Graco (GGG) 22 Apr 212021 Q1 Earnings call transcript

Company Profile

Participants

Kathy Schoenrock	EVP and Corporate Controller
Pat McHale	President and CEO
Mark Sheahan	CFO and Treasurer
Joe Ritchie	Goldman Sachs
Deane Dray	RBC Capital Markets
SareeBoroditsky	Jefferies
Mike Halloran	Baird
Bryan Blair	Oppenheimer
Jeff Hammond	KeyBanc
Matt Summerville	D.A. Davidson
Drew Buscaglia	Berenberg
Walter Liptak	Seaport Global

Call transcript

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Operator

Good morning and welcome to the First Quarter Conference Call for Graco Inc.

If you wish to access the replay for this call, you may do so by dialing 855-859-2056 within the United States or Canada. The dial-in number for international callers is 404-537-3406. The conference ID number is 6165727. The replay will be available through 2:00 PM Eastern Time, Thursday, April 29. available part PowerPoint of information is presentation additional as available the has in slide the which Graco webcast player. this their prospects During by Instructions] call, may remarks [Operator be management about the expectations, for and plans future. various made the These of harbor Securities Reform the Private purpose Act. remarks the statements of safe forward-looking Litigation constitute for provisions XX-K Actual of XA including Form factors, in Item in various of Report differ company's and those quarterly from Annual Form XX-Q. indicated those of most materially may XA risk results as result XXXX the the a Item recent on identified on company's report These www.sec.gov. website at are www.graco.com at on website SEC's reports the available and company's the

reflect information the call time President, these I to statements as update Corporate turn current made. or only will in now no speak of they of light Executive future obligation Forward-looking statements the Schoenrock, Vice Controller. events. new views The management's over and are company Kathy to undertakes

Kathy Schoenrock

Good everyone. with you, Thank this and Mark morning McHale Pat morning, Sheahan. Josh. I'm here

conference for million from $XXX.X benefits adjusting earnings totaled added we pricing $XXX year call on mix material you XX% Sales quarter XXX from quarter last have helpful. first saw website strong percentage After net costs the factory or totaled quarter, factory per quarter, performance remainder contractor translation our growth or from million $X.XX up of increase quarter. impact earnings and the diluted the the stock segment. points $X.XX approximately growth last year. share. for $XX of rate. negatively of realized our first an volumes rates. related quarter, exercises, find may lower information quarter on impacted X impact net million in margin the $XXX.X cost as that translation, material were partially provide the excess posted option effects additional We at currency from material gross Reported the will offset rates which per the in or tax diluted year volumes, the in increase and and the strong consistent of that costs share. increase the of an effect XX% Our in of translation The by and higher million been for slides unfavorable to basis margin margin favorable expect significant were factory pricing the throughout first were offset Gross to currency current of the continue points and the operating At of

in of or logistics disruptions with availability address capacity The across and working to to have currently of not disruptions manufacturing manufacturing any purchasing had losing lines component orders teams chain shutdown. supply our quarter the experienced are regards these also are and most We our we factories. and

non-operating quarter. increased in certain to quarter $X.X million translation, to Based in be to year. us to million the current higher were quarter, to on quarter. decrease estimated as is X which half liabilities. were dividends compared the due earnings A challenges totaled market due of in to quarter, operations in our will XX% rate to excess the continue an the growth effect million improvement stock Capital on in million. $X paid occurring points initiatives. the of related the and investments the in in and in expect an continue increase in $XX of $XXX effect first expenses for sales held the comments expenditures of a million, We invest tailwind last continue decreased tax as we Cash was with retirement flows expenses fund $XX Operating to a currency from quarter $X the in rates, product to few the for the year than percentage valuation this to including tax currency rest to million these year, $XX sales majority the due last $XX.X year. exercises. first $X effective expenses Other the first X% earnings option development earnings The The we benefit was of benefits million in of the look new to second based and full year. exchange significant impact of translation million and million be increases related of forward on most with X% increase

and expect We can million unallocated approximately $XX by be vary corporate quarter. to expense

XX% rate tax be be year tax excess stock to expenditures approximately estimated to $XXX million, facility are related excluding expected any million $XX to full Capital XX%, projects. option expansion XXXX Our to for including is benefits effect from exercises.

