UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

Quarterly Report Pursuant to Section 13 or 15 (d) of the Securities
Exchange Act of 1934

For the quarterly period ended September 24, 2004

Commission File Number: 001-9249

	GRACO INC.
	(Exact name of Registrant as specified in its charter)

Minnesota		41-0285640
(State of incorporation)		(I.R.S. Employer Identification Number)

88 - 11th Avenue N.E.
Minneapolis, Minnesota		55413
(Address of principal executive offices)		(Zip Code)

	(612) 623-6000
	(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days.

Yes

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act).

Yes

69,132,000 common shares were outstanding as of October 19, 2004.

GRACO INC. AND SUBSIDIARIES

INDEX

			Page Number
PART I	FINANCIAL INFORMATION

	Item 1.	Financial Statements

		Consolidated Statements of Earnings	3
		Consolidated Balance Sheets	4
		Consolidated Statements of Cash Flows	5
		Notes to Consolidated Financial Statements	6-10

	Item 2.	Management's Discussion and Analysis of Financial
		Condition and Results of Operations	11-14

	Item 4.	Controls and Procedures	14


PART II	OTHER INFORMATION

	Item 1.	Legal Proceedings	15

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	15-16

	Item 4.	Submission of Matters to a Vote of Security Holders	16

	Item 6.	Exhibits	17

SIGNATURES			18

EXHIBITS

PART I

	GRACO INC. AND SUBSIDIARIES
Item I.	CONSOLIDATED STATEMENTS OF EARNINGS
	(Unaudited)
	(In thousands except per share amounts)

	Thirteen Weeks Ended				Thirty-nine Weeks Ended
	Sept 24, 2004		Sept 26, 2003		Sept 24, 2004		Sept 26, 2003

Net Sales	$	149,066	$	133,788	$	444,213	$	399,812

Cost of products sold		66,946		62,385		203,547		189,474

Gross Profit		82,120		71,403		240,666		210,338

Product development		5,231		4,464		15,798		13,265
Selling, marketing and distribution		24,449		23,794		73,976		71,979
General and administrative		9,195		9,111		29,208		27,680

Operating Earnings		43,245		34,034		121,684		97,414

Interest expense		115		146		384		386
Other expense (income), net		113		377		277		360

Earnings Before Income Taxes		43,017		33,511		121,023		96,668

Income taxes		14,200		10,800		39,900		31,300

Net Earnings	$	28,817	$	22,711	$	81,123	$	65,368

Basic Net Earnings
Per Common Share	$	.42	$	.33	$	1.17	$	.94

Diluted Net Earnings
Per Common Share	$	.41	$	.32	$	1.15	$	.93

Cash Dividends Declared
Per Common Share	$	.09	$	.06	$	.28	$	.17

See notes to consolidated financial statements.

	GRACO INC. AND SUBSIDIARIES
	CONSOLIDATED BALANCE SHEETS
	(Unaudited)
	(In thousands)

	Sept 24, 2004			Dec 26, 2003
ASSETS

Current Assets
Cash and cash equivalents	$	56,273		$	112,118
Accounts receivable, less allowances
of $5,600 and $5,700		102,488			98,853
Inventories		39,108			29,018
Deferred income taxes		15,791			14,909
Other current assets		1,961			1,208
Total current assets		215,621			256,106

Property, Plant and Equipment
Cost		225,920			221,233
Accumulated depreciation		(134,948	)		(126,916	)
		90,972			94,317

Prepaid Pension		27,027			25,444
Goodwill		9,199			9,199
Other Intangible Assets		9,253			10,622
Other Assets		2,648			1,702
	$	354,720		$	397,390

LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities
Notes payable to banks	$	5,883		$	4,189
Trade accounts payable		18,096			15,752
Salaries, wages and commissions		17,180			16,384
Accrued insurance liabilities		8,750			9,939
Accrued warranty and service liabilities		8,972			9,227
Income taxes payable		9,584			5,981
Dividends payable		6,452			110,304
Other current liabilities		20,993			16,171
Total current liabilities		95,910			187,947

