THE TORO COMPANY Richard M. Olson Chairman & Chief Executive Officer Raymond James 43rd Annual Institutional Investors Conference March 8, 2022 POPE RENCOR UNIQUE Irritrol SAFE HARBOR • This presentation contains forward-looking statements regarding our business and future financial and operating results 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 futu ...

Financial Data and Key Metrics Changes - The company achieved consolidated net sales of $932.7 million, an increase of 6.8% compared to the first quarter of last year [28] - Reported and adjusted EPS were both $0.66 per diluted share, down from $1.02 and $0.85 respectively in the first quarter a year ago [29] - Gross margin for the quarter was 32.2%, compared to 36.1% in the same period last year, primarily due to higher material and freight costs [33] - SG&A expense as a percent of net sales for the quarter was 22.4%, compared to 19.9% in the same period last year [34] - Operating earnings as a percent of net sales for the first quarter were 9.8%, compared to 16.2% in the same period last year [36] Business Line Data and Key Metrics Changes - Professional segment net sales for the quarter were up 3.5% to $672.9 million, driven by net price realization, partially offset by lower volume due to product availability constraints [29] - Residential segment net sales for the first quarter were $255.4 million, up 17.3% over last year, primarily driven by increased net price realization and higher shipments of zero-turn riding and walk power mowers [31] - Professional segment earnings for the first quarter were $93.3 million, down from 18% in the first quarter last year to 13.9% [30] - Residential segment earnings for the quarter were $31.8 million, down from 14.7% in the first quarter last year to 12.4% [32] Market Data and Key Metrics Changes - The company noted strong demand momentum across its diverse portfolio of businesses, with particular strength in the golf market, where golf rounds played were up 5.5% in 2021 [51][52] - The company is closely monitoring geopolitical developments and their potential impacts on operations and supply chains [11][12] Company Strategy and Development Direction - The company is focused on technology advancements to accelerate profitable growth, introducing new products in battery electric, smart connected, and autonomous solutions [14][23] - The acquisition of the Intimidator Group is expected to enhance customer reach and geographic strength in the zero-turn mower market [24][25] - The company aims to restore and improve margins over the long term while adjusting pricing to market conditions [34][46] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate supply chain challenges and maintain strong demand across its markets [9][41] - The company updated its full-year fiscal 2022 guidance, expecting net sales growth in the range of 12% to 14% [43] - Management acknowledged the impact of geopolitical events on operations but emphasized the company's strong position to capitalize on profitable growth [48][51] Other Important Information - Free cash flow in the quarter was a use of cash at $102 million, driven by additional working capital needs [38] - The company plans to deploy $150 million to $175 million in capital expenditures this year to enhance capacity and productivity [40] Q&A Session Summary Question: Supply chain progress - Management noted improvements in the supply chain, with strong demand remaining a challenge for production capacity [61][62] Question: Full-year guidance implications - Management confirmed that guidance reflects ongoing progress, with geopolitical uncertainty factored in [65][66] Question: Price and inflation expectations - Management indicated that they are committed to restoring margins and expect to see improvements over time [75][76] Question: Order deferrals or cancellations - Management reported that order pace remains strong, with no significant drop-off in demand [80][81] Question: Professional segment revenue shortfall - Management attributed the shortfall to supply chain constraints, particularly in heavier duty professional product categories [90][92] Question: Impact of competitors' actions - Management expressed confidence in the growth of their electric product offerings, despite competitors dropping gas-powered equipment [94][95] Question: Intimidator Group acquisition impact - Management acknowledged that Intimidator has lower initial gross margins but is confident in leveraging synergies for growth [102][104] Question: Professional margins breakdown - Management indicated that supply chain constraints are affecting professional margins, but demand remains strong [114][116] Question: Snow season contribution to growth - Management highlighted a strong snow season contributing to growth, particularly in professional demand [118][120] Question: Equipment and rental market outlook - Management reported strong demand across the rental market, complementing direct sales [130][132]

The Toro Company THE TORO COMPANY Investor Presentation March 2022 TORO. � POPE TRENCOR UNIQUE HAYTER LIGHTING SYSTEMS® Irritrol. SAFE HARBOR • This presentation contains forward-looking statements regarding our business and future financial and operating results 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. Actual events and results may d ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Quarterly Period Ended January 28, 2022 ☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Transition Period from to Commission File Number: 1-8649 THE TORO COMPANY (Exact name of registrant as specified in its charter) State or Other Jurisdiction of Incorporation o ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Fiscal Year Ended October 31, 2021 THE TORO COMPANY (Exact name of registrant as specified in its charter) (State or Other Jurisdiction of Incorporation or Organization) Delaware 41-0580470 (I.R.S. Employer Identification No.) 8111 Lyndale Avenue South Bloomington, Minnesota 55420-1196 Telephone Number: (952) 888-8801 (Address, inclu ...