will over fourth the discussion. be Pat XXXX a week year I'll the the week call to Finally, extra for in turn XX with quarter. further segment regional occurring and now

Pat McHale

Thank you, everyone. Kathy. Good morning,

solid on a which was as delivered an with currency in constant region be of EMEA exception segment will every morning in basis. this process down low-single-digits. comments growth my organic of quarter and every the was we All QX

discretionary year, volume the see propane America continues working with and I In material improvement our both management purchasing, recognize supply and activity both growth XX% and issues dealing sales and as benefited center operating to of improvement the categories. to segment strong were remains do good out-the-door product revenue Overall segment gas quarter, the incoming in product and major this remain head throughout was on market oil half. up second robust. in access. we're regions. in and remains segment factory manufacturing, to prices. growth Similar key hard particularly by and Contractor for improved of end A major addition our chain orders broad-based to North continued demand. up in improving performance order home construction strong to business Asia The our end warehousing sales with solid to logistics the exception many performance with quarter. and external grew the improving is folks Contractor for the keep expense with vendors. with the Contractor and continued with demand Americas and second in strong the QX during Incoming industrial facilities quarter. were quarter growth in All successfully of the and however, the remains rates rising couple the all Order all outside quarter, grew Residential all earnings Favorable quarter. conditions, sales The earnings categories comments with outlook our as we get teens want Process in to in customer market for positive rates comparisons drove market year's solid last commercial Industrial tougher home outlook much teams, solid with second trough. was the our accelerated exceeded broad-based markets for Pacific. low record and into regions the as specifically begin end from reopen throughout QX quarter. during

a So QX. we expect good

comparisons more in difficult will business QX accelerated significantly get Second as and our half QX.

and who for closing, our customer to is meet to long-term to Although the growth employees, environment strategies ready want all continue In we our Operator, demands. pursue suppliers distributor aggressively second of half I economic partners will and we're continue work questions. key investments. to thank hard uncertain,

Operator

with Instructions] Sachs. Goldman you. [Operator Thank Joe first from Our Ritchie question comes

proceed You with your may question.

Joe Ritchie

talking investors supply one that curious, lot been has and really quarter. saw was Hey, in of to just impact we've I didn't things we the Great a that margins. inflation. on about seem chain your drop quarter Pat. It based to been the the

also what about seeing talk side you're and businesses just maybe the - those Just side? your across the along on inflation both supply chain different

Pat McHale

obviously would it. Yes, better have margins without been

think of and performance to we good with job I factory a did the offset impact that. pricing

still it, really obviously but not you're there. it's So seeing

can't for anticipating to chain so have problem parts to try here And been team go a models be successfully got point, things a I'm to They've come to but all big going. piece be we got you to XXX hard side, to big expedite or quarter. this to have effort keep find done as of parts that's supply waiting I'm there, the while equipment, over you going missing On at and not one throughout anticipating that the switch to they're forward, has in. substitutions to if to or have the a scrambling you in XXX you

So okay. been it's been challenging. surviving, We're but it's certainly

Joe Ritchie

as strength where can color you a Okay, stated, and around pickup fair provide versus others haven't take seeing end guess of I you're you there on the be kind really at any particular color the you where seen any a acceleration helpful. then the Just Industrial business, throughout And you that enough. seeing yet? you're look improvement that would is other much of markets

Pat McHale

softer being that think I really market probably No, gas. out still oil we calling only are is and the is

continue. I upon I and that generally broad-based what I'm been think going has based pretty improvement and to optimistic seeing the hearing feel that's

Joe Ritchie

thinking are different kind M&A seeing one. one we're Okay, about this like portfolio, I'm own - that last from on are businesses? just space. you across adjacencies great. your of your you're mean out A maybe M&A space, for the the a across curious and both perspective year has as big Maybe what also for an there been building I hearing lot divestitures across

Pat McHale

just Mark with has. Well, say he let thoughts I'll it's that I'll expensive any that and weigh-in

