Graco (GGG) 31 Jan 232022 Q4 Earnings call transcript

Good morning, and welcome to the Fourth 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. [Operator Instructions]

During this call, various remarks may be made by management about their expectations, plans and prospects for the future. statements the purposes Act. Private forward-looking harbor the constitute of provisions Securities remarks for of the safe These Litigation Reform results in including report from of materially XXXX recent annual XA may quarterly as Form company’s of Actual result XX-K the on a most and of those the XX-Q. various XA identified on those indicated factors, Form report in Item Item risk differ company's

the available are website the SEC's website on www.sec.gov. and reports These at at company's www.graco.com

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

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

I'm I Mark and for we and to $XXX of Good X% fourth morning, everyone, additional from provide and will then an over quarter Yesterday, increase sales thank of call. today David year. turn Sheahan here you our Lowe. Mark brief last discussion. our for summary a call results million, record the with reported of joining

included As year quarter the weeks, as weeks fourth XXXX. of last to a in compared reminder, XX XX

rates challenge of an sales the Net per to decreased share, million Currency effect were increase net by in a continue translation percentage of unfavorable or points quarter $XX million diluted diluted quarter, exchange. be million the fourth X%. rate decreasing to $X.XX $XXX earnings in by gross earnings the quarter, margin X $XX share. in and or $X.XX The per due the foreign

At as move effect margin to favorable than price quarter, expect cost our had increased rate current on we a continue a we the the dynamic actions favorable both XXXX. more gross cost costs, into offset During pricing and dollars. and

$XX translation charge pension million $XX decreased not offset were that partially increases. in repeat. and last year $XX volume rates or lower million the settlement decreased a expenses included Other as expenses and X%. expenses rate-related million quarter and by from earnings-based sales Reductions Operating did

XX%. of adjusted earnings to XXXX year, was from the rate anticipate the Contributing XX%, between of effects will and foreign annual at tax capital. million for provided incentive activities last taxed for decrease rates tax We for factors a be than and due Cash investments The were by rate in effective rate. quarter higher the $XX the the unfavorable include million year. $XXX XX% increased operating payments working U.S.

look I'll moment we to forward cover items a take XXXX. a now few as to

growth full-year night, materials segments in website of corrected low As uploaded with slides, in call. following last single-digit organic incorrectly presentation issued stated our constant regions. our and currency Slide conference a basis. XXXX we are on discussed to however, for call all be today's will growth initiating expected outlook we of an the our A revenue eight

been million continue in translation core and have We More moment, translation rates. currency seen and of at recently, currency changes to we in have anticipate our rates monitor full-year will effect the to would the XXXX. improvements earnings projected $XX point and fall to $XX sales range the million. stock-based increase are compensation. increase within This Unallocated increase related to in corporate X is and by percentage of expenses

We our expect at Switzerland Minnesota, projects South approximately $XXX to $XXX million Romania facility and for million capital expenditures with be locations. Dakota, expansion

to over call the turn for I'll Mark discussion. now further

and Thank everyone. good you, Kathy, morning,

be will All constant an morning comments on this of my organic currency basis.

records did segment realize quarter earnings. quarter was fourth that of operating revenue and quarterly annual both record in We mid-single-digits, in the only were for Sales resulting the XXXX. the not achieved each records these and in a Contractor fourth in up quarter.

in shy total did of sales. $X the annual reach and revenue just However, record segment billion ended

completion in of the quarter. the million where at it in strong time. approximately was equipment last Slowing our of at $XXX the demand project powder backlog reduced at consolidated third this reported backlogs quarter, from we year what along is Our the end was end which business with Contractor

of improvement during experienced availability also We in the component areas quarter.

shortages earlier in of has a year. some orders pace electronics incoming While of the key from to have supply improved items slowed, compared The persist, and year like castings ago. chains

are comparisons fourth flat the our year-over-year of modest remember XXXX, increase held heavily by the of However, Many timing XXXX. January. influenced XXXX in and that versus in a in magnitude after year we increases throughout price will the of quarter pricing you

substantial we will order fourth heightened the increase led we In year’s XXXX, fourth of in XXXX, a quarter. price in early be quarter that to activity announced implementing which last

