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The Toro Company Reports Fiscal 2019 Results

December 18, 2019 GMT

BLOOMINGTON, Minn.--(BUSINESS WIRE)--Dec 18, 2019--

The Toro Company (NYSE: TTC) today reported results for its fourth quarter and full fiscal year ended October 31, 2019.

“We concluded fiscal 2019 by exceeding the $3 billion revenue milestone and delivering strong gross margin and revenue growth momentum heading into fiscal 2020,” said Richard M. Olson, Toro’s chairman and chief executive officer. “The year was marked by record results, the transformational acquisition of Charles Machine Works and strong demand for snow and ice management products in our professional and residential segments. New product introductions contributed to our growth, such as the stand-on BOSS® Snowrator®, the redesigned Power Clear® snow thrower and the Flex-Force™ lithium-ion battery-powered products with all season capability. I would like to thank our team and channel partners for their dedication, consistent execution, and continued focus on our end customers.”

Fiscal Year 2019 Financial Highlights

Fourth Quarter Fiscal 2019 Financial Highlights

* Please see the tables provided for a reconciliation of non-GAAP adjusted net earnings and adjusted diluted earnings per share to the comparable GAAP measures.

Key Performance Highlights

First Quarter and Fiscal Year 2020 Outlook

“With the first quarter of fiscal 2020 underway, we are encouraged by the retail activity in our professional and residential snow and ice management products. The fundamentals of the business remain strong and we expect to generate higher levels of free cash flow and return value to our shareholders through dividends and share repurchases,” said Olson.

For fiscal 2020, management expects net sales of about $3.6 billion and adjusted EPS in the range of $3.33 to $3.40 per diluted share. For the first quarter, the company expects adjusted EPS of about $0.58 per diluted share. These adjusted diluted EPS estimates exclude the benefit of the excess tax deduction for share-based compensation, acquisition-related costs, and other non-recurring items.

The company expects higher depreciation and amortization as a result of the Charles Machine Works acquisition and are forecasting about $95 million for the year. Capital expenditures are estimated to be about $100 million for the year. We expect an adjusted effective tax rate of about 20.5%.

SEGMENT RESULTS

Professional

Residential

OPERATING RESULTS

Gross margin for fiscal 2019 was 33.4% compared with 35.9% for fiscal 2018, a decrease of 250 basis points, primarily the result of the unfavorable impact of higher commodity and tariff costs and purchase accounting charges associated with the CMW acquisition. For the fourth quarter of fiscal 2019, gross margin improved to 33.4% from 33.2% in the prior period, driven by pricing and productivity, partially offset by the unfavorable impact of the CMW purchase accounting and acquisition-related charges.

Selling, general and administrative (SG&A) expense as a percent of sales for fiscal 2019 increased 130 basis points to 23.0% versus the comparable period last year, reflecting higher incremental expenses related to the CMW acquisition and increased engineering expense for new product development. For the fourth quarter, SG&A expense as a percent of sales was 27.5%, an increase of 230 basis points from the fourth quarter of 2018 primarily a result of the CMW acquisition.

For fiscal 2019, operating earnings as a percent of net sales were 10.4%, compared with 14.2% in fiscal 2018. Operating earnings as a percent of net sales for the fourth quarter were 5.9%, compared with 8.0% in the same period last fiscal year.

Interest expense for fiscal year 2019 increased year over year by $9.7 million to $28.8 million as a result of higher outstanding borrowings to fund the purchase of CMW.

Other income, net, for fiscal 2019 was $25.9 million, an increase of $7.5 million primarily driven by realized gains on actuarial valuation changes for our pension and post-retirement plans and higher income from our proportionate share in the Red Iron joint venture.

The effective tax rate for fiscal 2019 was 14.9%, compared with 27.0% in fiscal 2018. The effective tax rate for the fourth quarter in fiscal 2019 was 12.4% compared with 10.4% for the fourth quarter in fiscal 2018.

