The Toro Company Reports Record First Quarter Fiscal 2015 Results

• First quarter sales increase 6.3 percent to $474.2 million
• Net earnings per share for the first quarter up 23 percent to $0.54
• Company well-positioned for spring selling season with innovative product line-up
• Full-year earnings guidance raised

BLOOMINGTON, Minn.-- Feb. 19, 2015-- The Toro Company today reported net earnings of $31 million, or $0.54 per share, on a net sales increase of 6.3 percent to $474.2 million for its 2015 first quarter ended January 30, 2015. In the comparable fiscal 2014 period, the company delivered net earnings of $25.9 million, or $0.44 per share, on net sales of $446 million.

“We are pleased to deliver record results for the quarter, which was not only the first of our fiscal year but also the first to include the BOSS® professional snow and ice management products as part of our expanded professional portfolio,” said Michael J. Hoffman, Toro’s chairman and chief executive officer.

“We are encouraged by the execution in that business and the sales it contributed to the quarter. Our integration efforts are progressing well and we continue to be optimistic about the prospects for future growth. Looking across our other professional businesses, shipments of worldwide golf and grounds equipment, landscape contractor turf equipment and rental products all increased in the quarter due to strong channel and retail demand for our innovative and productivity-enhancing offerings, helping to drive the double-digit revenue growth for that segment.”

“On the residential side of our business, we faced difficult first quarter comparisons due to last year’s early and abundant snowfalls that helped drive strong segment performance,” continued Hoffman. “This year, the robust pre-season demand that began in the second half of our 2014 fiscal year continued early in the quarter, but in-season demand was curtailed by a lack of snow events. The recent snowstorms that hit the Northeast and parts of Midwest at the end of our quarter, and are continuing to date, have helped to spur demand, drive retail sales, right-size field inventories and position us well for the pre-season next fall. 

All in, this is proving to be another successful snow season for us and one that helped our residential first quarter results, which otherwise were challenged by lower shipments of residential zero turn riding mowers due to supply inefficiencies and the ramp up of production of our highly anticipated new platform, as well as unfavorable currency exchange rates.”

“As we look ahead to our three key remaining tradeshows and beyond to our primary selling season, we believe we are well-positioned with a suite of new and innovative products that will help to drive retail sales and increase our market share across our businesses.

For example, at the Golf Industry Show next week, our Reelmaster® hybrid fairway mower and INFINITY® golf sprinklers are just two of the many new and enhanced products that will attract the attention of worldwide golf customers as they visit our booth and make equipment and irrigation selections for use in the development and renovation of golf courses.

At the Rental Show, which also is next week, we expect that the momentum from double-digit industry growth in 2014, combined with the excitement we expect to generate with the introduction of new products including our all-new Dingo® compact utility loader, will help to drive rental customer orders.

Finally, in March, BOSS will exhibit at the NTEA Work Truck Show and unveil several new products and features that will further evidence its innovation leadership in the professional snow and ice management market.”

“With our peak selling season still in front of us, we are optimistic and hopeful that Mother Nature will deliver more normal spring conditions after two consecutive years in which it basically showed up in time to transition to the summer growing season. That said, we are mindful of the challenges our businesses and customers could face if, among other things, we encounter unfavorable swings in economic conditions, additional currency pressure or continued supply inefficiencies or disruptions resulting from U.S. 

West Coast port labor issues. We remain flexible and prepared to make adjustments across the enterprise as necessary and will continue to maintain our focus on the things we can control—investing in product innovation, delivering excellent customer service and executing in our markets.”

The company continues to expect revenue growth for fiscal 2015 to be about 8 to 10 percent, and now expects net earnings per share to be about $3.35 to $3.45. For the second quarter, the company expects net earnings per share to be about $1.58 to $1.63.

SEGMENT RESULTS

PROFESSIONAL

Professional segment net sales for the first quarter totaled $339.7 million, up 15 percent from $295.5 million in the same period last year. The addition of the BOSS snow and ice management products to our professional portfolio helped to drive sales growth for the quarter. Worldwide golf and grounds sales increased on strong channel and retail demand for turf equipment. Sales of landscape maintenance equipment also grew with continued demand for our professional zero turn riding and walk-behind mowing platforms. Somewhat offsetting these increases were unfavorable currency exchange rates and lower international micro-irrigation sales primarily due to unfavorable economic conditions. Professional segment earnings for the first quarter totaled $55.7 million, up 17.3 percent from $47.5 million in the same period last year.

RESIDENTIAL

Residential segment net sales for the first quarter were $134.7 million, down 8.7 percent from $147.6 million in the same period last year. This decrease primarily was due to lower shipments of residential zero turn riding mowers resulting from supply inefficiencies and the ramp up of production of our highly anticipated new platform that offers either dual lever or steering wheel controls, as well as lower international sales of residential products due to unfavorable currency exchange rates and weather conditions in Australia. Somewhat offsetting these decreases were higher pre-season domestic sales of walk power mowers due to expanded channel placement and increased demand for our innovative product line-up, including the new all-wheel drive model. Sales of our residential snow thrower products also were up modestly. Residential segment earnings for the first quarter were $13.7 million, down $4.4 million from $18.1 million the same period last year.

OPERATING RESULTS

Gross margin as a percent of sales for the first quarter was 35.6 percent, a decrease of 110 basis points from the same period last year. This decrease primarily was due to the purchase accounting impact of the BOSS acquisition and unfavorable currency exchange rates, somewhat offset by favorable segment mix.

Selling, general and administrative (SG&A) expense as a percent of sales for the first quarter was 26.2 percent, a decrease of 140 basis points from the same period last year. This decrease was due to lower expense as a percent of sales across various expense categories, including warranty, warehousing, administrative and incentive expenses.

First quarter operating earnings as a percent of sales were 9.4 percent, compared to 9.1 percent for the same period last year.