I cover things outlook, into these our will factored later. have which We

segments. a out-the-door limited and remained The our the the of with effect lost in channel, due pro to American the Now turning in year. availability paint operations our on commentary business and strong, the Russia some sales product segment had strong. decline growth by quarter, equally in driven less this were center and paint home fourth pro EMEA sales, The discontinuing North in Contractor Pacific Asia to mid-single-digit the revenue for earlier quarter high-single-digits revenue demand

in Component business. order, on still our availability especially but we paint improved, pro back are

We indicators. to monitor global continue construction

However, revenue or which silver guide multiple of of us given us Simply is there ultimate is the expert for that in outcome. the has to put, consensus accurately certain leading broad categories, a nature bullet revenue. it indicators difficult no trajectory of our product predict to short-cycle business, terms

repainting Our new residential things projects covering products many projects categories. construction. have such also residential, these commercial as and construction for single-family and used in remodeling Contractors multifamily are

often infrastructure project like pipelines shipping. that applications. XXXX we pipelines go that contractors and commercial aforementioned striping things in working of bridges, seen addition, commercial coatings into and spray specialty XXXX report much categories and texture like line through doing pavement In Most foam insulation, and the maintenance, contractors applications jobs even applications spray in protective support for are high-pressure

channel a to than long both we initiatives, the factors, rely fate. will as our they position new buy parts expansion and only products have determine contractors Graco to has new had economy being launched revenue our Experience in us combined on and to project equipment. that if solid shown continue as spare puts pipelines, These with better

all results annual businesses the and in and the of regions, is growth global and quarter segment earnings. In for this such for year. up the experienced systems our quarter records achieved were operating and in product This equipment sales and they were the positive main reportable Industrial sales categories both Key of regions drivers adhesive sealant XX% for most all quarter solid segment, in growth. finishing and with and fourth as the the

be Profitability the records. Process in is with as quarterly good project XX% operating year. both incremental records the in annual of XX% again for Checking activity our XX% process finished sales quarter the quarter both The with revenue remained for and margins teams, quarter, continues the year. consecutive for the to strong and has grew and these fifth resulting that set segment earnings. This we

margins the Increased pumps, growth volume Broad-based fourth for XX% quarter XX% and strong performance. lubrication Incremental heaters drove drove in sales in the and profitability on. and the equipment, as went were the semiconductor fittings, year improvements full-year. pumps process

product As these about lubrication and backlogs and decent both in we have in large we excited in finish XXXX, upcoming recent semiconductor, and are pumps, project launches we businesses. process activity

on our Moving outlook. to

optimistic business earnings. ’XX, enter and a another order of drive in tempo. keeping that year growth cautiously close As we we and remain net we're At trends can on both this time, we eye sales

constant basis currency low-single-digit initiated we've for revenue a a outlook growth on such, year. organic the As

years, last well ready differ are teams expectations. conditions over Our react the from extremely we if performed two and our to

that am this will I reflect confident our performance XXXX. in

facilitate acquisitions global future. Our will also expanding and capabilities, core of launching our in products, channel pursuing investing strategies this only new growth the strategic year, but our manufacturing not in

remarks. prepared ready Operator, our we're questions. concludes That for

question-and-answer Markets. time. Your Thank line from will [Operator The you. comes at Capital begin the session this from first RBC Dray Deane of Instructions] question

Good morning, everyone. you. Thank

Deane. morning, Good

start and there frame But not people negative a and for lot there's -- I what being of applications. through pro we can here misperception, an and goes, and and everyone been just take your lower reality there's kind regarding earnings et end was read-through Graco. with the that -- us is oh, of market before, as through us cetera? you're worry the and this you having dependent guide one paint miss to have Hey, the exposure, immediate just And but customers relationship of as other think,

Yes.

