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What changed in GRACO INC's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of GRACO INC's 2024 and 2025 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 2025 report.

+151 added−154 removedSource: 10-K (2026-02-17) vs 10-K (2025-02-18)

Top changes in GRACO INC's 2025 10-K

151 paragraphs added · 154 removed · 126 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeThese 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.
Biggest changePrimary end users of our powder finishing products include manufacturers in the construction, home appliance, automotive component and custom 6 Table of Contents project coater industries. We strive to provide innovative solutions in powder coating for end users in emerging and developed markets.
Financial information concerning our segments and geographic markets is set forth in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations and Note B (Segment Information) to the Consolidated Financial Statements of this Form 10-K. For information about our Company and our products, services and solutions, visit our website at www.graco.com .
Financial information concerning our segments and geographic markets is set forth in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations and Note 2 (Segment Information) to the Consolidated Financial Statements of this Form 10-K. For information about our Company and our products, services and solutions, visit our website at www.graco.com.
Tenure of all employees averaged nearly 10 years, reflective of our positive workplace culture. Our recruiting team uses internal and external resources to recruit highly skilled and talented workers, and we encourage and reward employee referrals for open positions. We are committed to maintaining a culture of trust that recognizes the dignity and uniqueness of the individual.
Tenure of all employees averaged nearly 11 years, reflective of our positive workplace culture. Our recruiting team uses internal and external resources to recruit highly skilled and talented workers, and we encourage and reward employee referrals for open positions. We are committed to maintaining a culture of trust that recognizes the dignity and uniqueness of the individual.
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.
Note 12 (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.
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.
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.
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.
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 source raw materials and components from suppliers around the world.
Our manufacturing, product development, warehouse and administrative employees are generally located in the same or adjacent facilities, which we believe contributes to our culture of strong manufacturing, engineering and customer service capabilities. Health, Wellness & Safety 8 Table of Contents The personal health, wellness and safety of each of our employees is of primary importance.
Our manufacturing, product development, warehouse and administrative employees are generally located in the same or adjacent facilities, which we believe contributes to our culture of strong manufacturing, engineering and customer service capabilities. Health, Wellness & Safety The personal health, wellness and safety of each of our employees is of primary importance.
The information on the website is not part of this report nor any other report filed or furnished to the Securities and Exchange Commission (“SEC”). Manufacturing and Distribution We manufacture a majority of our products in the United States (“U.S.”).
The information on the website is not part of this report nor any other report filed or furnished to the Securities and Exchange Commission (“SEC”). 4 Table of Contents Manufacturing and Distribution We manufacture a majority of our products in the United States (“U.S.”).
Compliance with such agreements has no material effect on our Company or our operations. The location of the majority of our manufacturing operations within the U.S. allows us to flex employee resources as needed to respond to changes in demand of our business.
Compliance with such agreements has no material effect on our Company or our operations. 7 Table of Contents The location of the majority of our manufacturing operations within the U.S. allows us to flex employee resources as needed to respond to changes in demand of our business.
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.
Contractor products are also sold through general equipment distributors outside of North America. Industrial Segment The Industrial segment represented approximately 45 percent of our total sales in 2025. 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 $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.
Total product development expenditures for all segments were $82 million in 2025, $87 million in 2024 and $83 million in 2023. The amounts invested in product development averaged approximately 4 percent of sales over the last three years.
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.
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 26, 2025, our executive officers responsible for setting overall strategy averaged nearly 22 years of tenure.
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.
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 5 Table of Contents Contractor Segment The Contractor segment represented approximately 48 percent of our total sales in 2025.
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.
Outside of the U.S., our operations located in Australia, Belgium, Spain, Japan, Italy, Korea, India, the P.R.C., the United Kingdom and Brazil distribute our Company’s products and reinforce our commitment to those regions. Our manufacturing capacity is sufficient for current business demand levels.
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.
Compliance with Government Regulations Our compliance with federal, state and local laws and regulations, including environmental regulations, did not have a material effect upon our capital expenditures, earnings or competitive position during the fiscal year ended December 26, 2025. Human Capital Resources As of December 26, 2025, we employed approximately 4,400 persons.
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.
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. The Powder Division remains unchanged. The Expansion Markets segment consists of the Expansion Markets Division.
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.
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.
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.
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.
Lubrication The Lubrication division primarily designs and sells equipment for use in equipment maintenance and vehicle servicing. We supply pumps, hose reels, meters, valves and accessories for use by fast oil change facilities, service garages, fleet service centers, automobile dealerships, auto parts stores, truck builders and heavy equipment service centers.
The Industrial division also manufactures and supplies equipment for equipment maintenance and vehicle servicing applications, including supply pumps, hose reels, meters, valves, and accessories used by fast oil change facilities, service garages, fleet service centers, automobile dealerships, auto parts stores, truck builders, and heavy equipment service centers.
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.
In 2024 and 2023, we completed a number of significant expansion projects within the U.S., Switzerland and Romania. 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.
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.
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, consisting of the Contractor Division, remains unchanged as a reportable segment relative to prior periods.
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").
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").
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.
Each segment sells its products in North, Central and South America (the “Americas”), Europe, Middle East and Africa (“EMEA”), and Asia Pacific. For 2025, sales in the Americas represented approximately 60 percent of our Company’s total sales. Sales in EMEA represented approximately 24 percent and sales in Asia Pacific represented approximately 16 percent.
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.
Effective January 1, 2025, the Company began to classify 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.
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.
These acquisitions may be integrated into existing Graco operations or may be managed as stand-alone operations. In 2025, we completed two acquisitions within the Contractor and Industrial segments.
Manufacturers and processors in the food and beverage, dairy, pharmaceutical, cosmetic, oil and natural gas, semiconductor, electronics, wastewater, mining and ceramics industries use these pumps. This division makes environmental monitoring and remediation equipment that is used to conduct ground water sampling and ground water remediation, and for landfill liquid and gas management.
Expansion Markets Segment The Expansion Markets segment represented approximately 7 percent of our total sales in 2025 and includes pumps for use in the semiconductor industry; high pressure and ultra-high pressure valves used in the oil and natural gas industry; and environmental monitoring and remediation equipment that is used to conduct ground water sampling, ground water remediation, and for landfill liquid and gas management.
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In 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.
