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Toro Company CEO Discusses F2Q12 Results - Earnings Call Transcript

Our earnings release was issued this morning by Business Wire, a copy can be found in the Information section of our investor site, thetorocompany.com.

I will turn the call over to Mike.

Mike Hoffman

Thank you Kurt and good morning to all our listeners. Favorable weather conditions across much of the United States helped fuel the retail and continued the shift in momentum we reported during our first quarter call. We achieved record second quarter revenues and earnings per share. Net sales for the quarter grew 9.5% with earnings per share up 20%. For the first six months, net sales increased nearly 10% while earnings per share rose 21%. Renee will discuss our financial and operating results in more detail later in the call.

As reported in our earnings release earlier this morning, the strength of our second quarter and year-to-date performance led to our raising guidance for the year. In addition, the board has declared a two for one stock split. This is the third stock split declared by our board since we launched five by five, the first in a series of corporate initiatives to focus the enterprise on driving growth and efficiencies and thus add shareholder value. That effort continues with our current initiative, destination 2014.

Domestically while the economy still prevents mixed signals, the unseasonably warm weather and ample moisture are driving end user purchases across our residential landscape and golf businesses. In fact, we are enjoying strong results around the world with exception of Europe where economic conditions have slowed sales.

Golf courses across the United States are enjoying a resurgence of player activity. The National Golf Foundation or NGF's latest report shows rounds played in March grew by 30%, raising the 2012 calendar year to date growth rate to over 20%. Most regions in United States are reporting increased sales with the most significant growth coming from the large core markets of California, Arizona, Florida and the Carolinas which were all hard hit by the economic downturn. The NGF attributes these games to a lessening of recessionary effects on the game and an upward trend in golfer confidence. Whether also contributed to an early start to the golf season generating better than expected cash flow for golf course operations. In response to the increased activity, many courses are investing in new equipment, both to replace worn machinery and to capitalize on the innovation and productivity, our latest advancements deliver. We continue to win a significant share of large golf equipment packages. Our greensmower and rollers have been especially well received. New hybrid technology, featured on our greensmowers showed particular promise for future growth. As many of you witnessed firsthand, these and our many other cutting edge equipment, precision golf irrigation product and services kept our booth packed with customers during the National Golf Industries show in late February.

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