Good day, ladies and gentlemen, and welcome to The Toro Company First Quarter Earnings Conference Call. My name is Sue, and I will be your coordinator for today. [Operator Instructions] 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, Amy Dahl, Managing Director of Corporate Communications and Investor Relations for The Toro Company. Please proceed, Ms. Dahl.

Thank you, Sue, and good morning. Our earnings release was issued this morning by Business Wire, and a copy can be found in the Investor Information section of our corporate website, thetorocompany.com. Joining me for this call are Mike Hoffman, our Chairman and Chief Executive Officer; Renee Peterson, our Vice President Treasurer and Chief Financial Officer; and Tom Larson, Vice President and Corporate Controller. 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're 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 from those in our predictions. Please note that we do not have a duty to update our forward-looking statements. And with that, I will now turn the call over to Mike.

Thank you, Amy, and good morning to all our listeners. We're pleased to report on the beginning of a very special year at Toro. This year, we celebrate an important milestone, our 100th birthday on July 10, 2014, and it is also the final year in our Destination 2014 journey. We look forward to sharing our ongoing accomplishments with you throughout the year as we drive into our second century. This winter's headline-making snowfalls in North America fueled retail demand for snow throwers, helping drive first quarter sales and deliver a good start to fiscal 2014. As we indicated throughout fiscal 2013, accelerated first quarter channel demand for large pre-Tier 4 turf equipment that we experienced a year ago posed challenging year-over-year comparisons, even though most of the first quarter large turf equipment shipments went into field inventory at the time. Fortunately, our robust snow results this quarter, as well as increased international demand for our products help offset the anticipated reduced shipments of the commercial equipment and position us well for the prime selling season ahead. As we reported this morning, our net sales registered a slight increase for the quarter to $446 million, and delivered net earnings of $25.9 million or $0.44 per share. Renee will discuss our financial and operating results in more detail later in the call. Turning to our businesses. This time of year, we are in the midst of annual trade show season, featuring all of the leading industry shows, including the recent Golf Show. Some of you who were not snowbound in the Northeast joined us for this important event in Orlando. The show organizers indicated that attendance was up compared to 2013, a good sign for the golf industry. We were pleased by the energy in our booth and enthusiasm expressed for…

Thank you, Mike, and good morning, everyone. As we reported earlier this morning, net sales for the quarter were $446 million compared to $444.7 million for the same period a year ago. We delivered net earnings of $25.9 million, or $0.44 per share compared to $0.53 in the first quarter of fiscal 2013. Professional segment sales were down 10.2% for the quarter to $295.5 million due to last year's strong first quarter channel demand for large turf equipment related to the Tier 4 diesel engine emission standards. As we said throughout 2013, the elevated level of demand experienced in the first quarter of last year was a onetime occurrence that would not repeat in the first quarter of 2014. Professional net earnings for the quarter totaled $47.5 million compared to $60.7 million a year ago. Our residential segment sales for the quarter were up 22% to $147.6 million due to increased shipments of snow throwers to meet retail demand generated by significant snowfall across key markets in North America. Net earnings in the residential segment for the quarter totaled $18.1 million, up 49.2% from last year. Now to our key operating results. First quarter gross margin decreased 60 basis points to 36.7%, the decrease is primarily due to segment mix, but was also affected by unfavorable currency exchange rates and slightly higher commodity costs that was somewhat offset by realized pricing and our cost reduction efforts. For the full year, we continue to expect margins compared to last year to be higher by about 50 basis points. Market prices of select commodities increased during the first quarter, driven by the uptick in manufacturing, construction and overall economic activities in the second half of 2013. Our cost-reduction projects are on track and continue to help mitigate the situation. SG&A expense as…

Thank you, Renee. We're pleased by the start of the year and encouraged by the prospects for growth for the remainder of fiscal 2014. During the golf show, we featured a number of other new exciting products along our lower Tier 4 final offerings. For example, we unveiled a new 100-inch cutting deck for the Groundsmaster 360, a new heavy-duty workman vehicle with a patented automatic transmission, a new bunker rake featuring a zero-turn platform, as well as a new sprayer with multiple upgrades. We believe these new products will help distinguish us from the competition and increase sales. There are many positive indicators of the health of the golf industry. Multiple course management companies have reported that they expect to increase the number of courses they own or manage in 2014. The likelihood that 2014 will bring more playable weather conditions than last year could lead to more rounds being played and increased demand for additions, replacements and upgrades to courses' equipment fleets and irrigation systems. And our golf irrigation solutions are well-positioned to win. Our exciting INFINITY product takes the industry's best sprinkler, the 800 series, to a higher level with a new feature that we call SMART ACCESS. It eliminates costly time-consuming digging to access key components by providing direct access to them from the top. Furthermore, such adjustments can be done at each individual sprinkler without shutting off the mainline, which represents another tremendous time savings. The INFINITY was the talk of both shows when it was officially launched in the U.K. in January at the BTME, and in the U.S. at the Golf Industry Show in Orlando this month. Our landscape contractor business is similarly well-positioned, with appealing new products that include zero-turn riding mowers equipped with fuel-saving solutions such as electronic fuel injection, as…

[Operator Instructions] First question comes from Jim Barrett, CL King & Associates. James Barrett - CL King & Associates, Inc., Research Division: Renee, this may be a question for you. The increase in sales guidance, does that wholly reflect the increase in snowblower sales or are you more optimistic about your other product lines as well?

