Good day, ladies and gentlemen, and welcome to The Toro Company's Third Quarter Earnings Conference Call. My name is Gigi, and I'll 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 toward 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 Kerekes, Treasurer and Senior Managing Director of Global Tax and Investor Relations. Please proceed, Ms. Kerekes.

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 third 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 Steffan, 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 details 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 are disappointed by our third quarter results, which came in below our expectations, largely due to a reduction in homeowner demand for residential and professional segment lawn care products. This was driven by a combination of macro factors and unusually unfavorable weather patterns. Demand was strong across the rest of our end customer base, and with that, the other businesses in our diverse portfolio delivered excellent growth. In a moment, I'll discuss our initial estimates and assumptions for the third quarter and which of those did and did not come to fruition. Before I do that, it's important to note that we are encouraged by our continued market leadership, and believe we are well-positioned to drive long-term profitable growth in each of our attractive end markets. We're also excited by today's announcements of our partnership with Lowe's, which we expect will further strengthen our mass retail channel. We'll be discussing this development later in the call. But first, I'd like to explain what drove our lower-than-expected results for the quarter. On our June call, we shared expectations for total company net sales growth slightly below 7% in the third quarter. Instead, our net sales of $1.08 billion was a decline of 7%. We also shared expectations of adjusted diluted earnings per share slightly higher than last year's $1.19, and instead delivered $0.95. When we provided our third quarter and updated full year outlook on our last call, we outlined the key estimates and assumptions underlying our guidance. These included, continued strong demand across key professional segment markets, steady supply chain improvements, reduced volume for solutions geared to homeowners, and more normalized weather patterns for the remainder of the year. The first assumption held. Robust demand continued for products in our underground and specialty…

Thank you, Rick, and good morning everyone. While our performance in the third quarter fell short of our expectations, our market leadership remains strong, and many of the businesses in our portfolio delivered excellent growth. Consolidated net sales for the quarter were $1.08 billion, a decrease of 6.8% compared to last year. Reported EPS was a loss of $0.14 per diluted share. This includes non-cash goodwill impairment charges of $151.3 million on a gross basis, offset by an associated tax benefit of $36.7 million for a net of $114.6 million. Adjusted EPS was $0.95 per diluted share, both were down from $1.19 last year. Professional segment net sales for the third quarter were $896.3 million, up 1.1% year-over-year. This increase was primarily driven by higher shipments of construction and golf and grounds products and net price realization. This was partially offset by lower shipments of lawn care equipment, a reflection of reduced demand from homeowners who prefer professional solutions. Overall, the professional segment net sales growth reflects positive volume and price. Professional segment earnings for the third quarter were $13 million on a reported basis, down from $166.2 million last year. When expressed as a percentage of net sales, earnings for the segment were 1.5%, down from 18.8%. The year-over-year decrease was primarily due to gross non-cash impairment charges of $151.3 million and higher material and manufacturing costs. This was partially offset by productivity improvements and net price realization. Residential segment net sales for the third quarter were $175.3 million, down 35.1% compared to last year. The decrease was primarily driven by lower shipments of products broadly across the segments. Residential segment earnings for the quarter were down 85.4% to $3.8 million. When expressed as a percentage of net sales, earnings for the segment were 2.2%, down from 9.8%. The…

Thank you, Angie. Our business fundamentals remain strong, supported by our outstanding team of dedicated employees and channel partners. We have a long and proven track-record of managing through economic cycles and seasons with agility and resiliency. We expect that resiliency will help us navigate through the current rebalancing of homeowner demand. While consumer rebalancing in this macro-environment had a greater impact in the quarter than expected, we have a number of factors that we believe will drive positive results in the coming quarters. First and foremost, we are encouraged by very positive demand trends in other parts of the business. For example, we expect continued demand strength across the majority of our professional customer base, including professional contractors, golf courses, municipalities, sports fields and grounds, and our construction customers. Second, we believe our new strategic partnership with Lowe's is an excellent opportunity to complement and strengthen our mass channel in the residential segment. Third, the supply chain has been more stable, and we expect that it will continue to improve. This should enable productivity gains across our manufacturing facilities and help us drive incremental production for our backlog businesses. Finally, we're taking decisive actions to adjust our production and cost structure in the current demand environment. We believe these actions will drive near- and long-term productivity and margin benefits. I'd now like to provide additional comments on the factors we're seeing in our end markets which could impact future results. We anticipate continued strength in demand for our construction and golf and grounds businesses. We expect the drivers to be the same as we've noted previously, including infrastructure spending and support, sustained momentum in new golfers and rounds played, and the prioritization of public green spaces. Our order backlog for these businesses remain significantly elevated, and our team is…

