Group 1 - The Toro Company (NYSE: TTC) was reaffirmed as a 'hold' candidate in December 2023, indicating a stable outlook for the company [1] - The company focuses on the production and cash flow generation in the oil and natural gas sector, highlighting its value and growth prospects [1] Group 2 - Crude Value Insights provides an investing service and community centered on oil and natural gas, emphasizing cash flow analysis [2] - Subscribers have access to a 50+ stock model account and in-depth cash flow analyses of exploration and production (E&P) firms [2]

Company Overview - Toro (TTC) is a Consumer Discretionary stock headquartered in Bloomington, with a year-to-date price change of -5.37% [3] - The company currently pays a dividend of $0.38 per share, resulting in a dividend yield of 2.01%, which is slightly below the Tools - Handheld industry's yield of 2.11% and the S&P 500's yield of 1.53% [3] Dividend Performance - Toro's annualized dividend of $1.52 has increased by 5.6% from the previous year [4] - Over the last five years, Toro has raised its dividend five times, achieving an average annual increase of 10.22% [4] - The company's current payout ratio is 36%, indicating that it distributes 36% of its trailing 12-month earnings per share as dividends [4] Earnings Outlook - Toro is expected to see earnings growth in the current fiscal year, with the Zacks Consensus Estimate for 2025 at $4.31 per share, reflecting a year-over-year growth rate of 3.36% [5] Investment Considerations - Dividends are favored by investors as they enhance stock investing profits, reduce overall portfolio risk, and offer tax advantages [6] - While high-yielding stocks may face challenges during periods of rising interest rates, Toro is positioned as an attractive dividend play and a compelling investment opportunity, holding a Zacks Rank of 2 (Buy) [7]

Core Viewpoint - Wall Street's initial reaction to the new tariff policies is negative, particularly affecting heavy equipment manufacturers like Caterpillar, Toro, and Deere, which saw significant declines in their stock prices [1][2]. Group 1: Market Reaction - Shares of Caterpillar (CAT) fell by 8.11%, Toro (TTC) by 7.31%, and Deere (DE) by 4.16% as of 1 p.m. ET following the announcement of new tariffs [1]. - The aggressive round of tariffs has caught the markets off guard, leading investors to assess the potential impacts on their investments and the possibility of retaliatory measures from trade partners [2]. Group 2: Impact on Costs and Demand - New levies on raw materials like steel could increase costs for companies specializing in construction and agriculture equipment, potentially forcing them to raise prices or reduce profitability [2]. - Demand for heavy equipment may be affected both domestically and internationally, particularly for Caterpillar, which relies heavily on sales from China, a country likely to retaliate against tariffs [3]. - The agricultural sector, a core customer base for Deere, may see reduced profitability due to tariffs affecting about 20% of U.S. agricultural production that is exported [4]. Group 3: Long-term Considerations - There is a potential argument that tariffs could boost sales for U.S. manufacturers by reducing competition from foreign rivals, leading to increased demand for heavy-duty equipment if U.S. manufacturing is stimulated [5]. - Historical performance suggests that these companies are best-in-class operators that may eventually adapt to the new environment, although the uncertainty surrounding the duration and impact of the tariffs warrants caution [6].

