"We delivered the strongest quarter performance in our company's 90-year history," said Kendrick B. Melrose, chairman and Chief Executive Officer, The Toro Company, Bloomington, Minn. "Our financial results continue to be driven by strong sales growth, primarily from products introduced within the past two years, coupled with improved operating effectiveness and asset management," Melrose added.
Melrose said sharp growth in walk power mower shipments to the mass channel, increased shipments in nearly all professional segment product categories and strong growth in international shipments drove the 10.5 percent increase in second quarter net sales. "In our fiscal year to date, we have also benefited from generally favorable weather, including above-average winter snowfalls, a better spring than last year and a stronger economy," Melrose said. Improved margins, higher shipments during the quarter and favorable foreign currency effects all contributed to the strong second quarter profitability.
PROFESSIONAL SEGMENT
For the second quarter, fiscal 2004 professional segment sales increased 7.8 percent to $338.5 million compared with the same period last year. Segment sales increased in most product categories compared with the prior year quarter.
International professional segment sales for the fiscal 2004 second quarter increased at double-digit rates compared with the corresponding 2003 period, even excluding favorable foreign currency effects.
Professional segment earnings for the fiscal 2004 second quarter totaled $71.7 million, up 13.1 percent from the fiscal 2003 second quarter. Professional segment profitability benefited from improved margins on most products, leveraging of expenses and favorable foreign currency effects.
RESIDENTIAL
Residential segment sales for the fiscal 2004 second quarter totaled $194.8 million, up 13 percent compared with fiscal 2003 second quarter. Shipments of Toro(R) brand walk power mowers fueled by strong retail demand was the strongest contributor of the increase. The timing of a retail promotion program benefited the current quarter compared to fiscal 2003 second quarter.
International residential segment sales for the fiscal 2004 second quarter increased 6.6 percent compared with the fiscal 2003 second quarter. Most of the increase was attributable to strong demand for Pope(R) brand irrigation products in Australia.
Residential segment earnings for the fiscal 2004 second quarter totaled $26.7 million, up 9.7 percent compared with the fiscal 2003 second quarter. Sales growth outpaced earnings growth primarily due to a change in the sales mix toward lower-margin products.
DISTRIBUTION
Worldwide distribution segment sales for the fiscal 2004 second quarter totaled $44.9 million, up 27 percent compared with fiscal 2003 second quarter. Strong demand and the previously announced acquisition of a distributor in March 2003 resulted in increased sales at Toro's company-owned distributors. Distribution segment earnings for the fiscal 2004 second quarter increased to $1.6 million from $0.6 million in the fiscal 2003 second quarter as a result of higher sales volume.