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These acquisitions provide new product offerings, including mixing, shaking and automated material handling equipment for the Contractor segment and automated dosing systems for powder and liquid applications for the Industrial segment, while also expanding our manufacturing capabilities and strengthening our channel partner network.
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Industrial The Industrial division makes liquid finishing and advanced fluid dispense equipment primarily for use in industrial applications. This division’s products include liquid finishing equipment that applies liquids on metals, wood and plastics, with emphasis on solutions that provide easy integration to paint monitoring and control systems.
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Industrial The Industrial division designs and manufactures liquid finishing and advanced fluid dispensing equipment; pumps to move chemicals, petroleum, food, and other fluids; and systems, components, and accessories for the automatic lubrication of bearings, gears, and generators.
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Products include paint circulating and paint supply pumps, paint circulating advanced control systems, plural component coating proportioners, various accessories to filter, transport, agitate and regulate fluid, and spare parts such as spray tips, seals and filter screens.
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These products are primarily used in industrial manufacturing applications, including automotive and commercial equipment, and are also utilized by manufacturers and processors in the food and beverage, dairy, pharmaceutical, cosmetic, electronics, mining, and ceramics industries.
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The Industrial division also offers a variety of applicators that use different methods of atomizing and spraying liquid materials, paint or other coatings depending on the viscosity of the fluid, the type of finish desired and the need to maximize transfer efficiency, minimize overspray and minimize the release of volatile organic compounds into the air.
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Powder The Powder division makes powder finishing products, automated dosing systems and complete powder finishing systems that coat powder on metals. These products are sold under the Gema®, SAT™ and ColorService® brands. Gema powder systems coat window frames, metallic furniture, automotive components and sheet metal.
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Manufacturers in the automotive, automotive feeder, commercial and recreational vehicle, military and utility vehicle, aerospace, farm, construction, wood and general metals industries use our liquid finishing products. The Industrial division also manufactures equipment for industrial customers that pumps, meters, mixes and dispenses sealant, adhesive and composite materials.
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This segment also provides product design and licensing services for the development of high torque electric motors used in a variety of applications, including heating, ventilation, and air conditioning equipment, pumps, sprayers and other material handling equipment.
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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.
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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.
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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.
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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.
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This division also offers systems, components and accessories for the automatic lubrication of bearings, gears and generators in industrial and commercial equipment, compressors, turbines and on- and off-road vehicles. Automatic lubrication systems reduce maintenance costs, downtime and extend equipment life.
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These systems are utilized across a variety of industries including construction, mining, industrial manufacturing, transportation, wind energy and oil and natural gas. The Lubrication division also manufactures high pressure and ultra-high pressure valves used in the oil and natural gas industry, hydrogen refueling infrastructure, other industrial processes and research facilities.
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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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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 changeIf our distributors and original equipment manufacturers are unable to, or have a diminished ability to, purchase our products because of unavailable credit or unfavorable credit terms, depressed end-user demand, or are simply unwilling to purchase our products, our net sales and earnings will be adversely affected. 9 Table of Contents An economic downturn may have an adverse effect on our results of operations and financial condition and affect our ability to satisfy the financial covenants in the terms of our financing arrangements.
Biggest changeIf any participant in our sales channel, including end users, are unable to, or have a diminished ability to, purchase our products because of unavailable credit or unfavorable credit terms, depressed end-user demand, or are simply unwilling to purchase our products, our net sales and earnings will be adversely affected.
International political instability (including tensions between the U.S. and the countries in which we conduct business, rumors or threats of war, terrorism and other hostilities, and geopolitical activity or trade disruptions, such as those caused by the Russia-Ukraine and Israel-Hamas conflicts, or any conflict or threatened conflict between China and Taiwan) may cause economic conditions in the U.S. or abroad to deteriorate.
International political instability (including tensions or conflicts between the U.S. and the countries in which we conduct business, rumors or threats of war, terrorism and other hostilities, and geopolitical activity or trade disruptions, such as those caused by the Russia-Ukraine and Israel-Hamas conflicts, or any conflict or threatened conflict between China and Taiwan) may cause economic conditions in the U.S. or abroad to deteriorate.
These risks include: complying with foreign legal and regulatory requirements; international trade factors (export controls, customs clearance, trade policy, trade sanctions, trade agreements, duties, tariff barriers and other restrictions); trade disruptions arising out of geopolitical activity (such as those caused by the Russia-Ukraine and Israel-Hamas conflicts, or any conflict or threatened conflict between China and Taiwan); protection of our proprietary technology in certain countries; potentially burdensome taxes; potential difficulties staffing and managing local operations; and changes in exchange rates. 12 Table of Contents Catastrophic Events - Our operations are at risk of damage, destruction or disruption by natural disasters and other unexpected events.
These risks include: complying with foreign legal and regulatory requirements; international trade factors (export controls, customs clearance, trade policy, trade sanctions, trade agreements, duties, tariff barriers and other restrictions); trade disruptions arising out of geopolitical activity (such as those caused by the Russia-Ukraine and Israel-Hamas conflicts, or any conflict or threatened conflict between China and Taiwan); protection of our proprietary technology in certain countries; potentially burdensome taxes; potential difficulties staffing and managing local operations; and changes in exchange rates. 11 Table of Contents Catastrophic Events – Our operations are at risk of damage, destruction or disruption by natural disasters and other unexpected events.
Item 1A. Risk Factors As a global manufacturer of systems and equipment designed to move, measure, control, dispense and spray fluid and powder materials, our business is subject to various risks and uncertainties. Below are risk factors that could materially and adversely affect our business, financial condition and results of operations.
Item 1A. Risk Factors As a global manufacturer of systems and equipment designed to move, measure, mix, control, dispense and spray fluid and powder materials, our business is subject to various risks and uncertainties. Below are risk factors that could materially and adversely affect our business, financial condition and results of operations.
Reduced credit availability or a higher cost of capital may also limit the ability of end users of our products to invest in their businesses, which could depress demand for our equipment in all or some major geographies and markets. 10 Table of Contents Operational Risks Global Sourcing - Risks associated with foreign sourcing, supply interruption, delays in raw material or component delivery, supply shortages and counterfeit components may adversely affect our production or profitability.
