not be available to us on economically reasonable terms, or at all. The laws, regulations and customer-imposed controls governing cybersecurity and privacy continue to evolve and are becoming increasingly complex.
Any insurance coverage we do have may be inadequate to compensate for losses arising from any security breach or cybersecurity incident, and may in the future not be available to us on economically reasonable terms, or at all. The laws, regulations and customer-imposed controls governing cybersecurity and privacy continue to evolve and are becoming increasingly complex.
As a global manufacturer, we are subject to a variety of complex and stringent laws and regulations related to bribery, corruption and trade. The continued geographic expansion of our business increases our exposure to, and cost of complying with, these laws and regulations.
As a global manufacturer, we are subject to a variety of complex and stringent laws and regulations related to bribery, corruption and trade. The continued geographic expansion of our business increases our exposure to, and the cost of complying with, these laws and regulations.
Any such public health crisis could have negative impacts similar to those we experienced during the recent COVID-19 pandemic, including: employees being infected by, or exposed to, the virus; adverse impacts on the efficiency and productivity of our workforce and our operations; adverse impacts on our ability to manufacture products and provide related services in a timely manner; supply chain disruptions, including increased costs of raw materials and components, and delays, shortages and difficulties in sourcing raw materials and components; volatility in demand for certain of our products; inability to meet end-user customer demand; distribution and logistics challenges, including increased freight costs, reduced freight capacity, and shipping delays; restrictions on our employees’ ability to meet customers in person and the cancellation, postponement and reformatting of trade shows, industry events and product demonstrations, which impacted our selling activities and our ability to convert those activities into actual sales; and a significant investment of time, energy and resources by management in mitigating the effects of the pandemic on our employees and our business and complying with existing, new or modified governmental rules, regulations, standards and mandates.
Any such public health crisis could have negative impacts similar to those we experienced during the COVID-19 pandemic, including: employees being infected by, or exposed to, the virus; adverse impacts on the efficiency and productivity of our workforce and our operations; adverse impacts on our ability to manufacture products and provide related services in a timely manner; supply chain disruptions, including increased costs of raw materials and components, and delays, shortages and difficulties in sourcing raw materials and components; volatility in demand for certain of our products; inability to meet end-user customer demand; distribution and logistics challenges, including increased freight costs, reduced freight capacity, and shipping delays; restrictions on our employees’ ability to meet customers in person and the cancellation, postponement and reformatting of trade shows, industry events and product demonstrations, which impacted our selling activities and our ability to convert those activities into actual sales; and a significant investment of time, energy and resources by management in mitigating the effects of the pandemic on our employees and our business and complying with existing, new or modified governmental rules, regulations, standards and mandates.
The occurrence of a security breach or an intrusion into an information system or a network, or the breakdown, interruption in or inadequate upgrading or maintenance of our information processing software, hardware or networks or the internet, may adversely affect our business, reputation, results of operations and financial condition. We do not currently maintain specific cyber insurance coverage.
The occurrence of a security breach or an intrusion into an information system or a network, or the breakdown, interruption or inadequate upgrading or maintenance of our information processing software, hardware or networks or the internet, may adversely affect our business, reputation, results of operations and financial condition. We do not currently maintain specific cyber insurance coverage.
In addition, we source some of our materials, parts and components from suppliers located in China. As such, we are exposed to potential disruptions in deliveries from these suppliers due to political tensions with China, geopolitical risks, government-mandated facility closures in China due to public health matters or other causes.
In addition, we source some of our materials, parts and components from suppliers located in China. As such, we are exposed to potential disruptions in deliveries from these suppliers due to political tensions, geopolitical risks, government-mandated facility closures due to public health matters or other causes.
In addition, decreased value of local currency may make it difficult for some of our distributors and end users to purchase our products. A significant fluctuation in exchange rates may negatively impact our financial condition and results of operations.
In addition, the decreased value of local currency may make it difficult for some of our distributors and end users to purchase our products. A significant fluctuation in exchange rates may negatively impact our financial condition and results of operations.
The occurrence of any of these events could result in a prolonged economic slowdown, prevent us or our customers from expanding into certain geographies or limit our ability to grow our business. Civil disturbances may harm our business.
The occurrence of any of these events could result in a prolonged economic slowdown, prevent us or our customers from expanding into certain geographies or limit our ability to grow our business. Civil disturbances may also harm our business.
In addition, as investor and other stakeholder expectations relating to ESG matters change and evolve over time, any failure or perceived failure by us to adequately address those expectations may damage our reputation and adversely affect our business and results of operations.
As investor and other stakeholder expectations relating to ESG matters change and evolve over time, any failure or perceived failure by us to adequately address those expectations may damage our reputation and adversely affect our business and results of operations.
Shortages, delivery delays and price inflation in a wide variety of raw materials and components (including but not limited to electronic components, castings, engines and motors) and logistical challenges (including but not limited to increased freight costs, shipping container shortages, trucking shortages, ocean, railway and air freight capacity constraints, labor shortages and port delays) have adversely affected production and profitability and may continue to adversely affect production and profitability.
Shortages, delivery delays and price inflation in a wide variety of raw materials and components (including but not limited to electronic components, castings, engines and motors) and logistical challenges (including but not limited to increased freight costs, shipping container shortages, trucking shortages, ocean, railway and air freight capacity constraints, labor shortages and port delays) have adversely affected production and profitability and may adversely affect production and profitability in the future.
Growing concerns over climate change has resulted in, and may continue to result in, new laws, regulations and accords intended to reduce emissions of certain greenhouse gases and to require reporting on such emissions and other climate-related matters.
Growing concerns over climate change have resulted in, and may continue to result in, new laws, regulations and accords intended to reduce emissions of certain greenhouse gases and to require reporting on such emissions and other climate-related matters.
Changes in export control or trade sanctions laws may restrict our business practices, including cessation of business activities in sanctioned countries or with sanctioned entities, and may result in modifications to our compliance programs and increase compliance costs.
Changes in export control or trade sanction laws may restrict our business practices, including cessation of business activities in sanctioned countries or with sanctioned entities, and may result in modifications to our compliance programs and increase compliance costs.
The loss of, or substantial damage to, one of our facilities, our information system infrastructure or the facilities of our suppliers could make it difficult to manufacture product, fulfill customer orders and provide our employees with work.
The loss of, or substantial damage to, one of our facilities, our information system infrastructure or the facilities of our suppliers could make it difficult to manufacture products, fulfill customer orders and provide our employees with work.
The employment of generative AI tools creates opportunities for the potential loss or misuse of personal data, the inadvertent dissemination of our confidential or proprietary information, or the unintentional use of third parties’ intellectual property.
The deployment of generative AI tools creates opportunities for the potential loss or misuse of personal data, the inadvertent dissemination of our confidential or proprietary information, or the unintentional use of third parties’ intellectual property.
In addition, the content, analyses, recommendations or other output that generative AI tools produce could be deficient, inaccurate or biased or be based on flawed or insufficient datasets. Foreign Operations - Conducting business internationally exposes our Company to risks that could harm our business. In 2023, approximately 47 percent of our sales were generated by customers located outside the U.S.
In addition, the content, analyses, recommendations or other output that generative AI tools produce could be deficient, inaccurate or biased or be based on flawed or insufficient datasets. Foreign Operations - Conducting business internationally exposes our Company to risks that could harm our business. In 2024, approximately 46 percent of our sales were generated by customers located outside the U.S.
Uncertainty surrounding political leadership, as well as geopolitical unrest, could cause economic conditions in the U.S. or abroad to deteriorate, which could limit our growth opportunities and otherwise harm our business.
Political Instability – Uncertainty surrounding political leadership, as well as geopolitical unrest, could cause economic conditions in the U.S. or abroad to deteriorate, which could limit our growth opportunities and otherwise harm our business. Domestic political instability, including government shut downs, may limit our ability to grow our business.
We use these systems and networks to record, process, summarize, transmit and store electronic information, and to manage or support our business processes and activities.
We use these systems and networks to record, process, summarize, transmit and store electronic information, and to manage or support our business processes and activities. We may experience interruptions, delays and outages in service and availability from time to time, including infrastructure changes, human or software errors, upgrade disruptions and capacity constraints.
Similarly, any public statements we make about ESG-related matters and initiatives may result in legal and regulatory proceedings against us which could adversely affect our business and results of operations. Anti-Corruption and Trade Laws - We may incur costs and suffer damages if our employees, agents, distributors or suppliers violate anti-bribery, anti-corruption or trade laws and regulations.
In addition, our stakeholders have evolving, varied and sometimes conflicting expectations regarding many aspects of our business, including our operations and ESG-related matters. Anti-Corruption and Trade Laws - We may incur costs and suffer damages if our employees, agents, distributors or suppliers violate anti-bribery, anti-corruption or trade laws and regulations.
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Russian Invasion of Ukraine and Political Instability – Russia’s invasion of Ukraine, and the sanctions and actions taken against Russia and Belarus in response to the invasion, has adversely impacted our business and may continue to do so.
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The Russian invasion of Ukraine in 2022 and the resulting sanctions and actions taken against Russia and Belarus by the U.S., the United Kingdom, the European Union, Switzerland and others considerably restricted our ability to sell certain products in Russia and Belarus.
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As a consequence, beginning in 2022, we indefinitely suspended sales into Russia and Belarus, which continued throughout the entirety of 2023 and into 2024. We expect our ability to sell certain products in Russia and Belarus to continue to be restricted for the foreseeable future.
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While our sales into Russia and Belarus prior to 2022 were not material to our overall business, a significant escalation or expansion of the conflict beyond its current geographic, political and economic scope and scale could have a material adverse effect on our business, results of operations and financial condition, and could exacerbate other risks discussed in this report.
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Such risks include, but are not limited to: an increase in the frequency and severity of cybersecurity threats against us and the parties with whom we do business; unfavorable changes in exchange rates; further shortages, delivery delays and price inflation in a wide variety of raw materials and components; widespread reductions in end-user demand; and increased logistical challenges.
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Domestic political instability, including government shut downs, may limit our ability to grow our business.