First quarter interest expense was $4.7 million, up $1 million from the same period last year, primarily due to the additional long-term debt issued in connection with the BOSS acquisition.

The effective tax rate for the first quarter was 26.3 percent, compared to 33.2 percent in the same period last year, primarily due to the retroactive reenactment of the domestic research tax credit for calendar year 2014.

Accounts receivable at the end of the first quarter totaled $205.3 million, up 2.7 percent from the same period last year. Net inventories were $364.4 million, up 19.5 percent from the same period last year. Trade payables were $195.6 million, up 1.5 percent from the same period last year.

About The Toro Company

The Toro Company is a leading worldwide provider of innovative solutions for the outdoor environment, including turf, snow and ground engaging equipment and irrigation and outdoor lighting solutions. With sales of $2.2 billion in fiscal 2014, Toro’s global presence extends to more than 90 countries. Through constant innovation and caring relationships built on trust and integrity, Toro and its family of brands have built a legacy of excellence by helping customers care for golf courses, landscapes, sports fields, public green spaces, commercial and residential properties and agricultural fields.

The Toro Company Reports Record Fiscal 2014 Results

Fiscal 2014 sales increase 6.4 percent to a record $2.2 billion Net earnings per share for the year up 15 percent to a record $3.02 Quarterly cash dividend increased 25 percent to $0.25 per share Company achieves Destination 2014 goals and launches next employee initiative BOSS® acquisition closed and integration progressing well

BLOOMINGTON, Minn. -- Dec. 4, 2014-- The Toro Company today reported net earnings of $173.9 million, or $3.02 per share, on a net sales increase of 6.4 percent to $2.173 billion for its fiscal year ended October 31, 2014. In fiscal 2013, the company delivered net earnings of $154.8 million, or $2.62 per share, on net sales of $2.041 billion.

For the fourth quarter, Toro reported net earnings of $10.9 million, or $0.19 per share, on a net sales increase of 8.3 percent to $414.1 million. In the comparable fiscal 2013 period, the company posted net earnings of $5 million on net sales of$382.4 million.

The company also announced that its board of directors has declared a quarterly cash dividend of $0.25 per share, a 25 percent increase from its previous quarterly dividend rate of $0.20 per share. This dividend is payable on January 12, 2015, to shareholders of record on December 23, 2014.

“Fiscal 2014 was a significant year for The Toro Company for many reasons,” said Michael J. Hoffman, Toro’s chairman and chief executive officer. “We delivered record sales, operating earnings and earnings per share, which enabled us to successfully achieve our Destination 2014 revenue and profitability targets. We celebrated our Centennial and officially launched the company’s second century.

We entered into and subsequently closed the largest acquisition in our history with the addition of the BOSS^® professional snow and ice management business. Finally, we returned almost $150 million to our shareholders through the payment of $45 million in dividends and the repurchase of more than 1.6 million shares of our common stock.”

“I’d like to thank the entire team for their dedication and execution throughout the year. Their passion for innovation and customer service helped to drive retail sales across our portfolio. On the residential side of our business, we delivered double-digit revenue growth fueled by abundant snow conditions in key North American markets early in 2014 that generated strong in-season sales of our snow thrower products. Low field inventories and pent-up consumer demand set the stage for the robust snow pre-season that began late this summer and continues to date.

The residential business also saw gains from solid retail demand for our residential zero turn mowers, as homeowners continue to transition to these more efficient cutting platforms. Turning to our professional businesses, contractors who also benefited from the snow season made early investments in landscape maintenance equipment, helping to drive our sales.

New product features and favorable summer growing conditions provided additional momentum for the category. In golf, innovative new product offerings—including our new INFINITY™ sprinklers—helped us to expand our worldwide market-leading equipment and irrigation positions. We also continued to develop and grow our newer micro-irrigation, rental and specialty construction businesses.”

“In addition to driving revenue growth, our enterprise focus on improving productivity and leveraging expenses is yielding results. It is the combination of all of these efforts that enabled us to deliver record results for the year and successfully complete our four-year Destination 2014 journey. I am proud of the levels of performance that our team was able to achieve through this initiative, including growing organic revenues more than $430 million over the four-years and establishing a new level of operating earnings performance at 12.1 percent of sales as of the end of fiscal 2014. None of that would have been possible without the remarkable contributions of all of our engaged employees and channel partners around the world.”

“Looking ahead to fiscal 2015, we are cautiously optimistic. Our end markets are sound. Contractors will seek productivity-enhancing solutions for maintaining turf and managing snow and ice. Golf course renovations and development will progress in key markets. Around the world, customers will transition to more efficient methods of irrigation, particularly for agricultural use. Commercial and residential development and infrastructure improvements will continue, and homeowners will replace their lawn, snow and handheld products.”

“We are well positioned to capitalize on market growth and drive share gains with new and innovative product offerings across our businesses and additional product placements with key customers. We are encouraged by expected retail demand but, as always, will keep a watchful eye on field inventory levels and other market conditions. We are excited about the addition of BOSS to our portfolio and are focused on a successful integration, which is progressing well and helped by the cultural alignment among our two companies.

We launched a new employee initiative, Destination PRIME, which will provide momentum to help us drive growth and further improve productivity over the next three years, while also continuing our century-long commitment to innovation, relationships and excellence. Despite our optimism, we are certainly mindful of the challenges that unfavorable weather and economic conditions can create for our businesses and customers. We will remain flexible and are prepared to make adjustments across the enterprise as necessary.”

The company expects revenue growth for fiscal 2015 to be about 8 to 10 percent, and net earnings to be about $3.30 to $3.40 per share. For the first quarter, the company expects net earnings to be about $0.47 per share.

