The Toro Company (NYSE:TTC) Q2 2021 Earnings Conference Call June 3, 2021 11:00 AM ET Company Participants Julie Kerekes – Treasurer and Senior Managing Director-Investor Relations Rick Olson – Chairman and Chief Executive Officer Renee Peterson – Vice President and Chief Financial Officer Conference Call Participants Sam Darkatsh – Raymond James Tom Mahoney – Cleveland Research Tim Wojs – Baird David MacGregor – Longbow Research Ross Gilardi – Bank of America Mike Shlisky – Colliers Securities Operator Goo ...

The Toro Company THE TORO COMPANY Investor Presentation June 2021 | --- | --- | --- | --- | --- | --- | --- | --- | --- | |-------|-------|-------|-------|-------|---------|-------|-----------|--------| | | | | | | | | | | | TORO. | | | | UNIOI | | | | | | | | | | | | | | | | | | | | | 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 Private ...

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 April 30, 2021 ☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (Exact name of registrant as specified in its charter) State or Other Jurisdiction of Incorporation or Organization For the Transition Period from to Commission File Number: 1-8649 Dela ...

The Toro Company THE TORO COMPANY Investor Presentation March 2021 | --- | --- | --- | --- | --- | --- | --- | --- | --- | |-------|-------|-------|-------|-------|---------|-------|-----------|--------| | | | | | | | | | | | TORO. | | | | UNIOI | | | | | | | | | | | | | | | | | | | | | 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 Privat ...

Financial Data and Key Metrics Changes - The company reported net sales of $873 million, a 13.7% increase year-over-year, with reported EPS at $1.02 and adjusted EPS at $0.85 per diluted share, compared to $0.65 and $0.64 respectively in the same quarter last year [24][25][30] - Gross margin for the quarter was 36.1%, down 140 basis points from the prior year, primarily due to manufacturing cost pressures and product mix [29] - Free cash flow was $84.5 million with a net earnings conversion ratio of 76%, driven by higher earnings and lower working capital [33] Business Segment Data and Key Metrics Changes - Professional segment net sales increased by 9.3% to $650.2 million, driven by higher shipments of landscape contractor zero turn riding mowers and incremental sales from the Venture Products acquisition [25][26] - Residential segment net sales surged by 31.3% to $217.7 million, attributed to strong retail demand for snow products and expanded mass retail placement [27][28] - Professional segment earnings rose by 14% to $116.8 million, while residential segment earnings increased by 48.9% to a record $32.1 million [26][28] Market Data and Key Metrics Changes - The company noted strong retail demand across its businesses, particularly in the residential segment, which benefited from favorable weather and stay-at-home trends [18][21] - The ongoing effects of COVID-19 and supply chain challenges were highlighted as significant factors impacting the operational environment [43][44] Company Strategy and Development Direction - The company is focused on innovation, operational execution, and expanding its product offerings, particularly in battery-powered and autonomous solutions [16][20] - Recent acquisitions of TURFLYNX and Left Hand Robotics are seen as strategic moves to enhance technology capabilities [16][66] - The company aims to maintain strong relationships with channel partners and invest in technology to drive long-term growth [21][53] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about continued demand and recovery in professional segment end markets, particularly in the second and third quarters of 2021 [37][41] - The company anticipates net sales growth in the range of 6% to 8% for fiscal 2021, with a focus on managing supply chain dynamics and cost inflation [35][38] - Management emphasized the importance of vaccinations in navigating the ongoing pandemic and its impact on operations [17][78] Other Important Information - The company paid down $90 million in debt and returned $59.8 million to shareholders during the quarter [34] - The company reaffirmed its full-year fiscal 2021 guidance, indicating strong demand across its businesses [35] Q&A Session Summary Question: Supply chain constraints and management - Management acknowledged ongoing supply chain challenges due to COVID-19 and strong demand, emphasizing close relationships with suppliers to mitigate issues [56][58] Question: Residential business product placement and battery sales - Management noted improved product placement and emphasized the growing importance of battery-powered products, although they currently represent a small portion of total sales [61][63] Question: Impact of recent storms in Texas - Management indicated that while there were supply challenges due to storms, demand for snow products increased positively [73][75] Question: Outlook for professional business and deferred spending - Management highlighted strong recovery trends in the professional segment, particularly in landscape contracting and construction [111][112] Question: Acquisitions and autonomous product development - Management expressed confidence in the demand for autonomous products and the importance of meeting customer needs with effective solutions [121][124]

