The Toro Company Reports Record First Quarter Results

Thu February 21, 2019 - National Edition

The Toro Company has reported net earnings of $59.5 million, or $0.55 per share, on a net sales increase of 10 percent to $603 million for its first quarter ended February 1, 2019. In the comparable fiscal 2018 period, the company delivered net earnings of $22.6 million, or $0.21 per share, on net sales of $548.2 million. Adjusted 2019 first quarter net earnings were $55.2 million, or $0.51 per share, compared to adjusted net earnings of $52.1 million, or $0.48 per share in the comparable 2018 period, an increase of 6.3 percent, including $0.03 of acquisition related expenses in the quarter.

"Our professional businesses delivered another good quarter, led by strength in landscape contractor sales, increased golf and grounds channel demand and positive momentum in our Boss business," said Richard M. Olson, Toro's chairman and CEO. "New products were again the key to success, as customers responded favorably to the latest lineup of our Exmark Lazer and Radius zero-turn riding mowers and the Boss Stainless Steel XT V-Plow, which offers enhanced productivity and maneuverability for operators. Recent snow events in key regions also helped bolster sales of both professional and residential snow and ice management products in the quarter.

"At recent industry trade shows, our team showcased several new products with the latest technology, designed to help our customers do their jobs more effectively. Key product lines like the Greensmaster eTriFlex fully electric riding greensmower that effectively eliminates the potential for hydraulic leaks, while offering superior cutting performance, generated excitement among customers. The Outcross 9060 continues to be a crowd favorite as customers learn more about the various attachments and versatility this machine offers to help address some of their biggest challenges. Our new Dingo TXL 2000 also continues to impress with its vertical lifting capacity and telescoping arms for increased productivity and ease of use.

"We are very excited about the recent announcement regarding the acquisition of Charles Machine Works, known as 'The Underground Authority,' with a portfolio of businesses including Ditch Witch and other leading brands in the underground construction market," Olson said. "As mentioned during our conference call last week, this acquisition will align very well with our strategic priorities and will naturally complement our existing business. Similarly, the cultural alignment, commitment to innovation and the importance of community shared by the two companies, should position us well for a successful integration.

"Looking ahead, we remain committed to effectively balancing tariffs and related commodity pressures, with productivity gains and pricing strategies. While we maintain our prudent approach to expense management, we will not sacrifice important investments in new product development, technologies or operating efficiencies. These factors, paired with the good work and dedication of our team, positions us well to execute in the future."

Assuming the acquisition of Charles Machine Works closes in the third quarter, the company expects adjusted earnings per share of $1.15 to $1.20 for the second quarter. This includes an estimated $0.07 for the impact of acquisition-related expenses and share repurchase curtailment. These items are in addition to the $0.03 of acquisition expense incurred in the first quarter. This results in an adjusted earnings per share estimate of $1.66 to $1.71 for the first six months, which equates to operational performance of $1.76 to $1.81, excluding acquisition-related impacts. The company expects to update their guidance at, or after, the closing of the acquisition.

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