SEGMENT RESULTS

Professional

•          Professional segment net sales for fiscal 2014 totaled $1.478 billion, up 3.7 percent over last year. Sales of landscape maintenance equipment increased on strong retail demand for our zero turn mowers and new products introduced during the year. Global micro irrigation sales increased with continued demand for more efficient irrigation solutions for agriculture. Ground engaging and rental equipment sales grew on increased demand for our products. Worldwide golf sales were up as existing golf courses continued to replace aging irrigation systems and equipment with our innovative product offerings, including our new INFINITY™ sprinklers, and new international golf course projects were awarded to us. For the fourth quarter, professional segment net sales were $268.9 million, up 5.1 percent from the comparable fiscal 2013 period.
•          Professional segment earnings for fiscal 2014 totaled $276.3 million, up 8.6 percent from the prior year. For the fourth quarter, professional segment earnings were $31.6 million, up from $21.8 million in the comparable fiscal 2013 period.

    

Residential

•          Residential segment net sales for fiscal 2014 were $672.4 million, up 13.1 percent from last year. Sales of our snow thrower products increased due to strong in-season retail demand driven by abundant snowfall across key North American markets early in fiscal 2014 and robust pre-season demand that began late this summer and continued through the end of our fiscal year. Sales of domestic residential zero turn riding products grew on continued retail demand for these mowing platforms. Increased demand for our handheld solutions also contributed to residential segment net sales for the fiscal year. Somewhat offsetting these increases were lower sales of our products inAustralia due to unfavorable currency exchange rates and weather conditions. For the fourth quarter, residential segment net sales were $138.8 million, up 19 percent from the comparable fiscal 2013 period.
•           Residential segment earnings for fiscal 2014 totaled $76.9 million, up 24 percent from fiscal 2013. For the fourth quarter, residential segment earnings were $16.3 million, up from $10.1 million in the comparable fiscal 2013 period.

OPERATING RESULTS

Gross margin as a percent of sales for fiscal 2014 improved 10 basis points from last year to 35.6 percent. For the fourth quarter, gross margin as a percent of sales increased 90 basis points to 34.5 percent. For both periods, the increases primarily were due to realized pricing and productivity improvements somewhat offset by unfavorable segment mix, unfavorable currency exchange rates and slightly higher commodity costs.

Selling, general and administrative (SG&A) expense as a percent of sales for fiscal 2014 decreased 70 basis points from last year to 23.5 percent. For the fourth quarter, SG&A expense as a percent of sales decreased 160 basis points to 29.8 percent. For both periods, the decreases primarily were due to the leveraging of expenses over higher sales volumes.

Other income for fiscal 2014 was $8.7 million, down $3.5 million from last year. This decrease primarily was due to a one-time legal recovery realized in fiscal 2013 that was not repeated this year, as well as higher foreign currency losses this year.

Operating earnings as a percent of sales for fiscal 2014 improved 80 basis points from last year to 12.1 percent. For the fourth quarter, operating earnings improved 250 basis points to 4.7 percent of sales.

Interest expense for fiscal 2014 was $15.4 million, down 4.8 percent from last year. For the fourth quarter, interest expense totaled $4.4 million, an increase of 11.7 percent from the same period last year.

The effective tax rate for fiscal 2014 was 32.2 percent compared to 31.7 percent last year when the company benefited from the retroactive reinstatement of the domestic research tax credit.

Accounts receivable at the end of fiscal 2014 totaled $158.2 million, up 1 percent from last year. Net inventories were $274.6 million, up 14.4 percent from last year. Trade payables were $124.3 million, down 8.7 percent from last year.

Average net working capital (accounts receivable plus net inventory less trade payables) as a percent of net sales as of the end of fiscal 2014 was 15.1 percent compared to 16.6 percent as of the end of last year.

About the Toro Company

The Toro Company (NYSE: TTC) is a leading worldwide provider of innovative solutions for the outdoor environment, including turf, snow and ground engaging equipment and irrigation and outdoor lighting solutions. With sales of $2.2 billion in fiscal 2014, Toro’s global presence extends to more than 90 countries. Through constant innovation and caring relationships built on trust and integrity, Toro and its family of brands have built a legacy of excellence by helping customers care for golf courses, landscapes, sports fields, public green spaces, commercial and residential properties and agricultural fields. For more information, visit www.thetorocompany.com.

The Toro Company Reports Record Third Quarter Results

• Third quarter sales increase 11.3 percent to a record $567.5 million driven by strong retail demand for both professional and residential products
• Quarterly net earnings per share increase 28 percent to a record $0.87
• Company is well-positioned to achieve Destination 2014 goals as it launches its second century

BLOOMINGTON, Minn. --  Aug. 21, 2014-- The Toro Company today reported net earnings of $50 million, or $0.87 per share, on a net sales increase of 11.3 percent to $567.5 million for the third quarter of fiscal 2014. In the comparable fiscal 2013 quarter, the company delivered net earnings of $40.1 million, or $0.68 per share, on net sales of $509.9 million.

For the first nine months, Toro reported net earnings of $163 million, or $2.82 per share, on a net sales increase of 6 percent to $1.759 billion. In the comparable fiscal 2013 period, the company posted net earnings of $149.9 million, or $2.53 per share, on net sales of $1.659 billion.

“Our team is especially proud to deliver record results and double-digit sales and earnings growth for the third quarter in which we also celebrated our Centennial milestone,” said Michael J. Hoffman, Toro’s chairman and chief executive officer. “After successfully managing through the challenges of a late spring, our quarterly results benefited from favorable summer growing conditions in key markets that, similar to last year, helped drive retail sales across most of our businesses.

Shipments of golf equipment and irrigation products increased on strong retail demand for our innovative product offerings. In addition, we returned to a more normal quarterly flow for channel purchases of professional equipment subject to Tier 4 emission standards. Landscape contractor customers continued to invest in turf maintenance equipment, which also helped drive sales.

On the residential side of our business, early demand for snow products increased as channel partners began to prepare for the anticipated strong retail pre-season.”

