The Toro Company Reports Third-Quarter Fiscal 2020 Results
Residential Segment Retail Demand and Incremental Venture Products Sales
-
Net sales of
$841 million , up 0.3% year over year -
Reported and *adjusted diluted EPS of
$0.82 - Residential segment net sales up 38% on strong retail demand
-
Strong liquidity position of nearly
$1 billion
“We continued to deliver on our strategic business priorities of accelerating profitable growth, driving productivity and operational excellence, and empowering people,” said
“We are deeply grateful for the extraordinary efforts and resiliency of our entire team, which enabled us to deliver these results. Our dedicated people continue to live our brand promise and provide innovative solutions that meet our customers' needs,” concluded Olson.
THIRD-QUARTER AND YEAR-TO-DATE FISCAL 2020 FINANCIAL HIGHLIGHTS
-
Net sales of
$841.0 million , up 0.3% from$838.7 million in the third quarter of fiscal 2019; year-to-date fiscal 2020 net sales were$2.54 billion , up 5.6% from$2.40 billion in the same prior-year period. -
Net earnings of
$89.0 million , up 46.8% from$60.6 million in the third quarter of fiscal 2019; *adjusted net earnings of$88.7 million , down 1.2% from$89.8 million in the third quarter of fiscal 2019. -
Year-to-date fiscal 2020 net earnings of
$257.5 million , up 9.2% from$235.7 million in the same prior-year period; *adjusted net earnings of$258.6 million , down 5.1% from$272.4 million in the first nine months of fiscal 2019. -
Reported EPS of
$0.82 per diluted share, up 46.4% from$0.56 per diluted share in the third quarter of fiscal 2019; *adjusted EPS of$0.82 per diluted share, down 1.2% from$0.83 per diluted share in the third quarter of fiscal 2019. -
Year-to-date fiscal 2020 reported EPS of
$2.37 per diluted share, up 8.7% from$2.18 per diluted share in the same prior-year period; *adjusted EPS of$2.38 per diluted share, down 5.6% from$2.52 per diluted share in the first nine months of fiscal 2019. -
As of
July 31, 2020 , the company had ample liquidity of$992 million , including cash and cash equivalents of$394 million and availability under its revolving credit facility of$598 million .
*Please see the tables provided for a reconciliation of adjusted non-GAAP net earnings and adjusted non-GAAP diluted earnings per share to the comparable GAAP measures.
OUTLOOK
“Our diverse portfolio of businesses positions us to drive growth as end markets normalize. We are delivering on our long-standing principles of innovation, strong customer relationships, and sustained value creation through disciplined capital allocation. We are enthusiastic about the future given our innovation pipeline and the proven ability of the team to adapt and perform successfully in these dynamic times,” concluded Olson.
The company previously withdrew its financial guidance, which it is not reinstating at this time. However, based on current visibility, and with an understanding of the uncertain nature of the economic environment, it is providing the following assumptions for the fiscal 2020 fourth quarter. Continued year-over-year growth in the residential market is expected, but at a more moderate level. Professional markets should benefit from the gradual return to more normal buying patterns as customers' confidence in the economy increases. These positive trends will likely be somewhat offset by remaining COVID-19 headwinds, such as budget constraints, the effects of social distancing restrictions and regional variations in economic recovery. Although precision is difficult in this environment, if these assumptions hold true, the company anticipates that fiscal 2020 fourth-quarter adjusted EPS would be similar to that of its fiscal 2019 fourth quarter, on higher net sales.
THIRD-QUARTER SEGMENT RESULTS
Professional Segment
-
Professional segment net sales for the third quarter were
$623.6 million , down 7.9% compared with$676.8 million in the same period last year, primarily due to reduced channel demand as a result of COVID-19 related impacts, which led to fewer shipments of golf and grounds equipment, reduced sales of rental, specialty and underground construction equipment, and fewer shipments of landscape contractor zero-turn riding mowers. The net sales decrease was partially offset by incremental sales as a result of the company’s acquisition ofVenture Products .
For the first nine months of fiscal 2020, professional segment net sales were$1.88 billion , up 1.3% from$1.86 billion in the same period last year. The net sales increase was primarily driven by incremental sales from theCharles Machine Works andVenture Products acquisitions, partially offset by reduced channel demand as a result of COVID-19, which led to fewer shipments of landscape contractor zero-turn riding mowers, fewer shipments of golf and grounds equipment, and reduced sales of rental, specialty and underground construction equipment.