Thank you. [Operator Instructions] Your first question comes from the line of Michael Shlisky from D.A. Davidson & Company.

Yes. Hello. Good morning, and thanks for taking my question. A lot to unpack here...

Good morning, Mike.

Good morning. There's lot to unpack here, maybe I'll start with the questions on the Lowe's agreement. I guess, first of all, I mean, this sounds like a pretty heavy invoice you'll be giving them. It's a pretty big sell-in or stock-up order for them happening in the spring, I would imagine. Angie, was that part of the reason why maybe the free cash might be a little challenge in the near-term, do you have to build inventory and work in process in advance of that shipment? And then, just some kind of sizing as to how much that first invoice could be? I'm trying to think back to what happened with Tractor Supply. Just some sensibility of the sizing, too, if you could?

Okay. Sure, Mike. I'll start by answering your question on the free cash flow. I would say, no, that wasn't a big impact to our free cash flow for the quarter. We have been working on our working capital metrics really all year long. Inventory is higher than we want it to be today, but not necessarily driven by the Lowe's impact or building up inventory for that. We do expect to see improvement throughout the year on our free cash flow. I know we've guided down now to 50% to 60% from our previous 90% to 100%, and expect that historically to get back to our conversion rate of about 100%. And it's really based on all working capital metrics, inventory, AP and AR. Rick, may want to comment further on the Lowe's piece.

Sure. As you can imagine, we're incredibly excited to have a partnership with Lowe's and it's -- actually, it's a great fit for us given a couple of factors. First of all, the strength of Lowe's, particularly in the zero-turn category, the location of their stores matches up well with that demographic. Our leadership in the area of these and really the combination of the two brands that's really a powerful opportunity for both. An opportunity really to bring our Flex-Force products to more customers was another thing that was important to us. And we value all of our long-term channel partners, but we really believe that this is the right thing to do for us and for our customers, a broader availability of the products. And it will be a substantial deal for us right off the bat in the first year. We're not guiding -- so, we're not specifically guiding for '24 yet, but will be a positive impact for '24.

Okay. And just a follow-up there, does what's happening at Lowe's change how you work at all with Home Depot? As far as I know with sort of exclusive until now, obviously, is it change in terms or the mix that you might have in that store going forward?

As with all of our partners, the Home Depot has been a terrific and continues to be a terrific partner for us. So, we will continue to look to them and each of our partners to provide a unique value proposition for each of their customers sets. There are differences, and we really want to work with each of our partners to help them grow their business as we grow as well. So, we continue to view the Home Depot as a strong partner as we do our other mass, and certainly our dealer channel as well, all important to us, bringing our products and our offerings to our customers in different ways, in the ways that they would like to have access to them.

Okay. And then turning to the other piece of big news, how the lawn care business was impacted by dry weather. I'd be curious, on the other side of things, did you have a good quarter or good outlook here for the golf irrigation business. If things were so dry, but people are still playing. Do you feel people are getting a lot of usage out of their systems and looking to upgrade or add some new products going forward on some of the golf courses out there?

Yes. Thanks for the question. That's an excellent question. We had a fantastic quarter on the golf side of the business. And really the non-landscape contractor portion of our professional business was very strong, particularly, we called out golf grounds and irrigation, but also the underground specialty construction. The big piece of this is the steady progress that we're making, excuse me -- steady progress that we're making with the supply chain as our plants have been able to operate more consistently. Our supply chain team has done an excellent job in working with our suppliers to get more consistent supply of components and the plants are gearing up much closer to pre-pandemic level on a consistent basis. So, that's been the driver. The demand has continued to be there across those businesses, and we've been able to meet that more significantly recently.

