Company: GGG
Filing Date: 2025-10-22
Form Type: 10-Q
Source: 0000042888-25-000047
Chunk: 40

Company: GRACO INC
Filing Date: 2025-10-22
Form: 10-Q
Item: Item 8
Chunk 40
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 for the third quarter decreased 5 percent and included a non-cash gain of $14 million from the reduction in fair value of acquisition-related contingent consideration. 

16

Net earnings increased 13 percent for the third quarter. Adjusted net earnings were flat, as higher sales offset increased operating expenses and lower non-operating income.

Excluding the impact of excess tax benefits from stock option exercises and contingent consideration fair value adjustments presents a more consistent basis for comparison of financial results. A calculation of the non-GAAP adjusted measurements of operating earnings, earnings before income taxes, income taxes, effective income tax rate, net earnings and diluted earnings per share follows (in millions except per share amounts):

Three Months EndedNine Months EndedSeptember 26,2025September 27,2024September 26,2025September 27,2024Operating earnings$164.7 $145.7 $466.2 $440.1 Contingent consideration(14.1)— (14.1)— Operating earnings, adjusted$150.6 $145.7 $452.1 $440.1 Earnings before income taxes$168.5 $151.3 $478.1 $456.8 Contingent consideration(14.1)— (14.1)— Earnings before income taxes, adjusted$154.4 $151.3 $464.0 $456.8 Income taxes, as reported$30.8 $29.1 $88.8 $79.4 Excess tax benefit from option exercises0.7 — 5.1 10.3 Income taxes, adjusted$31.5 $29.1 $93.9 $89.7 Effective income tax rate   As reported18.3 %19.2 %18.6 %17.4 %   Adjusted20.4 %19.2 %20.2 %19.7 %Net Earnings, as reported$137.6 $122.2 $389.4 $377.4 Contingent consideration(14.1)— (14.1)— Excess tax benefit from option exercises(0.7)— (5.1)(10.3)Net Earnings, adjusted$122.8 $122.2 $370.2 $367.1 Weighted Average Diluted