The Toro Company (TTC, Financial) filed Quarterly Report for the period ended 2009-01-30.
Toro Company designs manufactures and markets consumer and professional turf maintenance equipment snow removal products and irrigation systems and provides landscaping and turf maintenance services. The company manufactures walk-behind power mowers and snowblowers and riding lawn mowers and lawn and garden tractors. The company designs and markets electrical and gas products professional turf maintenance equipment and turf irrigation products. The Toro Company has a market cap of $819.69 million; its shares were traded at around $21.04 with a P/E ratio of 7.7 and P/S ratio of 0.44. The dividend yield of The Toro Company stocks is 2.6%. The Toro Company had an annual average earning growth of 18.8% over the past 10 years. GuruFocus rated The Toro Company the business predictability rank of 4-star.
Net earnings for the first quarter of fiscal 2009 were $6.7 million, or $0.18 per diluted share, compared to $18.6 million, or $0.47 per diluted share, for the first quarter of fiscal 2008, net earnings per diluted share decrease of 61.7 percent. The primary factors contributing to this decrease were lower sales volumes and a decline in gross profit, somewhat offset by a decrease in SG&A expense and a lower effective tax rate.
Worldwide consolidated net sales for the first quarter of fiscal 2009 were $340.2 million compared to $405.8 million in the first quarter of fiscal 2008, a decrease of 16.2 percent. Worldwide professional segment net sales were down 22.3 percent as shipments for most product categories were hampered by decreased demand resulting from the global economic recession. Worldwide sales of golf maintenance equipment and irrigation systems were down significantly, as well as sales of professionally installed residential/commercial irrigation products and landscape contractor equipment. Residential segment net sales were slightly up by 0.7 percent for the first quarter of fiscal 2009 compared to the first quarter of fiscal 2008. This increase was led by strong demand for snow thrower products in North America as a result of heavy snow falls during the winter season of 2008/2009. In addition, improved product placement for a new and broader line of walk power mowers benefited residential segment net sales, which was offset by a decline in shipments of riding products due mainly to our customers efforts to reduce field inventory levels by ordering product closer to retail demand. International sales were down 17.7 percent, as compared to the first quarter of fiscal 2008, due also to the recessionary conditions affecting key international markets, as well as a stronger U.S. dollar compared to other currencies in which we transact business that accounted for approximately $12 million of our sales decline for the quarter.
Other income, net for the first quarter of fiscal 2009 was $0.8 million compared to $1.7 million for the same period last fiscal year, a decrease of $0.9 million. The decrease was due primarily to lower currency exchange rate gains, a decline in financing revenue, and lower interest income in the first quarter of fiscal 2009 compared to the first quarter of fiscal 2008.
Cash Flow. Our first fiscal quarter historically uses more operating cash than other fiscal quarters due to the seasonality of our business. Cash used in operating activities for the first three months of fiscal 2009 was $2.5 million higher than the first three months of fiscal 2008 due primarily to a decline in accounts payable and accrued liabilities, as well as lower net earnings. Somewhat offsetting those unfavorable factors was a lower increase in receivables and inventory levels for the first three months of fiscal 2009 compared to the first three months of fiscal 2008. Cash used in investing activities was lower by $0.9 million compared to the first quarter of fiscal 2008, due to a decrease in purchases of property, plant, and equipment in the first quarter of fiscal 2009 compared to the first quarter of fiscal 2008. Cash provided by financing activities was also lower by $30.0 million compared to the first quarter of fiscal 2008, due to a substantial decline in short-term debt for the first quarter of fiscal 2009 compared to the first quarter of fiscal 2008, somewhat offset by lower levels of repurchases of our common stock for the first quarter comparison.
Credit Lines and Other Capital Resources. Our businesses are seasonal, with accounts receivable balances historically increasing between January and April, as a result of higher sales volumes and payment terms made available to our customers and decreasing between May and December when payments are received. The seasonality of production and shipments causes our working capital requirements to fluctuate during the year. Our peak borrowing usually occurs between January and April. Seasonal cash requirements are financed from operations and with short-term financing arrangements, including a $225.0 million unsecured senior five-year revolving credit facility that expires in January 2012. Interest expense on this credit line is determined based on a LIBOR rate plus a basis point spread defined in the credit agreement. In addition, our non-U.S. operations maintain unsecured short-term lines of credit of approximately $16 million. These facilities bear interest at various rates depending on the rates in their respective countries of operation. We also have a letter of credit subfacility as part of our credit agreement. Average short-term debt was $12.0 million in the first quarter of fiscal 2009 compared to $55.2 million in the first quarter of fiscal 2008, a decrease of 78.2 percent. This decline was due mainly to a decrease in working capital needs in the first quarter of fiscal 2009 compared to the first quarter of fiscal 2008 as a result of lower levels of accounts receivable and inventory, as previously discussed, as well as lower levels of repurchases of our common stock during the first quarter of fiscal 2009 compared to the same period last fiscal year. As of January 30, 2009, we had $215.8 million of unutilized availability under our credit agreements.
Read the The complete ReportTTC is in the portfolios of Kenneth Fisher of Fisher Asset Management, LLC.