Okay. Thank you. I'm going to leave it there. I appreciate the help.

Okay. Thank you, Mike.

Thank you. One moment for our next question. Our next question comes from the line of Tim Wojs from Baird.

Yeah. Hey, guys. Good morning.

Good morning, Tim.

Maybe just the first question on the lawn care business within pro, or maybe just in pro in general. I mean, could you give us a little bit -- some flavor or maybe some buckets just in terms of how much the lawn care business declined in the third quarter in the pro business, and then maybe how much the other businesses underground and golf and grounds kind of grew? Just to give us an idea of the moving pieces there.

Yeah. As I mentioned the demand remains very strong on those other pieces. And if you look at -- you know, there's different ways to look at the reduction in-demand from a homeowner standpoint. If you look in the third quarter year-over-year, the split was pretty even between residential and the professional side or landscape contractor side. We've built-in a larger portion of that into what we said in the second quarter and our thinking was different than we expected was more reduction on the landscape contractor side. So, that was kind of the splits. It was pretty evenly split between res and the professional portion, landscape contractor going to homeowner. But the residential portion, we had anticipated more and on the landscape contractor side that ended up being a bigger piece. The other factor that was there, Tim, was just the normal rebalancing that our channel does, and as they look at their inventory carrying costs, the time of the season, they were looking to reduce their stock as well. So that's a factor that's kind of in-between us and the end-customers as well, that was a factor. But, the underground specialty construction, golf grounds, those parts of the business remain strong. Underlying drivers for those infrastructure, the strength of golf continue to be extraordinarily strong.

Okay, good. And then, I guess, just on the field inventory, I mean, it sounds like you're going to -- you expect to actually exit the season with higher inventory in the field. So, I guess, what are the conversations that you're having with distributors and dealers, just given -- I think you do have some pretty tough comps in the first half of the year for '23, and it seems like just given kind of exiting the year with higher inventory and then just higher cost to carry and those types of things, I mean, do you think it's possible that your distributors and dealers kind of take inventory into next year more on a -- I guess, just in time basis, or closer to the season?

Field inventory for us is really a story that's different depending on which of the categories. If you do think about those areas of high demand, our field inventory is very low. For example, the underground specialty construction, much, much lower than we would like to see it. That product is going directly to customers. The same with golf and grounds. The other end of the spectrum is what you're talking about, which is for those landscape contractor products specifically, in some categories of res, we go into a lower part where they're off part of the season with higher field inventory. So, we do expect that, that will take into 2024 to work through that. And probably realistically, if it gets carried through the off-season, it's going to be largely the second quarter when the demand is high enough to really bleed that off in a significant way and get back to a more normal level, just kind of working through the rebalancing of demand, the channel expectations and what our production is.

Okay. That makes sense. All right, appreciate the color, guys. Good luck on the rest of the year.

Thank you.

Thank you.

Thank you. One moment for our next question. Our next question comes from the line of Eric Bosshard from Cleveland Research Company.

Thank you. Two things. First of all, if you go back a little bit in time, like, the only residential mass customer was Home Depot. And it felt like that was a strategic decision. And over the last three years -- three years ago, you had Tractor, now you got Lowe's. And so, I'm curious, philosophically or strategically, what changed in either the market or your thinking that suggested good idea to do business with all three of these guys versus previously there obviously was a conscious decision to just sell one. What changed?

I don't know that anything has necessarily changed. We make that kind of calculation on an annual basis. We think through our strategies, we look at particular product categories where we're looking to grow. And we value all of our long-term and medium-term partners as you've mentioned. We just look at the opportunity that was there with Lowe's to bring our product to more customers and look at the entire picture, and we believe that it was the right thing to do for us now. And so, we have the opportunity to bring our brand to more customers and that ability to leverage at higher volumes, it's important for us as we're investing in new technologies and so forth to the level of investments in new product development becomes even greater. And to have larger scale and larger volume really is a help for all of our partners. We have a relationship with each of our channel partners, and we have an incredibly important dealer channel that we think of in every decision, and we believe we have the opportunity to grow at each of those channel types of channel partners as we go forward.

