Toro Announces Improved First Quarter Results

Professional segment sales for the quarter were $185.9 million, an increase of 18.6 percent over last year’s first quarter sales of $156.8 million. Commercial equipment, irrigation, and landscape contractor businesses were all up significantly over last year. Toro stated that new products introduced over the past year combined with overall strong retail demand, drove sales increases. Landscape contractor sales continued to be strong for both Toro and Exmark brands, led by increases in Toro Dingo products. Sales to irrigation contractors were also up for both Toro and Irritrol brands. Operating profits for the professional segment were $18.1 million, a 23.7 percent increase over the $14.6 million recorded in last year’s first quarter.

International sales for the quarter increased 15.8 percent due to strong increases of professional segment, particularly landscape contractor and commercial equipment. During the quarter, Toro also announced that it was named the official supplier of equipment and irrigation to the 60 sites comprising the European PGA Tour.

Toro reported net income for the 1999 fiscal year at $36.1 million – compared to net income of $13.2 million in the 1998 fiscal year – a trend the company predicts to continue. "We’re pleased that the strong resurgence of good financial results enjoyed by Toro in 1999 has carried over into 2000, and that both our professional and residential segments are off to a strong start in sales and profitability," said Kendrick Melrose, chairman and CEO of Toro. "We continue to benefit from our investments initiated in 1999, and we are on target in 2000 to complete our previously announced $20 million profit improvement plan."

Toro’s "Other" segment decreased in both sales and operating profit for the quarter. Toro purchased three of its distributors in fiscal 1999 and their addition accounted for a majority of the "Other" category change. According to the company, Toro distributors typically record losses and increased inventories during the first quarter in anticipation of the selling season. In season, they typically record profits and reduce inventories.

Residential segment sales increased 3.4 percent for the quarter, led by an increase in snowthrower, riding product, do-it-yourself irrigation and blower product sales.

The company is releasing several new products into the market, including the Toro Dingo utility loader, which was well received at the Green Industry Expo in November 1999. "The cluster of product innovations unveiled in 1999 and scheduled for release in 2000, is the strongest in our 86 year history," Melrose stated. "We are positioned for a good selling season in 2000, assuming a normal weather pattern."

In investor-related news, Toro announced yesterday that it has authorized the repurchase of up to 1 million of its outstanding shares. The company said the purchases will be made from time to time at market prices, over an unspecified period, depending upon prices and market conditions. Toro said the purchased stock will be used to meet the company’s various employee benefit plans.