Graco Inc. (NYSE:GGG) Q3 2023 Earnings Call Transcript

Mark Sheahan: Yes. So I think we disclosed that. We will disclose that in terms of the absolute levels that we’ve purchased. I think Chris gave that information. What we try to do here when we evaluate when to buy stock and how much to buy is we really run a discounted cash flow analysis on Graco. And we treat it like any other capital project that we might consider within the company. And long story short, we come up with a number. We look at the market cap of the company and the overall valuation. And to the extent that we feel like there’s a mismatch there. We are active in the market. And of course, we become more active in the market when we think that mismatch is broader. Historically, I think our approach has worked extremely well.

The last number that I saw that I think David shared with me is that over the last dozen or so years, our own IRR on stock buybacks is somewhere around 13% or 14%, which I feel really good about. So here in this quarter, obviously, there has been some weakness in the stock. We’ve gotten involved with it, and we’ll continue to be opportunistic as the year goes on.

David Lowe: Yes. And I think that’s the — that really remains the key word is opportunistic. And the way Mark described, the discounted cash flow/ROI, process we go through really is the way we do it. And while I may not necessarily think of Graco as a classic cyclical. We serve cyclical markets, and so the Street tends to think of us that way. And because of that, there will be opportunities from time to time to be more aggressive. And I think it’s something we keep in mind because when days — when times are dark, like they were in ’09 briefly in ’15 and certainly in ’20, we were positioned strongly to move aggressively and take advantage of those short-term discrepancies that seem to appear every so often.

Larry De Maria: Good luck. And if you have the price volume number, that would be helpful.

Operator: [Operator Instructions]. Our next question comes from the line of Jeff Hammond with KeyBanc Capital Markets. There are no further questions, I will now turn the conference over to Mark Sheanhan.

Mark Sheahan: Okay. Well, again, I want to thank everyone for participating in today’s call, and thank you for your loyalty and continued interest in Graco. Have a great day.

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