TTC - Earnings call 1 2024 | The Toro Company

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Operator

Good day, ladies and gentlemen, and welcome to Toro Company's First Quarter Earnings Conference Call. My name is Carmen, and I will be your coordinator for today. [Operator Instructions] As a reminder, this conference is being recorded for replay purposes. I would now like to turn the presentation over to your host for today's conference, Julie Kerekes, Treasurer and Senior Manager Director of Global Tax and Investor Relations. Please proceed, Ms. Kerekes.

Julie Kerekes

morning, good and you, everyone. Thank

was Our copy our morning, a this be earnings corporate found thetorocompany.com. of release can section in and Information issued the website, Investor

supplement our earnings also first have release. posted presentation We to our earnings quarter

Chairman our Officer; Chief Chief Officer; Angie On Director Steffan, and Executive and President and Jeremy Rick Vice Investor today are Financial call Olson, Drake, Relations.

make plans and the future. During our this projections regarding call, forward-looking statements we will for

uncertainties upon based materially are our historical other current cause and may and risks, by from these differ are performance subject statements. expectations actual to statements and contemplated to that factors Forward-looking results those

Additional information in these can as our our in today's be found regarding release and earnings well factors presentation, SEC as investor reports. in

which are company's today's evaluating the in we believe During will financial we call, performance. important refer to measures, non-GAAP

these turn call on to please two, the investor presentation. I measures, of GAAP With release our most Rick. refer reconciliation a measures and the details that, more over now For to and the this earnings morning's comparable will

Richard Olson

Thanks, Julie, everyone. good and morning,

out of The first XXXX expected. we largely fiscal as quarter played

we to continues as and resilience, capitalize actions demand to dedication, best creativity team operate on with near-term Our took trends.

productivity benefits costs made leadership organization to to throughout offset and market long-term higher positions enhance material our growth. drive the investments and drove We

exceptional For and include Golf adjusted top we over and line diluted Underground the just for Specialty $X.XX. delivered businesses. and Construction results first growth quarter, $X earnings of billion net of sales These per and Grounds share our

from This first elevated mowers fiscal channel as of replenishment heading and businesses by The strength mowers to of to more supply. output a contractor-grade benefited we've our ago, increase period in end Construction taken with ability expected, constrained these markets was Our quarter on our actions of lower compares Golf the inventories was following result continued capitalize when demand Grounds strong the field we supply. year zero-turn stable of offset and shipments in given into a to year.

offset by to also and was management strength products, of average snow ice lower The shipments below due snowfall.

a by supply categories delayed in for In shipments addition, Professional segment. Select issues the few chain were our affected Product results our

first year adjusted current visibility the full Angie net and our for sales fiscal our year, on those the earnings of XXXX are will we quarter per share reaffirming details and Based remainder through diluted walk shortly. guidance. our results

we capitalize Throughout opportunities. on to sharp the positioning company quarter, maintained on long-term the growth a focus

these broad are and smart technology developing key aligned power, advantages, We portfolio market products drive alternative areas We investments growth. our growth new autonomous provide and in connected trends will distinct profitable strengthen our accelerated with investments of across leadership that leveraging competitive solutions. prioritizing believe the and innovation further

products. show and irrigation was golf at suite our equipment competitive the Phoenix, and leadership where Course showcased Golf in Our on recent of advantage display clearly full Superintendent we

was evident Importantly, all the in overall from end golf strength market XX the with of states XX highest XXXX also attendance since the representatives countries. and

included operation which as versions products, compromise proven on with booths electric expanded fully performance. machines, no of offering Our popular and new our an offer several of quiet such

productivity increase and and provides connected of control that unsurpassed hybrid autonomous irrigation consistency and system that to ease latest fairway designed use mower precision. our Our is smart unmatched

solutions the positioned and as both. the attractive equipment We market in the and to leader offer extremely only company market both in are golf global irrigation well as

and productivity our also we advanced quarter, enterprise priority operational excellence. the strategic During of driving

to for is Amplifying Maximum great we've Our off a Productivity, multiyear named initiative AMP that start.