Accounts receivable at the end of the fiscal year were $268.8 million, up 39.1% from last fiscal year. Net inventories were $651.7 million, up 81.9% from last fiscal year. Accounts payable were $319.2 million, up 24.4% from the comparable period last fiscal year. The overall increase in working capital at the end of fiscal 2019 was mainly due to the CMW acquisition.

About The Toro Company

The Toro Company (NYSE: TTC) is a leading worldwide provider of innovative solutions for the outdoor environment including turf and landscape maintenance, snow and ice management, underground utility construction, rental and specialty construction, and irrigation and outdoor lighting solutions. With sales of $3.1 billion in fiscal 2019, The Toro Company’s global presence extends to more than 125 countries through a family of brands that includes Toro, Ditch Witch, Exmark, BOSS Snowplow, American Augers, Subsite Electronics, HammerHead, Trencor, Unique Lighting Systems, Irritrol, Hayter, Pope, Lawn-Boy and Radius HDD. Through constant innovation and caring relationships built on trust and integrity, The Toro Company and its family of brands have built a legacy of excellence by helping customers care for golf courses, sports fields, construction sites, public green spaces, commercial and residential properties and agricultural operations. For more information, visit www.thetorocompany.com.

LIVE CONFERENCE CALL
December 18, 2019 at 10:00 a.m. CST
www.thetorocompany.com/invest

The Toro Company will conduct its earnings call and webcast for investors beginning at approximately 10:00 a.m. CST on December 18, 2019. The webcast will be available at www.streetevents.com or at www.thetorocompany.com/invest. Webcast participants will need to complete a brief registration form and should allocate extra time before the webcast begins to register and, if necessary, download and install audio software.

Use of Non-GAAP Financial Information

This press release and our related earnings call references certain non-GAAP financial measures, which are not calculated or presented in accordance with U.S. GAAP, as information supplemental and in addition to the most directly comparable financial measures calculated and presented in accordance with U.S. GAAP. The non-GAAP financial measures included within this press release and our related earnings call consist of gross profit, operating earnings before income taxes, operating earnings, net earnings, net earnings per diluted share and effective tax rate, each as adjusted, as measures of our operating performance.

The Toro Company uses these non-GAAP financial measures in making operating decisions because we believe these non-GAAP financial measures provide meaningful supplemental information regarding core operational performance and provide us with a better understanding of how to allocate resources to both ongoing and prospective business initiatives. Additionally, these non-GAAP financial measures facilitate our internal comparisons to both our historical operating results and our competitors’ operating results by factoring out potential differences caused by charges not related to our regular ongoing business, including, without limitation, non-cash charges, certain large and unpredictable charges, acquisitions and dispositions, legal settlements, and tax positions. Further, we believe that these non-GAAP financial measures, when considered in conjunction with the financial measures prepared in accordance with U.S. GAAP, provide investors with useful supplemental financial information to better understand our core operational performance.

Reconciliations of historical non-GAAP financial measures to the most comparable GAAP financial measures are included in the financial tables contained in this press release. These measures, however, should not be considered superior to, as a substitute for, or as an alternative to, and should be considered in conjunction with, the GAAP financial measures included within this press release and our related earnings call. These non-GAAP financial measures may differ from similar measures used by other companies.

The Toro Company cannot provide quantitative reconciliations of forward-looking non-GAAP diluted EPS guidance to projected GAAP diluted EPS guidance or non-GAAP adjusted effective tax rate guidance to projected GAAP effective tax rate guidance without unreasonable effort because the combined impact and timing of recognition of potential charges or gains is inherently uncertain and difficult to predict. In addition, since any adjustments could have a substantial impact on GAAP measures of financial performance, such quantitative reconciliations would imply a degree of precision and certainty that could be confusing to investors.

