Good day ladies and gentlemen, and welcome to The Toro Company’s Second Quarter Earnings Conference Call. My name is Daniel, 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, Nicholas Rhoads, Managing Director of Investor Relations for The Toro Company. Please proceed, Mr. Rhoads.

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. 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 all are 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, 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 and metrics to reported GAAP financial measures and metrics can be found in our earnings release or on our website. The company believes these measures and metrics may be useful in performing meaningful comparisons of past and present operating results to understand the performance of its ongoing operations and how management views the business. Such non-GAAP financial measures and metrics should not be considered superior to, as a substitute for, or as an alternative to, and should be considered in conjunction with the GAAP financial measures presented in our earnings release in this call. With that, I will now turn the call over to Rick.

Thanks, and good morning. I’ll start by acknowledging the sad and disturbing recent events in the Minneapolis St. Paul Metro area and across the nation that began with the horrific death of one of our community members, George Floyd. Our hearts go out to the family and friends of Mr. Floyd and the communities directly affected. Regrettably, these events are representative of larger social and systemic issues. As our communities work together through these tragic circumstances, we must stand for what is right. The Toro Company has a long-standing focus on the importance of respect for all, in our workplaces and how we conduct business and in the communities we serve. In addition to the events of the past week, we all continue to deal with the effects of COVID-19. We hope all of you and your families are safe during this difficult time. It was humbling to see how so many people and organizations moved forward without hesitation to do what was needed to help others as the COVID-19 pandemic spread around the world. In response to the coronavirus, we prioritized the safety, well-being, and support of our employees, customers, and communities. In addition to our value of respect for all, as previously mentioned, some of our other core people values include caring relationships, trust, and integrity. Even through significant personal and family challenges, our team has transformed the way we work to protect the safety of one another, support our customers, and help our communities. I am deeply grateful for all of our employees around the world, many who are coming into our facilities each day to develop, test, build, and ship our products. The team’s flexibility, resourcefulness, and resolve is being demonstrated as we’ve acted to make our facilities safe and implement work-from-home policies. At the same…

Thank you, Rick, and good morning, everyone. The Toro Company is comprised of a balanced portfolio of products that enhance our customers’ productivity across the seasons. The company has a strong balance sheet that enables us to allocate capital effectively among a variety of alternatives, including new product development, acquisitions, dividends, debt paydown and share repurchases. Q2 was no exception. While the COVID-19 pandemic affected our results, we were able to adjust our operations and move the business forward. We reported net sales of $929 million in the quarter, a 3.4% decrease from the second quarter of fiscal 2019. Diluted EPS was $0.91 for the quarter compared to $1.07 last year. Adjusted diluted EPS was $0.92 down 21.4% compared to the second quarter of fiscal 2019. For the first six months of fiscal 2020, net sales increased 8.4%. Diluted EPS was $1.55 compared to $1.62 in the first six months of fiscal 2019. Year-to-date adjusted diluted EPS was $1.56 compared to $1.69 a year ago. Before I review segment results, I’ll cover liquidity. Back in March, we entered into a three-year term loan agreement for $190 million. This was to refinance our revolving credit facility borrowings incurred in connection with Venture Products acquisition, which closed on March 2. With the funding of this new term loan, the company now has liquidity of approximately $800 million, including cash and cash equivalents of $200 million, and availability under our revolving credit facility of approximately $600 million. We have no significant debt maturities until April 2022. We continue to work closely with their banking partners and monitor credit markets. Receivable collections continue to track similar to last year. All of this gives us confidence in our ability to weather the current and potentially extended period of macroeconomic uncertainty. I’d like to provide more…

