The Toro Company (TTC) 20 Dec 232023 Q4 Earnings call transcript

Good day, ladies and gentlemen. Welcome to the Toro Company's Fourth Quarter and Full Year Fiscal 2023 Earnings Conference Call. My name is Val, and I'll be your conference coordinator for today. [Operator Instructions].

As a reminder today's call is being recorded for replay purposes.

to Treasurer presentation of and and Relations. like host, to Global now Investor Kerekes, Julie Senior would turn over the today's Tax I Manager, Director Please Ms. proceed, Kerekes.

good and Thank everyone. you morning,

this Our earnings found the thetorocompany.com. Information Investor and website, copy of corporate can in our morning, section release be a issued was

with fourth investor general presentation. posted We presentation supplement updated have a also our an to earnings quarter earnings release, along

Chairman Officer; and President On Jeremy Chief Officer; our Rick call Relations. Vice Financial today Angie Investor and Director, Olson, Chief and are Steffan, Drake, Executive

We begin with our customary forward-looking statement policy.

factors make call, we estimates and business statements this and and acquisition-related as During that plans regarding weather, customers. other projections assumptions the will operating may includes forward-looking This impact technological, regarding well as acceptance, economic, future. our our results financial for market and and

are the aware statements. difficulties, uncertainties and of risks making predictive all You inherent

SEC those well important materially actual forward-looking release from as update risk Our not we our predictions. have a that statements. do as results may factors the duty earnings detail our to in note Please cause our some that of differ our to filings

to In and of believe results earnings for this present non-GAAP measures in our measures measures our useful financial views measures we certain our reported cash will release addition, We in considered business. ongoing management these performing well applicable substitute be to can how financial the investor presented on operating release to may as call. be historical our and GAAP and as the measures understand should website a financial meaningful and past and performance our filings. in financial superior operations of presentations measures. flows GAAP financial the earnings of during found comparisons this or Non-GAAP be our SEC non-GAAP call, Reconciliations reference in in

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

increase grounds demand as segment This the demand half an morning, strong channel weather and line much sales earnings We environment. and share exceptionally net a specialty that includes golf homeowner while the destocking led output. taken of saw good offset strength the our This and later and double-digit to we robust dynamic the by sharp of on delivered second performance reduction combination Julie, per residential throughout macro Thanks, professional and acceleration production growth year. during everyone. products underground diluted top adjusted fiscal actions and businesses, factors our and operating and and -- across and full construction driven for year. professional for year growth segment to an of in of

strength adjusted as total the of partners. talented with team year's of record our channel Even and sales earnings testament $X.XX $X.XX these to results. factors, dedication a and our well share the significant employees billion of benefits both and the as exceeded diluted net is our last valued company This portfolio of per of extremely

enterprise. the prudent for outlook This the quarter actions down order diluted exceeded on swift our in For products lawn fourth for third output and businesses current backlog, was year result management $X.XX, markets. than quarter, We drove expense we various million $XXX across with of to Adjusted and align decreased our last with of shared share as expected. gains productivity increased although net conditions elevated output a year care the lower of compared were earnings call. the to per sales ago our

dynamics. to restructuring addition, headcount In were actions adjust these for taken industry

by results I'll segment. our full year highlight now

all top of solutions. lawn the growth care the a segments, line on segment year-over-year contractor-grade net across for fiscal businesses We X%. up sales For strength basis, in demand professional were capitalized exception continued delivering with XXXX, on of much

and grounds for output Importantly, to and golf us enabled underground specialty chain products. a manufacturing increase supply construction stabilizing and

As were times to able lead a better we our serve result, and improve customers.

in branded for number the factors. uncertainty Residential patterns sales XXXX we navigated in demand down a interest unfavorable with distribution of rate annual stores are strengths along delivered as period the selling positioned performance pandemic. patterns following Toro rates, continued as believe macro normalization residential demand our this we products a average we trusted segment year, XXXX. and capitalize result weather economic XX% beginning an increasingly with full at to Lowe's since products season. innovative These exceptional rebounds. these of the on and sold fiscal our market further is even On To put well X% line factors in have perspective, spring segment were with a that of to nationwide robust are during of This the this channel. to homeowners products of growth available brands, excited net time include of rising note, the has We this upcoming

consistent total and record and positive financial each. growth, enterprise year, Throughout the of results business excellence and advanced deliver profitable company stakeholders. long operational all for sustainable priorities The we people. our managing X a examples productivity has driving highlight value strategic to empowering the accelerating of track of strategically I'll