Mark Sheahan

but the returning capital there should M&A obviously best - committed play forward. and big Yes, of still can, to think we shareholders that part are I that we're high. we is still doing Pricing our going job a that to

shake going there. that see to what's to we're the think continue out and I bushes

would in world-class partnering great when got Graco to think lot it does the a I bring brand. that We interesting potential party with be comes manufacturing. to We've us. companies a got

We have channel. We sales. got

the around world. representation have We

So see our the being that leverage here. matter some to we'll do to try best deals to we those and it's good things bring of and able are things strategic and home a

Operator

next D.A. Our Matt Davidson. comes with Summerville from question

question. state may your You

Matt Summerville

Thanks.

it hurt So auto. or in on projects just sporadic your all deferred. in that a folks are catch business quick to maybe Have have maybe gotten shutdowns helped at capital sense industry that up looking one even that these the on

specifically? maybe detail So could around you speak little more auto a

Pat McHale

the Yes, I think that planned that's parts think plants volume. I XX% aren't about as and is running And of upon are sporadic we're shutdowns. and better accessories based good business when as shutdowns

improving. of we're of but Industrial I bit implant will market that ding little again come a sure is So there is - getting And along automotive kind whole a I'm overall, that. with think the that there,

Matt Summerville

what a in input price given seen price Thank did we've you. more would you as than just realize the expect what how favorable realization taking you giving And steel to aluminum, and would that and the like cost spread do increases price normally 'XX year? you be things up then environment Graco cost - terms of throughout - in and the end as move follow-up, guys

Pat McHale

kind anywhere at range It's when and to one we our up beyond directly prices Yes, a take consider market. pricing look no, factors material we in pricing that jag we what's of don't the of tie didn't an to basis. many annual on we happening typically normal the

that as well. to weigh-in So And that I could would think price be you I'll past years. expect Mark similar let realization

Mark Sheahan

it's no, expect to in X% Yes, that's I think that we'd range, Matt. what X.X%

Operator

comes question next KeyBanc. Jeff from Our Hammond with

You question. may proceed with your

Jeff Hammond

on. luck guys. good of you here move Best Hey, Pat to morning as you

Pat McHale

Thank you.

Jeff Hammond

folks done? frames you into hasn't kind sense And stuff your are of what forward? of been pent-up give of us as of on, Just terms view in a that demand they're can plants, and going kind how seeing your getting that

Pat McHale

what but get people really a That's canceled, are more around. that I'd being weren't were hard throughout it's hearing we say, than from else, our our projects was hands really they anecdotal pushed. being Yes. little pandemic, anything the to

didn't we wasn't so had have pipeline. action We our just And going of happening. and drop things to things a moving lot out and off

to some And starting of see break so we're lose. that

have the So try I that get of forward. to into radar and go and what's screen is are and coming on we back have new of sort kind what projects been half out to what onto as going - projects orders, turning actual the to year now we're the actually to think pushed the into tempo

the there. out jury say I'd So is

Jeff Hammond

but signs to DIY, but And some on Contractor, back strength signs then we and forward. kind said yet? of both to just kind home, reopen of of you thesis I think is, and as any get things go their on moderating working that of in besides the demand here do you Okay. start normal I of other any and Pro know people

Pat McHale

and good, are learn the Bookings Yes. we second in will think more lot that half. a I

Mark Sheahan

confidence are gone good are starts Interest probably are - they XX%, now for seen housing really investments I level that their have really type And are homes was I homes would guess and is still about this consumers market. up, there is making putting million homes some the pretty on Yes. I that there. what $X.X homes so being of Prices a as for activity. other things of huge their the permits, that about versus think are X into built-in is you think money they up the with a the expect out dearth as way are doing of under projected million is strong maybe there running as they're home. rates and we I which think People right our There in of favorable.

still have run legs for some So should I think a the and that thing while.

Jeff Hammond

in the freeze, about see that or lot then is been impact And there's last just spray business do the your in one. what Texas foam of talk a there? you of Okay. and I any know short-term like shortages foam

Pat McHale

have sure on we of a raw heard about I get scrambling material. contractors for been that occasions. number blenders to So that and have have

I think direct deal point, not in terms it's of at in sales. general, this big a our

Operator

Our Jefferies. SareeBoroditsky from question next comes with

proceed may with You your question.

