The Toro Company Reports Record First Quarter Results
-
First quarter revenues grow 4.9 percent to a record
$444.7 million -
Net earnings per share up over 60 percent to a record
$0.53 - Company raising full-year earnings guidance; well positioned entering key selling season
-
Commitment to building micro irrigation global presence continues with
acquisition in
China
“Our record-setting first quarter, driven by particularly strong channel
demand for large turf equipment and the continued growth of micro
irrigation sales, propelled us to a solid start for the year,” said
“The optimistic outlook of customers across our businesses is encouraging, as we prepare for our primary selling season,” said Hoffman. “Barring new economic headwinds, we anticipate the momentum our golf, landscape contractor and micro irrigation businesses enjoyed this past quarter will carry into spring. Our residential business retail potential looks solid as well. Recent snowfall across our primary snow markets, including the record-breaking blizzard that struck the Northeast, generated additional revenue for our contractor customers and is helping clear field inventories, thus boosting prospects for our autumn pre-season snow sales.”
“Additionally, along with positive market conditions,” Hoffman added,
“our latest professional and residential product innovations, like the
Reelmaster® 3550-D (the lightest golf fairway mower on the market), new
30” professional walk power mowers for landscape contractors and the
newly
The
The company continues to expect revenue growth of about 4 to 5 percent
for fiscal 2013. With the expectations that the accelerated margin and
earnings benefit of the Tier 4 transition will moderate through the
year, the earnings expectations are being raised largely to reflect the
benefit of tax rate improvement discussed below. The company now expects
fiscal 2013 net earnings to be about
SEGMENT RESULTS
Professional
-
Professional segment net sales for the first quarter totaled
$329.1 million , up 16 percent from the same period last year. Domestic shipments of large turf equipment were up due to channel demand. The early successful launch of products from the Astec and Stone acquisitions, also contributed to the professional businesses’ strong quarter. Furthermore, increased capacity enabled the company to capitalize on steadily growing demand for micro-irrigation systems to meet the ever-growing global food requirements. Results in the professional segment were somewhat offset by soft international sales activity. -
Professional segment earnings totaled
$60.7 million , up 44.3 percent from$42.1 million last year.
Residential
-
Residential segment net sales for the first quarter totaled
$120.9 million , down 12.1 percent from the first quarter last year. The decline reflects reduced retail demand for snow products due to unseasonable winter weather inNorth America . However, residential segment results benefitted from improved sales of Pope products inAustralia . -
Residential segment earnings for the fiscal 2013 first quarter totaled
$12.2 million , down 3.6 percent from$12.6 million in the same period last year.
OPERATING RESULTS
Gross margin for the fiscal 2013 first quarter increased 270 basis points from last year to 37.3 percent. The margin growth was primarily the result of product mix, pricing, and progress on our productivity efforts.
Selling, general and administrative (SG&A) expense as a percent of sales
for the fiscal 2013 first quarter was up 30 basis points to 26.9
percent. The SG&A increase as a percent of sales reflects incremental
costs associated with the acquisition of Astec and Stone, as well as
start-up costs for the new distribution facility in
First quarter operating earnings as a percent of sales were 10.4 percent compared to 8 percent a year ago.
First quarter interest expense was down 4 percent to
The effective tax rate for the quarter was 27.7 percent compared with
33.8 percent last year. The lower tax rate was primarily due to the
retroactive extension of the
Accounts receivable at the end of the fiscal 2013 first quarter totaled
About The
The
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www.thetorocompany.com/invest
The
Safe Harbor
Statements made in this news release, which are
forward-looking, are made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. Forward-looking
statements involve risks and uncertainties that could cause actual
results to differ materially from those projected or implied. These
uncertainties include factors that affect all businesses operating in a
global market as well as matters specific to
THE TORO COMPANY AND SUBSIDIARIES | ||||||||||
Condensed Consolidated Statements of Earnings (Unaudited) | ||||||||||
(Dollars and shares in thousands, except per-share data) | ||||||||||
Three Months Ended | ||||||||||
February 1, | February 3, | |||||||||
2013 | 2012 | |||||||||
Net sales | $ | 444,661 | $ | 423,835 | ||||||
Gross profit | 165,817 | 146,651 | ||||||||
Gross profit percent | 37.3 | % | 34.6 | % | ||||||
Selling, general, and administrative expense | 119,613 | 112,630 | ||||||||
Operating earnings | 46,204 | 34,021 | ||||||||
Interest expense | (4,249 | ) | (4,428 | ) | ||||||
Other income, net | 1,443 | 493 | ||||||||
Earnings before income taxes | 43,398 | 30,086 | ||||||||
Provision for income taxes | 12,002 | 10,163 | ||||||||