-
Professional segment earnings for the third quarter were
$113.7 million , up 39.3% compared with$81.6 million in the same period last year, and when expressed as a percentage of net sales, increased 610 basis points to 18.2% from 12.1%. This increase was primarily due to lower non-recurring acquisition-related charges as compared to the prior-year period, favorable net price realization and lower commodity costs. The increase was partially offset by unfavorable product mix and COVID-19 related manufacturing inefficiencies.
Year to date, professional segment earnings were$322.4 million , an increase of 0.8% compared with the same period in the prior fiscal year. Professional segment earnings as a percentage of net sales remained a constant 17.2% for both fiscal periods. The professional segment earnings increase was primarily driven by lower non-recurring acquisition-related charges as compared to the prior-year period, favorable net price realization, and productivity and synergy initiatives. This increase was partially offset by COVID-19 related manufacturing inefficiencies and higher SG&A expenses as a result of theCharles Machine Works andVenture Products acquisitions.
Residential Segment
-
Residential segment net sales for the third quarter were
$205.0 million , up 38.3% compared with$148.2 million in the same period last year. The net sales increase was primarily due to strong retail demand for zero-turn riding and walk power mowers and the company's expanded mass retail channel.
For the first nine months of fiscal 2020, residential segment net sales were$632.8 million , up 20.4% compared with$525.5 million in the same period last year. This increase was mainly driven by incremental shipments as a result of the company's expanded mass retail channel, and strong retail demand for zero-turn riding and walk power mowers.
-
Residential segment earnings for the third quarter were
$28.5 million , up 76.7% compared with$16.2 million in the same period last year, and when expressed as a percentage of net sales, increased 300 basis points to 13.9% from 10.9%. For the first nine months of fiscal 2020, residential segment earnings increased 70.2% to$87.2 million , and when expressed as a percentage of net sales, increased 400 basis points to 13.8% from 9.8%. For both periods, this increase was primarily driven by productivity and synergy initiatives and SG&A leverage, which was partially offset by COVID-19 related manufacturing inefficiencies and unfavorable product mix.
OPERATING RESULTS
Gross margin for the third-quarter was 35.0%, up 330 basis points compared with 31.7% for the same prior-year period, primarily driven by the decrease in acquisition-related charges as compared to the prior-year period, favorable net price realization in the company's professional segment and productivity and synergy initiatives. *Adjusted gross margin for the third quarter was 35.2%, down 70 basis points compared with 35.9% for the same prior-year period. The decrease in adjusted gross margin was primarily driven by COVID-19 related manufacturing inefficiencies, unfavorable mix due to higher sales of residential products and increased inventory reserves in one of the company's professional segment businesses. This decrease was partially offset by favorable net price realization in the company’s professional segment, and productivity and synergy initiatives.
For the first nine months of fiscal 2020, gross margin was 35.0%, up 160 basis points compared with 33.4% for the same prior-year period. The increase in gross margin was primarily driven by the decrease in acquisition-related charges as compared to the prior-year period, productivity and synergy initiatives, and favorable net price realization in the professional segment. This increase was partially offset by unfavorable mix due to higher sales of residential products and COVID-19 related manufacturing inefficiencies. *Adjusted gross margin for the first nine months was 35.2%, down 10 basis points compared with 35.3% for the same prior-year period.
The decrease in adjusted gross margin was primarily driven by unfavorable mix due to higher sales of residential products and COVID-19 related manufacturing inefficiencies. This decrease was partially offset by productivity and synergy initiatives, and favorable net price realization in the professional segment.
Selling, general and administrative (SG&A) expense as a percentage of sales for the third quarter decreased 170 basis points to 21.2% from 22.9% in the prior-year period. The decrease in SG&A expense as a percentage of sales was primarily due to lower travel and meeting expenses, acquisition-related costs, and employee salaries. This was partially offset by increased incentive compensation expense. For the first nine months of fiscal 2020, SG&A expense as a percentage of sales was 21.9%, up 20 basis points from 21.7% in the prior-year period.
