The Toro Company Reports Record 2012 Third Quarter Results

The company now expects revenue growth for fiscal 2012 to be about 4 to 5 percent and net earnings to be about $2.10 per share, which continues to include the $0.08 negative earnings per share impact for investments related to the Astec and Stone product-line acquisitions.

SEGMENT RESULTS

Professional

• Professional segment net sales for the third quarter totaled $361.1 million, up 4.4 percent from the prior year period. Sales of landscape maintenance equipment increased on the strength of new products and continued demand in markets not impacted by drought. Domestic sales of golf equipment and irrigation were up on new products and continued golf industry confidence. Micro irrigation sales increased domestically as demand continues for better solutions for agricultural irrigation. Recent acquisitions - including Astec Underground, Stone Construction Equipment and Unique Lighting Systems - also contributed to sales. International economic issues and unfavorable currency exchange negatively impacted the sales of all professional businesses. For the first nine months, professional segment net sales were $1,100.9 million, up 7.7 percent from the comparable fiscal 2011 period
• Professional segment earnings for the third quarter totaled $70.5 million, up 9.6 percent from the prior year period. For the first nine months, professional segment earnings were $211.3 million, up 12.5 percent from the comparable fiscal 2011 period.

Residential

• Residential segment net sales for the third quarter totaled $135.9 million, down 7.9 percent from the prior year period. As expected, snow blower sales were lower for the quarter due to anticipated soft preseason demand. Shipments of walk power mowers were up slightly for the quarter, while sales of residential riding products were down. Sales of Toro’s new string and hedge trimmers also contributed incrementally to the quarter. For the first nine months, residential segment net sales were $505.4 million, up 5.2 percent from the comparable fiscal 2011 period.
• Residential segment earnings for the third quarter totaled $10 million, up 116.6 percent from our fiscal 2011 third quarter, when a pre-tax charge of $4.5 million to account for one-time costs associated with a rework issue affecting a large number of walk power mowers resulted in a decline in earnings. For the first nine months, residential segment earnings were $51.2 million, up 20.3 percent from the comparable fiscal 2011 period.

OPERATING RESULTS

Gross margin for the quarter improved 180 basis points to 35.3 percent due to realized pricing offsetting higher materials costs, a stronger professional/residential mix, and the absence of last year’s walk power mower rework impact. For the first nine months, gross margin was up 40 basis points to 34.6 percent.

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