First, innovation key leadership, company strengthen is our which our to the and of to driving continue profitable growth. long-term we lifeblood

trends, in directional launch investments largest world's drill. with During the the the aligned year, the as products of growth we such new ATXXX, horizontal all-terrain prioritized market

our to in customers. our and bolster this construction underground and market uptime the productivity with to drive continue for market solutions We new increase other leadership designed

customers vehicles Recent our gas versatility performance. options Vista and both This in built balance of include portfolio. energy, with mover solutions. development and line line lines leveraging transformational autonomous technologies examples of strong broad Both supported people increased battery sheet and utility our also our smart sustainable are with technologies available vehicles expanded in connected and Workman of all new options. and Our reliability. across alternative on includes productivity, the investments These kinds for provide no

near-term costs quickly in across align environment. operational manage Second, we drove a productivity with excellence demand and changing we organization as and the production

a into this named initiative. We've launch AMP, momentum multiyear our this productivity which transformational carrying maximum productivity. initiative, amplifying for are our We XXXX stands of recent with

route-to-market We are supply dedicating resources value implement to transformation. and designed and to identify sustainable based

this more expect to annual reinvest further long-term than by portion initiative fiscal and business in savings XXXX. major million of accelerate in A to innovation intend cost the growth. result we incremental to of this, $XXX We

And way. In third, to employees nimble their supported that our played customers much originally ensuring unwavering focused possible on to team than were our our and year differently partners for empowered remained best and stakeholders. with do right the expected, channel out that the drive business and all commitment aligned outcomes a

and to capitalize construction in on to continue the and have in strong sustained end our markets. ability to growth the to call like specialty This our markets. rebound demand Before over reiterate businesses attractive grounds confidence we golf the our opportunities of eventual I Angie, I'd hand seen the and and in includes homeowner we've underground high

the quarter our will [ and rents details Angie XXXX through of ] that, walk our guidance. fiscal fourth With

good you, Rick, everyone. Thank and morning,

Our $X.XX. was results restructuring $XXX.X of share saw quarter our down year. last year. to $X.XX decrease their we $X.XX in reflects program EPS several out was $X.XX the down and Consolidated fourth continue related quarter a October. momentum to million the from in Reported per [ ] The last close quarter net were to the per was EPS expectations, diluted ], sales we businesses from aligned $X.XX year. strong were [ fourth a with compared a XX.X% share, of the diluted initiated and in $X.XX Adjusted charge for

inclusive of share, per This year, the per was billion $X.XX. basis, EPS This from Reported of For $X.XX up result and diluted charges diluted last billion $X.XX share. adjusted On $X.XX from compensation. full EPS net stock-based $X.XX about X% impact sales compares restructuring and impairment of $X.XX year. tax was year up to were year. the full an was last noncash

Now lower higher grounds and net sales were to the segment floor $XXX.X year-over-year. and primarily million, of snow shipments shipments and and and care equipment. driven long equipment the products decrease was segment of XX.X% by underground offset fourth specialty contractor-grade results. for products by planning costs. golf construction quarter increased This was This partially down Professional

fourth that increased expressed million to When sales billion as year, Professional resources, segment down full total for year. sales. and on the $X.XX net were million $XXX the comprised X.X% company segment quarter earnings of XX% For professional last were was to the of from net and product $XXX.X last by increased planning floor to This year. mix. due The offset material favorable productivity compared earnings percentage primarily change XX.X% XX% costs. net partially sales a was sales, lower segment higher and improvements loss,

in million. 'XX million full compared were of charges $XXX The gross fiscal noncash $XXX.X results segment $XXX fiscal impairment to year, For XXXX. the professional earnings million include

driven primarily offset net last broadly lower XX.X% were benefit earnings Residential net of percentage across to year. by $XXX.X for year. a last the As net segment, down sales, sales were partially XX% to XX.X% of shipments compared realization. segment price decrease of the the The fourth was quarter compared million, products segment by

decrease net sales, driven and material inventory to by earnings This segment million realization, company The percentage compared lower partially million sales $XX.X lower net by was compared sales. price as reserves, year, product billion $X.X offset the and XX% sales higher were productivity last in $X.X of to Residential year. and When the for for the X.X% quarter of unfavorable total volume. benefits primarily full comprised and XXXX the net segment last was residential segment mix $XXX.X of expressed For net earnings compared year. the were year-over-year X% improvements were fiscal to million a costs.

the year, XXXX. million For Residential million to full in $XXX.X fiscal were $XX.X segment compared earnings

X.X% fiscal sales, As of a segment net percentage in to XXXX. XX.X% earnings compared were