Forward-Looking Statements

This news release contains forward-looking statements, which are being 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, and often can be identified by words such as “expect,” “strive,” “looking ahead,” “outlook,” “guidance,” “forecast,” “goal,” “optimistic,” “anticipate,” “continue,” “plan,” “estimate,” “project,” “believe,” “should,” “could,” “will,” “would,” “possible,” “may,” “likely,” “intend,” “can,” “seek,” “potential,” “pro forma,” or the negative thereof or similar expressions. Forward-looking statements involve risks and uncertainties that could cause actual events and results to differ materially from those projected or implied. Particular risks and uncertainties that may affect our operating results or financial position include: worldwide economic conditions, including slow or negative growth rates in global and domestic economies and weakened consumer confidence; disruption at our manufacturing or distribution facilities, including drug cartel-related violence affecting our maquiladora operations in Juarez, Mexico; fluctuations in the cost and availability of commodities, components, parts, and accessories, including steel, engines, hydraulics and resins; the impact of abnormal weather patterns, including unfavorable weather conditions exacerbated by global climate change or otherwise; the impact of natural disasters and global pandemics; the level of growth or contraction in our key markets; customer, government and municipal revenue, budget and spending levels; loss of any substantial customer, including mass retailers and home centers for our residential business; elimination of shelf space for our products at dealers or retailers; inventory adjustments or changes in purchasing patterns by our customers; our ability to develop and achieve market acceptance for new products; increased competition; the risks attendant to international relations, operations and markets, including political, economic and/or social instability and conflict, tax and trade policies in the U.S. and other countries in which we manufacture or sell our products, and implications of the United Kingdom’s process for exiting the European Union; foreign currency exchange rate fluctuations; our relationships with our distribution channel partners, including the financial viability of our distributors and dealers; risks associated with acquisitions, including those related to our recent acquisition of Charles Machine Works, such as delays or failure by us in achieving the net sales, earnings and cost or revenue synergies expected from the acquisition, delays and challenges in integrating the businesses, business disruptions due to the acquisition, impacts as a result of purchase accounting adjustments and unanticipated liabilities or exposures for which we have not been indemnified or may not recover; impairment of goodwill or other intangible assets; delays or failures in implementing, and unanticipated charges, as a result of, restructuring activities; management of our alliances or joint ventures, including Red Iron Acceptance, LLC; the costs and effects of enactment of, changes in and compliance with laws, regulations and standards, including those relating to consumer product safety, accounting, taxation, trade and tariffs, healthcare, and environmental, health and safety matters; unforeseen product quality problems; loss of or changes in executive management or key employees; the occurrence of litigation or claims, including those involving intellectual property or product liability matters; and other risks and uncertainties described in our most recent annual report on Form 10-K, subsequent quarterly reports on Form 10-Q, and other filings with the Securities and Exchange Commission. We make no commitment to revise or update any forward-looking statements in order to reflect events or circumstances occurring or existing after the date any forward-looking statement is made.

THE TORO COMPANY AND SUBSIDIARIES

Condensed Consolidated Statements of Earnings (Unaudited)

(Dollars and shares in thousands, except per-share data)

 

 

 

Three Months Ended

 

Twelve Months Ended

 

 

October 31,

 

October 31,

 

October 31,

 

October 31,

2019

 

2018

 

2019

 

2018

Net sales

 

$

734,379

 

 

$

539,303

 

 

$

3,138,084

 

 

$

2,618,650

 

Gross profit

 

245,067

 

 

179,063

 

 

1,047,963

 

 

941,011

 

Gross margin

 

33.4

%

 

33.2

%

 

33.4

%

 

35.9

%

Selling, general and administrative expense

 

201,761

 

 

136,067

 

 

722,934

 

 

567,926

 

Operating earnings

 

43,306

 

 

42,996

 

 

325,029

 

 

373,085

 

Interest expense

 

(8,395

)

 

(4,882

)

 

(28,835

)

 

(19,096

)

Other income, net

 

8,787

 

 