“We are optimistic as we enter the final quarter of our fiscal year and Destination 2014 journey,” said Hoffman. “With our Centennial on July 10, 2014, we officially launched the company’s second century. Looking ahead, we will continue to focus on the key things that have driven our past performance: developing innovative products, serving our customers and executing in the marketplace. We will keep a close eye on both retail demand and field inventory levels and make adjustments as necessary. We also will continue to seek opportunities across the enterprise to improve productivity and leverage expenses.

Of course, we remain mindful of the things outside of our control, such as unfavorable weather or economic conditions, that could create potential challenges for our customers. That said, a strong snow pre-season and continued productivity gains, somewhat offset by product mix, should drive solid fourth quarter revenue and earnings results. As such, today we are changing our full-year outlook.”

The company now expects revenue growth for fiscal 2014 to be about 6 percent, and net earnings per share to be about $2.94 to $2.96.

SEGMENT RESULTS

Professional

Professional segment net sales for the third quarter totaled $384.7 million, up 11.9 percent from the comparable fiscal 2013 period. Sales of golf equipment and irrigation products increased on strong retail demand for our innovative product offerings, including our new INFINITY™ sprinklers. Sales also benefitted from the return to a more normal quarterly flow of channel purchases of equipment subject to Tier 4 emission standards, as compared to fiscal 2013 when sales were pulled from the third quarter to the first quarter in connection with the regulatory transition.

Turf maintenance and ground engaging equipment sales were up due to continued demand by landscape contractors for our productivity enhancing products. In addition, global micro irrigation sales increased with continued demand for more efficient solutions for agriculture. For the first nine months, professional segment net sales were $1.209 billion, up 3.4 percent from the comparable fiscal 2013 period. Sales for the year-to-date period increased on strong retail demand for landscape maintenance equipment and increased demand for our micro irrigation, construction and rental products.

Professional segment earnings for the third quarter totaled $74.8 million, up 23.7 percent from the comparable fiscal 2013 period. For the first nine months, professional segment earnings were $244.7 million, up 4.8 percent from the comparable fiscal 2013 period.

Residential

Residential segment net sales for the third quarter totaled $175.7 million, up 13 percent from the comparable fiscal 2013 period. Sales of snow products were up due to increased early demand as channel partners began to prepare for the anticipated strong retail pre-season. Sales of our residential zero turn mowing products also grew on continued retail demand for these mowing platforms.

For the first nine months, residential segment net sales were $533.7 million, up 11.7 percent from the comparable fiscal 2013 period. Sales for the year-to-date period increased on strong in-season and pre-season demand for our snow products, as well as increased channel and retail demand for our residential zero turn mowers.

Residential segment earnings for the third quarter totaled $18.7 million, up 24.1 percent from the comparable fiscal 2013 period. For the first nine months, residential segment earnings were $60.7 million, up 16.9 percent from the comparable fiscal 2013 period.

OPERATING RESULTS

Gross margin for the third quarter was 35.6 percent, an increase of 70 basis points compared to the same fiscal 2013 period, primarily due to favorable product mix and realized pricing, somewhat offset by higher commodity costs. For the first nine months, gross margin was 35.8 percent, a decrease of 10 basis points, primarily due to higher commodity costs and unfavorable segment mix and currency exchange rates, somewhat offset by realized pricing.

Selling, general and administrative (SG&A) expense as a percent of sales for the third quarter was 22.9 percent, a decrease of 50 basis points compared to the same fiscal 2013 period. For the first nine months, SG&A expense as a percent of sales was 22 percent, also a decrease of 50 basis points. For both periods, the decrease primarily was due to the leveraging of expenses over higher sales volumes.

Third quarter operating earnings as a percent of sales improved 120 basis points to 12.7 percent compared to the same fiscal 2013 period. For the first nine months, operating earnings as a percentage of sales improved 40 basis points to 13.8 percent.

The effective tax rate for the third quarter decreased to 29.4 percent from 30.5 percent in the comparable fiscal 2013 period primarily due to a one-time tax benefit. For the first nine months, the effective tax rate increased to 31.7 percent from 31 percent in the comparable fiscal 2013 period when the company benefited from the retroactive reinstatement of the Federal Research and Engineering Tax Credit in the first quarter of that fiscal year.

Accounts receivable at the end of the third quarter totaled $215.6 million, up 6.7 percent from the same fiscal 2013 period. Net inventories were $293.8 million, up 13.5 percent from the same period last year. Trade payables were $169 million, up 36 percent compared to the same fiscal 2013 period, primarily due to recent purchases in anticipation of product demand.

About The Toro Company

The Toro Company (NYSE: TTC) is a leading worldwide provider of innovative turf, landscape, rental and construction equipment, and irrigation and outdoor lighting solutions. With sales of more than $2 billion in fiscal 2013, Toro’s global presence extends to more than 90 countries through strong relationships built on integrity and trust, constant innovation and a commitment to helping customers enrich the beauty, productivity and sustainability of the land. Since 1914, the company has built a tradition of excellence around a number of strong brands to help customers care for golf courses, sports fields, public green spaces, commercial and residential properties and agricultural fields.

The Toro Company Reports Record Second Quarter Results

• Company achieves record second quarter sales of $745 million, a 6 percent increase, driven by strong demand for professional segment products
• Quarterly net earnings increase 14 percent to a record $1.51 per share
• The Toro Company to celebrate the significant milestone of 100 years in business on July 10, 2014

 BLOOMINGTON, Minn.-- May 22, 2014-- The Toro Company today reported net earnings of $87.1 million, or $1.51 per share, on a net sales increase of 5.8 percent to $745 million for its fiscal 2014 second quarter ended May 2, 2014. In the comparable fiscal 2013 period, the company delivered net earnings of $78.4 million, or $1.32 per share, on net sales of $704.5 million.

“I’m proud of our team’s execution that delivered record sales and earnings for the quarter despite challenging spring weather conditions for the second straight year,” said Michael J. Hoffman, Toro’s chairman and chief executive officer. “Although retail sales of some residential products were hampered by the late spring, we experienced strong growth in our landscape maintenance business.