Thanks, Renee. As we’ve seen so far in 2020, we have been agile in our response to the pandemic and remain committed to our core values of innovation and caring relationships built on trust and integrity. While our near-term visibility is limited, we have taken measures to ensure a solid financial position as we move forward. We are confident in our ability to continue serving our global customers throughout and far beyond the pandemic. As we look ahead, we are optimistic about our many exciting opportunities. Our investments in alternative power, smart connected products and robotic and autonomous technologies will drive an entirely new cycle of innovative products across our markets. We continue to expand our full-featured portfolio of battery-powered products as customers seek convenience and an opportunity to reduce emissions. We expect that customers who deferred new equipment purchases will return to the historic buying patterns as the economy improves. In past recessionary times when we saw new equipment purchase deferrals, we experienced strong growth in the recovery. In construction, the build-out of 5G and rural broadband should benefit sales of our underground equipment like the new JT24 horizontal directional drill. In golf and grounds, we will continue to innovate to increase productivity and solve customer challenges. For example, our IntelliDash course management platform helps turf professionals integrate data and use information to simplify operations and use water and other resources more efficiently. We continue to support contractors with an expanded line of high productivity equipment solutions. For the snow and ice season, this includes the BOSS Snowrator and Ventrac SSV, and for the growing season, the Exmark Staris and Toro GrandStand Multi Force. These are just a few examples of how we’re creating long-term growth through new product development and strategic acquisitions. We also expect continued homeowner interest in Home & Garden improvement. We have an exciting array of new products, including an expanded portfolio of 60-volt solutions, refresh brand content and marketing, and a new channel partner that is broadening our reach. In closing, our strategic priorities are enduring. Now and long after we emerge from this challenging time, we remain focused on accelerating profitable growth, driving productivity and operational excellence and empowering people. I’d like to again recognize the dedication and resilience of our employees and channel partners and offer my sincere thanks to our customers and shareholders for your continued support. With that, Renee and I would be happy to take your questions.

[Operator Instructions] Please standby for your first question. Your first question comes from David MacGregor with Longbow Research. Your line is now open.

Yes, good morning everyone. And thanks for taking the questions.

Good morning, Dave.

I guess where I’d like to start is – and thank you for the additional color. That’s helpful. But you talked about the third quarter as being potentially the worst from both the revenue and earnings standpoint. I wonder if you could just open that up a little bit and just talk about some of the individual business units and the dynamics that you expect would contribute to that net result?

Sure. I could talk just maybe hit a few of the businesses. I think the most important thing to watch would be the general and macroeconomic trends and general consumer confidence, business confidence throughout the next period here as being a significant factor along with what the weather does throughout the summer and the trajectory of the COVID virus. So there’s those macro pieces, if you look at some of the individual areas. If you look at golf, for example, we’ve all seen in the news that the rounds played have been very positive since the COVID – government restrictions were released. So, there’s a strong demand for golf rounds. However, that’s the one piece of cost of revenue. So we need the food and beverage, the events sort of revenues to continue coming back as the restrictions are released and the rate at which that happens will provide more revenue flexibility to continue investing in equipment. If you look at LCE, that’s a business confidence factor for those small businesses in many cases, and a solid mowing season this year will put revenue in their pockets. And so, we’ve got confidence that the economy is recovering, they’ll return to making capital purchases because that equipment does get consumed as part of the usage process for them. Ground, what happens to municipal budgets or some of them may hold the Federal CARES Act and other acts that are helping to offset some of the expenses that they had elsewhere. Residential, there’s strong growing conditions, we see the trends continuing with the interest in investing in your home and making that a place that you want to spend time. Underground, the resumption of 5G and broadband projects. So, we’re seeing signs that spending in those areas with contractors and the groups that are installing those systems is coming back. So, that would be something to watch there. And then construction and rental, we know that some elements of construction will be a more extended recovery, but any signs there. On the rental side, we’ve seen strong rental usage from homeowners. So the smaller rental shops in municipalities that particularly rental homeowners have done extremely well. It’s really more of the construction elements, the larger national rental accounts with a lot of the businesses tied to construction, that’s a factor. So that gives you just a little bit of flavor of the kinds of factors that we’re looking at going forward. The other thing to watch would just be COVID as it relates to our operations and our supply chain if there are widespread disruptions caused by that or specific regions that were affected by, those will be factors as well. So, that just gives you a little bit of flavor of the factors that we’re looking at as we go forward.

And I would just offer, David, that this is similar to what we saw. There’s many parallels to the 2008, 2009 recession, where we saw the residential segment really hold up well, again, as Rick said, more influenced by weather. And we saw more deferrals within the professional segment with a pretty strong recovery when we came out of that recession. And also, I would just offer, keep in mind, in Q3, we don’t have that incremental benefit from Charles Machine Works as an acquisition. As Rick mentioned, we’ve passed that one-year anniversary, and so that’s integrated into our business going forward.

Right. Is there any way of assessing just how much revenue was dislocated from 2Q into 3Q due to plant closures and product availability, backlog and those types of issues?

