The Toro Company Reports Record Third-Quarter Fiscal 2022 Results
Highlighted by Strong Professional Segment Performance and Increased Profitability
-
Record third-quarter net sales up 18.8% year over year to
$1.16 billion
-
Record third-quarter reported diluted EPS of
$1.19 ; *adjusted diluted EPS of$1.19
- Operational execution drives gross margin and operating earnings margin expansion
- Raises full-year *adjusted diluted EPS guidance
“We delivered record results while advancing our strategic initiatives during the third quarter,” said
“Professional segment demand remained robust and broad-based. Our biggest challenge continued to be our ability to fulfill heightened order levels in this time of constrained supply. Residential segment demand was solid, moderating as expected on top of the higher base we have built with the past two years of double-digit growth, and aligned with more typical seasonal trends.
“During the quarter, we continued to invest for the long-term and prioritized the key technology areas of alternative power, smart-connected, and autonomous solutions. Our focus on technology leadership dovetails with our enterprise-wide commitment to environmental, social, and governance best practices. We were excited to introduce goals and metrics in our latest sustainability report, which should help us drive change in a meaningful way for all stakeholders.”
THIRD-QUARTER FISCAL 2022 FINANCIAL HIGHLIGHTS
-
Net sales of
$1,160.6 million , up 18.8% from$976.8 million in the third quarter of fiscal 2021.
-
Net earnings of
$125.2 million , up 29.9% from$96.3 million in the third quarter of fiscal 2021; *adjusted net earnings of$125.1 million , up 25.8% from$99.4 million in the third quarter of fiscal 2021.
-
Reported diluted EPS of
$1.19 versus$0.89 in the third quarter of fiscal 2021; *adjusted diluted EPS of$1.19 versus$0.92 in the third quarter of fiscal 2021.
YEAR-TO-DATE FISCAL 2022 FINANCIAL HIGHLIGHTS
-
Net sales of
$3,342.7 million , up 11.5% from$2,998.9 million in the first nine months of fiscal 2021.
-
Net earnings of
$325.8 million , down 6.9% from$349.8 million in the first nine months of fiscal 2021; *adjusted net earnings of$327.0 million , down 1.8% from$333.0 million in the first nine months of fiscal 2021.
-
Reported diluted EPS of
$3.08 versus$3.21 in the first nine months of fiscal 2021; *adjusted diluted EPS of$3.09 versus$3.06 in the first nine months of fiscal 2021.
OUTLOOK
“We continue to see solid demand for our innovative solutions across our end markets and are well-prepared to capitalize on growth opportunities,” continued Olson. “Orders in our professional segment remain strong, including exceptional momentum in underground construction and golf. For solutions geared to landscape contractors and residential customers, demand remains favorable and, as expected, retail patterns are beginning to normalize.
“On a macro basis, we are keeping a close eye on the mixed signals we are seeing in the economy. We are also watching the broader supply chain environment, which continues to show signs of improvement. Importantly, our team is driving operational efficiencies that put us in a favorable position as we close out our fiscal year and set us up as an even more productive and agile organization."
The company is updating its full-year fiscal 2022 guidance and now expects total net sales growth of about 14% and *adjusted diluted EPS in the range of
THIRD-QUARTER FISCAL 2022 SEGMENT RESULTS
Professional Segment
-
Professional segment net sales for the third quarter were
$886.2 million , up 23.3% from$718.5 million in the same period last year. The increase was driven primarily by net price realization, higher shipments of zero-turn and stand-on mowers, and incremental revenue from the company’s fiscal 2022Intimidator Group acquisition, partially offset by lower volume in certain key product categories due to product availability constraints.
-
Professional segment earnings for the third quarter were
$166.2 million , up 35.9% from$122.3 million in the same period last year, and when expressed as a percentage of net sales, 18.8%, up from 17.0% in the prior-year period. The increase was primarily due to net price realization, productivity improvements, and net sales leverage, partially offset by higher material, freight, and manufacturing costs, and the addition of theIntimidator Group at a lower initial margin than the segment average.
Residential Segment
-
Residential segment net sales for the third quarter were
$270.0 million , up 7.1% from$252.1 million in the same period last year. The increase was primarily driven by net price realization and higher shipments of zero-turn riding mowers and snow products, partially offset by lower sales of walk-power mowers and portable-power products.