The Toro Company (NYSE:TTC) Q4 2021 Earnings Conference Call December 15, 2021 11:00 AM ET Company Participants Julie Kerekes - Investor Relations Rick Olson - Chairman and Chief Executive Officer Renee Peterson - Vice President and Chief Financial Officer Conference Call Participants Tim Wojs - Baird David MacGregor - Longbow Research Ross Gilardi - Bank of America Operator Good day, ladies and gentlemen and welcome to The Toro Company’s Full Year and Fourth Quarter Earnings Conference Call. My name is Vic ...

The Toro Company THE TORO COMPANY Investor Presentation December 2021 | --- | --- | --- | --- | --- | --- | --- | --- | --- | |-------|-------|-------|-------|-------|---------|-------|-----------|--------| | | | | | | | | | | | TORO. | | | | UNIOL | | | | | | | | | | | | | | | | | | | | | TRENCOR | | Irritrol. | � POPE | SAFE HARBOR • This presentation contains forward-looking statements regarding our business and future financial and operating results made pursuant to the safe harbor provisions of the Pri ...

The Toro Company THE TORO COMPANY Investor Presentation September 2021 | --- | --- | --- | --- | --- | --- | --- | --- | --- | |-------|-------|-------|-------|-------|---------|-------|-----------|--------| | | | | | | | | | | | TORO. | | | | UNIOL | | | | | | | | | | | | | | | | | | | | | TRENCOR | | Irritrol. | � POPE | SAFE HARBOR • This presentation contains forward-looking statements regarding our business and future financial and operating results made pursuant to the safe harbor provisions of the Pr ...

Financial Data and Key Metrics Changes - The Toro Company reported total net sales for Q3 2021 of $976.8 million, a 16.2% increase year-over-year [21] - Reported EPS was $0.89 per diluted share, up from $0.82 last year, while adjusted EPS was $0.92, reflecting a 12.2% increase [21][22] - Gross margin decreased to 33.9%, down 110 basis points compared to the same period last year [25] - Year-to-date free cash flow was $429 million with a conversion ratio of 123% [29] Business Line Data and Key Metrics Changes - Professional segment net sales increased by 15.2% to $718.5 million, driven by demand in landscape contractor, golf, and snow management markets [22][23] - Residential segment net sales rose by 23% to $252.1 million, primarily due to strong retail demand for zero-turn and walk power mowers [24] - Professional segment earnings increased by 7.6% to $122.3 million, while residential segment earnings rose by 10.5% to $31.5 million [23][24] Market Data and Key Metrics Changes - The company experienced robust demand across global markets, particularly in landscape contracting and golf [10][14] - Supply chain constraints and inflationary pressures were noted as significant challenges affecting product availability and costs [15][17] Company Strategy and Development Direction - The Toro Company is focused on investing in new product development, enhancing distribution, and maintaining strong relationships with channel partners [14][18] - Strategic investments are being made in alternative power, smart connected, and autonomous technologies [19][20] - The company aims to accelerate profitable growth while managing operational challenges and inflationary pressures [20][33] Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing supply chain and inflation challenges but expressed confidence in the company's ability to manage these factors [15][41] - The company updated its full-year fiscal 2021 guidance, expecting net sales growth above 17% and adjusted EPS in the range of $3.53 to $3.57 per diluted share [37][39] - Management remains optimistic about long-term growth opportunities despite current operational headwinds [51][52] Other Important Information - The company has maintained a strong liquidity position with $1.1 billion available, including cash and cash equivalents of $535 million [30] - Recent acquisitions and increased capital expenditures reflect the company's commitment to innovation and capacity expansion [31][32] Q&A Session Summary Question: Sales guidance increase to 17% - how much is price vs. volume? - Management indicated that the majority of the sales guidance increase relates to volume, driven by strong business fundamentals [54] Question: Progress on passing through cost inflation? - Management noted that while they have taken multiple pricing actions, they have not fully realized all pricing impacts yet [59][60] Question: Residential growth contribution from Tractor Supply? - Management stated that the growth was broad-based and not solely dependent on Tractor Supply, with multiple initiatives contributing [66][68] Question: Annualized inflation and supply chain impacts? - Management highlighted significant material and commodity inflation, particularly in steel and resins, and noted ongoing logistics challenges [77][80] Question: Expected price benefit to fiscal '22 sales? - Management indicated that price increases are expected to be more significant than normal due to multiple pricing actions taken [93][94] Question: Fourth quarter guidance and timing of shipments? - Management explained that the stronger third quarter impacted fourth quarter expectations, with ongoing inflation and supply chain challenges anticipated [100][101] Question: Infrastructure stimulus effects on Ditch Witch? - Management expressed strong fundamentals for the Ditch Witch business, with significant demand expected from infrastructure investments [102][104] Question: Backlog situation and visibility on meeting it? - Management confirmed that the backlog is continuing to grow, reflecting strong demand relative to supply constraints [144]