Operating earnings as a percentage of net sales increased 500 basis points to 13.8% for the third quarter. *Adjusted operating earnings as a percentage of net sales increased 50 basis points to 13.9% for the third quarter. For the first nine months of fiscal 2020, operating earnings as a percentage of net sales were 13.1% compared with 11.7% in the year-ago period. *Adjusted operating earnings as a percentage of net sales for the first nine months of fiscal 2020 were 13.4% compared with 14.2% in the year-ago period.
Interest expense decreased
The effective tax rate for the third quarter was 19.8% compared with 14.9% for the third quarter of fiscal 2019, driven by a lower tax benefit related to the excess tax deduction for share-based compensation. The *adjusted effective tax rate for the third quarter was 20.9% compared with 18.1% for the third quarter of fiscal 2019, driven by one-time discrete items. For the first nine months of fiscal 2020, the effective tax rate was 19.2% compared with 15.3% for the first nine months of fiscal 2019. The *adjusted effective tax rate for the first nine months of fiscal 2020 was 20.6% versus 19.5% in the first nine months of fiscal 2019.
Working capital at the end of the third quarter was up compared with the end of the third-quarter of the prior fiscal year, primarily driven by an increase in inventory and a reduction in accounts payable, partially offset by a reduction in accounts receivable.
*Please see the tables provided for a reconciliation of adjusted non-GAAP gross margin, adjusted non-GAAP operating earnings and adjusted non-GAAP effective tax rate to the 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 references 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,” “anticipate,” “continue,” “plan,” “estimate,” “project,” “believe,” “should,” “could,” “will,” “would,” “possible,” “may,” “likely,” “intend,” “can,” “seek,” “potential,” “pro forma,” or the negative thereof or similar expressions. Forward-looking statements involve risks and uncertainties that could cause actual events and results to differ materially from those projected or implied. Particular risks and uncertainties that may affect the company’s operating results or financial position include: COVID-19 related factors, risks and challenges, including among others, the severity of COVID-19, its effect on the demand for the company’s products and services, the ability of dealers, retailers, and other channel partners that sell the company’s products to remain open, availability of employees and their ability to conduct work away from normal working locations and/or under revised protocols, and the ability to receive commodities, components, parts, and accessories on a timely basis through its supply chain and at anticipated costs, and the ability of the company to continue its production operations; adverse worldwide economic conditions, including weakened consumer confidence; disruption at or in proximity to its facilities or in its manufacturing or other operations, or those in its distribution channel customers, mass retailers or home centers where its products are sold, or suppliers; fluctuations in the cost and availability of commodities, components, parts, and accessories, including steel, engines, hydraulics and resins; the effect of abnormal