Turning results. to operating our

quarter. reserves driven to last by XX% differences product gross margin were inventory mix. the respectively, The Our higher improvements partially costs and material by same adjusted XX.X% reported compared the and respectively, primarily and offset This and year. productivity XX.X%, for XX.X%, were favorable period and in

and driven in full XXXX. result and the increase positive the grew year, in of offset and last net realization XX.X% material price lower net research sales a the same respectively, lower partially by to and quarter reported partially costs. in higher by and was net This engineering. This improvements, was driven This This primarily period compared margin XX.X% gross increased XX.X% for by as percentage costs. was from primarily expense by XX.X% XX.X%, to XX.X%, was investment productivity offset SG&A was adjusted For up and respectively. sales year. fiscal warranty

XX.X% of compared SG&A year, percentage the year. XX.X% a sales was For full to as net last expense

period a quarter These were a percentage Operating in the compare same as and basis. fourth adjusted an reported of XX.X% were XX.X% sales on to for adjusted on net X.X% earnings and year basis and last XX.X%. the

percentage the For net XX.X% operating were basis, earnings and on in compared as were both an XX.X%. sales year, adjusted to of These a XXXX. full X.X% fiscal

$XX up $X.X $XX.X increases for for million, expense the up the due interest was million. period higher the were year-over-year same average million million, The was quarter to full primarily Interest year Interest year. from last rates. expense $XX.X

stock The for was effective reported deductions higher XX.X% compensation The rate compared primarily and XX.X% the XX.X% for rate compared primarily the last was of quarter adjusted fourth excess mix by difference The to tax quarter geographic effective was due increase in with earnings the tax year. The benefits of driven year-over-year for was year tax earnings. the geographic as period. prior the recorded tax mix with year. XX.X% fourth last

full the respectively. fiscal were XX.X% reported in XX.X%, to tax This XX.X% and adjusted the For rate XXXX. and year, and XX.X% effective compares

supply the levels stabilizing goods. offset by primarily payable inventory XX% were work in year-over-year, enabled process X% was receivable up year-end. This primarily sold Inventory goods by $XX higher $XXX down by driven was improvement a reduction terms from third and Turning driven partially $X.XX and to a due of quarter, improvement by million, from driven billion, was payment in finished finished environment. decreased a year balance end were for purchases. process work homeowners. was of to as This by to international million sheet Accounts a higher compared to demand largely with down XX% in primarily up million, products in last ago, sales. year. increase to $XXX the in compared year both ago Accounts Sequentially, our material

Full which as earnings reflects reported ratio of cash was $XXX.X million, net of XX% flow a year free conversion expected.

an was continued result. capital this While from fiscal to affect XXXX, improvement working elevated the

conversion average fiscal XXX%. For historical of expect XXXX, our about we to to return rate

our sheet strong. remains balance Importantly,

X with investment-grade leverage financial This, to well ability range Xx. ratings, Our long-term the of credit gross that target drive sustainable within investments debt-to-EBITDA fund ratio along is our provides growth. our to

goals. and organically repurchases approach and in allocate strategic to include: leverage through share our our continue to which our We capital dividends disciplined business making with and maintaining returning drive and profitable acquisitions, cash consistent long-term growth, priorities, through shareholders to investments both

priorities expenditures regular these the investments, to capacity of for million support million. to is million new year, share and commitment our return advanced manufacturing growth, including: of of deployment demonstrated payments that by capital Our dividend repurchases $XXX million technologies product our $XX to this through actions fund of $XXX and $XXX shareholders and

We Board recently the for a XXXX. dividend are quarterly increase of pleased that approved fiscal regular our our first X% in quarter

As we attractive number growth are to market well look long-term encouraged be In play. in XXXX, continue each markets. end believe we our of drive leadership we be near there term, and profitable ahead fiscal to in to our positioned to the a continues of factors by

has inventories some expect dealer these caution residential elevated expanded this mass channel. been contractor-grade from continued care the our of inventory in there headwinds last will of since and help we incremental Of peak. levels consumer products growth reducing anticipate First, progress quarter's from long offset note, We products. and field

specialty with remains driven we much do key construction are backlog are existing components, to solutions than This billion Second, and be leveraging footprint ended by and we capacity so. and demand underground supply With fiscal we equipment. increased typical. production golf which our our a for flexible XXXX and to enabling the are order of strong experiencing a higher more continues grounds manufacturing $X stable

this improve will allow customers. times expect our to us lead better We and serve further

field driven of products by fiscal heading last third, inventories into totals year. lower-than-average year, snowfall as the expected, were the And elevated snow new

our has current early snow providing this been we fully for has fiscal and visibility, following on the this snowfall to guidance backdrop are season based play While XXXX. With light. yet activity out,

expect growth with our low being For total the and we QX quarters. single-digit net year, full company sales QX larger

rate at the average. professional total For than the grow a to company net segment, we expect sales lower