savings $XXX is track we XXXX. place, office of at on deliver fiscal annualized transformation by million to and in Our are least

a we intend to As we discussed, growth. of savings and to the portion further innovation long-term reinvest accelerate

promote and chemical reduced industry and exhaust leaders noise includes benefits, This share to water our maintained that and solutions emissions and less we partnering as Finally, sustainability. environmental other knowledge focus such on usage. with

review for leadership organization our Foundation For our golf, We market focused in example, enhancing on provide guidance. through accelerating further to that, the benefits, focus we sustainability on financial significant detailed outlook sustainability believe results our from an I'll sustainable Angie. extended for to and long-term driving turn worldwide. of With innovation opportunities partnership JIO discuss I The will our with Toro Golf and call Angie's following Company. over XX-year our

Angie Snavely

along you, to Thank to extensive supported disciplined with ability in everyone. us and capital support network distribution morning, leadership. and opportunities deliver positions Rick, allocation our sheet, markets. well confident our to attractive end good We and value balance in on approach to by stakeholders, our strong innovation remain all This, capitalize growth our

our aligned said, expectations. results were As first in with our quarter, the Rick

for at $X.XX the of the $X closer year. billion, per $X.XX down $X.XX. XX.X% Looking compared which first from over was in from EPS just last last was per the numbers. to decrease share, sales were Consolidated $X.XX EPS Reported expected quarter of diluted as share, was year. net down Adjusted quarter a diluted

net Professional Ice products. down the and first construction products million, and was of and underground segment results. ground quarter year-over-year. Management decrease were $XXX.X to lower This driven XX.X% was by specialty by partially offset mowers of primarily Segment for shipments Snow Now and golf sales This shipments and equipment. the zero-turn higher

last product million segment last partially earnings volume, primarily Professional The due expressed earnings sales, to a were to net When million, the XX.X%, percentage for first XX.X% segment mix. was favorable compared change from lower quarter the year. year. were for net by offset of down $XXX.X as sales $XXX.X

mowers. products. Residential partially last walk and power quarter net was portable to driven quarter This were snow decrease to mowers segment power million, were of million $XXX.X segment $XX.X compared compared the by sales for $XX.X million, X.X% by was of and lower offset shipments shipments the earnings for year. Residential last down primarily year. higher The first products zero-turn

X.X%, largely net as product expressed last was compared sales, for When were The to by earnings a XX.X% decrease the year. percentage segment driven year-over-year mix. of

to Turning our results. operating

primarily year. product mix for to same gross product due and Professional the last compares both adjusted for Residential the segment, the was reported unfavorable XX.X% the in favorable by Our This period both XX.X% to segment. decrease within within mostly offset slight margin were mix quarter. The

compared net a period same sales adjusted period for volume. X.X% quarter and the were on X.X%. to This of was was as adjusted the for were XX.X% XX.X%, quarter sales SG&A basis percentage the increase These primarily an Operating of net a same expense, sales net in to basis a earnings, as lower last and reported both, in year. XX.X% by on the driven percentage last year. compare

Interest current period. XX.X% quarter tax first The compared a rate recorded expense This quarter average by tax due primarily partially was favorable higher offset benefits with the interest $X.X reported $XX.X compensation million mix up The increase due rates was higher year as borrowings. The last last for XX%, effective excess stock-based to year. geographic and year. of million, was average for from primarily tax increase was to for was the outstanding more in the earnings. deductions lower

The primarily the last by adjusted first XX.X% difference mix driven the year. earnings. compared year-over-year effective of geographic rate tax for was XX.X%, The quarter was with

levels channel from Turning to our was ice mowers last driven X% and to productivity of and availability billion, year. timing Inventory balance zero-turn enabled finished more by improvements. $XXX.X year partially This our XX.X% was were balances, was and driven compared to receivables shipments component offset products. by million, $X.XX up payment by primarily mass terms. and a sheet. This management working primarily ago, Accounts up snow higher by reliable goods process improved

a ago. net and were million align the to cash heading primarily XX.X% our use in season earnings. to payable by in lower year flow compared levels needs working by material actions $XXX.X spring down and Accounts Free a was quarter demand, million, $XXX.X a cash. primarily reduction was of inventory the This to additional production driven into capital selling purchases. driven

reminder, a typically is our second our flow year. of the the majority As fiscal in generated half cash of operating

strong. Importantly, our sheet balance remains

ratio Xx. along sustainable in continue target the with range credit financial long-term our fund a drive to the debt-to-EBITDA gross investments X of We that provides growth. to This, to ratings, investment-grade flexibility leverage

both Our returning remains to goals. organically with to share approach unchanged, include to drive investments strategic acquisitions, repurchases growth, through our and in allocation dividends our cash and through maintaining leverage priorities capital long-term business and that shareholders disciplined profitable making