Financial Data and Key Metrics Changes - The Toro Company reported total net sales of nearly $1 billion for Q1 2025, with a slight decrease from the previous year due to lower shipments in the residential segment [8][26] - Adjusted diluted earnings per share (EPS) increased to $0.65, up from $0.64 in the previous year, while reported EPS was $0.52 compared to $0.62 last year [10][26] - The company maintained its full-year fiscal 2025 net sales and adjusted diluted EPS guidance despite uncertainties in the tariff environment [11][49] Business Segment Data and Key Metrics Changes - Professional segment net sales were $768.8 million, up 1.6% year-over-year, driven by higher shipments of golf and grounds products and increased demand for zero-turn mowers [28] - Residential segment net sales decreased to $221 million from $240 million, primarily due to lower shipments of snow products and the divestiture of Pope Products [30] - Professional segment earnings improved to $127.2 million, representing a 13% increase from the previous year, while residential segment earnings fell to $17.2 million [29][31] Market Data and Key Metrics Changes - Demand for golf products remains strong, with order backlogs elevated and robust channel demand for new contractor-grade zero-turn mowers [9][43] - The underground construction market is identified as a key growth opportunity, supported by the acquisition of ProKASRO Services USA [19][21] - Field inventories of lawn care products are in a better position compared to the previous year, while snow product inventories remain elevated but are trending in the right direction [44][46] Company Strategy and Development Direction - The company is focused on innovation to address customer needs and align with market growth trends, launching cutting-edge products equipped with the latest technologies [12][13] - The AMP initiative aims to drive productivity and profitability, with nearly $50 million in run rate savings implemented in Q1 [22][24] - The Toro Company plans to reinvest up to half of the savings from the AMP initiative to accelerate innovation and long-term growth [24][42] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver positive financial results despite uncertainties in the macro environment, including economic and geopolitical factors [56][58] - The underground construction and golf markets are highlighted as having strong near- and long-term prospects, supported by increasing demand for infrastructure investments [59][61] - The company is prepared to adjust operations and pricing in response to evolving tariff situations while maintaining its market leadership [47][96] Other Important Information - The company repurchased $100 million in shares during the quarter, reflecting confidence in future financial performance [25][42] - The effective tax rate for Q1 was reported at 20.1%, slightly higher than the previous year's 19% [36] Q&A Session Summary Question: Clarification on AMP savings and impact on Q1 - Management confirmed $7 million in gross realized savings in Q1, with a total run rate savings of $64 million to date, emphasizing that not all savings drop to the bottom line [72][73] Question: Pro snow inventory and contractor sentiment - Management noted that while snow product sales were down due to below-average snowfall, contractor budgets are in good shape heading into spring [81][85] Question: Price-cost expectations for the year - Management indicated that while costs increased due to higher manufacturing and freight costs, they expect to return to a normal price increase of 1% to 2% for the full year [87][89] Question: Tariff exposure and production locations - The majority of products are made in the U.S., with minimal exposure to China and Mexico, and management is actively working to mitigate tariff impacts [92][95] Question: Impact of Pope Products divestiture - The Pope Products business contributed approximately $7.5 million in net sales in Q1 last year, affecting year-over-year comparisons [119]

Financial Data and Key Metrics Changes - The company reported total net sales of nearly $1 billion for the first quarter, with a slight decrease from the previous year due to the divestiture of Pope Products [8][26] - Adjusted diluted earnings per share (EPS) increased to $0.65, up from $0.64 year-over-year, while reported EPS decreased to $0.52 from $0.62 [10][26] - The professional segment net sales were $768.8 million, up 1.6% year-over-year, while the residential segment net sales were $221 million, down from $240 million [28][30] - The company's reported and adjusted gross margins were 33.7% and 34.1%, respectively, compared to 34.4% in the same period last year [33] Business Line Data and Key Metrics Changes - Professional segment earnings for the first quarter were $127.2 million, up 13% from $112.8 million last year, with a profitability increase to 16.5% from 14.9% [29] - Residential segment earnings decreased to $17.2 million from $23.5 million, with a margin drop to 7.8% from 9.8% [31] - The professional segment's growth was driven by higher shipments of golf and grounds products and increased demand for zero-turn mowers [28][30] Market Data and Key Metrics Changes - Demand in the golf market remains strong, with record rounds played and elevated order backlogs [9] - The residential segment faced challenges due to elevated field inventories of snow products and lower shipments of portable power products [30][31] - The company noted that snowfall activity has improved compared to last year, but year-to-date totals remain below historical averages [46] Company Strategy and Development Direction - The company is focused on innovation to address customer needs and align with market growth trends, launching cutting-edge products equipped with the latest technologies [12][13] - The acquisition of ProKASRO Services USA enhances the company's underground construction product portfolio, capitalizing on synergies with existing products [19][22] - The AMP initiative aims to deliver $100 million in annualized run rate savings by fiscal 2027, with a portion reinvested to accelerate innovation [24][42] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver positive financial