Retirement Benefits and Deferred Compensation		31,864			30,567

Deferred Income Taxes		8,927			9,066

Shareholders' Equity
Common stock		69,103			46,040
Additional paid-in capital		98,335			81,405
Retained earnings		51,618			43,295
Other, net		(1,037	)		(930	)
Total shareholders' equity		218,019			169,810
	$	354,720		$	397,390

See notes to consolidated financial statements

	GRACO INC. AND SUBSIDIARIES
	CONSOLIDATED STATEMENTS OF CASH FLOWS
	(Unaudited)
	(In thousands)

	Thirty-nine Weeks Ended
	Sept 24, 2004			Sept 26, 2003
Cash Flows from Operating Activities

Net Earnings	$	81,123		$	65,368
Adjustments to reconcile net earnings to net cash
provided by operating activities
Depreciation and amortization		13,333			13,568
Deferred income taxes		(985	)		(764	)
Tax benefit related to stock options exercised		5,500			3,200
Change in:
Accounts receivable		(3,740	)		2,077
Inventories		(10,112	)		957
Trade accounts payable		2,353			(1,539	)
Salaries, wages and commissions		800			(547	)
Retirement benefits and deferred compensation		(777	)		2,173
Other accrued liabilities		7,015			47
Other		(152	)		223
		94,358			84,763

Cash Flows from Investing Activities

Property, plant and equipment additions		(9,184	)		(10,934	)
Proceeds from sale of property, plant and equipment		126			109
Capitalized software additions		(856	)		--
Acquisition of business		--			(13,514	)
		(9,914	)		(24,339	)

Cash Flows from Financing Activities

Borrowings on notes payable and lines of credit		20,943			12,588
Payments on notes payable and lines of credit		(19,186	)		(21,217	)
Common stock issued		14,075			9,427
Common stock retired		(32,773	)		(55,496	)
Cash dividends paid		(123,460	)		(11,460	)
		(140,401	)		(66,158	)
Effect of exchange rate changes on cash		112			(1,606	)
Net increase (decrease) in cash and cash equivalents		(55,845	)		(7,340	)

Cash and cash equivalents

Beginning of year		112,118			103,333
End of period	$	56,273		$	95,993

See notes to consolidated financial statements.

	GRACO INC. AND SUBSIDIARIES
	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
	(Unaudited)

The consolidated balance sheet of Graco Inc. and Subsidiaries (the Company) as of September 24, 2004, and the related statements of earnings for the thirteen and thirty-nine weeks ended September 24, 2004 and September 26, 2003, and cash flows for the thirty-nine weeks ended September 24, 2004 and September 26, 2003 have been prepared by the Company without being audited.

In the opinion of management, these consolidated statements reflect all adjustments (consisting of only normal recurring adjustments) necessary to present fairly the financial position of Graco Inc. and Subsidiaries as of September 24, 2004, and the results of operations and cash flows for all periods presented.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. Therefore, these statements should be read in conjunction with the financial statements and notes thereto included in the Company’s 2003 Form 10-K.

The results of operations for interim periods are not necessarily indicative of results that will be realized for the full fiscal year.

2.	On February 20, 2004, the Board of Directors declared a three-for-two split of the Company’s common stock. The split was distributed on March 30, 2004 to shareholders of record on March 16, 2004. Share and per share amounts for all periods presented reflect the stock split.

3.	The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share amounts):

	Thirteen Weeks Ended				Thirty-nine Weeks Ended
	Sept 24, 2004		Sept 26, 2003		Sept 24, 2004		Sept 26, 2003
Net earnings available to
common shareholders	$	28,817	$	22,711	$	81,123	$	65,368

Weighted average shares
outstanding for basic
earnings per share		69,176		68,777		69,167		69,374

Dilutive effect of stock
options computed using the
treasury stock method and
the average market price		1,067		1,240		1,089		1,116

Weighted average shares
outstanding for diluted
earnings per share		70,243		70,017		70,256		70,490

Basic earnings per share	$	.42	$	.33	$	1.17	$	.94
Diluted earnings per share	$	.41	$	.32	$	1.15	$	.93

The Company accounts for stock option and purchase plans using the intrinsic value method and has adopted the “disclosure only” provisions of Statement of Financial Accounting Standards (SFAS) No. 123, as amended by SFAS No. 148, “Accounting for Stock-Based Compensation — Transition and Disclosure.” No compensation cost has been recognized for the Employee Stock Purchase Plan and stock options granted under the various stock incentive plans.