$XXX our we over manufacturing flows. fiscal fund and expenditures as reflection future fiscal product advanced technologies well We of through is new priorities capital investments, our are to as X% to XXXX. XXXX, growth, support for in acting a increase on capacity these that financial cash in million and payout confidence our plan This the performance have dividend regular of in

golf for the and of In continued from our to substantial we order in we fiscal strength expect specialty remainder the our Professional As mass look and channel. products our from the year, and construction and benefits backlogs expect expanded segment, ahead benefits underground Residential grounds demand our equipment. in we segment,

by in drive these company driven patterns. made increased fiscal from open the taken actions the the basis, slightly order year-end, total at orders increased to a XXXX we've balance seasonal we backlog during driven For order sequentially businesses, reducing output. our billion progress $X.XX slight On by quarter,

a basis. is year-over-year Our backlog lower on order

assuming being see our in opportunity care weather Spring long to field are first products, levels. we with Our seasonal normal more appreciable inventory a patterns, reduction meaningful

elevated of snowfall products, management this we will inventory activity channel and the snow heading next For season remain anticipate ice lack given winter. into

shared and visibility, and on guidance, full based adjusted last backdrop reaffirming this current call. sales are performance and net our EPS we quarter first the With we earnings on our year diluted

low expect QX company total growth single-digit and being net to sales QX larger We our continue quarters. with

For at to rate average. the a lower net the than grow we segment, Professional company sales expect total

net higher at the expect Residential segment, total the For rate a sales average. company grow we to than

profitability. at Looking

expect by margin, slight to a gross we initiatives. adjusted driven year-over-year For continue improvement, productivity

continue We levels. by we expect inventory manufacturing and offset care be Residential will as contractor-grade rebalance equipment this long inefficiencies, partially to

net earnings, sales. percentage as adjusted a to Turning of operating

For year. the over improvement continue last expect full to we a year, slight

both be expect margins the and to Professional last earnings also segment higher year. Residential We than

a We to as higher expect compared of incentive normal category expectations expense, more fiscal to the result our reflect for a to activities compensation. return other XXXX

to continue the expect that, of diluted range adjusted $X.XX. full to we With EPS $X.XX year in

we depreciation expense continue an tax rate for adjusted $XXX about of to and $XXX and of effective $XX million about XX%. amortization expect about Additionally, of full million the to million, interest year,

to total quarter the net sales company Moving anticipate higher similar XXXX. year-over-year. second We fiscal be of to slightly to

with same anticipate expected our a quarter and of dynamic present The channel this dealer this reminder, for we our inventory focus in contractor-grade businesses of XXXX, a We increased benefited is by mass constrained expanded will fiscal from driving incremental output more backlog. second on of than distributor our be not benefits year. following from the order As supply. zero-turn mowers, retail period elevated and offset replenishment

mid-single of comparison XX.X% Given strong Professional sales growth. be expect these second down for digits, last to on considerations, quarter year's of net segment the we top

the same segment to We last be net expect low Residential year. mid-XXs, the to period for quarter second sales compared up to growth

Looking profitability. at

quarter, second demand some as the adjusted same we total For company mix align production inefficiencies be to This last margin lower trends. our expectations to the for reflects than period operating and we anticipate year. segment continued

We margin margin on expect the Professional segment year-over-year. higher to And a year-over-year the lower basis. to Residential be segment earnings earnings be

quarter to last adjusted XXXX more Overall, in diluted with results second results. record we fiscal expect XXXX EPS and XXXX lower year's and meaningfully than fiscal our be line

We continue to our build growth. business profitable for long-term

with new prioritized that be deploying discipline, will key help products we and capital address are We that and technologies our market in investments customers believe trends including successful.

our I'll of ability back a call to exciting unlock Company. confident that, opportunities and productivity part turn an Rick. significant with also initiatives. are The With be to It's AMP, Toro in to our the benefits time We multiyear