SareeBoroditsky

Thanks.

First, on upcoming Pat retirement. congratulations your

I think adventures. of had that I read bucket list you

So with working few in appreciate have you past that a and really great you I time we hope on years. the

Pat McHale

I to to quarter still plan support have making every a and kicking. he's time I listening that Mark good sure Well, I to and appreciate am going and right. All everybody's be

SareeBoroditsky

change guess, you deployment building negative the in And or increasing does thinking would about balance I leverage effectively think share any sheet? I will. know cash or about you're past, capital about buybacks both he we've rates, sure M&A the your I'm for question. on M&A? talked how this

Pat McHale

Yes.

weigh-in here. think ahead Mark let Go I I'll Mark.

Mark Sheahan

Yes.

a So market We don't of some million balance to the $XXX we the we're billion yet we built sure company. at point sheet. sheet. a have think cap really I balance where for on take that cash $XX on cash like action, We feel got it's

We'd critical deploy a like So at it's to not stage. it.

as That's investments take development what time. hopefully overall some at try through we our that do machine product can our we share that's dollars. on of well through tool it think a and I factory of to every rates objective is the do double-digit some get a repurchases investment deploy and we're into we'll Obviously M&A. what but look to new do the we We put we return making.

terms cash. probably, challenging well it a rest So, over the up of given the a equity current markets both can that as you valuation big M&A the see levels assured but markets that in us, makes are time as that more mountain just for we pile of little we going to

it and Our to job think I we'll continue deploy do future. in done is to it, the that's we've what That's do what smartly historically.

SareeBoroditsky

maybe that's on in there customer little Is then And a up? Growth as seeing Great. in up picked difference driving this? underperformed And market on Industrials. benefit factories Americas, just and you're APAC. there exposures end commentary of open just EMEA bit a the

Pat McHale

business based soon to is Those nature move can I that around of businesses So upon about that it's timeframe projects. that tell. we're talking the the that and think too

our move regions. on Industrial that broad-based, that region and should is is recovery the I is, not trend a decide worth think view in from is think But trying a all good XX-week noting that benefit over for to the we region period that's us. side some is that there the to I

Operator

Markets. question RBC comes with from Deane Capital Our next Dray

question. your with proceed may You

Deane Dray

by most like? any know what the recent I But has just parse of that talk like orders, the like kind size from Hey, out April, or where things region. Also to six issue. color what away given about can you're demand the been looks cadence comp six-week giving that, update getting just in you the of weeks

Pat McHale

getting give what not tried really - to running but you have view been we're bookings too in saw let you get a happen know granular, with that that, weeks few we in of last Yes, we March. consistent the

I good. overall is the So tempo think

Mark Sheahan

Yes.

regions. We haven't big terms in really any seen terms businesses of in and Deane, deviations, of

kind of broad-based it's what in been saw think you I fairly like QX.

Deane Dray

just It and if lessons that. in tariffs, that? things about I from do power pricing biggest XXXX that you and then way of particular cadence remember our Graco was you one when terms I And - of and that Graco back the price Good. seemed The the the all own worry in when everyone at that's we with was increases. you your not have appreciate putting multi-industry quarter said guys like it so on no, inventory learned

that might the through So the talk has already and be? about when increases you price X.X% during put much the how balance X% of of what is of be cadence price year increases - been to

Pat McHale

realized. mean just is Yes, X% clear X.X% that to to I be

it to of our probably product factors the on lots marketplace from run you X% X.X% different you numbers or channel that going may may in realized consistent there's promotions range. we pricing in be partners out see our price to and discounts the increases we do and the through that basis that the and but it's higher, are list-to-list net So We run what typically higher other going categories involve quarter. hear is to first in and be that

year, probably quarters. And there past ahead impact, out QX. realized doing sometimes channel pricing will increase. Sometimes try of into there we don't the be a you've pricing example, We and we're couple to that typically going in years. quarter. haven't push seen on second is there all But on have realized with what pricing timing a yet. orders this and in new project, the No, the will and a going in-house, to price factors some in have in third kind dependent the and might was saw those our very December coming change for January of the we're new But Orders we various first is the not upon not it impact of what get that realized it we to are typically consistent to that are go of all?

