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Graco Inc. (NYSE: GGG) is a global leader in fluid and coating management technologies. The company designs, manufactures, and markets systems and equipment that move, measure, control, dispense, and spray fluid and coating materials. Its products serve a wide range of industries, including construction, automotive, aerospace, food and beverage, and oil and gas.
- Contractor - Markets sprayers and equipment for applying paint, texture, insulation, and coatings to surfaces, serving professional painters, specialty contractors, tradesmen, and do-it-yourselfers.
- Industrial - Provides equipment and solutions for moving and applying paints, coatings, sealants, adhesives, and other fluids, catering to industries such as automotive, aerospace, marine, and construction.
- Process - Offers pumps, valves, meters, and accessories for dispensing chemicals, oil, water, food, and other fluids, supporting industries like food and beverage, oil and gas, and pharmaceuticals.
| Name | Position | External Roles | Short Bio | Start Date |
|---|---|---|---|---|
Mark W. Sheahan ExecutiveBoard | President and CEO | Board of Managers, Fernweh Group, LLC | Joined Graco in 1995; became CEO in June 2021; previously CFO and Treasurer; extensive experience in manufacturing, finance, and administration. | June 2021 |
Angela F. Wordell Executive | EVP, Operations | None | Joined Graco in 1993; became EVP, Operations in January 2022; previously led Oil & Natural Gas Division and strategic sourcing. | January 2022 |
Christopher D. Knutson Executive | EVP, Corporate Controller | None | Joined Graco in 2008; became EVP, Corporate Controller in May 2023; previously held roles in treasury, investor relations, and regional finance. | May 2023 |
Claudio Merengo Executive | President, Worldwide Powder Division | None | Joined Gema (acquired by Graco) in 1994; became President, Worldwide Powder Division in February 2024; previously led Gema and ITW Finishing Group. | February 2024 |
David M. Lowe Executive | CFO and Treasurer | None | Joined Graco in 1995; became CFO in June 2021; previously held leadership roles in multiple divisions, including Process and Industrial Products. | June 2021 |
Joseph James Humke Executive | EVP, General Counsel and Corporate Secretary | None | Joined Graco in July 2021; previously a partner in M&A and private equity practice groups at Ballard Spahr LLP. | July 2021 |
Kathryn L. Schoenrock Executive | EVP and CIO | None | Joined Graco in 2012; became EVP and CIO in February 2024; previously EVP, Corporate Controller and CTO. | February 2024 |
Laura L. Evanson Executive | EVP, Marketing | None | Joined Graco in 2008; became EVP, Marketing in January 2023; previously led marketing for Lubrication Equipment Division and South and Central America. | January 2023 |
Peter J. O’Shea Executive | President, Worldwide Lubrication Division | None | Joined Graco in 1995; held leadership roles in multiple divisions and regions, including South and Central America. | July 2021 |
Ronita Banerjee Executive | EVP, Chief Human Resources Officer | None | Joined Graco in May 2023; previously held HR leadership roles at Westinghouse, Honeywell, and General Mills. | May 2023 |
Timothy R. White Executive | President, Worldwide Process Division | None | Joined Graco in 1992; became President, Worldwide Process Division in June 2021; previously led subsidiaries and regional operations. | June 2021 |
Archie C. Black Board | Director | Director at SPS Commerce, Inc. and Proto Labs, Inc. (Chairman) | Joined Graco’s Board in February 2023; former CEO of SPS Commerce; expertise in leveraging technology to improve business processes. | February 2023 |
Brett C. Carter Board | Director | None | Joined Graco’s Board in February 2021; former EVP at Xcel Energy; expertise in operations, marketing, and IT. | February 2021 |
Eric P. Etchart Board | Director | Director at Alamo Group Inc., WD-40 Company, and UPERIO Group | Joined Graco’s Board in 2010; extensive global manufacturing experience; chairs ESG committees at UPERIO Group. | 2010 |
Heather L. Anfang Board | Director | Board Member at Eggland’s Best, Innovation Center for U.S. Dairy, Consumer Brands Association | Joined Graco’s Board in May 2023; President, Dairy Foods at Land O’Lakes; extensive experience in marketing and operations. | May 2023 |
J. Kevin Gilligan Board | Chair of the Board | None | Joined Graco’s Board in 2001; became Chair in February 2024; extensive experience in construction and public company leadership. | February 2024 |
Jody H. Feragen Board | Director | Director at Patterson Companies, Inc. | Joined Graco’s Board in 2015; former CFO of Hormel Foods; expertise in finance and governance; Chair of Graco’s Audit Committee. | 2015 |
Kevin J. Wheeler Board | Director | Chairman, President, and CEO of A. O. Smith Corporation | Joined Graco’s Board in February 2020; extensive experience in sales, manufacturing, and international operations. | February 2020 |
Martha A. Morfitt Board | Director | Chair of the Board at lululemon athletica inc.; Director at Olaplex Holdings, Inc. | Joined Graco’s Board in 1995; extensive marketing and leadership experience; former CEO of CNS, Inc.. | 1995 |
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Given the significant decline in the Process segment sales, down 12% compared to the same quarter last year due to continued weakness in the semiconductor and mining markets and a slowdown in vehicle service business, with decremental margins of nearly 60%, what specific strategies are you implementing to mitigate these declines and improve profitability in this segment?
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Considering that over 90% of the overall revenue decline in the quarter, and over 60% year-to-date, was attributed to the decrease in China revenue across the Industrial and Process segments due to broad-based weakness and overcapacity in key end markets, how do you plan to address the challenges in China, and when do you expect to see a recovery in that market?
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With the recent acquisitions of PCT Systems and Corob, and the formation of the new Expansion Markets division aiming to drive inorganic growth, how will you ensure these investments lead to meaningful growth given that the organic growth in these segments isn't expected to be vastly different from Graco's overall growth, and what metrics will you use to measure success?
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Your operating expenses increased by $9 million or 7% in the quarter due to new product development spending, growth initiatives, and other items, while operating margins declined. With the adoption of the new global customer-centric operating structure in 2025, how will you balance the increased costs associated with this restructuring against the need to improve margins, and what specific cost savings do you anticipate?
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Given the 8% decrease in reported and adjusted net earnings to $122 million, and cash provided by operations decreasing by $55 million from last year, primarily due to inventory purchases related to new product launches and lower net earnings, what measures are you taking to improve cash flow, and how sustainable are your capital allocation plans, including share repurchases and dividends, under these conditions?
Notable M&A activity and strategic investments in the past 3 years.
| Company | Year | Details |
|---|---|---|
Corob S.p.A. | 2024 | Graco Inc. acquired Corob S.p.A. for €230 million with up to an additional €30 million in contingent consideration, funded with cash on hand. The strategic rationale was to strengthen its paint and coating machinery capabilities and expand its global footprint, particularly in Asia Pacific and India, by leveraging Corob’s advanced dispensing and mixing equipment. |
Acquired businesses (Q1 2022) | 2022 | Graco Inc. completed a $25 million acquisition, net of cash acquired, where the acquired business was not material to the company’s consolidated financial statements; no further strategic details or key capabilities were provided. |
Recent developments and announcements about GGG.
Earnings
New Earnings (Q4 2024)
·Jan 28, 2025, 5:49 PMView full earnings summary →Despite soft Q4 orders, GGG sees low single-digit organic growth in 2025, aided by 4–5% from Corob. Reorg yields $16M in annual savings, offsetting 2024’s $16M litigation hit. Powder Coatings' backlog remains robust, supporting a positive earnings outlook.