Reduced credit availability or a higher cost of capital may also limit the ability of end users of our products to invest in their businesses, which could depress demand for our equipment in all or some major geographies and markets. 9 Table of Contents Operational Risks Global Sourcing – Risks associated with foreign sourcing, supply interruption, delays in raw material or component delivery, supply shortages and counterfeit components may adversely affect our production or profitability.
Once successfully integrated into our existing businesses or 13 Table of Contents added to our corporate structure, an acquired business may not perform as planned, be accretive to earnings, generate positive cash flows, provide an acceptable return on investment or otherwise be beneficial to us. We may not realize projected efficiencies and cost-savings from the businesses we acquire.
Once successfully integrated into our existing businesses or 12 Table of Contents added to our corporate structure, an acquired business may not perform as planned, be accretive to earnings, generate positive cash flows, provide an acceptable return on investment or otherwise be beneficial to us. We may not realize projected efficiencies and cost-savings from the businesses we acquire.
Legal, Regulatory and Compliance Risks Laws and Regulations - Changes in laws and regulations, and the imposition of new or additional laws and regulations, may impact how we can do business and the cost of doing business around the world. 14 Table of Contents We are subject to many laws and regulations in the jurisdictions where we operate, and as the nature and geographic scope of our business grows and expands, we may become subject to additional laws and regulations previously inapplicable to our business.
Legal, Regulatory and Compliance Risks Laws and Regulations – Changes in laws and regulations, and the imposition of new or additional laws and regulations, may impact how we can do business and the cost of doing business around the world. 13 Table of Contents We are subject to many laws and regulations in the jurisdictions where we operate, and as the nature and geographic scope of our business grows and expands, we may become subject to additional laws and regulations previously inapplicable to our business.
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.
As a manufacturer, our operating technology assets and systems are susceptible to disruption through cyberattacks. We 10 Table of Contents 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.
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.
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 shutdowns, may limit our ability to grow our business.
Economic, Financial and Political Risks Economic Environment - Demand for our products depends on the level of commercial and industrial activity worldwide. The demand for our products depends, in part, on the general economic conditions of the industries, geographies or economies in which our customers operate.
Economic, Financial and Political Risks Economic Environment – Demand for our products depends on the level of commercial and industrial activity worldwide. 8 Table of Contents The demand for our products depends, in part, on the general economic conditions of the industries, geographies or economies in which our customers operate.
While we believe the development and adoption of generative AI technologies are in their early stages, the increased use of these technologies in the conduct of our business poses risks which, if they materialize, could adversely impact our business, financial condition, results of operation and reputation.
The development and adoption of generative AI technologies are rapidly evolving, and the increased use of these technologies in the conduct of our business poses risks which, if they materialize, could adversely impact our business, financial condition, results of operation and reputation.
We cannot predict the timing, severity or duration of any such downturn, or the timing of any recovery. Currency - Changes in currency translation rates could adversely impact our revenue, earnings and the valuation of assets denominated in foreign currencies. A significant number of routine transactions to which we are a party are conducted in foreign currencies.
Currency – Changes in currency translation rates could adversely impact our revenue, earnings and the valuation of assets denominated in foreign currencies. A significant number of routine transactions to which we are a party are conducted in foreign currencies.
Geopolitical instability (including in Europe and the Middle East), protective tariffs, unpredictable changes in duty rates, and changes in trade policies, agreements, relations and regulations have made and may continue to make certain foreign-sourced parts of limited availability or no longer competitively priced. Long supply chains may be disrupted by environmental events, public health crises, political or other factors.
Geopolitical instability (including in Europe, Asia, the Middle East, and South America), protective tariffs, unpredictable changes in duty rates, and changes in trade policies, agreements, relations and regulations have made and may continue to make certain foreign-sourced parts of limited availability or no longer competitively priced.
We have experienced and expect to continue to experience cybersecurity threats and attacks on our systems and networks and those of our third-party service providers. To date, none of the cybersecurity threats and attacks we have experienced have had a material adverse impact on our operations, business or financial condition.
We have experienced and expect to continue to experience cybersecurity threats and attacks on our systems and networks and those of our third-party service providers. To date, none of the cybersecurity threats and attacks we have experienced have materially affected, or are reasonably likely to materially affect, our results of operations, business strategy or financial condition.
The tactics and capabilities of cybercriminals are growing increasingly sophisticated, and it is virtually impossible for any organization, including us, to completely eliminate the risk of cyberattacks.
The tactics and capabilities of cybercriminals are growing increasingly sophisticated, and they will continue to evolve in their sophistication as artificial intelligence is leveraged to perpetrate cyberattacks. It is virtually impossible for any organization, including us, to completely eliminate the risk of cyberattacks.
Legal Proceedings - Costs associated with claims, litigation, administrative proceedings and regulatory reviews, and potentially adverse outcomes, may affect our profitability. 15 Table of Contents The nature of our business, including the equipment we develop, manufacture and sell, or have in the past developed, manufactured and sold, exposes us to the risk of product liability, warranty and tort (including toxic tort), commercial and employment-related claims, demands and litigation .
The nature of our business, including the equipment we develop, manufacture and sell, or have in the past developed, manufactured and sold, exposes us to the risk of product liability, warranty and tort (including toxic tort), commercial and employment-related claims, demands and litigation .
Raw materials may become limited in availability from certain regions. Port labor issues may delay shipments. We source a large volume and a variety of electronic components, which exposes us to an increased risk of counterfeit components entering our supply chain. If counterfeit components unknowingly become part of our products, we may need to stop delivery and rework our products.
Long supply chains may be disrupted by environmental events, public health crises, political or other factors. Raw materials may become limited in availability from certain regions. Port labor issues may delay shipments. We source a large volume and a variety of electronic components, which exposes us to an increased risk of counterfeit components entering our supply chain.
Operations and sales outside of the U.S. expose us to certain risks that could adversely impact our sales volume, rate of growth or profitability.
Foreign Operations – Conducting business internationally exposes our Company to risks that could harm our business. In 2025, approximately 48 percent of our sales were generated by customers located outside the U.S. Operations and sales outside of the U.S. expose us to certain risks that could adversely impact our sales volume, rate of growth or profitability.
We may be subject to warranty claims and may need to recall products.
If counterfeit components unknowingly become part of our products, we may need to stop delivery and rework our products. We may be subject to warranty claims and may need to recall products.