Sure. We had – as you can imagine, with the multiple objectives by state and by region, it was an incredible challenge to keep our operations running. But our team did a great job of making sure that our facilities continue to operate, and we had no disruptions from a professional side and from a residential side. A few product categories, we had some delays. Some of that could fall into this next quarter, but for the most part, though, it’s actually a bit of the opposite story. We’ve been able to take some sales opportunities because we have availability versus our competitors.

Right. And last question for me is just the decremental margins were rather large in the quarter. Obviously, things get – it’s hard to be nimble with your costs. But how should we think about decrementals moving into the third quarter and fourth quarter? Do you have an opportunity to start maybe normalizing costs down to reflect the – what’s going at the top line? Or how should we think about that?

Yes. Well, if you look at history, I mean, what we’ve seen, first, from an incremental standpoint is we tend to be between 20% and 25% incremental margins, really depending on product mix and segment mix as well. If you, again, using maybe the 2008, 2009 downturn as an example, what we saw there in the short term. We saw higher than that rate from a decremental standpoint, just as we adjust our cost structure. And we tend to continue to invest in innovation and new products and that serves us very well in that particular case, coming out really strong and able to again capture market share coming out of the recession. If we view this as a longer-term economic downturn, we certainly would take some other more aggressive fixed costs, actions as well, but at this point in time, we haven’t tried to take out capacity or anything like that because we do expect that. Although, this will fill into next year, that we’re going to see that recovery, we want to make sure that we are able to respond to that recovery when it occurs.

Got it. Thanks very much and good luck.

Thank you. Our next question comes from Mike Shlisky with Dougherty Colliers. Your line is now open.

Good morning. So you’ve been talking about some of the pro customers reducing their CapEx, that’s certainly not surprising. They just came in a tough time of the year during the first part of the spring. I’m kind of curious do you think you have actually this last [indiscerible] for the year? If you didn’t get it in March or April, it’s not going to happen because of the way that the seasons run, and perhaps as a related question, is there a certain base business? Is there – can you give us as still kind of percent of that segment that runs on a three or four-year lease cycle? And do you feel like you’ve got a good sense that everyone who is off-lease is trading in and buying something new even though it’s a tougher environment if they can have no machine? I’m kind of curious as to kind of where is the base business in the professional segment?

Great. To answer the first part of the question, we think it’s probably a combination of all of those possibilities. So what definitely happened is when our professional customers realized that we were in an economic downturn or situation, they responded like we did. They pulled back on expenses. They held their capital purchases and they reserved their cash. As we start to see the economy begin to grow again, those projects that have been on pause are what they are now evaluating. Obviously, most of our products are consumed as they are used to some extent. So the product has been used, golf courses have to be maintained regardless of the economy. The grass has to be mowed. There are other projects that continue on with or without the economy. So in that respect, for the capital projects that are delayed, it means that it moves out, but it does not, in most cases, go away. To answer your question about the lease renewal, there are three or four-year leases, that’s pretty typical in our golf environment. And I don’t have exact information on the renewal or trend for those.

Yes. I would say for the golf and ground, for the golf in particular, it’s probably close to about half of the business goes through lease, but that’s not a typical thing within like landscape contractor. So that would be specific to the golf portion of the business.

And again, folks can’t just end the lease, bring back machine and not have anything. So in general, you’re seeing renewal or a new machine out the door? Or they’re still kind of holding off temporarily?

With – from a golf leasing standpoint, I think they would be more likely to renew their lease. It’s more that the individual who isn’t leasing today, and they’re making that decision to buy or not, we tend to see that particular customer migrate more toward repair.

So it’d really be those leases that are coming due, they happen to come due right now in the middle of the situation. They’ve got to make a decision if they go ahead and renew normally, which is probably most likely they could also extend leases or they’ve got other options as well.

Okay. And then turning to residential, you had a large channel partner rolling out in the quarter. Some reasons you didn’t name them. I won’t name them either, but I know they are. I’m kind of curious, has the sell-through there, even with the crisis, has it been as good as you expected? Let’s say, six months ago, is it kind of going to your expectations. Also kind of curious, are you able to ship everything into the stores, whether it was signage and the actual products themselves in time before the COVID prices hit? And also, kind of curious, are you able to shift any kind of restock now? Are you up and running on that level?