Deane Dray

Great.

from what's and is for the the year? might kind on, What's pipeline the expect? on you of contribution question last me expectation what like Just look product introductions new would

Pat McHale

pretty I think difficult. looks it

in new increasing. development stable product Our investment has slightly been to

with And be to going they're don't in it so or got dramatically better that's prior the contribute how we're be year. happy this pipeline across going that projects would to think the anything I years. the businesses and than worse we've

Operator

question with Our comes next Buscaglia Berenberg. from Andrew

question. your with proceed may You

Andrew Buscaglia

guys. morning, Good

Mark Sheahan

morning. Good

Pat McHale

you Good morning. lose Did Are it. we you there? Josh. like It Andrew? sounds

Operator

you. Thank

Our Baird. Robert Mike next W. from comes Halloran with question

your proceed You may question. with

Mike Halloran

everybody best I've or whatever the luck and over best? all morning been with good Pat. Hey, wish working last of decade you enjoyed and you the it's

Pat McHale

Thanks, Mike. Yes, a I me. once on a think decade buy in put you

more So years I on been be recent otherwise poorly in thinking retirement. appreciate that I'd that's you

Mike Halloran

But wanted sent Right. this pretend a you're going know like a one dilution to I are note, be items be of to and I you I don't is I not bucket know on high sends think into that I do be, out going you to retirement. little? to but case, the to make you that sure that's man. I'd those list yes.

Pat McHale

for won't. I rate but growth has annual the Compound years, last XX been

Mike Halloran

but pretty pass make It's can of straightforward. I that appreciated. since file to listening, it's on But I tradition but to you aside, tidy, sure calls. you're you informative very these I conference very the be hope Mark know going

Pat McHale

that keep the doubt he no will and tradition alive well. have I

Mike Halloran

Good a stuff, couple here. so

terms mean I look anything in the when the a Contractor there I at underlying half don't that from terms little going concerns in year comps an mean anything demand mean growth the when you back in you're think segments, to of is perspective? in the unsustainable there rate, about absolute three you there you that excess, levels, is piece. absolute tough of right? First, But is face the of in of in you business, terms think I the

Pat McHale

nice laying So a market out environment I think really Mark the did the end on job side. propane

are of of the Industrial still businesses, again, the the how which seeing in of work-from-home the I today year. side questions half least broad-based of not, me. concern have the last the think kind home really I second and given on that recovery at Contractor for impacted center the cause business exploded we're

really, my think it question is, that market biggest And the so dislocation, is people pull-ahead, think an here I doing business got about. regarding is into to and the are feeling until But here right we're today, I half. it more because mark way now, no is projects Graco we segments today, there bigger get all is end a good the a sitting pie second sitting of pretty that I rest know think,

Mark Sheahan

for might Yes, in add or they're down would I'd eye the housing be going may things and could be up with well. some coming like and on agree looks rates that pretty an terms building at costs flags that things only a little as good. whole the seem thing as we're I other as to But keeping point well slow that red of bit it up interest now questions

Mike Halloran

a Makes mean or Contractor pretty been some area has know Asia, like highlighted you've where sense. it. it's maybe you always certainly would been to work product strong. other characterize I performance I segments. The more little had But of an the how you do geographic than seems

you've like to change you where kind got it of feel humming or to be, You want necessary? more that

Pat McHale

No.

well. us today. of for real business Contractor be. now think great opportunity and many become lot starting I EMEA, that of years group time terms we the work size in it that's a the actual sizable a that's business over point this which that that really run in way that happy some think our in We Asia there Pacific happen that it even and saw many, doing the continues to business I here view that should to going expect to to our as in all at day to than of And business have a But than is. bigger be smaller is a got we're is has business the with

to on, see growth are what to about we working be feeling that's the rates like team it good is needs small and a bigger. we the and while So business

Mike Halloran

the it year thoughts versus about just of divisions kind the of some think Yes, capacity last on expansions. today, they all a how one, this as extended those because facility CapEx, across normal sits exist? just and you your where then when constraints here you Maybe see little obviously using

