Good day, ladies and gentlemen, and welcome to The Toro Company Second Quarter Earnings Conference Call. My name is Britney, and I will be the 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. (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, 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, Chairman and Chief Executive Officer; Renee Peterson, 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. With that, I will now turn the call over to Mike.

Thank you, Amy, and good morning to all our listeners. Although we faced unfavorable spring weather conditions for a second year in a row, the company achieved record sales and earnings for the quarter. Net sales increased 5.85 and net earnings per share grew 14.4%. Both our Professional and Residential segments posted sales gains for the quarter, with strong demand for professional products leading the way. Sales for the first six months of the year grew by 3.6%. Professional sales for the first half of the year were flat due to the unusually strong domestic channel demand for commercial equipment in the first quarter of last year, plus lower professional segment sales to our international markets. As we’ve previously indicated, last year’s strong first quarter demand for commercial equipment was related to the Tier 4 transition. Residential segment sales posted an 11% gain year-to-date as a result of the robust snow thrower sales, strong domestic demand for zero-turn riders, and increased sales of electric products. Following a brief commentary on the state of our businesses through the first half of the fiscal year, Renee will discuss our financial and operating results in more detail. Our Landscape contractor businesses had a particularly strong quarter, benefiting from contractors optimistic outlook and willingness to invest as a result of the strong revenues their robust snow plowing season generated. Early season retail movement of both our zero-turn riding and stand-on product lines, has been brisk in spite of an engine supplier issue that delayed production of some of our popular zero-turn models. As the mowing season kicks into high gear, the momentum our landscape contractor businesses have enjoyed in recent years hopefully will continue to gain steam. Our golf equipment business, while posting gains over fiscal 2013 second quarter results felt the effects of…

Thank you, Mike, and good morning, everyone. As we reported earlier this morning, net sales for the quarter were a record $745 million, compared to $704.5 million for the same period a year ago. We also delivered net earnings of $87.1 million or $1.51 per share compared to $1.32 in the second quarter of fiscal 2013. Year-to-date net sales were up 3.6% to $1.191 billion. We achieved net earnings of $113 million for the first six months or $1.95 per share compared to $1.85 per share a year ago. Professional segment sales were up 6.5% for the quarter to $528.6 million. Landscape contractor sales were up due to retail demand fueled by contractors’ income from a busy snow season. Increased sales of new construction equipment, golf irrigation and micro irrigation systems also drove growth in the quarter. Year-to-date professional sales were flat at $824 million due to strong demand for pre Tier-4 compliant products last year in the first quarter. Professional net earnings for the quarter totaled $122.4 million, a 9% increase over last year. For the first six months, Professional segment earnings were $169.8 million, down 1.8% compared to the same period last year. Second quarter residential sales increased 4.5% to $210.4 million. Year-to-date residential sales were up 11% to $357.9 million. The quarter and year to date growth is attributable to domestic retail demand for snow throwers, zero-turn writing equipment and electric products, along with increased international sales of walk power mowers and Hayter products. Net earnings in the residential segment for the quarter totaled $23.8 million, down 3.5% from last year. Year to date earnings were $42 million, a 13.9% increase compared to the first six months of fiscal 2013. Earnings for the quarter were somewhat negatively impacted by a supplier related rework issue. Our gross margin…

Thank you, Renee. Despite the unfavorable weather this spring, our end markets are sound, our product offerings are aligned to our customers’ needs and we continue to compete effectively in the marketplace. Our landscape contractor business outlook remains bullish. With anticipated favorable weather and arguably our best product lineup for both contractors and acreage customers ever, we are well positioned to extend the sales momentum of the first six months. We are launching additional products including extensions of our popular zero-turn line featuring rear discharge decks, direct collection systems and smart technologies and a brand new line of 21 inch heavy duty mowers with added durability and improved bagging performance. These products continue with our tradition of delivering superior value to our contractor customers. With our strong product lineup backed by an aggressive promotional calendar, we believe we are in an excellent position to help our channel partners drive retail sales for the remainder of 2014. Our professional grounds business should benefit as improved weather conditions boost sports activity and revenue for local sports associations. A new 100 inch deck option for our Groundsmaster 360 was released earlier this month. This significant enhancement to the productivity of the 360 should appeal to local sports and municipal agencies alike. With temperature on the rise, so are the prospects for golf equipment business. As rounds played rebound, greens fees and course revenues follow, which should lead to additional equipment purchases. Our golf course customers remain optimistic and our open order banks are strong. Furthermore we anticipate golf irrigation sales to remain strong as exceptional innovations like our INFINITY sprinkler series set us apart and help us win new projects around the world. We remain cautiously optimistic about the residential and commercial contractor irrigation field. Water use restrictions in drought stricken regions will…

(Operator Instructions) And your first question comes from the line of Robert Kosowsky with Sidoti & Company. Please proceed. Robert Kosowsky – Sidoti & Company: Good morning, everyone. I had a quick question on the Other segment. That seemed to be down pretty significantly year-over-year and I am wondering -- I know it’s a catch-all segment for a lot of different items. So I’m wondering what some of the drivers were that drove that decline in the quarter.

