What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2021-02-16 compared with 2020-02-18 · 50 added, 13 removed, 163 unchanged (28% of the section changed)

36 unchanged sentences

For all segments, we primarily sell our equipment through third-party distributors worldwide, positioned throughout our geographic regions, and through selected retailers.

Our products are sold from our warehouse to our third-party distributors or retailers who sell

our products to end users.

Our products are sold from our warehouse to our third-party distributors or retailers who sell our products to end users.

Certain of our businesses sell their products directly to end-user customers and have direct relationships with customers.

3 unchanged sentences

Shanghai, P.R.C.;

and Montevideo, Uruguay reinforce our commitment to their regions.

and Montevideo, Uruguay;

reinforce our commitment to their regions.

During 2020, manufacturing capacity met business demand.

Production requirements in the immediate future are expected to be met through existing facilities, planned facility expansions, the installation of new automatic and semi-automatic machine tools, efficiency and productivity improvements, the use of leased space and available subcontract services.

In 2019, we completed a project to significantly expand our manufacturing facility in Sioux Falls, SD, and construction will be completed in early 2020 on a project that will more than double the size of our Contractor segment facility in Rogers, MN.

In 2020, we completed a project to significantly expand our Contractor segment facility in Rogers, Minnesota.

We are in the planning and design phases of additional projects to expand capacity in other manufacturing and distribution locations in 2021 and beyond.

7 unchanged sentences

Erie, Pennsylvania;

and Coventry and Brighouse, United Kingdom.

and Coventry, United Kingdom.

The product development and engineering groups focus on new product design, product improvements, and new applications for existing products and technologies for their specific customer base.

48 unchanged sentences

The Process segment markets pumps, valves, meters and accessories to move and dispense chemicals, oil and natural gas, water, wastewater, petroleum, food, lubricants and other fluids.

Markets served include food and beverage, dairy, oil and natural gas, pharmaceutical, cosmetics, semi-conductor, electronics, wastewater, mining, fast oil change facilities, service garages, fleet service centers, automobile dealerships and industrial lubrication applications.

Markets served include food and beverage, dairy, oil and natural gas, pharmaceutical, cosmetics, semiconductor, electronics, wastewater, mining, fast oil change facilities, service garages, fleet service centers, automobile dealerships and industrial lubrication applications.

Most Process segment equipment is sold worldwide through third-party distributors and original equipment manufacturers.

Some products are sold directly to end users, particularly in the oil and natural gas and semi-conductor industries.

Some products are sold directly to end users, particularly in the oil and natural gas and semiconductor industries.

Our Process division makes pumps of various technologies that move chemicals, water, wastewater, petroleum, food and other fluids.

Manufacturers and processors in the food and beverage, dairy, pharmaceutical, cosmetic, oil and natural gas, semi-conductor, electronics, wastewater, mining and ceramics industries use these pumps.

Manufacturers and processors in the food and beverage, dairy, pharmaceutical, cosmetic, oil and natural gas, semiconductor, electronics, wastewater, mining and ceramics industries use these pumps.

This division makes environmental monitoring and remediation equipment that is used to conduct ground water sampling and ground water remediation, and for landfill liquid and gas management.

3 unchanged sentences

The division also has a line of chemical injection pumping solutions for precise injection of chemicals into producing oil wells and pipelines and is sold through third-party distributors.

In 2020, we sold our U.K.-based valves business (Alco), reducing our exposure to oil and natural gas markets.

The Lubrication division designs and sells equipment for use in vehicle servicing.

7 unchanged sentences

Contractor equipment also includes sprayers that apply texture to walls and ceilings, highly viscous coatings to roofs, and markings on roads, parking lots, athletic fields and floors.

This segment introduced airless and electrostatic disinfectant sprayers in 2020, which are compatible with chemicals used to treat surfaces against SARS-CoV-2, the novel coronavirus that causes the disease COVID-19.

This segment’s end users are primarily professional painters in the construction and maintenance industries, tradesmen and do-it-yourselfers.

15 unchanged sentences

To manage cost, we source significant amounts of materials and components from outside the U.S., primarily in the Asia Pacific region.

In 2019 , our raw material and purchased component availability was strong.

In 2020, our raw material and purchased component availability was sufficient, although we saw isolated instances where supply was interrupted by impacts of the COVID-19 pandemic on our suppliers.

Generally we are able to find alternative suppliers to source raw materials and components for our products if interruptions persist.

Pressures from tariffs, mostly on metals and electronics, and increased material prices, particularly in aluminum, stainless steel, carbon steel bar stock, electronic controls, plastics and copper, increased production cost in 2020.

Although pressures from tariffs continue in 2020, we are working with our supplier base on a variety of opportunities to lessen the effect.

Although pressures from tariffs continued in 2020, we worked with our supplier base on a variety of opportunities to lessen the effect.