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The unaudited financial statements show significant year-over-year growth in net sales and net earnings for the nine months ended July 30, 2021 Condensed Consolidated Statements of Earnings Highlights (Nine Months Ended) | Metric | Nine Months Ended July 30, 2021 | Nine Months Ended July 31, 2020 | YoY Change | | :--- | :--- | :--- | :--- | | Net sales | $2,998,929 thousand | $2,537,853 thousand | +18.2% | | Gross profit | $1,049,106 thousand | $889,379 thousand | +18.0% | | Operating earnings | $444,120 thousand | $332,876 thousand | +33.4% | | Net earnings | $349,772 thousand | $257,505 thousand | +35.8% | | Diluted EPS | $3.21 | $2.37 | +35.4% | Condensed Consolidated Balance Sheet Highlights | Metric | July 30, 2021 | July 31, 2020 | | :--- | :--- | :--- | | Total current assets | $1,545,789 thousand | $1,384,246 thousand | | Total assets | $2,968,049 thousand | $2,813,863 thousand | | Total current liabilities | $958,440 thousand | $797,112 thousand | | Long-term debt, less current portion | $587,345 thousand | $782,036 thousand | | Total stockholders' equity | $1,237,178 thousand | $1,054,032 thousand | Condensed Consolidated Statements of Cash Flows Highlights (Nine Months Ended) | Metric | Nine Months Ended July 30, 2021 | Nine Months Ended July 31, 2020 | | :--- | :--- | :--- | | Net cash provided by operating activities | $477,135 thousand | $305,876 thousand | | Net cash used in investing activities | ($70,691) thousand | ($184,648) thousand | | Net cash (used in) provided by financing activities | ($351,169) thousand | $119,154 thousand | [Notes to Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail key asset acquisitions, a significant litigation settlement, debt reduction, and disaggregated revenue performance - The company completed the acquisition of Turflynx, Lda and Left Hand Robotics, Inc to support the development of alternative power, smart-connected, and autonomous products[34](index=34&type=chunk) - In January 2021, the company received a **$33.65 million settlement** from Briggs & Stratton Corporation related to a long-standing patent infringement lawsuit[72](index=72&type=chunk)[73](index=73&type=chunk) - During the first nine months of fiscal 2021, the company prepaid a total of **$100.0 million** on its term loans, reducing total long-term debt[44](index=44&type=chunk) Segment Net Sales (Nine Months Ended July 30, 2021) | Segment | Net Sales (in thousands) | | :--- | :--- | | Professional | $2,197,058 | | Residential | $784,852 | | Other | $17,019 | | **Total** | **$2,998,929** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes strong revenue growth to robust demand, while noting flat gross margins due to inflation and supply chain disruptions [Company Overview](index=27&type=section&id=Company%20Overview) The company's strategy focuses on growth and productivity amid ongoing supply chain challenges and strong post-pandemic demand - The company's strategic priorities are accelerating growth, driving productivity and operational excellence, and empowering people, under its **"Sustainability Endures"** strategy[104](index=104&type=chunk) - COVID-19 continues to impact operations, with **greater supply chain disruptions** in Q3 2021 limiting product availability and the ability to meet customer demand[109](index=109&type=chunk)[110](index=110&type=chunk)[112](index=112&type=chunk) - Demand has **strongly rebounded** in the Professional segment and remains robust in the Residential segment, driven by homeowner investments[113](index=113&type=chunk) [Results of Operations](index=30&type=section&id=Results%20of%20Operations) Consolidated net sales grew significantly due to strong demand and price increases, with net earnings boosted by higher volume and a legal settlement - Gross margin for the nine-month period was **flat YoY at 35.0%**, as price realization and productivity improvements offset higher commodity and freight costs[126](index=126&type=chunk) - SG&A expense as a percentage of sales **decreased by 170 basis points** for the nine-month period, due to expense leverage and a favorable legal settlement[130](index=130&type=chunk) Net Sales Growth by Segment (Q3 2021 vs Q3 2020) | Segment | Q3 2021 Net Sales | YoY Growth | | :--- | :--- | :--- | | Professional | $718.5 million | +15.2% | | Residential | $252.1 million | +23.0% | | **Total** | **$976.8 million** | **+16.2%** | [Business