weather patterns; the effect of natural disasters, social unrest, and global pandemics; the level of growth or contraction in its key markets; customer, government and municipal revenue, budget, spending levels and cash conservation efforts; loss of any substantial customer; inventory adjustments or changes in purchasing patterns by customers; the company’s ability to develop and achieve market acceptance for new products; increased competition; the risks attendant to international relations, operations and markets, including political, economic and/or social instability and conflict, tax and trade policies, trade regulation and/or antidumping and countervailing duties petitions; foreign currency exchange rate fluctuations; financial viability of and/or relationships with the company’s distribution channel partners; risks associated with acquisitions, including those related to the recent acquisitions of
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 |
|
$ |
840,972 |
|
|
$ |
838,713 |
|
|
$ |
2,537,853 |
|
|
$ |
2,403,705 |
|
Cost of sales |
|
|
546,398 |
|
|
|
572,732 |
|
|
|
1,648,474 |
|
|
|
1,600,809 |
|
Gross profit |
|
|
294,574 |
|
|
|
265,981 |
|
|
|
889,379 |
|
|
|
802,896 |
|
Gross margin |
|
|
35.0 |
% |
|
|
31.7 |
% |
|
|
35.0 |
% |
|
|
33.4 |
% |
Selling, general and administrative expense |
|
|
178,622 |
|
|
|
192,037 |
|
|
|
556,503 |
|
|
|
521,173 |
|
Operating earnings |
|
|
115,952 |
|
|
|
73,944 |
|
|
|
332,876 |
|
|
|
281,723 |
|
Interest expense |
|
|
(8,304 |
) |
|
|
(9,004 |
) |
|
|
(25,119 |
) |
|
|
(20,440 |
) |
Other income, net |
|
|
3,345 |
|
|
|
6,295 |
|
|
|
10,746 |
|
|
|
17,152 |
|
Earnings before income taxes |
|
|
110,993 |
|
|
|
71,235 |
|
|
|
318,503 |
|
|
|
278,435 |
|
Provision for income taxes |
|
|
22,025 |
|
|
|
10,628 |
|
|
|
60,998 |
|
|
|
42,718 |
|
Net earnings |
|
$ |
88,968 |
|
|
$ |
60,607 |
|
|
$ |
257,505 |
|
|
$ |
235,717 |
|
|
|
|
|
|
|
|
|
|
||||||||
Basic net earnings per share of common stock |
|
$ |
0.83 |
|
|
$ |
0.57 |
|
|
$ |
2.39 |
|
|
$ |
2.21 |
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted net earnings per share of common stock |
|
$ |
0.82 |
|
|
$ |
0.56 |
|
|
$ |
2.37 |
|
|
$ |
2.18 |
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average number of shares of common stock outstanding — Basic |
|
|
107,710 |
|
|
|
107,005 |
|
|
|
107,561 |
|
|
|
106,644 |
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average number of shares of common stock outstanding — Diluted |
|
|
108,543 |
|
|
|
108,253 |
|
|
|
108,569 |
|
|
|
108,024 |
|
Segment Data (Unaudited) (Dollars in thousands) |
||||||||||||||||
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||
Segment |
|
|
|
|
|
|
|
|
||||||||
Professional |
|
$ |
623,615 |
|
|
$ |
676,756 |
|
|
$ |
1,879,423 |
|
|
$ |
1,855,268 |
|
Residential |
|
|
204,961 |
|
|
|
148,234 |
|
|
|
632,807 |
|
|
|
525,539 |
|
Other |
|
|
12,396 |
|
|
|
13,723 |
|
|
|
25,623 |
|
|
|
22,898 |
|
Total net sales* |
|
$ |
840,972 |
|
|
$ |
838,713 |
|
|
$ |
2,537,853 |
|
|
$ |
2,403,705 |
|
|
|
|
|
|
|
|
|
|
||||||||
*Includes international net sales of: |
|
$ |
150,014 |
|
|
$ |
186,710 |
|
|
$ |
508,001 |
|
|
$ |
547,332 |
|
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||
Segment Earnings (Loss) |
|
|
|
|
|
|
|
|
||||||||
Professional |
|
$ |