say have, outlook are busy, contractors overall, a haven't I hit I decline activity different they think, we our interest seen about got and really fact of kind that particularly things. still feel newer rates paint on sell some the into that But of, pro housing any, they I that business, the of do been increase they've in buy good would markets think and construction when overall. So in we projects, the that's reflective by stuff the that, notwithstanding

a when as business said, into what revenue opening growth tried point that macro use that lot the in lot side. on I you product a our guide we a different And see broad of you looking categories. There's Contractor specific of remarks is really aren't, one the thing we to to can this applications, different pretty at out tied business. you're

are you look having progresses, okay quickly the pretty some things come it going. can. our a us be where as in get we're issues what for we we create cycle, are year as know. And now, everything at on much in, we about visibility as when for short them good possibly because CED. just and right does So orders feel experiencing better, of And we but our customers, we as will out It's clear visibility terms

a week attended. was trade trade I it's show last at organization, by paint it show. was very large a And well annual their

the positive say was that me in a And the busy. They and I fairly floor talk around interest launching. Our that able with takeaway is participants was it different overall new extremely in that booth There our their managers would lot for industry. country. a we're being store from of bring walk products to in

So pretty but it are now. we'll things in hanging how for out, good plays again, see there

one -- realization just That's to hear. What you for of what is expecting? XXXX, good you're back pricing or cost? the for that's going then And to What And plan. kind the increase you're for at to going outlook, on are price January? price you that least does back mean had expectation said price increase all

might And that depends really I increase, on more It a say, XXXX. the line first you each quarter. seen Yes. will in what the with in speaking, is be unit XXXX, price this here region. of normal But implementing would segment in the in have business generally

on, And through we of quarter. bit fairly end a push the to did going the at the increase price until some regions healthy wait because of a just are later third

prices Contractor, tight think for I twice, going a already raised their we're while. given they In have to that hang

we're were. than better I we think in shape

to continue way that we've out actions cost the hopeful neutral You will for favorable actually year. saw that of slightly the taken rest that play QX. We're price the in to

you. Thank Great.

Yes.

question. next your for moment One you. Thank

Our from comes next Halloran Baird. of Michael the question line from

and Hey, year where just kind the question. expecting everyone. just I as then -- but the And so think talk separate. where good whether then related And the you're points ask I basis pieces not? them I'll -- by -- this you're us growth and there, start about this all pressure might maybe then morning, gave well, I'll maybe a on be? you keep segment where And -- second there of Mark, We'll

Yes.

on So lot you that really expansion segment feel visibility of would as launches see can isn't that region a the different out, that going for great, our the channel good one generally really about say and we probably segment. reasons, is initiatives or product by the Process we what biggest I outlook didn't in break but by

as we business, a well help the particular took, them of semiconductor on from full-year particularly part group has that should still orders As the in a which basis. really backlog of revenue lot that

-- are feel good pretty in they're we things segment, that in shape. like So

have might and powder out they our year to play other business. equipment that backlogs our end both some On orders came here as of how a regard the XXXX businesses. of sealant adhesive better they latter, the the on our some short-cycle of versus fortunately, growth industrial and the a side, lot of have the And at with businesses the and visibility and year do lot growth well the as really we in saw from do

put industrial pretty together, good shape again, with you of things. those getting grow XXXX regions when we're So in two I without those feel into types respect things details to like being in in to and on able

contractor's sort wildcard. a And as know, you of

side we As pro the here The center is okay. been today, home than better sit side. have orders

profitable or pro for center the As you know, -- more center is home than side pro us side.

the you us standpoint, that on weaker from of if to having profitability one strong other, should help have had pro good that the than business So was front. the side a

when you comfortable all, guide. So low all it we But the hopefully, roll think pretty all helps. feel that in single-digit up, I with

little little as year, of quarter, bit sense. the look about that the the of maybe normal there the Is talk the then is increase the element price of of given the better of a reflected kind imply in comments in maybe prepared that time pre-buy little a through you versus more in outlook? front back frame the that outflow front just of cadence part some of in in remarks a some in of tends bit makes to an And That half half? some relatively year, the Or guidance? about seasonality ahead fourth that embedded visibility

Yes.

things. bit factor volatility we full we job you year best think tried all to There's a of in going little I just raised year the could But guide. that that We a probably to in we of QX saw that give to in standpoint prices to comparison do the be terms of of certainly year. from from those rates a types QX, this past also order in and ago.

