Exhibit 99

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

      Graco Inc. (the  "Company")  wishes to take advantage of the "safe harbor"
provisions  regarding  forward-looking  statements  of  the  Private  Securities
Litigation  Reform Act of 1995 and is filing this Cautionary  Statement in order
to do so.

      From time to time various  forms filed by the Company with the  Securities
and Exchange  Commission,  including the Company's Form 10-K, Form 10-Q and Form
8-K, its Annual  Report to  Shareholders,  and other  written  documents or oral
statements  released by the  Company,  may contain  forward-looking  statements.
Forward-looking  statements  generally  use words such as  "expect,"  "foresee,"
"anticipate,"  "believe,"  "project," "should,"  "estimate," "will", and similar
expressions,  and reflect the Company's expectations concerning the future. Such
statements are based upon currently available information, but various risks and
uncertainties  may cause the Company's actual results to differ  materially from
those expressed in these statements. Among the factors which management believes
could affect the Company's operating results are the following:

     o    With  respect to the  Company's  business  as a whole,  the  Company's
          prospects and operating results may be affected by:

          -    changing economic conditions in the United States and other major
               world  economies,  including  economic  downturns or  recessions,
               capital goods  investment  activity,  interest  rates and foreign
               currency exchange rate fluctuations;

          -    international  trade factors,  including changes in international
               trade policy, such as export controls, trade sanctions, increased
               tariff barriers and other restrictions;  weaker protection of the
               Company's  proprietary  technology in certain foreign  countries,
               the burden of  complying  with foreign  laws and  standards;  and
               potentially burdensome taxes;

          -    the  ability  of  the  Company  to  develop  new   products   and
               technologies;  maintain and enhance its market position  relative
               to  its  competitors;   maintain  and  enhance  its  distribution
               channels;  identify  and  enter  into new  markets;  successfully
               conclude and integrate  acquisitions;  realize  productivity  and
               product quality improvements; and continue to control expenses.

          -    disruption in operations, transportation,  communication, sources
               of supply, customer operations or payment, caused by political or
               economic instability,  acts of God, labor disputes, war, embargo,
               fire or other cause beyond its reasonable control.

          -    changes  in  the  markets  in  which  the  Company  participates,
               including  consolidation of competitors and major customers,  and
               price competition

     o    The  prospects  and  operating  results  of the  Company's  Contractor
          Equipment  Division  may be affected  by:  variations  in the level of
          residential,  commercial  and  institutional  building and  remodeling
          activity;  the  availability  and cost of  financing;  changes  in the
          environmental  regulation  of  coatings;  consolidation  in the  paint
          equipment  manufacturing  industry;  changes in the business practices
          (including   inventory   management)  of  the  major  distributors  of
          contractor   equipment;   changes  in   construction   materials   and
          techniques;  the cost of labor in foreign markets; the regional market
          strength of certain  competitors;  the level of government spending on
          infrastructure  development  and road  construction,  maintenance  and
          repair; and the nature and extent of highway safety regulation.

     o    The    prospects    and    operating    results   of   the   Company's
          Industrial/Automotive  Equipment  Division  may be  affected  by:  the
          capital  equipment  spending  levels  of  industrial  customers;   the
          availability   and  cost  of  customer   financing;   changes  in  the
          environmental  regulation  of  coatings;   changes  in  the  technical
          characteristics of materials;  changes in application technology;  the
          ability  of  the  Company  to  meet  changing  customer  requirements;
          consolidation in the fluid handling equipment  manufacturing industry;
          the  equipment  purchase  plans  of  major  automobile   manufacturers
          worldwide (which are in turn impacted by the level of automotive sales
          worldwide); changes in automotive manufacturing processes; the pricing
          strategies   of   competitors;   consolidation   in   the   automobile
          manufacturing  industry  worldwide;  and the success of the Company in
          moving its automotive  customers from  custom-designed  systems to the
          purchase of the Company's package modules sold through integrators and
          distributors.

     o    The  prospects  and  operating  results of the  Company's  Lubrication
          Equipment  Division  may be  affected  by  consolidation  in  the  oil
          industry;  the  development of extended life  lubricants for vehicles;
          the reduction in the need for changing  vehicle  lubricants;  consumer
          trends   in   "do-it-yourself"   vs.   "do-it-for-me"   oil   changes;
          consolidation of automotive  dealerships;  trends in spending by state
          and local governments, and variations in the equipment spending levels
          of the major oil companies.