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.
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.
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In addition, the U.S. government could adopt changes to international trade agreements, tariffs, taxes and other related regulations.
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An economic downturn may have an adverse effect on our results of operations and financial condition and affect our ability to satisfy the financial covenants in the terms of our financing arrangements. We cannot predict the timing, severity or duration of any such downturn, or the timing of any recovery.
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The Company’s ability to execute its strategic objectives could be adversely affected if it is unable to successfully integrate new technologies, including artificial intelligence, in a timely, cost‑effective, compliant, and appropriate manner, or if the processes and methods used to develop, deploy, or otherwise utilize such technologies are determined to be inconsistent with evolving or newly enacted regulatory requirements.
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Tariff and Trade Policies – Changes and uncertainty in U.S. trade policies, including tariffs, trade agreements and other regulations, as well as in those of other countries, may affect our operating results, cash flows and financial condition. 14 Table of Contents The Company’s business can be impacted by changes in U.S. trade policies, including tariffs, trade agreements and other related regulations, as well as trade restrictions and retaliatory actions imposed or taken by foreign governments.
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The U.S. government has imposed and significantly increased tariffs on foreign imports, with many foreign governments implementing retaliatory tariffs on U.S. exports into their countries.
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This has resulted in higher costs to the Company for certain raw materials and components it imports and uses in the manufacture of its products, as well as higher prices to purchasers of the Company’s products in certain foreign geographies and opportunities for competitors to enhance their presence in markets in which we participate.
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The U.S.-imposed tariffs have been the subject of numerous legal challenges, including before the U.S. Supreme Court, the outcome of which has yet to be determined.
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Even if those challenges are successful, it is uncertain as to whether the Company will be able to recover any tariffs it has previously paid, or whether the U.S. government will attempt to reimpose the tariffs under some other authority.
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Further changes in U.S. or foreign trade policies, tariffs and other trade-related regulations, and continued uncertainty around the foregoing, could adversely impact the Company’s business, financial condition and results of operations. Legal Proceedings – Costs associated with claims, litigation, administrative proceedings and regulatory reviews, and potentially adverse outcomes, may affect our profitability.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeIn addition, management periodically arranges for outside experts to present to the Audit Committee on cyber governance frameworks, regulatory developments, industry practices and risk management. None of the cybersecurity risks, including as a result of any prior incidents we have experienced, have had a material adverse impact on our operations, business or financial condition. 16 Table of Contents
Biggest changeNone of the risks from cybersecurity threats, including as a result of any prior cybersecurity incidents we have experienced, have materially affected, or are reasonably likely to materially affect, our results of operations, business strategy or financial condition. 16 Table of Contents
Our cybersecurity oversight committee and cybersecurity team, with the support of external cyber-specialist resources, include technical experts in cybersecurity risk management, incident response and security operations with extensive experience in the operations of networks, network security and infrastructure management. In addition, members of our cybersecurity team have cybersecurity experience or certifications, such as the Certified Information Systems Security Professional certification.
Our cybersecurity team, with the support of external cyber-specialist resources, include technical experts in cybersecurity risk management, incident response and security operations with extensive experience in the operations of networks, network security and infrastructure management. In addition, members of our cybersecurity team have cybersecurity experience or certifications, such as the Certified Information Systems Security Professional certification.
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.
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 15 Table of Contents to simulate and prepare for potential incidents.
The Company’s cybersecurity risks are evaluated at least annually through our enterprise risk management program, which is a company-wide effort to identify, assess, manage, report and monitor material risks that may affect our ability to achieve our business objectives.
The Company’s cybersecurity risks are evaluated at least annually through our enterprise risk management program, which is a company-wide effort to identify, assess, manage, report and monitor material risks that may affect our ability to achieve our business objectives. To manage our cybersecurity program, we have established a cybersecurity team led by our Chief Information Officer ("CIO").
Policies, procedures and controls under our cybersecurity program are designed in consideration of published frameworks, including the Center for Information Security ("CIS") Critical Security Controls, and routinely evaluated for ongoing adherence to those frameworks. Our cybersecurity program includes a process for incident response and continuous improvement.
Policies, procedures and controls under our cybersecurity program are designed in consideration of published frameworks, including the National Institute of Standards and Technology (“NIST”) Cybersecurity Framework, and routinely evaluated for ongoing adherence to those frameworks. Our cybersecurity program includes a process for incident response and continuous improvement.
Removed
To manage our cybersecurity program, we have established a cross-functional cybersecurity oversight committee and cybersecurity team, both led by our Chief Information Officer ("CIO").

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 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.
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 Industrial Dayton, Minnesota, United States Owned 520,000 Distribution center and office All segments Minneapolis, Minnesota, United States Owned 390,000 Manufacturing and office Industrial Anoka, Minnesota, United States Owned 384,000 Manufacturing, warehouse 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 Expansion Markets 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 Expansion Markets Minneapolis, Minnesota, United States Owned 87,000 Assembly Industrial Kamas, Utah, United States Owned 70,000 Manufacturing, warehouse, office, product development and test laboratory Expansion Markets Dexter, Michigan, United States Owned 65,000 Manufacturing, warehouse, office and product development Expansion Markets 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 Maasmechelen, Belgium Owned 619,000 Office, warehouse and assembly All segments 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 Verona, Italy Owned 164,000 Manufacturing and warehouse Industrial Sibiu, Romania Owned 148,000 Manufacturing Industrial Dueville, Italy Owned 82,000 Office and warehouse 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 Suzhou, 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 18, 2025, under our operating segment structure for the year ended December 27, 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 17, 2026, under our operating segment structure for the year ended December 26, 2025, is set forth in the chart below.
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
Owned 80,000 Manufacturing, warehouse, office and product development All segments Tây Ninh, Vietnam Leased 61,000 Manufacturing, warehouse and office Industrial 17 Table of Contents Daman, India Owned 54,000 Manufacturing Contractor Shanghai, P.R.C. Leased 47,000 Office All segments Bundoora, Australia Leased 38,000 Office All segments Gyeonggi-do, South Korea Leased 33,000 Office and warehouse All segments

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeFrom 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
Biggest changeFrom 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 19 Table of Contents Director, Industrial Product Division and China Factory. Prior to that, she held various manufacturing management and engineering positions.