this see pretty good of might though, for full-year, around that we guide I you it. little think in feel gave low that kind the bit So number about All more single-digit as a we all, well. the order that volatility

have to do David, you anything there? add

a frankly, -- the order in all when think adjustment. generalizing, many plan but a don’t the I know price what wouldn't of really do Industrial that Process lot. of and I'm over. the ahead to stock to talk we quite channels terms And varies demand a them Their about space,

short-cycle is certainly look go if we've on, -- done if to we a at the this, shortest we of on cycle of little CED probably, our XXXX touched work businesses. -- the Mark the As certainly back is all

and a what I channel quality to confidence situation to going And to I gaps -- pretty getting degree, feel return feel could Better But normalcy partners what some still we're in the we that to good supply more experiencing to normalcy. seeing or a with some is, chains, is there chips. promptly. electronics I'd order be closer that are point a we say, getting at that where situation ship knowing this

it. Got

to the the like going reasonably saying but So patterns there's normal, are be it what through volatility sounds you're seasonal year. some is expected

So be to there's forward. variance as process going we thought that some move in

actually the a little bit out better it factories spot the Yes, be some is could order where what the we volatility. door volatility. Hopefully, rate a are than order get smoother

were $XXX-plus backlogs, right? So course, mean we when I the Of talking got of fact that's year with we had we're ago, here big too. were a still backlog, we lamenting you today, million where and guys, that we at

So…

Thanks, Mark. it. David. Appreciate Thanks,

Yes.

you. Thank

One for your you. Thank question. moment next

line comes question Jefferies. Saree next from from Boroditsky Your the of

morning. good Hi,

up gross see were remain margins So gross to margins but What need you level? still bit do that a back sequentially, under get to XX% above pressure. little

Kathy. is Hi, Saree, this

exchange. comments, I in really think what current my of currency we that foreign we said as the experienced in I saw unfavorable effect the quarter,

rates rates where price/cost that change. don't into fourth we we're the I continue expect did could a and ‘XX. some dynamic about ‘XX obviously, headwind to optimistic expansion. given at I with have right where -- to rate enter that think mean, margin in are think beginning gross how see favorable we And we I now, quarter,

the that volumes need the -- course, same, to cost main we to same. Of remain

the in throughout first factors So monitor that XXXX. to quarter two continue those here the will we be and

would throughout of at that impressive. interim reflects famous lost the question, is by I to a that the we've pricing And a cost completed the early made would say I did of And going after quite a maybe just The summer the beginning way impact we it of QX gosh, was months. price that Yes. the at go back ’XX. increases in -- about QX, got us. the year. I not And of think, of here progress to serious that half a -- the anticipating guess add really on really I beginning back we pressure price lesson in now quarters as dozen we

Yes. been at look have QX, neutral, above currency And were would XX%. like you if if we

stays hope see should so actual get at then I of And that back -- that point. our come it we let's were better in. some that starting to creep is costs think cost price gets some neutral down that in about. you may nothing the talking broken I have those that input shape, So up to -- that We here, rates

you in going drove Great. quarter? And just talk the the then obviously, outlook you've the seen think what year. year? about next those positive Can markets strength for how the And do into you industrial about on

great I all, Yes. things year in I team. for to it a before. I all I the say just was said that mean, point would would that

I on automation good solid projects footing on going business, got They've robust projects industries, our teams that regions now adhesive more customers are aviation, got general both We've located have lead in expanding across special as our sealant the on really product engineering that that as dispensing to think industry, for They solar. their business, side. paint doing initiatives circulation multiple channel. in business including channel is well the for plan. a

production. they've So I are backlogs performed nice in feel business build we really last there. and of throw our equipment years, over good a in then and into extremely well business, in like space the overall, e-mobility, heading shape trying And which the think has packaging ‘XX. got good you We're couple to powder like battery things

in feel our about pretty on us makes industrial what's positive really segment. that of going All

my Thanks questions. for taking Great.