5,457

 

 

25,939

 

 

18,408

 

Earnings before income taxes

 

43,698

 

 

43,571

 

 

322,133

 

 

372,397

 

Provision for income taxes

 

5,432

 

 

4,534

 

 

48,150

 

 

100,458

 

Net earnings

 

$

38,266

 

 

$

39,037

 

 

$

273,983

 

 

$

271,939

 

 

 

 

 

 

 

 

 

 

Basic net earnings per share of common stock

 

$

0.36

 

 

$

0.37

 

 

$

2.57

 

 

$

2.56

 

 

 

 

 

 

 

 

 

 

Diluted net earnings per share of common stock

 

$

0.35

 

 

$

0.36

 

 

$

2.53

 

 

$

2.50

 

 

 

 

 

 

 

 

 

 

Weighted-average number of shares of common stock outstanding — Basic

 

107,166

 

 

106,042

 

 

106,773

 

 

106,369

 

 

 

 

 

 

 

 

 

 

Weighted-average number of shares of common stock outstanding — Diluted

 

108,414

 

 

107,916

 

 

108,090

 

 

108,657

 

 

Segment Data (Unaudited)

(Dollars in thousands)

 

 

 

Three Months Ended

 

Twelve Months Ended

 

 

October 31,

 

October 31,

 

October 31,

 

October 31,

Segment Net Sales

2019

 

2018

 

2019

 

2018

Professional

 

$

588,180

 

 

$

400,463

 

 

$

2,443,448

 

 

$

1,946,999

 

Residential

 

135,735

 

 

133,224

 

 

661,274

 

 

654,413

 

Other

 

10,464

 

 

5,616

 

 

33,362

 

 

17,238

 

Total net sales*

 

$

734,379

 

 

$

539,303

 

 

$

3,138,084

 

 

$

2,618,650

 

 

 

 

 

 

 

 

 

 

*Includes international net sales of:

 

$

177,599

 

 

$

146,685

 

 

$

724,931

 

 

$

643,088

 

 

 

 

Three Months Ended

 

Twelve Months Ended

 

 

October 31,

 

October 31,

 

October 31,

 

October 31,

Segment Earnings (Loss)

2019

 

2018

 

2019

 

2018

Professional

 

$

61,225

 

 

$

61,199

 

 

$

380,914

 

 

$

399,806

 

Residential

 

13,898

 

 

6,788

 

 

65,151

 

 

64,807

 

Other

 

(31,425

)

 

(24,416

)

 

(123,932

)

 

(92,216

)

Total segment earnings

 

$

43,698

 

 

$

43,571

 

 

$

322,133

 

 

$

372,397

 

THE TORO COMPANY AND SUBSIDIARIES

Condensed Consolidated Balance Sheets (Unaudited)

(Dollars in thousands)

 

 

 

October 31,

 

October 31,

2019

 

2018

ASSETS

 

 

 

 

Cash and cash equivalents

 

$

151,828

 

$

289,124

Receivables, net

 

268,768

 

193,178

Inventories, net

 

651,663

 

358,259

Prepaid expenses and other current assets

 

50,632

 

54,076

Total current assets

 

1,122,891

 

894,637

 

 

 

 

 

Property, plant and equipment, net

 

437,317

 

271,459

Deferred income taxes

 

6,251

 

38,252

Goodwill, other intangible assets, and other assets, net

 

764,088

 

366,636

Total assets

 

$

2,330,547

 

$

1,570,984

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

Current portion of long-term debt

 

$

79,914

 

$

Accounts payable

 

319,230

 

256,575

Accrued liabilities

 

357,826

 

276,060

Total current liabilities

 

756,970

 

532,635

 

 

 

 

 

Long-term debt, less current portion

 

620,899

 

312,549

Deferred income taxes

 

50,579

 

1,397

Other long-term liabilities

 

42,521

 

55,487

Total stockholders' equity

 

859,578

 