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We have implemented measures and incurred costs intended to secure our information systems and networks and prevent unauthorized access to or loss of sensitive data by employing a number of measures, including employee training, comprehensive monitoring of our networks and systems, and maintenance of backup and protective systems.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe enlist outside advisors to evaluate the maturity of our cybersecurity program, review processes and policies, conduct penetration and vulnerability tests and simulation exercises, and to monitor and help identify potential cybersecurity incidents. We provide training to our employees to help identify potential cybersecurity threats and attacks through an annual cybersecurity awareness month and targeted phishing campaigns.
Biggest changeWe periodically enlist outside advisors to evaluate the maturity of our cybersecurity program, review processes and policies, conduct penetration and vulnerability tests and simulation exercises, and to monitor and help identify potential cybersecurity incidents.
Added
We provide annual cybersecurity awareness training to our employees and contractors to help identify potential cybersecurity threats and attacks, perform targeted phishing campaigns, use multifactor authentication for secure access to our systems and networks and tabletop exercises to simulate and prepare for potential incidents.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeFacility Owned or Leased Square Footage Facility Activities Operating Segment North America Rogers, Minnesota, United States Owned 782,000 Manufacturing, warehouse, office and product development Contractor Dayton, Minnesota, United States Owned 538,000 Manufacturing, warehouse, office and product development Contractor and Process Dayton, Minnesota, United States Owned 520,000 Distribution center and office All segments Minneapolis, Minnesota, United States Owned 390,000 Manufacturing and office Industrial Rogers, Minnesota, United States Leased 268,000 Distribution center and office All segments Anoka, Minnesota, United States Owned 208,000 Manufacturing, warehouse, office and product development Process Sioux Falls, South Dakota, United States Owned 203,000 Manufacturing, warehouse and office Industrial and Contractor Minneapolis, Minnesota, United States Owned 141,000 Worldwide headquarters; office and product development Corporate and Industrial North Canton, Ohio, United States Owned 131,000 Manufacturing, warehouse, office and application laboratory Industrial Erie, Pennsylvania, United States Owned 89,000 Manufacturing, warehouse, office and product development Process Minneapolis, Minnesota, United States Owned 87,000 Assembly Industrial Kamas, Utah, United States Owned 70,000 Manufacturing, warehouse, office, product development and test laboratory Process Dexter, Michigan, United States Owned 65,000 Manufacturing, warehouse, office and product development Process Indianapolis, Indiana, United States Owned 64,000 Warehouse, office, product development and application laboratory Industrial Minneapolis, Minnesota, United States Owned 42,000 Corporate administrative office All segments Europe Maasmechelen, Belgium Owned 210,000 EMEA headquarters, warehouse and assembly All segments Verona, Italy Owned 164,000 Manufacturing and warehouse Industrial Sibiu, Romania Owned 129,000 Manufacturing Industrial St.
Biggest changeFacility Owned or Leased Square Footage Facility Activities Operating Segment North America Rogers, Minnesota, United States Owned 782,000 Manufacturing, warehouse, office and product development Contractor Dayton, Minnesota, United States Owned 538,000 Manufacturing, warehouse, office and product development Contractor and Process Dayton, Minnesota, United States Owned 520,000 Distribution center and office All segments Anoka, Minnesota, United States Owned 384,000 Manufacturing, warehouse, office and product development Process Minneapolis, Minnesota, United States Owned 390,000 Manufacturing and office Industrial Sioux Falls, South Dakota, United States Owned 203,000 Manufacturing, warehouse and office Industrial and Contractor Minneapolis, Minnesota, United States Owned 141,000 Worldwide headquarters; office and product development Corporate and Industrial North Canton, Ohio, United States Owned 131,000 Manufacturing, warehouse, office and application laboratory Industrial Erie, Pennsylvania, United States Owned 89,000 Manufacturing, warehouse, office and product development Process Minneapolis, Minnesota, United States Owned 87,000 Assembly Industrial Kamas, Utah, United States Owned 70,000 Manufacturing, warehouse, office, product development and test laboratory Process Dexter, Michigan, United States Owned 65,000 Manufacturing, warehouse, office and product development Process Indianapolis, Indiana, United States Owned 64,000 Warehouse, office, product development and application laboratory Industrial Charlotte, North Carolina, United States Leased 50,000 Office and warehouse Contractor Minneapolis, Minnesota, United States Owned 42,000 Corporate administrative office All segments Europe Modena, Italy Owned 519,000 Manufacturing, warehouse, office and product development Contractor Gossau, Switzerland Owned 231,000 Manufacturing, warehouse, office, product development and application laboratory Industrial Maasmechelen, Belgium Owned 210,000 Office, warehouse and assembly All segments Verona, Italy Owned 164,000 Manufacturing and warehouse Industrial Sibiu, Romania Owned 148,000 Manufacturing Industrial Maasmechelen, Belgium Leased 64,000 Warehouse All segments Rödermark, Germany Owned 41,000 Office and warehouse Industrial Verona, Italy Owned 31,000 Office and warehouse Industrial Asia Pacific Gujarat, India Leased 178,000 Office and warehouse Contractor Shanghai, P.R.C.
Item 2. Properties Our facilities are in satisfactory condition, suitable for their respective uses, and are generally adequate to meet current needs. A description of our principal facilities as of February 20, 2024, is set forth in the chart below.
Item 2. Properties Our facilities are in satisfactory condition, suitable for their respective uses, and are generally adequate to meet current needs. A description of our principal facilities as of February 18, 2025, under our operating segment structure for the year ended December 27, 2024, is set forth in the chart below.
Leased 80,000 Asia Pacific headquarters All segments Suzhou, P.R.C. Owned 80,000 Manufacturing, warehouse, office and product development All segments 17 Table of Contents Derrimut, Australia Leased 38,000 Warehouse All segments Gyeonggi-do, South Korea Leased 33,000 Office and warehouse All segments Shanghai, P.R.C. Leased 27,000 Office and warehouse Industrial
Leased 80,000 Office All segments 17 Table of Contents Suzhou, P.R.C. Owned 80,000 Manufacturing, warehouse, office and product development All segments Daman, India Owned 54,000 Manufacturing Contractor Bundoora, Australia Leased 38,000 Office All segments Gyeonggi-do, South Korea Leased 33,000 Office and warehouse All segments
Removed
Gallen, Switzerland Owned 82,000 Manufacturing, warehouse, office, product development and application laboratory Industrial Maasmechelen, Belgium Leased 64,000 Warehouse All segments Rödermark, Germany Leased 32,000 Office and warehouse Industrial Verona, Italy Owned 31,000 Office and warehouse Industrial St. Gallen, Switzerland Leased 26,000 Manufacturing Industrial Aachen, Germany Leased 22,000 Office and warehouse All segments Asia Pacific Shanghai, P.R.C.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeThompson joined the Company in 1988. Timothy R. White, 54, became President, Worldwide Process Division, in June 2021. From August 2020 to June 2021, he served as President, White Knight and QED Environmental Systems. From December 2018 to August 2020, he served as President, EMEA. From August 2015 to December 2018, he was President of Q.E.D.
Biggest changeFrom August 2020 to June 2021, he served as President, White Knight and QED Environmental Systems. He served as President, EMEA from 2018 to August 2020. From 2015 to 2018, he was the President of QED Environmental Systems. He served as Director of Sales and Marketing, Applied Fluid Technologies Division, from 2012 to 2015.
Prior to joining Graco, she served as a Senior Manager in the audit practice of Deloitte & Touche LLP from 2008 to 2012, and held various positions in the audit practice of Deloitte & Touche LLP from 2002 to 2008 and in the audit practice of Arthur Andersen LLP from 2000 to 2002. Ms. Schoenrock joined the Company in 2012.
Prior to joining Graco, she served as a Senior Manager in the audit practice of Deloitte & Touche LLP from 2008 to 2012, and held various positions in the audit practice of Deloitte & Touche LLP from 2002 to 2008 and in the audit practice of Arthur Andersen LLP from 2000 to 2002. She joined the Company in 2012.
Prior to joining Piper Jaffray, he held various roles in finance, consulting and engineering, including most recently as Director of Finance – Analytics at United Health Group from 2003 to 2007. Mr. Grasdal joined the Company in January 2022. Joseph J. Humke, 53, became Executive Vice President, General Counsel and Corporate Secretary in July 2021.
Prior to joining Piper Jaffray, he held various roles in finance, consulting and engineering, including most recently as Director of Finance – Analytics at United Health Group from 2003 to 2007. He joined the Company in January 2022. Joseph J. Humke, 54, became Executive Vice President, General Counsel and Corporate Secretary in July 2021.
From April 2020 to May 2023, he was Director of Corporate Treasury and Investor Relations, and from July 2017 to April 2020, was Director of Corporate Treasury and Regional Controller, South and Central America. From May 2016 to July 2017, he was Vice President of Finance at United Skin Specialists, after which he returned to Graco.
From April 2020 to May 2023, he was Director of Corporate Treasury and Investor Relations, and from 2017 to April 2020, was Director of Corporate Treasury and Regional Controller, South and Central America. He served as Vice President of Finance from 2016 to 2017 at United Skin Specialists, after which he returned to Graco.
Item 4. Mine Safety Disclosures Not applicable. Information About Our Executive Officers The following are all the executive officers of Graco Inc. as of February 20, 2024: Mark W. Sheahan, 59, became President and Chief Executive Officer in June 2021. From June 2018 to June 2021, he served as Chief Financial Officer and Treasurer.
Item 4. Mine Safety Disclosures Not applicable. Information About Our Executive Officers The following are all the executive officers of Graco Inc. as of February 18, 2025: Mark W. Sheahan, 60, became President and Chief Executive Officer in June 2021. From June 2018 to June 2021, he served as Chief Financial Officer and Treasurer.
Prior to joining Ecolab, he was Senior Director Corporate Development at 3M Company, a diversified global technology company, from 2012 to October 2018. From 2007 to 2012, he was Vice President Investment Banking at Piper Jaffray & Co.