Yes.

question. you. Thank next One moment your for

D.A. line from of Summerville from Davidson. Matt Your next question comes the

whether for facility expansion how for addition as Good wanted I the was curious plans, business. This interested you -- Summerville is at have you've in that Jellison the businesses organically Graco or in the Will pipeline that ask of would to to is process? not in a Matt adding be believe out And as portfolio thinking part about what laid today. investing inorganically you're business? in I morning. to to kind of the on And the moment? you investing you actionable you

be trying sure, generate good times making keep we returns possibly In them. our that investments going asking everybody development, good Thanks notwithstanding like company look capital a we I cash associated to enough that to for product And question. with to at penny have that things into we're still to bad, acquisitions. for in we're upgrading and on back can. it's follows the mean, good that facilities, knows Yes, business every investment that, investing able it. this put

existing that say have would in where We've I markets, as And great job on looking good a as is adjacencies can value. of developing manufacturing we the got some pipelines production at corporate the well the over with done their last year and the the teams think really side. various applications, us, drive both the side. value we for team working engineering pretty with on

the world. I then, skills we think channel And of have that some sales, there. around we bring course, infrastructure the marketing and

coming coming growth knows, really through I here. where things add on. some acquisitions. with or see some could frothy, last up stepped has -- I to help last been business We'll the market at down, so. kind the All multiples We a feel good the of have as strategic create rates opportunities bit XX-months that the over everyone think up what good Graco for and But we're year. in there's about decent The pipelines, So going journey happens. units activities now

And businesses in has out, event. that's perhaps attractive an would just and I learning we're there, before from We've a would towards prospect spent day to their really that add Mark's point lot there's time I has of where with the operating not building those reaching a relationship, teams corporate what segments. Yes. the before a group reactive and out the attractive, an up a call fleshed list there's in been with mode, situations eye about when greatest. a

that we puts things extremely applications, would like, We like, markets long-term like business-to-business. we strong that like getting have markets. just participants that As niche say that I positions. on base, like that characteristics markets installed -- and far as markets large We have without that we because are specific

Of us course, important it's will about recurring we no and central pay markets proposition. there's And that for quality innovation to revenue. because doubt value is a like to it, our supplier

That’s great. you for question. Thank my taking

Thanks.

for moment One your question. you. Thank next

of Your next question Ritchie line Joe from Sachs. comes from the Goldman

Thank you. Good morning, everyone.

Good morning.

sure may that pricing I Is guess make the I to low come is is flat did want volumes pretty understand be down. for guidance understand XXXX. I to single-digit the for correctly? just I that low-single-digits, framework much the So -- in going expectation to the

But the of have didn't those out you that's there in versus where guide. of our roll it we kind you -- in really built-in course, a we couple there. volume year. out be favorability price the do didn't because, ‘XX, we Yes. in as versus through raised break the of prices realization when all low-single-digit outlook. volume a price lot up, We some really We get last times of should ‘XX And break But roll outlook. overall outlook

exiting XXXX, then maybe pricing as into you're just And of that pricing the forward carries Okay. much comment, how XXXX? on

year, Well, frame. ground call September January and came year, the a kind it, We another let's again, we price increase had zero. the then in one of, time through in big last that started

get will you September, effect where that double that. -- the increases first months we we of be so, with year price that at, you time So in ago. And a or of get on least as kind nine at were we par should for two at to those

vast made backlog, the backlog the pricing interim our the at January of age of or majority the you middle When either ‘XX our reflects we in year. Yes. adjustment

you've side? growth over sense. I focusing maybe XX% years. guess that the you I between last that Got divergent guess cycles a demand divergence that what there’s in seen in pro point the experience, center? just just that second. typical is year. home you you pretty it. there's segment the trends I in several expect shocking last mentioned pro your have the converge is end as some business on revenue really almost to incredible, and Contractor to when almost it's the -- segment Yes, for that base This weakens? pro the your would the to demand center continuing the the seeing And side is that been you're that the on outlook. makes that home guess of healthy, of a if at versus Or It's of outlook the stay start