For than net a higher the at the residential total segment, we sales company expect average. rate to grow

of full sales year, earnings be for expect to at net higher year. profitability, adjusted the percentage than overall last as slightly operating Looking we a

the segment than category We expect anticipate normal to expense margins a XXXX. expect compared both to higher the And higher earnings activities that, also other be more return with We residential reflect year. to professional fiscal compensation. and incentive we last to

adjusted Turning margin. to gross

a improvement. We slight expect year-over-year

be by we we productivity $X.XX by contractor the in care adjusted partially $X.XX We long range manufacturing continue inefficiencies as and offset levels. share. EPS to this expect this anticipate backdrop, rate to of per equipment to initiatives, driven year With residential inventory rebalance full diluted

expenditures million, XX%. about adjusted $XX $XXX the full Additionally, of depreciation effective tax $XXX million. of to and $XXX for Interest year, about of amortization we of capital million about expect expense about an million rate and

XXXX. anticipate Turning to double low digits year-over-year. quarter fiscal sales the first of total net down be company We to

our quarter a sales comparison. reminder, so fiscal grew the first a in difficult As XXXX, XX% of net

the double net We the be year. for expect professional to to sales and first low last down segment quarter also digits compared same residential period

lower we to Looking adjusted period be expect at margin the the profitability, for quarter, same year. last first total operating than company

year-over-year basis. adjusted first lower quarter margin to meaningfully lower. the fourth fiscal on Overall, sequentially diluted our be EPS a be lower professional to and we share slightly modestly quarter segment earnings to margin from fiscal earnings of expect and XXXX the XXXX. the expect be segment per We residential

We are to confidence with looking XXXX and fiscal forward optimism.

and is supply supported balance sponsor executive expects the This to personally and for AMP, certain unlock As sheet. stable by initiative. excited a this environment am I with with more opportunities possible team our made our significant about benefits

for our We for stakeholders. long-term drive build growth, continue profitable remain value confident business we to to sustained ability our in all and

turn that, back call I'll Rick. With the to

you, Angie. Thank

remain leadership market strong. and fundamentals business Our

agility seasonal long a of and and and a track through managing situations Our resiliency. of record team with proven fluctuations has macro range

equipment, improve help and production supply in golf and period of exceptional specialty flexing times. we and stabilizing to During with underground continue grounds for demand to agility us expect our construction this and lead upward

rebalancing we position expect of help well channel will navigate and care our recovers. resiliency demand solutions this us current and for Additionally, the long homeowner as us through market

as policy well confidence monetary consumer geopolitical spending business actions and inflation, environment. in We watching are and patterns the closely as

market our is in leadership the This support some created homeowner us markets trusted believe drive and and long-term by headwinds, results. extensive reinforced networks. we to rebalancing brands positive While leadership our distribution near-term products, has innovative positions well-established

the replacement cycles continued from expect products. also essential our We efforts and of regular nature

now our I'll could markets factors affect results. on comment in future that end

end-user to For construction, public and underground robust. supported aging private infrastructure, to specialty is as increased and all energy by we address demand and remain expect This access broadband spending issues build-outs. alternative such

comprehensive and these repair, rehab channel equipment with most in as We needs are helping and address well our industry, lineup the the new on solutions trusted including replacement. focused as customers for innovative installations our

momentum demand strength just in played. For grounds not U.S. new global. golf, is sustained expect a in momentum and trend. driven by It's continued This we golfers

market example, of And we outside both XXXX, company are and in rise provider turf as XX% there the tremendous on-course irrigation North Rider are both. positioned in our selection the in the number golfers our This solutions, example We're An is irrigation since XXXX. equipment uniquely and for For is only leadership this honor. has the markets through an of Cup maintenance space. we offer in official America. participating a been the leader to global

no grounds, municipalities growth with decades CapEx exhaust and our the category of public we including utility of solutions X of options base. us product more line configurations. vehicle work battery and on for than success a available new proven mover in in a opportunity multiple vehicles gas-powered budgets people developing built prioritization continued An innovative Vista reliability is in The and expect zero This of foundation example is on we focused new these that productivity, green drive compromise remain spaces. on our and on emission healthy the alternatives trends, performance. with For

to product year's X-foot BOSS eye steel our box to inventories. plate keeping including in on contractor to would snowfall new normal file more a as management, of be clear new snowfall below-average return snowfall steady elevated large we storm and effectively continues expect of We're that amounts leadership to demand Blade and market cadence A an aimless launches subdued activity attachment. this resulted in snow. last designed continue positive. files our are following For more XX-inch quickly Ventrac Both enhance position our field

demand conservation. we spending, and importance The irrigation watch highlight across and continue geographies lighting, last patterns weather market trends. housing the and from uneven conditions the drought commercial of many residential water to consumer expect For year and over contractors

