On this page of StockholderLetter.com we present the 3/13/2024 shareholder letter from GRACO INC — ticker symbol GGG. Reading current and past GGG letters to shareholders can bring important insights into the investment thesis.

 •  3/13/2024 Letter Continued (Full PDF)
 •  3/15/2023 GGG Stockholder Letter
 •  3/12/2025 GGG Stockholder Letter
 •  More "Industrial Machinery & Equipment" Category Stockholder Letters
 •  GGG Benford's Law Stock Score = 78

GGG 3/13/2024 Shareholder/Stockholder Letter Transcript:

TO OUR SHAREHOLDERS
Re   ecting on a successful year, I extend my appreciation for the
dedication and resilience demonstrated by the Graco team. I take
pride in the way each employee embraced challenges, contributing
to the accomplishment of record annual sales and earnings in 2023.
Our momentum is anchored in our four core strategies: new product
development, expanding distribution, entering new markets, and
pursuing strategic acquisitions to enhance shareholder value.
MARK W. SHEAHAN
President and CEO
The Industrial and Process segments achieved unprecedented annual
sales and operating earnings, while the Contractor segment attained
record operating earnings despite a challenging environment. Growth
in these segments resulted from our commitment to customer service
through innovative product platforms and high-quality offerings. The
Contractor segment expanded through successful new product launches
and sustained strength in the protective coatings and spray foam
product categories.
Despite lower powder    nishing system sales, speci   c end markets
within the Industrial segment, such as battery, alternative energy,
and electronics remained robust. Our Process segment experienced
broad-based growth, particularly in the vehicle service, industrial
lubrication, and semiconductor end markets.
Acknowledging the evolving landscape, we are dedicated to enhancing
our customers    experience and easier access to superior products.
As we approach our centennial year in 2026, we recognize areas
where complexity has developed over the years. To address this, our
teams are focused on simplifying processes, streamlining operations,
and improving the overall experience for our most important customers.
We continue to invest in facilities to meet increased demand and
to support our growth strategies. The new Distribution Center in
Dayton, MN, not only provides additional space but also aligns
with customer preferences, improving order processing speed and
accuracy. Investments in automation, layout, and    ow at this facility
contribute to safety, quality, delivery time, and cost improvements.

Additionally, the groundbreaking for an additional 176,000 square
feet in Anoka, MN supports the expansion of our Lubrication
Equipment Division, positioning us for the next decade of growth.
The opening of our Middle East Application Center in Dubai underscores
our commitment to the region. This strategically positioned facility
serves as a central hub, offering training programs and supporting
local contractors, distributors, and material manufacturers.
Our success is deeply rooted in the culture at Graco. Upholding core
values such as quality, customer-centricity, continuous improvement,
and ethical business practices, we earned our sixth Fortune Magazine   s
Great Places to Work honor. Ninety percent of our employees proudly
associate themselves with Graco and this shows up in the quality
of the products we design, produce, and deliver daily.
With a dedicated team, superior products, a strong market position,
and a solid    nancial foundation, I want to express con   dence in
Graco   s future. Our unwavering focus on core strategies and continuous
improvement positions us well to deliver exceptional value to our
shareholders and customers.
Thank you for your continued support and con   dence in Graco.
Sincerely,