results despite uncertainties in the macro environment, including economic and geopolitical factors [56][57] - The company expects sustained strength in demand for underground construction and golf products, with a normalization of field inventories for lawn care and snow products [43][44] - Guidance for fiscal 2025 includes total company net sales growth in a range of 0% to 1%, with adjusted diluted EPS expected between $4.25 and $4.40 [49][51] Other Important Information - The company repurchased $100 million in shares during the quarter, reflecting confidence in future financial performance [25][41] - The effective tax rate for the first quarter was reported at 20.1%, up from 19% last year, primarily due to lower tax benefits [36] Q&A Session Summary Question: Clarification on AMP savings and impact on earnings - Management confirmed that $7 million in gross realized savings were achieved in Q1, with a total run rate savings of $64 million to date [72][73] Question: Inquiry about Pro snow and dealer inventories - Management noted that snow levels were down significantly compared to historical averages, impacting sales, but contractor budgets are in good shape [81][84] Question: Expectations for price-cost spread for the year - Management indicated that while costs have risen, they expect to return to a normal price increase of 1% to 2% for the full year, excluding tariffs [87][88] Question: Tariff exposure and manufacturing locations - Management stated that the majority of products are made in the U.S., with minimal exposure to China and Mexico, and they are prepared to mitigate tariff impacts [92][95] Question: Field channel inventory status - Management reported that field inventories for the Pro landscape contractor side are improved compared to last year, with expectations for further normalization in the spring [103][106] Question: Underground business performance - Management confirmed strong demand in the underground space, with ongoing product introductions and positive future outlook [109]

Financial Performance - Consolidated net sales for Q1 fiscal 2025 were $995.0 million, a decrease of 0.7% from $1,001.9 million in Q1 fiscal 2024 [107]. - Net earnings for Q1 fiscal 2025 were $52.8 million, or $0.52 per diluted share, down from $64.9 million, or $0.62 per diluted share in Q1 fiscal 2024 [108]. - Adjusted net earnings for Q1 fiscal 2025 were $65.9 million, or $0.65 per diluted share, compared to $66.5 million, or $0.64 per diluted share in Q1 fiscal 2024 [120]. - Gross profit for Q1 fiscal 2025 was $335.6 million, down 2.6% from $344.5 million in Q1 fiscal 2024, with a gross margin of 33.7% compared to 34.4% [115]. - Professional segment net sales increased by 1.6% to $768.8 million, while Residential segment net sales decreased by 8.0% to $221.0 million [107]. - Professional segment earnings increased by 12.8% to $127.2 million, with an earnings margin of 16.5% compared to 14.9% in Q1 fiscal 2024 [123]. - Residential segment earnings decreased by 26.8% to $17.2 million, with an earnings margin of 7.8% compared to 9.8% in Q1 fiscal 2024 [125]. Cash Flow and Liquidity - Net cash used in operating activities was $48.6 million in Q1 fiscal 2025, a decrease from $92.2 million in Q1 fiscal 2024, mainly due to favorable fluctuations in working capital [129]. - Free cash flow for the three months ended January 31, 2025, was $(67.7) million, compared to $(111.3) million for the same period in 2024, indicating an improvement [147]. - Free cash flow conversion percentage was (128.2)% for the three months ended January 31, 2025, compared to (171.5)% for the same period in 2024 [147]. - As of January 31, 2025, available liquidity was $884.1 million, consisting of cash and cash equivalents of $171.3 million and $712.8 million under the revolving credit facility [132]. - Net cash provided by financing activities was $44.6 million in Q1 fiscal 2025, down from $114.1 million in Q1 fiscal 2024, attributed to higher common stock repurchases [131]. Cost Management and Savings Initiatives - The AMP initiative is expected to deliver annualized cost savings of over $100 million by fiscal 2027, with cumulative savings of $10.7 million achieved by Q1 fiscal 2025 [106]. - SG&A expense increased by $1.9 million, or 0.7%, as a percentage of net sales increased by 30 basis points compared to Q1 fiscal 2024 [116]. - The company employs productivity initiatives to mitigate the impact of commodity cost changes, including collaborating with suppliers and reviewing alternative sourcing options [156]. Inventory and Receivables - Accounts receivable increased by $5.2 million, or 1.1%, in Q1 fiscal 2025 compared to Q1 fiscal 2024, driven by increased international shipments [128]. - Inventory levels decreased by $34.0 million, or 2.9%, in Q1 fiscal 2025 compared to Q1 fiscal 2024, primarily due to lower lawn care product balances [128]. Debt and Interest Rate Exposure - The company has $524.2 million in gross fixed-rate long-term debt and $400.0 million in gross variable rate debt as of January 31, 2025 [153]. - The company has no earnings or cash flow exposure due to interest rate risks on its fixed-rate long-term debt obligations [153]. Foreign Currency and Commodity Risks - The company is exposed to foreign currency exchange rate risks primarily with the Euro, Australian dollar, Canadian dollar, British pound, and Mexican peso [150]. - The company has entered into various derivative instruments to hedge against foreign currency exchange rate risks, with gains and losses highly correlated to underlying exposures [151]. - The primary commodity cost exposures include steel, aluminum, petroleum, and natural gas-based resins, which are critical to the manufacturing process [155]. - As of January 31, 2025, the average contracted rate for foreign currency exchange contracts includes 0.6558 for AUD, 1.3583 for CAD, and 1.1006 for EUR [152]. Shareholder Returns - The Board approved a cash dividend of $0.38 per share for Q1 fiscal 2025, a 5.6% increase from $0.36 per share in Q1 fiscal 2024 [135]. - During Q1 fiscal 2025, the company repurchased 1,240,496 shares of common stock, with 6,931,461 shares remaining available for repurchase [136].