Net earnings | $ | 31,396 | $ | 19,923 | ||||||
Basic net earnings per share | $ | 0.54 | $ | 0.33 | ||||||
Diluted net earnings per share | $ | 0.53 | $ | 0.33 | ||||||
Weighted average number of shares of common
stock outstanding – Basic |
58,480 | 59,986 | ||||||||
Weighted average number of shares of common
stock outstanding – Diluted |
59,628 | 60,947 | ||||||||
Shares and per share data have been adjusted for all periods presented
to reflect a two-for-one stock split effective
Segment Data (Unaudited) |
||||||||||
(Dollars in thousands) |
||||||||||
Three Months Ended | ||||||||||
|
February 1, | February 3, | ||||||||
Segment Net Sales |
2013 | 2012 | ||||||||
Professional | $ | 329,144 | $ | 283,834 | ||||||
Residential | 120,947 | 137,608 | ||||||||
Other | (5,430 | ) | 2,393 | |||||||
Total* | $ | 444,661 | $ | 423,835 | ||||||
* Includes international sales of | $ | 141,591 | $ | 149,462 | ||||||
Three Months Ended | ||||||||||
|
February 1, | February 3, | ||||||||
Segment Earnings (Loss) Before Income Taxes |
2013 | 2012 | ||||||||
Professional | $ | 60,738 |
|
$ |
42,091 |
|||||
Residential | 12,154 |
|
12,608 |
|||||||
Other | (29,494 | ) |
|
(24,613 |
) |
|||||
Total | $ | 43,398 |
|
$ |
30,086 |
|||||
THE TORO COMPANY AND SUBSIDIARIES | ||||||||
Condensed Consolidated Balance Sheets (Unaudited) | ||||||||
(Dollars in thousands) | ||||||||
February 1, | February 3, | |||||||
2013 | 2012 | |||||||
ASSETS |
||||||||
Cash and cash equivalents | $ | 60,700 | $ | 71,804 | ||||
Receivables, net | 180,317 | 175,498 | ||||||
Inventories, net | 335,700 | 272,474 | ||||||
Prepaid expenses and other current assets | 25,291 | 18,796 | ||||||
Deferred income taxes | 63,878 | 61,900 | ||||||
Total current assets | 665,886 | 600,472 | ||||||
Property, plant, and equipment, net | 173,267 | 188,271 | ||||||
Deferred income taxes | — | 75 | ||||||
Goodwill and other assets, net | 144,990 | 148,189 | ||||||
Total assets | $ | 984,143 | $ | 937,007 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||
Current portion of long-term debt | $ | 250 | $ | 2,078 | ||||
Short-term debt | — | 25,024 | ||||||
Accounts payable | 168,334 | 151,836 | ||||||
Accrued liabilities | 258,909 | 226,370 | ||||||
Total current liabilities | 427,493 | 405,308 | ||||||
Long-term debt, less current portion | 223,498 | 223,685 | ||||||
Deferred revenue | 10,974 | 9,997 | ||||||
Deferred income taxes | 2,804 | 1,368 | ||||||
Other long-term liabilities | 6,531 | 7,920 | ||||||
Stockholders’ equity | 312,843 | 288,729 | ||||||
Total liabilities and stockholders’ equity | $ | 984,143 | $ | 937,007 | ||||
THE TORO COMPANY AND SUBSIDIARIES | ||||||||||
Condensed Consolidated Statements of Cash Flows (Unaudited) | ||||||||||
(Dollars in thousands) | ||||||||||
Three Months Ended | ||||||||||
February 1, | February 3, | |||||||||
2013 | 2012 | |||||||||
Cash flows from operating activities: | ||||||||||
Net earnings | $ | 31,396 | $ | 19,923 | ||||||
Adjustments to reconcile net earnings to net cash
used in operating activities: |
||||||||||
Noncash income from finance affiliate | (1,353 | ) | (1,002 | ) | ||||||
Provision for depreciation and amortization | 13,517 | 12,960 | ||||||||
Stock-based compensation expense | 2,479 | 2,597 | ||||||||
Decrease (increase) in deferred income taxes | 335 | (486 | ) | |||||||
Other | (11 | ) | (21 | ) | ||||||
Changes in operating assets and liabilities, net of effect of acquisitions: | ||||||||||
Receivables, net | (32,217 | ) | (27,888 | ) | ||||||
Inventories, net | (83,794 | ) | (50,000 | ) | ||||||
Prepaid expenses and other assets | (243 | ) | (2,118 | ) | ||||||
Accounts payable, accrued liabilities, deferred revenue, and other long-term liabilities |
46,429 |
29,723 |
||||||||
Net cash used in operating activities | (23,462 | ) | (16,312 | ) | ||||||
Cash flows from investing activities: | ||||||||||
Purchases of property, plant, and equipment, net | (3,233 | ) | (13,797 | ) | ||||||
Proceeds from asset disposals | 13 | 26 | ||||||||
(Contributions to) distributions from finance affiliate, net | (2,484 | ) | 13 | |||||||
Acquisition, net of cash acquired | — | (550 | ) | |||||||
Net cash used in investing activities | (5,704 | ) | (14,308 | ) | ||||||
Cash flows from financing activities: | ||||||||||
(Repayments of) proceeds from short-term debt | (415 | ) | 25,000 | |||||||
Repayments of long-term debt | (1,578 | ) | (1,479 | ) | ||||||
Excess tax benefits from stock-based awards | 3,442 | 5,071 | ||||||||
Proceeds from exercise of stock options | 3,602 | 5,208 | ||||||||
Purchases of Toro common stock | (33,185 | ) | (4,865 | ) | ||||||
Dividends paid on Toro common stock | (8,198 | ) | (6,607 | ) | ||||||
Net cash (used in) provided by financing activities | (36,332 | ) | 22,328 | |||||||
Effect of exchange rates on cash | 342 | (790 | ) | |||||||
Net decrease in cash and cash equivalents | (65,156 | ) | (9,082 | ) | ||||||
Cash and cash equivalents as of the beginning of the fiscal period | 125,856 | 80,886 | ||||||||
Cash and cash equivalents as of the end of the fiscal period | $ | 60,700 | $ | 71,804 | ||||||
Source: The
The Toro Company
Investor Relations
Kurt
Svendsen, 952-887-8630
Managing Director, Corporate Communications
and Investor Relations
kurt.svendsen@toro.com
or
Media
Relations
Branden Happel, 952-887-8930
Senior Manager,
Public Relations
branden.happel@toro.com