113,652 |
|
|
$ |
81,592 |
|
|
$ |
322,385 |
|
|
$ |
319,689 |
|
Residential |
|
|
28,545 |
|
|
|
16,151 |
|
|
|
87,233 |
|
|
|
51,253 |
|
Other |
|
|
(31,204 |
) |
|
|
(26,508 |
) |
|
|
(91,115 |
) |
|
|
(92,507 |
) |
Total segment earnings |
|
$ |
110,993 |
|
|
$ |
71,235 |
|
|
$ |
318,503 |
|
|
$ |
278,435 |
|
THE TORO COMPANY AND SUBSIDIARIES Condensed Consolidated Balance Sheets (Unaudited) (Dollars in thousands) |
||||||||||||
|
|
|
|
|
|
|
||||||
ASSETS |
|
|
|
|
|
|
||||||
Cash and cash equivalents |
|
$ |
394,141 |
|
|
$ |
143,317 |
|
|
$ |
151,828 |
|
Receivables, net |
|
294,672 |
|
|
312,239 |
|
|
268,768 |
|
|||
Inventories, net |
|
656,208 |
|
|
620,612 |
|
|
651,663 |
|
|||
Prepaid expenses and other current assets |
|
39,225 |
|
|
54,235 |
|
|
50,632 |
|
|||
Total current assets |
|
1,384,246 |
|
|
1,130,403 |
|
|
1,122,891 |
|
|||
|
|
|
|
|
|
|
||||||
Property, plant, and equipment, net |
|
457,891 |
|
|
426,415 |
|
|
437,317 |
|
|||
|
|
424,228 |
|
|
380,503 |
|
|
362,253 |
|
|||
Other intangible assets, net |
|
413,270 |
|
|
319,886 |
|
|
352,374 |
|
|||
Right-of-use assets |
|
81,634 |
|
|
— |
|
|
— |
|
|||
Investment in finance affiliate |
|
22,580 |
|
|
25,108 |
|
|
24,147 |
|
|||
Deferred income taxes |
|
9,772 |
|
|
3,603 |
|
|
6,251 |
|
|||
Other assets |
|
20,242 |
|
|
23,815 |
|
|
25,314 |
|
|||
Total assets |
|
$ |
2,813,863 |
|
|
$ |
2,309,733 |
|
|
$ |
2,330,547 |
|
|
|
|
|
|
|
|
||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
||||||
Current portion of long-term debt |
|
$ |
108,869 |
|
|
$ |
99,877 |
|
|
$ |
79,914 |
|
Accounts payable |
|
268,747 |
|
|
304,661 |
|
|
319,230 |
|
|||
Accrued liabilities |
|
404,314 |
|
|
351,865 |
|
|
357,826 |
|
|||
Short-term lease liabilities |
|
15,182 |
|
|
— |
|
|
— |
|
|||
Total current liabilities |
|
797,112 |
|
|
756,403 |
|
|
756,970 |
|
|||
|
|
|
|
|
|
|
||||||
Long-term debt, less current portion |
|
782,036 |
|
|
620,804 |
|
|
620,899 |
|
|||
Long-term lease liabilities |
|
69,752 |
|
|
— |
|
|
— |
|
|||
Deferred income taxes |
|
71,346 |
|
|
46,940 |
|
|
50,579 |
|
|||
Other long-term liabilities |
|
39,585 |
|
|
41,764 |
|
|
42,521 |
|
|||
|
|
|
|
|
|
|
||||||
Stockholders’ equity: |
|
|
|
|
|
|
||||||
Preferred stock, par value |
|
— |
|
|
— |
|
|
— |
|
|||
Common stock, par value |
|
107,264 |
|
|
106,549 |
|
|
106,742 |
|
|||
Retained earnings |
|
981,344 |
|
|
763,941 |
|
|
784,885 |
|
|||
Accumulated other comprehensive loss |
|
(34,576) |
|
|
(26,668) |
|
|
(32,049) |
|
|||
Total stockholders’ equity |
|
1,054,032 |
|
|
843,822 |
|
|
859,578 |
|
|||
Total liabilities and stockholders’ equity |
|
$ |
2,813,863 |
|
|
$ |
2,309,733 |
|
|
$ |
2,330,547 |
|
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 |
|
$ |
257,505 |
|
|
$ |
235,717 |
|
Adjustments to reconcile net earnings to net cash provided by operating activities: |
|
|
|
|
||||
Non-cash income from finance affiliate |
|
|
(6,161 |
) |
|
|
(9,135 |
) |
Distributions from finance affiliate, net |
|
|
7,729 |
|
|
|
6,569 |
|
Depreciation of property, plant and equipment |
|
|
55,272 |
|
|
|
48,770 |
|
Amortization of other intangible assets |
|
|
14,591 |
|
|
|
13,633 |
|
Fair value step-up adjustment to acquired inventory |
|
|
3,951 |
|
|
|
31,304 |
|
Stock-based compensation expense |
|
|
10,322 |
|
|
|
10,258 |
|