Toro Company designs manufactures and markets consumer and professional turf maintenance equipment snow removal products and irrigation systems and provides landscaping and turf maintenance services. The company manufactures walk-behind power mowers and snowblowers and riding lawn mowers and lawn and garden tractors. The company designs and markets electrical and gas products professional turf maintenance equipment and turf irrigation products. The Toro Company has a market cap of $819.69 million; its shares were traded at around $21.04 with a P/E ratio of 7.7 and P/S ratio of 0.44. The dividend yield of The Toro Company stocks is 2.6%. The Toro Company had an annual average earning growth of 18.8% over the past 10 years. GuruFocus rated The Toro Company the business predictability rank of 4-star.
Highlight of Business Operations:
During this tough economic environment, we have been reducing expenses and continuing efforts to reduce working capital. As a result of these actions, our selling, general, and administrative (SG&A) expenses were down 10.7 percent and our inventory levels decreased 19.3 percent for the first quarter of fiscal 2009 compared to the first quarter of fiscal 2008, which also contributed to a decline in short-term debt of $60.8 million as of the end of the first quarter of fiscal 2009 compared to the end of the first quarter of fiscal 2008. We also declared a cash dividend of $0.15 per share during the first quarter of fiscal 2009.Net earnings for the first quarter of fiscal 2009 were $6.7 million, or $0.18 per diluted share, compared to $18.6 million, or $0.47 per diluted share, for the first quarter of fiscal 2008, net earnings per diluted share decrease of 61.7 percent. The primary factors contributing to this decrease were lower sales volumes and a decline in gross profit, somewhat offset by a decrease in SG&A expense and a lower effective tax rate.
Worldwide consolidated net sales for the first quarter of fiscal 2009 were $340.2 million compared to $405.8 million in the first quarter of fiscal 2008, a decrease of 16.2 percent. Worldwide professional segment net sales were down 22.3 percent as shipments for most product categories were hampered by decreased demand resulting from the global economic recession. Worldwide sales of golf maintenance equipment and irrigation systems were down significantly, as well as sales of professionally installed residential/commercial irrigation products and landscape contractor equipment. Residential segment net sales were slightly up by 0.7 percent for the first quarter of fiscal 2009 compared to the first quarter of fiscal 2008. This increase was led by strong demand for snow thrower products in North America as a result of heavy snow falls during the winter season of 2008/2009. In addition, improved product placement for a new and broader line of walk power mowers benefited residential segment net sales, which was offset by a decline in shipments of riding products due mainly to our customers efforts to reduce field inventory levels by ordering product closer to retail demand. International sales were down 17.7 percent, as compared to the first quarter of fiscal 2008, due also to the recessionary conditions affecting key international markets, as well as a stronger U.S. dollar compared to other currencies in which we transact business that accounted for approximately $12 million of our sales decline for the quarter.
Other income, net for the first quarter of fiscal 2009 was $0.8 million compared to $1.7 million for the same period last fiscal year, a decrease of $0.9 million. The decrease was due primarily to lower currency exchange rate gains, a decline in financing revenue, and lower interest income in the first quarter of fiscal 2009 compared to the first quarter of fiscal 2008.
Cash Flow. Our first fiscal quarter historically uses more operating cash than other fiscal quarters due to the seasonality of our business. Cash used in operating activities for the first three months of fiscal 2009 was $2.5 million higher than the first three months of fiscal 2008 due primarily to a decline in accounts payable and accrued liabilities, as well as lower net earnings. Somewhat offsetting those unfavorable factors was a lower increase in receivables and inventory levels for the first three months of fiscal 2009 compared to the first three months of fiscal 2008. Cash used in investing activities was lower by $0.9 million compared to the first quarter of fiscal 2008, due to a decrease in purchases of property, plant, and equipment in the first quarter of fiscal 2009 compared to the first quarter of fiscal 2008. Cash provided by financing activities was also lower by $30.0 million compared to the first quarter of fiscal 2008, due to a substantial decline in short-term debt for the first quarter of fiscal 2009 compared to the first quarter of fiscal 2008, somewhat offset by lower levels of repurchases of our common stock for the first quarter comparison.
Credit Lines and Other Capital Resources. Our businesses are seasonal, with accounts receivable balances historically increasing between January and April, as a result of higher sales volumes and payment terms made available to our customers and decreasing between May and December when payments are received. The seasonality of production and shipments causes our working capital requirements to fluctuate during the year. Our peak borrowing usually occurs between January and April. Seasonal cash requirements are financed from operations and with short-term financing arrangements, including a $225.0 million unsecured senior five-year revolving credit facility that expires in January 2012. Interest expense on this credit line is determined based on a LIBOR rate plus a basis point spread defined in the credit agreement. In addition, our non-U.S. operations maintain unsecured short-term lines of credit of approximately $16 million. These facilities bear interest at various rates depending on the rates in their respective countries of operation. We also have a letter of credit subfacility as part of our credit agreement. Average short-term debt was $12.0 million in the first quarter of fiscal 2009 compared to $55.2 million in the first quarter of fiscal 2008, a decrease of 78.2 percent. This decline was due mainly to a decrease in working capital needs in the first quarter of fiscal 2009 compared to the first quarter of fiscal 2008 as a result of lower levels of accounts receivable and inventory, as previously discussed, as well as lower levels of repurchases of our common stock during the first quarter of fiscal 2009 compared to the same period last fiscal year. As of January 30, 2009, we had $215.8 million of unutilized availability under our credit agreements.
Read the The complete ReportTTC is in the portfolios of Kenneth Fisher of Fisher Asset Management, LLC.