Robert, you are correct that there are a lot of moving pieces within the Other segment. This includes some of our corporate level expenses as well as the results of our company-owned distributors. As you know we continue to focus on productivity and fixed cost leverage across the organization. And some of the improvements that you saw within the quarter is SG&A related and that would be driven by some of the favorable healthcare claims experience. We are self-insured and also some favorable in a products claims experience. Year-to-date there’s also an impact that we had mentioned in the first quarter’s release related to our company-owned distributors and intercompany profit elimination. Robert Kosowsky – Sidoti & Company: Okay, that is helpful. Then otherwise, the golf equipment sales, it seems like some of that has pushed out. And just Mike, it seems like this is a reflection of rounds played being weak last year and a slow start to this year. Is that kind of the take away from here? We just need to weather to cooperate to get rounds played up and that is going to lead to kind of a release of equipment sales demand; is that the right way of thinking about it?

Yeah. Robert, I think that is the right way to look at it. And so while courses will have capital budgets and plans, they are also no different than we saw back in the downturn. They are going to be a little bit cautious. We expect that it’s actually going to be more favorable than it has been. What I can say is when we look at our year to date results and open orders, we are actually in a very good position, but we are playing a bit of catch up there. And now the weather is improving and rounds played will improve as well. Robert Kosowsky – Sidoti & Company: Okay. Are these orders that could be pushed off indefinitely?

No. these are – when I mention orders these are orders that will be delivered this quarter. Robert Kosowsky – Sidoti & Company: Okay. and then finally …

I’m talking retail sales, not our shipments. Robert Kosowsky – Sidoti & Company: Okay. and then, finally, on the stock buyback pace. It seemed like it was very elevated in first half of this year, at least versus what it was last year. Should we expect this to continue at this pace or was it just kind of front-end loaded for whatever reason?

Rob, this is Tom. Yeah. As Renee indicated, we bought about $40 million worth of stock in the quarter. So that brings us to about $80 million for the year. Coming to the end year we said we expected to spend roughly similar amount as we did last year, which was around $100 million. Granted we’re ahead of that pace, but our thinking around this really hasn’t changed and the spending in the back half will depend on both price movements as well as our other needs and opportunities for use of our cash. But again our thinking around this really hasn’t changed. We’re just ahead of pace. Robert Kosowsky – Sidoti & Company: Okay, that is helpful. Congratulations on the 100 years, guys.

And your next question comes from the line of Jim Barrett with C.L. King. Please proceed. Jim Barrett – C.L. King & Associates: This is Jim Barrett with C.L. King. Good morning, everyone. Mike, I know it is still very early, but any sell-through indications yet for the SmartStow lawnmower?

Yeah. I think too early, but clearly the channel excitement around that product at both people and dealers has been very, very positive. And my guess is we’ll see more of these kinds of things because it’s a great feature, freeing up space in the homeowners garage. As an addition to that with the SmartStow kind of momentum, we brought out a whole new line of Lawn-Boy mowers this year that have also gotten a very good acceptance and created some excitement. Jim Barrett – C.L. King & Associates: Okay. and then separately, I may have missed it, but is there an opportunity in lawnmowers to provide a quieter engine in terms of a gasoline-powered lawnmower? I noticed one of your vendors is touting that technology.

I’m not sure I followed, Jim. Jim Barrett – C.L. King & Associates: I noticed Briggs & Stratton has a Quiet Power Technology engine. Is that an opportunity to implement in the lawnmower?

Yeah. I get that. I did get the question. I’m not sure our guys have – I’m sure they’ve talked with Briggs about that. So that’s something we are always looking at, making our products better. In this case better -- quieter no doubt is better maybe all the way some day to more electric powered products that are really quiet. So whether it’s SmartStow or a quiet power or different features that drive cutting performance, we are focused on all of those. Jim Barrett – C.L. King & Associates: Okay. And then more broadly, given some deals that have been in the space in the last six months, would there be antitrust issues for Toro if there was an interest and an inclination to expand into the commercial landscaping mower market, given your two leading brands that you currently have?

Yeah. We have a certainly a very strong share of the landscape contractor arena with the Toro and Exmark brands. I’ll leave that to the general council, but I think given our relative share that nothing would prevent us from continuing to grow that.

And your next question comes from the line of Sam Darkatsh with Raymond James. Please proceed Sir.