We are address in in WaterSense honored our of need. the education our We to EPA committed ninth Award receive to for and were designing consecutive solutions through outreach. that October use this our efficient promoting efforts water

For weather irrigation, prices, indicators expect stable we as and agricultural from key patterns are rates. such micro demand growers interest and crop specialty monitoring

to continue including by We efficiency. automated expanding productivity market our end-to-end engage of our drive offerings, position and that development increased our solutions

For demand with expect retail sensitivity. price contractors, we landscape some steady

be expect Equally done our that work more We less high important support continued interest high with solutions to is to productivity, our best-in-class service labor capacity contractors in allow and resources. network.

expect For have continued driven we by factors homeowners, caution discussed. the macro we same

homeowners, along essential be a would given replacement we these and both contractors and products. watching position, favorable as remain believe average markets precipitation to these are us with levels and the we early temperatures patterns of regular leadership normal landscape for return cycles nature For the spring. our Despite more dynamics, weather with recent excellent an

high value term. long have for ability in confidence stakeholders the drive our all We over to sustained

on and drive in prudent in This and adjust and our will capital We production current we investment are we margin which long-term decisive disciplined productivity focused that believe the our to and cost delivers excellent AMP, allocation includes benefits. actions near- environment demand are structure and taking returns.

strategic productivity our driving actions of always, and by excellence accelerating guided people. are and As operational growth, our enterprise profitable empowering priorities

I partners to going enhance and happy day our and safe also note, I gratitude that and shareholders for of would like beyond customers a like sustainability thank my would our I channel to above to to wish productivity everyone the beauty, season. holiday land. your for employees and help and continued every On support. the extend customers

call the questions. open that, With for we up will

[Operator Instructions].

Our comes line Darkatsh first of question James. of the Sam from Raymond

to Three this topics, could, if explore morning. I

the first the that within then market, is April Lowe's if that, the of how the the help much, to for residential guide, the resi quarter -- quarter effects of Or an at within the you regarding you all, quarter? when do guidance load-in the if Lowe's you the And so more what market incorporating does for dynamic? First, related -- year? are net your what effects exclude

we'll to quarter. regard clear There answer it's Well, the question of of And Okay. effects first but start second in the impact Lowe's. be -- it residential would With shipping is to the Lowe's first. have significant it's Most benefit the quarter, be the first process will a the in that more most quarter. I'll the of second significant will overall. -- be in net hopefully, the

Right.

benefit the the for out if Lowe's residential are then the So 'XX base what within net when anticipating guidance you again? you back of market for your --

feel within net because But of Yes. do point. in seen go ] And It would summary [ the we've retail signs from a are guidance field at positive included through that be side. that those some are our will XXXX. ops a kind of standpoint all forth, inventory we adjustments this period on residential the so and the

it's really what's channel excluding the them. between a and So lows in us of matter

we that then certainly to residential. our manufacturing rebalance and we'll we field start poised but to grow year in that with kind can that the our align our Higher inventory, continue of Sam, share to inventory, so are demand

Got you.

if Second seeing give could year-on-year basis? backlog, that orders color last mentioned of $X And then topic, the you're And on late? cancellation you versus then sequentially to order you experience the around is quarter? What that related some that billion. growth a

from third slightly down $XXX And Yes. Starting question quarter. sequentially down the quarter information backlog the third year-over-year. with from for year-over-year our is your about million is

second then really of down actually of bumped first a and XXXX. quarters up down. XXXX second and in step the And in the half stepping So slightly

from mainly chain. years. out hard So couple reflects That's we're the our plants output supply first net bite of something we the additional have significant made that of last It backlog healthier on. and working the probably the in

with backlog. So situation that's the

and orders trends seeing what Rick? cancellations, are there, order you And

to at cancellations order and a strong point. very minimal very order Minimal, continue this have flow

net the actually, about backlog, but last the is of seeing of orders quarter, we those XX it's the You're actually talked improving. impact I think

we're that some just that's reduce to orders, But you our and new the they our balance are see. being time. their open make the the most long-term sure of our situation really important because serve for replaced order is fulfilling customers, us So them we orders by net goal is in expected to

apologies. obviously couple I'll Got you. and My topic months going have of final been defer Steel prices to then or others, batty past over the so.