668,916

Total liabilities and stockholders' equity

 

$

2,330,547

 

$

1,570,984

THE TORO COMPANY AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows (Unaudited)

(Dollars in thousands)

 

 

 

Twelve Months Ended

 

 

October 31,

 

October 31,

2019

2018

Cash flows from operating activities:

 

 

 

 

Net earnings

 

$

273,983

 

 

$

271,939

 

Adjustments to reconcile net earnings to net cash provided by operating activities:

 

 

 

 

Non-cash income from finance affiliate

 

(11,948

)

 

(11,143

)

Distributions from finance affiliate, net

 

10,343

 

 

9,228

 

Depreciation of property, plant and equipment

 

69,314

 

 

53,484

 

Amortization of other intangible assets

 

18,384

 

 

7,793

 

Fair value step-up adjustment to acquired inventory

 

39,368

 

 

 

Stock-based compensation expense

 

13,429

 

 

12,161

 

Deferred income taxes

 

(6,190

)

 

25,255

 

Other

 

6,357

 

 

507

 

Changes in operating assets and liabilities, net of effect of acquisitions:

 

 

 

 

Receivables, net

 

(11,042

)

 

(10,365

)

Inventories, net

 

(104,832

)

 

(29,770

)

Prepaid expenses and other assets

 

9,747

 

 

(11,744

)

Accounts payable, accrued liabilities, deferred revenue and other long-term liabilities

 

30,458

 

 

47,460

 

Net cash provided by operating activities

 

337,371

 

 

364,805

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

Purchases of property, plant and equipment

 

(92,881

)

 

(90,124

)

Proceeds from asset disposals

 

4,669

 

 

151

 

Proceeds from sale of a business

 

12,941

 

 

 

Investments in unconsolidated entities

 

(200

)

 

(6,750

)

Acquisitions, net of cash acquired

 

(697,471

)

 

(31,202

)

Net cash used in investing activities

 

(772,942

)

 

(127,925

)

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

Borrowings under debt arrangements

 

900,000

 

 

 

Repayments under debt arrangements

 

(511,000

)

 

(19,757

)

Proceeds from exercise of stock options

 

29,336

 

 

17,243

 

Payments of withholding taxes for stock awards

 

(2,662

)

 

(4,095

)

Purchases of Toro common stock

 

(20,043

)

 

(160,435

)

Dividends paid on Toro common stock

 

(96,133

)

 

(85,031

)

Net cash provided by (used in) financing activities

 

299,498

 

 

(252,075

)

 

 

 

 

 

Effect of exchange rates on cash and cash equivalents

 

(1,223

)

 

(5,937

)

 

 

 

 

 

Net decrease in cash and cash equivalents

 

(137,296

)

 

(21,132

)

Cash and cash equivalents as of the beginning of the fiscal period

 

289,124

 

 

310,256

 

Cash and cash equivalents as of the end of the fiscal period

 

$

151,828

 

 

$

289,124

 

THE TORO COMPANY AND SUBSIDIARIES
Reconciliation of Non-GAAP Financial Measures (Unaudited)
(Dollars in thousands, except per-share data)

The company has provided non-GAAP financial measures, which are not calculated or presented in accordance with accounting principles generally accepted in the United States (“GAAP”), as information supplemental and in addition to the most directly comparable financial measures presented in the accompanying press release that are calculated and presented in accordance with GAAP. The company uses these non-GAAP financial measures in making operating decisions because the company believes these non-GAAP financial measures provide meaningful supplemental information regarding the company’s core operational performance and provide the company with a better understanding of how to allocate resources to both ongoing and prospective business initiatives. Additionally, these non-GAAP financial measures facilitate management’s internal comparisons to both the company’s historical operating results and to the company’s competitors’ operating results by factoring out potential differences caused by charges not related to the company’s regular, ongoing business, including, without limitation, non-cash charges, certain large and unpredictable charges, acquisitions and dispositions, legal settlements, and tax positions. Further, the company believes that such non-GAAP financial measures, when considered in conjunction with the company’s financial measures prepared in accordance with U.S. GAAP, provide investors with useful supplemental financial information to better understand the company’s core operational performance. Such non-GAAP financial measures should not be considered superior to, as a substitute for, or as an alternative to, and should be considered in conjunction with, the most directly comparable GAAP financial measures presented in the accompanying press release. The non-GAAP financial measures presented in the accompanying press release may differ from similar measures used by other companies.

