Growth in contractor and Asia Pacific sales led a blockbuster third quarter for Graco Inc., which has posted double-digit percentage revenue growth for the quarter and the year to date across all divisions and regions.
Like other coatings-related companies, the Minneapolis-based spray equipment manufacturer turned in a strong performance for the quarter and the year to date.
Net sales for the quarter ended Sept. 24 increased by 29% over 2009, to $190 million, the company reported. Year-to-date sales totaled $546.8 million, a 26% increase over 2009.
Net earnings increased by 76% over 2009 for the third quarter and 139% over 2009 for the year to date. Diluted net earnings per common share increased by 72% for the quarter, to 50 cents, and by 136% for the year to date, to $1.25.
New Product Sales Strong
Sales of new products boosted the Contractor segment. Contractor segment sales increased 27% for the quarter and 19% year-to-date, including gains for the quarter of 29% in the Americas and 30% in Europe (41% at consistent translation rates).
Industrial segment sales increased 27% for the quarter and 31% year-to-date, with the strongest percentage growth in Asia Pacific (up 40% for the quarter and 55% year-to-date). Lubrication segment sales increased 49% for the quarter and 29% year-to-date, with strong increases in all regions.
“Revenue growth continued to drive improved earnings,” said president and CEO Patrick J. McHale. “Sales gains were strong worldwide, with increases in excess of 20% in all regions.
“We are particularly pleased with the revenue performance of our Contractor segment, which was able to grow with new products despite the depressed conditions in major construction markets.
“Operating margins in our Industrial and Lubrication businesses improved nicely on strong top-line performance, driven by improved economic conditions, new products and solid global execution.”
Optimism on Recovery
Higher volume and leveraging of expenses drove continued improvement in operating earnings, particularly in the Industrial and Lubrication segments. In the Contractor segment, operating margin percentages were steady, the company said.
“Although we expect construction markets in the U.S. and parts of Europe will remain in difficult shape for the near term, we are optimistic that the global industrial recovery will continue,” said McHale.
“During the recession, we continued to invest heavily in new product development and international expansion. We are pleased with the resulting flow of exciting new products, from every division, that are contributing to our growth performance, and with the continued strengthening of our teams, infrastructure and channel in Europe and Asia Pacific. ”
Graco’s Contractor Equipment division offers spray equipment designed for professional painting contractors. The Industrial Equipment division provides fluid handling equipment for a wide variety of spray finishing, chemical transfer, sealant, adhesives, lubrication and proportioning applications. The Lubrication Equipment division manufactures products used to dispense, meter and transfer motor and gear oils, grease, hydraulic & transmission fluids, anti-freeze and specialty lubricants.