Toro reports record first-quarter results, announces acquisition
The Toro Company reported Feb. 21 net earnings of $31.4 million, or $0.53 per share, on a net sales increase of 4.9 percent to $444.7 million for its fiscal first quarter ended Feb. 1, 2013. In the comparable fiscal 2012 period, the company delivered net earnings of $19.9 million, or $0.33 per share, on net sales of $423.8 million. The “per share” data for the comparative periods was adjusted to reflect a two-for-one stock split effective June 29, 2012.
“Our record-setting first quarter, driven by particularly strong channel demand for large turf equipment and the continued growth of micro-irrigation sales, propelled us to a solid start for the year,” said Michael J. Hoffman, Toro’s chairman and chief executive officer. “Our financial performance benefitted from both accelerated sales related to pre-Tier 4 product shipments and early professional end-user demand, along with positive effects of our productivity initiatives.”
“The optimistic outlook of customers across our businesses is encouraging, as we prepare for our primary selling season,” said Hoffman. “Barring new economic headwinds, we anticipate the momentum our golf, landscape contractor and micro-irrigation businesses enjoyed this past quarter will carry into spring. Our residential business retail potential looks solid as well. Recent snowfall across our primary snow markets, including the record-breaking blizzard that struck the Northeast, generated additional revenue for our contractor customers and is helping clear field inventories, thus boosting prospects for our autumn pre-season snow sales.”
“Additionally, along with positive market conditions,” Hoffman added, “our latest professional and residential product innovations, like the Reelmaster 3550-D (the lightest golf fairway mower on the market), new 30-inch professional walk power mowers for landscape contractors and the newly Toro-branded products from our Astec and Stone Construction acquisitions from 2012, are helping create further opportunities.”
The Toro Company also announced Feb. 21 that it had entered into an agreement to acquire a Chinese micro-irrigation company, subject to applicable regulatory approval and other customary closing conditions. Terms of the transaction were not disclosed. Hoffman commented, “Although small, this acquisition will help strengthen our presence in China, a critical growth market, by establishing a micro-irrigation base of operations.”
The company continues to expect revenue growth of about 4 to 5 percent for fiscal 2013. With the expectations that the accelerated margin and earnings benefit of the Tier 4 transition will moderate through the year, the earnings expectations are being raised largely to reflect the benefit of tax-rate improvement. The company expects fiscal 2013 net earnings to be about $2.40 to $2.45 per share. For the second quarter, the company expects to report net earnings per share of about $1.20.
