The Toro Company (NYSE:TTC) Q2 2018 Earnings Conference Call Transcript

May 24, 2018 • 11:00 am ET

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The Toro Company (NYSE:TTC) Q2 2018 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good day, ladies and gentlemen, and welcome to The Toro Company Second Quarter Earnings Conference Call. My name is Sabrina and I will be your coordinator for today. At this time, all participants are in a listen-only mode. We will be facilitating a question-and-answer session towards the end of today's conference (Operator Instructions) As a reminder, this conference is being recorded for replay purposes.

I would now like to turn the presentation over to your host for today's conference, Heather Hille, Director of Investor Relations and External Communications for The Toro Company. Please proceed, Ms. Hille.

Executive
Heather Hille

Thank you, and good morning. Our earnings release was issued this morning by Business Wire and a copy of the earnings release, including a reconciliation of non-GAAP financial measures, can be found in the Investor Information section of our corporate website, thetorocompany.com.

On our call today are Rick Olson, Chairman and Chief Executive Officer and Renee Peterson, Vice President, Treasurer and Chief Financial Officer. We begin with our customary forward-looking statement policy, as well as information regarding non-GAAP measures.

During this call, we will make forward-looking statements regarding our business and future financial and operating results. You all are aware of the inherent difficulties, risks and uncertainties in making predictive statements. Our earnings release as well as our SEC filings detail some of the important risk factors that may cause our actual results to differ from those in our predictions. Please note that we do not have a duty to update our forward-looking statements.

Our earnings release in this related call contains certain non-GAAP measures consisting of adjusted net earnings, diluted net earnings per share and effective tax rate as financial measures of our operating performance. The Company believes these measures may be useful in performing meaningful comparisons of past and present operating results to understand the performance of its ongoing operations, and how management views the business.

Reconciliations of adjusted non-GAAP measures to reported GAAP financial measures are included in the schedules contained in our earnings release. Such non-GAAP measures should not be considered superior to, as a substitute for or as an alternative to, and should be considered in conjunction with the GAAP measures presented in our earnings release in this related call.

With that, I will now turn the call over to Rick.

Executive
Richard M. Olson

Thank you, Heather, and good morning to all of our listeners. We are pleased to have delivered record sales and earnings for the second quarter despite challenges posed by spring's late arrival. Net sales posted a modest increase to $875.3 million, while reported net earnings per share grew to $1.21 and adjusted earnings per share were $1.20.

Professional products, most notably in our landscape contractor Golf and Grounds portfolios drove our growth for the quarter as Professional segment sales increased 8.1%. Our Residential segment sales declined by 17.8% due primarily to an unusually cold April in key markets. Following a brief commentary on the state of our businesses to-date, Renee will discuss our financial and operating results in more