Toro Company (The)

Good day, ladies and gentlemen, and welcome to the Turo Company's second quarter earnings conference call. My name is Tanya, and I will be your coordinator for today. At this time, all participants are in a listen-only mode. We will be facilitating a question and answer session towards the end of today's conference. As a reminder, this conference is being recorded for replay purposes. I would now like to turn the presentation over to your host for today's conference, Julie Karikas, Treasurer and Senior Managing Director of Global Tax and Investor Relations, Please proceed, Ms. Karakas.

Thank you and good morning, everyone. Our earnings release was issued this morning, and a copy can be found in the investor information section of our corporate website, thetorocompany.com. We have also posted a second quarter earnings presentation to supplement our earnings release and general investor presentation. On our call today are Rick Olson, Chairman and Chief Executive Officer, Angie Drake, Vice President and Chief Financial Officer, and Jeremy Steffen, Director, Investor Relations. We begin with our customary forward-looking statement policy. During this call, we will make forward-looking statements regarding our plans and projections for the future. This includes estimates and assumptions regarding financial and operating results, as well as economic, technological, weather, market acceptance, acquisition-related, and other factors that may impact our business and customers. You are all aware of the inherent difficulties, risks, and uncertainties in making predictive statements. Our earnings release, as well as our SEC filings, detail some of the important risk factors that may cause our actual results to differ 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 in our earnings release and on our website in our investor presentations, as well as in our applicable SEC filings. We believe these measures may be useful in performing meaningful comparisons of past and present operating results and cash flows 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, Julie, and good morning, everyone. We delivered record top and bottom line results in the second quarter. Net sales were up 7% and reported and adjusted diluted earnings per share were up 28% and 26% respectively over last year. Our top line growth was driven by strong professional segment performance, especially in the key areas of construction and golfing grounds, where we achieved volume gains from increased production along with continued robust demand. Our ability to increase output was driven by our disciplined operational execution and efficiencies gained from continued supply chain improvements. For our residential segment, sales volumes were pressured by unfavorable weather patterns and macroeconomic factors. Once again, the actions we have taken to diversify our portfolio and leverage our scale proved beneficial. We delivered overall net sales growth in the quarter. Moving to our bottom line performance, our team delivered a 250 basis point improvement in adjusted operating earnings as a percentage of net sales for the quarter year over year. The positive result was driven by net price realization, favorable mix, and productivity gains. While we remained in an inflationary environment, the overall rate continued to slow with notable improvements in freight costs. We delivered strong results in the quarter while also positioning the company for long-term profitable growth. A key element of our growth strategy is prioritizing technology investments in alternative power, smart, connected, and autonomous solutions. We continue to develop and introduce products that leverage these investments to provide customers with sustainable options and increased productivity, all with no compromise on performance. We are pleased that two of our FlexForce 60-volt products were recently recognized as Popular Mechanics' Best New Lawn Products of 2023. Our market leadership is built on a foundation of long-term customer relationships and offering the best innovative products. This foundation is central to delivering on our purpose of helping our customers enrich the beauty, productivity, and sustainability of the land. An example of this leadership is the extension of our commitment to the National Recreation and Park Association Business Council. This partnership explores, shares, and deploys solutions that benefit both parks and recreation and the business sector with an ultimate goal to build stronger communities. We're excited to continue working closely with the Council as we strive to solve common challenges together in a way that enhances the quality of life for all. Another example is our recent selection as turf partner for Bay Hill Club and Lodge, as well as Latrobe Country Club, two courses connected with the legendary Arnold Palmer. We are honored to partner with these storied clubs as they continue Mr. Palmer's legacy of providing a top-notch experience for members, guests, and golf professionals. We delivered a strong first half of the year, and we believe we are well positioned to carry that momentum into the second half. While the macro environment remains dynamic, we are accustomed to growing our business for long-term success through all kinds of economic and weather cycles. We intend to continue operating with our hallmark discipline and resiliency while advancing our strategic priorities. With this focus, we expect to grow our market leadership in both the near term and the long term. With that, I will turn the call over to Angie for a more detailed review of our second quarter financial results.