As fiscal it related your down And for your stands you or is raw what right cost as material same accordingly input to now, things up, then do stand. 'XX? anticipate stack the that, pricing

Yes.

stabilizing, are although for work When demand. but So been price steel and prices kind returning to to our F to the in year, to we 'XX, our commodities it are have of guidance. expect we normal are comes cost, really our see have the we considered certainly benefits -- average that are to our watching productivity X% throughout our continuing some We on do X% production to pricing. we aligning

seeing and variances we're continue. And inefficiencies manufacturing so some

holidays Happy helpful. entire Very to team. your

Sam. you, to Holidays

One moment, please.

Our from line Tim Wojs. of comes next question the

line is open. Your

some there underground maybe the thinking landscape that got to way of guess guide kind know kind give how subcomponents, And professionals to is there. to the there's for in company, you've start total lower there? professional grow the to where within growth business Maybe some business. I of maybe confirm us you're then visibility than kind confirm, fiscal going just of it's the of in you embedded color whether golf expect a to of the and but 'XX? do the I just in what's and just off I that backlog be want to And it's positively

to expect of the slightly back piece range to expected of important And question year-over-year. outcomes. Sure. the part professional within of first segment business Well, grow second your we part to the the is it's all, of do professional a the the understand, first question,

high where we point. areas have that this at the with on back So coincide order

our that's So throughout all mainly improved something output steadily continued grounds, driven by or last we do construction, in year. And this increased underground expect improved that growth, plants.

the the entered new chain a we with with into place So better supply year our much plants. at

rebalancing go the end if of And we channel. you spectrum, the expect within continued the do to other

landscape contractor landscape the contractors. side, On the especially customers homeowner to related

part So commercial the lease talking ] portion there. [ the that we're about more would be

the through to acting residential So rebalancing, that's probably going similar more markets. to go

Okay.

Okay.

mean pretty sounds there's meaningful is factored between pretty guidance? into the a a I there what's kind two, -- So it like gap least of at

It's growth a expected of about. the I ends spectrum, two meaningful range that the two talked between

Okay.

to Okay. improve perspective? we AMP, normally from Or kind on in? understand. what incremental than program things that supply is be margins? would of -- then expect chain a incremental this you'd margin annualized guess, do of support I this that to phase that And something on something I different Good. does guess Like doing to product I how is kind you'd kind sure design basis this to make And purely normalized just of incremental the just that what just is and to more normal how things productivity. guess be I'm and around an like the just like I I'm trying

Yes.

really history. productivity. think drive I -- supply allow to for chain over on our and more It is have initiative, I'd this time ever us X with, an has start transformational intact. be that been in done remain what will able is different productivity incremental. a and it because focus we than So It employee the really which so AMP will initiative largest is initiative that PTC's our do we've really improved to

we and and X. run probably by XXXX, savings to in cost margin which So normal gross will rate million productivity in is time, savings savings get to accelerate our $XXX over the seeing be that X majority expect our the of goal do annual to years improvements. incremental come And

Okay.

then And just helpful. one. That's Okay. last the

of little a Anything or either the rest about color us think fiscal the as of perspective? we of expectations. an on bit think gave fiscal of kind a QX revenue the You to EPS else cadence 'XX, in from terms about

Yes. Sure.

remarks, for adjusted is prepared half typically our [ the if it to this cadence is QX of half in typically about in it said be. it we QX and quarter. you than first kind ] in the we EPS, think as the second our But So are and higher expect

Okay.

appreciate good. color. I Sounds the

One please. moment,

line Tom comes question King. next CL Our of of from Hayes the

Rick, maybe bit. just a little

may your on rental to you go in your prepared because remarks, channel we've is think maybe right where the wanted weakness have now? but in just heard thoughts I channel, back mentioned some the I just

healthy. XXXX driver rental us category the but place adjustments in for see channel taking Obviously, that perspective, healthy continue an still by and and us. our from as strong. very for very continues It's a customer, to are business a -- there be by order strong we to was individual be But positions been it

inventory then on it's to a other are the feel And the but just lawn the maybe some questions, now? the think few we're on know in field maybe Do of end the as just of you additional care. midpoint just, professional where level of you field on or the kind and levels I inventories come up Okay. we kind closer far than right destocking kind residential your as of color

for point. time where given from the it's would this at them at Field off of inventories really we meaningfully Especially spring elevated this products, like still see season to are year.

see start So that to flow -- spring the we're get until through see in North America, going to momentum. retail not into where the major we'll we

season had is a but our a provided built year, last Not guidance year. so into Snow higher. we relatively far off it. this snow still So great all that's poor as higher. to start We

Okay. -- just ahead. Maybe sorry, go a

grounds golf still one specialty things. construction and last businesses. very low, thing the and is Pro field the for regarding of Tom, just side on low historically inventory underground,