It really reflects the strength that we've seen from a snow standpoint, both within this quarter and then subsequent in Q4 for a stronger pre-season as well. James Barrett - CL King & Associates, Inc., Research Division: And Mike, considering the number of new products and line extensions being introduced into the marketplace, is '14 likely to be a year where you would expect market share progress? Or do you see the competitive offerings resulting in some level of parity?

Yes, you almost have to take that business-by-business. Well, the fact is, we are always striving for market share improvement. And so, for example, at the recent golf show down in Orlando, we introduced the new INFINITY golf sprinkler head. Now we have very strong share position in that business, but I think this will strengthen it. We introduced a number of other equipment, new products there as well. And I kind of went through that, all those new products just a minute or 2 ago. And so I think we're well-positioned to hold or grow share kind of across that portfolio. That's always our goal, and that's right at the core value driving innovation. James Barrett - CL King & Associates, Inc., Research Division: Right. True. And then, my final question. In focusing on your goal of 12% operating margins for '14, is the improvement relative to last year, will that be broad-based? Or do you see greater opportunities in one segment as opposed to the other?

Yes, I would say it is broad-based, I mean, it's across the portfolio, both in the performance in the market with the new products that we've talked about, but it's also a lot of the work that's broad-based back here on both the professional and residential businesses in driving productivity and Renee is really leading that and with a strong focus on making our resources go farther. And we are making good progress on that. And you'll see some of that borne out in our gross margin improvement that we've made and will continue to make and the expectation of continued SG&A leverage. That's a journey, we're making good progress.

And your next question is from Josh Borstein, Longbow Research.

This is Josh Borstein in for David MacGregor. Just looking ahead to spring, does the unusually harsh winter that we've had so far, both in terms of snowfall and the extreme temperatures, does it bode either positively or negatively for the second and third quarters?

Yes, I guess, the second quarter is right in front of us, it's a large quarter for us, as is the third. I'd answer it this way that -- I guess, I'd say no, it doesn't have that much impact. In that last year, we had a moderate winter, not as moderate as in '12 but it was still moderate. And then, we had a spring that extended well into April, and it was still snowing here in Minnesota in May. And so the weather can turn quite quickly, and we would model and we would think this -- the probability of a much improved spring period, which is our most critical time, is much higher than lower, it's well over weighted to the good.

Just sticking on snow for a minute. You mentioned snow products moving all the way through to the end user this winter. I guess, my question is how typical is that and does that mean you're still sending inventory into the channel whereas maybe this time of the year, you would have already stopped?

Well, we will strive to meet ongoing demand, from the end user demand through the channel demand back to here, to the degree it's available. Most of the snow inventory, I think, across the industry has moved through from manufacturer to channel to retail. There always will be some pockets, but given the kind of winter we've had, it's created an opportunity to pretty much clean out the channel and clean out manufacturers. And so we're in a good position there and that replenishment will really commence next fall.

And then, just a final one for me. You had mentioned stronger international demand than you had originally anticipated. Where were you seeing the strengths and where, perhaps, are you still seeing some international weakness?

Certainly, the #1 strength is right across the border here, selling snow products into Canada, but we've also seen some strong commercial and irrigation business around the golf arena in some of our markets. I think, the ongoing concern, as was true last year, remain -- is somewhat more in Europe. We're keeping our eye on Europe. They had -- the residential side in Europe had a more mild winter, they didn't benefit from the snow sales like we did here in North America. But hopefully, that will have a good spring there in Western Europe, but larger part of the business there is still commercial, and so we watch the European economies, there are a number of kind of different ones and hope that will continue a slow but a steady improvement.

And your next question is from Sam Darkatsh, Raymond James. Sam Darkatsh - Raymond James & Associates, Inc., Research Division: A couple of questions. I don't want to be too much of a stickler on this because I know that this is -- we're still out of season, but you beat your quarter guidance for the first quarter by $0.09, but you only raised the year by $0.05 suggesting that the back half of the year, you might even have a little bit more of a mildly sober outlook than before. I'm curious as to why that might be based on what you're seeing?

Yes, I think that there still is -- our 2 large quarters are in front of us and so we didn't pull it all in. Snow was certainly the bulk of that, and we did put this additional snow revenue in there and that certainly have been the part of the raising earnings guidance for the year. Sam Darkatsh - Raymond James & Associates, Inc., Research Division: Okay. The second question I would have, I think, you were suggesting to us in prior calls that you were looking for about 1% in price this year, in realized price this year. What did you get in the first quarter? It looked like gross margins were considerably better than expected and that was from realized price with some offsets. So did you get better than the 1% in the first quarter, and then, you're maybe expecting that to bleed off a little bit, or how should we look at realized price in this quarter versus for the year?

Yes, well, I guess, I'd say that, we think, for the year, we're going to get about 1%. So much of what took place in the first quarter was mix, and so I don't --

Really not different than what we expected in the first quarter and obviously we give specific guidance on that.

But again, I think, when you look at what we have talked about gross margins improving for the year by 50 basis points and some of that is priced but some of that is going to be all the focus on productivity, some of that is mix. So I don't think it's different than we would've talked about last quarter. We just simply got the benefit of snow.

I would agree. Sam Darkatsh - Raymond James & Associates, Inc., Research Division: And third question, and this is probably too fine a point either, but the payables being up, Renee, and the inventories being down. The payables being up, you suggested because of increased purchases, yet inventories down, you were working your inventory through. So how do those 2 reconcile with each other? Is it a switch between work-in-process and finished goods, or how should we look at that?

Sam, it's primarily a timing difference from that standpoint. We continue to focus on accounts payable from a term standpoint, but no significant change there. And we always focus on our inventory, and we had a strong end to the quarter. So it's more than anything timing. Sam Darkatsh - Raymond James & Associates, Inc., Research Division: Got you. If I could sneak one more in real quick. It looks like you spent about $42 million in share repurchases, which is, I guess, about normal and healthy for you folks. Average price about $61.50. Stock's up a little bit more than that. Any reason to think why that pace wouldn't continue near term.

Sam, this is Tom. Really, our approach on this hasn't changed and we would -- our idea for the year is that we would spend roughly similar to what we've spent in prior years. Now that would be less shares if the price continues the way it is, but no real change of direction there.

And your next question is from Robert Kosowsky, Sidoti. Robert A. Kosowsky - Sidoti & Company, LLC: Sounds like you see golf CapEx increasing. Would that be at a higher rate or lower rate than the growth you see in the landscaping and in the grounds side of the business?

Golf CapEx increasing, well, I think, golf courses are -- I don't think that is a material change. I don't think it is changing that much. I'm not sure where you're drawing that. I mean, they continue to look at their plates and ways to drive more productivity and be more efficient. And that certainly is -- when we can bring new products to help them do that, that can be an accelerator. But year-over-year, I don't think we're expecting significant change in golf purchases. Robert A. Kosowsky - Sidoti & Company, LLC: Okay. So you'd expect that growth in like the landscaping in the grounds channel to be in excess of what golf would be this year?

It would, yes. Robert A. Kosowsky - Sidoti & Company, LLC: Okay. And then, also, can you talk about what you're seeing on the mass retail mower side, how is the sell-in looking so far. Are they taking any more inventory? Any kind of thoughts that you have on, given we had such a brisk snowblower season and also what kind of growth do you see for this category over the season?

Right. So last year's, if you use lawn, particularly, we use walk power mowers as a bellwether there, if you will, that was down and that was very much related to the late spring conditions and the impact of that. So speaking specifically for Toro, I mean, we're at a good shape. We have -- they have been focused on snow because we've had relatively more snow than last year, but they transition pretty quickly to spring, it doesn't take very long to transition a department, the large retailer or a dealer to spring products. We do expect spring to come earlier this year than it did last. And so right now, we've got, as I mentioned in the text, I mentioned earlier that shipments are being going in now for Lawn-Boy and for some of the new Toro walk power mowers and Z mowers. Our lineup is as strong as it's ever been from a SKU standpoint, in a home center with people and a solid position with dealers. So we're very encouraged by the residential lineup placement and some of the innovation that's on the new products. Robert A. Kosowsky - Sidoti & Company, LLC: That's helpful. And then, finally, do you have any thoughts on -- and this question might go nowhere, do you have any thoughts on the John Deere water assets. It looks like they're likely going to be sold? I mean, is there any kind of comment you can make on that or you just say no comment?

Yes, I'll just say no comment. We'll continue to watch that unfold.

This concludes the question-and-answer session. Mr. Hoffman, please proceed to closing remarks.

Thank you, Sue, and thanks, to all our listeners for your questions and interest in Toro. I look forward to sharing our second quarter results in May, when we hopefully will be enjoying an early and warm spring. So thank you, and have a good day.

Thank you. Ladies and gentlemen, this concludes your conference call for today. Thank you for your participation. You may now disconnect. Good day.