Richard Olson

Angie. you, Thank

Our business fundamentals remain leadership strong. market and

flex to for component Our with continues supply. more market conditions, we enabled reliable agility, by production as team operate

and improved geopolitical we We From open continue to a elevated customers. with and to businesses and drive perspective, consumer for are times and well monetary lead orders current increased spending upcoming policy inflation, better environment. elections numerous closely as patterns, output as business watching serve actions, macro our our confidence the

end to impact comment Turning on that markets. the could future I'll factors results. our

remain increasingly to construction, For build-outs. aging demand expect address This global and to These strong. spending underground as and issues, are and broadband making specialty such starts. private their energy access is project way end-user public we to alternative infrastructure, by funds supported

address trusted We're the our these in with on equipment comprehensive customers and the needs industry. most our lineup helping focused channel

new in For expect played. momentum and golf, demand, continued sustained rounds we strength in by driven golfers

with highest XXXX, rounds total. rounds were played XXX year U.S. marking million than the in straight For the fourth more ever,

best-in-class service position We market are of deep our network. leadership with complete our in global on enhance solutions this and support focused to suite attractive relationships continuing and

performance. emission healthy and compromise grounds, public we're municipalities alternatives productivity, For prioritization of capitalize the innovative no on with on spaces. zero products and exhaust we green expect budgets including these To that continued drive developing trends,

new and in our all eXXXX all hyper proprietary system product battery-powered category. of on our example, innovation model time smart electric run cell, outfront battery operations. Groundsmaster The this quiet builds Company, XX For leverages This years by provide rotary Toro day to mower,

expect needs, snow by following end to seasons below For of X driven replacement and ice management, demand consecutive we average market be snowfall.

We how will and storm affects inventory that season activity watching late be levels. channel

irrigation also projects. commercial of and homeowner continued uneven we as from but a residential and For contractors expect result demand, steady commercial around demand caution lighting,

irrigation, For expect demand focus growers, yield, water agricultural stable we from the maximizing usage. with minimizing crop micro while on

We continue solutions sensing the was our technology. Association. Irrigation including solution to innovative Year, named this by that plant New the XXXX develop address Product Transera automated need, This direct Toro of

price sensitivity. we For landscape contractors, expect with demand retail steady some

to done work in to expect productivity, high interest labor more continue high We solutions allow less with resources. capacity our be that

retail expect we homeowners, stabilizing begin to the spring. demand For

and watching would In more temperatures and homeowners, weather patterns. average as landscape spring a For favorable. to early precipitation levels both we're return well normal contractors as be

have and and While extensive well-established positions distribution effect, believe underpinned continue market networks. our by positive long-term leadership support us drive dynamics is trusted market leadership to we brand near-term a results. This products, innovative to our

from expect also replacement nature our of cycle We benefits regular products. the essential and continued

continues to sheet, by capital bolstered an enduring partners. success. this customer strong commitment is our superior delivering team balance channel care Our innovation and disciplined drive of to our commitment and employees outstanding And allocation

result, we sustained all value ability confidence As stakeholders. to high a drive for our in have

thank our I I their questions. for partners we our continued and will your would customers like and our note, customers. channel for serving also to the On support. to thank that dedication shareholders for up to With would like that, employees open call

Operator

with [Operator Raymond Instructions] Darkatsh Our James. first question Sam is from

Sam Darkatsh

could. quick Three if I topics,

that I that $X.XXX that think First, backlog there the I order mentioned right, if first progress order the -- that cancellations? that was Angie, of than still you you then notes update you are billion my you're sequentially right, fairly said that, to secondly, backlog. was my seeing Does slight But in the higher off, healthy that think terms sequentially. And if does an give related imply could growth? with in

Angie Snavely

You right. are

seasonally. We are up slightly

construction We specialty to and strong see in underground demand and are our continuing and Golf groups. Browns

that throughout side. to speak some making let better. our as continue overall, slight And to we with supply I'll become We as are progress and output improving chain go We're our it's we XXXX. expect cancellations Rick see the

Richard Olson

Yes, Sam, that not seen. something we've that is

years. cancellations sensitive or to the it there. any that So just backlog managing stay to given this not people watching for it's appreciable in very queue, something want been we're closely, point, we've We're the they at are if last seeing several the

for So been not that's factor us. a

Sam Darkatsh

us get saying up versus seasonality, So give less you're normal was of experiencing? up in was so when -- a sequentially, you're Just it than pattern it so seasonally seasonal trying to that line? a the sense more what

Richard Olson

Yes.

a higher average an be normally level, level order would regardless or look If period. the just at you the year of this output of

is the that's we'll fulfilled seasonal we ultimately as be upcoming get normally so increase during orders, an So what by during we that's season. mean

better -- significantly actually grounds, but specialty underground, year-over-year are construction down. and golf So and

of typical that. So in patterns it's really that more are our other driving the sales businesses some