The following table provides a reconciliation of financial measures calculated and reported in accordance with GAAP, as well as adjusted non-GAAP financial measures, in the accompanying press release for the three and twelve month periods ended October 31, 2019 and October 31, 2018:

 

 

Three Months Ended

 

Twelve Months Ended

 

 

October 31,

 

October 31,

 

October 31,

 

October 31,

2019

2018

2019

2018

Gross profit

 

$

245,067

 

 

$

179,063

 

 

$

1,047,963

 

 

$

941,011

 

Acquisition-related costs 1

 

7,267

 

 

 

 

42,958

 

 

 

Management actions 2

 

1,199

 

 

 

 

10,316

 

 

 

Adjusted non-GAAP gross profit

 

$

253,533

 

 

$

179,063

 

 

$

1,101,237

 

 

$

941,011

 

 

 

 

 

 

 

 

 

 

Operating earnings

 

$

43,306

 

 

$

42,996

 

 

$

325,029

 

 

$

373,085

 

Acquisition-related costs 1

 

11,275

 

 

 

 

62,333

 

 

 

Management actions 2

 

7,163

 

 

 

 

16,311

 

 

 

Adjusted non-GAAP operating earnings

 

$

61,744

 

 

$

42,996

 

 

$

403,673

 

 

$

373,085

 

 

 

 

 

 

 

 

 

 

Earnings before income taxes

 

$

43,698

 

 

$

43,571

 

 

$

322,133

 

 

$

372,397

 

Acquisition-related costs 1

 

11,275

 

 

 

 

62,333

 

 

 

Management actions 2

 

8,019

 

 

 

 

17,167

 

 

 

Adjusted non-GAAP earnings before income taxes

 

$

62,992

 

 

$

43,571

 

 

$

401,633

 

 

$

372,397

 

 

 

 

 

 

 

 

 

 

Net earnings

 

$

38,266

 

 

$

39,037

 

 

$

273,983

 

 

$

271,939

 

Acquisition-related costs 1

 

9,347

 

 

 

 

51,149

 

 

 

Management actions 2

 

6,454

 

 

 

 

13,817

 

 

 

Tax impact of share-based compensation 3

 

(2,159

)

 

(4,917

)

 

(13,677

)

 

(14,555

)

U.S. Tax Reform 4

 

(86

)

 

89

 

 

(1,012

)

 

32,702

 

Adjusted non-GAAP net earnings

 

$

51,822

 

 

$

34,209

 

 

$

324,260

 

 

$

290,086

 

 

 

 

 

 

 

 

 

 

Diluted EPS

 

$

0.35

 

 

$

0.36

 

 

$

2.53

 

 

$

2.50

 

Acquisition-related costs 1

 

0.09

 

 

 

 

0.47

 

 

 

Management actions 2

 

0.06

 

 

 

 

0.13

 

 

 

Tax impact of share-based compensation 3

 

(0.02

)

 

(0.04

)

 

(0.12

)

 

(0.13

)

U.S. Tax Reform 4

 

 

 

 

 

(0.01

)

 

0.30

 

Adjusted non-GAAP diluted EPS

 

$

0.48

 

 

$

0.32

 

 

$

3.00

 

 

$

2.67

 

 

 

 

Three Months Ended

 

Twelve Months Ended

 

 

October 31,

 

October 31,

 

October 31,

 