We endeavor to address fluctuations in the price and availability of various materials and components through adjustable surcharges and credits, close management of current suppliers, price negotiations and an intensive search for new suppliers.

7 unchanged sentences

and foreign countries, including registered trademarks for “GRACO,” “Gema,” several forms of a capital “G,” and various product trademarks that are material to our business, inasmuch as they identify Graco and our products to our customers.

Sales to Major Customers

Worldwide sales in the Contractor and Industrial segments to The Sherwin-Williams Company represented over 10 percent of the Company’s consolidated sales in 2019 , 2018 and 2017 .

We encounter a wide variety of competitors that vary by product, industry and geographic area.

7 unchanged sentences

We also face competitors who illegally sell counterfeits of our products or otherwise infringe on our intellectual property rights.

We may have to increase our intellectual property and unfair competition enforcement activities.

As this type of unfair competition grows or evolves, we may have to increase our intellectual property and unfair competition enforcement activities.

Environmental Protection

Our compliance with federal, state and local laws and regulations did not have a material effect upon our capital expenditures, earnings or competitive position during the fiscal year ended December 25, 2020.

Human Capital Resources

As of December 25, 2020, we employed approximately 3,700 persons.

4 unchanged sentences

Compliance with such agreements has no material effect on our Company or our operations.

The location of the majority of our manufacturing operations within the U.S.

allows us to flex employee resources as needed to respond to changes in demand of our business.

During 2020, we were able to temporarily reassign manufacturing employees to our Contractor segment from other segments to align with sales demand.

Our manufacturing, product development, warehouse and administrative employees are generally located in the same or adjacent facilities, which we believe contributes to our culture of strong manufacturing, engineering and customer service capabilities.

Health, Wellness & Safety

The personal health and safety of each of our employees is of primary importance.

The prevention of occupationally-induced injuries and illnesses is given precedence over operating productivity.

Our Health, Wellness and Safety program is designed to increase employee engagement, reduce employee absenteeism due to illness or injury, provide healthier lifestyle choices by our employees, and reduce health risk factors for our employees.

During 2020, our experience with – and ongoing commitment to - workplace health and safety enabled us to remain operational during the COVID-19 pandemic while at the same time protecting the health and safety of our employees and workplace visitors.

In response to the COVID-19 pandemic, we implemented enhanced safety and cleaning protocols, altered our manufacturing operations to allow for appropriate social distancing and hygiene, provided additional personal protective equipment to employees, provided paid time-off for employees directly impacted by COVID-19, implemented work-from-home arrangements for most office employees, and invested in modifications to factories, manufacturing cells and office space to create a safe work environment for our employees.

We did not implement any workforce or pay reductions in response to the COVID-19 pandemic.

Total Rewards

Our reward programs connect all employees to the performance and success of the Company.

As an employer of choice we offer pay, benefits and a work environment that attracts and retains high-performing talent.

We believe that an effective

compensation program must be at target of market as well as fair and equitable.

Our compensation program is designed to attract and retain top talent, drive and reward performance and enhance our reputation.

Our total reward program is comprised of various elements, including base pay, variable pay, equity-based compensation for all employees, and health, welfare and retirement benefits.

To achieve our strategic objectives, it is imperative that we attract, develop and retain qualified personnel.

We seek to develop talent from within our organization and supplement our workforce with external hires as necessary.

This approach has helped create among our employees an in-depth understanding of our business, products, competition and customers, while also adding new employee ideas and perspectives in support of our continuous improvement initiatives.

Our executive officers responsible for setting overall strategy average nearly 26 years of tenure with us.

Tenure of all employees averages nearly 11 years, reflective of our positive workplace culture.

Our recruiting team uses internal and external resources to recruit highly skilled and talented workers, and we encourage and reward employee referrals for open positions.

We are committed to maintaining a culture of trust that recognizes the dignity and uniqueness of the individual.

We provide equal opportunities for professional growth and advancement based on performance, qualifications, demonstrated skill and achievements.

All employees are encouraged, under a continuous improvement program with financial incentives, to submit ideas to improve profitability, quality, safety and environmental practices.

New employee orientations and regular ethics training are required for all employees.

We complete a biennial survey of our employees to assess our culture and make improvements as necessary.

We have a long history of giving back to the communities where we live and work through the volunteer efforts of our employees and the giving efforts of the Graco Foundation.

The Graco Foundation’s goal is to help organizations grow their ability to serve community needs through grants focused on capital projects, specific programs and technology needs.

The Graco Foundation places emphasis on educational programs, especially STEM (science, technology, engineering and math) programs;

human service programs promoting workforce development;

and youth development programs.

The Graco Foundation also supports several employee-based programs, including dollar-for-dollar gift matching, grants to support volunteerism, scholarships for children of employees, tutoring with a local middle school and an annual Paint-A-Thon that helps low-income seniors and people with permanent disabilities continue to live independently in their own homes .

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business