Deferred income taxes |
|
|
(3,425 |
) |
|
|
449 |
|
Other |
|
|
521 |
|
|
|
4,440 |
|
Changes in operating assets and liabilities, net of the effect of acquisitions: |
|
|
|
|
||||
Receivables, net |
|
|
(17,687 |
) |
|
|
(54,446 |
) |
Inventories, net |
|
|
18,248 |
|
|
|
(54,541 |
) |
Prepaid expenses and other assets |
|
|
7,827 |
|
|
|
10,734 |
|
Accounts payable, accrued liabilities, deferred revenue and other liabilities |
|
|
(42,817 |
) |
|
|
15,361 |
|
Net cash provided by operating activities |
|
|
305,876 |
|
|
|
259,113 |
|
|
|
|
|
|
||||
Cash flows from investing activities: |
|
|
|
|
||||
Purchases of property, plant and equipment |
|
|
(46,627 |
) |
|
|
(56,801 |
) |
Proceeds from asset disposals |
|
|
204 |
|
|
|
4,636 |
|
Investment in unconsolidated entities |
|
— |
|
|
|
(150 |
) |
|
Acquisitions, net of cash acquired |
|
|
(138,225 |
) |
|
|
(691,822 |
) |
Net cash used in investing activities |
|
|
(184,648 |
) |
|
|
(744,137 |
) |
|
|
|
|
|
||||
Cash flows from financing activities: |
|
|
|
|
||||
Borrowings under debt arrangements |
|
|
636,025 |
|
|
|
900,000 |
|
Repayments under debt arrangements |
|
|
(446,025 |
) |
|
|
(491,000 |
) |
Proceeds from exercise of stock options |
|
|
11,939 |
|
|
|
25,482 |
|
Payments of withholding taxes for stock awards |
|
|
(2,102 |
) |
|
|
(2,632 |
) |
Purchases of TTC common stock |
|
— |
|
|
|
(20,043 |
) |
|
Dividends paid on TTC common stock |
|
|
(80,683 |
) |
|
|
(72,009 |
) |
Net cash provided by financing activities |
|
|
119,154 |
|
|
|
339,798 |
|
|
|
|
|
|
||||
Effect of exchange rates on cash and cash equivalents |
|
|
1,931 |
|
|
|
(581 |
) |
|
|
|
|
|
||||
Net increase (decrease) in cash and cash equivalents |
|
|
242,313 |
|
|
|
(145,807 |
) |
Cash and cash equivalents as of the beginning of the fiscal period |
|
|
151,828 |
|
|
|
289,124 |
|
Cash and cash equivalents as of the end of the fiscal period |
|
$ |
394,141 |
|
|
$ |
143,317 |
|
THE TORO COMPANY AND SUBSIDIARIES
Reconciliation of Non-GAAP Financial Measures (Unaudited)
(Dollars in thousands, except per-share data)
The company has provided non-GAAP financial measures, which are not calculated or presented in accordance with accounting principles generally accepted in
Further, the company believes that such non-GAAP financial measures, when considered in conjunction with the company's financial measures prepared in accordance with
The following table provides a reconciliation of financial measures calculated and reported in accordance with
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
Gross profit |
|
$ |
294,574 |
|
|
$ |
265,981 |
|
|
$ |
889,379 |
|
|
$ |
802,896 |
|
Acquisition-related costs1 |
|
|
1,087 |
|
|
|
26,172 |
|
|
|
3,950 |
|
|
|
35,691 |
|
Management actions2 |
|
— |
|
|
|
9,117 |
|
|
|
857 |
|
|
|
9,117 |
|
|
Non-GAAP gross profit |
|
$ |
295,661 |
|
|
$ |
301,270 |
|
|
$ |
894,186 |
|
|
$ |
847,704 |
|
|
|
|
|
|
|
|
|
|
||||||||
Gross margin |
|
|
35.0 |
% |
|
|
31.7 |
% |
|
|
35.0 |
% |
|
|
33.4 |
% |
Acquisition-related costs1 |
|
|
0.2 |
% |
|
|
3.1 |
% |
|
|
0.2 |
% |
|
|
1.5 |
% |
Management actions2 |
|
|
— |
% |
|
|
1.1 |
% |
|
|
— |
% |
|
|
0.4 |
% |
Non-GAAP gross margin |
|
|
35.2 |
% |
|
|
35.9 |
% |
|
|
35.2 |
% |
|
|
35.3 |
% |
|
|
|
|
|
|
|
|
|
||||||||
Operating earnings |
|
$ |
115,952 |
