GRACO INCGGG
GRACO INC Segments Disclosure
Segment Information
Sales to Major Customers. Worldwide sales to one customer in the Contractor and Industrial segments individually represented over 10 percent of the Company’s consolidated sales in 2025, 2024 and 2023.
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. 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. 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. Prior year segment information has been recast to conform to the current organizational structure.
The Company has four operating segments which are aggregated into three reportable segments: Contractor, Industrial and Expansion Markets.
The Contractor segment markets sprayers and equipment that apply paint to walls and other structures, texture to walls and ceilings, insulation to building walls and other items, highly viscous coatings to roofs, markings on roads, parking lots, athletic fields and floors and high-performance volumetric and gravimetric dispense, mixing, and shaking equipment.
The Industrial segment includes our Industrial and Powder divisions. 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. 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 Powder division makes powder finishing products and complete powder finishing systems that coat powder on metals. Markets served include automotive and vehicle assembly and components production, including Electro or e-mobility, wood and metal products, rail, marine, aerospace, farm, construction, bus, recreational vehicles and various other industries.
The Expansion Markets segment markets and manufactures 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. 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. Markets served include oil and natural gas, environmental, electronics, industrial, renewable energy, semiconductor fabrication and wastewater.
The accounting policies of the segments are the same as those described in the summary of significant accounting policies. The cost of manufacturing for each segment is based on product cost, and expenses are based on actual costs incurred along with cost allocations of shared and centralized functions based on activities performed, sales or space utilization. Depreciation expense is charged to the manufacturing or operating cost center that utilizes the asset and is then allocated to segments on the same basis as other expenses within that cost center. Segments are responsible for development, manufacturing, marketing and sales of their products. This allows for focused marketing and efficient product development. The segments share common purchasing, certain manufacturing, distribution and administration functions.
The Company’s chief operating decision maker is the chief executive officer.
The Company’s chief operating decision maker uses operating earnings excluding unallocated corporate expense to assess the operating performance of each segment. Operating earnings is used to make resource allocation decisions amongst segments and to determine compensation for certain employees. Gross profit is additionally used to evaluate product pricing and operating performance.
Unallocated corporate expenses include such items as stock compensation, certain acquisition transaction costs, bad debt expense, charitable contributions and certain facility expenses. Asset information by segment is not reported to the chief operating decision maker and therefore is not disclosed.
Segment information follows (in thousands):
| 2025 | 2024 | 2023 | ||||||||||||||||||
| Contractor | ||||||||||||||||||||
| Net Sales | $ | 1,071,878 | $ | 988,865 | $ | 985,675 | ||||||||||||||
| Cost of products sold | 552,798 | 484,926 | 493,857 | |||||||||||||||||
| Gross Profit | 519,080 | 503,939 | 491,818 | |||||||||||||||||
| Operating Expenses | 248,772 | 233,795 | 206,424 | |||||||||||||||||
| Contractor Operating Earnings | $ | 270,308 | $ | 270,144 | $ | 285,394 | ||||||||||||||
| Industrial | ||||||||||||||||||||
| Net Sales | $ | 996,814 | $ | 958,023 | $ | 1,018,142 | ||||||||||||||
| Cost of products sold | 423,938 | 413,038 | 440,598 | |||||||||||||||||
| Gross Profit | 572,876 | 544,985 | 577,544 | |||||||||||||||||
| Operating Expenses | 238,290 | 233,275 | 221,550 | |||||||||||||||||
| Industrial Operating Earnings | $ | 334,586 | $ | 311,710 | $ | 355,994 | ||||||||||||||
| Expansion Markets | ||||||||||||||||||||
| Net Sales | $ | 167,912 | $ | 166,428 | $ | 191,788 | ||||||||||||||
| Cost of products sold | 78,344 | 86,013 | 93,937 | |||||||||||||||||
| Gross Profit | 89,568 | 80,415 | 97,851 | |||||||||||||||||
| Operating Expenses | 48,072 | 48,905 | 54,518 | |||||||||||||||||
| Expansion Markets Operating Earnings | $ | 41,496 | $ | 31,510 | $ | 43,333 | ||||||||||||||
| Reportable Segment Operating Earnings Total | $ | 646,390 | $ | 613,364 | $ | 684,721 | ||||||||||||||
| Unallocated corporate expense | 35,654 | 43,266 | 38,678 | |||||||||||||||||
| Contingent consideration | (14,061) | — | (8,600) | |||||||||||||||||
| Impairment | — | — | 7,800 | |||||||||||||||||
| Operating Earnings | 624,797 | 570,098 | 646,843 | |||||||||||||||||
| Interest expense | 2,893 | 2,828 | 5,191 | |||||||||||||||||
| Other (income) expense, net | (19,296) | (22,013) | 32,850 | |||||||||||||||||
| Earnings Before Income Taxes | $ | 641,200 | $ | 589,283 | $ | 608,802 | ||||||||||||||
Geographic information follows (in thousands):
| 2025 | 2024 | 2023 | |||||||||||||||
| Net Sales (based on customer location) | |||||||||||||||||
| United States | $ | 1,169,881 | $ | 1,149,044 | $ | 1,161,607 | |||||||||||
| Other countries | 1,066,723 | 964,272 | 1,033,999 | ||||||||||||||
| Total | $ | 2,236,604 | $ | 2,113,316 | $ | 2,195,606 | |||||||||||
| Long-lived Assets | |||||||||||||||||
| United States | $ | 600,011 | $ | 635,698 | |||||||||||||
| Other countries | 155,053 | 135,958 | |||||||||||||||
| Total | $ | 755,064 | $ | 771,656 | |||||||||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 17, 2026 | Showing above |
| 2024 | Feb 18, 2025 | |
| 2023 | Feb 20, 2024 | |
| 2022 | Feb 21, 2023 | |
| 2021 | Feb 22, 2022 | |
| 2020 | Feb 16, 2021 | |
| 2019 | Feb 18, 2020 | |
| 2018 | Feb 19, 2019 | |
| 2017 | Feb 20, 2018 | |
| 2016 | Feb 21, 2017 | |
| 2015 | Feb 16, 2016 | |
About Segments Disclosures
Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.
Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.