Prior to joining Ecolab, he was Senior Director Corporate Development at 3M Company from 2012 to 2018. From 2007 to 2012, he was Vice President Investment Banking at Piper Jaffray & Co.
From January 2012 to December 2012, he was Director of Sales and Marketing, Industrial Products Division, and from 2008 to January 2012, he was Director of Sales and Marketing, Industrial Products Division and Applied Fluid Technologies Division.
From 2012 to 2012, he was Director of Sales & Marketing, Industrial Products Division, and from 2008 to 2012, he was Director of Sales & Marketing, Industrial Products Division and Applied Fluid Technology Division.
He was Vice President and General Manager, Applied Fluid Technologies Division from February 2008 to June 2018. He served as Chief Administrative Officer from September 2005 to February 2008, and was Vice President and Treasurer from December 1998 to September 2005. Prior to becoming Treasurer in December 1996, he was Manager, Treasury Services. Mr. Sheahan joined the Company in 1995.
He was Vice President and General Manager, Applied Fluid Technologies Division from 2008 to 2018. He served as Chief Administrative Officer from 2005 to 2008, and was Vice President and Treasurer from 1998 to 2005. Prior to becoming Treasurer in December 1996, he was Manager, Treasury Services. Mr.
From 1999 to 2004, he was Managing Director, Gema Italy. From 1994 to 1999, he held different positions in R&D, Sales and After Sales for Gema. Gema has been part of Graco since the acquisition of the ITW Finishing Group in 2012. Mr. Merengo joined Gema in 1994. Peter J.
From 1999 to 2004, he was Managing Director, Gema Italy. From 1994 to 1999, he held different positions in R&D, Sales and After Sales for Gema. He joined Gema in 1994. Gema has been part of Graco since the acquisition of the ITW Finishing Group in 2012. Peter J. O’Shea, 60, became President, Global Industrial Division in January 2025.
Humke joined the Company in July 2021. Dale D. Johnson, 69, became Chief Commercial Development Officer in January 2024, prior to which he was President, Worldwide Contractor Equipment Division, from February 2017 to December 2023. From April 2001 through January 2017, he served as Vice President and General Manager, Contractor Equipment Division.
He joined the Company in July 2021. Dale D. Johnson, 70, became Chief Commercial Development Officer in January 2024. He was previously President, Worldwide Contractor Equipment Division, from 2017 to December 2023. From 2001 to 2017, he served as Vice President and General Manager, Contractor Equipment Division. From 2000 to 2001, he served as President and Chief Operating Officer.
He joined the Company in 2008. David M. Lowe, 68, became Chief Financial Officer and Treasurer in June 2021. From April 2020 to June 2021, he served as President, Worldwide Process Division. He was President, Worldwide Industrial Products Division from June 2018 to April 2020. From April 2012 to June 2018, he was Executive Vice President, Industrial Products Division.
Lowe, 69, became Chief Financial Officer and Treasurer in June 2021. From April 2020 to June 2021, he served as President, Worldwide Process Division. He was President, Worldwide Industrial Products Division from June 2018 until April 2020. From 2012 until 2018, he was Executive Vice President, Industrial Products Division.
He was Country Manager, Australia - New Zealand from 2005 to 2008, and from 2002 to 2005 he served as Business Development Manager, Australia - New Zealand. Prior to becoming Business Development Manager, Australia - New Zealand, he worked in various Graco sales management positions. Mr. O’Shea joined the Company in 1995. 19 Table of Contents Christian E.
He was Country Manager, Australia - New Zealand from 2005 to 2008, and from 2002 to 2005 he served as Business Development Manager, Australia - New Zealand. Prior to becoming Business Development Manager, Australia - New Zealand, he worked in various Graco sales management positions. He joined the Company in 1995. Kathryn L.
Ronita Banerjee, 46, became Executive Vice President and Chief Human Resources Officer in May 2023. Before joining Graco, Ms. Banerjee was Global Human Resources Vice President and Chief Human Resources Officer at Westinghouse Electric Company LLC, a provider of nuclear products and services to utilities globally, from May 2019 to April 2023.
Before joining Graco, she was Global Human Resources Vice President and Chief Human Resources Officer at Westinghouse Electric Company LLC, a provider of nuclear products and services, from May 2019 to April 2023.
Inge Grasdal, 53, became Executive Vice President, Corporate Development in January 2022. Prior to joining Graco, he was Vice President Corporate Development at Ecolab Inc., a global provider of water, hygiene and infection prevention solutions and services, from November 2018 to January 2022.
She joined the Company in 2008. Inge Grasdal, 54, became Executive Vice President, Corporate Development in January 2022. Before joining Graco, he was Vice President Corporate Development at Ecolab, a global provider of water, hygiene and infection prevention solutions and services, from 2018 to January 2022.
Before joining Graco, he was an equity partner in the Mergers & Acquisitions and Private Equity practice groups at Ballard Spahr LLP and Lindquist & Vennum LLP (which combined in January 2018) from 2004 to June 2021, and an associate from 2001 to 2003.
Before joining Graco, from 2001 to June 2021, he was an equity partner in the Mergers & Acquisitions and Private Equity practice groups at Ballard Spahr LLP and Lindquist & Vennum LLP (which combined in January 2018) and an associate from 2001 to 2003. Mr. Humke also serves as a director of SkyWater Technology, Inc.
O’Shea, 59, became President, Worldwide Lubrication Equipment Division, and President, South and Central America in January 2022. From July 2021 to January 2022, he was President, Worldwide Industrial Products Division, and President, South and Central America. From April 2020 to January 2022, he was President, Worldwide Lubrication Equipment Division.
From January 2022 to December 2024, he served as President, Worldwide Lubrication Equipment Division, and President, South and Central America. From July 2021 to January 2022, he was President, Worldwide Industrial Products Division, and President, South and Central America. From April 2020 to January 2022, he was President, Worldwide Industrial Products Division.
Claudio Merengo, 54, became President, Worldwide Gema in 2007, his title having been changed to President, Worldwide Powder Division in February 2024. During this time, he also served as Group President, ITW Finishing from 2010 to 2012 and Group President, ITW Dynatec from 2008 to 2009. From 2004 to 2007, he was President, Gema Europe.
From February 2024 to December 2024, he served as President, Worldwide Powder Division. He was previously President, Worldwide Gema from 2007 to February 2024. During this time, he also served as Group President, ITW Finishing from 2010 to 2012 and Group President, ITW Dynatec from 2008 to 2009. From 2004 to 2007 he was President, Gema Europe.
From June 2010 to May 2016, he served in several Controller roles at Graco, including in the Applied Fluid Technologies Division, the Asia Pacific region, and the Lubrication Equipment Division, and from August 2008 to August 2010 was Internal Audit Manager. Prior to joining Graco, Mr. Knutson worked at PricewaterhouseCoopers for seven years within their audit practice.
From 2010 to 2016 he served in several Controller roles, including in the Applied Fluid Technology Division, Asia Pacific, and Lubrication Equipment Division. He first joined Graco as the Internal Audit Manager from 2008 to 2010. Prior to joining Graco, he worked at PricewaterhouseCoopers for seven years within their audit practice. He joined the Company in 2008. David M.
From February 2005 to April 2012, he was Vice President and General Manager, Industrial Products Division. He was Vice President and General Manager, European Operations from September 1999 to February 2005. Prior to becoming Vice President, Lubrication Equipment Division in December 1996, he was Treasurer. Mr. Lowe joined the Company in 1995.
From 2005 to 2012, he was Vice President and General Manager, Industrial Products Division. He was Vice President and General Manager, European Operations from 1999 to 2005. Prior to becoming Vice President, Lubrication Equipment Division in December 1996, he was Treasurer. He joined the Company in 1995. Claudio Merengo, 55, became President, Global Powder Division in January 2025.
He was Vice President and General Manager, Lubrication Equipment Division from January 2016 to June 2018. From January 2013 to December 2015, he was Vice President and General Manager, Asia Pacific.
From 2018 to April 2020, he was President, Worldwide Lubrication Equipment Division. From 2016 to 2018, he was Vice President and General Manager, Lubrication Equipment Division. From 2012 to 2015, he was Vice President and General Manager, Asia Pacific.
Chambers joined the Company in 1992. Laura L. Evanson, 43, became Executive Vice President, Marketing in January 2023. From September 2021 to December 2022, she served as Vice President of Marketing for the Lubrication Equipment Division and Vice President of Marketing for South and Central America.
From September 2021 to December 2022, she served as Vice President of Marketing for the Lubrication Equipment Division and Vice President of Marketing for South and Central America. From 2017 to September 2021, she served as the Director of Marketing for the Lubrication Equipment Division.
From January 2000 through March 2001, he served as President and Chief Operating Officer. From December 1996 to January 2000, he was Vice President, Contractor Equipment Division. Prior to becoming Director of Marketing, Contractor Equipment Division in June 1996, he held various marketing and sales positions in the Contractor Equipment Division and the Industrial Equipment Division. Mr.
From 1996 to 2000, he was Vice President, Contractor Equipment Division. Prior to becoming the Director of 18 Table of Contents Marketing, Contractor Equipment Division in June 1996, he held various marketing and sales positions in the Contractor Equipment division and the Industrial Equipment division. He joined the Company in 1976. Christopher D.
From February 2008 to March 2010, she was Operations Manager, Industrial Products Division. Prior to February 2008, she held various manufacturing management and engineering positions. Ms. Wordell joined the Company in 1993. 20 Table of Contents PART II
From 2017 to 2018, she was Purchasing Director. From January 2017 to April 2017, she served as Strategic Sourcing Director. From 2010 to 2017, she was Operations Director, Industrial Product Division and China Factory. Prior to that, she held various manufacturing management and engineering positions. She joined the Company in 1993. 20 Table of Contents PART II
From July 2017 to September 2021, she served as the Director of Marketing for the Lubrication Equipment Division. From December 2015 to July 2017 she served as a Senior Global Marketing Manager for the Lubrication Equipment Division. From 2010 to December 2015, she was a Senior Global Product Marketing Manager for the Lubrication Equipment Division.
