Toro’s 2Q Earnings Exceed EstimatesBLOOMINGTON, Minn. (May 22, 2002) -- The Toro Company (NYSE:TTC) today announced results for its second quarter ended May 3, 2002. Net earnings for the second quarter were $36.4 million. Net sales were $470.3 million for the second quarter and $748.2 million for the first half compared to $459.6 million and $740.0 for the same periods last year, an increase of 2.3 and 1.1 percent respectively. For the first half net earnings were $37.9 million compared to $35.2 million for the first half of fiscal 2001, an increase in earnings per share of 9.7 percent.
"We are pleased with our net earnings results for the second quarter," said Kendrick B. Melrose, chairman and chief executive officer of The Toro Company. "Ongoing focus on our '5 by Five' profit improvement opportunities contributed to our continued strong earnings growth. Revenue growth was positive in spite of the forces of economy and weather, but behind our plan. This was because proactive inventory management by Toro's channel partners and retailers curtailed our shipment velocity, even though retail movement in most of our business segments has been strong."
Residential sales, led by new mowers sold through both The Home Depot and Toro dealers, were up 9.1% to $169.7 million. Retail movement of this line exceeded company expectations. Overall rider sales were less than last year, due partially to the pipeline-fill component of last year's successful introduction of the Toro Timecutter Z mower. The Timecutter Z continues to do well at retail. Home improvement products also declined from a year ago as a result of the unusually cold spring and field inventory reduction, even though retail movement outpaced last year.
Professional sales were down slightly, 1.6% to $290.2 million. Sales were up in both the commercial equipment and irrigation categories due to the successful introduction of new products, such as new rotaries and sprinkler heads, as well as customer sales that were postponed last year. The late spring and higher than expected field inventories entering the season caused a reduction in the landscape contractor business for both Toro and Exmark products. Toro does not believe that all of the shortfall will be recovered and has therefore reduced its forecast for the year's landscape contractor business, even though retail movement of this product continues to be strong.