-
Residential segment earnings for the third quarter were
$26.3 million , down 16.5% from$31.5 million in the same period last year, and when expressed as a percentage of net sales, 9.8%, down from 12.5% in the prior-year period. The decrease was largely driven by higher material, freight, and manufacturing costs, partially offset by increased net price realization, productivity improvements, and favorable product mix.
OPERATING RESULTS
Gross margin for the third quarter was 34.5%, compared with 33.9% for the same prior-year period. The increase in gross margin was primarily due to net price realization and productivity improvements, partially offset by higher material, freight and manufacturing costs, as well as the addition of the
SG&A expense as a percentage of net sales for the third quarter was 20.5% compared with 21.4% in the prior-year period. The improvement was primarily due to the impact of a one-time legal settlement in the prior-year period and increased net sales leverage, partially offset by higher indirect marketing expenses.
Operating earnings margin was 14.0% for the third quarter, compared with 12.5% in the same prior-year period. *Adjusted operating earnings margin for the third quarter was 14.1%, compared with 13.1% in the same prior-year period.
Interest expense was up
The reported effective tax rate for the third quarter was 20.3%, compared with 18.0% for the same prior-year period. The reported effective tax rate increase was primarily due to less favorable one-time adjustments in the current-year period, as well as lower tax benefits recorded as excess tax deductions for stock compensation in the current-year period. The *adjusted effective tax rate for the third quarter was 20.7%, compared with 19.3% in the third quarter of 2021. The increase was primarily due to less favorable one-time adjustments in the current-year period.
*Non-GAAP financial measure. Please refer to the “Use of Non-GAAP Financial Information” for details regarding these measures, as well as the tables provided for a reconciliation of historical non-GAAP financial measures to the most comparable GAAP measures.
LIVE CONFERENCE CALL
www.thetorocompany.com/invest
About
Use of Non-GAAP Financial Information
This press release and our related earnings call reference certain non-GAAP financial measures, which are not calculated or presented in accordance with
Reconciliations of historical non-GAAP financial measures to the most comparable
Forward-Looking Statements
This news release contains forward-looking statements, which are being made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management’s current assumptions and expectations of future events, and often can be identified by words such as “expect,” “strive,” “looking ahead,” “outlook,” “guidance,” “forecast,” “goal,” “optimistic,” “encourage,” “anticipate,” “continue,” “plan,” “estimate,” “project,” “target,” “improve,” “believe,” “become,” “should,” “could,” “will,” “would,” “possible,” “promise,” “may,” “likely,” “intend,” “can,” “seek,” “pursue,” “potential,” “pro forma,” variations of such words or the negative thereof, and similar expressions or future dates. Forward-looking statements involve risks and uncertainties that could cause actual events and results to differ materially from those projected or implied. Forward-looking statements in this release include the company’s fiscal 2022 financial guidance, and expectations for more normal Residential demand patterns and continued operational execution, as well as modest accretion from the company’s