Mark Sheahan

we're shape. and part business, a brick think standpoint. our building and new of capacity Minnesota, which in from out will Obviously, Yes, a in that I help will we're our factory really mortar process decent so Industrial a here help

us think good at else. but put pretty to I the it's years so, future, can't doing have five in would about while. for here shape I before, something a say least we'd think maybe I predict or

equipment non-brick ticked I side, the that's On you the up and up. here QX, just probably result noticed business on that spend in really our overall the stuff think mortar the and of picking

point You just more can that everything some also to seeing capital volume to obviously opportunities justify from more capital to the then divisions this vertical you've is volume-based integration got out-the-door. just bring good go fact the equipment ready retiring just old tired at and seeing and to and are we're that

capital got fund So Obviously deploy. we're That's going our factor we've employees, that in shape. good need they've upgraded to things really know manufacturing engineers, a got for overall, feel to that effect or they we're great like to our people, I it. our that

about So, at. I feel good we're where

Mike Halloran

for Take Thanks luck everyone. Best of care Pat. that.

Pat McHale

right. All Thanks.

Kathy Schoenrock

you. Thank

Mark Sheahan

Mike. Thanks,

Operator

you. Thank

Berenberg. comes Our Andrew Buscaglia question from with next

proceed You question. your with may

Andrew Buscaglia

has and I'm continue to thought I that's a that kind how with than pretty then much And what So I better up picked would dig to in maybe oil weak Industrial it's wondering was influenced that of this. process, a couple same interesting expecting. bit and I was just be wanted of little areas nicely.

any Just, six conversations distributors in maybe three last with maybe or of I an there really is in directly know suggesting not the with spending that confidence are months? oil, increasing but your improving

Pat McHale

the seeing say, I positives on we're Yes, pricing. would

- from it. should were but standpoint, didn't Graco would the by price our in on We say which a through, going QX in helped oil. numbers So that I see oil, is of trickle not what's

Mark Sheahan

drove Yes, improvements that business, things the finishing broad-based environmental business, are our the our business, business, those growth. liquid really in powder business, we semiconductor saw our coating no, pretty our so the lubrication our

Andrew Buscaglia

Okay.

broad-based, any could much to. all pretty So one And... area, point you not really

Pat McHale

And by not price driven oil. of the

Andrew Buscaglia

Yes.

looking if know - whatever get areas about Okay opportunistically where I it is you're proactively but and it? look are I more about thinking you bolt-ons, on you you've I then about lastly high, are you'll just are move M&A, like valuations at. know add some valuation what going up you'll guess or other comes right the talked a how take to

Pat McHale

we No, here markets of an place be things that in we've in actual interested the to and used that targeting lines proactive doing. in got process we're product and terms other

opportunistic area, but that's We'll active. targeted that so not And they if in things they're at also be right in on our think look an enough. are may basis we close

we've So got going a process on.

to I let think weigh-in do that too what likely here segment. he'd in in lot given markets Contractor the if time, Mark to a And you and be should I'll like. deals be segments that the is nature the likely more of is, expect over Industrial our the we Process and less

Mark Sheahan

definitely good I existing for Yes, to our opportunities continue look in we think businesses.

that feel talking I the business teams we that pretty the consider those, into think that in pipeline units I adds But companies a before And forward, our Graco think where think the with operate, currently with have have the lot they to I are be there. that equation I all about to somewhere tied good going competencies to adjacencies. also got the we will bring table. those value and

successful we're as there well. hopefully So

Andrew Buscaglia

guys. thanks helpful, that's Okay,

Pat McHale

Yes.

Operator

Thank you.

Bryan from with comes question next Blair Oppenheimer. Our

proceed with may You your question.

Bryan Blair

transition. and Congrats. the pending Mark Pat on

Pat McHale

Thanks. right. All

Bryan Blair

of quick questions couple I Most have follow-up, my of clarifications. answered, can but been

that impact and and restricting a restrictions some difference geography, how of may be by growth is Process and to terms still still specifically the there there? operations, access of in the improving meaningful In Industrial thinking Europe of facility in place

Pat McHale

very sporadic, And we're restrictions and of for while place. vaccine the the ahead than other here Yes, of we've of terms a rollout got in of China Europe pretty in my well has that of view direction kind been restrictions. good is our localized that kind

