Graco, Inc. (GGG) Q2 2022 Earnings Call Transcript

For the period ending June 30, 2022

July 28, 2022 11:00 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Good morning, and welcome to the second quarter conference call for Graco Inc. If you wish to access the replay for this call, you may do so by visiting the company's website at www.graco.com.

Graco has additional information available in a PowerPoint slide presentation which is available as part of the webcast player. At the request of the company, we will open the conference up for questions and answers after the opening remarks from management.

During this call, various remarks may be made by management about their expectations, plans and prospects for the future. These remarks constitute forward-looking statements for the purposes of the safe harbor provisions of the Private Securities Litigation Reform Act.

Actual results may differ materially from those indicated as a result of various risk factors, including those identified in Item 1A of the company's 2021 annual report on Form 10-K and in Item 1A of the company's most recent quarterly report on Form 10-Q. These reports are available on the company's website at www.graco.com and the SEC's website at www.sec.gov.

Forward-looking statements reflect management's current views and speak only as of the time they are made. The company undertakes no obligation to update these statements in light of new information or future events.

I will now turn the conference over to Kathy Schoenrock, Executive Vice President, Corporate Controller and Information Systems. Please go ahead.

Kathryn Schoenrock

Good morning, everyone, and thank you for joining our call. I'm here today with Mark Sheahan and David Lowe. I will provide a brief overview of our quarterly results before turning the call over to Mark for additional discussion.

Our conference call slides and our second quarter Form 10-Q are on our website and provide additional information on our quarter.

Yesterday, we reported second quarter sales of $549 million, an increase of 8% from the second quarter of last year. Reported net earnings were $117 million for the quarter or $0.68 per diluted share. The effect of currency translation rates was a substantial headwind in the quarter on both sales and earnings, decreasing sales by 4% or $15 million and decreasing net earnings by 8% or $7 million. We expect translation rates to continue to be a challenge for the remainder of the year. At current exchange rates, we expect the full year unfavorable effect of currency translation to decrease sales by 3% and earnings by 7% with the impact in the second half being similar to what was experienced in the second quarter.