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We manufacture a majority of our products in the United States (“U.S.”).
−Removed: We manufacture some of our products in Switzerland (Industrial segment), Italy (Industrial segment), the United Kingdom (Process segment), the People’s Republic of China (“P.R.C.”) (all segments), Belgium (all segments) and Romania (Industrial segment).
+Added: We also manufacture products in Switzerland (Industrial segment), Italy (Industrial segment), the United Kingdom (Process segment), the People’s Republic of China (“P.R.C.”) (all segments), Belgium (all segments) and Romania (Industrial segment).
Our manufacturing is aligned with our business segments and is co-located with product development to accelerate technology improvements and improve our cost structure.
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Shanghai, P.R.C.;
−Removed: and Montevideo, Uruguay;
−Removed: reinforce our commitment to their regions.
−Removed: During 2020, manufacturing capacity met business demand.
+Added: and Porto Alegre, Brazil reinforce our commitment to their regions.
+Added: Our manufacturing capacity is sufficient for current business demand levels.
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.
−Removed: In 2020, we completed a project to significantly expand our Contractor segment facility in Rogers, Minnesota.
+Added: Construction is in progress on a facility in Dayton, Minnesota that will contain manufacturing operations for our high performance coatings and foam business as well as a portion of our Process division.
+Added: In 2022, we expect to begin facility expansion projects in our Sioux Falls, South Dakota;
+Added: Gallen, Switzerland;
+Added: and Sibiu, Romania manufacturing facilities.
We are in the planning and design phases of additional projects to expand capacity in other manufacturing and distribution locations in 2022 and beyond.
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and Coventry, United Kingdom.
+Added: In 2021, we opened facilities in Dongguan City, P.R.C.
+Added: and Aachen, Germany, devoted to the support and development of products for electronics assembly, battery and new energy vehicles.
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.
We continue to enhance our product capabilities with particular emphasis on automation and configurability, easier integration with end-user customer manufacturing and business systems, and increased focus on data and analytics.
−Removed: Our product development efforts focus on bringing new and supplemental return on investment value to end users of our products.
+Added: Our product development efforts focus on bringing new and supplemental return on investment value to end users of our products and enhance their ability to manage products and efficiency and support their sustainability initiatives.
Our Company consistently makes significant investments in new products.
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Our Company measures the results of acquired businesses as compared to historical results and projections made at the time of acquisition.
−Removed: Our Company will invest in engineering, manufacturing and commercial resources for these businesses based on expected return on investment.
+Added: We will invest in engineering, manufacturing and commercial resources for these businesses based on expected return on investment.
Business Segments
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We work with material suppliers to develop or adapt our equipment for use with specialized or hard-to-handle materials.
−Removed: Distributors promote and sell the equipment, hold inventory, provide product application expertise and offer on-site service, technical support and integration capabilities.
+Added: Distributors promote and sell the equipment, hold
+Added: inventory, provide product application expertise and offer on-site service, technical support and integration capabilities.
Integrators implement large individual installations in manufacturing plants where products and services from a number of different manufacturers are aggregated into a single system.
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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.
−Removed: 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.
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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.
−Removed: 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.
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Contractor products are also sold through general equipment distributors outside of North America.
+Added: 2022 Change in Organizational Structure
+Added: As previously announced, effective January 1, 2022, our high performance coatings and foam product offerings within the Applied Fluid Technologies division of the Industrial segment were realigned and are now managed under the Contractor segment.
+Added: High performance coatings and foam equipment includes two-component proportioning systems to spray foam and polyurea coatings, equipment that sprays specialty coatings for protection and fireproofing and vapor-abrasive blasting equipment.
+Added: Also effective January 1, 2022, our Oil and Natural Gas division is now combined into our Lubrication division, with no impact to Process segment reporting.
+Added: These changes will allow leadership to address overlap of markets, products, end users and distributors between the businesses.
+Added: Segment operating results will be reported under the new organizational structure commencing with the first quarter of 2022, in connection with the effective date of the realignment.
+Added: Historic segment information restated to conform to the new organizational structure is available as supplemental financial information on the Company’s website at www.graco.com.
Raw Materials
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To manage cost, we source significant amounts of materials and components from outside the U.S., primarily in the Asia Pacific region.
−Removed: 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.
−Removed: Generally we are able to find alternative suppliers to source raw materials and components for our products if interruptions persist.
−Removed: 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.
+Added: In 2021, we experienced logistical and production constraints associated with raw materials and purchased components.
+Added: These constraints were due to limited component availability, reduced freight capacity, shipping delays, and labor shortages.
+Added: While we were generally able to find alternative suppliers to source raw materials and components for our products as interruptions persisted, these constraints reduced our ability to meet strengthening demand and increased lead times across many of our product lines.
+Added: Additionally, we experienced price inflation related to raw materials and purchased components.
+Added: The effects of inflation were most pronounced on motors, electronics, and commodity prices for materials, such as aluminum, stainless steel, carbon steel bar stock, plastics and copper.
Although pressures from tariffs continued in 2021, we worked with our supplier base on a variety of opportunities to lessen the effect.
−Removed: 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.
+Added: We endeavor to address fluctuations in the price and availability of various materials and components through close management of current suppliers, price negotiations and an intensive search for new suppliers.
We have performed risk assessments of our key suppliers, and we factor the risks identified into our commodity plans.
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allows us to flex employee resources as needed to respond to changes in demand of our business.
−Removed: During 2020, we were able to temporarily reassign manufacturing employees to our Contractor segment from other segments to align with sales demand.
−Removed: 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.
+Added: Our manufacturing, product development, warehouse and
+Added: 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
1 unchanged sentence
The prevention of occupationally-induced injuries and illnesses is given precedence over operating productivity.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: We did not implement any workforce or pay reductions in response to the COVID-19 pandemic.
+Added: Our Health, Wellness and Safety program is designed to increase engagement, reduce absenteeism due to illness or injury, provide healthier lifestyle choices, and reduce health risk factors for our employees.
+Added: Our experience with – and ongoing commitment to – workplace health and safety has enabled us to remain operational throughout the COVID-19 pandemic while at the same time protecting the health and safety of our employees and workplace visitors.
+Added: We have implemented a variety of comprehensive protocols, practices, operational changes, workplace modifications and arrangements.
+Added: Employees have adapted to evolving conditions and continue to adapt as processes and procedures are adjusted and aligned with public health authority recommendations and requirements.
Total Rewards
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As an employer of choice, we offer pay, benefits and a work environment that attracts and retains high-performing talent.
−Removed: We believe that an effective
−Removed: compensation program must be at target of market as well as fair and equitable.
+Added: We believe that an effective compensation program must be market competitive 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.
−Removed: 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.
+Added: Our total rewards 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.
8 unchanged sentences
New employee orientations and regular ethics training are required for all employees.
−Removed: We complete a biennial survey of our employees to assess our culture and make improvements as necessary.
+Added: We complete a biennial survey of our employees to assess our culture, benchmark us against industry leaders, and to 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.
5 unchanged sentences
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.