So is based I upon likely Europe I last. think what be see, to

Bryan Blair

Sprayer Makes penetration in you level a sense. Pacific. Asia multi-year an there in I in Contractor and that And lower number assume versus EMEA EMEA, you mentioned the what opportunity you've strong much is do on have On the growth APAC? industry trajectory numbers had in

Pat McHale

paint wage that you but to increases see and now in those labor to between you start capital. extent it a exact you India, don't just labor it's data as doesn't under and all, aided and and the going rates see at gallons get People cost emerging does making of question Asia things then to US paint there I that And in available penetrated. also that eventually is choices Australia it's at we Australia, at need high more to like the now, higher and is per can of goes the say, I in lot the by see see equipment have in Yes, markets What continue in like need of take markets vary of in demand particularly for that the to enough us look one when quality, Right country. up, anything we West happen, of geographies. the course. But high we its to really think low. when. and the very so we you and look sold of gallon it's automation see dramatically labor it's can you help that would numbers places if that equipment should driven rates at out in continue look and of that's medium are is, as automation as a in to amount you look a by or and into it Europe, look the rates plant and really by that are labor

Bryan Blair

Got appreciate it. Thank the I you. color.

Pat McHale

All right.

Operator

you. Thank

Walter from comes Seaport. Liptak question next Our with

with proceed your You question. may

Walter Liptak

during you. We've to watching work. you calls in good thank your you want conference retirement too. Hey, these with enjoyed say your and you to do I luck

PatMcHale

Walt. Thanks,

Walter Liptak

on touched starting to and refresh you you products? wanted I a Graco a ask on inventory But I Industrial channel. such thing little wondered And is with there see bit the are an or to

Pat McHale

not Industrial this a of no I on - think thing. a stocking, generally kind destocking isn't side, the it's

practical. all stock catalog Distributors on daily here ship have that day. to manufacturing basis thousands operations thousands generally things not warehousing and pretty a Our be selling fast. of up the set operations products and very is of ship might same thick they a are are selling them and off to We

So the parts, ship it. standard they're I'll then and and they an going sell they stock, to repair it typically everything know they order will bread butter else and items, we products, call place

- times their that's So some there's boost impact distributors muted. in trying but cut of bad, and that is think to or I'm I there in sure down back up, good it inventory

Walter Liptak

doing right, great. out side. to people talked to and wonder vaccines I put projects all about they the still Zoom on back normal. on sales street, meetings Okay, bit the little things Industrial are getting back also then, process for together a your And are you

PatMcHale

So at really this since ever been started customer. the that here US, that's the least by - driven in

into have people never our went hiding. sales So

meet. going number wasn't been or really Our course weren't issue, customers over really want when been to Graco have it people always customers willing here, But a never it's to November-December the more been - do. whatever that you of to in that to were it's sales out spike back yes, and willing most spring into going willing were of big has But just last meet with to that the happen pretty get year frankly based to was facilities. meet the you and to the go upon going you customers dramatically varied to when

younger probably there going continue be guess future. still part to and to we'll to more of get in-person. day more be like to I as is more and going a that can and are doing my going some in although I'm that benefits less have our out I there more in-person, because that are is, probably it's customers going hopefully people a Zoom, anticipate to Zoom And that's So get and to we're folks think Webex Dinosaur, both. There vaccinated that

Walter Liptak

Okay, up. great. all Mark, right, the you And lube think, is picking I business mentioned

tend from those can to What think funnel some or I the larger from are CapExrollouts. the you project customers? or your funnel larger be it order seeing be of

Mark Sheahan

definitely Yes year. it it's than last better was

not product compared what saw which XXXX. across a large general any board. not across pickup to really just say it's a is we was driven significant by categories. projects. the So, multiple I'd any in decline pretty the pickup It's It's - steep more

Operator

there to Pat Thank turn will the further over McHale. call questions, no now I are you. If

Pat McHale

of Mark you look for good talking this All time will talking and their thank call. right, sure numbers. right. Thanks end probably I'm That's to forward morning. about And I'm last July it's everybody hoping. my the at what to All you everyone.

Operator

concludes Thank for you you. for Thank all conference today. now our nice day. This All participating a have and parties disconnect. may

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