Segments](index=33&type=section&id=Business%20Segments) Both Professional and Residential segments reported strong double-digit sales growth, with improved earnings margins - Professional segment growth was driven by strong demand for landscape contractor zero-turn mowers and increased shipments of golf and irrigation products[143](index=143&type=chunk) - Residential segment growth was driven by strong retail demand for mowers, snow throwers, and new 60V battery-powered products[147](index=147&type=chunk) Segment Performance (Nine Months Ended July 30, 2021) | Segment | Net Sales | YoY Change | Segment Earnings | YoY Change | Earnings as % of Sales | | :--- | :--- | :--- | :--- | :--- | :--- | | Professional | $2,197.1M | +16.9% | $406.3M | +26.0% | 18.5% | | Residential | $784.9M | +24.0% | $109.6M | +25.7% | 14.0% | [Financial Position](index=36&type=section&id=Financial%20Position) The company maintains a strong financial position with increased operating cash flow and significant liquidity despite working capital challenges - Working capital was impacted by supply chain challenges, with inventory up 1.4% YoY and **accounts payable increased 53.1%** due to normalized spending and payment timing[154](index=154&type=chunk) - Cash from operations for the first nine months **increased to $477.1 million** from $305.9 million in the prior year, driven by higher net earnings[155](index=155&type=chunk) - As of July 30, 2021, the company had available **liquidity of $1.13 billion**, consisting of cash and availability under its revolving credit facility[160](index=160&type=chunk) - During the first nine months of fiscal 2021, the company **repurchased 1,733,477 shares** of its common stock[165](index=165&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=45&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company is exposed to market risks from foreign currency, interest rates, and commodity costs, which are expected to remain high - The company actively manages foreign currency exchange rate risk by using derivative instruments to hedge forecasted sales and purchases[192](index=192&type=chunk)[193](index=193&type=chunk) - As of July 30, 2021, the company had **$270.0 million of gross LIBOR-based borrowings**, exposing it to interest rate fluctuations[195](index=195&type=chunk) - The company faces significant commodity cost risk and anticipates that component costs will be **significantly higher** in the remainder of fiscal 2021[199](index=199&type=chunk) [Item 4. Controls and Procedures](index=47&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective, with integration of a recent acquisition's controls underway - The CEO and CFO concluded that the company's disclosure controls and procedures were **effective** as of the end of the reporting period[201](index=201&type=chunk) - The company is currently integrating the internal controls for the Venture Products acquisition and expects to complete it by the end of fiscal 2021[202](index=202&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=48&type=section&id=Item%201.%20Legal%20Proceedings) The report refers to Note 15 of the financial statements for details on material legal proceedings, including a recent settlement - The company refers to Note 15, "Contingencies," in the financial statements for a description of its material legal proceedings[206](index=206&type=chunk) [Item 1A. Risk Factors](index=48&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the company's risk factors have occurred since the last Annual Report on Form 10-K - The company states that there has been **no material change** in its risk factors since its last Annual Report on Form 10-K[207](index=207&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=48&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased over 660,000 shares in the third quarter, with over 5.3 million shares remaining under its buyback program - As of July 30, 2021, **5,308,779 shares remained available for repurchase** under the company's authorized stock repurchase program[208](index=208&type=chunk) Share Repurchases in Q3 2021 | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | May 1 - June 4, 2021 | — | $— | | June 5 - July 2, 2021 | 659,982 | $106.06 | | July 3 - July 30, 2021 | 836 | $111.06 | | **Total Q3** | **660,818** | **$106.07** | [Item 6. Exhibits](index=49&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the report, including required CEO and CFO certifications and XBRL data