Yes. I don't all mean, what that Depot least regard home really money and is tell I last to it's of at that of hanging stimulus of Home I home over would know. years, projects, couple from been you kind at the the with center thing. doing working with people the crazy, and out kind right,

for So long line seen it we what up probably may Money free doesn't have with was historically. time. really a

Now not anymore. free money is

I of bit likely little is the on would business. believe that So side to a and up consumer that going the retrench show that do

they can On experience painter see always going new and sprayer a side, got like projects been they two you're our equipment. thing can a pipeline the you're or out, pay and they've they're has pro you Typically, busy, jobs. and again, you a and that and that new got they've busy for one if buy if jobs within buy

really new a tool get benefits the all new So piece of equipment. of payback, you plus a it's having a and quick

footing. things thing with, different it So now, that of And fairly all good sort it's projects the with for at they for least involved and a appears get to be confidence them. on

margins one over an for business? a mixed sprayers. for you margins and guys to Contractor. there your about products remember that up in sold, the segment the sneak were you opportunity last How really Because I normal could How I the do for that think in If expand higher-priced time about as you normalized do when on low-XXs, think one were was like it. margins Got them Contractor time? the being

Yes.

those the point business. one And the you thing historically, go spray in back So or if had is are in never foam protective Industrial their coatings I'd our out just numbers.

really So target say it's our what teams don't for What and it hard comes increases and go will get is margin to bit trying we little we're when compare. a to I back to have a to.

price/cost not if relief volume that margins really in seen the and much little on can we we've get of bit trend their can the higher. a that think there, I which is equation, contractor

of this from have Industrial a if year, you years last did your to XX% here? ago, I year, the operating do mean, XX% at margins go you said, from gosh, year what So at went quarter. were somebody Where would are look well, probably margins fourth and XX% we in so couple this high. we And we

So on the and these a grow to find And we to don't get both top bottom business really lid on They things for do people. it. the incentivized the line our line. put we ways

Thank you. helpful. Super

Yes.

[Operator Inc. line next Our question Markets you. Thank Jeff Instructions] from Capital Hammond from the KeyBanc comes of

Hey, good morning.

clarify in changing. the think you -- presentation I what the said you changed know if you something in presentation. I is don't

all markets clarification some said growth and there. just changing you're regions? from Maybe in you think I

Sure.

with on the currency all are the range in the single-digit just the guidance We leaving an regions constant of expected and taking low out growth full-year and to in segments organic it basis. growth

So there's or a geography you'd be does to down? that segment expect that imply that

couldn't comment. or We like real overall come from. really said, an can't we where micromanage I are just really fine-tune to going -- It's get things

previously So we And carryover sure make just a want and -- clarification. that published we that the modified. to was get had we slide at didn't that from bottom the put there that little unfortunately, note

now. of read guide just It's for really this confident So in still into the I low-single-digit But too wouldn't unfortunate an we're it. overall error. clerical much

Okay, perfect.

strong, And a semiconductor think, has market been been quarter, is but just consistently pretty been mentioning, maybe process focus you've your that there's a you then in can lot just this think I of I and what there? remind there's -- been the lot think those And we you're if into longer-term wondering cracks? any Act of CapEx semi. you growth go term, maybe of the cuts market? longer around how And of plays just Chips and some even as kind and seeing worries us of that

Yes, business. bought since times, think, grown, been XX the it. for really us. It's we strong we like It's I

happening to business manufacture equipment not say certainly negative that Again, is components pumps there's that's the into to still there. used these about high-purity go chips. So much actually There we and make it.

a that's this if built. inside so to new the of in being going putting need And they're fab equipment somewhere, to they're go fab

So you've the by got of that's the backlog last was couple that over business all created happened years. the

now as and around house pumped the creates of, that chemicals locations equipment. the businesses, in. in and to of the sell kind and that actually And heating do are some opportunities high-purity world, things manufacturers used go other them to for then get bought put move to then us around some We before are they new it like baths looking that

and all space. in in feel we nice a like niche, pretty it. all, good about we the We're So

just big about And of -- going a reading fab years. of about capital and actually, would terms over that the three read I investment been ‘XX couple play to ones investments of the for out the the that now, years they're you couple next of in add we've and spend, ‘XX,

there's legs in the it's, let's some than Graco So this because average. longer space say, cycle

thanks. Okay,

One next Thank for your you. moment question.