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.
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, 55, became Executive Vice President, General Counsel and Corporate Secretary in July 2021.
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.
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, 56, became President, Expansion Markets Division in January 2025. From June 2021 to December 2024, he served as President, Worldwide Process Division.
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.
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, 61, became President, Global Industrial Division in January 2025.
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.
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, 45, became Executive Vice President and Chief Marketing Officer in January 2024. From January 2023 to December 2024, she served as Executive Vice President, Marketing.
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.
She joined the Company in 2008. Inge Grasdal, 55, 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.
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.
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, 56, became President, Global Powder Division in January 2025.
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.
David J. Thompson, 58, 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.
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.
Wordell, 54, 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.
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.
Sheahan also serves as a director of Tennant Company and on the board of managers of Fernweh Group, LLC. Ronita Banerjee, 48, became Executive Vice President and Chief Human Resources Officer in May 2023.
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.
Lowe, 70, 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.
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.
Schoenrock, 48, 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.
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.
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 18 Table of Contents Specialists, after which he returned to Graco.
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.
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 Operations Director, Contractor Equipment Division, he held various manufacturing management positions. He joined the Company in 1992. Angela F.
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.
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 17, 2026: Mark W. Sheahan, 61, became President and Chief Executive Officer in June 2021. From June 2018 to June 2021, he served as Chief Financial Officer and Treasurer.
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.
He joined the Company in July 2021. Christopher D. Knutson, 48, 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.
Removed
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.
Added
She joined the Company in 1993. 20 Table of Contents PART II
Removed
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.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe authorization is for an indefinite period of time or until terminated by the Board. There are no shares available for repurchase under previous authorizations.
Biggest changeOn December 5, 2025, the Board of Directors authorized the Company to purchase up to an additional 15 million shares of its outstanding stock, primarily through open-market transactions. The authorizations are for an indefinite period of time or until terminated by the Board. There are no shares available for repurchase under previous authorizations.
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.
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, 2020, and all dividends were reinvested). 2020 2021 2022 2023 2024 2025 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 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.
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 23, 2026, the share price was $86.55 and there were 165,338,302 shares outstanding and 1,471 common shareholders of record, which includes nominees or broker dealers holding stock on behalf of an estimated 219,163 beneficial owners.
Information 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
Information 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 27, 2025 - Oct 24, 2025 — — — 8,767,558 Oct 25, 2025 - Nov 21, 2025 694,544 $ 80.54 694,544 8,073,014 Nov 22, 2025 - Dec 26, 2025 76,076 $ 81.70 76,076 22,996,938
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.
Industrial Machinery $100 $112 $95 $123 $121 $122 S&P 500 100 129 105 133 166 196 Graco Inc. 100 124 109 138 153 170 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

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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.
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): 2025 2024 Operating earnings, as reported $ 624.8 $ 570.1 Contingent consideration (14.1) — Business reorganization — 7.7 Operating earnings, adjusted $ 610.7 $ 577.8 Earnings before income taxes, as reported $ 641.2 $ 589.3 Contingent consideration (14.1) — Business reorganization — 7.7 Earnings before income taxes, adjusted $ 627.1 $ 597.0 Income taxes, as reported $ 119.4 $ 103.2 Other non-recurring tax benefit 2.9 — Excess tax benefit from option exercises 6.0 14.9 Business reorganization tax effect — 1.8 Income taxes, adjusted $ 128.3 $ 119.9 Effective income tax rate As reported 18.6 % 17.5 % Adjusted 20.5 % 20.1 % Net Earnings, as reported $ 521.8 $ 486.1 Contingent consideration (14.1) — Other non-recurring tax benefit (2.9) — Excess tax benefit from option exercises (6.0) (14.9) Business reorganization — 5.9 Net Earnings, adjusted $ 498.8 $ 477.1 Weighted Average Diluted Shares 169.2 172.4 Diluted Net Earnings per Share As reported $ 3.08 $ 2.82 Adjusted $ 2.95 $ 2.77 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: 2025 2024 Net Sales 100.0 % 100.0 % Cost of products sold 47.5 46.9 Gross profit 52.5 53.1 Product development 3.7 4.0 Selling, marketing and distribution 12.2 13.0 General and administrative 9.3 9.1 Contingent consideration (0.6) — Operating earnings 27.9 27.0 Interest expense 0.1 0.1 Other (income) expense, net (0.9) (1.0) Earnings before income taxes 28.7 27.9 Income taxes 5.4 4.9 Net Earnings 23.3 % 23.0 % Net Earnings, adjusted (see non-GAAP measurements above) 22.3 % 22.6 % Net Sales The following table presents net sales by geographic region (in millions): 2025 2024 Americas (1) $ 1,353.0 $ 1,329.3 EMEA (2) 527.5 454.2 Asia Pacific 356.1 329.8 Consolidated $ 2,236.6 $ 2,113.3 (1) North, Central and South America, including the U.S.
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”).
The Company has made and may continue to make opportunistic share repurchases in 2026 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”).
Long-term financial growth targets accompany these strategies, including our objectives of 10 percent revenue growth and 12 percent consolidated net earnings growth per annum. We continue to develop new products in each operating division that are expected to drive incremental sales growth, as well as continued refreshes and upgrades of existing product lines.
Long-term financial growth targets accompany these strategies, including our objectives of 10 percent revenue growth and 12 percent consolidated net earnings growth per annum. We continue to develop new products in each operating segment that are expected to drive incremental sales growth, as well as continued refreshes and upgrades of existing product lines.
The Company’s most significant accounting policies are disclosed in Note A (Summary of Significant Accounting Policies) to the consolidated financial statements. The preparation of the consolidated financial statements, in conformity with U.S. GAAP, requires management to make estimates and judgments that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual amounts will differ from those estimates.
The Company’s most significant accounting policies are disclosed in Note 1 (Summary of Significant Accounting Policies) to the consolidated financial statements. The preparation of the consolidated financial statements, in conformity with U.S. GAAP, requires management to make estimates and judgments that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual amounts will differ from those estimates.
The Company specializes in equipment for applications that involve difficult-to-handle materials with high viscosities, materials with abrasive or corrosive properties and multiple-component materials that require precise ratio control. Graco sells primarily through independent third-party distributors worldwide to industrial and contractor end users. Graco’s business is classified by management into three reportable segments: Contractor, Industrial and Process.
