The Toro Company Reports Record Results For Fiscal 2012

“We are early in our fiscal 2013, and mindful of the challenging world-wide economic environment and, as always, acutely aware of the volatility of Mother Nature. Nonetheless, the outlook for our end markets appears promising. Golf rounds and revenues were up last year, housing and construction are showing signs of improvement, and the agriculture market continues to adopt more efficient methods of irrigation. While we hope for better weather for our business, that is out of our control. We will concentrate on those actions that have made us successful: developing innovative products, serving our customers, executing in the marketplace, and engaging our employees to improve profitability as we pursue our Destination 2014 goals of additional revenue growth and further operating earnings expansion.”

The company expects revenue growth for fiscal 2013 to be about 4 to 5 percent, and net earnings to be about $2.35 to $2.40 per share. For the first quarter, the company expects net earnings to be about $0.40 to $0.45 per share, positively impacted by anticipated accelerated purchases of diesel products in advance of the Tier 4 price change.

SEGMENT RESULTS

Professional

• Professional segment net sales for fiscal 2012 totaled $1,329.5 million, up 7.3 percent over last year. Sales of golf equipment and irrigation were up domestically on continued demand as golf courses replaced equipment and renovated aging irrigation systems. Landscape maintenance equipment increased on the success of new products and retail demand in markets not impacted by the drought. Micro irrigation sales in the Americas increased significantly on improved capacity and dealer expansion that enabled Toro to better meet growing demand for agricultural irrigation. Recent acquisitions also contributed incremental sales for the year. International economic issues, particularly Europe, negatively impacted the sales of most professional businesses for the year. For the fourth quarter, professional segment net sales were $228.6 million, up 5.6 percent from the comparable fiscal 2011 period.
• Professional segment earnings for fiscal 2012 totaled $232.1 million, up 13.2 percent from the prior year. For the fourth quarter, professional segment earnings were $20.8 million, up 21.2 percent from the comparable fiscal 2011 period.

Residential

• Residential segment net sales for fiscal 2012 were $607.4 million, down from $623.9 million in fiscal 2011. Snow thrower sales were down about 50 percent for the year due to the lack of snowfall last winter and the resulting soft preseason demand in the fourth quarter. Shipments of walk power mowers and riding products were up for the year due in part to the successful launch of the TimeMaster™ 30 inch walk power mower. For the fourth quarter, residential segment net sales were $102 million, down 28.9 percent from the comparable fiscal 2011 period due to reduced demand for snowthrowers.
• Residential segment earnings for fiscal 2012 totaled $57.9 million, up $3.5 million or 6.4 percent from fiscal 2011, when a pre-tax charge of $4.7 million to account for one-time costs associated with a rework issue affecting walk power mowers resulted in a decline in earnings. For the fourth quarter, residential segment earnings were $6.7 million, down from $11.9 million in the comparable fiscal 2011 period.

OPERATING RESULTS

Gross margin for fiscal 2012 improved 60 basis points from last year to 34.4 percent. The majority of the margin expansion was due to realized price, coupled with productivity improvement, somewhat offset by higher materials costs. For the fourth quarter, gross margin was up 100 basis points to 33.3 percent.

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