Q1 2025 EARNINGS RELEASE March 6, 2025 THE TORO COMPANY 2 Q1 2025 EARNINGS RELEASE THE TORO COMPANY Safe Harbor This presentation 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 "believe," "forward," "future," "goal," "guidance," "improve," "may," ...

Financial Performance - First-quarter net sales were $995 million, down 1% from $1,002 million in the same period of fiscal 2024[5] - Reported diluted EPS for the first quarter was $0.52, a decrease of 16% compared to $0.62 in the same period of fiscal 2024[5] - Adjusted diluted EPS for the first quarter was $0.65, up 2% from $0.64 in the same period of fiscal 2024[5] - Operating earnings decreased to $77.8 million, compared to $88.6 million in the previous year, reflecting a decline of 12.0%[28] - Net earnings for the three months ended January 31, 2025, were $52.8 million, down 18.6% from $64.9 million in the same period of 2024[28] - Adjusted net earnings for the three months ended January 31, 2025, were $65.9 million, slightly down from $66.5 million in the prior year, with adjusted net earnings per diluted share at $0.65, compared to $0.64[36] Segment Performance - Professional segment net sales increased by 1.6% to $768.8 million, driven by higher shipments of golf and grounds products[17] - Professional segment earnings rose to $127.2 million, with a margin of 16.5%, up from 14.9% in the prior-year period[17] - Residential segment net sales decreased by 8% to $221 million, primarily due to lower shipments of snow products and the prior year Pope Products divestiture[17] - The Professional segment net sales increased to $768.8 million, up 1.9% from $756.5 million in the prior year, while the Residential segment net sales decreased to $221.0 million, down 7.9%[30] Cash Flow and Shareholder Returns - The company returned $100 million to shareholders through share repurchases, reflecting improved cash flow[2] - The company reported a net cash used in operating activities of $48.6 million for the three months ended January 31, 2025, compared to $92.2 million in the same period of 2024[34] - Free cash flow for the three months ended January 31, 2025, was $(67.7) million, an improvement from $(111.3) million in the same period of 2024, resulting in a free cash flow conversion percentage of (128.2)% compared to (171.5)%[38] - Net cash used in operating activities for the three months ended January 31, 2025, was $(48.6) million, an improvement from $(92.2) million in the prior year[38] Guidance and Future Initiatives - The company maintains full-year fiscal 2025 net sales growth guidance of 0% to 1% and adjusted diluted EPS guidance of $4.25 to $4.40[7] - The AMP initiative has delivered $64 million in run-rate cost savings to date, with a target of $100 million by fiscal 2027[6] - The company anticipates continued demand trends and has provided fiscal 2025 financial guidance, although specific figures were not disclosed in the provided content[25] Cost and Margin Analysis - Gross margin for the first quarter was 33.7%, down from 34.4% in the same prior-year period due to higher material and manufacturing costs[12] - Gross profit for the same period was $335.6 million, resulting in a gross margin of 33.7%, down from 34.4% in the prior year[28] - Operating earnings for the three months ended January 31, 2025, were $77.8 million, down from $88.6 million in the prior year, with an operating earnings margin of 7.8% compared to 8.8%[36] - Adjusted operating earnings for the three months ended January 31, 2025, were $94.0 million, compared to $92.5 million in the same period of 2024, with an adjusted operating earnings margin of 9.4%[36] Taxation - The effective tax rate for the three months ended January 31, 2025, was 20.1%, an increase from 19.0% in the same period of 2024[36] - Income tax provision for the three months ended January 31, 2025, was $13.3 million, down from $15.2 million in the prior year[36] - The company recorded a tax impact of share-based compensation of $0.1 million for the three months ended January 31, 2025, compared to $1.5 million in the same period of 2024[36]

Financial Data and Key Metrics Changes - The company reported net sales of $4.58 billion for the full year, up about 1% from the previous year, marking the 15th consecutive year of top-line growth [10][28] - Adjusted diluted earnings per share (EPS) for the full year was $4.17, slightly down from $4.21, reflecting a product mix weighted towards the residential segment [29][38] - For Q4, net sales increased by 9.4% year-over-year to $1.08 billion, with adjusted EPS rising 34% to $0.95 [16][28] Business Line Data and Key Metrics Changes - Professional segment net sales for Q4 were $913.9 million, up 10.3% year-over-year, driven by higher shipments of golf and grounds products and underground construction equipment [29] - Residential segment net sales for Q4 were $155.1 million, up 4.5%, but reported a loss of $13.8 million compared to a profit of $4.5 million last year due to higher costs [34][35] - For the full year, professional segment net sales decreased 3.2% to $3.56 billion, while residential segment net sales increased 16.9% to $998.3 