Contractors who benefited from the robust snow season last winter invested in more new turf equipment during the quarter, favoring our productivity-enhancing mowers. In addition, shipments of golf equipment and irrigation products increased due to channel demand for our innovative new product offerings, including the recently introduced INFINITY™ sprinklers.”

For the first six months, Toro reported net earnings of $113 million, or $1.95 per share, on a net sales increase of 3.6 percent to $1.191 billion. In the comparable fiscal 2013 period, the company posted net earnings of $109.8 million, or $1.85 per share, on net sales of $1.149 billion. Strong retail demand for snow products and landscape maintenance equipment, as well as contributions from its micro irrigation, construction and rental businesses, helped the company to surpass sales and earnings earned in the comparable fiscal 2013 period, which benefited from the Tier 4 diesel engine transition.

“As we approach our Centennial and look ahead to the end of our Destination 2014 journey, we remain encouraged about both our business and prospects for achieving our goals,” said Hoffman. “Our portfolio of innovative products has us well-positioned to drive retail sales and strengthen our market share.

We will keep a watchful eye on retail demand and field inventories across our businesses and make any necessary adjustments. In addition, we will benefit from increased pre-season snow thrower shipments, primarily in the fourth quarter, that are needed to replenish inventories diminished by strong customer demand last winter.

As we strive to achieve our operating earnings goal, we will continue to pursue productivity improvements to leverage expenses and expand margins. While focused on things within our control, we remain mindful that Mother Nature may not deliver favorable summer growing conditions again this year or economic conditions may change, either of which could create potential challenges for our businesses and customers.”

The company continues to expect revenue growth for fiscal 2014 to be about 5 to 6 percent, and net earnings per share to be about $2.90 to $2.95. For the third quarter, the company expects net earnings per share to be about $0.82.

Segment Results

Professional

Professional segment net sales for the second quarter totaled $528.6 million, up 6.5 percent from the comparable fiscal 2013 period. Sales of landscape maintenance equipment increased on strong retail demand, including for our zero turn radius mowers.

Golf equipment and irrigation product sales were up due to channel optimism and demand for new product offerings, including the INFINITY™ sprinklers and Multi Pro® advanced spraying system. Global micro irrigation sales increased with continued demand for more efficient solutions for agriculture and construction and rental equipment sales grew on channel demand for Toro® branded products.

Slightly offsetting these increases were lower sales of professional products in international markets. For the first six months, professional segment net sales were $824 million, essentially flat with the comparable fiscal 2013 period. Sales benefited from strong retail demand for landscape maintenance equipment and increased demand for micro irrigation, construction and rental products, but were offset by sales in the first quarter of last fiscal year that benefited from the Tier 4 diesel engine transition and were not repeated this year.

Professional segment earnings for the second quarter totaled $122.4 million, up 9 percent from the comparable fiscal 2013 period. For the first six months, professional segment earnings were $169.8 million, down 1.8 percent from the comparable fiscal 2013 period.

Residential

Residential segment net sales for the second quarter totaled $210.4 million, up 4.5 percent from the comparable fiscal 2013 period. Sales increased due to stronger domestic retail demand for our residential zero turn mowing products, as customers continued to transition to this mowing platform.

International demand for walk power mowers, as well as domestic demand for electric blowers and trimmers, also benefited sales for the quarter. Offsetting these increases were lower shipments of domestic walk power mowers and decreased sales in Australia due to unfavorable currency exchange and weather conditions.

For the first six months, residential segment net sales were $357.9 million, up 11 percent from the comparable fiscal 2013 period. Sales for the period increased on strong retail demand for our snow products, primarily in the first quarter, due to significant snowfall across key North American markets, as well as increased channel and retail demand for residential zero turn mowing products and international demand for walk power mowers.

Residential segment earnings for the second quarter totaled $23.8 million, down 3.5 percent from the comparable fiscal 2013 period. For the first six months, residential segment earnings were $42 million, up 13.9 percent from the comparable fiscal 2013 period.

Operating Results

Gross margin for the second quarter was 35.5 percent, a decrease of 30 basis points compared to the same fiscal 2013 period, primarily due to higher commodity costs and unfavorable currency exchange rates, somewhat offset by realized pricing. For the first six months, gross margin was 35.9 percent, a decrease of 50 basis points, primarily due to higher commodity costs, segment mix and unfavorable currency exchange rates, somewhat offset by realized pricing.

Selling, general and administrative (SG&A) expense as a percent of sales for the second quarter was 17.9 percent, a decrease of 120 basis points compared to the same fiscal 2013 period. For the first six months, SG&A expense as a percent of sales was 21.5 percent, a decrease of 60 basis points. For both periods, the decrease primarily was due to lower administrative expense, including health care costs, somewhat offset by higher incentive expense.

Second quarter operating earnings as a percent of sales improved 90 basis points to 17.6 percent compared to the same fiscal 2013 period. For the first six months, operating earnings as a percentage of sales improved 10 basis points to 14.4 percent.

The effective tax rate for the second quarter was 32.6 percent, which is the same as the effective tax rate for the comparable fiscal 2013 period. For the first six months, the effective tax rate increased to 32.7 percent from 31.3 percent in the comparable fiscal 2013 period when the company benefited from the retroactive reinstatement of the Federal Research and Engineering Tax Credit in the first quarter.

Accounts receivable at the end of the second quarter totaled $313.5 million, up 1.9 percent from the same fiscal 2013 period. Net inventories were $302.5 million, down 2.4 percent from the same period last year. Trade payables were $236 million, up 15.8 percent compared to the same fiscal 2013 period, primarily due to recent component and commodity purchases in anticipation of product demand in the second half of our fiscal year.

