The Toro Co. releases COVID-19 action plan

The Toro Co. provided a business update on the actions it is taking as a result of the novel coronavirus (COVID-19) pandemic.

Richard M. Olson, The Toro Co.’s chairman and CEO said, “As the events surrounding the coronavirus continue to unfold, we are focused first and foremost on the health, safety and wellbeing of our employees, customers and communities around the world. We have adopted practices and policies to best support our people during this difficult time, while also enabling us to continue operating our businesses which are critical to helping our customers maintain essential infrastructure globally. The Toro Co. is in a solid financial position. We have a strong balance sheet and adequate liquidity to navigate the uncertainty of the current situation and to be well-positioned when the health and economic environments improve.”

The company has preparedness and response plans in place at its facilities and has taken actions to keep employees safe and healthy. In line with guidelines from the Centers for Disease Control and Prevention (CDC), World Health Organization (WHO) and state and local authorities that are intended to slow the virus spread, the company has asked employees who can work remotely to do so and has implemented enhanced health and safety protocols to further safeguard the majority of our employees who perform jobs that must be done in our facilities.

The company also adopted a special COVID-19 leave policy that provides two weeks of pay for employees who have the virus, are involuntarily quarantined because of the virus or are without work due to changes in our production schedules as the result of the virus.

The company intends to continue operations to the extent possible as an essential critical infrastructure business; however, it is presently temporarily suspending production or reducing levels of production at certain facilities due to the effects of the virus, including anticipated reduced demand for products in certain businesses.

The company continues to have a strong balance sheet and liquidity profile, with no significant debt maturities until April 2022. Given the current uncertainties surrounding the economic environment and out of an abundance of caution, the company entered into a three-year term loan agreement for $190 million to refinance revolving credit facility borrowings incurred in connection with the Venture Products, Inc. acquisition and to add incremental liquidity.With the funding of the term loan, the company will have liquidity of approximately $810 million, including cash on hand and unutilized availability under its $600 million revolving credit facility.

The company is taking additional prudent measures to further increase financial flexibility and liquidity during this period, including reviewing all options to reduce discretionary spending; deferring nonessential capital expenditures; optimizing working capital; and continuing curtailment of share repurchases.

“I believe that we have the right people, plans, systems and resources to face these unprecedented challenges. We are focused on operational efficiencies and are prudently managing our balance sheet to provide additional flexibility as we navigate this uncertain environment,” said Olson.

As a result of the many and evolving COVID-19 related factors, risks and challenges that could negatively impact The Toro Co.’s business, the company does not have the ability to predict the level of impact on its businesses and financial results for the fiscal 2020 second quarter or for the remainder of fiscal 2020 at this time.

Accordingly, The Toro Co. is withdrawing its fiscal 2020 second quarter and full year guidance provided in its Form 8-K and its Quarterly Report on Form 10-Q, each filed on March 5, 2020.
The company is not updating its outlook at this time but plans to share further updates in its second-quarter earnings announcement and conference call expected to be held on June 4, 2020.