So of a substantially businesses, some make the process seasonal little sequentially regard. up because that year-over-year, in of bit continue Yes. progress better our normal to in but

from operations, the our encouraging driven that's our of Just very it. part plants. to much from output being by better reiterate, That's

Sam Darkatsh

Got it.

were initial DSOs pretty function to up that quarter. Angie. a question, clarification Lowe's? quick Second the of in sell-in meaningfully Is the

Angie Snavely

Yes.

to to we was our -- yes, mass our timing in really referenced that shipments comments, of talking related As our channel.

channel of extended to continue components partners some ship customers. to be to some up that kind to able fill to to they as packages their extended pieces on our have we certain of also wait their We terms have

Sam Darkatsh

Got no it. quarter. And need repo to the repo you And the to share would that? noticed then in see was in last I order what question. Why commence activity?

Angie Snavely

quarter. that thing same a typically is and cash usage, we peak saw this QX time for

our be looking our first, at our to growth. as And we approach versus profitable So QX, repurchases. invest continues remaining first focus priority a in as we're paying down long-term to revolver

Operator

please, line and Tim our question, Wojs for is from moment Baird. with next the One of

Timothy Wojs

maybe year? historically, think be Because million kind been kind just maybe think of I It it, of of and of in just $XXX of half start implying, just this, sounds EPS Angie, quarter million and the you're guess has in to of like QX call bridge the half of QX to what's maybe kind should the range. trying what to cadence EPS on the $XXX the back quarter. of kind for the kind your about the back seasonally strongest I year. second kind

what just QX get half I'm that like of trying to back in in So might the understand hurting better year? is kind of maybe the

Angie Snavely

for really look for we're backlog, with EPS. a earlier, off our increase year in be going from better And So expecting be cadence, lawn place. incremental XXXX and fiscal of confidence again, half care. line against our line guided We're in 'XX first, some to to I output. at last And comparing we're F because in field second a to would for as We're that being comes meaningfully also XXXX drop our our volume the say. we EPS. with sharp talked from continue more adjusted a QX -- inventory more lower will you our driving We year-over-year, output be to about we our as we down if

Timothy Wojs

Okay.

maybe And patterns. the some is of -- of as markets about of utilities incoming Rick, backlog. you just, trying normalize to talk you're you key of that just activity can, business, as how and telecom appreciate guess, you the order out there? terms to kind you. in about order And like I I can on look? to much of any could Got kind then get product the anything Okay. the can if But underground talk kind just try

Richard Olson

has same the I mean, more I work strong. we're out every that recently be extremely down funding on on we're At And the improving for happen order do probably emphasis the or continues been time, put pretty situation. think open day, increasing some this output, mean, the projects. which the just a backlog are to demand that remarkable. we've situation of recently commitments in dive to the I deep our we outputs our there to

should don't more markets I more happening than in mean would then have of one we where but the digital those U.S., billion, what's of broadband. much about talk say, Digital $XXX the we in the on Europe, Act, Just a And million, Recovery to allocated categories $XX and $XX billion applications $XXX apply for broadband billion probably to substantially presence. which so-called

So it steady at from like demand looks from the demand, what at this market just runway point. see tremendously market can see and we the we point positive this

we where So as output and within as of our where there today we're a able increase adding to, to forward. constraints, are need allow to us go that to that's footprint going piece get our we bigger

that's build-out areas, issues that to be utility the we're yes, an we part addressing of everything addressing it's this worldwide, to so mean be to the part the And exciting issues that. ultimately just a pleased really but have position able from be that market business. to and more time in this one with putting we're of And incredibly underground. a energy I the power power of

Timothy Wojs

Okay.

kind last normally one utilization way basis on kind it there Is of where is, that on frame a just any of business then the kind landscape. like of trailing And where XX-month is? the Good. versus in Pro Okay. to

Richard Olson

of ... Utilization in terms

Timothy Wojs

out pro just of just through utilization. hit on I'm kind the of understand the trying like production. kind is No, to in of pulling trying terms to I'm on manufacturing what the think back -- landscape trying kind to absorption figure what -- of just

Richard Olson

obviously, thing have able anecdotally, We do numbers been don't probably we've there. -- positive those the here, capacity to we've lower within that we got specific utilization but plants. just flex The those is

lower talked at think, contractor example, go into production, that market. I even of have earnings landscape obviously, Intimidator, with we about, products call, for we the So the those last

operations to construction and our be have business produce they flex terrific The other in terrific a from past. for product the been to able positive do is to products workforce. and there would us able be thing that We've difficult

Angie Snavely

there. we say -- based our I'd on in see we included we've Yes. our just guidance, what estimates best

Operator

Moment please. next Longbow McGregor for our line of from the question, Its David with Research.