The Company specializes in equipment for applications that involve difficult-to-handle materials with high viscosities, materials with abrasive or corrosive properties and multiple-component materials that require precise ratio control. Graco sells primarily through independent third-party distributors worldwide to industrial and contractor end users. Graco’s business is classified by management into three reportable segments: Contractor, Industrial and Expansion 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 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.
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 2025. No impairment charges were recorded as a result of that review. Income Taxes.
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.
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 2026, the Company will use an investment return assumption of 7.5 percent for the funded U.S. plan. The 2025 rate assumed was 7.3 percent for the funded U.S. plan.
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.
A discussion of changes in our financial condition and the results of operations from the year ended December 27, 2024 compared to December 29, 2023 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 27, 2024.
The discussion is organized in the following sections: • Overview • Results of Operations • Segment Results • Financial Condition and Cash Flow • Critical Accounting Estimates Overview Graco designs, manufactures and markets systems and equipment used to move, measure, control, dispense and spray fluid and powder materials.
The discussion is organized in the following sections: • Overview • Results of Operations • Segment Results • Financial Condition and Cash Flow • Critical Accounting Estimates Overview Graco designs, manufactures and markets systems and equipment used to move, measure, mix, control, dispense and spray a wide variety of fluid and powder materials.
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.
See 23 Table of Contents 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 $6 million in 2025 and $15 million in 2024.
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.
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 2025, the Board of Directors increased the Company’s regular quarterly dividend from $0.275 to $0.295 per share, an increase of 7 percent. Cash Flow.
Although the Americas represent the majority of sales for the Process segment, management monitors indicators such as levels of gross domestic product, capital investment, industrial production, oil and natural gas markets and mining activity worldwide. 29 Table of Contents Financial Condition and Cash Flow Working Capital.
Although the Americas represent the majority of sales for the Expansion Markets segment, management monitors indicators such as levels of gross domestic product, capital investment, industrial production and oil and natural gas markets. 29 Table of Contents Financial Condition and Cash Flow Working Capital.
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.
Internally generated funds and unused financing sources are expected to provide the Company with the flexibility to meet its liquidity needs in 2026, including its capital expenditure plan of approximately $100 million, planned dividends estimated at $195 million, share repurchases and acquisitions.
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.
Mortality rates are based on current common group mortality tables for males and females. At December 26, 2025, a one-half percentage point decrease in the indicated assumptions would have the following effects (in millions): Assumption Funded Status Expense Discount rate $ (15.6) $ 1.7 Expected return on assets $ — $ 0.7 Goodwill and Other Intangible Assets.
Sales in the U.S. were $1,149 million in 2024 and $1,162 million in 2023. (2) Europe, Middle East and Africa.
Sales in the U.S. were $1,170 million in 2025 and $1,149 million in 2024. (2) Europe, Middle East and Africa.
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 .
The increase provided by current year earnings of $522 million was primarily offset by dividends of $185 million and share repurchases of $423 million. Other increases in shareholders' equity included share issuances, stock compensation and other comprehensive income of $157 million. Liquidity and Capital Resources .
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 .
Cash Flows Used in Investing Activities. Cash flows used in investing activities totaled $173 million in 2025, including $135 million for business acquisitions and $46 million for capital additions. 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 Financing Activities .
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.
The Company's other primary source of liquidity includes funds available through various debt financing arrangements. As of December 26, 2025, the Company had available liquidity of $1,401 million, including cash held in deposit accounts of $624 million, of which $192 million was held outside of the U.S., and available credit under existing committed credit facilities of $777 million.
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 .
A summary of cash flow follows (in millions): 2025 2024 Operating activities $ 683.6 $ 621.7 Investing activities (172.8) (342.8) Financing activities (576.0) (139.9) Effect of exchange rates on cash 14.0 (1.6) Net cash (used) provided (51.2) 137.4 Cash and cash equivalents at end of year $ 624.1 $ 675.3 Cash Flows From Operating Activities .
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.
At December 26, 2025, the Company’s capital structure included current notes payable of $23 million and shareholders’ equity of $2,654 million. At December 27, 2024, the Company’s capital structure included current notes payable of $29 million and shareholders’ equity of $2,584 million. Shareholders’ equity increased by $70 million in 2025.
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.
The following table highlights several key measures of asset performance (dollars in millions): 2025 2024 Working capital $ 1,004.6 $ 1,091.6 Current ratio 3.2 3.7 Days of sales in receivables outstanding 62 62 Inventory turnover (LIFO) 2.6 2.3 Lower cash and cash equivalent balances primarily drove decreases in working capital in 2025, in addition to increases in trade accounts payable and sales and earnings-based accruals.
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.
The following table presents the components of net sales change by geographic region: 2025 2024 Volume and Price Acquisitions Currency Total Volume and Price Acquisitions Currency Total Americas (1)% 3% 0% 2% (1)% 0% 0% (1)% EMEA 2% 10% 4% 16% (4)% 1% 1% (2)% Asia Pacific 1% 8% (1)% 8% (16)% 1% (1)% (16)% Consolidated 0% 5% 1% 6% (4)% 1% (1)% (4)% In 2025, net sales increased in all regions compared to 2024, driven mostly by acquisitions in the Contractor and Industrial segments.
The Company repurchased and retired 0.4 million shares in 2024, 1.4 million shares in 2023 and 3.6 million shares in 2022.
The Company repurchased and retired 5.2 million shares in 2025, 0.4 million shares in 2024 and 1.4 million shares in 2023.
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.
Cash flows used in financing activities totaled $576 million in 2025 and included dividends of $183 million and share repurchases of $423 million, partially offset by net proceeds from share issuances of $37 million.
The Company routinely monitors the potential impact of such situations and believes that liabilities are properly stated. Valuations related to amounts owed and tax rates could be impacted by changes to tax codes and the Company’s interpretation thereof, changes in statutory rates, the Company’s future taxable income levels and the results of tax audits.
Valuations related to amounts owed and tax rates could be impacted by changes to tax codes and the Company’s interpretation thereof, changes in statutory rates, the Company’s future taxable income levels and the results of tax audits.
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.
