Exhibit 99

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

     Graco Inc. (the  "Company")  wishes to take  advantage of the "safe harbor"
provisions  regarding  forward-looking  statements  of  the  Private  Securities
Litigation  Reform Act of 1995 and is filing this Cautionary  Statement in order
to do so.

     From time to time various  forms filed by the Company  with the  Securities
and Exchange  Commission,  including the Company's Form 10-K, Form 10-Q and Form
8-K, its Annual  Report to  Shareholders,  and other  written  documents or oral
statements  released by the  Company,  may contain  forward-looking  statements.
Forward-looking  statements  generally  use words such as  "expect,"  "foresee,"
"anticipate,"   "believe,"   "project,"   "should,"   "estimate,"   and  similar
expressions,  and reflect the Company's expectations concerning the future. Such
statements are based upon currently available information, but various risks and
uncertainties  may cause the Company's actual results to differ  materially from
those expressed in these statements. Among the factors which management believes
could affect the Company's operating results are the following:

     o    With  respect to the  Company's  business  as a whole,  the  Company's
          prospects and operating results may be affected by:

          -    changing economic conditions in the United States and other major
               world economies,  including  economic downturns or recessions and
               foreign currency exchange rate fluctuations;

          -    international  trade factors,  including changes in international
               trade policy, such as trade sanctions,  increased tariff barriers
               and  other  restrictions,  weaker  protection  of  the  Company's
               proprietary  technology in certain foreign countries,  the burden
               of complying  with foreign laws and  standards,  and  potentially
               adverse taxes;

          -    the  ability  of  the  Company  to  develop  new   products   and
               technologies,  maintain and enhance its market position  relative
               to  its  competitors,   maintain  and  enhance  its  distribution
               channels,  realize productivity and product quality improvements,
               and continue to control expenses.

          -    the  ability  of  the  Company  and  its  suppliers,   customers,
               creditors  and  financial  service   organizations  to  implement
               information   processing   software   and   hardware   that  will
               accommodate the Year 2000;

          -    disruption in operations, transportation,  communication, sources
               of supply, customer operations or payment, caused by political or
               economic instability,  acts of God, labor disputes, war, embargo,
               fire or other cause beyond its reasonable control.

          -    changes  in  the  markets  in  which  the  Company  participates,
               including consolidation of competitors and major customers.

     o    The  prospects  and  operating  results  of the  Company's  Contractor
          Equipment  Division  may be affected  by:  variations  in the level of
          residential,  commercial  and  institutional  building and  remodeling
          activity;  the  availability  and cost of  financing;  changes  in the
          environmental  regulation  of  coatings;  consolidation  in the  paint
          equipment  manufacturing  industry;  changes in construction materials
          and  techniques;  the cost of labor in foreign  markets;  the regional
          market  strength  of  certain  competitors;  the  level of  government
          spending on infrastructure development,  road construction and repair;
          and the nature and extent of highway safety regulation.

     o    The    prospects    and    operating    results   of   the   Company's
          Industrial/Automotive  Equipment  Division  may be  affected  by:  the
          capital  equipment  spending  levels  of  industrial  customers;   the
          availability   and  cost  of  customer   financing;   changes  in  the
          environmental  regulation  of  coatings;   changes  in  the  technical
          characteristics of materials;  changes in application technology;  the
          ability of the Company to meet  changing  customer  requirements;  the
          equipment purchase plans of major automobile  manufacturers  worldwide
          (which  are  in  turn  impacted  by  the  level  of  automotive  sales
          worldwide); changes in automotive manufacturing processes; the pricing
          strategies   of   competitors;   consolidation   in   the   automobile
          manufacturing  industry  worldwide;  and the success of the Company in
          moving its automotive customers from custom-designed systems purchased
          directly  from the  Company to the  purchase of package  modules  sold
          through integrators and distributors.

     o    The  prospects  and  operating  results of the  Company's  Lubrication
          Equipment  Division  may be  affected  by  consolidation  in  the  oil
          industry,  the  development of extended life  lubricants for vehicles,
          the  reduction  in the  need  for  changing  vehicle  lubricants,  and
          variations  in  the  equipment   spending  levels  of  the  major  oil
          companies.