The Toro Company (NYSE: TTC) today provided a business update on
the actions it is taking as a result of the novel coronavirus
(COVID-19) pandemic.
Richard M. Olson, The Toro Company’s chairman and chief
executive officer said, “As the events surrounding the coronavirus
continue to unfold, we are focused first and foremost on the
health, safety and wellbeing of our employees, customers and
communities around the world. We have adopted practices and
policies to best support our people during this difficult time,
while also enabling us to continue operating our businesses which
are critical to helping our customers maintain essential
infrastructure globally. The Toro Company is in a solid financial
position. We have a strong balance sheet and adequate liquidity to
navigate the uncertainty of the current situation and to be
well-positioned when the health and economic environments
improve.”
People & Plant Operations
The company has preparedness and response plans in place at its
facilities and has taken actions to keep employees safe and
healthy. In line with guidelines from the Centers for Disease
Control and Prevention (CDC), World Health Organization (WHO) and
state and local authorities that are intended to slow the virus
spread, the company has asked employees who can work remotely to do
so and has implemented enhanced health and safety protocols to
further safeguard the majority of our employees who perform jobs
that must be done in our facilities. These include, among other
things, increased frequency of and additional cleaning measures,
suspension of all non-essential visitors and reconfiguration of
work spaces and direction to achieve social distancing. The company
also adopted a special COVID-19 leave policy that provides two
weeks of pay for employees who have the virus, are involuntarily
quarantined because of the virus or are without work due to changes
in our production schedules as the result of the virus.
The company intends to continue operations to the extent
possible as an essential critical infrastructure business; however,
it is presently temporarily suspending production or reducing
levels of production at certain facilities due to the effects of
the virus, including anticipated reduced demand for products in
certain businesses.
Strong Balance Sheet and Liquidity
The company continues to have a strong balance sheet and
liquidity profile, with no significant debt maturities until April
2022. Given the current uncertainties surrounding the economic
environment and out of an abundance of caution, the company entered
into a three-year term loan agreement for $190 million to refinance
revolving credit facility borrowings incurred in connection with
the Venture Products, Inc. acquisition and to add incremental
liquidity.
With the funding of the term loan, the company will have
liquidity of approximately $810 million, including cash on hand and
unutilized availability under its $600 million revolving credit
facility.
The company is taking additional prudent measures to further
increase financial flexibility and liquidity during this period,
including: reviewing all options to reduce discretionary spending;
deferring non-essential capital expenditures; optimizing working
capital; and continuing curtailment of share repurchases.
“I believe that we have the right people, plans, systems and
resources to face these unprecedented challenges. We are focused on
operational efficiencies and are prudently managing our balance
sheet to provide additional flexibility as we navigate this
uncertain environment,” said Olson.
Outlook and Withdrawal of Financial Guidance
As a result of the many and evolving COVID-19 related factors,
risks and challenges that could negatively impact The Toro
Company’s business, the company does not have the ability to
predict the level of impact on its businesses and financial results
for the fiscal 2020 second quarter or for the remainder of fiscal
2020 at this time. Accordingly, The Toro Company is withdrawing its
fiscal 2020 second quarter and full year guidance provided in its
Form 8-K and its Quarterly Report on Form 10-Q, each filed on March
5, 2020.
The company is not updating its outlook at this time but plans
to share further updates in its second-quarter earnings
announcement and conference call expected to be held on June 4,
2020.
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, Ventrac, 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.
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 the company’s operating results or
financial position include: COVID-19 related factors, risks and
challenges, including among others, the length of time that the
pandemic continues, its effect on the demand for the company’s
products and services, the ability of dealers and retailers that
sell the company’s products to remain open, availability of
employees and their ability to conduct work away from normal
working locations and/or under revised protocols, and the ability
to receive commodities, components, parts, and accessories on a
timely basis through its supply chain and at anticipated costs, and
the ability of the company to continue its production operations;
worldwide economic conditions, including slow or negative growth
rates in global and domestic economies and weakened consumer
confidence; disruption at its manufacturing or distribution
facilities; fluctuations in the cost and availability of
commodities, components, parts, and accessories, including steel,
engines, hydraulics and resins; the effect of abnormal weather
patterns, including unfavorable weather conditions exacerbated by
global climate change or otherwise; the effect of natural disasters
and global pandemics, including COVID-19; the level of growth or
contraction in its key markets; customer, government and municipal
revenue, budget and spending levels; loss of any substantial
customer, including mass retailers and home centers for the
company’s residential business; elimination of shelf space for its
products at dealers or retailers; inventory adjustments or changes
in purchasing patterns by customers; the company’s 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 the company manufactures or sells its
products, or trade regulation and/or industry activity; foreign
currency exchange rate fluctuations; relationships with the
company’s distribution channel partners, including the financial
viability of distributors and dealers; risks associated with
acquisitions, including those related to the recent acquisitions of
Charles Machine Works and Venture Products, Inc., such as delays or
failure in achieving the net sales, earnings and cost or revenue
synergies expected from acquisitions, delays and challenges in
integrating the businesses, business disruptions due to
acquisitions, impacts as a result of purchase accounting
adjustments and unanticipated liabilities or exposures for which
the company has 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 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 COVID-19, 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 the company’s most recent annual report on Form 10-K,
subsequent quarterly reports on Form 10-Q or current reports on
Form 8-K, and other filings with the Securities and Exchange
Commission. The company makes 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.
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version on businesswire.com: https://www.businesswire.com/news/home/20200330005163/en/
Investor Relations Nicholas Rhoads Managing Director,
Investor Relations (952) 887-8865, nicholas.rhoads@toro.com
Media Relations Branden Happel Senior Manager, Public
Relations (952) 887-8930, branden.happel@toro.com
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