Okay. Secondly, Intimidator, just curious to understand a little bit better within this. I would assume when you bought the business or valued the business or pro forma the business, the revenue growth -- the mid-teen revenue growth last year was probably better than you had budgeted. I guess, I'm just surprised 18 months later to have a write-off of this magnitude, especially considering the first 12 months performance was again probably better than the pro forma. Is this inventory being written-off? Is this goodwill being written-off? Is there like something over the medium-term that -- or what's different in the medium-term that changes the arc of this business that accounting-wise got you to having to make such a move today?

Yeah, you're right. We saw a really nice growth in the first year of Intimidator Group, it was about 16.5%, so, very strong growth. What we saw impact that group and that business this year was the same thing that we saw in our other residential and homeowner businesses. Our Q3 results were significantly lower than expected. Really, the summer seasonality trends that they normally see did not come to fruition, mainly due to the weather. June ended up being a really hot month, and it impacted them in kind of the southern regions and -- that they play in. They are also largely based on customers that are homeowners who prefer to buy a professional product. So that, with the macro factors that Rick discussed earlier and he had in his prepared remarks, really affected that business. So, it's really goodwill and the trade name that were impaired. It's not a write-down of their assets.

Okay. And I -- admittedly, I don't -- totally understand the accounting piece of it, but what I guess I don't understand is like the June was a hot month in the summer seasonality and -- which seems very near-term to then impact how you carry the asset on the balance sheet. It just seems like a big change, if it's just indeed hot weather in June and some unique seasonality. There's not something different on a sustained go-forward basis. It's just as narrow as what happened here this summer.

It's largely -- Eric, for us, it's largely a math exercise, and really the impacts in near-term on our model is more significant. So, the actual results in the current quarter, for example, and then projecting just as we've talked about with the other businesses through -- into next year really has a more significant impact on the overall model for the business. Interest rates were also significantly higher. So, you put that all together, and I'd indicated it was appropriate for us to have the impairments related to goodwill and trade name that we're carrying.

Yeah. I would just also add to that, they're going into next year as well with a lot of field, a lot of channel inventory, so just like our res business.

So, we'll take into 2024 to get through that. I will say just not to get lost in this discussion, we still feel incredibly positive about the Intimidator Group and the Spartan business, we have no regrets about that becoming part of The Toro Company and have very strong expectations for that business going forward.

Okay. Thank you.

Thank you. One moment for our next question. Our next question comes from the line of Tom Hayes from C.L. King.

Hey, good morning everyone. Appreciate the time today.

Good morning, Tom.

Hey Rick, you mentioned a couple of times in your prepared remarks that it sounds like the supply chain is getting better. Could you just maybe elaborate a little bit on that? And kind of where you think -- is there further improvement we could see going forward?

Yeah, thanks for the question. We have seen a really significant improvement in supply chain, especially if you're looking at a year-over-year basis, it's been a steady improvement. The categories we've talked about over the last several quarters, wiring harnesses, hydraulic components, chips, et cetera, there's still -- we're still having periodic issues with those, but the frequency and the duration of those issues impacting our plants is much less. So, we're back closer to production levels before the pandemic in many cases. We've also been able to shift production of our products to plants that have lesser demand for some of the reasons we just talked about. And in fact, some of those abilities were really developed during the pandemic. So, we've become a little bit more flexible that way. And I would just say, having been out to a number of our plants within the last 30 days, there is a different sense than we had just a short time ago that the products are running down the lines consistently. The plants are busy and producing products very consistently, and just it's physically noticeable that we're back in a much better position. We still have ways to go in some areas and especially in some particular facilities and lines. But in general, a much different situation than we were in 12 months ago.

Okay. And then maybe as a follow-up on the residential side. I'm just wondering if you're seeing the broad-based decline in activity in the quarter, was that spread across both the traditional gas-powered engines and the battery products, or is -- there was maybe one a little bit better than the other?

It was spread across both, yeah, pretty similar response.

Okay. I appreciate the color. Thank you.

Okay, thank you.

Thank you. One moment for our next question. Our next question comes from the line of David MacGregor from Longbow Research.

Yeah. Good morning, everyone, and thanks for taking my questions.

Good morning, David.