-- demand is So once that a with found still to needs refilled and the that's be channel supply. balance

along guess, I case? last for sounds I and lines your good the would that that it I pretty last felt municipal golf-related a budgets similar Is think revenue remain It ground and solid Okay. you that the time of opportunities. and be is. the that you like point, indicator you indicated talked, still

courses. golf in has golf been the just That's this still just access growth some I'm at looking the morning in participation case. strongest information actually and municipal

be access that strong green from with for And So to the investments. to early adopters positioned Budgets of really I emission with spaces well have and be ] making tend golf really [ municipalities guess to we've has open made a last be the would municipalities. strong in continue standpoint. to zero prioritized piece investments courses volting us those that the products that

So it really good from a standpoint. in puts a us position municipal

next question Longbow of McGregor David Research. the from of line Our comes

Your line is open.

could just arguably, business, of come for the to question most a to addition and mean, little XXXX is bit the Sam's back maybe for But just addition event if Lowe's ask it you tremendous maybe I a enterprise. the important I which is the differently.

of single-digit or Within incremental business reductions other box be the will the growth what's your low the dilutive accretive revenue contribution to expected margins? partners? And net Lowe's likely incremental this business XXXX from guidance, retail to big

we the Net, to break don't of down specifics mix. the

think We it -- well. about and network you our the if major ports just also as dealer through goes

the key. into bringing even were not that there of other are kind that really So are here equation elements

a business healthy. continued net dealer but for grow has be the overall business. It's the Our very time. some benefit for to Lowe's residential will with -- And been

Our our desire with is all grow of to to continue partners.

So to with positive be and would net our -- residential. work gas with of And product effect Lowe's that, for for to all for a that on differentiated every dealer them. work to mixes we will grow look partners continue but continue

speak you I've a to the incremental can Rick, margins? got to or business is accretive And And whether follow-up. dilutive

direction. consistent. a be swing either It's big not Should in

in for best are estimates that, David, included guidance. our Yes. And

Okay.

the forecast in want make On business, Lowe's sure down I if is XXXX. exclude EPS just that the you I'm reading XXXX to surface, profile. looks it like versus your

Yes.

working variances some manufacturing our and get We that still through rebalancing to are of inventory. we're I mean --

we've I and with our backlog you if business in seeing got what homeowner volume. businesses we're and continuing overall look think doing this through. EPS, work within So at professional of course, that well our out And that, it's that offsetting are the to demand we're proving

is cash maybe in -- going just conversion. flow And my you there through question of I if capital looks down was $XXX that It like could XXX% million on it XX% order drivers things if down, million, in $XXX free I'm you're us then And math, behind wondering looks this you year. it approximately Okay. there on flow help the just into magnitude. could if cash inventories of recovery follow-up the is anticipating back from free the walk working us appreciated. there? somewhere wondering Any you Or would just other reduction? are working help be all capital

Yes, reduction. to opportunity working going is at Sure. that the majority of be

continue majority you cash focus a that to to capital We want we've convert we typically, and the know, second the had in that year, half. XXX%. as So of really working effort flow sharp have And free on will the we focused last on generate that. to a

And it? close that number, you're that's at $XXX offered [ thinking million just approximation ] how about of a of that I you,

said exactly QX. our inventory And decline WIP that year-over-year I sequentially would but what you see don't be, we've inventory, if did look is sharp that focus. the at both from and know we

improvements. are we some So making

Research. Our next of line Eric the comes question Bosshard from Cleveland of

I could. couple of if A things,

of taking time. curious all, I growth, been with focused revenue you in programs just need I'm at chain company one think that back, relative enables what's are What and on. historically. this And of still business. just supply the one market, need think First I'm got the curious X-year you've is is this, that this different. like competition? this program had the I a was point going for generally the I'm different that AMP history about there there this the historically these the for guess step that the I to hasn't a with business, notably on like Is curious with different half why created there something a

Yes, Eric, one. I'll take this

This is portion point cost our out do manufacturing scale So why our difficult of within productivity pricing. if costs. period plants, time, something different. some and with of we go her base. be relative we're mentioned that's in focus is initiatives, plants, on and out if improvement. some focused really there of the think cost work, out Efficiency where a supply our laser of you the right unique that to particularly And to been it's pandemic is employee this is coming and improving supply working base remarks a we our prepared where our leverage are to of our go-to-market that can back taking on of that now able whole within to back to Angie and to with the productivity the The improve at now

It's doing. cuts So and it the we're else the helps things that other now is time. across that something we do, us everything enable perfect