We are extremely pleased with new partnership with the Tractor Supply Company, and that is going on as planned. And in spite of overall economic situation and COVID situation, the sales there have been well within the bands that we would expect. So we’ve been very happy with that. And it’s complementary to our other channel partners. The Home Depot, for example, has done extremely well. Our other mass partners in total have done well. The dealer business has seen incremental growth. So it’s a customer-driven demand, and we are pleased with all of our mass partners as well as the progress that’s been made with dealers. Tractor supply extends and is complementary and breaches further into the rural and farm markets and large acreage owners.

Good to speak with you guys. I’ll pass along. Thank you.

Thank you. Our next question comes from Joe Mondillo with Sidoti. Your line is now open.

Good morning, everyone. Just want to say I appreciate your opening remarks, Rick. My first question, just related to golf. I was wondering if you could sort of talk about equipment versus irrigation? Have you – were you seeing any maybe positive performance or better than equipment on the irrigation side, given that that’s more sort of capital projects? Did you have any projects undergoing? And so as those capital projects run off, does the irrigation get worse? Or just talk about irrigation versus equipment?

Yes. I think equipment would be very much in keeping with the discussion that we’ve had about capital purchases and consumption of the product, if you will, through its life cycle and leases, those kinds of considerations. For irrigation, there are other factors. So the fact that some courses were shutdown for the COVID restrictions, created some opportunities to get on to the courses and do some work from an irrigation standpoint. Our irrigation business for golf has held up very well, partially also because of – we’ve had good availability. So we’ve had the components that they need, and that’s been an issue in the marketplace. And then for major projects that have been – that were planned, a few of those dropped out, but they were quickly replaced by other projects that were in the queue because there is – the constraint is there are a handful of contractors that are sort of the trusted people that do the installations. And so where there is availability for them that freed up, it was immediately filled with a project that was in the queue. Now what happens at the end of the line, do some of the projects that were delayed, come back in again? There’s a little bit more question, a little bit further out. But in the near-term perspective, golf irrigation has done well and projects – the mix is a little bit different on projects, but the total has been very solid.

Great. And when you look at the channel inventory levels at the professional business, maybe if you compare it to 2009, it looked like this quarter, the organic growth was off similar to maybe one of your worst quarters in 2009. So when you think about channel inventories and the way this even more specifically, the timing of this sort of economic shutdown right at your prime time, seasonal time, how do you think about channel inventories as we go through the year and into next season? I know it’s sort of early, but just wondering your thoughts on that.

Yes. I mean, from a positive standpoint, our field inventories for the professional side are actually in great shape, and we’ve been able to continue. Over the last couple of quarters, we talked about higher field inventory in some categories like landscape contractor and maybe commercial, both of those have been able to manage those down in spite of the current situation. So we’re making good progress there. That leaves capacity as well in those channels as we begin a recovery process as well. So we’re in good shape from a professional side.

Are you referring to your, The Toro inventories in the channel or industry? Because I’m sort of curious in the industry, just how that’s potentially going to affect later this year or into next year?

Yes, I’m really referring to our channel inventory. I don’t have as much visibility on other professional competitor inventories in the field, especially right now, given the change of the…

Okay. Okay. And then last question for me. Just on your specialty construction and CMW business, specifically. I think in your prepared remarks, you stated that things were trending actually relatively pretty positive. I think maybe it was – you stated a little offset by construction in oil and gas. But just curious, how does that – have you seen the worst in that business sort of in this trend, given April, a lot of cap equipment is expected to sort of see the worse in April time period, maybe May? Do you anticipate improvement in that business sequentially going through the rest of the calendar year? Or how do you view that business? And where we’re at today?

First of all, we’ve talked about one of our tests for acquisitions, which is how do we feel about it a year later. And I will say, we feel even better about it a year later. We could not be more pleased with the acquisition of Charles Machine Works. And now Venture Products. From underground businesses that are covered by Charles Machine Works, they had a similar response to Toro legacy products in this end markets in this economic situation and roughly the same response back in 2008, 2009, 2010 in terms of coming back. The separate factor would be oil and gas. So roughly 10% – a little bit more than 10% of the business is tied to oil and gas. And that’s going to be in a different cycle. That will probably be a slower recovery bringing those markets back. But the big drivers that are different than 2008 through 2010 are the 5G and the broadband, and we’ve already seen signs that even if they pause some of those projects or they had to because of the Board restrictions, those – there’s a lot of momentum about completing those build-out of 5G and the recognition of broadband gap for many parts of the country in U.S. here and actually around the world. I mean, the positive thing is that we have – we are on track with our synergies, and we have been very pleased to see how those synergies extend beyond the intersection of Charles Machine Works and The Toro Company to other parts of our business, including just as an example, the positive margins that you see in residential in a part are due to the benefits that we’ve seen from additional scale in some of the categories.

