Toro Reports Strong First Quarter Earnings

Gregory V. Harris

BLOOMINGTON, Minn. - The Toro Company today reported net earnings of $11.2 million on net sales of $346.9 million for its fiscal 2005 first quarter ended January 28. In its fiscal 2004 first quarter, the company reported net earnings of $9.3 million on net sales of $313.6 million.

?EUR??,,????'??Our strong momentum continued into the new fiscal year as our ongoing efforts to increase sales and improve profitability benefited overall performance,?EUR??,,????'?? said Kendrick B. Melrose, The Toro Company chairman and CEO.

Melrose said results for Toro's first quarter, typically the seasonally smallest sales period, were fueled by double-digit sales growth in its professional segment as well as in international sales of both professional and residential products.

Compared with the prior year, fiscal 2005 first quarter professional segment sales increased 18.1% to $245.2 million. In addition, volume increased in nearly all product categories.

?EUR??,,????'??At the recent Golf Industry Show, our customers expressed increasing optimism about the golf business and many are forecasting a successful year,?EUR??,,????'?? Melrose said. ?EUR??,,????'??While new course construction remains slow, investments in course renovations and improvements continue to drive demand for our equipment, services and systems. This same optimism was prevalent at other industry tradeshows during the quarter, where landscape contractors and sports turf professionals were very bullish about their business and the outlook for this season.?EUR??,,????'??

Earnings for the first quarter totaled $38.9 million, up 36.6% compared with $28.4 million in the prior year first quarter resulting from higher sales volume and improved leveraging of expenses.

Residential segment sales for the first quarter totaled $95.9 million, down 2.1% from last year's first quarter. A late-arriving snow season in many parts of the country helped boost retail sales for snow throwers, but not early enough to keep the expected shipments for mowers and riding products moving into the channels.

Earnings for the first quarter totaled $4.4 million, down 46.8% compared with the same period last year. The decline resulted primarily from lower than expected sales as well as steel and other commodity price increases not present in the first quarter of fiscal 2004.