I'm market different in price of product, market Is it is that that supply different that a standpoint things the for up catch need you if the for changing market relates this? terms also were just Or of able characterize you end points, pandemic from to chain. -- that is there a anything way curious that those. this during is is to kind in do and amplifies end as

an for that next initiative factor, thing competitive driven out It's announce year just I say. external number, to key by one helps for driven ]. We've factor can XXXX. it's particular being initiative But particular by to goals any we employee we'll be we'll left to it's always competitive be internal December launch X left a would stretch or is have employee more a those clarify, employee our not there that of external and we standpoint. year. from able have options of drive [ which pricing new That's nicely X to in a triggered not our us

year this at next So time.

positive was but Then wonder What a moving could lot that into that you're parts that signs also if encouragement little signs. provide we I positive that the comment retail of a seeing just made the residential, dig the a business? second comment bit. made are there retail on in within thing,

starts, and We're giving first going in to is the activity a there's little there. bit of some for at a of see We has to But this of factor retail, low of bulk And -- example, the it's biggest point, is us the so read the retail our that just but residential much improvement retail into I given a too few correlation business. what's year us products. for be more between very much of for signs wouldn't not residential portion positive. case. we just tiny that's this housing the had

too So I just positive. would not many but early signs, from slightly conclusions which draw I

the sensitive the clarity within last about was more then also normal to to the in just about that square a comment trying contractor was there than there price/mix And And a comment was I returning -- past. price comment I on realization landscape business. made more wanted with

standpoint is normal just there And your there or area, if or that, that so clarity I'm curious a return within opportunity would. something if different from price an you to on market mix within end a is in if

Yes.

to Does question? more about that But typical to X% a average price to year. talked we see the than have So less price realized the we high returning for your field others. the businesses that X% answer inventory, expect

of Half it.

get back normal? what out. getting that's more some to some to get I'm less do So trying than I you to are guess figure than normal because normal

have really I but relates a mentioned think something approach we it we often, as haven't probably to market-based pricing. to

relative total our we value. the -- is of So the that's customer features, And markets. that price in this guidance all in reflects to market innovation, get across the the the

Yes.

in. So it put would be

Michael from of Company. moment, next Davidson you. Our Thank of Shlisky line question please? One & the comes D.A.

small it the going it's to million it to figured or you on Maybe of want touch to have as program basis? -- how guess of onetime growth issue? piece R&D of a the first of of the to you kinds the said program. Do to trip these any back you'll $XXX reinvest, reductions out get as some see on will wanted any have I cash sense question. was almost you you where portion, or it large a of outset a be a secondly, you it's sense X-part all a at One have do other done to outlay kind much of Amplify go but cost I of the is,

Yes.

all time of our into really are reflected onetime beginning those and will we have GAAP get this restructuring productivity implement as we see up ramp those charges quarter office transformational We'll and be some will that as details. in earnings. we So those to we communicate over and evolve we'll set our up

we accelerating our business. Your as much areas to question our in where maybe invest back growth. profitable and our on technology want this innovation and as We intend to in reinvest of can reinvestment, -- yes, XX% do see we in in

being kind just it. rates there it grow with construction business to. when of you've seeing, guess, the you're to of you up ramping moving. get quarter in in some does on permanently you settle best very made professional golf to permanent and current additional to grounds the what some it to just of the need and I you wanted some typically last Got have market anything the production out meet backlogs any of trends conditions? think temporary they bridge down and history? then curious, capacity of all Or unground And kind other the businesses kind of so in is the got the is total follow sort and there? just was And that about do given of up Toro's I'm ordinary was doing Or there for it comments I

So the the we first part what are of effect of the your doing do. really question, results

components integrated work without was the work combination that. that and Company, our plants get incredible really supply was within team supply healthier it's base enable Toro based many of chain That our of on output. more additional to focused disciplines in a done and the So really supply on consistent

answer. break down question, the that's you really split a capacity If

areas cetera. going construction forward, in where underground growth see we in et So inflection an rate

more to are than a and to rate golf add we're instead our growth to we're know capacity We path, that structural be grounds areas growth a capacity way. capacity rate it's working not that flexible future. and in able existing would see that regret areas. In adding those different We return to support probably into the to that a historical glide in going structural we we using like typical a

looking growth really businesses those for solutions production more hours, the we're between to shifting working for, that So to we facilities, return expect cetera, traditional rates. that's that more et extended

Okay. I Thanks. appreciate holidays. discussion. Happy the

Thank you, Mike.

over showing at the call like I'd turn questions for to to time. Ms. Kerekes closing any remarks. I'm you. back Thank this no further

to quarter all wish We we XXXX your questions Toro to Thank forward Company. talking discuss season, in you, results. everyone, our in and the and for you look a you fiscal again with interest March first joyful holiday

and you conclude Ladies for this does you. today's Thank all participating. Thank conference. gentlemen,

disconnect. now day. great a may Have You