Toro Announces Strong Start to 2002

MINNEAPOLIS, Minn. - Toro, which expected to lose money throughout the first three months of 2002, announced in late January that it now expects to turn a profit in the first quarter of its fiscal year, primarily on the strength of its sales of consumer mowers and heavy sales of snow equipment. Part of the engine driving the consumer mower sales is the company's recently announced relationship with The Home Depot, but Toro reported strong sales through its dealer network as well.

"We are pleased with the developing strength of the first quarter," noted Ken Melrose, chairman and chief executive of Toro. "The previously announced walk power mower initiative with The Home Depot and dealers is off to a strong start and retail movement is already occurring in some markets. The late winter snowstorms have stimulated snow sales in certain parts of the country."

However, Melrose said the company maintains its guarded outlook on the new year. "While the first quarter operating results appear to be better than expected, we are still approaching the year with caution due to the economic environments worldwide," he related.

At the same time, the company announced it will take one-time accounting charges "for goodwill resulting principally from the acquisition of Drip In Irrigation, and to a lesser extent, the acquisition of Hardie Ag, which had been combined to become the Toro Worldwide Ag Division."  Toro took the charge because these acquired companies' performance "has not met management expectations mainly due to less growth than anticipated in the drip line market as a whole.  This has caused a reduction in industry-wide pricing and consequently margins on Toro product sales causing unsatisfactory results."

The company did state that it expects this area of its business to perform better in the next few years due to cost reductions and stronger management.