Okay. And just a follow-up. In the context of the economic shutdown and whatnot, would you expect Charles Machine Works to sequentially improve through the calendar year? Is that visible or…

I think when you look at the overall – maybe answering it from an overall standpoint. If you adjust for the impact that we saw, the benefit that we saw from Charles Machine Works in Q2, we would expect that the overall company level that we will see improvement as we go through the remainder of this year. Again, Q3 is a larger decline, but driven by the fact that in Q2, we saw the benefits from the acquisition. So overall, we’re seeing that. And I think the same is true for Charles Machine Works.

I think it would follow the rest of the company with regard to – essentially, it’s a sequence of less negative as time goes on. That’s going to nominally match the economic cycle.

Okay. All right. Thanks for taking my questions. I appreciate it.

Thank you.

Thank you.

Thank you. Our next question comes from Tim Wojs with Baird. Your line is now open.

Hi, good morning, everybody. Thanks for the details.

Good morning.

Good morning.

Maybe, just on the guidance or the qualitative guidance for the third quarter, I just had a clarification. Is the guidance of Q3 being kind of the most pronounced on a sales basis on a year-over-year basis? Is that a total growth number or an organic number just because Charles Machine Works was kind of included in the second quarter still? And I’m just trying to kind of clarify that comment.

No, Tim, that would be a total number. Not an organic number. The organic number would show, as Rick just said, improvement as we go less negative as we go through the remainder of this year. So, that’s a total.

Okay, okay. Perfect. And then maybe, just on the golf side. If we do start to see – if we see a continuation of good rounds played and then also just a pickup in food and beverage, do you think golf could see a rebound in terms new equipment sales over the summer? Or do you think that, that really just kind of gets deferred into next year if you had to give us your best guess?

Yes. The best response is it will be a combination of those. So some of those, especially in areas where the restrictions have been released more quickly, we’ll come back quickly. And in some cases, they’ve just committed to buy the equipment that’s needed because it’s recognized that that’s what the organization is about. There are other parts of golf that will definitely be slower to come back, and those would be resort golf, for example, on an international basis, especially places that you fly to play golf. And that is TBD in terms of how quickly travel comes back, where people start to feel more comfortable going through airports. And so that will be on a little different cycle. Individual business decisions, I mean, right now, there are few – there are – we have customers that say, don’t see this as a long-term issue; we’re going to go ahead and maintain our equipment replacement cycle. Others have said, we lost all of our food and beverage revenue and weddings and banquets, so we’re going to hold off. So it’s really a spectrum. I’d like to give you a clean answer, but that’s what’s happening.

No. No, that’s helpful. I appreciate that. And then maybe just last question on residential. I know the sellout and kind of sell-in has been pretty strong here to kind of begin the year. But just given the expansion into Tractor Supply, do you think the structural margins in residential, there’s a new level that you’re kind of getting to and that we can continue to see that improve over the intermediate term, maybe back to kind of that low double-digit type frame you were in four, five years ago?

Yes. What I would say, Tim, is we’re not providing specific guidance in this quarter, but we did talk about residential margins in Q1. And what we had shared is we expected Q2 to remain pretty strong. I mean it is the benefit of that incremental volume and also some of the productivity and synergy actions that Rick just mentioned. We did say that based on the outlook at that point in time, we expected them to moderate in the second half of the year, and that’s very consistent with what we normally see. And at that time, we thought it would be more moderating into the low teens. So maybe a little lower than that because of the impacts of COVID-19. But we do definitely see a benefit from some of the synergy and productivity actions across the portfolio as well as volume benefit by having an expanded channel that should carry forward as well.

Okay, okay. That’s it. That’s all I have. Thanks, guys. Good luck for next year.

Thank you.

Thank you.

Thank you. Our next question comes from Sam Darkatsh with Raymond James. Your line is now open.

Good morning, Rick. Good morning, Renee. And I hope and you and your families are well and safe. Just a couple of clarification questions. And if this was covered and I missed it, I apologize. Could you help specifically quantify what May sales were down just so we can get a sense of as things improve, at least, what’s the base from where it would improve?