(Financial tables follow)
THE TORO COMPANY AND SUBSIDIARIES |
||||||||||||||||
Condensed Consolidated Statements of Earnings (Unaudited) |
||||||||||||||||
(Dollars and shares in thousands, except per-share data) |
||||||||||||||||
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
Net sales |
|
$ |
1,160,550 |
|
|
$ |
976,836 |
|
|
$ |
3,342,678 |
|
|
$ |
2,998,929 |
|
Cost of sales |
|
|
760,644 |
|
|
|
645,719 |
|
|
|
2,236,927 |
|
|
|
1,949,823 |
|
Gross profit |
|
|
399,906 |
|
|
|
331,117 |
|
|
|
1,105,751 |
|
|
|
1,049,106 |
|
Gross margin |
|
|
34.5 |
% |
|
|
33.9 |
% |
|
|
33.1 |
% |
|
|
35.0 |
% |
Selling, general and administrative expense |
|
|
236,858 |
|
|
|
209,178 |
|
|
|
680,500 |
|
|
|
604,986 |
|
Operating earnings |
|
|
163,048 |
|
|
|
121,939 |
|
|
|
425,251 |
|
|
|
444,120 |
|
Interest expense |
|
|
(9,182 |
) |
|
|
(7,016 |
) |
|
|
(24,219 |
) |
|
|
(21,662 |
) |
Other income, net |
|
|
3,225 |
|
|
|
2,528 |
|
|
|
8,262 |
|
|
|
8,062 |
|
Earnings before income taxes |
|
|
157,091 |
|
|
|
117,451 |
|
|
|
409,294 |
|
|
|
430,520 |
|
Provision for income taxes |
|
|
31,941 |
|
|
|
21,131 |
|
|
|
83,509 |
|
|
|
80,748 |
|
Net earnings |
|
$ |
125,150 |
|
|
$ |
96,320 |
|
|
$ |
325,785 |
|
|
$ |
349,772 |
|
|
|
|
|
|
|
|
|
|
||||||||
Basic net earnings per share of common stock |
|
$ |
1.19 |
|
|
$ |
0.90 |
|
|
$ |
3.10 |
|
|
$ |
3.25 |
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted net earnings per share of common stock |
|
$ |
1.19 |
|
|
$ |
0.89 |
|
|
$ |
3.08 |
|
|
$ |
3.21 |
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average number of shares of common stock outstanding — Basic |
|
|
104,827 |
|
|
|
107,130 |
|
|
|
104,931 |
|
|
|
107,667 |
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average number of shares of common stock outstanding — Diluted |
|
|
105,448 |
|
|
|
108,363 |
|
|
|
105,754 |
|
|
|
108,818 |
|
Segment Data (Unaudited) |
||||||||||||||||
(Dollars in thousands) |
||||||||||||||||
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||
Segment net sales |
|
|
|
|
|
|
|
|
||||||||
Professional |
|
$ |
886,232 |
|
|
$ |
718,477 |
|
|
$ |
2,484,927 |
|
|
$ |
2,197,058 |
|
Residential |
|
|
269,962 |
|
|
|
252,117 |
|
|
|
845,039 |
|
|
|
784,852 |
|
Other |
|
|
4,356 |
|
|
|
6,242 |
|
|
|
12,712 |
|
|
|
17,019 |
|
Total net sales* |
|
$ |
1,160,550 |
|
|
$ |
976,836 |
|
|
$ |
3,342,678 |
|
|
$ |
2,998,929 |
|
|
|
|
|
|
|
|
|
|
||||||||
*Includes international net sales of: |
|
$ |
216,142 |
|
|
$ |
191,665 |
|
|
$ |
656,799 |
|
|
$ |
638,921 |
|
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||
Segment earnings (loss) before income taxes |
|
|
|
|
|
|
|
|
||||||||
Professional |
|
$ |
166,191 |
|
|
$ |
122,331 |
|
|
$ |
424,833 |
|
|
$ |
406,279 |
|
Residential |
|
|
26,348 |
|
|
|
31,548 |
|
|
|
95,203 |
|
|
|
109,642 |
|
Other |
|
|
(35,448 |
) |
|
|
(36,428 |
) |
|
|
(110,742 |
) |
|
|
(85,401 |
) |
Total segment earnings before income taxes |
|
$ |
157,091 |
|
|
$ |
117,451 |
|
|
$ |
409,294 |
|
|
$ |
430,520 |
|
THE TORO COMPANY AND SUBSIDIARIES |
||||||||||||
Condensed Consolidated Balance Sheets (Unaudited) |
||||||||||||
(Dollars in thousands) |
||||||||||||
|
|
|
|
|
|
|
||||||
ASSETS |
|
|
|
|
|
|
||||||
Cash and cash equivalents |
|
$ |
231,564 |
|
|
$ |
535,330 |
|
|
$ |
405,612 |
|
Receivables, net |
|
|
350,657 |
|
|
|
301,234 |
|
|
|
310,279 |
|
Inventories, net |
|
|
939,274 |
|