Results of Operations A summary of financial results follows (in millions except per share amounts): 2025 2024 Net Sales $ 2,236.6 $ 2,113.3 Operating Earnings 624.8 570.1 Net Earnings 521.8 486.1 Diluted Net Earnings per Common Share $ 3.08 $ 2.82 Adjusted (non-GAAP) (1) : Operating Earnings, adjusted $ 610.7 $ 577.8 Net Earnings, adjusted 498.8 477.1 Diluted Net Earnings per Common Share, adjusted $ 2.95 $ 2.77 (1) Excludes the impact of excess tax benefits from stock option exercises, contingent consideration fair value adjustments, certain non-recurring tax provision adjustments and prior year business reorganization charges.
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.
Management assesses the performance of segments by reference to operating earnings excluding unallocated corporate expenses and asset impairments.
These assets and liabilities are analyzed regularly, and management assesses the likelihood that deferred tax assets will be recoverable from future taxable income. A valuation allowance is established to the extent that management believes that recovery is not likely. Liabilities for uncertain tax positions are also established for potential and ongoing audits of federal, state and international issues.
A valuation allowance is established to the extent that management believes that recovery is not likely. Liabilities for uncertain tax positions are also established for potential and ongoing audits of federal, state and international issues. The Company routinely monitors the potential impact of such situations and believes that liabilities are properly stated.
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 also reviews gross domestic product for the regions and the level of the U.S. dollar versus the euro and other currencies.
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.
Net cash provided by operating activities was $684 million in 2025, up $62 million compared to 2024, due primarily to higher net earnings. Fewer inventory purchases in 2025 as part of an inventory 30 Table of Contents reduction program, as well as other decreases in working capital further contributed to the increase in cash provided by operating activities.
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.
The following table presents net sales and operating earnings by reporting segment (in millions): 2025 2024 Sales Contractor $ 1,071.9 $ 988.9 Industrial 996.8 958.0 Expansion Markets 167.9 166.4 Total $ 2,236.6 $ 2,113.3 Operating Earnings Contractor $ 270.3 $ 270.1 Industrial 334.6 311.7 Expansion Markets 41.5 31.5 Unallocated corporate (expense) (1) (35.7) (43.2) Contingent consideration 14.1 — Total $ 624.8 $ 570.1 (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): 2025 2024 Sales Americas $ 740.1 $ 721.6 EMEA 228.6 183.9 Asia Pacific 103.2 83.4 Total $ 1,071.9 $ 988.9 Operating Earnings as a Percentage of Sales 25 % 27 % The following table presents the components of net sales change by geographic region for the Contractor segment: 2025 2024 Volume and Price Acquisitions Currency Total Volume and Price Acquisitions Currency Total Americas (2)% 5% 0% 3% (2)% 1% 0% (1)% EMEA (2)% 22% 4% 24% (1)% 3% 0% 2% Asia Pacific (1)% 26% (1)% 24% 6% 6% (2)% 10% Segment Total (2)% 10% 0% 8% (1)% 2% (1)% 0% Contractor segment net sales growth for the year included $100 million from acquired operations, which more than offset continued softness in worldwide residential and non-residential construction markets.
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.
On December 5, 2025, the Board of Directors authorized the Company to purchase up to an additional 15 million shares of its outstanding stock. The authorizations are for an indefinite period of time or until terminated by the Board. As of December 26, 2025, approximately 23 million shares remain available for purchase under the authorization.
Operating Expenses Total operating expenses increased $38 million (7 percent) for 2024 compared to 2023.
Operating Expenses Total operating expenses decreased $4 million (1 percent) for 2025 compared to 2024.
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.
Investment in new product development in 2025 was $82 million, approximately 4 percent of sales. Operating Earnings Sales growth and decreased operating expenses led to a 10 percent increase in operating earnings.
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.
The increase in 2025 was largely due to variations in excess tax benefits from stock option exercises. Segment Results The Company has four operating segments which are aggregated into three reportable segments: Contractor, Industrial and Expansion Markets. Refer to Part I Item 1. Business, for a description of the Company’s three reportable segments.
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.
Expansion Markets Segment The following table presents net sales and operating earnings as a percentage of sales for the Expansion Markets segment (dollars in millions): 2025 2024 Sales Americas $ 101.2 $ 107.1 EMEA 27.9 27.0 Asia Pacific 38.8 32.3 Total $ 167.9 $ 166.4 Operating Earnings as a Percentage of Sales 25 % 19 % The following table presents the components of net sales change by geographic region for the Expansion Markets segment: 2025 2024 Volume and Price Acquisitions Currency Total Volume and Price Acquisitions Currency Total Americas (6)% 0% 0% (6)% (7)% 0% 0% (7)% EMEA 3% 0% 1% 4% (5)% 0% 1% (4)% Asia Pacific 20% 0% 0% 20% (34)% 0% 0% (34)% Segment Total 1% 0% 0% 1% (13)% 0% 0% (13)% Expansion Markets net sales increased 1 percent for the current year compared to last year.
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.
Changes in receivables were consistent with higher sales levels. Reductions to inventory levels in 2025 as the result of an inventory reduction program were offset by the effect of acquired inventory on working capital, but improved inventory turnover in 2025. The current ratio decreased in 2025 in line with the changes in working capital. Capital Structure.
This includes estimating current tax liability as well as assessing temporary differences resulting from different treatment of items for tax and financial statement purposes. These differences result in deferred tax assets and liabilities, which are recorded on the balance sheet using statutory rates in effect for the year in which the differences are expected to reverse.
These differences result in deferred tax assets and liabilities, which are recorded on the balance sheet using statutory rates in effect for the year in which the differences are expected to reverse. These assets and liabilities are analyzed regularly, and management assesses the likelihood that deferred tax assets will be recoverable from future taxable income.
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.
The operating margin rate for this segment in 2025 was 2 percentage points lower than 2024 as price realization and 2024 litigation costs that did not repeat were unable to offset higher product costs from increased tariffs and the lower margin rates of acquired operations.
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.