2 0 2 3
N E W
P R O D U C T S
INDUSTRIAL
E-App (Relaunch)
With the GemaConnect   E-App, you can monitor your application and coating cost in real-time,
improving the efficiency of your application. Updated features that extend the control of the
powder coating process are included in the latest release. The tool covers the needs of different
stakeholders     from production line management to the maintenance of the equipment.
E-App (Relaunch)
Horizontal Axis XT12
InvisiPac HM10
MDX Valve
Horizontal Axis XT12
The X-axis is the basis for building multi-axis systems and is used in various automation levels
of a coating system: for manually or automatically operated moving sequences and for simple or
complex coating processes. The coating distance between the gun and object surface is vital for
precise coating results. With the Horizontal Axis XT12, the axis moves a ZA vertical reciprocator
to the coating object, adjusting the gun position to the object width. It also extends the application
range for strokes over 1400mm, which are often required for XXL MagicCompact    booth solutions.
InvisiPac   HM10 Hot Melt Adhesive Dispense System
With a 10 pound (4.5 kilogram) per hour hot melt rate, the InvisiPac HM10 Hot Melt Adhesive
Dispense System is for end-of-line packaging with low    ow, low volume needs. This complements
our proven middle to high volume hot melters, making InvisiPac Tank-Free    melt-on-demand
technology available to packaging lines of any volume at any speed.
MDX Valve
A maximum    ow rate of 150 ccs per second and a    uid path designed for extremely fast production
make this mixing dispense valve ideal for battery, solar energy, and wind power applications. The
MDX valve easily integrates with these Graco two component meter, mix and dispense systems:
Electric Fixed Ratio (EFR   ), Electric Variable Ratio (EVR   ), Hydraulic Fixed Ratio (HFR   ).
Precision Shot Meter (PSM)
An innovative    uid path and robust construction make the precision shot meter (PSM   ) ideal for
automatically dispensing epoxies, silicones, acrylics, urethanes, polysul   des and thermal interface
materials (TIMs). No other one-component shot meter and dispense system offers the same
repeatable accuracy that automotive, electronics, and telecommunications manufacturers need.
Precision Shot
Meter (PSM)
PR-Xv Variable
Ratio Solution
PR-Xv    Variable Ratio Solution
The Posi-Ratio   system offers the extreme variability (PR-Xv   ) needed for precise meter, mix
and dispense of adhesives and sealants. Changing ratios for two component material no longer
means changing equipment with the newest member of Graco   s Posi-Ratio   product family.
RobotBooth BA06
RobotBooth BA06 is the new booth solution for robot applications with external robot positioning,
ensuring optimized vertical air extraction. The solution is ideal for users with robot applications
and frequent color change as well as coaters who want to automate their pre-coating.
RobotBooth BA06
Stellair Auto Air
Spray Gun
Stellair    Auto Air Spray Gun
Stellair Auto brings all-star performance, swift serviceability, and low pro   le design to liquid
   nishing automation. Paint technicians, service technicians and paint line managers bene   t
from the automatic air spray gun   s stellar    nish results, spray pattern alignment tool,
material-speci   c air caps, and quick-change    uid cartridge.
Synchronizing Axis YT05
The YT05 heavy-duty horizontal axis is specially designed for challenging automatic powder
coatings, such as enamel cavity, wheel and enclosure coating. The axis ful   lls the highest
requirements on dynamics and stability, making it the optimal solution for users who require
a precise synchronized axis movement for product tracking with the conveyor, achieving
maximum exposure time of the powder guns to the product.
Synchronizing
Axis YT05
Twin Control
(TC) Valve
Twin Control (TC) Valve
The innovative mixing dispense valve for two component sealants and adhesives
has separate A and B path control for repeatable precision when applying
epoxies, silicones, urethanes and thermal interface materials (TIMs).

PROCESS
AP   4.5 Xtreme   
This larger 4.5" diameter Auto Pump   is the newest extension of the Xtreme
family. With the Xtreme technology combined with a 4.5" diameter, this pump
runs longer between service events than any Auto Pump in our lineup.
AP 4.5 Xtreme
AP4 LTD
AP4 LTD
This 4" Auto Pump limits maximum    ow to 2.5 gpm. The hassle of regularly
adjusting throttling valves is now a problem of the past, as this pump gives
steady leachate discharge with varying submergence levels.
Combo Core
The new Combo Core sampler combines the capacities of 5 gram and 10 gram sampler
sizes into a single tool. It   s molded with Bio-Tec   s EcoPure   additive to reduce the
environmental impact of plastic waste (see GoEcoPure.com for more information).
Combo Core
Fast-Ball 100
Oil Pump
Fast-Ball   100 Oil Pump
Redesigned for enhanced quality, durability and reliability, the Fast-Ball 100 air-operated
piston pump is easy to install and operate. Its simple design allows for efficient serviceability
when necessary to minimize downtime and keep your operations running.
Fluid Defender   
The Graco Fluid Defender is designed to give you precise control of your bulk    uid
tanks to help prevent over   lls and pump runaway. Mount near your tank    lling
location, either indoors or outdoors, to support after-hours re   ll services.
Fluid Defender
Grease Jockey
with Telematics
Grease Jockey   with Telematics
The Electric Grease Jockey with Telematics provides low level and system faults
through a telematics system to the cloud. Users have the ability to remotely
view if the pump is low on grease or if there is a system fault.
GCI    Series Cartridge Injector
The lubrication industry   s    rst cartridge injector, Graco GCI, establishes a new level of
durability and serviceability. It delivers up to two times the life of current injectors while cutting
replacement time from minutes to seconds    increasing uptime and decreasing labor costs.
GCI Series
Cartridge Injector
Pulsation Dampeners
Protect downstream equipment and extend the life of transfer systems with pulsation
dampeners. Minimize noise, plumbing damage and even product degradation while
ensuring a smooth, steady    ow with reduced cavitation and foaming.
Pulsation Dampeners
White Knight    Aquarius-ECO    Heater Systems
White Knight Aquarius-ECO    Heater Systems enable customers to conserve energy
and reduce water usage while providing continuous, accurate, and precise    ows
of hot DI water. The systems utilize our ultrapure pumps to recirculate water while
not in use, which ensures ultrapure DI water is heated and ready for use.
Quantm i120LP
Xact Count
Cycle Counter
QUANTM    i120LP
This large particle transfer pump is based on proven Graco pump technology,
integrating new highly-efficient electric motor technology. The durable    ap valve
passes particles up to nearly 2-inches, delivering an efficient transfer solution
for waste and trash in mines, sumps, and in-plant applications.
White Knight
Aquarius-ECO
Heater Systems
Xact    Count Cycle Counter
Doubling as a discharge check valve, this cycle counter mounts on the pump
discharge line to give high accuracy cycle count readings. Cleaning and service
are made easy with all 316 stainless steel wetted components.



 3/13/2024 Letter Continued (Full PDF)