Toro Company Earnings Call Insights: Mower Business Outlook and Tier 4 Impact
Mower Business Outlook
Mark Herbek – Cleveland Research: As it relates to August to-date in the mower business, can you talk a bit about what you’re seeing first 20 days of August is the growth in the mower business continuing, and then also what you think that means for field inventory in the mover business as we exit the season?
Michael J. Hoffman – Chairman and CEO: Well, again as we’ve said, field inventories kind of across the portfolio are in good shape, and that was a really key objective is the last quarter. So, a lot of focus there, lot of good execution, so the impact on our sales is somewhat. And so, the last few weeks I would say that the retail momentum has continued to be positive, maybe not quite as strong as it was, but it’s up over the prior year. And so this will somewhat depend on just what kind of growth we get in the August, September, October time period. But I’d say we’re relatively positive about that, and early indications are that’s holding up.
Mark Herbek – Cleveland Research: Your expectation field inventory finished the season down year-over-year?
Michael J. Hoffman – Chairman and CEO: Yeah.
Mark Herbek – Cleveland Research: I know you talk about it being reduced.
Michael J. Hoffman – Chairman and CEO: We want both our Toro inventory and our goal would be for the same for the field.
Mark Herbek – Cleveland Research: Next question in terms of favorable commodity trends, can you talk about what that means for 2014 production. I guess Renee, is it your expectation that cost will be down versus 2013? And also then a follow-up question on that, what do you now expect your gross margin expansion to be for 2013?