Chief Financial Officer & Treasurer, Graco
Search every verified David Lowe interview, podcast appearance, and on-the-record quote — each transcript cross-checked by AI and human review to confirm speaker identity. At the Gabelli PVW Symposium on March 17, 2025, David Lowe discussed Graco's business strategy and market conditions. He described the company's focus on niche, sub-billion dollar markets with stable competitors, and noted that Graco invests about 4% of revenue annually in product development. Lowe stated that over the past 20 years, Graco has repurchased more than $2 billion of its stock, achieving a return on investment of approximately 155%. He also said that more than 80% of Graco's manufacturing is based in the U.S., with labor comprising only about 8% of cost of goods sold. Regarding market headwinds, Lowe noted that in 2024, Graco's industrial segment faced strong negative impacts from China and the semiconductor business, though order activity appeared to be stabilizing at lower levels. He pointed to the aging U.S. housing stock—with a median age of 42 years, up from 28 in 2000—as a long-term opportunity for the company's remodel and repaint sector. On tariffs, Lowe said most of Graco's key vendors are domestic or nearby, and that tariffs might add one to two percent to purchase costs, though he acknowledged a lack of complete visibility into vendor sourcing.
“We like businesses that are global, we like recurring revenue, and we like critical applications because business-to-business people will pay you well if you offer durable high-quality solutions. Our customers are return on investment driven, as in fact we are; it's part of our culture and reflected in our operating re...”
“The Corab deal fits within our special sphere of niche markets, which are mostly sub-billion dollar markets, relatively stable with known competitors. We like that new competitors typically don't enter these specialized markets, and corporate industrial behemoths owning the whole market wouldn't mean much to them.”
“We invest about 4% a year in product development because in business-to-business environments, where people look to improve productivity and ROI, the best product wins if you can get it into people's hands with high enough quality and support at a reasonable price.”
“We have brought in a little more than 2 billion dollars worth of stock over the last 20 years with a return on investment of about 155%. We like to be in a position to move quickly and aggressively when the stock goes on sale, which happens roughly every three or four years with a 30-35% drop.”
“Our manufacturing footprint is interesting: while we are a global company, more than 80% of our manufacturing is here in the US. We stay competitive by competing with automation and state-of-the-art machine tools, robotics, and by consolidating global demand in dedicated factories.”
“Labor is only about 8% of our cost of goods sold; the labor component is quite small, and the raw inputs come from global markets. We compete with sophisticated corporate players like Idex, Nordson, and IDEX, but not with global behemoths like Siemens or Emerson Electric.”
“Being a public company has pros and cons. The quarterly and annual reporting requirements are expensive and ongoing, but we strive to take advantage of being public by offering employee stock purchase plans and stock grant programs to give employees skin in the game and share in the company's financial success.”
“Most of our key vendors are domestic or nearby, so tariffs might add one or two percent to our purchase costs, which would surprise me. However, we lack complete visibility into where our vendors source their parts, which is a risk we monitor closely.”
“In 2024, our industrial side faced strong negative impacts from China and the semiconductor business, but order activity showed steadiness and appears to be stabilizing at lower levels. We hope to see improvement in 2025.”
“The median age of US housing is now 42 years, up from 28 years in 2000, which presents a big opportunity for remodeling and repainting. As more existing homes come to market, this will be very good for our remodel and repaint sector.”
Kevin Dreyer (Co-CIO, Value) moderates a discussion with Graco Inc.'s David Lowe (CFO & Treasurer) and John Bower (Director ...
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