million [30][33] Market Data and Key Metrics Changes - The company ended the year with a backlog of approximately $1.2 billion, improved from about $2 billion a year ago, with expectations to normalize by the end of fiscal 2025 [54] - Field inventories for lawn care products remain higher than ideal, while underground construction equipment inventories are much lower than ideal [56] Company Strategy and Development Direction - The company is focused on three strategic priorities: accelerating profitable growth, driving productivity and operational excellence, and empowering people [19] - The introduction of the "AMP It Up" initiative aims to enhance productivity and profitability across the organization [65] - The company plans to continue investing in innovation, particularly in autonomous solutions and alternative power technologies [83] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to capitalize on future growth opportunities despite macroeconomic caution [67] - The outlook for fiscal 2025 includes total company net sales growth in the range of 0% to 1%, with expectations for improved profitability margins [61][62] - Management is closely monitoring macro factors, including the economy and consumer confidence, which could impact future performance [68] Other Important Information - The company returned nearly $400 million to shareholders, including share repurchases of about $250 million and an increase in the regular dividend payout [15] - Free cash flow for the full year was significantly higher at $471 million, reflecting a conversion ratio of 112% of reported net earnings [48] Q&A Session Summary Question: Residential profit contraction in the quarter - Management anticipated a tougher quarter for Residential due to less volume and a mix shift towards lower-margin products [90] Question: Professional segment revenue performance - Management noted caution from homeowners purchasing professional products, impacting revenue expectations for 2025 [93] Question: Details on the AMP It Up initiative - The initiative is an extension of the original AMP program, focusing on productivity and profitability across the employee base [102][103] Question: Autonomous products launch - The launch will include significant retail introductions across golf and commercial applications, with higher penetration expected in these areas [107] Question: Residential business growth and first quarter guidance - Management clarified that the strength in Q4 was not due to pull forward but rather a result of strong product performance [120] Question: 2025 guidance and margin performance - Management indicated that despite lower top-line growth, they expect to improve profitability through strategic positioning and cost management [124]

Financial Risks and Compliance - The company faces potential increases in funding costs and liquidity issues if credit ratings fall below investment grade or leverage ratios exceed 1.50[121]. - Future changes in accounting or tax standards could impact the preparation and reporting of the company's financial statements, potentially affecting financial condition and operating results[121]. - The company is subject to extensive laws and regulations that may increase compliance costs and affect product demand, including climate change legislation that could impose stricter emissions requirements[125]. - The company cannot predict the ultimate impact of future laws on its operations, which may lead to increased compliance burdens and costs[125]. - The company faces financial and operating restrictions due to credit arrangements, including covenants that require maintaining a maximum leverage ratio[118]. - A downgrade in credit ratings could increase the cost of funding and adversely affect access to capital markets[121]. - The company is exposed to risks associated with compliance with international anti-corruption laws, which could result in significant fines and penalties[128]. - The uncertainty in regulatory processes may lead to increased compliance burdens and costs, adversely affecting business operations[125]. Operational Efficiency and Cost Management - The company aims for annualized cost savings of over $100 million by fiscal 2027 through its "Amplifying Maximum Productivity" initiative, focusing on operational efficiency and sustainable supply chains[130]. - The company actively monitors commodity costs and supply chain health to mitigate risks associated with procurement disruptions[39]. - Increased costs of commodities and components have negatively impacted profit margins, highlighting the need for effective cost management strategies[79]. - The company employs Lean methods to continuously improve manufacturing processes, aiming to streamline operations and eliminate waste[36]. - The company is dependent on efficient operations of its facilities and those of suppliers, with potential disruptions from supply chain challenges and labor shortages[95]. Environmental and Sustainability Initiatives - The company is involved in environmental remediation efforts and may incur future costs related to compliance with environmental laws, which could adversely