Maybe I -- good morning, Rick. Can we just start by, for context sake, what percentage of this -- of the LCE business today do you think is the residential customer buying up and versus what percentage is the professional landscape contractor? I'm just trying to get some context for what's going on here.

Yeah. In the landscape contractor category in general across the three brands, the residential, what we would call -- I think you said residential, while we would say a homeowner, because it's typically a homeowner that has acreage that would justify a machine like that from a capacity standpoint or just the desire to get a professional product, but it is an appreciable portion of those businesses and it ranges a little bit differently across the brands. The x mark is a higher percentage of pure professionals and larger contractors, but still has an element of homeowners. On the other end of the spectrum, a higher percentage of it is homeowners and the Spartan brand, and then Toro is kind of in between. We don't break out the specific numbers because most of our competitors are private companies in these areas, and we know they look for information when we talk about it publicly, but it's an appreciable portion.

Okay. I guess, is there any way to just talk about -- where you are seeing some strength here in golf and in construction equipment, obviously, you've got a very substantial backlog that you continue to ship against. But could you speak to what you're seeing in order patterns in terms of incoming orders? And are you seeing any inflection or slowing or cancellation in orders, specifically maybe smaller courses or smaller dealers?

Yeah. The order flow continues to be very strong across those backorder categories, again, golf and grounds, underground construction and just as a -- thinking of the same kinds of questions, we just recently went through a kind of an aging review in our backorders and the majority by far of the backorders are actually in the current year, so that's something that's changed. It really speaks to the idea, although the overall backorder number has only come down slightly, it's been refreshed as we've been able to fulfill orders. New orders have been coming in. Lead times have been improving. So, those kind of multiyear orders that we're trying to fulfill are much smaller than they were a couple of years ago.

So, when you say that the backorders, the majority of those backorders are in the current year, are you saying 4Q, we're going to work down a very large portion of your current backlog in 4Q?

I would just say the composition of what we refer to as backorders or open orders were generated this year as opposed to last year or the year before.

You mean the incoming order as opposed to when you expect to ship?

When -- exactly. Yeah, when the order was placed. So, it speaks to the aging of those orders.

Right. As we still work out kind of the COVID era, it still takes some time to do that. So we're still working through orders that had come in, in '21 and '22.

Okay. I got it. Thank you for that distinction. And then, is there any way to isolate within the margins the impact of manufacturing curtailments versus everything else that's going on?

No. We are seeing manufacturing variances affect us, but we don't break it out specifically.

And to that point, obviously, when we see a decline in demand, the first thing we do is make adjustments within our plants to make sure we're not producing products that we don't need and making any expense adjustments that we need to make sure we're right-sized relative kind of to the market opportunity. But in Q3 and Q4, manufacturing variance is a factor, definitely, as you can imagine, with the reduction in volume.

Sure. That makes sense. Last question from me. During the quarter, you had kind of a short two-week period where you did not have any retail promotions, and that was kind of a gap between one sales event and the other. What did you see in the way of POS elasticity during that period? I'm just trying to get a sense of how impactful incentives might ultimately be in terms of helping you kind of elevate demand here and clear inventory, or whether the market has just become maybe a little more insensitive to incentives. But just maybe what did you see during that period that would inform that thought?

We're returning to a more normal situation. And I would say the programs that we run do have an impact. So they -- it is helpful in demand generation, et cetera. And -- but it's really returning to more normal kind of pre-pandemic type of response. We just hadn't been running those kind of promotions during the pandemic due to lack of availability of product. So, we're back to a more normal situation where we use those throughout the season to help drive or stimulate demand just on a normal basis and they have been working...

Thanks very much -- and they have been working, okay.

Yes.

Thank you.

Thank you. One moment for our next question. Our next question comes from the line of Joshua Wilson from Raymond James.

Good morning, and thanks for fitting me in.

Good morning, Josh.

Just one clarification on the backlog before I get to some other questions. You said it was down slightly versus three months ago. Is that right?

That's correct. Yes. We're down slightly from year-end.

Okay. And then as it relates to the new relationship with Lowe's, are there going to be any product exclusives or anything like that in the relationship? And then separately, do you have a sense of who you're displacing at Lowe's?

