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BLOOMINGTON, Minn. - The Toro Company, a manufacturer of lawnmowers, snowthrowers and irrigation products for commercial and residential markets, announced today, Feb. 21, 2001, that its first quarter earnings performance exceeded the company's expectations, despite dipping slightly from the same period last year.
The Bloomington, Minn.-based company said its net income for the first quarter of 2001 was $1.3 million, compared with $913,000 a year ago. Revenue was slightly higher, rising to $283.5 million from $280.2 million for the same quarter last year. Additionally, the company said it expects second-quarter sales and earnings to increase by 8 to 10 percent.
Toro expected to lose money in the first quarter because of foreign currency support, interest costs, lower snowthrower sales and increased expenses from the addition of two company-owned distributors, and a change in the distribution of Toro Siteworks® Systems products. During the quarter, however, exchange related issues, expense timing and interest costs improved from expected levels. These external developments, combined with internal improvements from initial 5 by Five programs such as better asset management, cost and expense reductions and process improvements, produced a better than expected and a profitable quarter.
“We're very pleased that we were able to beat our targets and analyst expectations,” said Kendrick Melrose, chairman and CEO of Toro. “The earnings' result was due to a combination of some positive changes in our business fundamentals and unexpected favorable external developments.'”
Toro's professional segment sales were basically flat for the quarter, even though some businesses performed better than expected. Toro and Exmark landscape contractor equipment experienced strong growth during the quarter. Worldwide grounds and golf equipment sales were also up. However, residential/commercial irrigation sales were down due to high beginning inventories in the field and abnormally high sales in the previous comparable quarter.
Toro's overall residential segment sales declined for the quarter due primarily to snowthrower sales that were lower because of a shift to pre-season shipping in last year's fourth quarter. Toro's overall lawn and garden market sales were relatively flat.
Toro's other segment, including company-owned distributors, saw improved sales during the quarter due to a change in shipping patterns and the addition of two distributors purchased during fiscal 2000.
OUTLOOK. Melrose said new products in each of Toro's business units should fuel growth even if the industry is flat. For example, customer acceptance was high for the new Toro Flex 21® greensmower and several other new products at the Golf Course Superintendents Association of America (GCSAA) Conference and Show in Dallas this month.
Melrose added that Toro's landscape equipment segment should continue its strong growth. He was also optimistic about the residential market due to the reception of three new consumer products.
“We expect second quarter sales and earnings to increase by 8 to 10 percent,” Melrose said. “In addition, snowthrower inventories heading into next season are currently at very low levels, and that should provide a good snowthrower season in the fall. While current economic indicators appear less favorable than at the outset of the year, we still expect to meet our financial targets for the year. Our number one priority is to improve our profit after tax yield over these next three years.''
For more information about The Toro Company visit its web site at www.toro.com.