|
|
665,648 |
|
|
|
738,170 |
|
Prepaid expenses and other current assets |
|
|
82,861 |
|
|
|
43,577 |
|
|
|
35,124 |
|
Total current assets |
|
|
1,604,356 |
|
|
|
1,545,789 |
|
|
|
1,489,185 |
|
|
|
|
|
|
|
|
||||||
Property, plant, and equipment, net |
|
|
531,816 |
|
|
|
456,992 |
|
|
|
487,731 |
|
|
|
|
583,803 |
|
|
|
421,958 |
|
|
|
421,680 |
|
Other intangible assets, net |
|
|
595,141 |
|
|
|
426,497 |
|
|
|
420,041 |
|
Right-of-use assets |
|
|
73,349 |
|
|
|
72,236 |
|
|
|
66,990 |
|
Investment in finance affiliate |
|
|
31,389 |
|
|
|
19,272 |
|
|
|
20,671 |
|
Deferred income taxes |
|
|
961 |
|
|
|
6,362 |
|
|
|
5,800 |
|
Other assets |
|
|
19,134 |
|
|
|
18,943 |
|
|
|
24,042 |
|
Total assets |
|
$ |
3,439,949 |
|
|
$ |
2,968,049 |
|
|
$ |
2,936,140 |
|
|
|
|
|
|
|
|
||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
||||||
Current portion of long-term debt |
|
$ |
65,000 |
|
|
$ |
104,217 |
|
|
$ |
— |
|
Accounts payable |
|
|
487,030 |
|
|
|
411,413 |
|
|
|
503,116 |
|
Accrued liabilities |
|
|
443,557 |
|
|
|
427,407 |
|
|
|
419,620 |
|
Short-term lease liabilities |
|
|
15,675 |
|
|
|
15,403 |
|
|
|
14,283 |
|
Total current liabilities |
|
|
1,011,262 |
|
|
|
958,440 |
|
|
|
937,019 |
|
|
|
|
|
|
|
|
||||||
Long-term debt, less current portion |
|
|
990,616 |
|
|
|
587,345 |
|
|
|
691,242 |
|
Long-term lease liabilities |
|
|
60,921 |
|
|
|
60,002 |
|
|
|
55,752 |
|
Deferred income taxes |
|
|
50,332 |
|
|
|
74,381 |
|
|
|
50,397 |
|
Other long-term liabilities |
|
|
40,216 |
|
|
|
50,703 |
|
|
|
50,598 |
|
|
|
|
|
|
|
|
||||||
Stockholders’ equity: |
|
|
|
|
|
|
||||||
Preferred stock |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Common stock |
|
|
104,194 |
|
|
|
106,441 |
|
|
|
105,206 |
|
Retained earnings |
|
|
1,213,551 |
|
|
|
1,157,428 |
|
|
|
1,071,922 |
|
Accumulated other comprehensive loss |
|
|
(31,143 |
) |
|
|
(26,691 |
) |
|
|
(25,996 |
) |
Total stockholders’ equity |
|
|
1,286,602 |
|
|
|
1,237,178 |
|
|
|
1,151,132 |
|
Total liabilities and stockholders’ equity |
|
$ |
3,439,949 |
|
|
$ |
2,968,049 |
|
|
$ |
2,936,140 |
|
THE TORO COMPANY AND SUBSIDIARIES |
||||||||
Condensed Consolidated Statements of Cash Flows (Unaudited) |
||||||||
(Dollars in thousands) |
||||||||
|
|
Nine Months Ended |
||||||
|
|
|
|
|
||||
Cash flows from operating activities: |
|
|
|
|
||||
Net earnings |
|
$ |
325,785 |
|
|
$ |
349,772 |
|
Adjustments to reconcile net earnings to net cash provided by operating activities: |
|
|
|
|
||||
Non-cash income from finance affiliate |
|
|
(5,814 |
) |
|
|
(4,694 |
) |
(Contributions to)/Distributions from finance affiliate, net |
|
|
(4,905 |
) |
|
|
5,167 |
|
Depreciation of property, plant and equipment |
|
|
54,269 |
|
|
|
55,301 |
|
Amortization of other intangible assets |
|
|
24,760 |
|
|
|
17,493 |
|
Fair value step-up adjustment to acquired inventory |
|
|
535 |
|
|
|
— |
|
Compensation cost for stock-based compensation awards |
|
|
17,105 |
|
|
|
16,176 |
|
Deferred income taxes |
|
|
— |
|
|
|
699 |
|
Other |
|
|
3,358 |
|
|
|
(26 |
) |
Changes in operating assets and liabilities, net of the effect of acquisitions: |
|
|
|
|
||||
Receivables, net |
|
|
(38,118 |
) |
|
|
(42,217 |
) |
Inventories, net |
|
|
(173,000 |
) |
|
|
(20,080 |
) |
Prepaid expenses and other assets |
|
|
(32,483 |
) |
|
|
(1,019 |
) |
Accounts payable, accrued liabilities, and other liabilities |
|
|
(16,929 |
) |
|
|
100,563 |
|
Net cash provided by operating activities |
|
|