From 2015 to 2017 she served as a Senior Global Marketing Manager for the Lubrication Equipment Division. From 2010 to 2015, she was a Senior Global Product Marketing Manager for the Lubrication Equipment Division. Prior to that, she worked in various Product Marketing and Channel Marketing roles for the Lubrication Equipment Division and Industrial Products Division.
Johnson joined the Company in 1976. Christopher D. Knutson, 46, became Executive Vice President, Corporate Controller in May 2023. He has served as the Company’s principal accounting officer since May 2023.
Knutson, 47, became Vice President, Controller and Chief Accounting Officer in January 2025. From May 2023 to December 2024, he served as Executive Vice President, Corporate Controller. He has also served as the Company's principal accounting officer since May 2023.
From January 2022 to April 2023, she was Executive Vice President, Corporate Controller and Information Systems, and from August 2020 to January 2022, she was Executive Vice President, Corporate Controller. She also served as the Company’s principal accounting officer from August 2020 to April 2023. From December 2018 to August 2020, she served as Director of Corporate Finance.
She has also served as the Company’s principal accounting officer from August 2020 to May 2023. From 2017 to August 2020, she was Director of Corporate Finance. She served as Director of Financial Reporting from 2012 to 2018.
From December 2017 to May 2019, she served as Global Human Resources Vice President, Building Solutions, and Global Human Resources Director, at Honeywell Inc., a diversified technology and manufacturing company, prior to which she served as Global Human Resources Director from April 2015 to December 2017. Prior to her time at Honeywell, Ms.
Prior to joining Westinghouse from 2017 to May 2019, she served as Global Human Resources Vice President, Building Solutions, and Global Human Resources Director, at Honeywell Inc., prior to which she served as Global Human Resources Director from 2015 to 2017. She was in several human resources management roles at General Mills Inc. from May 2007 to March 2015.
David J. Thompson, 56, became President, Worldwide Contractor Equipment Division in January 2024. From December 2021 to December 2023, he was Vice President of Engineering, Worldwide Contractor Equipment Division, and from 2007 to December 2021, he was Director of Engineering, Worldwide Contract Equipment Division. Prior to 2007, he held various engineering-related positions within the Contractor Equipment Division. Mr.
David J. Thompson, 57, became President, Global Contractor Division in January 2025. From January 2024 to December 2024, he served as President, Worldwide Contractor Equipment Division. He was previously Vice President of Engineering, Contractor Equipment Division, a role he had held since 2021.
From June 2008 to February 2012, he was Director of Sales and Marketing for the PMG business 18 Table of Contents in the Lubrication Equipment Division. Prior to becoming Director of Sales and Marketing for the PMG business in the Lubrication Equipment Division, he held various product and sales management positions. Mr. Gargano joined the Company in 2005.
From 2011 to 2012, he was the North American Sales Manager, Applied Fluid Technologies Division. From 2008 to 2011, he was Operations Director, Contractor Equipment Division. Prior to becoming 19 Table of Contents Operations Director, Contractor Equipment Division, he held various manufacturing management positions. He joined the Company in 1992. Angela F.
Prior to January 2008, he held various manufacturing management positions. Mr. White joined the Company in 1992. Angela F. Wordell, 52, became Executive Vice President, Operations, in January 2022. From April 2020 to January 2022, she was Executive Vice President, Operations, and President, Worldwide Oil & Natural Gas Division.
Wordell, 53, became Executive Vice President and Chief Operations and Supply Chain Officer in January 2025. From January 2022 to December 2024, she served as Executive Vice President, Operations. From April 2020 to January 2022, she was Executive Vice President, Operations, and President, Worldwide Oil & Natural Gas Division. From 2018 to April 2020, she was Executive Vice President, Operations.
Chambers, 59, became President, EMEA in August 2020. From August 2020 to January 2022, she also held the additional role of Executive Vice President, Information Systems. From June 2018 to August 2020, she served as Executive Vice President, Corporate Controller and Information Systems. She also served as the Company’s principal accounting officer from September 2007 to August 2020.
Schoenrock, 47, became Executive Vice President and Chief Information Officer in February 2024. She was previously Executive Vice President and Chief Technology Officer from May 2023 to February 2024. From January 2022 to May 2023, she was Executive Vice President, Corporate Controller and Information Systems. From August 2020 to January 2022, she was Executive Vice President, Corporate Controller.
Removed
Banerjee was Senior Human Resources Manager at General Mills, Inc., a global manufacturer and marketer of branded consumer foods, from May 2007 to March 2015, and Compensation Consultant and Staffing Specialist at Dell Technologies Inc., from October 2003 to May 2005 and March 2003 to September 2003, respectively. Ms. Banerjee joined the Company in May 2023. Caroline M.
Added
Sheahan also serves as a director of Tennant Company and on the board of managers of Fernweh Group, LLC. Ronita Banerjee, 47, became Executive Vice President and Chief Human Resources Officer in May 2023.
Removed
She was Vice President, Corporate Controller and Information Systems from December 2013 to June 2018. From April 2009 to December 2013, she was Vice President and Corporate Controller. She served as Vice President and Controller from December 2006 to April 2009.
Added
Before that, she worked at Dell Technologies Inc. within their compensation and staffing practice from 2003 to 2005, and began her career at Gati Ltd. She joined the Company in 2023. Laura L. Evanson, 44, became Executive Vice President and Chief Marketing Officer in January 2024. From January 2023 to December 2024, she served as Executive Vice President, Marketing.
Removed
She was Corporate Controller from October 2005 to December 2006 and Director of Information Systems from July 2003 through September 2005. Prior to becoming Director of Information Systems, she held various management positions in the internal audit and accounting departments. Prior to joining Graco, she was an auditor with Deloitte & Touche in Minneapolis, Minnesota and Paris, France. Ms.
Added
He held a series of positions of increasing responsibility within the Contractor Equipment Division throughout his career, including Engineering Manager, Senior Engineering Manager and Director of Engineering. He joined the Company in 1988. Timothy R. White, 55, became President, Expansion Markets Division in January 2025. From June 2021 to December 2024, he served as President, Worldwide Process Division.
Removed
Prior to that, she worked in various product marketing and channel marketing roles for the Lubrication Equipment Division and Industrial Products Division. Ms. Evanson joined the Company in 2008. Anthony J. Gargano, 53, became President, Asia Pacific in July 2021.
Removed
From October 2020 to July 2021, he was Vice President of Sales and Marketing for the Advanced Fluid Dispense business segment in Asia Pacific. He served as Vice President of Sales and Marketing for the global High Performance Coatings and Foams business segment from September 2018 to October 2020.
Removed
From January 2017 to December 2018, he served as President of Global Automotive. He served as Director of Sales and Marketing for the Applied Fluid Technologies Division in Asia Pacific from February 2012 to January 2017.
Removed
Prior to joining Lindquist & Vennum, he worked as an associate in the Corporate & Securities practice group of Mayer Brown LLP in Chicago from 1998 to 2001, and served as a law clerk to the Honorable John L. Coffey on the United States Court of Appeals for the Seventh Circuit from 1997 to 1998. Mr.
Removed
Rothe, 50, became President, Worldwide Industrial Division in January 2022. From June 2018 to January 2022, he was President, Worldwide Applied Fluid Technologies Division. He was Chief Financial Officer and Treasurer from September 2015 to June 2018. From June 2011 through August 2015, he was Vice President and Treasurer.
Removed
Prior to joining Graco, he held various positions in business development, accounting and finance, including, most recently, at Gardner Denver, Inc. as Vice President, Treasurer from January 2011 to June 2011, Vice President - Finance, Industrial Products Group from October 2008 to January 2011, and Director, Strategic Planning and Development from October 2006 to October 2008. Mr.
Removed
Rothe joined the Company in 2011. Kathryn L. Schoenrock, 46, became Executive Vice President and Chief Technology Officer in May 2023, her title having been changed to Executive Vice President and Chief Information Officer in February 2024.
Removed
She served as Director of Financial Reporting from August 2012 to December 2018.
Removed
Environmental Systems, Inc., a Graco subsidiary. He served as Director of Sales and Marketing, Applied Fluid Technologies Division, from April 2012 to August 2015. From May 2011 to April 2012, he was North American Sales Manager, Applied Fluid Technologies Division. From January 2008 to April 2011, he was Operations Director, Contractor Equipment Division.
Removed
From December 2018 to April 2020, she was Executive Vice President, Operations. From April 2017 to December 2018, she was Purchasing Director. From January 2017 to April 2017, she served as Strategic Sourcing Director. From March 2010 to January 2017, she was Operations Director, Industrial Products Division and China Factory.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

4 edited+0 added−0 removed3 unchanged
Biggest changeInformation on issuer purchases of equity securities follows: Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs (at end of period) Sep 30, 2023 - Oct 27, 2023 971,961 $ 71.96 — 13,572,340 Oct 28, 2023 - Nov 24, 2023 22,700 $ 74.17 — 13,549,640 Nov 25, 2023 - Dec 29, 2023 — $ — — 13,549,640
Biggest changeInformation on issuer purchases of equity securities follows: Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs (at end of period) Sep 28, 2024 - Oct 25, 2024 — — — 13,151,009 Oct 26, 2024 - Nov 22, 2024 — — — 13,151,009 Nov 23, 2024 - Dec 27, 2024 — — — 13,151,009
Industrial Machinery Index over the same period (assuming the value of the investment in Graco common stock and each index was $100 on December 31, 2018, and all dividends were reinvested). 2018 2019 2020 2021 2022 2023 Dow Jones U.S.
Industrial Machinery Index over the same period (assuming the value of the investment in Graco common stock and each index was $100 on December 31, 2019, and all dividends were reinvested). 2019 2020 2021 2022 2023 2024 Dow Jones U.S.
Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities Graco Common Stock Graco common stock is traded on the New York Stock Exchange under the ticker symbol “GGG.” As of January 26, 2024, the share price was $84.75 and there were 168,178,661 shares outstanding and 1,641 common shareholders of record, which includes nominees or broker dealers holding stock on behalf of an estimated 147,980 beneficial owners.
Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities Graco Common Stock Graco common stock is traded on the New York Stock Exchange under the ticker symbol “GGG.” As of January 24, 2025, the share price was $85.86 and there were 169,493,970 shares outstanding and 1,570 common shareholders of record, which includes nominees or broker dealers holding stock on behalf of an estimated 204,372 beneficial owners.
Industrial Machinery $100 $136 $158 $196 $172 $218 S&P 500 100 131 156 200 164 207 Graco Inc. 100 129 182 203 172 225 21 Table of Contents Issuer Purchases of Equity Securities On December 7, 2018, the Board of Directors authorized the Company to purchase up to 18 million shares of its outstanding common stock, primarily through open-market transactions.
Industrial Machinery $100 $116 $144 $126 $160 $177 S&P 500 100 118 152 125 158 197 Graco Inc. 100 141 158 134 175 171 21 Table of Contents Issuer Purchases of Equity Securities On December 7, 2018, the Board of Directors authorized the Company to purchase up to 18 million shares of its outstanding common stock, primarily through open-market transactions.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

34 edited+11 added−7 removed24 unchanged
Biggest changeA calculation of the non-GAAP adjusted measurements of operating earnings, earnings before income taxes, income taxes, effective income tax rates, net earnings and diluted earnings per share follows (in millions except per share amounts): 2023 2022 Operating earnings, as reported $ 646.8 $ 572.7 Contingent consideration (8.6) — Impairment 7.8 — Operating earnings, adjusted $ 646.0 $ 572.7 Earnings before income taxes, as reported $ 608.8 $ 565.7 Pension settlement loss 42.1 — Contingent consideration (8.6) — Impairment 7.8 — Earnings before income taxes, adjusted $ 650.1 $ 565.7 Income taxes, as reported $ 102.3 $ 105.1 Pension settlement tax effect 8.8 — Other non-recurring tax benefit 4.8 — Excess tax benefit from option exercises 10.3 5.1 Income taxes, adjusted $ 126.2 $ 110.2 Effective income tax rate As reported 16.8 % 18.6 % Adjusted 19.4 % 19.5 % Net Earnings, as reported $ 506.5 $ 460.6 Pension settlement loss, net 33.3 — Contingent consideration (8.6) — Impairment 7.8 — Other non-recurring tax benefit (4.8) — Excess tax benefit from option exercises (10.3) (5.1) Net Earnings, adjusted $ 523.9 $ 455.5 Weighted Average Diluted Shares 172.2 172.9 Diluted Net Earnings per Share As reported $ 2.94 $ 2.66 Adjusted $ 3.04 $ 2.63 25 Table of Contents Components of Net Earnings as a Percentage of Sales: The following table presents an overview of components of net earnings as a percentage of net sales: 2023 2022 Net Sales 100.0 % 100.0 % Cost of products sold 47.1 50.7 Gross profit 52.9 49.3 Product development 3.7 3.7 Selling, marketing and distribution 11.9 11.7 General and administrative 7.8 7.2 Contingent consideration (0.4) — Impairment 0.4 — Operating earnings 29.5 26.7 Interest expense 0.2 0.4 Other expense, net 1.6 (0.1) Earnings before income taxes 27.7 26.4 Income taxes 4.6 4.9 Net Earnings 23.1 % 21.5 % Net Earnings, adjusted (see non-GAAP measurements above) 23.9 % 21.3 % Net Sales The following table presents net sales by geographic region (in millions): 2023 2022 Americas (1) $ 1,338.0 $ 1,281.9 EMEA (2) 463.9 451.8 Asia Pacific 393.7 409.8 Consolidated $ 2,195.6 $ 2,143.5 (1) North, Central and South America, including the U.S.
Biggest changeA calculation of the non-GAAP adjusted measurements of operating earnings, earnings before income taxes, income taxes, effective income tax rates, net earnings and diluted earnings per share follows (in millions except per share amounts): 2024 2023 Operating earnings, as reported $ 570.1 $ 646.8 Contingent consideration — (8.6) Impairment — 7.8 Business reorganization 7.7 — Operating earnings, adjusted $ 577.8 $ 646.0 Earnings before income taxes, as reported $ 589.3 $ 608.8 Pension settlement loss — 42.1 Contingent consideration — (8.6) Impairment — 7.8 Business reorganization 7.7 — Earnings before income taxes, adjusted $ 597.0 $ 650.1 Income taxes, as reported $ 103.2 $ 102.3 Pension settlement tax effect — 8.8 Other non-recurring tax benefit — 4.8 Excess tax benefit from option exercises 14.9 10.3 Business reorganization tax effect 1.8 — Income taxes, adjusted $ 119.9 $ 126.2 Effective income tax rate As reported 17.5 % 16.8 % Adjusted 20.1 % 19.4 % Net Earnings, as reported $ 486.1 $ 506.5 Pension settlement loss, net — 33.3 Contingent consideration — (8.6) Impairment — 7.8 Other non-recurring tax benefit — (4.8) Excess tax benefit from option exercises (14.9) (10.3) Business reorganization 5.9 — Net Earnings, adjusted $ 477.1 $ 523.9 Weighted Average Diluted Shares 172.4 172.2 Diluted Net Earnings per Share As reported $ 2.82 $ 2.94 Adjusted $ 2.77 $ 3.04 25 Table of Contents Components of Net Earnings as a Percentage of Sales: The following table presents an overview of components of net earnings as a percentage of net sales: 2024 2023 Net Sales 100.0 % 100.0 % Cost of products sold 46.9 47.1 Gross profit 53.1 52.9 Product development 4.0 3.7 Selling, marketing and distribution 13.0 11.9 General and administrative 9.1 7.8 Contingent consideration — (0.4) Impairment — 0.4 Operating earnings 27.0 29.5 Interest expense 0.1 0.2 Other (income) expense, net (1.0) 1.6 Earnings before income taxes 27.9 27.7 Income taxes 4.9 4.6 Net Earnings 23.0 % 23.1 % Net Earnings, adjusted (see non-GAAP measurements above) 22.6 % 23.9 % Net Sales The following table presents net sales by geographic region (in millions): 2024 2023 Americas (1) $ 1,329.3 $ 1,338.0 EMEA (2) 454.2 463.9 Asia Pacific 329.8 393.7 Consolidated $ 2,113.3 $ 2,195.6 (1) North, Central and South America, including the U.S.
Each segment is responsible for product development, manufacturing, marketing and sales of their products. Graco’s key strategies include developing and marketing new products, leveraging products and technologies into additional, growing end-user markets, expanding distribution globally and completing strategic acquisitions that provide additional channel and technologies.
Each segment is responsible for product development, manufacturing, marketing and sales of their products. Graco’s key strategies include developing and marketing new products, leveraging products and technologies into additional, growing end-user markets, expanding distribution globally and completing strategic acquisitions that provide additional channels and technologies.
The Company has made and may continue to make opportunistic share repurchases in 2024 via open market transactions or short-dated accelerated share repurchase (“ASR”) programs. 31 Table of Contents Critical Accounting Estimates The Company prepares its consolidated financial statements in conformity with generally accepted accounting principles in the United States of America (“U.S. GAAP”).
The Company has made and may continue to make opportunistic share repurchases in 2025 via open market transactions or short-dated accelerated share repurchase programs. 31 Table of Contents Critical Accounting Estimates The Company prepares its consolidated financial statements in conformity with generally accepted accounting principles in the United States of America (“U.S. GAAP”).
See Financial Results Adjusted for Comparability below for a reconciliation of adjusted non-GAAP financial measures to GAAP 24 Table of Contents Certain events in the last two years caused fluctuations in financial results. Excess tax benefits related to stock option exercises reduced income taxes by $10 million in 2023 and $5 million in 2022.
See Financial Results Adjusted for Comparability below for a reconciliation of adjusted non-GAAP financial measures to GAAP. 24 Table of Contents Certain events in the last two years caused fluctuations in financial results. Excess tax benefits related to stock option exercises reduced income taxes by $15 million in 2024 and $10 million in 2023.
A discussion of changes in our financial condition and the results of operations from the year ended December 30, 2022 compared to December 31, 2021 can be found in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations of our Annual Report on Form 10-K for the year ended December 30, 2022.
A discussion of changes in our financial condition and the results of operations from the year ended December 29, 2023 compared to December 30, 2022 can be found in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations of our Annual Report on Form 10-K for the year ended December 29, 2023.
The Company believes it has the ability to meet its long-term cash requirements by using available cash and internally generated funds and to borrow under its committed and uncommitted credit facilities. In December 2023, the Board of Directors increased the Company’s regular quarterly dividend from $0.235 to $0.255 per share, an increase of 9 percent. Cash Flow.
The Company believes it has the ability to meet its long-term cash requirements by using available cash and internally generated funds and to borrow under its committed and uncommitted credit facilities. In December 2024, the Board of Directors increased the Company’s regular quarterly dividend from $0.255 to $0.275 per share, an increase of 8 percent. Cash Flow.
In setting this number, the Company considers the input of actuaries and investment advisers, its long-term historical returns, the allocation of plan assets and projected returns on plan assets. For 2024, the Company will use an investment return assumption of 7.6 percent for the funded U.S. plan, consistent with the rate assumed for 2023.
In setting this number, the Company considers the input of actuaries and investment advisers, its long-term historical returns, the allocation of plan assets and projected returns on plan assets. For 2025, the Company will use an investment return assumption of 7.3 percent for the funded U.S. plan. The 2024 rate assumed was 7.6 percent for the funded U.S. plan.
We also manufacture some of our products in Switzerland (Industrial segment), Italy (Industrial segment), the United Kingdom (Process segment), the People’s Republic of China (all segments), Belgium (all segments) and Romania (Industrial segment). Our primary distribution facilities are located in the U.S., Belgium, Switzerland, United Kingdom, P.R.C., Japan, Italy, Korea, India, Australia and Brazil.
