The Toro Company last week reported net earnings of $119.7 million, or $3.10 per share, on net sales of $1.9 billion for its fiscal year ended Oct. 31. The company’s results for fiscal 2008 were reduced by a pre-tax charge of $4.7 million, or $0.08 per share on an after-tax basis, taken in its fiscal fourth quarter to account for workforce adjustments. In fiscal 2007, the company posted net earnings of $142.4 million, or $3.40 per share, on net sales of $1.9 billion.
For the fourth quarter ended Oct. 31, Toro reported breakeven net earnings on net sales of $341.2 million. In the comparable fiscal 2007 period, the company reported net earnings of $6.5 million, or $0.16 per share, on net sales of $332.5 million.
With a strong focus on asset management, the company achieved significant improvements in working capital and cash flow. During fiscal 2008, the company generated a record $216 million in cash from operating activities – an improvement of $32 million over the previous year. In addition, the company returned $133 million to shareholders through dividend payments and share repurchases. Entering the new fiscal year, the company’s liquidity position is solid as indicated by a strong cash balance and supporting committed credit facilities.
“While our revenue growth was impacted for the year due to persistently difficult domestic market conditions, Toro and field inventories are down significantly and should benefit us in the coming year,” said Michael Hoffman, Toro’s chairman and CEO. “As a result of our heightened focus around lean and asset management, and despite the soft sales environment, we made measurable progress to improve our working capital position and generated record operating cash flow.”
The company expects the weak market conditions to continue well into fiscal 2009 with even more uncertainties and challenges. “While we don’t know how deep and prolonged these difficult economic conditions will be, we will run our business in the coming year with an emphasis on driving demand with innovative new products, lowering our cost structure, and further reducing working capital through improved asset management,” said Hoffman.
Given the ongoing global economic weakness and tight credit markets, the outlook for the year ahead is more uncertain and the resulting impact on the business will be even more difficult to predict. The company currently expects fiscal 2009 net earnings per share to be $2.50 to $2.70 on a revenue decline of approximately 5 percent compared with fiscal 2008. For its fiscal first quarter, a seasonally smaller revenue period, the company expects to report net earnings per share of $0.15 to $0.25.
The Toro Co., Bloomington, Minn., is a worldwide provider of outdoor maintenance equipment and beautification products to help customers care for golf courses, sports fields, public green spaces, commercial and residential properties, and agricultural fields.