Had compensation cost been determined based upon fair value (using the Black-Scholes option-pricing method) at the grant date for awards under these plans, the Company’s net earnings and earnings per share would have been reduced as follows (in thousands, except per share amounts):

	Thirteen Weeks Ended				Thirty-nine Weeks Ended
	Sept 24, 2004		Sept 26, 2003		Sept 24, 2004		Sept 26, 2003
Net earnings

As reported	$	28,817	$	22,711	$	81,123	$	65,368
Stock-based compensation, net
of related tax effects		878		970		2,594		3,044

Pro forma	$	27,939	$	21,741	$	78,529	$	62,324

Net earnings per
common share

Basic as reported	$	.42	$	.33	$	1.17	$	.94
Basic pro forma		.40		.32		1.14		.90
Diluted as reported		.41		.32		1.15		.93
Diluted pro forma		.40		.31		1.12		.88

5.	The components of net periodic benefit cost for retirement benefit plans were as follows (in thousands):

	Thirteen Weeks Ended						Thirty-nine Weeks Ended
	Sept 24, 2004			Sept 26, 2003			Sept 24, 2004			Sept 26, 2003
Pension Benefits
Service cost	$	982		$	886		$	3,067		$	2,658
Interest cost		2,193			2,051			6,554			6,153
Expected return on assets		(3,524	)		(2,498	)		(10,571	)		(7,493	)
Amortization and other		5			213			263			638
Net periodic benefit cost (credit)	$	(344	)	$	652		$	(687	)	$	1,956

Postretirement Medical
Service cost	$	193		$	171		$	578		$	514
Interest cost		375			370			1,126			1,112
Amortization of net loss		113			90			339			269
Net periodic benefit cost	$	681		$	631		$	2,043		$	1,895

In December 2003, the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (the Act) was signed into law. The Company’s retirement medical plan is not eligible for the Medicare subsidy under the Act.

Total comprehensive income in 2004 was $28.8 million in the third quarter and $80.8 million year-to-date. In 2003, comprehensive income was $22.7 million for the third quarter and $65.6 million for the nine-month period. There have been no significant changes to the components of comprehensive income from those noted on the 2003 Form 10-K.

The Company has three reportable segments; Industrial/Automotive, Contractor and Lubrication. The Company does not identify assets by segment. Sales and operating earnings by segment for the thirteen and thirty-nine weeks ended September 24, 2004 and September 26, 2003 were as follows (in thousands):

	Thirteen Weeks Ended						Thirty-nine Weeks Ended
	Sept 24, 2004			Sept 26, 2003			Sept 24, 2004			Sept 26, 2003
Net Sales

Industrial/Automotive	$	67,305		$	57,276		$	197,027		$	167,378
Contractor		68,620			65,316			209,205			197,060
Lubrication		13,141			11,196			37,981			35,374
Consolidated	$	149,066		$	133,788		$	444,213		$	399,812

Operating Earnings

Industrial/Automotive	$	22,612		$	16,981		$	63,980		$	46,253
Contractor		18,670			17,493			54,150			48,186
Lubrication		3,446			1,549			9,096			7,136
Unallocated Corporate
expenses		(1,483	)		(1,989	)		(5,542	)		(4,161	)
Consolidated	$	43,245		$	34,034		$	121,684		$	97,414

8.	Major components of inventories were as follows (in thousands):

	Sept 24, 2004			Dec 26, 2003

Finished products and components	$	30,160		$	25,548

Products and components in various stages
of completion		16,760			16,464

Raw materials and purchased components		19,437			15,408

		66,357			57,420

Reduction to LIFO cost		(27,249	)		(28,402	)

	$	39,108		$	29,018

9.	Information related to other intangible assets follows (in thousands):

	September 24, 2004						December 26, 2003
	Original Cost		Amorti- zation		Book Value		Original Cost		Amorti- zation		Book Value
Customer lists and
distribution network	$	3,765	$	1,354	$	2,411	$	8,336	$	4,980	$	3,356