We also manufacture some of our products in Switzerland (Industrial segment), Italy (Industrial and Contractor segment), the P.R.C. (all segments), India (Contractor segment), Belgium (all segments) and Romania (Industrial segment). Our primary distribution facilities are located in the U.S., Belgium, Switzerland, United Kingdom, P.R.C., Japan, Italy, South Korea, India, Australia and Brazil.
Other expense for 2023 included a $42 million non-cash pension settlement loss. In 2023, the Company recorded a goodwill impairment and contingent consideration adjustment related to an acquisition that was not material to the financial statements. Other benefits from tax planning activities further reduced income taxes in 2023.
Business reorganization charges reduced operating earnings in 2024 by $8 million. Other expense for 2023 included a $42 million non-cash pension settlement loss. In 2023, the Company recorded a goodwill impairment and contingent consideration adjustment related to an acquisition that was not material to the financial statements. Other benefits from tax planning activities further reduced income taxes in 2023.
The following table highlights several key measures of asset performance (dollars in millions): 2023 2022 Working capital $ 970.6 $ 805.7 Current ratio 3.5 3.0 Days of sales in receivables outstanding 58 57 Inventory turnover (LIFO) 2.2 2.5 Higher cash and cash equivalent balances primarily drove increases in working capital in 2023.
The following table highlights several key measures of asset performance (dollars in millions): 2024 2023 Working capital $ 1,091.6 $ 970.6 Current ratio 3.7 3.5 Days of sales in receivables outstanding 62 58 Inventory turnover (LIFO) 2.3 2.2 Higher cash and cash equivalent balances primarily drove increases in working capital in 2024.
Sales in the Americas represents the majority of sales for the Contractor segment. Management regularly reviews economic and financial indicators for North America, including levels of residential, commercial and institutional construction, remodeling rates and interest rates. Management also reviews gross domestic product for the regions and the level of the U.S. dollar versus the Euro and other currencies.
Management regularly reviews economic and financial indicators for North America, including levels of residential, commercial and institutional construction, remodeling rates and interest rates. Management also reviews gross domestic product for the regions and the level of the U.S. dollar versus the euro and other currencies.
Mortality rates are based on current common group mortality tables for males and females. At December 29, 2023, a one-half percentage point decrease in the indicated assumptions would have the following effects (in millions): Assumption Funded Status Expense Discount rate $ (15.3) $ 2.0 Expected return on assets — 1.2 Goodwill and Other Intangible Assets.
Mortality rates are based on current common group mortality tables for males and females. At December 27, 2024, a one-half percentage point decrease in the indicated assumptions would have the following effects (in millions): Assumption Funded Status Expense Discount rate $ (14.6) $ 1.8 Expected return on assets $ — $ 0.6 Goodwill and Other Intangible Assets.
Sales in the U.S. were $1,162 million in 2023 and $1,116 million in 2022. (2) Europe, Middle East and Africa.
Sales in the U.S. were $1,149 million in 2024 and $1,162 million in 2023. (2) Europe, Middle East and Africa.
The increase provided by current year earnings of $507 million was primarily offset by dividends of $161 million and share repurchases of $102 million. Other increases in shareholders' equity included share issuances, stock compensation and other comprehensive income of $122 million. Liquidity and Capital Resources .
The increase provided by current year earnings of $486 million was primarily offset by dividends of $176 million and share repurchases of $31 million. Other increases in shareholders' equity included share issuances, stock compensation and other comprehensive income of $81 million. Liquidity and Capital Resources .
Internally generated funds and unused financing sources are expected to provide the Company with the flexibility to meet its liquidity needs in 2024, including its capital expenditure plan of approximately $120 million, including $60 million for building projects to expand production capacity, planned dividends estimated at $171 million, share repurchases and acquisitions.
Internally generated funds and unused financing sources are expected to provide the Company with the flexibility to meet its liquidity needs in 2025, including its capital expenditure plan of approximately $60 million, planned dividends estimated at $186 million, share repurchases and acquisitions.
The Company's other primary source of liquidity includes funds available through various debt financing arrangements. As of December 29, 2023, the Company had available liquidity of $1,313 million, including cash held in deposit accounts of $538 million, of which $129 million was held outside of the U.S., and available credit under existing committed credit facilities of $775 million.
The Company's other primary source of liquidity includes funds available through various debt financing arrangements. As of December 27, 2024, the Company had available liquidity of $1,453 million, including cash held in deposit accounts of $675 million, of which $144 million was held outside of the U.S., and available credit under existing committed credit facilities of $778 million.
A summary of cash flow follows (in millions): 2023 2022 Operating activities $ 651.0 $ 377.4 Investing activities (185.3) (226.8) Financing activities (268.0) (434.4) Effect of exchange rates on cash 1.0 (1.3) Net cash provided 198.7 (285.1) Cash and cash equivalents at end of year $ 537.9 $ 339.2 Cash Flows From Operating Activities .
A summary of cash flow follows (in millions): 2024 2023 Operating activities $ 621.7 $ 651.0 Investing activities (342.8) (185.3) Financing activities (139.9) (268.0) Effect of exchange rates on cash (1.6) 1.0 Net cash provided 137.4 198.7 Cash and cash equivalents at end of year $ 675.3 $ 537.9 Cash Flows From Operating Activities .
Segment Results The Company has five operating segments which are aggregated into three reportable segments: Contractor, Industrial and Process. Refer to Part I Item 1. Business, for a description of the Company’s three reportable segments. Management assesses performance of segments by reference to operating earnings excluding unallocated corporate expenses and asset impairments.
Refer to Part I Item 1. Business, for a description of the Company’s three reportable segments. Management assesses the performance of segments by reference to operating earnings excluding unallocated corporate expenses and asset impairments.
The following table presents net sales and operating earnings by reporting segment (in millions): 2023 2022 Sales Contractor $ 985.7 $ 999.1 Industrial 662.8 649.3 Process 547.1 495.1 Total $ 2,195.6 $ 2,143.5 Operating Earnings Contractor $ 285.3 $ 249.9 Industrial 234.1 231.3 Process 165.3 122.3 Unallocated corporate (expense) (1) (38.7) (30.8) Contingent consideration 8.6 — Impairment (7.8) — Total $ 646.8 $ 572.7 (1) Unallocated corporate (expense) includes such items as stock compensation, certain acquisition transaction items, bad debt expense, charitable contributions, and certain facility expenses. 27 Table of Contents Contractor Segment The following table presents net sales and operating earnings as a percentage of sales for the Contractor segment (dollars in millions): 2023 2022 Sales Americas $ 730.2 $ 739.1 EMEA 179.5 176.8 Asia Pacific 76.0 83.2 Total $ 985.7 $ 999.1 Operating Earnings as a Percentage of Sales 29 % 25 % The following table presents the components of net sales change by geographic region for the Contractor segment: 2023 2022 Volume and Price Acquisitions Currency Total Volume and Price Acquisitions Currency Total Americas (1)% 0% 0% (1)% 7% 0% (1)% 6% EMEA (1)% 0% 2% 1% (6)% 1% (9)% (14)% Asia Pacific (5)% 0% (4)% (9)% 0% 0% (6)% (6)% Segment Total (1)% 0% 0% (1)% 4% 0% (3)% 1% Contractor segment sales decreased 1 percent for the year.
The following table presents net sales and operating earnings by reporting segment (in millions): 2024 2023 Sales Contractor $ 988.9 $ 985.7 Industrial 619.6 662.8 Process 504.8 547.1 Total $ 2,113.3 $ 2,195.6 Operating Earnings Contractor $ 270.1 $ 285.3 Industrial 201.5 234.1 Process 141.7 165.3 Unallocated corporate (expense) (1) (43.2) (38.7) Contingent consideration — 8.6 Impairment — (7.8) Total $ 570.1 $ 646.8 (1) Unallocated corporate (expense) includes such items as stock compensation, certain acquisition transaction items, bad debt expense, charitable contributions, and certain facility expenses. 27 Table of Contents Contractor Segment The following table presents net sales and operating earnings as a percentage of sales for the Contractor segment (dollars in millions): 2024 2023 Sales Americas $ 721.6 $ 730.2 EMEA 183.9 179.5 Asia Pacific 83.4 76.0 Total $ 988.9 $ 985.7 Operating Earnings as a Percentage of Sales 27 % 29 % The following table presents the components of net sales change by geographic region for the Contractor segment: 2024 2023 Volume and Price Acquisitions Currency Total Volume and Price Acquisitions Currency Total Americas (2)% 1% 0% (1)% (1)% 0% 0% (1)% EMEA (1)% 3% 0% 2% (1)% 0% 2% 1% Asia Pacific 6% 6% (2)% 10% (5)% 0% (4)% (9)% Segment Total (1)% 2% (1)% 0% (1)% 0% 0% (1)% Contractor segment sales in 2024 were flat compared to 2023.
Cash flows used in investing activities totaled $185 million in 2023, including $185 million for capital additions. Cash flows used in investing activities totaled $227 million in 2022 including $201 million for capital additions and $25 million for business acquisitions. Cash Flows Used in Financing Activities .
Cash flows used in investing activities totaled $343 million in 2024, including $242 million for business acquisitions and $107 million for capital additions. Cash flows used in investing activities totaled $185 million in 2023, including $185 million for capital additions. Cash Flows Used in Financing Activities .
At December 29, 2023, the Company’s capital structure included current notes payable of $30 million and shareholders’ equity of $2,224 million. At December 30, 2022, the Company’s capital structure included current notes payable of $21 million, long-term debt of $75 million and shareholders’ equity of $1,860 million. Shareholders’ equity increased by $365 million in 2023.
At December 27, 2024, the Company’s capital structure included current notes payable of $29 million and shareholders’ equity of $2,584 million. At December 29, 2023, the Company’s capital structure included current notes payable of $30 million and shareholders’ equity of $2,224 million. Shareholders’ equity increased by $360 million in 2024.