|
|
$ |
73,944 |
|
|
$ |
332,876 |
|
|
$ |
281,723 |
|
Acquisition-related costs1 |
|
|
1,161 |
|
|
|
29,304 |
|
|
|
6,183 |
|
|
|
51,058 |
|
Management actions2 |
|
— |
|
|
|
9,148 |
|
|
|
857 |
|
|
|
9,148 |
|
|
Non-GAAP operating earnings |
|
$ |
117,113 |
|
|
$ |
112,396 |
|
|
$ |
339,916 |
|
|
$ |
341,929 |
|
|
|
|
|
|
|
|
|
|
||||||||
Earnings before income taxes |
|
$ |
110,993 |
|
|
$ |
71,235 |
|
|
$ |
318,503 |
|
|
$ |
278,435 |
|
Acquisition-related costs1 |
|
|
1,161 |
|
|
|
29,304 |
|
|
|
6,183 |
|
|
|
51,058 |
|
Management actions2 |
|
— |
|
|
|
9,148 |
|
|
|
857 |
|
|
|
9,148 |
|
|
Non-GAAP earnings before income taxes |
|
$ |
112,154 |
|
|
$ |
109,687 |
|
|
$ |
325,543 |
|
|
$ |
338,641 |
|
|
|
|
|
|
|
|
|
|
||||||||
Net earnings |
|
$ |
88,968 |
|
|
$ |
60,607 |
|
|
$ |
257,505 |
|
|
$ |
235,717 |
|
Acquisition-related costs1 |
|
|
924 |
|
|
|
23,953 |
|
|
|
4,922 |
|
|
|
41,814 |
|
Management actions2 |
|
— |
|
|
|
7,351 |
|
|
|
682 |
|
|
|
7,351 |
|
|
Tax impact of share-based compensation3 |
|
|
(1,173 |
) |
|
|
(1,200 |
) |
|
|
(4,550 |
) |
|
|
(11,518 |
) |
|
|
— |
|
|
|
(926 |
) |
|
— |
|
|
|
(926 |
) |
||
Non-GAAP net earnings |
|
$ |
88,719 |
|
|
$ |
89,785 |
|
|
$ |
258,559 |
|
|
$ |
272,438 |
|
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
Diluted EPS |
|
$ |
0.82 |
|
|
$ |
0.56 |
|
|
$ |
2.37 |
|
|
$ |
2.18 |
|
Acquisition-related costs1 |
|
|
0.01 |
|
|
|
0.22 |
|
|
|
0.05 |
|
|
|
0.39 |
|
Management actions2 |
|
— |
|
|
|
0.07 |
|
|
— |
|
|
|
0.07 |
|
||
Tax impact of share-based compensation3 |
|
|
(0.01 |
) |
|
|
(0.01 |
) |
|
|
(0.04 |
) |
|
|
(0.11 |
) |
|
|
— |
|
|
|
(0.01 |
) |
|
— |
|
|
|
(0.01 |
) |
||
Non-GAAP diluted EPS |
|
$ |
0.82 |
|
|
$ |
0.83 |
|
|
$ |
2.38 |
|
|
$ |
2.52 |
|
|
|
|
|
|
|
|
|
|
||||||||
Effective tax rate |
|
|
19.8 |
% |
|
|
14.9 |
% |
|
|
19.2 |
% |
|
|
15.3 |
% |
Acquisition-related costs1 |
|
|
— |
% |
|
|
(1.4 |
)% |
|
|
— |
% |
|
|
(0.7 |
)% |
Management actions2 |
|
|
— |
% |
|
|
1.6 |
% |
|
|
— |
% |
|
|
0.5 |
% |
Tax impact of share-based compensation3 |
|
|
1.1 |
% |
|
|
1.7 |
% |
|
|
1.4 |
% |
|
|
4.1 |
% |
|
|
|
— |
% |
|
|
1.3 |
% |
|
|
— |
% |
|
|
0.3 |
% |
Non-GAAP effective tax rate |
|
|
20.9 |
% |
|
|
18.1 |
% |
|
|
20.6 |
% |
|
|
19.5 |
% |
1 |
On |
|
2 |
During the third quarter of fiscal 2019, the company announced the wind down of its Toro-branded large horizontal directional drill and riding trencher product line ("Toro underground wind down"). Management actions for the nine month period ended |
|
3 |
In the first quarter of fiscal 2017, the company adopted Accounting Standards Update No. 2016-09, Stock-based Compensation: Improvements to Employee Share-based Payment Accounting, which requires that any excess tax deduction for share-based compensation be immediately recorded within income tax expense. These amounts represent the discrete tax benefits recorded as excess tax deductions for share-based compensation during the three and nine month periods ended |
|
4 |
Signed into law on |
View source version on businesswire.com: https://www.businesswire.com/news/home/20200903005102/en/
Investor Relations
Managing Director, Investor Relations
(952) 887-8865, nicholas.rhoads@toro.com
Media Relations
Senior Manager, Public Relations
(952) 887-8930, branden.happel@toro.com
Source: