Editor's note: The following information is excerpted from Toro's first quarter report of its fiscal year 2002. See http://biz.yahoo.com/e/020318/ttc.html for the full version of Toro’s quarterly report.
First quarter net sales were $277.9 million, compared to $280.4 million last year, a slight decrease of 0.9 percent. Worldwide sales for the professional segment were down 4.3 percent compared to last year’s first quarter (from $183.6 million to $175.8 million), due primarily to customers’ reluctance to place orders because of uncertain economic conditions and Toro’s efforts to manage field inventory levels.
Worldwide shipments of commercial equipment, landscape contractor mowing equipment and Toro brand irrigation systems were also down due to the previously mentioned factors. However, Irritrol and agricultural irrigation product sales were up compared to last year due to lower Irritrol field inventory levels entering fiscal 2002 as well as higher international sales for agricultural irrigation products. Sitework Systems shipments were also higher than last year due to the addition of sales from new dealers in fiscal 2002, and because sales for the same quarter in fiscal 2001 were lower due to product returns related to the distribution change to dealer-direct.
First quarter gross profit was $95.3 million compared to $91.4 million last year, an increase of 4.3 percent. As a percentage of net sales, gross profit for the first quarter of fiscal 2002 was 34.3 percent compared to 32.6 percent in the first quarter of fiscal 2001. This increase was due to cost reduction efforts, favorable change in the Japanese yen exchange rate with the U.S. dollar, lower resin costs for irrigation products, as well as positive results from lower material costs as part of the company’s “5 by Five” program initiatives. International gross profit also improved, due to lower currency support costs in fiscal 2002, compared to fiscal 2001. Somewhat offsetting those positive factors were higher manufacturing costs due to lower plant utilization.
Operating earnings before restructuring and other expenses for the worldwide professional segment in the first quarter of fiscal 2002 was $19 million compared to $18.1 million last year, an increase of 5.3 percent.
Historically, net sales and earnings for the first quarter of Toro’s fiscal year are lower than other quarters, so that results for the first quarter of fiscal 2002 are not necessarily an indicator of spring season sales trends. The company anticipates good growth for the professional segment as Toro introduces new products and programs, including new financing solutions for golf courses, municipalities and sports fields to acquire irrigation systems and maintenance equipment.