affect financial condition[128]. - The company has taken actions to enhance its ESG practices, including hiring a new executive officer for sustainability and releasing a sustainability report for fiscal 2022[112]. - The sustainability report outlines goals to increase battery and hybrid product sales and reduce GHG emissions over time[112]. - California's AB 1346 mandates that most new sales of small off-road engines must be zero-emission starting January 1, 2024, potentially impacting product demand[126]. - The company is involved in evaluating and cleaning up environmental liabilities, although these matters are not expected to materially affect financial results[75]. Market and Sales Dynamics - International net sales accounted for 20.1%, 20.8%, and 19.5% of total consolidated net sales for fiscal years 2024, 2023, and 2022 respectively[33]. - The company’s Residential segment products are more seasonal, with lawn and garden products shipped primarily between February and June[43]. - The Professional segment's net sales are influenced by factors such as reduced revenue for golf courses, decreased consumer spending on property maintenance, and reduced investment in golf course renovations[88]. - The Residential segment's net sales depend on product placement, consumer confidence, and buying patterns, with potential adverse effects from changes in shelf space at mass retailers[90]. - Weather conditions, exacerbated by climate change, have impacted demand for products, particularly in the Residential and Professional segments, affecting sales patterns[87]. Product Development and Innovation - The company focuses on innovation and quality, investing in new product development and improvements to existing products, utilizing "Voice of the Customer" tools[35]. - New products introduced in the current and previous two fiscal years have represented a significant portion of net sales, indicating the importance of product innovation for future revenue growth[85]. - Changes in product mix can negatively impact financial performance, as Professional segment products generally have higher profit margins than Residential segment products[91]. - The company has set goals to increase battery and hybrid product sales and reduce greenhouse gas emissions over time[130]. Human Resources and Employee Management - The company is dependent on attracting and retaining key executives and employees to achieve strategic objectives, with competition for talent being intense[131]. - Approximately 10.5% of the company's employees are represented by a union under collective bargaining agreements, with agreements expiring between October 2025 and October 2026[59]. - The average number of employees during fiscal 2024 was 11,464, with a total of 11,108 employees as of October 31, 2024[59]. - The company emphasizes employee safety through mandatory monthly training and safety management courses for supervisors[60]. - The company provides a variety of health and wellness programs, including 24/7 access to licensed physicians and on-site nurses[64]. - The company conducts regular compensation market benchmarking to ensure competitive pay and offers a range of benefits including stock-based compensation and flexible work schedules[66]. - The company is committed to upholding human rights and prohibits all forms of child and forced labor in its operations[70]. Financial Performance and Challenges - The Toro Company has faced adverse impacts on net sales and earnings due to economic conditions, including business closures and reduced consumer spending levels[79]. - Disruptions in the availability of commodities and components have adversely affected operations, with some items sourced from single suppliers limiting production capabilities[87]. - The company recorded non-cash impairment charges of $18.0 million related to the Spartan® trade name and $133.3 million related to Intimidator goodwill during Q3 fiscal 2023[110]. - The company may incur additional impairment charges in the future, which could adversely affect operating results[113]. - Foreign currency exchange rate fluctuations have adversely affected operating results and could continue to do so in the future[117]. - The company relies on floor plan financing arrangements for inventory financing, with changes in credit availability potentially affecting sales and operating results[101]. - Inventory management decisions of channel customers can negatively impact net sales and working capital, leading to potential manufacturing inefficiencies[99]. Strategic Partnerships and Acquisitions - The company announced a strategic partnership with Lowe's in September 2023 to drive growth through acquisitions and alliances[108]. - The company’s strategy includes pursuing acquisitions and partnerships, which carry inherent risks that could affect future performance[80]. - The company may face challenges in managing and integrating acquired businesses, which could impact financial performance and operational efficiency[110]. - Divestitures and restructuring activities carry risks that may negatively affect the company's operations and financial condition[111].