About The Toro Company

The Toro Company (NYSE: TTC) is a leading worldwide provider of innovative turf, landscape, rental and construction equipment, and irrigation and outdoor lighting solutions. With sales of more than $2 billion in fiscal 2013, Toro’s global presence extends to more than 90 countries through strong relationships built on integrity and trust, constant innovation and a commitment to helping customers enrich the beauty, productivity and sustainability of the land. Since 1914, the company has built a tradition of excellence around a number of strong brands to help customers care for golf courses, sports fields, public green spaces, commercial and residential properties and agricultural fields.

The Toro Company Reports First Quarter Results

• First quarter sales grow to $446 million driven by strong demand for snow products
• Net earnings per share of $0.44 delivered for the quarter
• Company well-positioned for primary selling season with innovative new product offerings

BLOOMINGTON, MN.-- Feb. 20 -- The Toro Company today reported net earnings of $25.9 million, or $0.44 per share, on net sales of $446 million for its fiscal 2014 first quarter ended January 31, 2014. In the comparable fiscal 2013 period, the company delivered net earnings of $31.4 million, or $0.53 per share, on net sales of $444.7 million.

“Significant snowfall across key North American markets this winter season spurred retail demand for our snow products—helping to drive sales for the quarter and providing a solid start to our 2014 fiscal year,” said Michael J. Hoffman, Toro’s chairman and chief executive officer.

“The combination of more abundant snow conditions, stronger international demand and solid execution by our team helped us to temper the challenging year-over-year quarterly comparisons we faced due to the Tier 4 diesel engine transition that accelerated sales of large turf equipment into our first quarter last year. In addition, we finished our first quarter more favorably situated in terms of field inventory levels as compared to last year, considering that pre-Tier 4 equipment sales last year went into our channel while snow products sold this year moved all the way through to end-user customers.”

“Looking ahead to our primary selling season, we are well-positioned across our businesses to drive retail sales and increase our market share. Golf course development and renovations continue to progress and customers and channel partners alike are excited about our innovative new equipment and irrigation offerings, including those featured at the recent Golf Industry Show—the Sand Pro® zero turn mechanical bunker rake, the Multi Pro® advanced spraying systems, and the INFINITY™ golf sprinklers with unique SMART ACCESS™ to internal components.

Landscape contractor equipment sales are poised to benefit from the additional revenues generated by contractors this winter, as well as the increased demand we expect for our zero turn radius mowers featuring new electronic fuel injection and onboard intelligence technologies. Global food demand and increased water use restrictions continue to drive the need for more efficient irrigation solutions for agriculture, including our new Neptune® thin wall drip line with flat emitter technology.

“Although we are optimistic, it is early in our fiscal year, our peak selling season is still in front of us and we remain mindful of the challenges we could face if we encounter unfavorable swings in economic or weather conditions. As such, we will continue to focus on the things we can control—product innovation, customer service, and market execution—as well as our Destination 2014 goals of driving revenue growth and further improving productivity.”

The company now expects revenue growth for fiscal 2014 to be about 5 to 6 percent, and net earnings per share to be about $2.90 to $2.95. For the second quarter, the company expects net earnings per share to be about $1.45 to $1.50.

SEGMENT RESULTS

Professional

Professional segment net sales for the first quarter totaled $295.5 million, down 10.2 percent from the same period last year. This decrease primarily was attributable to strong channel demand in the first quarter of last fiscal year that was not repeated this year for large turf equipment subject to the Tier 4 diesel engine emission requirements that began phasing in for products manufactured after January 1, 2013.

Sales benefitted from pre-season shipments of landscape maintenance equipment, including our zero turn radius products with electronic fuel injection and onboard intelligence technologies, in anticipation of retail demand. Rental and construction equipment sales grew on increased demand for our products, including recently acquired products newly introduced under the Toro brand. Global micro-irrigation sales increased with continued demand for more efficient irrigation solutions for agriculture. Worldwide golf irrigation sales benefitted as customers continued to select our innovative system offerings for new course projects and existing course renovations.

Professional segment earnings for the first quarter totaled $47.5 million, down 21.9 percent from the same period last year.

Residential

Residential segment net sales for the first quarter totaled $147.6 million, up 22.0 percent from the same period last year. This increase primarily was driven by retail demand for our snow products due to significant snowfall across key North American markets this winter season.

Sales also benefitted from pre-season shipments of domestic residential zero turn radius mowers in anticipation of the continuing transition of consumers to this mowing platform, as well as additional shipments of handheld solutions. Offsetting such increases were unfavorable currency exchange rates, primarily relating to the Australian dollar versus the U.S. dollar.

Residential segment earnings for the first quarter totaled $18.1 million, up 49.2 percent from the same period last year.

OPERATING RESULTS

Gross margin for the first quarter was 36.7 percent, a decrease of 60 basis points compared to the same period last year, primarily due to product mix but also affected by unfavorable currency exchange rates and slightly higher commodity costs, somewhat offset by realized pricing.

Selling, general and administrative (SG&A) expense as a percent of sales for the first quarter was 27.6 percent, an increase of 70 basis points compared to the same period last year, primarily due to higher administrative expense, including health care costs, warranty expense, and incremental expense relating to our recently completed China micro-irrigation acquisition, somewhat offset by lower warehousing expense.

First quarter operating earnings as a percent of sales were 9.1% compared to 10.4% in the same period last year.

First quarter interest expense was down 11.7 percent to $3.8 million compared to the same period last year.

The effective tax rate for the first quarter was 33.2 percent compared with 27.7 percent in the same period last year when the company benefited from the retroactive reinstatement of the Federal Research and Engineering Tax Credit.

Accounts receivable at the end of the first quarter totaled $199.8 million, up 10.8 percent from the same period last year. Net inventories were $304.9 million, down 9.2 percent from the same period last year. Trade payables were $192.7 million, up 14.5 percent compared to the same period last year.