This is Josh filling in for Sam. Thanks for taking my questions. I wanted to dig into the gross margin a little more. Could you quantify the commodity impacts on gross margin in the quarter, and maybe spell out specific commodities or components in which you saw the most inflation?

What we saw within the quarter was -- I would characterize as modest commodity increases. We expect commodity prices to stay about where they are today versus continuing to escalate. Most significant increases were in the areas of steel and resin.

Okay. And then could you talk about the pricing realization that you had?

What we have stated previously is that we expect to realize about 1% net price realization and we are on track from that perspective. Quite a bit of that would have already been recognized based on our pricing actions.

Got it and are there any concerns you have with channel inventories or have those started to get on the right path now that we are through April and into May?

Yeah. I would say that -- and we had a similar discussion last year that overall our inventories are okay. Now they are a little higher than we would have liked because we had another really cold spring. With that said, we have good retail momentum across the business as we talked about earlier, particularly in the riding products and landscape products and so on. We will expect strong retail when it comes to snow products as we get into the back half of the year. So Mother Nature let’s face it as we had this conversation a year ago, the probability was we thought high that we would have gotten a, call it a normal spring and well, you know the story there. So it’s impacted many industries particularly here in the US and we’ve had a really fairly good spring in Europe. So that’s been on the positive side of the ledger, but 70% of our revenues are here in the US. And so the late spring has impacted that, but retail momentum right now is very strong. In fact we are just finishing up Toro days in May and that’s been a plus. So we think that will, like it did the last time around, take care of itself.

And other than weather and the commodity inflation, were there any other notable either positive or negative variances versus your prior plan?

No. I think things are playing out similarly to what we expected. I guess we dealt with the weather issue, the economy inching along, not a major step change either way. Certainly we will have the benefit of snow. So you look at our portfolio snows range, as little as 3% of our revenues in the past and as much as 6% over the last five years and certainly it’s going to move to the higher side as a result of this last winter.

And your next question comes from the line of Mark Herbek with Cleveland Research. Please proceed. Mark Herbek – Cleveland Research Company: Good morning, everyone. In terms of your full-year sales guidance, still 5% to 6%. Has anything changed over the last 90 days? Specifically, have your snow forecasts moved higher and has there been anything that might have moved lower in terms of you holding your 5% to 6% revenue growth for the full year?

Yeah. We’ve kind of asked and answered to some degree. Certainly the snow is built on the positive side of the ledger and the late spring when we talked last in February we would have expected a better spring environment. It’s not been that. So will that cost us a bit in terms of revenue? Probably. So all in, we are holding the position, but some of that will play out over the next three months, May, June, July in terms of what happens with our, particularly residential business in this coming quarter. Mark Herbek – Cleveland Research Company: And I guess on that subject, 20 days into May what have you seen in terms of retail demand on the consumer side? How much better is it?

Again it is similar to last year. We got -- again backing up to 2012, we had just an extraordinarily good spring. It was – people were playing golf here in Minnesota in March. Last year it was just the other book end. And while it hasn’t snowed, I’ll use Minnesota, while it hasn’t snowed here in May, it has certainly been cold and impacted. Whether that’s a residential homeowner’s intent to get out and use or purchase products as well as all the way to the other book end, the golf rounds plate. So I think that again back to what I said earlier, we’ll see how this plays out over the next 90 days. But we see strong signs from our landscape business, both I mean influenced by the good season they had with snow for the northern contractors, but more than that, really strong product portfolio. So that business is good and that’s a bit more planned. Golf is probably the most planned and the residential business is the one that riders in the residential arena are more planned than a walk-power motor. That’s probably the most variable in terms of going to be influenced by Mother Nature. So that’s a long winded answer. I hope that got to your question. Mark Herbek – Cleveland Research Company: In terms of the non-US guidance, I think I heard you mention you expect it to improve from here versus what was a softer second quarter. Specifically, what are you seeing in the non-US business in terms of golf equipment, golf irrigation? Are you seeing improvements and any quick update on the China moratoriums?

Yeah, not a dramatic change outside the U.S and again that’s a portfolio of a lot of countries and places around the world. We would look at it broadly and say Europe is sound. Europe as I mentioned earlier had a good spring. Golf is sound. We’re not going to see a step change either way there. We don’t think. Asia and China, a smaller part of our portfolio, both really important part of that business. I got a chance to go to their Beijing Golf show a couple of months ago. and that business continues to improve. I would say -- you used the term moratorium, certainly there was a slowdown but that is moving back in the right direction and there will be golf courses built in China and we have a really excellent position there and outside of China in other parts of Asia. So that is good. Probably the most significant headwind has come from Australia. It has been really challenging weather, had record drought issues. Our winter here is their summer there. So they had a record drought. We’ve had major currency headwinds. That’s about 25% of our international sales all in. and so that’s been -- when you put that in, that’s been the most negative.