Trademarks, trade names
and non-compete
agreements		1,494		606		888		2,803		1,622		1,181

Patents and other		1,241		567		674		1,241		436		805
		6,500	$	2,527		3,973		12,380	$	7,038		5,342

Not Subject to
Amortization:
Brand name		5,280				5,280		5,280				5,280
	$	11,780			$	9,253	$	17,660			$	10,622

Amortization of intangibles was $0.3 million in the third quarter of 2004 and $1.4 million year-to-date. Estimated annual amortization is as follows: $1.7 million in 2004, $1.1 million in 2005, $0.9 million in 2006, $0.9 million in 2007, $0.4 million in 2008 and $0.3 million thereafter.

10.

A liability is established for estimated future warranty and service claims that relate to current and prior period sales. The Company estimates warranty costs based on historical claim experience and other factors including evaluating specific warranty issues. Following is a summary of activity in accrued warranty and service liabilities (in thousands):

	Thirty-nine Weeks Ended Sept 24, 2004			Year Ended Dec 26, 2003

Balance, beginning of year	$	9,227		$	6,294
Charged to expense		5,531			9,490
Margin on parts sales reversed		2,065			4,697
Reductions for claims settled		(7,851	)		(11,254	)
Balance, end of period	$	8,972		$	9,227

11.

The Company has been named as a defendant in a number of lawsuits alleging bodily injury as a result of exposure to asbestos or silica. None of the suits make any allegations specifically regarding the Company or any of its products. Management does not know why the Company was included in the suits along with hundreds of other defendants. Management does not expect that resolution of these matters will have a material adverse effect on the Company, although the ultimate outcome cannot be determined based on available information.

	GRACO INC. AND SUBSIDIARIES
Item 2.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF
	FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Results of Operations

Increased sales and higher gross margin rates resulted in a 27 percent increase in net earnings for the quarter and a 24 percent increase year-to-date. Factors contributing to the improved results include better economic conditions, controlled spending increases, and favorable foreign currency translation rates. Translated at consistent exchange rates, third quarter and year-to-date net earnings increased by 21 percent and 17 percent, respectively.

The following table sets forth items from the Company’s Consolidated Statements of Earnings as percentages of net sales:

	Thirteen Weeks Ended						Thirty-nine Weeks Ended
	Sept 24, 2004			Sept 26, 2003			Sept 24, 2004			Sept 26, 2003
Net Sales		100.0	%		100.0	%		100.0	%		100.0	%
Cost of products sold		44.9			46.6			45.8			47.4
Gross Profit		55.1			53.4			54.2			52.6
Product development		3.5			3.4			3.5			3.3
Selling, marketing and distribution		16.4			17.8			16.7			18.0
General and administrative		6.2			6.8			6.6			6.9
Operating Earnings		29.0			25.4			27.4			24.4
Interest expense		0.1			0.1			0.1			0.1
Other (income) expense, net		0.1			0.3			--			0.1
Earnings Before Income Taxes		28.8			25.0			27.3			24.2
Income taxes		9.5			8.0			9.0			7.9
Net Earnings		19.3	%		17.0	%		18.3	%		16.3	%

Net Sales

Sales by segment and geographic area were as follows (in thousands):

	Thirteen Weeks Ended		Thirty-nine Weeks Ended
	Sept 24, 2004	Sept 26, 2003	Sept 24, 2004	Sept 26, 2003
By Segment

Industrial/Automotive	$ 67,305	$ 57,276	$197,027	$167,378
Contractor	68,620	65,316	209,205	197,060
Lubrication	13,141	11,196	37,981	35,374
Consolidated	$149,066	$133,788	$444,213	$399,812

By Geographic Area

Americas¹	$100,621	$ 93,307	$297,663	$278,303
Europe²	29,533	24,383	90,525	75,119
Asia Pacific	18,912	16,098	56,025	46,390
Consolidated	$149,066	$133,788	$444,213	$399,812

North and South America, including the U.S.