David S. MacGregor

X help got, count top us can different or just I -- what making bridging you that could variables are minimum, lot sort for single-digit or in or line best you of year. contributing? -- as I in on your if that and just wonder as going that help you're us capacity your there's if least wonder mean address be I at can mean just a I a I at this and might there. the investments maybe X growth low guidance you've

Sam's And I've reduction just today? on Rick, million $XXX shared of the in you of can XQ, kind follow-ups. a Last update a any us quarter, off then And in that for of then chance maybe backlog. with the year-over-year building number couple number there got question you us, is the backlog

Richard Olson

comes can where Angie that mean we certainly foundation you point. many to year regard from last this address and different part. good have we X open Maybe But in I about with really confidence factors, talked the the Yes. news capacity the as of at businesses, is those orders the understand as that

be construction, going grounds, golf plans. within So that's outlook driven by and our improved and underground to

seeing that And year. improvements that we're throughout we to have -- benefit in see the continue steady direction. We'll

great it's product, new through and side, all we're that really unique there. we clear not a working business of channel of for the with side, Residential and positive the great with -- customers. value proposition partners on Lowe's Lowe's, each have, But our to adjustment support but their We first of an the on just create going all, have

completely not our different capacity, do where where believe And a been get drivers strategy, we're it's where of past, open been And, more orders or adding with the rate growth So structural normalized we to to lot back our capacity, can a lot regard use rate. to alleviate we've it's growth consistent variables, flex so also to than in side. of us careful help we've that's but on the with have think to where going to need a there's to and go. return we been capacity a that that to we longer-term positions, positive we

we've that, that's and right with right consistent that's -- been So believe now. that's we -- the approach

Angie Snavely

And quarter. on your question break out on backlog, that every typically we don't

up So we're little reported just at to give last we just trying in, 'XX, just which But and said important a seeing we coming have like that weren't earlier, seeing But we're we first -- in here. tick down orders the as quarter what is F year. color this based us. we from we did the end seasonally of QX are slightly, open on very of in year,

David S. MacGregor

Right. up you on bridge. guys offline Got follow I the with can it. Maybe

we Just The expense AMP maybe program, the of, consideration? that in as upfront a into that quickly. or couple investment take is just the of you're investment other AMP should things quarter out there rolling

Angie Snavely

Yes.

great our Rick As reported we our will start, is be which we a in which prepared in numbers, it's our have expenses got the earnings in in did will some -- remarks, we release, his transformation and $X.X million SG&A list out. said it off and quarter, is AMP adjusted to place, had we in office

David S. MacGregor

now, what might might quantifying have seeing What in there of contributed to must be with typically be. be maybe like of your and level just just right Parts must -- parts specialty and that of what also in way terms finally at backlogs Got construction, you the golf of both for it benefit you in terms a and or be accessories any running me, then in it. you terms Is revenues, would Accessories above elevated profit. seems And these but quarter? business

Richard Olson

We be don't been little it Part's during maybe a out to extraordinary. it's contribution just run anecdotally, this relative but parts period, would us It's nothing to bit -- rate sales. break specifically, stronger but typical a for

Operator

comes with The line next of And King. the question, Tom CL please. it from Hayes

Thomas Hayes

around segment, Residential wanted get both thoughts especially the just Care and I on, Lawn your Professional. to Rick,

As forward? path. thoughts just continued far thoughts Professional your was year your the on battery well that adoption? going as along about segments Residential this the Certainly, the I side wondering

Richard Olson

Yes.