With regard to specific SKUs, that becomes part of the discussions with each of our channel partners. So, you would expect there would be some at any of our partners, including Lowe's. And with regard to displacement, we really can't speak to that. That's really within the -- with another discussion of the Lowe's with their other suppliers, but we are extraordinarily excited about the opportunity that Lowe's presents for us here as we go forward.

And do you have any sense of the net gain or loss in like shelf space between Lowe's and Home Depot?

We don't at this point. As you can imagine, we're pretty early in the relationship, and those -- all of those details are being worked out right now. And we're not really guiding to what's going to happen in '24. We'll be much more specific in December.

Got it. Thank you very much.

Thank you.

Thank you. One moment for our next question. Our next question comes from the line of Ted Jackson from Northland Securities.

Thanks. Down to the wire for me.

Hi, Ted.

Hi, Ted.

How are you? I just have a couple of follow-up questions. All the main ones I wanted have been asked. So first, just quickly on Lowe's. Is it fair to assume, I know you're not giving guidance, but we would see the impact of Lowe's in the second quarter of the next fiscal year just in terms of their -- how it would impact your business and they're getting stock in place with regards to the season and such?

Yeah. I think, Ted, you'll begin to see that in the spring 2024 selling season.

Again since -- and given that your second quarter is April, second quarter is where we would be looking for that impact to start showing up?

Yeah. Although we're not really -- we don't really know what the guidance will be at this point, but that's a good assumption.

Yeah. I'm just talking about timing. And then, the other question on inventory, you made a commentary that inventories are higher because of the weakness on the homeowner side of lawn care and that you felt that, that would be normalized by the time you got -- or I mean, I think you basically kind of said second quarter of '24 also. Can you give a little definition of what the term normal means? Is that like on a turns basis, the days of inventory basis? Is it on a dollar basis? Just kind of what's the bogey there?

Yeah. I think it would be really on all those basis. But we mentioned in the second quarter, we -- just in general, we believe it will take time into fiscal 2024 to normalize, to use that term again. And the biggest opportunity is in the second quarter just because of the traditional scale of sales as a percentage of the year for those types of products. So, that's when the volume becomes large enough to really impact the field. In the meantime, we're working with our channel partners to make sure that we've got the right stock levels, and they're making decisions based on their own business metrics. So, that's really what we refer to. But normal to us would be back to the more historical days inventory on hands and those kinds of metrics that we typically look at, and we're beyond those...

The new kid on the block, which is me, who doesn't have the history with the company, like what is the historical norm in terms of like days of inventory? I mean, in [indiscernible].

Yeah, it depends on both the channel and the specific brand and the flow of the product. So, I can't say that specifically in general.

If I were to look back at a year, could you give me a year I can calculate out like what you'd say would be a typical year that I would want to go look at for a reference point?

Yeah. We might be able to cover some of that a little bit later. I think that we are still trying to figure out what some of that normal means post COVID as well. But just to give you some comfort, we are seeing something good. We're making good progress in WIP, and we have seen the inventory come down two quarters in a row. So, we do believe to be in a better position in F '24.

And I was referring to field inventory there. So there are probably two different matters, yeah.

Yeah, I would be able to see that one as much, I'm sure. I mean, then my last thing, and I will step aside at [if that's what this is] (ph). I know we're not getting into guidance with Lowe's or anything else. But just, I don't recall, have you ever provided any kind of color of the percentage of your top-line that comes from mass markets? And if so, what...

We have not given specific numbers. A number of years ago, when we're a smaller company, we reported the numbers based on the need to do so, because it was more than 10% of our business. But that's -- we don't do that since we become larger. But they are -- it's a significant piece of our business. It's a significant part of the residential business specifically. And so, if you look at the total of residential, it's going to be a good portion of that.

Okay. I guess that's all I can ask for. All right, thanks very much.

Okay. Thank you.

Thank you.

Thank you. This concludes the question-and-answer session. Ms. Kerekes, please proceed to closing remarks.

Thank you all for your questions and interest in The Toro Company. We look forward to talking with everyone again in December to discuss our fiscal 2023 fourth quarter and full year results.

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