About The Toro Company

The Toro Company (NYSE: TTC) is a leading worldwide provider of innovative turf, landscape, rental and construction equipment, and irrigation and outdoor lighting solutions. With sales of more than $2 billion in fiscal 2013, Toro’s global presence extends to more than 90 countries through strong relationships built on integrity and trust, constant innovation and a commitment to helping customers enrich the beauty, productivity and sustainability of the land. Since 1914, the company has built a tradition of excellence around a number of strong brands to help customers care for golf courses, sports fields, public green spaces, commercial and residential properties and agricultural fields. More information is available at www.thetorocompany.com.

The Toro Company Kicks Off Centennial Year Celebration

BLOOMINGTON, Minn., Jan 27 -- On July 10, 2014, The Toro Company  will celebrate a rare business milestone – achieving 100 years in business. According to Michael J. Hoffman, Toro’s chairman and chief executive officer, Toro attributes its remarkable longevity to, “the character of our people and channel partners, and their relentless commitment to serving our customers and building market leadership through innovation.”

Toro’s yearlong celebration of its 100th anniversary provides an opportunity not only to look back on the company’s notable achievements, but also to recognize the ingenuity and dedication of its employees – and to thank its channel partners and end-user customers around the world for their loyalty and trust in The Toro Company.

As Hoffman put it, “These same values that have been core throughout our first 100 years form the foundation for continued success into our next century.”

A Legacy of Excellence From the start, Toro built its legacy by understanding the needs of its customers and developing products and services to help them succeed. This commitment to innovation is reflected in the more than 1,500 patents its employees around the world have earned over the years.

In addition, Toro has developed strong networks of professional distributor, dealer and retailer partners across industries in more than 90 countries to provide local, expert, professional customer service. For example, in 1922, Toro created the golf industry’s first national distributor network. And, in 1934 as the business grew, Toro encouraged its distributors to establish dealers in areas the distributors’ staff could not effectively cover, providing local customer service that proved to be a competitive advantage.

This commitment to customer service has been instrumental in Toro’s development of long-term relationships with golf courses, homeowners, professional contractors, agricultural growers, construction and rental companies, government and educational institutions – in addition to many premier sporting events, venues and historic sites around the world.

People Make the Difference For decades, customers have counted on Toro because of the company’s reputation for reliability, quality and standing behind its products. When Toro celebrated its 25th anniversary in 1939, the company’s first president and co-founder John Samuel Clapper noted that the loyal service of Toro’s employees and distributors was the customers’ guarantee of a high-quality product. As Hoffman summarized, “What was true 75 years ago when Mr. Clapper made his statement about Toro remains true today – the loyal service of our employees and channel partners is critical to our company’s success.”

Explore Toro Innovations From developing new technologies to expanding into new markets, a timeline of the company’s many innovations and achievements is available atwww.toro.com/100 

People are invited to visit www.toro.com/100 to learn more about other Toro industry firsts and contribute their own Toro stories.

They can also share their Toro memories on Twitter at www.twitter.com/thetorocompany using the hashtag #Toro100 , and on Facebook at www.facebook.com/toro.company .

About The Toro Company 

The Toro Company is a leading worldwide provider of innovative turf, landscape, rental and construction equipment, and irrigation and outdoor lighting solutions. With sales of more than $2 billion in fiscal 2013, Toro’s global presence extends to more than 90 countries through strong relationships built on integrity and trust, constant innovation and a commitment to helping customers enrich the beauty, productivity and sustainability of the land. Since 1914, the company has built a tradition of excellence around a number of strong brands to help customers care for golf courses, sports fields, public green spaces, commercial and residential properties and agricultural fields. More information is available at www.toro.com .

The Toro Company Reports Record Results for Fiscal 2013

• Fiscal 2013 sales increase to a record $2 billion
• Operating earnings expand to 11.3 percent and a record $230.7 million
• Net earnings per share for the year up 22 percent to a record $2.62
• Quarterly cash dividend increased 43 percent to $0.20 per share

BLOOMINGTON, Minn.-- Dec. 5, 2013-- The Toro Company today reported net earnings of $154.8 million, or $2.62 per share, on a net sales increase of 4.2 percent to $2,041.4 million for its fiscal year ended October 31, 2013. In fiscal 2012, the company delivered net earnings of $129.5 million, or $2.14 per share, on net sales of $1,958.7 million.

For the fourth quarter, Toro reported net earnings of $5 million, or $0.08 per share, on a net sales increase of 12.7 percent to $382.4 million. In the comparable fiscal 2012 period, the company posted net earnings of $0.3 million on net sales of $339.3 million.

The company also announced that its board of directors has declared a quarterly cash dividend of $0.20 per share, an increase from its previous quarterly dividend rate of $0.14 per share. This dividend is payable on January 15, 2014, to shareholders of record on December 30, 2013. In addition, the company increased its annual dividend guideline to 30 to 40 percent of its three-year average net earnings per share, up from the previous guideline of 20 to 30 percent. In fiscal 2013, the company paid $32.5 million in dividends and repurchased over 2 million shares of its common stock, returning more than $130 million in total cash to its shareholders.

“The Toro Company completed a record year with new highs for revenues, operating earnings and earnings per share,” said Michael J. Hoffman, Toro’s chairman and chief executive officer. “We are particularly excited to have crossed over the $2 billion revenue milestone for the first time in the company’s history, a timely accomplishment as we head down the home stretch to our Centennial in July 2014. In addition, we remain focused on returning value to our shareholders, as demonstrated by the increase in both our annual dividend guideline and quarterly cash dividend.”

“Looking across our businesses, Fiscal 2013 was a good year. I am extremely proud of our team and their passion for innovation and serving our customers. Of course we had our share of challenges, but we were able to successfully manage through less than ideal weather conditions in the first half of the year, as well as the phase-in of the Tier 4 diesel engine transition. 

Our innovative new product offerings helped us to defend and grow our positions in golf equipment and irrigation, landscape maintenance products, residential ZTR mowers and handheld blowers and trimmers. Our recent acquisitions in the rental and construction space are integrated and contributing. 

