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GRACO REPORTS IMPROVED FIRST QUARTER OPERATING RESULTS

 GRACO REPORTS IMPROVED FIRST QUARTER OPERATING RESULTS
 MINNEAPOLIS, April 20 /PRNewswire/ -- Graco Inc. (NYSE: GGG) today


announced operating results for its first quarter (13 weeks) ended March 27, 1992. Sales for the quarter were $72,885,000, an increase of 8 percent from the first quarter of 1991. Net earnings for the period were $1,934,000, or 25 cents per share, compared with $185,000, or 2 cents per share, in the 1991 period.
 Results for the 1992 period do not include sales of Graco's robotic spray painting business, which was sold at the end of the second quarter last year. If robotic sales are removed from the comparison, Graco's first quarter sales were up nearly 17 percent from a weak first quarter in 1991.
 Company Chairman and Chief Executive Officer David A. Koch said, "We are pleased with the growth in sales and improved operating profitability which occurred in the first quarter. Higher unit sales volume, particularly contractor equipment in the Americas, generated greater manufacturing efficiencies and higher gross profit margins."
 Sales in the Americas for the quarter increased 9 percent to $47,025,000 with strong sales increases in the Contractor Equipment Division and solid gains in sales of industrial equipment. Partially offsetting these increases was a decline in sales of paint circulating systems to automotive manufacturers. Sales in Europe increased by 3 percent to $14,549,000. The gain resulted from increased sales of standard products in both painting contractor and industrial markets, offset by the effect of a stronger U.S. dollar. Sales in the Pacific of $11,311,000 were 10 percent higher than in 1991, resulting from a stronger Japanese yen and increased sales of equipment to industrial markets.
 Gross margins increased to 51 percent of sales from 49 percent in the first quarter of 1991 as the result of a higher proportion of more profitable standard product sales, and lower amounts of unabsorbed manufacturing overhead, as the result of increased production.
 Operating expenses increased 4 percent to $32,787,000 for the first quarter of 1992 as compared with $31,624,000 for the same period in 1991. Operating profit of $4,109,000 for the first three months was up substantially from $1,380,000 for the same period in 1991.
 Backlog at March 27, 1992 was $32 million and equal to the backlog on Dec. 27, 1991. The decline in backlog from $43 million on March 29, 1991 results from the sale of the company's robotics business and the delivery of certain large paint circulating systems.
 Koch commented, "We are encouraged by the strength of our bookings and the improving economic outlook in the Americas, however, we remain cautious about the potential for a slowdown in business activity in certain of our overseas markets, particularly Japan and Germany. We expect improved gross margins to continue in 1992 as a result of the shift of sales mix to more profitable standard products and increased production levels."
 Graco Inc. supplies technology and expertise for the management of fluids for both industrial and commercial applications. It designs, manufactures and markets systems and equipment to move, measure, control, dispense and apply fluid materials. A recognized leader in its specialties, Minneapolis-based Graco serves customers around the world in the manufacturing, processing, construction and maintenance industries.
 GRACO, INC. AND SUBSIDIARIES
 CONSOLIDATED STATEMENTS OF EARNINGS
 (In thousands, except First Quarter (13 Weeks) Ended
 per share amounts) March 27, 1992 March 29, 1991
 NET SALES $ 72,885 $67,489
 Cost of products sold 35,989 34,485
 GROSS PROFIT 36,896 33,004
 Product development 2,630 3,167
 Selling 20,267 19,934
 General and administrative 9,890 8,523
 OPERATING PROFIT 4,109 1,380
 Interest expense 752 1,006
 Other expense, net 73 64
 EARNINGS BEFORE INCOME TAXES 3,284 310
 Income taxes 1,350 125
 NET EARNINGS $1,934 $185
 NET EARNINGS PER COMMON SHARE $.25 $.02
 WEIGHTED AVERAGE NUMBER OF
 COMMON SHARES 7,540 7,377
 All figures are subject to audit and adjustment at the end of the fiscal year.
 -0- 4/20/92
 /CONTACT: Roger L. King, 612-623-6700, or David L. Schoeneck 612-623-6679, both of Graco/
 (GGG) CO: Graco, Inc. ST: Minnesota IN: SU: ERN


AL -- MN009 -- 0001 04/20/92 11:20 EDT
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Publication:PR Newswire
Date:Apr 20, 1992
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