Europe, Africa and Middle East

Industrial/Automotive segment sales increased 18 percent for the both the quarter and year-to date. Translated at consistent exchange rates, sales increased 14 percent for the quarter and 13 percent year-to-date. Sales in this segment grew in all three geographic regions and across all major product categories. New product introductions contributed to sales growth, including the ProMix™ II and ProMix Easy units, which were launched in the second quarter.

Contractor segment sales increased 5 percent for the quarter and 6 percent year-to-date. Translated at consistent exchange rates, sales were up 4 percent for the quarter and 5 percent year-to-date. Sales increased in all geographic regions, with strong volume increases in Europe and Asia Pacific. In the Americas, sales were higher in both the professional paint store channel and in the home center channel. Sales were aided by demand for new products, including the new Ultra® Max II sprayers and a new texture unit.

Lubrication segment sales were up 17 percent for the quarter and 7 percent year-to-date. Translated at consistent exchange rates, sales were up 16 percent for the quarter and 6 percent year-to-date. Sales increased in all geographic regions, with most of the increase from the Americas. New product introductions include the Mini Fire-Ball oil pump released for sale in August.

Gross Profit

Gross margin rate was higher for the quarter and year-to-date. The effect of higher material costs on margin rate was more than offset by the favorable effects of production volume, productivity, favorable foreign currency translation rates and pension costs.

Operating Expenses

Operating expenses for the quarter were 4 percent higher than the third quarter last year and 5 percent higher year-to-date. Operating expenses for both the quarter and year-to-date decreased as a percentage of sales. The Company increased spending on product development to meet its stated objective of creating sales growth from new products. Changes in currency translation rates contributed significantly to the increase in selling, marketing and distribution expenses. Year-to-date contributions to the Company’s charitable foundation (included in general and administrative expenses) were $2.7 million in 2004 compared to $1.1 million last year.

Year-to-date operations include a pension benefit credit of $.7 million compared to $2 million of expense in the same period last year. This change resulted from the increase in pension plan assets due to investment gains and the $20 million voluntary contribution made in the fourth quarter of 2003. Pension income / expense is allocated based on related salaries and wages, approximately 45 percent to cost of products sold and 55 percent to operating expenses.

Liquidity and Capital Resources

Significant uses of cash in the first nine months of 2004 included $123 million of dividends paid (including $104 million for a one-time special dividend) and $33 million for purchases and retirement of Company common stock. Inventories have increased to support higher sales and from actions taken to improve customer service.

The Company has announced that it intends to open a manufacturing facility in the Shanghai region of China sometime in the second half of 2005. The facility will be approximately 50,000 square feet and will require approximately $4 million in capital investment.

The Company had unused lines of credit available at September 24, 2004 totaling $48 million. Subsequent to the end of the quarter, the Company obtained an additional $20 million uncommitted line of credit. Cash balances of $56 million at September 24, 2004, internally generated funds and unused financing sources provide the Company with the financial flexibility to meet liquidity needs, including its capital expenditure plan.

Outlook

Management has not been able to identify economic indicators that predict future Company results. The Company has experienced sales growth from favorable economic conditions and has leveraged fixed costs to improve profitability. Management is encouraged by these results, especially given the substantial price increases the Company has experienced for raw materials like steel. Management will attempt to protect the Company’s margins by increasing prices in 2005 and continuing to reduce manufacturing costs and improve efficiencies. While management is uncertain as to the duration of the economic recovery, it is cautiously optimistic that favorable conditions will remain for the balance of 2004 and into early 2005. Management is looking forward to the prospects for further growth as it pursues its strategies of developing new product, entering new markets, expanding distribution and making strategic acquisitions.

SAFE HARBOR CAUTIONARY STATEMENT

A forward-looking statement is any statement made in this report and other reports that the Company files periodically with the Securities and Exchange Commission, as well as in press or earnings releases, analyst briefings and conference calls, which reflects the Company’s current thinking on market trends and the Company’s future financial performance at the time they are made. All forecasts and projections are forward-looking statements.

