Graco 2005 Annual Report Download - page 21

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Operating income by segment was as follows for the year ended December 31, (in millions):
2004 2003 % Change
Cleaning & OrganizationÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $100.7 $103.6 (2.8)%
OÇce Products ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 261.9 309.6 (15.4)
Tools & Hardware ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 181.8 179.3 1.4
Home FashionsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 33.0 44.4 (25.7)
Other ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 92.0 114.8 (19.9)
Corporate ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (39.4) (30.3) (30.0)
Impairment charges ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (295.1) (34.5)
Restructuring costsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (44.2) (189.3) Ì
Total Operating Income ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $290.7 $497.6 (41.6)%
Cleaning & Organization
Net sales for 2004 were $1,702.7 million, a decrease of $145.9 million, or 7.9%, from $1,848.6 million
in 2003. The 7.9% sales decrease was driven primarily by a decline in the Rubbermaid Home Products
business due to planned low-margin product line rationalizations, partially oÅset by favorable pricing and
increases in core product sales in the Rubbermaid Foodservice, Rubbermaid Commercial, and Rubbermaid
Asia PaciÑc businesses.
Operating income for 2004 was $100.7 million, a decrease of $2.9 million, or 2.8%, from
$103.6 million in 2003. The decrease in operating income is primarily the result of higher raw material
costs (particularly resin), partially oÅset by favorable pricing and improvement in Rubbermaid
Commercial and Rubbermaid Asia PaciÑc businesses.
OÇce Products
Net sales for 2004 were $1,686.2 million, an increase of $5.0 million, or 0.3%, from $1,681.2 million
in 2003. The increase in net sales primarily resulted from a single-digit increase in the writing instruments
business on the strength of innovative new products, largely oÅset by the exit of low margin resin based
products in the Eldon oÇce products business.
Operating income for 2004 was $261.9 million, a decrease of $47.7 million, or 15.4%, from
$309.6 million in 2003. The decrease in operating income was driven by restructuring related costs in the
European writing instruments business and raw material inÖation, primarily in resin costs in the Eldon
oÇce products division, partially oÅset by improvement in the Sanford Latin America and Sanford Asia
PaciÑc businesses.
Tools & Hardware
Net sales for 2004 were $1,218.7 million, an increase of $19.0 million, or 1.6%, from $1,199.7 million
in 2003. The increase in net sales was driven by increases in the LENOX businesses.
Operating income for 2004 was $181.8 million, an increase of $2.5 million, or 1.4%, from
$179.3 million in 2003. The improvement in operating income was generated primarily by productivity
savings, sales increases and streamlining initiatives, partially oÅset by raw material inÖation.
Home Fashions
Net sales for 2004 were $906.8 million, an increase of $5.8 million, or 0.6%, from $901.0 million in
2003. The increase in net sales was driven primarily by favorable foreign currency Öuctuation, partially
oÅset by planned product line exits in the Swish UK business.
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