PART I. FINANCIAL INFORMATION [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The company presents its unaudited condensed consolidated financial statements for the first quarter of fiscal 2021 [Condensed Consolidated Statements of Earnings (Unaudited)](index=3&type=section&id=Condensed%20Consolidated%20Statements%20of%20Earnings%20(Unaudited)) Q1 2021 vs Q1 2020 Earnings Summary (in thousands) | Metric | Three Months Ended Jan 29, 2021 | Three Months Ended Jan 31, 2020 | | :--- | :--- | :--- | | **Net sales** | $872,986 | $767,483 | | **Gross profit** | $315,036 | $288,088 | | **Operating earnings** | $141,465 | $91,129 | | **Net earnings** | $111,281 | $70,091 | | **Diluted EPS** | $1.02 | $0.65 | [Condensed Consolidated Balance Sheets (Unaudited)](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20(Unaudited)) Balance Sheet Summary (in thousands) | Metric | Jan 29, 2021 | Oct 31, 2020 | | :--- | :--- | :--- | | **Cash and cash equivalents** | $433,394 | $479,892 | | **Inventories, net** | $675,307 | $652,433 | | **Total current assets** | $1,456,743 | $1,427,648 | | **Total assets** | $2,875,138 | $2,853,228 | | **Total current liabilities** | $819,541 | $855,797 | | **Long-term debt, less current portion** | $691,356 | $691,250 | | **Total stockholders' equity** | $1,179,722 | $1,114,828 | [Condensed Consolidated Statements of Cash Flows (Unaudited)](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20(Unaudited)) Q1 2021 vs Q1 2020 Cash Flow Summary (in thousands) | Metric | Three Months Ended Jan 29, 2021 | Three Months Ended Jan 31, 2020 | | :--- | :--- | :--- | | **Net cash provided by (used in) operating activities** | $95,025 | $(23,299) | | **Net cash used in investing activities** | $(2,086) | $(11,796) | | **Net cash used in financing activities** | $(142,989) | $(7,507) | | **Net decrease in cash and cash equivalents** | $(46,498) | $(42,914) | [Notes to Condensed Consolidated Financial Statements (Unaudited)](index=7&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) The notes detail accounting policies, business combinations, segment data, and a significant litigation settlement - On March 2, 2020, the company acquired Venture Products, Inc for a total consideration of **$163.2 million**, resulting in **$61.2 million in goodwill**[30](index=30&type=chunk)[31](index=31&type=chunk)[32](index=32&type=chunk) - In January 2021, the company received a **$33.65 million settlement** from Briggs & Stratton Corporation related to a patent infringement lawsuit[68](index=68&type=chunk)[69](index=69&type=chunk) - The company uses forward currency contracts to hedge foreign currency risk, with a notional amount of **$259.9 million** in outstanding contracts as of January 29, 2021[76](index=76&type=chunk)[78](index=78&type=chunk)[84](index=84&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=26&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management analyzes Q1 2021 performance, highlighting a 13.7% sales increase driven by both segments [Company Overview](index=26&type=section&id=Company%20Overview) The company operates through Professional and Residential segments, noting COVID-19 impacts and the Venture Products acquisition - The company's operations are classified into two reportable segments: **Professional and Residential**[102](index=102&type=chunk) - The COVID-19 pandemic has had a material impact, causing **manufacturing cost pressures and inefficiencies**, though operations have continued as an essential business[105](index=105&type=chunk)[107](index=107&type=chunk) - The acquisition of Venture Products on March 2, 2020, broadened and strengthened the **Professional segment's product offerings** and dealer network[104](index=104&type=chunk) [Results of Operations](index=28&type=section&id=Results%20of%20Operations) Q1 net sales grew 13.7% to $873.0 million, though gross margin declined to 36.1% due to cost pressures Q1 2021 vs Q1 2020 Results of Operations | Metric | Q1 2021 | Q1 2020 | % Change | | :--- | :--- | :--- | :--- | | **Net Sales** | $873.0M | $767.5M | +13.7% | | **Gross Profit** | $315.0M | $288.1M | +9.4% | | **Gross Margin** | 36.1% | 37.5% | -140 bps | | **Operating Earnings** | 16.2% of sales | 11.9% of sales | +430 bps | | **Net Earnings** | $111.3M | $70.1M | +58.8% | | **Diluted EPS** | $1.02 | $0.65 | +56.9% | - The decrease in gross margin was primarily due to **manufacturing cost pressures and unfavorable product mix**, partially offset by productivity initiatives and net price realization[120](index=120&type=chunk) - SG&A expense decreased as a percentage of sales due to leveraging higher sales volumes, a **favorable net legal settlement** with Briggs & Stratton, and reduced travel and marketing costs[122](index=122&type=chunk) [Business Segments](index=30&type=section&id=Business%20Segments) Both Professional and Residential segments reported strong sales growth of 9.3% and 31.3%, respectively Segment Net Sales (Q1 2021 vs Q1 2020) (in thousands) | Segment | Q1 2021 Net Sales | Q1 2020 Net Sales | % Change | | :--- | :--- | :--- | :--- | | **Professional** | $650,223 | $594,721 | +9.3% | | **Residential** | $217,700 | $165,848 | +31.3% | Segment Earnings (Q1 2021 vs Q1 2020) (in thousands) | Segment | Q1 2021 Earnings | Q1 2020 Earnings | % Change | | :--- | :--- | :--- | :--- | | **Professional** | $116,816 | $102,474 | +14.0% | | **Residential** | $32,108 | $21,566 | +48.9% | [Financial Position, Liquidity, and Capital Resources](index=32&type=section&id=Financial%20Position) The company maintained a strong liquidity position, improved operating cash flow, and returned capital to shareholders - Cash provided by operating activities increased to **$95.0 million** from a use of $23.3 million in the prior year, driven by higher net earnings and lower cash used for inventory[138](index=138&type=chunk) - Inventory levels **decreased by $63.7 million (8.6%)** compared to the prior year due to strong product demand[137](index=137&type=chunk) - The company **repaid the remaining $90.0 million** outstanding on its $190.0 million term loan during the quarter[153](index=153&type=chunk) - The company **resumed share repurchases**, buying back 332,878 shares, and paid a cash dividend of $0.2625 per share, a 5.0% increase[161](index=161&type=chunk)[162](index=162&type=chunk) [Non-GAAP Financial Measures](index=38&type=section&id=Non-GAAP%20Financial%20Measures) The company provides a reconciliation of GAAP to non-GAAP measures, adjusting for litigation and tax impacts GAAP to Non-GAAP Reconciliation Summary (Q1 2021) | Metric | GAAP | Adjustments | Non-GAAP | | :--- | :--- | :--- | :--- | | **Net Earnings** | $111.3M | $(18.0M) | $93.2M | | **Diluted EPS** | $1.02 | $(0.17) | $0.85 | [Quantitative and Qualitative Disclosures about Market Risk](index=44&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 - The company is exposed to foreign currency risk, primarily with the Euro, Australian dollar, Canadian dollar, and British pound, and **uses derivative instruments to hedge** these exposures[184](index=184&type=chunk)[185](index=185&type=chunk) - As of January 29, 2021, the company had **$280.0 million of gross LIBOR-based borrowings**, exposing it to interest rate fluctuations[187](index=187&type=chunk) - The company faces commodity cost risk for key materials and anticipates that the **average cost of commodities will be higher** for the remainder of fiscal 2021 compared to fiscal 2020[189](index=189&type=chunk)[190](index=190&type=chunk) [Controls and Procedures](index=45&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of the quarter-end - The CEO and CFO concluded that the company's **disclosure controls and procedures were effective** as of the end of the quarter[192](index=192&type=chunk) - The company is in the process of **integrating internal controls for the Venture Products acquisition**, which was excluded from the current assessment and is expected to be included by October 31, 2021[193](index=193&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=47&type=section&id=Item%201.%20Legal%20Proceedings) The company references Note 15 for details on material legal proceedings, including a significant settlement - The company refers to Note 15 for a description of its material legal proceedings, including the settlement of the **Briggs & Stratton patent infringement case**[197](index=197&type=chunk) [Risk Factors](index=47&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors were reported since the last Annual Report on Form 10-K - There has been **no material change** in the company's risk factors since its last Annual Report on Form 10-K[198](index=198&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=47&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased 332,878 shares of its common stock during the first quarter of fiscal 2021 Share Repurchases in Q1 2021 | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | Nov 1 - Dec 4, 2020 | — | $— | | Dec 5 - Jan 1, 2021 | 204,033 | $94.16 | | Jan 2 - Jan 29, 2021 | 130,012 | $94.27 | | **Total** | **334,045** | **$94.20** | - As of January 29, 2021, **6,709,378 shares remained available for repurchase** under the company's Board-authorized program[199](index=199&type=chunk) [Exhibits](index=48&type=section&id=Item%206.%20Exhibits) This section lists filed exhibits, including CEO/CFO certifications and Inline XBRL financial statements - The report includes certifications from the Chief Executive Officer and Chief Financial Officer pursuant to **Sections 302 and 906 of the Sarbanes-Oxley Act of 2002**[200](index=200&type=chunk)

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, 2020 or ☐ 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 8111 Lyndale Avenue South Bloomington, Minnesota 55420-1196 Telephone Number: (952) 888-8801 (Address, including zip code, a ...

The Toro Company (NYSE:TTC) Q4 2020 Earnings Conference Call December 16, 2020 11:00 AM ET Company Participants Nicholas Rhoads - Managing Director, Investor Relations Rick Olson - Chairman and Chief Executive Officer Renee Peterson - Vice President, Treasurer and Chief Financial Officer Conference Call Participants Mike Shlisky - Colliers Securities Tim Wojs - Robert W. Baird Eric Bosshard - Cleveland Research Sam Darkatsh - Raymond James David MacGregor - Longbow Research Operator Ladies and gentlemen, th ...

The Toro Company THE TORO COMPANY Investor Presentation December 2020 TORO. TRENCOR® UNIQUE 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 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 differ from those predic ...

The Toro Company (NYSE:TTC) Q3 2020 Earnings Conference Call September 3, 2020 11:00 AM ET Company Participants Nicholas Rhoads - MD, IR Rick Olson - Chairman, President, and CEO Renee Peterson - CFO and VP, Treasurer Conference Call Participants Mike Shlisky - Dougherty Colliers David MacGregor - Longbow Research Joe Mondillo - Sidoti Tim Wojs - Baird Sam Darkatsh - Raymond James Tom Mahoney - Cleveland Research Operator Ladies and gentlemen, thank you for standing by and welcome to The Toro Company’s Thir ...