154,563 |
|
|
|
477,135 |
|
|
|
|
|
|
||||
Cash flows from investing activities: |
|
|
|
|
||||
Purchases of property, plant and equipment |
|
|
(75,772 |
) |
|
|
(47,961 |
) |
Business combinations, net of cash acquired |
|
|
(402,386 |
) |
|
|
(14,874 |
) |
Asset acquisitions, net of cash acquired |
|
|
(7,225 |
) |
|
|
(27,176 |
) |
Proceeds from asset disposals |
|
|
197 |
|
|
|
588 |
|
Proceeds from sale of a business |
|
|
4,605 |
|
|
|
18,732 |
|
Net cash used in investing activities |
|
|
(480,581 |
) |
|
|
(70,691 |
) |
|
|
|
|
|
||||
Cash flows from financing activities: |
|
|
|
|
||||
Borrowings under debt arrangements |
|
|
700,000 |
|
|
|
— |
|
Repayments under debt arrangements |
|
|
(335,000 |
) |
|
|
(100,000 |
) |
Proceeds from exercise of stock options |
|
|
4,440 |
|
|
|
12,535 |
|
Payments of withholding taxes for stock awards |
|
|
(2,308 |
) |
|
|
(1,875 |
) |
Purchases of TTC common stock |
|
|
(110,004 |
) |
|
|
(177,152 |
) |
Dividends paid on TTC common stock |
|
|
(94,401 |
) |
|
|
(84,677 |
) |
Net cash provided by (used in) financing activities |
|
|
162,727 |
|
|
|
(351,169 |
) |
|
|
|
|
|
||||
Effect of exchange rates on cash and cash equivalents |
|
|
(10,757 |
) |
|
|
163 |
|
|
|
|
|
|
||||
Net (decrease) increase in cash and cash equivalents |
|
|
(174,048 |
) |
|
|
55,438 |
|
Cash and cash equivalents as of the beginning of the fiscal period |
|
|
405,612 |
|
|
|
479,892 |
|
Cash and cash equivalents as of the end of the fiscal period |
|
$ |
231,564 |
|
|
$ |
535,330 |
|
THE TORO COMPANY AND SUBSIDIARIES
Reconciliation of Non-GAAP Financial Measures (Unaudited)
(Dollars in thousands, except per-share data)
The following table provides a reconciliation of the non-GAAP financial performance measures used in this press release and our related earnings call to the most directly comparable measures calculated and reported in accordance with
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
Gross profit |
|
$ |
399,906 |
|
|
$ |
331,117 |
|
|
$ |
1,105,751 |
|
|
$ |
1,049,106 |
|
Acquisition-related costs1 |
|
|
401 |
|
|
|
— |
|
|
|
1,425 |
|
|
|
— |
|
Adjusted gross profit |
|
$ |
400,307 |
|
|
$ |
331,117 |
|
|
$ |
1,107,176 |
|
|
$ |
1,049,106 |
|
|
|
|
|
|
|
|
|
|
||||||||
Operating earnings |
|
$ |
163,048 |
|
|
$ |
121,939 |
|
|
$ |
425,251 |
|
|
$ |
444,120 |
|
Acquisition-related costs1 |
|
|
704 |
|
|
|
— |
|
|
|
3,456 |
|
|
|
— |
|
Litigation settlement, net2 |
|
|
— |
|
|
|
5,750 |
|
|
|
— |
|
|
|
(11,325 |
) |
Adjusted operating earnings |
|
$ |
163,752 |
|
|
$ |
127,689 |
|
|
$ |
428,707 |
|
|
$ |
432,795 |
|
|
|
|
|
|
|
|
|
|
||||||||
Operating earnings margin |
|
|
14.0 |
% |
|
|
12.5 |
% |
|
|
12.7 |
% |
|
|
14.8 |
% |
Acquisition-related costs1 |
|
|
0.1 |
% |
|
|
— |
% |
|
|
0.1 |
% |
|
|
— |
% |
Litigation settlement, net2 |
|
|
— |
% |
|
|
0.6 |
% |
|
|
— |
% |
|
|
(0.4 |
) % |
Adjusted operating earnings margin |
|
|
14.1 |
% |
|
|
13.1 |
% |
|
|
12.8 |
% |
|
|
14.4 |
% |
|
|
|
|
|
|
|
|
|
||||||||
Earnings before income taxes |
|
$ |
157,091 |
|
|
$ |
117,451 |
|
|
$ |
409,294 |
|
|
$ |
430,520 |
|
Acquisition-related costs1 |
|
|
704 |
|
|
|
— |
|
|
|
3,456 |
|
|
|
— |
|
Litigation settlement, net2 |
|
|
— |
|
|
|
5,750 |
|
|
|
— |
|
|
|
(11,325 |
) |
Adjusted earnings before income taxes |
|
$ |
157,795 |
|
|
$ |
123,201 |
|
|
$ |
412,750 |
|
|
$ |
419,195 |
|
|
|
|
|
|
|
|
|
|
||||||||
Net earnings |
|
$ |
125,150 |
|
|
$ |
96,320 |
|
|
$ |
325,785 |
|
|
$ |
349,772 |
|