Your next question comes from the line of Joshua Borstein with Longbow Research. Please proceed. Joshua Borstein – Longbow Research: Good morning, everyone. Thank you for taking my questions. Just to go back to a question that Josh asked on the inventories, were you speaking about your own inventories or about channel inventories?

I was speaking about channel inventories as obviously you can see. Joshua Borstein – Longbow Research: Okay, thanks for that. and then just I was hoping you can address the DIY segment, whether that’s for irrigation or rental equipment or another segment. Just trying to get a sense if you are seeing any slowdown there with some of the housing data points that have come out lately.

Yeah. Our rental team would say actually business has been good. No, we’re not as big a player there as some, but growing one. And we came off a very good year in rental side last year. I think their feedback would be maybe a little bit of slowing on the residential side. On the other hand, the commercial side seems to be picking up and we have even a stronger product offering which certainly helps our position and share. So that would be the biggest part of that DIY as we work with the rental companies, the channel partners we sell to them and they rent. Irrigation, DIY, that’s a much smaller part of the portfolio and I don’t have a good answer for right answer. Joshua Borstein – Longbow Research: Okay, and then on to the golf irrigation. Could you talk about the opportunity for that piece of the business, maybe this year and next? Do you have a sense for where in the replacement cycle courses are; if you expect any tailwinds from aging systems?

Yeah. I think we do. that should extent a number of years forward. Part of this is based on when you think about it, many of these course installations, of course I should say the new course development here in the U.S, that plays back in the late ‘80s and ‘90s and those courses are -- those systems are aging out right now. And so that should provide a bit of an annuity long into the future. We have a very high share in that space, work very hard to make sure we’ve got the right kind of offerings. And so the U.S market is more of a replacement market there. It’s a significant one. We will still see new golf growth outside the U.S long into the future. Those are new installations. And so we track those very carefully and we’re going to have a good year there this year and we would expect that to continue into the future. Joshua Borstein – Longbow Research: Great, thank you. And then just for modeling purposes, can you remind us how 3Q of last year played out, if there were any particular weather events from last year that we should take into consideration?

The 3Q weather last year was good and as I mentioned earlier in the remarks, we hope that effect plays out to similarly this year with temperature and moisture. And then some of that feeds into Q4. And so the snow part of that as we get to the last part of Q3 and into Q5 will be clearly better. Joshua Borstein – Longbow Research: Okay. And then just finally, on the rework issue that you had mentioned, can you tell us what segment that was in and what kind of impact that might have had to the gross margin?

Yeah. It was in the residential segment. so it impacted the residential gross margin. I think what we would say is without having that with the supplier issue, without having that, our residential earnings would have been similar to the prior year. and so we’ll work through that. those things happen. we do our best to try to make sure they don’t, but we’ve got it behind us and working with our channel partners to make sure that we don’t let inventory get out to our end users. so it’s been corrected within the quarter from getting our hands on the product. Joshua Borstein – Longbow Research: So that was just a 2Q event and there is no spillover into 3Q?

There will be a small part that will spill over as we make a couple of fixes on the product that we brought back, but it’s not material. Joshua Borstein – Longbow Research: Okay, great. Thank you and good luck on the rest of the year.

Your next question comes from the line of Robert Kosowsky with Sidoti. Please proceed. Robert Kosowsky – Sidoti & Company: Just a quick follow-up question on the dealer side of the business. It seems like Briggs and Husqvarna are making a bigger push into the higher end retail mower and landscaper channel. And I am just wondering if there has been any difference in how your dealers are reacting to you or maybe pricing expectations because of that.

Yeah. I don’t think that’s been what I’d call a material change. Actually that’s been true and similar for quite a while. So this is much about as we compete in the marketplace, do we bring the kind of innovation our customers. Do we have as I talked in the remarks to channel end-user relationships that differentiate us. we will keep doing, following that MO. Robert Kosowsky – Sidoti & Company: Okay. Thank you very much.

This concludes the question-and-answer session. Ms. Dahl, please proceed the closing remarks.

Thank you for your questions and continued interest in Toro. there are a couple of upcoming events of which we’d like to make you aware. On Wednesday of next week, May 28th, we will visit the New York Stock Exchange and ring the closing bell to commemorate our upcoming 100th anniversary. then later this summer, we encourage you to tune into Major League Baseball’s all-star game to be held in Minneapolis on July 15, just after our centennial celebrations. we know that Larry DiVito, head Groundskeeper for the Minnesota Twins and his crew will have the playing field in pristine condition for this event, and we are proud to help in that effort by being the exclusive provider of turf maintenance equipment and irrigation systems to Target field. After that, we look forward to talking with you in August to discuss our third quarter results. Thank you, and have a great day.

Ladies and gentlemen, that concludes the presentation for today’s conference. You may now all disconnect and have a wonderful day.