October 31,

2019

2018

2019

2018

Effective tax rate

 

12.4

%

 

10.4

%

 

14.9

%

 

27.0

%

Acquisition-related costs 1

 

(0.4

)%

 

%

 

(0.3

)%

 

%

Management actions 2

 

0.6

%

 

%

 

0.1

%

 

%

Tax impact of share-based compensation 3

 

4.9

%

 

11.3

%

 

4.3

%

 

3.9

%

U.S. Tax Reform 4

 

0.2

%

 

(0.2

)%

 

0.3

%

 

(8.8

)%

Adjusted non-GAAP effective tax rate

 

17.7

%

 

21.5

%

 

19.3

%

 

22.1

%

1

During the second quarter of fiscal 2019, the company acquired The Charles Machine Works, Inc. ("CMW"), a privately held Oklahoma corporation. Acquisition-related costs represent integration and transaction costs incurred, as well as charges incurred for the take-down of the inventory fair value step-up amount and amortization of the backlog intangible asset resulting from purchase accounting adjustments, related to the company's acquisition of CMW during the three and twelve month periods ended October 31, 2019.

 

 

2

During the third quarter of fiscal 2019, the company announced its wind down of its Toro-branded large horizontal directional drill and riding trencher product line. Additionally, during the fourth quarter of fiscal 2019, the company incurred charges for a corporate restructuring event and a loss on the divestiture of a used underground construction equipment business. Management actions represent charges incurred during the three and twelve month periods ended October 31, 2019 for the Toro underground wind down, including charges related to the write-down of inventory, anticipated inventory retail support activities, and accelerated depreciation on fixed assets; the corporate restructuring event, including employee severance charges; and the divestiture of a used underground construction equipment business, including the loss on the sale of the business.

 

 

3

In the first quarter of fiscal 2017, the company adopted Accounting Standards Update No. 2016-09, Stock-based Compensation: Improvements to Employee Share-based Payment Accounting, which requires that any excess tax deduction for share-based compensation be immediately recorded within income tax expense. These amounts represent the discrete tax benefits recorded as excess tax deductions for share-based compensation during the three and twelve month periods ended October 31, 2019 and October 31, 2018.

 

 

4

Signed into law on December 22, 2017, the Tax Cuts and Jobs Act ("Tax Act"), reduced the U.S. federal corporate tax rate from 35.0 percent to 21.0 percent, effective January 1, 2018, resulting in a blended U.S. federal statutory tax rate of 23.3 percent for the fiscal year ended October 31, 2018. This reduction in rate required the re-measurement of the company's net deferred taxes as of the date of enactment. The Tax Act also imposed a one-time deemed repatriation tax on the company's historical undistributed earnings and profits of foreign affiliates. During the three and twelve month periods ended October 31, 2019, the company recorded a tax benefit of $0.1 million and $1.0 million, respectively, related to a prior year true-up of the Tax Act. During the three and twelve month periods ended October 31, 2018, the remeasurement of the company's net deferred taxes and the one-time deemed repatriation tax resulted in a combined charge of $0.1 million and $32.7 million, respectively.

 

View source version on businesswire.com:https://www.businesswire.com/news/home/20191218005098/en/

CONTACT: Investor Relations

Nicholas Rhoads

Director, Investor Relations

(952) 887-8865,nicholas.rhoads@toro.comMedia Relations

Branden Happel

Senior Manager, Public Relations

(952) 887-8930,branden.happel@toro.com

KEYWORD: MINNESOTA UNITED STATES NORTH AMERICA

INDUSTRY KEYWORD: RETAIL HOME GOODS MANUFACTURING AGRICULTURE NATURAL RESOURCES OTHER MANUFACTURING

SOURCE: The Toro Company

Copyright Business Wire 2019.

PUB: 12/18/2019 08:30 AM/DISC: 12/18/2019 08:30 AM

http://www.businesswire.com/news/home/20191218005098/en