The Toro Company (NYSE:TTC) Q2 2023 Earnings Call Transcript

Edward Jackson: Okay. And now a real deep in the weeds question for you. In the cash flow statement on your distribution and contributions to the finance affiliate, you’ve been — it’s been a use of cash to the tune of about $2.5 million per quarter. And can you just provide some kind of color on how we should think about that line item in your cash flow statement as we go forward? I mean, it’s just something I really need a little guidance for and is important as it relates to cash flow.

Julie Kerekes: Yes, Ted, this is Julie. That relates to our Red Iron joint venture, and that will just kind of move up and down as our balances with them move up and down throughout the year. So we can discuss that further when we talk. I think we’re talking several but yes, yes.

Edward Jackson: Okay, well thank you for taking my questions.

Rick Olson: Thank you.

Angie Drake: Yes, thanks.

Operator: One moment for our next question. And our next question seems to be a follow-up from David MacGregor of Longbow Capital Research. Your lines is open.

David MacGregor: Yes, thanks for taking the follow-up. Rick, just sort of backing away from the quarter and looking at some longer-term drivers here, could you just give us an update on where you are with the autonomous offering in Residential? And I guess two things, what are the opportunities here to expand distribution and put the product in front of more consumers? And secondly, I guess based on kind of the early feedback you’re getting, what are the consumers focusing on with your product as the sources of competitive differentiation?

Rick Olson: Sure. I think one thing I would just say is, keeping the Residential offering in the context of the other products that we’ve already talked about and those that are in process, we really see a suite of robotic solutions going forward, of which that particular platform and configuration would be one of them, but we’ve also shown what we’re doing on the golf side, we’ve shown through our industry trade shows, what we’re doing on the landscape contractor side. And as these needs converge, they will — they may have a combination of solutions. The specific residential solution that you’re talking about, we have operating in limited volume out in the field right now, and we’ll be expanding that availability of that product through this year and into the first part of next year as well.

So what they see really as the differentiated piece that’s desirable is ability to operate in all conditions with less impact from things like tree canopies and access to GPS. So it uses fairly advanced optical systems to be able to create an understanding of its environment, and we think that, that will — although it’s a very challenging technical issue we believe that provides a lot of value to our customers, ultimately and better satisfaction rate.

David MacGregor: Interesting. And I guess, battery and hybrid products overall, you’re targeting 20% of motorized product sales by 2025. Where is that percentage today?

Rick Olson: I think the exact percentage is somewhere a little bit north of 6% at this point. We did publish and have been public about our goal to be 20% by 2025. And we have — as you’ve seen, we have been on a steady path releasing electrical battery solutions across all of our markets. We are challenged to keep up with the demand for golf, fully battery zero emission products in golf. Including green mowers, walk and rides, the utility vehicles with — and people movers, with lithium-ion solutions on the — we just introduced the revolution and the landscape contractor side, Exmark will be coming with a similar products. We’ve had our residential products, the 60V Flex-Force platform, just a steady introduction of those products, even in the construction side, the eDingo, the Ultra mud buggy that’s electric battery have opened up new opportunities for us to operate indoors.