The Company desires to take advantage of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 by making cautionary statements concerning any forward-looking statements made by or on behalf of the Company. The Company cannot give any assurance that the results forecasted in any forward-looking statement will actually be achieved. Future results could differ materially from those expressed, due to the impact of changes in various factors. These risk factors include, but are not limited to: economic conditions in the United States and other major world economies, currency fluctuations, political instability, changes in laws and regulations, and changes in product demand. Please refer to Exhibit 99 to the Company’s Annual Report on Form 10-K for fiscal year 2003 for a more comprehensive discussion of these and other risk factors.

Investors should realize that factors other than those identified above and in Exhibit 99 might prove important to the Company’s future results. It is not possible for management to identify each and every factor that may have an impact on the Company’s operations in the future as new factors can develop from time to time.

Item 4.

CONTROLS AND PROCEDURES

Evaluation of disclosure controls and procedures

As of the end of the fiscal quarter covered by this report, the Company carried out an evaluation of the effectiveness of the design and operation of its disclosure controls and procedures. This evaluation was done under the supervision and with the participation of the Company’s President and Chief Executive Officer, Vice President and Controller, Vice President and Treasurer, and Vice President, General Counsel and Secretary. Based upon that evaluation, they concluded that the Company’s disclosure controls and procedures are effective in gathering, analyzing and disclosing information needed to satisfy the Company’s disclosure obligations under the Exchange Act.

Changes in internal controls

During the quarter, there was no change in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II

Item 1. Legal Proceedings

The Company is engaged in routine litigation incident to its business, which management believes will not have a material adverse effect on its operations or consolidated financial position. The Company has also been named as a defendant in a number of lawsuits alleging bodily injury as a result of exposure to asbestos, and a number of lawsuits alleging bodily injury as a result of exposure to silica. All of these lawsuits have multiple (most in excess of 100) defendants, and several have multiple plaintiffs. None of the suits make any allegations specifically regarding the Company or any of its products. A substantial portion of the cost and potential liability for these cases is covered by insurance, although the exact extent of insurance coverage cannot be determined at this time because the cases are in the early stages of the litigation process and the allegations are so indefinite. Management does not expect that resolution of these matters will have a material adverse effect on the Company, although the ultimate outcome cannot be determined based on available information.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities ¹

On February 22, 2002, the Board of Directors authorized a plan for the Company to purchase up to a total of 2,700,000 shares of its outstanding common stock, primarily through open-market transactions. This plan effectively expired upon approval of a new plan on February 20, 2004, authorizing the purchase of up to 3,000,000 shares and expiring on February 28, 2006.

In addition to shares purchased under the plan, the Company purchases shares of common stock held by employees who wish to tender owned shares to satisfy the exercise price or tax withholding on stock option exercises.

Information on issuer purchases of equity securities follows:

Period	(a) Total Number of Shares Purchased	(b) Average Price Paid per Share	(c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	(d) Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs (at end of period)

Jun 26, 2004 - Jul 23, 2004	--	--	--	2,471,200

Jul 24, 2004 - Aug 20, 2004	245,678	$30.60	236,800	2,234,400

Aug 21, 2004 - Sep 24, 2004	47,800	$31.00	47,800	2,186,600

¹	All share and per share data reflects the three-for-two stock splits distributed on June 6, 2002 and March 30, 2004.

Item 4.	Submission of Matters to a Vote of Security Holders

	None

Item 6.	Exhibits

		31.1	Certification of President and Chief Executive Officer pursuant to Rule 13a-14(a)

		31.2	Certification of Vice President and Controller pursuant to Rule 13a-14(a)

		31.3	Certification of Vice President and Treasurer pursuant to Rule 13a-14(a)

		32	Certification of President and Chief Executive Officer, Vice President and Controller, and Vice President and Treasurer pursuant to Section 1350 of Title 18, U.S.C.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

			GRACO INC.
Date:	October 22, 2004	By:	/s/David A. Roberts

			David A. Roberts
			President and Chief Executive Officer
Date:	October 22, 2004	By:	/s/James A. Graner

			James A. Graner
			Vice President and Controller
Date:	October 22, 2004	By:	/s/Mark W. Sheahan

			Mark W.Sheahan
			Vice President and Treasurer