Demand for our precision agriculture irrigation products continued to grow and we further expanded our global presence with the closing of our China acquisition in the fourth quarter. And our efforts on productivity are making a positive difference, helping to expand our operating earnings to a record $230.7 million and 11.3 percent and continuing our progress toward our Destination 2014 operating earnings goal.”

“For the fourth quarter, even with favorable comparisons to last year when we saw soft preseason demand for our snow products, we delivered solid performance. Practically all of our product lines contributed to our sales growth and our expanded gross margins further evidence the traction we are gaining with our productivity efforts.”

“Looking ahead to fiscal 2014, we are mindful of the mild expectations for our world-wide economic environments, as well as the challenges that Mother Nature can create for our businesses and customers. Nonetheless, we are cautiously optimistic about the prospects for our end markets in this Centennial year. Golf course development is progressing in key markets, housing and construction continues to improve, and around the world customers are seeking more efficient methods of irrigation. 

We are well-positioned across our product portfolio to capitalize on growth in all of these areas. In addition, our recent investments to expand the global footprint of our micro irrigation business and grow our rental and construction market presence are yielding positive results and will continue to gain momentum. 

While we hope that Mother Nature will deliver favorable weather, that is out of our control. Instead, we remain focused on the things that have made us successful for our first 100 years: developing innovative products, serving our customers and executing in the marketplace. We continue to pursue our Destination 2014 goals in this final year of our initiative and our employees are engaged to drive revenue growth and further improve productivity.”

The company expects revenue growth for fiscal 2014 to be about 4 to 5 percent, and net earnings to be about $2.85 to $2.90 per share. For the first quarter, the company expects net earnings to be about $0.35 per share, with unfavorable year-over-year quarterly comparisons due to increased sales accelerated into the first quarter of last year by the Tier 4 diesel engine transition that will not be repeated this year.

SEGMENT RESULTS

Professional

Professional segment net sales for fiscal 2013 totaled $1,425.3 million, up 7.2 percent over last year. Sales of landscape maintenance equipment increased on strong retail demand for our zero turn radius products and successful new product introductions—including our new TurfMaster™ heavy duty walk power mower, electronic fuel injection products and turf renovation products. Worldwide golf and irrigation sales were up as existing golf courses continued to replace aging equipment and irrigation systems with our offerings and new international golf course projects were awarded to us. 

Rental and construction equipment sales grew on increased demand for our products and incremental sales from recent acquisitions. Global micro irrigation sales increased with continued demand for more efficient irrigation solutions for agriculture. For the fourth quarter, professional segment net sales were $255.8 million, up 11.9 percent from the comparable fiscal 2012 period.

Professional segment earnings for fiscal 2013 totaled $254.4 million, up 9.6 percent from the prior year. For the fourth quarter, professional segment earnings were $21.8 million, up 5 percent from the comparable fiscal 2012 period.

Residential

Residential segment net sales for fiscal 2013 were $594.4 million, down 2.1 percent from last year. This slight decline largely was attributable to challenged preseason sales of snow products early in fiscal 2013 and unfavorable spring weather at the beginning of the key selling season. Sales benefitted from increased shipments of domestic residential riding products as consumers continued to transition to our zero turn radius mowers, including our Timecutter® line of Zs, and from higher demand for our handheld trimmer and blower products in the U.S. and Pope-branded irrigation products in Australia. 

For the fourth quarter, residential segment net sales were $116.6 million, up 14.3 percent from the comparable fiscal 2012 period. This increase primarily was due to improved preseason demand for snowthrowers as compared to our fiscal 2012 fourth quarter, with sales of worldwide residential riding products, handheld solutions and Pope irrigation products also contributing.

Residential segment earnings for fiscal 2013 totaled $62 million, up 7.2 percent from fiscal 2012. For the fourth quarter, residential segment earnings were $10.1 million, up from $6.7 million in the comparable fiscal 2012 period.

OPERATING RESULTS

Gross margin for fiscal 2013 improved 110 basis points from last year to 35.5 percent. The majority of the margin expansion was due to realized price, product mix and productivity improvement, somewhat offset by unfavorable currency exchange rates. For the fourth quarter, gross margin was up 30 basis points to 33.6 percent.

Selling, general and administrative (SG&A) expense as a percent of sales increased 30 basis points to 24.2 percent for fiscal 2013. For the fourth quarter, SG&A expense as a percentage of sales decreased 70 basis points to 31.4 percent.

Other income for fiscal 2013 was $12.3 million, up $4.7 million from last year. The increase primarily was due to a one-time legal recovery, as well as lower foreign currency losses and higher income from our investment in Red Iron Acceptance, our channel financing joint venture.

Operating earnings as a percent of sales improved 80 basis points to 11.3 percent for fiscal 2013 For the fourth quarter, operating earnings improved 100 basis points to 2.2 percent of sales compared to 1.2 percent last year.

Interest expense for fiscal 2013 was $16.2 million, down 4.1 percent compared to fiscal 2012. For the fourth quarter, interest expense totaled $3.9 million, down 5.2 percent from the same period last year.

The effective tax rate for the fiscal year was 31.7 percent compared with 34 percent last year, primarily due to the reinstatement of the Federal Research and Engineering Tax Credit.

Accounts receivable at the end of the fiscal year totaled $157.2 million, up 6.6 percent from the prior year period. Net inventories were $240.1 million, down 4.4 percent from the end of fiscal 2012. Trade payables were $136.2 million, up 9.1 percent compared with last year.

About The Toro Company

The Toro Company is a leading worldwide provider of innovative turf, landscape, rental and construction equipment, and irrigation and outdoor lighting solutions. With sales of more than $2 billion in fiscal 2013, Toro’s global presence extends to more than 90 countries through strong relationships built on integrity and trust, constant innovation and a commitment to helping customers enrich the beauty, productivity and sustainability of the land. Since 1914, the company has built a tradition of excellence around a number of strong brands to help customers care for golf courses, sports fields, public green spaces, commercial and residential properties and agricultural fields.