from line from question next of Thomas comes Morgan Stanley. the Johnson Your

the get if it in could terms availability business as So would easing the on you limited segment what seen just in paint Hi, back just some color you wanted know a how I to pro incremental thanks. impacted had has or I there? maybe EMEA product business? revert noted improvement here. that in exactly availability the contractor headwind to your headwind be and comments, helpful, of you've

Yes.

also EMEA, about currency, were of get believed, quarter we environment we and was you but you of you comment manner. had sort for the that, better it the were in part back we noted year it of if And the were mentioned, able to Contractor a actually and in that actually we pro quarter, think if down, flat the more over Russia been a as ago and would as a out a year I But better higher-end for to in was timely us business have said. us more EMEA. we Europe some to a So units

had better higher-end flow posted numbers. EMEA been and throughout things year. we've if those that As of you aspects components team would have over electronic in probably And our go that of they we the products, better into believes know, battling our sprayers different the

helpful. basis those headwinds in I -- what very for a in looking is kind that for from level XXXX just assume business that easing -- year-over-year will and of to But region outlook. terms be That's obviously, of not And you've it seen then and on fair improvements availability Great. in know region?

Yes.

have I good in that in saw still better pretty component a past. things we're year. would think but we shortages would the I like back with as some we last through We're half in a the of today characterize overall we improvement got been spot electronics, is than faced

Thank all me. That’s Great. you. for

Thanks.

Thank moment next for you. our One question.

from comes Seaport Our next of the line question Walter from Research. Liptak

good Hey, morning, guys.

Good morning.

EMEA I thanks more about if -- EMEA part generally bit the data business. bit been and could on some you about What's little process? just clarity better industrial and of the Yes, wonder little the and maybe Contractor your for seen recently. you experience macro talk what a get we've there a

I'll -- -- call it is talking side, we're attribute. a Germany, bodes if the EMEA maybe macro call it, I say, Europe's spot's industrial is for certainly, market, that say outlook exaggeration, an to the bright economic would but favorable picture which largest on would a I Well, data

Our a people have had prior guess indicate than were ground helps. in we we've Europe had and really the that than projecting I milder people that and some which on in winter years,

stabilized. prices that So the fact have energy

people gas space a helped the in of new our work think also And that I and Europeans the coal extensions quite some are even nuclear bit. conservation, doing and sources of probably around that natural

for us. In our lastly, about but are at tell has automotive change. with market those along prices of down couple prices, still And are important It's there, an terms down a tough a years America. gas electric elevated guess, I -- people are Europe, pretty auto levels, XX%. peak well. about XX% had of we're And improving always natural as retail from dramatic But sales

improving just Okay. your similarly, you And there? do better. an beginning is ISMs economy? China from Can Or like exposure benefit chain? it's a Great. looks it were supply us about open up. And talk mostly little to to you bit

Yes, that Hopefully, they're from economy. China we improving up. an should benefit opening in now things

I better are the people getting by say we this basically to there, think talk the through our still wave that they're week. things literally but team over COVID -- going

us. all activity and So energy, part Big for automotive. as it all with all obviously that, that important more, wind All they that business for we factories that be talked about we open the should solar, are the along alternative stuff serve more of up applications industrial. energy is with batteries, those Graco

with be I the potential China, our grain salt, of -- that for always upside hopefully So way should work company. in COVID through this some once but a say we hopefully,

Okay, you. great. Thank

Thank you.

the will no As I to questions, further are Mark turn there conference over Sheahan. now

to closing, been world Graco. record like but able been the at their we've customer contributions challenging year partners value. significant you, year, suppliers, deliver true Graco overcome and everyone. our employees, and I'd our Thank distributor and our post around it's a fashion, shareholder helping Yes, the in another In us Okay. to thank strong for hurdles

that that to contribute company great. While our this there strong are make many loyal it's really employees performance, our and things hard-working

That concludes good have today's call. Thanks for day. a and participating,

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