Pricing actions implemented in 2022 and 2023 have generally mitigated the effects of inflation. 23 Table of Contents Results of Operations A summary of financial results follows (in millions except per share amounts): 2023 2022 Net Sales $ 2,195.6 $ 2,143.5 Operating Earnings 646.8 572.7 Net Earnings 506.5 460.6 Diluted Net Earnings per Common Share $ 2.94 $ 2.66 Adjusted (non-GAAP) (1) : Operating Earnings, adjusted $ 646.0 $ 572.7 Net Earnings, adjusted 523.9 455.5 Diluted Net Earnings per Common Share, adjusted $ 3.04 $ 2.63 (1) Excludes the impact of a pension settlement loss, contingent consideration fair value adjustment, impairment charge, excess tax benefits from stock option exercises and certain non-recurring tax provision adjustments.
Results of Operations A summary of financial results follows (in millions except per share amounts): 2024 2023 Net Sales $ 2,113.3 $ 2,195.6 Operating Earnings 570.1 646.8 Net Earnings 486.1 506.5 Diluted Net Earnings per Common Share $ 2.82 $ 2.94 Adjusted (non-GAAP) (1) : Operating Earnings, adjusted $ 577.8 $ 646.0 Net Earnings, adjusted 477.1 523.9 Diluted Net Earnings per Common Share, adjusted $ 2.77 $ 3.04 (1) Excludes impacts of business reorganization charges, excess tax benefits from stock option exercises, impairment charges, contingent consideration fair value adjustments, pension settlement losses and certain non-recurring tax 23 Table of Contents provision adjustments.
The following table presents the components of net sales change by geographic region: 2023 2022 Volume and Price Acquisitions Currency Total Volume and Price Acquisitions Currency Total Americas 4% 0% 0% 4% 11% 1% (1)% 11% EMEA 0% 0% 3% 3% 7% 0% (10)% (3)% Asia Pacific (1)% 0% (3)% (4)% 16% 0% (6)% 10% Consolidated 2% 0% 0% 2% 11% 1% (4)% 8% Sales in the Americas were up modestly in 2023, as conditions varied by end market.
The following table presents the components of net sales change by geographic region: 2024 2023 Volume and Price Acquisitions Currency Total Volume and Price Acquisitions Currency Total Americas (1)% 0% 0% (1)% 4% 0% 0% 4% EMEA (4)% 1% 1% (2)% 0% 0% 3% 3% Asia Pacific (16)% 1% (1)% (16)% (1)% 0% (3)% (4)% Consolidated (4)% 1% (1)% (4)% 2% 0% 0% 2% In 2024, net sales declined in all regions and in most end markets compared to 2023.
Industrial Segment The following table presents net sales and operating earnings as a percentage of sales for the Industrial segment (dollars in millions): 2023 2022 Sales Americas $ 263.6 $ 239.3 EMEA 207.6 205.7 Asia Pacific 191.6 204.3 Total $ 662.8 $ 649.3 Operating Earnings as a Percentage of Sales 35 % 36 % 28 Table of Contents The following table presents the components of net sales change by geographic region for the Industrial segment: 2023 2022 Volume and Price Acquisitions Currency Total Volume and Price Acquisitions Currency Total Americas 10% 0% 0% 10% 13% 0% (1)% 12% EMEA (2)% 0% 3% 1% 15% 0% (12)% 3% Asia Pacific (3)% 0% (3)% (6)% 14% 0% (6)% 8% Segment Total 2% 0% 0% 2% 14% 0% (6)% 8% Industrial segment sales increased 2 percent for the year as continued strength in the automotive, industrial and machinery end markets in the Americas was mostly offset by lower finishing system sales in EMEA and Asia Pacific.
Industrial Segment The following table presents net sales and operating earnings as a percentage of sales for the Industrial segment (dollars in millions): 2024 2023 Sales Americas $ 273.0 $ 263.6 EMEA 200.3 207.6 Asia Pacific 146.3 191.6 Total $ 619.6 $ 662.8 Operating Earnings as a Percentage of Sales 33 % 35 % 28 Table of Contents The following table presents the components of net sales change by geographic region for the Industrial segment: 2024 2023 Volume and Price Acquisitions Currency Total Volume and Price Acquisitions Currency Total Americas 4% 0% 0% 4% 10% 0% 0% 10% EMEA (4)% 0% 0% (4)% (2)% 0% 3% 1% Asia Pacific (22)% 0% (2)% (24)% (3)% 0% (3)% (6)% Segment Total (6)% 0% (1)% (7)% 2% 0% 0% 2% Industrial segment sales decreased 7 percent for 2024 as finishing system sales in the Americas were unable to offset reduced project activity for automotive, e-mobility and electronic projects in Asia Pacific and weakened industrial activity in EMEA.
Process Segment The following table presents net sales and operating earnings as a percentage of sales for the Process segment (dollars in millions): 2023 2022 Sales Americas $ 344.2 $ 303.5 EMEA 76.8 69.3 Asia Pacific 126.1 122.3 Total $ 547.1 $ 495.1 Operating Earnings as a Percentage of Sales 30 % 25 % The following table presents the components of net sales change by geographic region for the Process segment: 2023 2022 Volume and Price Acquisitions Currency Total Volume and Price Acquisitions Currency Total Americas 13% 0% 0% 13% 22% 3% 0% 25% EMEA 10% 0% 1% 11% 22% 1% (8)% 15% Asia Pacific 5% 0% (2)% 3% 34% 0% (5)% 29% Segment Total 11% 0% 0% 11% 25% 2% (2)% 25% Process segment sales increased in all businesses and regions for the year, reflecting continued favorable conditions in many end markets, such as vehicle services, industrial pumps, oil and gas, mining, industrial lubrication and semi-conductors.
Process Segment The following table presents net sales and operating earnings as a percentage of sales for the Process segment (dollars in millions): 2024 2023 Sales Americas $ 334.5 $ 344.2 EMEA 70.1 76.8 Asia Pacific 100.2 126.1 Total $ 504.8 $ 547.1 Operating Earnings as a Percentage of Sales 28 % 30 % The following table presents the components of net sales change by geographic region for the Process segment: 2024 2023 Volume and Price Acquisitions Currency Total Volume and Price Acquisitions Currency Total Americas (3)% 0% 0% (3)% 13% 0% 0% 13% EMEA (10)% 0% 1% (9)% 10% 0% 1% 11% Asia Pacific (20)% 0% (1)% (21)% 5% 0% (2)% 3% Segment Total (8)% 0% 0% (8)% 11% 0% 0% 11% Process segment sales decreased in 2024 in all regions mainly due to decline in semiconductor end markets.
Though management considers its judgments and assumptions to be reasonable, changes in these assumptions could impact the estimated fair value. 32 Table of Contents In the third quarter of 2023, the Company recognized a goodwill impairment related to the reorganization of a business acquired in 2020 that is not material to the consolidated financial statements.
Though management considers its judgments and assumptions to be reasonable, changes in these assumptions could impact the estimated fair value. 32 Table of Contents We completed our annual impairment test of goodwill and other intangible assets in the fourth quarter of 2024. No impairment charges were recorded as a result of that review.
Net cash provided by operating activities was $651 million in 2023, up $274 million compared to 2022, due primarily to higher net earnings and fewer inventory purchases in 2023. Other decreases in working capital further contributed to the increase in cash provided by operating activities in 2023. 30 Table of Contents Cash Flows Used in Investing Activities.
Fewer inventory purchases in 2024 as part of an inventory 30 Table of Contents reduction program, as well as other decreases in working capital partially offset the effects of lower net earnings on cash provided by operating activities. Cash Flows Used in Investing Activities.
Changes in receivables were consistent with higher sales levels. Inventories decreased as supply chain disruptions eased and the associated effects of inflation subsided. As inventory purchases decreased, trade accounts payable decreased. The current ratio increased in 2023 in line with the changes in working capital. Capital Structure.
Decreased receivables from lower sales activity were more than offset by the incremental effect of acquired operations. An effort to reduce inventory levels in 2024 more than offset the effect of acquired inventory. As inventory purchases decreased, trade accounts payable decreased. The current ratio increased in 2024 in line with the changes in working capital. Capital Structure.
The operating margin rate for this segment increased 5 percentage points for the year, primarily due to realized pricing, lower product costs and expense leverage.
The operating margin rate for this segment decreased 2 percentage points for the year due to higher product costs from lower sales volumes, business reorganization expenses and the unfavorable effects of product and channel mix.
Operating Expenses Total operating expenses for 2023 increased $29 million compared to 2022. The increase includes increased spending on product development and other growth initiatives of $7 million, incremental share-based compensation of $6 million and higher sales and earnings-based expenses of $4 million. Investment in new product development in 2023 was $83 million, approximately 4 percent of sales.
Reductions in volume and earnings-based expenses of $14 million for the year partially offset the increase in operating expenses. Investment in new product development in 2024 was $87 million, approximately 4 percent of sales. Operating Earnings Sales declines and increased operating expenses led to a 12 percent decrease in operating earnings.
Other Expense Interest expense decreased $5 million compared to 2022 as private placement debt was repaid in the first quarter of 2022 and in the third quarter of 2023. Other non-operating expenses for 2023 included a non-cash pension settlement loss of $42 million in connection with the transfer of certain pension obligations to an insurance company.
Operating earnings expressed as a percentage of sales in 2024 decreased approximately 3 percentage points compared to 2023 as lower sales, higher product costs and higher expenses impacted profitability for the year. Interest & Other Expense Interest expense was $2 million lower for 2024 compared to 2023 as private placement debt was repaid in the third quarter of 2023.
The authorization is for an indefinite period of time or until terminated by the Board. As of December 29, 2023, approximately 14 million shares remain available for purchase under the authorization. The Company repurchased and retired 1.4 million shares in 2023 and 3.6 million shares in 2022. The Company did not repurchase and retire shares in 2021.
On December 7, 2018, the Board of Directors authorized the purchase of up to 18 million shares of common stock, primarily through open market transactions. The authorization is for an indefinite period of time or until terminated by the Board. As of December 27, 2024, approximately 13 million shares remain available for purchase under the authorization.