are a forward our We are in produce, XX-volt this we go that say -- the additional access year. we [ fantastic is customers our -- on The the is one confident both extremely even to product Residential can as side. for I line the getting ] thing we platforms

both side, which the X excited put products of on outcome honestly again, that culmination introduce, extremely for focus able On to the years. the area we've about or been we've Professional are the the X we're that the of

it's so uptake uptick a emissions Golf categories, the a in to lot specific noise, and the from especially fulfilling our uptake reasons customers, seen beyond operator So see higher implications exhaust has just battery-powered forth. and of of of products for Zero

the greatest to exhaust are our customers that And we under some the need introduced eXXXX, just those And Zero provide Groundsmaster the new which be are emission will perfect municipalities. products. product for of

want. lineup and have to that and Residential So, both pleased categories, the we in see product the our Pro great customers get they a the we're

to have customers. add, for our focus and options battery Just or going terrific both or able to provide be really electric a solution to gas

Thomas Hayes

for apologize off I Okay. there. you cutting

know back, the circling maybe under it's couple for last pressure Just been I quarters. of

Rental market? Just Equipment any on thoughts maybe the

Richard Olson

been from It's for Equipment, well. accounts our a demand to for national Rental positive most little continues really as that's a be it been of as perspective particularly And fleets, us aging at future that's portion us. bit activity, strong. of are contractor, construction there's driver looking very -- replacing is more of some

Operator

the last Securities. It's please. Ted our to Northland Jackson with from of going are coming we question, And line

Ted Jackson

ones. couple Most of my but bigger a questions of have been small answered, just

as trend to still talked reduction bit that year? back hold? we should still are going little a so working that a we that thesis have capital where Angie, we'll about just a through 'XX -- roll more inventory First, of we that a that and through and see kind we in half the in it of the Is mainly expect? a trend Is

Angie Snavely

capital improvement kind about your is I capital. throughout understood question We expect working the But working some you're of it quiet. year. do correctly, see Yes, asking you're to

cash. quarter our first peak of typically usage The is

So as that, generate through to cash we working second and in expect do growing of we more but our half. our inventory are the

with the As of expect, working you capital, inventory also behind being flow majority and can the is that down. drivers cash driving our our opportunity

sharp finished continued on inventory, the year goods throughout reduce as a we our Ted, focus both So, and WIP. that, go to

Ted Jackson

is, And I that kind I'm to a of say call kind on I of it, XXX look is Is exit inventory, see expect to so? about to inventory it level a trying bit, fair And when pre that a basis speak that we up at as I and days normalized or little mumble XXX, coded. you think tend could 'XX? to is days

Angie Snavely

that continue look I look back We We're changed to but, a certainly pre-COVID, we know information, Machine provided Works. we don't are we've at really the added we improve a we lot. Charles to as it. company, different today. When that we've -- our expecting makeup

We have could to through added customers. Intimidator increase of a our a provide that we so went group. period We Ventra. We've to needing inventory our

of of also go So inventory of increased saw our winter rebalancing season lack a and we're the into course, we in as we some level. that. And QX, that still snowfall

free that for our number we've guidance, on today. feel certainly place So put we I that you an achieve cash exact confident flow days, have we in but don't can

Ted Jackson

Okay.

basis nitpicky, per little like the to sure it A now? share -- dividend on question. What right. Next make payout but the just is right a got I've

Angie Snavely

have I I a front know -- me XX% that that Ted. X% right in year-over-year. of The don't increase

Ted Jackson

our with quarter. That's and the just a formas one. initiatives, number you a numbers you we that nitpicky to the in, it pro regards there on terms just initiatives Is every pro quarter? out then Is modeling? the forma that can AMP just of back worth in figure in that it or would show that basically put your And savings suggest this showed for you something okay. I as

Angie Snavely

the next that for So get we over to and we the benefits expecting expect million $XXX to X are years. savings achieve, the

we savings. expect $XXX So million to in by annual XXXX, cost get

but majority X. we expect see in, to savings X in be years We of and what have will built 'XX, F in the those

half the the on level of part. more project So, back than first that

Ted Jackson

weather the doing mowers you thing we a in have, winter? of your as And in could given about then think you Okay. more thought lawn marketing, marketing maybe one

Richard Olson

golfing. the Well, golfers good has And started. the news is marketing already are

that's So a a on positive bit trade-off a us for of side.

Operator

will ladies This the gentlemen. I back to pass Q&A you, thank for it remarks. closing Ms. concludes session. and Kerekes And

Julie Kerekes

We our and The to your with quarter you, again June look talking Toro interest questions in Thank to discuss Xnd Company. in for you forward results. XXXX, everyone, fiscal

Operator

And with participating. for conference all Thank that, close we the you today.

now may disconnect. You

The Toro Company (TTC) 7 Mar 242024 Q1 Earnings call transcript