Industrial Segment The following table presents net sales and operating earnings as a percentage of sales for the Industrial segment (dollars in millions): 2025 2024 Sales Americas $ 511.7 $ 500.6 EMEA 271.0 243.3 Asia Pacific 214.1 214.1 Total $ 996.8 $ 958.0 Operating Earnings as a Percentage of Sales 34 % 33 % 28 Table of Contents The following table presents the components of net sales change by geographic region for the Industrial segment: 2025 2024 Volume and Price Acquisitions Currency Total Volume and Price Acquisitions Currency Total Americas 2% 0% 0% 2% 1% 0% 0% 1% EMEA 4% 3% 4% 11% (5)% 0% 0% (5)% Asia Pacific (2)% 2% 0% 0% (19)% 0% (1)% (20)% Segment Total 2% 1% 1% 4% (5)% 0% 0% (5)% Industrial segment net sales increased 4 percent for the year, including 1 percentage point each from acquired operations and favorable changes in foreign currency translation rates.
Excluding the impacts of those items presents a more consistent basis for comparison of financial results.
Excluding the impacts of those items presents a more consistent basis for comparison of financial results, which management believes is useful information to help investors and others evaluate the Company's performance relative to other similarly-situated companies.
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.
The operating margin rate for this segment increased approximately 1 percentage point for the year as price realization and expense leverage more than offset unfavorable product and channel mix from lower margin finishing system sales and higher product costs from increased tariffs.
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.
Gross Profit 26 Table of Contents The gross profit margin rate for 2025 decreased approximately 1 percentage point compared to 2024 as price realization was unable to offset higher product costs, including $14 million of increased tariff costs, and the unfavorable effect of lower margin rates of acquired operations.
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.
Other non-recurring tax provision adjustments from tax planning activities further reduced income taxes by $3 million in 2025. Operating earnings were increased by contingent consideration fair value adjustments of $14 million in 2025 and reduced by business reorganization charges of $8 million in 2024.
Cash flows used in financing activities totaled $268 million in 2023 and included share repurchases of $102 million (partially offset by net proceeds from share issuances of $60 million), dividends of $158 million, and net payments on long-term debt and outstanding lines of credit of $65 million.
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. 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.
Removed
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.
Added
Improved industrial and vehicle services end markets in the Americas were partially offset by continued softness in residential and non-residential construction markets. In EMEA, increased industrial and finishing system project activity led to higher sales in 2025.
Removed
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.
Added
Sales growth in China in 2025 from improved construction and semiconductor end markets more than offset reduced industrial activity in the rest of the Asia Pacific region.
Removed
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.
Added
Operating expenses for 2025 included $36 million of expenses from acquired operations and were mostly offset by a $14 million non-cash gain from the reduction in the fair value of acquisition-related contingent consideration recognized in the current year and $21 million of litigation and business reorganization costs from the prior year that did not repeat.
Removed
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.
Added
Operating earnings expressed as a percentage of sales in 2025 increased approximately 1 percentage point compared to 2024 primarily due to a $14 million non-cash gain from the reduction in the fair value of acquisition-related contingent consideration in 2025. Interest & Other (Income) Expense Interest expense for 2025 was flat compared to 2024.
Removed
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.
Added
Other income decreased $3 million in 2025 compared to 2024 and included higher exchange losses on net liabilities of certain foreign operations of $8 million and decreased interest income of $8 million.
Removed
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
Partially offsetting these items were a $5 million gain in 2025 from the sale of a former manufacturing and distribution facility in Switzerland and $2 million of favorable market valuation changes on investments held to fund certain retirement benefits. Income Taxes The effective income tax rate for 2025 was 19 percent, up 1 percentage point from 2024.
Removed
Net cash provided by operating activities was $622 million in 2024, down $29 million compared to 2023, due primarily to lower net earnings.
Added
Sales in the Americas represent the majority of sales for the Contractor segment, although an acquisition completed in 2024 expanded this segment's global geographic presence. Management regularly reviews economic and financial indicators for North America, including levels of residential, commercial and institutional construction, remodeling rates and interest rates.
Removed
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.
Added
Net sales growth in the semiconductor and electric motor product applications in 2025 was partially offset by decreases in the environmental and high-pressure valves product applications.
Added
The operating margin rate for this segment for the year increased 6 percentage points compared to last year mostly due to the favorable margin impact of upfront license fees in the electric motor product application.
Added
In the preparation of the Company’s consolidated financial statements, management calculates income taxes. This includes estimating current tax liability as well as assessing temporary differences resulting from different treatment of items for tax and financial statement purposes.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

6 edited+1 added−3 removed9 unchanged
Biggest changeThese 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.
Biggest changeThese risk factors include, but are not limited to, risks relating to the demand for our products and the level of commercial, industrial and construction activity worldwide; changes in currency translation rates; international and domestic instability; interest rate fluctuations and changes in credit markets; global sourcing of materials; inflationary cost pressures and our ability to raise prices without decreasing demand for our products; interruptions of or intrusions into our information systems; intellectual property rights; the use of generative artificial intelligence and other emerging technologies; 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 or tariff rates or the adoption of new tax or tariff legislation; and costs associated with legal proceedings; and other risks and uncertainties including those discussed in Item 1A of this Form 10-K.
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.
From time to time various forms filed by our Company with the Securities and Exchange Commission, including our Form 10-K, Form 10-Qs and Form 8-Ks, and other disclosures, including our 2025 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.
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.
At December 26, 2025, 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, Brazilian real 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 2024, changes in currency translation rates reduced sales by approximately $6 million and reduced net earnings by approximately $3 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 2025, changes in currency translation rates increased sales by approximately $13 million and increased net earnings by approximately $3 million.
At 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.
At January 26, 2026 exchange rates, assuming the same volumes, mix of products and mix of business by currency as in 2025, the movement in foreign currencies would have a favorable impact of approximately 1 percentage point on net sales and net earnings for 2026. The Company's backlog is not a good indicator of future long-term business levels.
As a result, the Company's outlook for 2025 is low single-digit revenue growth on an organic, constant currency basis.
For 2026, the Company expects low single‑digit organic sales growth on a constant‑currency basis and mid‑single‑digit sales growth on a constant‑currency basis including acquisitions.
Removed
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
In 2024, changes in currency translation rates reduced sales by approximately $3 million and reduced net earnings by approximately $3 million. 2026 Outlook Entering 2026, Graco remains committed to its key initiatives: driving product innovation, pursuing strategic acquisitions, and advancing the One Graco operating model.
Removed
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.
Removed
The Company's backlog is not a good indicator of future long-term business levels.

Other GGG 10-K year-over-year comparisons