Partially offsetting the pension settlement loss was an increase in interest income of approximately $11 million for the year. Income Taxes The effective income tax rate for 2023 was 17 percent, down 2 percentage points from 2022. The decrease in 2023 was due to additional non-recurring tax benefits and excess tax benefits from stock option exercises.
Excluding a prior year pension settlement loss of $42 million, other income increased $13 million for 2024, largely due to increased interest income. Income Taxes The effective income tax rate for 2024 was 18 percent, up 1 percentage point from 2023.
We completed our annual impairment testing of goodwill and other intangible assets in the fourth quarter of 2023. No additional impairment charges were recorded as a result of that test. Income Taxes. In the preparation of the Company’s consolidated financial statements, management calculates income taxes.
In 2023, the Company recognized a goodwill impairment related to the reorganization of a business acquired in 2020 that was not material to the consolidated financial statements. Income Taxes. In the preparation of the Company’s consolidated financial statements, management calculates income taxes.
Removed
Supply Chain and Inflation In 2023, the Company's supply chain stabilized, and the associated effects of inflation largely subsided. While the Company experienced isolated supply chain disruptions in 2023, the impact was not as significant as compared to previous years in 2022 and 2021.
Added
Declines in global semiconductor markets drove sales lower in the Americas and Asia Pacific. Reduced project activity for automotive, electronics and e-mobility end markets, especially in China, furthered sales declines in Asia Pacific. In the Americas, strong finishing system sales were unable to offset soft residential and non-residential construction markets.
Removed
Sales of industrial products remained favorable, however rising interest rates and other economic conditions adversely impacted sales in construction markets. EMEA sales growth in 2023 benefited mostly from favorable changes in currency translation rates. Lower finishing system sales in EMEA for 2023 offset broad-based sales growth in Western Europe and emerging countries.
Added
In EMEA, decreased industrial activity in Western Europe led to lower sales in 2024. Gross Profit 26 Table of Contents The gross profit margin rate for 2024 increased slightly as the favorable effects of realized pricing more than offset unfavorable product and channel mix, lower sales volume and higher product costs.
Removed
In the Asia Pacific region, economic conditions in China and unfavorable changes in currency translation rates more than offset underlying growth in the rest of the region for 2023. Gross Profit 26 Table of Contents The gross profit margin rate for 2023 increased approximately 4 percentage points compared to 2022 mostly due to realized pricing.
Added
Operating Expenses Total operating expenses increased $38 million (7 percent) for 2024 compared to 2023.
Removed
Operating Earnings Sales growth led to an 8 percent increase in operating earnings. Operating earnings expressed as a percentage of sales in 2023 increased 3 percentage points compared to 2022 as realized pricing more than offset higher product costs and operating expenses.
Added
Operating expenses for 2024 included $13 million in incremental litigation costs associated with a trial that concluded in December of 2024, $13 million of investments in new product development and other growth initiatives, $7 million of business reorganization costs and $7 million of expenses from acquired operations.
Removed
Favorable response to new product offerings was more than offset for the year by slower economic activity in worldwide construction markets. The operating margin rate for this segment improved 4 percentage points for the year. Realized pricing drove most of the improvement in the operating margin rate for the year.
Added
The increase in 2024 was largely due to non-recurring tax benefits in 2023, variations in excess tax benefits from stock option exercises and the unfavorable effects of foreign earnings taxed at higher rates than the U.S. Segment Results The Company has five operating segments which are aggregated into three reportable segments: Contractor, Industrial and Process.
Removed
The operating margin rate for this segment decreased 1 percentage point for the year as realized pricing and lower product costs were offset by unfavorable changes in currency translation rates and higher operating expenses.
Added
Incremental sales from acquired operations, increased sales of protective coatings equipment and favorable response to new product offerings offset declines in North American construction markets.
Removed
Cash flows used in financing activities totaled $434 million in 2022 and included dividends of $142 million and net proceeds from share issuances totaling $36 million. On December 7, 2018, the Board of Directors authorized the purchase of up to 18 million shares of common stock, primarily through open market transactions.
Added
The operating margin rate for this segment was 2 percentage points lower than last year due to higher product costs on lower sales volumes, the unfavorable effects of lower margin rates of acquired operations and litigation costs associated with a trial that concluded in December of 2024. Sales in the Americas represent the majority of sales for the Contractor segment.
Added
Other end markets, such as mining, oil and gas, industrial pumps and vehicle services were weaker in 2024 compared to 2023. The operating margin rate for this segment decreased approximately 2 percentage points for the year as price realization was not enough to offset unfavorable expense leverage on lower sales volume.
Added
Net cash provided by operating activities was $622 million in 2024, down $29 million compared to 2023, due primarily to lower net earnings.
Added
Cash flows used in financing activities totaled $140 million in 2024 and included dividends of $172 million and share repurchases of $31 million, partially offset by net proceeds from share issuances of $66 million.
Added
The Company repurchased and retired 0.4 million shares in 2024, 1.4 million shares in 2023 and 3.6 million shares in 2022.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

7 edited+2 added−1 removed9 unchanged
Biggest changeAt January 31, 2024 exchange rates, assuming the same volumes, mix of products and mix of business by currency as in 2023, the movement in foreign currencies would not have an impact on net sales or net earnings for 2024.
Biggest changeAt January 31, 2025 exchange rates, assuming the same volumes, mix of products and mix of business by currency as in 2024, the movement in foreign currencies would have an unfavorable impact of approximately 1 percentage point on net sales and 2 percentage points on net earnings for 2025.
From time to time various forms filed by our Company with the Securities and Exchange Commission, including this Annual Report on Form 10-K and our Form 10-Qs and Form 8-Ks, and other disclosures, including our overview report, press releases, earnings releases, analyst briefings, conference calls and other written documents or oral statements released by our Company, may contain forward-looking statements.
From time to time various forms filed by our Company with the Securities and Exchange Commission, including this Form 10-K and our Form 10-Qs and Form 8-Ks, and other disclosures, including our overview report, press releases, earnings releases, analyst briefings, conference calls and other written documents or oral statements released by our Company, may contain forward-looking statements.
These risk factors include, but are not limited to, risks relating to the demand for our products and the level of commercial and industrial activity worldwide; changes in currency translation rates; Russia’s invasion of Ukraine and other political instability; interest rate fluctuations and changes in credit markets; global sourcing of materials; interruptions of or intrusions into our information systems; intellectual property rights; the use of generative artificial intelligence; conducting business internationally; catastrophic events; our ability to attract, develop and retain qualified personnel; public health crises; our growth strategies and acquisitions; potential goodwill impairment; our ability to compete effectively; our dependence on a few large customers; our dependence on cyclical industries; changes in laws and regulations; climate-related laws, regulations and accords; environmental, social and governance-related expectations and requirements; compliance with anti-corruption and trade laws; changes in tax rates or the adoption of new tax legislation; costs associated with legal proceedings; and other risks and uncertainties including those discussed in Item 1A of this Annual Report on Form 10-K.
These risk factors include, but are not limited to, risks relating to the demand for our products and the level of commercial and industrial activity worldwide; changes in currency translation rates; international and domestic political instability; interest rate fluctuations and changes in credit markets; global sourcing of materials; interruptions of or intrusions into our information systems; intellectual property rights; the use of generative artificial intelligence; conducting business internationally; catastrophic events; our ability to attract, develop and retain qualified personnel; public health crises; our growth strategies and acquisitions; potential goodwill impairment; our ability to compete effectively; our dependence on a few large customers; our dependence on cyclical industries; changes in laws and regulations; climate-related laws, regulations and accords; environmental, social and governance-related expectations and requirements; compliance with anti-corruption and trade laws; changes in tax rates or the adoption of new tax legislation; costs associated with legal proceedings; and other risks and uncertainties including those discussed in Item 1A of this Form 10-K.
At December 29, 2023, the currencies to which the Company had the most significant balance sheet exchange rate exposure were the euro, Swiss franc, Canadian dollar, British pound, Japanese yen, Australian dollar, Chinese renminbi, South Korean won and Indian rupee.
At December 27, 2024, the currencies to which the Company had the most significant balance sheet exchange rate exposure were the euro, Swiss franc, Canadian dollar, British pound, Japanese yen, Australian dollar, Chinese renminbi, South Korean won and Indian rupee.
It is not possible to determine the true impact of currency rate changes; however, the direct translation effect on net sales and net earnings can be estimated. In 2023, changes in currency translation rates reduced sales by approximately $2 million and reduced net earnings by approximately $4 million.
It is not possible to determine the true impact of currency rate changes; however, the direct translation effect on net sales and net earnings can be estimated. In 2024, changes in currency translation rates reduced sales by approximately $6 million and reduced net earnings by approximately $3 million.
Entering 2024, demand levels generally remain steady in an uncertain macroeconomic environment. As a result, the Company's outlook for 2024 is low single-digit revenue growth on an organic, constant currency basis.
As a result, the Company's outlook for 2025 is low single-digit revenue growth on an organic, constant currency basis.
While the Company's backlog in recent years has been elevated relative to historic levels, backlog is not a good indicator of future long-term business levels.
The Company's backlog is not a good indicator of future long-term business levels.
Removed
In 2022, changes in currency translation rates reduced sales by approximately $66 million and reduced net earnings by approximately $31 million. 2024 Outlook The Company expects its core growth strategies of developing new products, expanding distribution, seeking adjacent markets and targeting strategic acquisitions will continue to drive shareholder value.
Added
In 2023, changes in currency translation rates reduced sales by approximately $2 million and reduced net earnings by approximately $4 million. 2025 Outlook Entering 2025, overall incoming order rates remain steady in an uncertain macroeconomic environment. Demand in China and for semiconductor products appear to have stabilized.
Added
The Company's reorganization into global businesses, centered around common customers and distributors, has been completed and is designed with the intention of driving incremental profitable growth. The Company remains committed to its core growth strategies of developing new products, expanding distribution, seeking adjacent markets and new geographies, and pursuing strategic acquisitions.

Other GGG 10-K year-over-year comparisons