Acquisition-related costs1 |
|
|
561 |
|
|
|
— |
|
|
|
2,740 |
|
|
|
— |
|
Litigation settlement, net2 |
|
|
— |
|
|
|
4,525 |
|
|
|
— |
|
|
|
(8,947 |
) |
Tax impact of stock-based compensation3 |
|
|
(581 |
) |
|
|
(1,397 |
) |
|
|
(1,568 |
) |
|
|
(7,846 |
) |
Adjusted net earnings |
|
$ |
125,130 |
|
|
$ |
99,448 |
|
|
$ |
326,957 |
|
|
$ |
332,979 |
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted EPS |
|
$ |
1.19 |
|
|
$ |
0.89 |
|
|
$ |
3.08 |
|
|
$ |
3.21 |
|
Acquisition-related costs1 |
|
|
0.01 |
|
|
|
— |
|
|
|
0.03 |
|
|
|
— |
|
Litigation settlement, net2 |
|
|
— |
|
|
|
0.04 |
|
|
|
— |
|
|
|
(0.08 |
) |
Tax impact of stock-based compensation3 |
|
|
(0.01 |
) |
|
|
(0.01 |
) |
|
|
(0.02 |
) |
|
|
(0.07 |
) |
Adjusted diluted EPS |
|
$ |
1.19 |
|
|
$ |
0.92 |
|
|
$ |
3.09 |
|
|
$ |
3.06 |
|
|
|
|
|
|
|
|
|
|
||||||||
Effective tax rate |
|
|
20.3 |
% |
|
|
18.0 |
% |
|
|
20.4 |
% |
|
|
18.8 |
% |
Tax impact of stock-based compensation3 |
|
|
0.4 |
% |
|
|
1.3 |
% |
|
|
0.4 |
% |
|
|
1.8 |
% |
Adjusted effective tax rate |
|
|
20.7 |
% |
|
|
19.3 |
% |
|
|
20.8 |
% |
|
|
20.6 |
% |
1 |
On |
|
2 |
On |
|
3 |
The accounting standards codification guidance governing employee stock-based compensation requires that any excess tax deduction for stock-based compensation be immediately recorded within income tax expense. Employee stock-based compensation activity, including the exercise of stock options, can be unpredictable and can significantly impact our net earnings, net earnings per diluted share, and effective tax rate. These amounts represent the discrete tax benefits recorded as excess tax deductions for stock-based compensation during the three and nine month periods ended |
Reconciliation of Non-GAAP Liquidity Measures
The company defines free cash flow as net cash provided by operating activities less purchases of property, plant and equipment. Free cash flow conversion percentage represents free cash flow as a percentage of net earnings. The company considers free cash flow and free cash flow conversion percentage to be non-GAAP liquidity measures that provide useful information to management and investors about the company's ability to convert net earnings into cash resources that can be used to pursue opportunities to enhance shareholder value, fund ongoing and prospective business initiatives, and strengthen the company's Consolidated Balance Sheets, after reinvesting in necessary capital expenditures required to maintain and grow the company's business.
The following table provides a reconciliation of non-GAAP free cash flow and free cash flow conversion percentage to net cash provided by operating activities, which is the most directly comparable financial measure calculated and reported in accordance with
|
|
Nine Months Ended |
||||||
(Dollars in thousands) |
|
|
|
|
||||
Net cash provided by operating activities |
|
$ |
154,563 |
|
|
$ |
477,135 |
|
Less: Purchases of property, plant and equipment |
|
|
75,772 |
|
|
|
47,961 |
|
Free cash flow |
|
|
78,791 |
|
|
|
429,174 |
|
Net earnings |
|
$ |
325,785 |
|
|
$ |
349,772 |
|
Free cash flow conversion percentage |
|
|
24.2 |
% |
|
|
122.7 |
% |
View source version on businesswire.com: https://www.businesswire.com/news/home/20220901005175/en/
Investor Relations
Treasurer and Sr. Managing Director, Global Tax
and Investor Relations
(952) 887-8846, julie.kerekes@toro.com
Media Relations
Senior Manager, Public Relations
(952) 887-8930, branden.happel@toro.com
Source: