The Toro pany(US:TTC)2024-09-05 16:41Financial Performance - Consolidated net sales for Q3 fiscal 2024 were $1,156.9 million, a 6.9% increase from $1,081.8 million in Q3 fiscal 2023[106]. - Professional segment net sales for Q3 fiscal 2024 were $880.9 million, a decrease of 1.7% compared to $896.3 million in Q3 fiscal 2023[106]. - Residential segment net sales for Q3 fiscal 2024 were $267.5 million, an increase of 52.6% compared to $175.3 million in Q3 fiscal 2023[106]. - Net earnings for Q3 fiscal 2024 were $119.3 million, or $1.14 per diluted share, compared to a net loss of $15.0 million, or $0.14 per diluted share, in Q3 fiscal 2023[106]. - Adjusted net earnings for Q3 fiscal 2024 were $123.7 million, or $1.18 per diluted share, compared to $99.4 million, or $0.95 per diluted share, in Q3 fiscal 2023[106]. - Gross profit for Q3 fiscal 2024 was $402.8 million, an 8.2% increase from $372.4 million in Q3 fiscal 2023, with a gross margin of 34.8%[109]. - SG&A expense increased by $14.5 million, or 6.0%, for Q3 fiscal 2024 compared to Q3 fiscal 2023[110]. - International net sales decreased by $16.8 million in Q3 fiscal 2024, primarily due to lower shipments of both Residential and Professional segment products[108]. Shareholder Returns - The company returned $221.8 million to shareholders through dividends and share repurchases in the first nine months of fiscal 2024[106]. - A cash dividend of $0.36 per share was approved for Q3 fiscal 2024, representing a 5.9% increase from $0.34 per share in Q3 fiscal 2023[135]. - During the first nine months of fiscal 2024, the company repurchased 1,178,074 shares, with 5,771,417 shares remaining available for repurchase[136]. - The company expects to continue paying quarterly cash dividends and repurchasing shares throughout the remainder of fiscal 2024[135][136]. Debt and Liquidity - As of August 2, 2024, available liquidity was $818.4 million, consisting of cash and cash equivalents of $221.1 million and availability under the revolving credit facility of $597.3 million[132]. - As of August 2, 2024, total long-term debt is $991.9 million, a decrease from $1,061.3 million on August 4, 2023[133]. - The company has a $600 million revolving credit facility with $597.3 million of unutilized availability as of August 2, 2024[133]. - The company is in compliance with all debt covenants and requirements of its credit agreements as of August 2, 2024[133]. Operational Efficiency - The company announced the AMP initiative, aiming for annualized cost savings of at least $100 million by fiscal 2027[104]. - The company launched a significant productivity initiative named AMP in the first quarter of fiscal 2024, which is expected to enhance operational efficiency[143]. - Non-GAAP financial measures are used to assess liquidity and operational performance, providing supplemental information to U.S. GAAP measures[138]. Tax and Earnings - The effective tax rate for Q3 fiscal 2024 was 17.3%, a significant decrease from 47.6% in Q3 fiscal 2023, primarily due to prior year tax impacts and a favorable geographic mix of earnings[115]. - Adjusted net earnings for Q3 fiscal 2024 increased by 24.2% per diluted share to $123.7 million, or $1.18 per diluted share, compared to $99.4 million, or $0.95 per diluted share, in Q3 fiscal 2023[116]. Market Risks - The company is exposed to market risks from foreign currency exchange rates, interest rates, and commodity costs, which could affect earnings and cash flows[147]. - The company is exposed to commodity cost changes, particularly in steel, aluminum, petroleum, and natural gas-based resins, which are critical for manufacturing[152]. - The company may increase product prices to offset changes in the cost of commodities, components, parts, and accessories[154]. - The company faces potential declines in gross margins if commodity and component costs increase without effective pricing strategies[154]. Receivables and Cash Flow - Accounts receivable increased by $141.6 million, or 36.2%, as of the end of Q3 fiscal 2024 compared to Q3 fiscal 2023[127]. - Net cash provided by operating activities for the first nine months of fiscal 2024 was $329.8 million, up from $154.7 million in the same period of fiscal 2023[129]. - The net amount of receivables financed for dealers under the arrangement with Red Iron decreased from $2,160.8 million in August 2023 to $1,882.3 million in August 2024[137]. - The total amount of net receivables outstanding under the arrangement with HCFC and other institutions increased from $187.2 million in August 2023 to $228.5 million in August 2024[137]. - The company is contingently liable to repurchase up to $30.2 million of inventory related to receivables under inventory repurchase agreements as of August 2, 2024[137]. Interest Rate and Currency Management - The company has a gross fixed-rate long-term debt of $524.2 million and gross variable rate debt of $470.0 million as of August 2, 2024[151]. - The company does not use interest rate swaps to mitigate interest rate fluctuations, indicating a conservative approach to interest rate risk[151]. - The average contracted rate for foreign currency exchange contracts as of August 2, 2024, indicates ongoing management of currency risk through derivative instruments[149]. - The average contracted rate for buying U.S. dollars and selling Australian dollars is 0.6632, with a notional amount of $92.4 million[150]. - The average contracted rate for buying U.S. dollars and selling Euros is 1.1074, with a notional amount of $177.1 million[150].