Yes. We didn’t specifically talk to May sales. And from a quantified standpoint, what Rick said, I believe, was that we did see improvement in May versus what we have seen in April. So kind of recounting some impact the second half of March, a more significant decline in April, and we saw May improving as far as that trend.

Trajectory.

Could you quantify one of those, maybe April or May, just for scope for us, if you could?

Yes. In the seasonal business, we don’t have all the monthly detail with us because every one of our months are a little bit different than the quarter. But I think we felt good about the trend we’re seeing in May, and I’m seeing that improve across all of the businesses.

Got you. Okay. And then and again, if I’ve missed this, I apologize. The snow season was challenging this year, again, particularly in the Northeast, which I think you’re underway. But how would you look at the snow inventories and the prospective pre-season to come, if you could, Rick?

Sure. Yes. If you look particularly at snow in the second quarter, that was year-over-year below the prior year; both on the residential side and professional, but that would be probably a little bit more typical. The last couple of seasons have been – the winter season at least in the Midwest has extended well into April, some would argue the first part of May. So there were stronger late season sales last year than this year. Overall, the snow season for us, both on the residential and the pro side, it has been a decent snow year for us. And I think it reflects two things. We have done a lot of work with the residential team on our product lineup. We have great products with a lot of innovation the people are responding to. And then we are, as you said, overweighted to the Midwest. And we had a decent winter in the Midwest, Upper Midwest, especially this last season. So preorders, as you can imagine, in the middle of the COVID situation were a little bit less than we had hoped for the coming season. The channel is telling us that it’s not reflecting their lack of confidence in the business, but they’re more likely to make those purchases within the season versus preordering them. And from the professional side, the Snowrator, we talked about in the past, that continues to be very solid. And now the Ventrac SSV, sidewalk vehicle, those are open spaces for us that have a huge productivity story associated with them that our customers really see.

My last question – and thank you for that, that was helpful. My last question would be, there’s a fair amount of noise with the acquisitions on some of the balance sheet items. Could you help us, Renee, in terms of where your goal is for fiscal year-end inventories?

Certainly, so when we look at inventories, they are higher at this current point in time just due to the sudden change in demand and the efforts to realign. And Rick talked about field inventory also being lower. When we look at year-end, we do expect them that we’ll probably carry a little more inventory than we traditionally have just because of the desire to try to buffer some of the potential supplier issues that could occur. That serves us well as we look at how we’ve managed through this year, and we plan to continue the same unless the supplier environment really improves substantially. And then social distancing and the impact that it has on our capacity will also impact that. We’re assuming social distancing is going to be something that’s in place for the foreseeable future, so we’re kind of planning around that. And that has some impact on the inventory that we carry based on the certain plant locations. It’s not every plant location. And then the last thing is just being ready for the recovery. We do view this as something that we’ll see that recovery as we go into F 2021. And what we have seen from past recessions is that recovery for us happens pretty quickly, and we want to be prepared based on the financial strength of the company. We feel that would be a good investment.

So, inventories in dollars would be up on a year-on-year basis by the end of the fiscal year, by the end of October, is that how to think of it then despite the sales declines?

Okay. Thank you very much. I appreciate it. Again, be well.

Thank you.

Thank you. You too.

Thank you. Our next question comes from Tom Hayes with Northcoast Research. Your line is now open.

Thank you. Good morning, Rick, Renee. Appreciate you for taking my question.

Good morning.

Good morning, Tom.

I guess, just quickly, most of my questions have been asked and answered. But maybe, Rick, on a year-to-date basis, it looks like your international revenue is up slightly, just wondering if there’s any markets or products that are kind of driving that standout to you?

Yes. Let’s see. I think overall, I’m not sure we are up overall for international. On the pro side, we are up a little bit, and that would be driven really regionally. So in Europe, for example, driven by golf projects that continue until – right up until the COVID thing happened, would be the biggest driver. Parts of Asia that had a very good year. They are counter-seasonal thoughts. So those would be the big drivers, but no major standout sort of factors there. And together, residential and professional, I think we’re actually – we may actually be down a little bit.

All right, thank you. Appreciate the color.

Okay. Thank you.

Thank you.

This concludes our question-and-answer session. Mr. Rhoads, please proceed to closing remarks.

Great. Thank you all for your questions and interest in The Toro Company. We look forward to speaking with you again in September, to discuss our results for the third quarter. Thank you.

Thank you for your participation in today’s conference. This concludes the presentation. You may now disconnect.