Toro Company (The)

Ladies and gentlemen, thank you for standing by, and welcome to the Toro Company fourth quarter and fiscal year 2020 earnings conference call. At this time, all participant lines are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star then one on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star then zero. I will now hand the conference over to Nicholas Rose, Managing Director of Investor Relations. Please go ahead.

Thank you, Sarah, and good morning. Our earnings release was issued this morning, and a copy 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. During this call, we will make forward-looking statements regarding our business and future financial and operating results. You are all aware of the inherent difficulties, risks, and uncertainties in making predictive statements. On our earnings release, as well as our SEC filings, detail some of the important risk factors, including those related to COVID-19, that may cause our actual results to differ materially from those in our predictions. Please note that we do not have a duty to update our forward-looking statements. In addition, during this call we will reference certain non-GAAP financial measures. Reconciliations of historical non-GAAP financial measures to reported GAAP financial measures can be found on our earnings release or on our website. We believe these measures may be useful in performing meaningful comparisons of past and present operating results to understand the performance of our ongoing operations and how management views the business. Non-GAAP financial measures should not be considered superior to or a substitute for the GAAP financial measures presented in our earnings release and this call. With that, I will now turn the call over to Rick.

Thanks, Nick, and good morning. We are pleased to report robust results for fiscal 2020, highlighted by professional segment growth, primarily from incremental contributions from Charles Machine Works and Venture Products, a record performance from our residential segment. We owe our successful performance to our team, which demonstrated perseverance and ingenuity in this challenging year. We navigated COVID-induced manufacturing inefficiencies, including social distancing and workforce fluctuations. At the same time, we provided innovative solutions to meet demand from our retailers and end customers. Our employees manage these changes admirably while working in significantly modified production environments or at home as they balance personal challenges resulting from the pandemic. I am beyond proud of our team and will remember this year as one that highlighted the way we lived our values while caring for one another and serving our customers with determination. Thank you to the entire team for your perseverance and ongoing commitment to work safely to drive our business forward. And to our channel partners, as essential businesses, you served our customers with dedication and passion. Together, we persevered to maintain and gain market share in key product categories with existing and new customers. Execution in this challenging year continued to be guided by our enterprise strategic priorities of accelerating profitable growth, driving productivity and operational excellence, and empowering people. In addition, we enhanced our commitment to the well-being of our employees, service to our customers, and support for our communities. Ultimately, staying true to our values enabled us to deliver for our stakeholders. For fiscal 2020, highlights include record growth in the residential segment, successful introduction of new battery-powered products for residential and professional applications, increased investment in research and development in key technology areas, strong free cash flow, the continued return of value to shareholders via dividends, and the launch of our Sustainability Endures platform that documents our progress aligned with long-held values and objectives, and profiles our continued efforts to address environmental, social, and governance priorities. I'll now provide some commentary regarding key results by segment for the full year and fourth quarter, and Renee will go into more detail. For fiscal 2020, professional segment net sales were up 3% year-over-year and earnings were up 12%. Residential sales were up 24% and earnings were up 75%. For the fourth quarter, professional segment net sales were up 10% versus the same prior year period and earnings were up 70%. Residential net sales were up 39% and earnings were up 90%. I'll now provide some insight into the demand environment for the quarter. In the residential segment, we experienced a continuation of trends seen throughout much of fiscal 2020. Stay-at-home directives and the expansion and strength of our channel were key contributors to high demand for walk power mowers and zero-term riding mowers. Innovative features, refreshed brand presence, and extended season sales provided additional momentum. In the professional segment, we drove growth with increased demand for our landscape contractor, snow and ice management, golf irrigation, rental and specialty construction, and ag irrigation products. Strong product offerings, favorable weather, and stay at home trends drove retail demand throughout the quarter and provided momentum going into fiscal 2021. The Toro Company is sustainably strong. The pandemic year of 2020 proved that by focusing on our enterprise strategic priorities and living our enduring values, we're able to deliver strong results. Our performance this year was only possible because of the resilience and flexibility of our team, the manner in which our operations and businesses resourcefully responded to customer demands, and the dedication of our channel partners. As a result, I'm optimistic about our momentum going into the new fiscal year. With that, I will turn the call over to Renee for a more detailed discussion of our financial results.