Michael J. Hoffman - President and CEO Stephen P. Wolfe - CFO, VP, Finance

Sam Darkatsh - Raymond James Seaver Wang - Utendahl Capital Partners Jim Lucas - Janney Montgomery Scott James Bank - Sidoti & Company

Good day ladies and gentlemen and welcome to the Toro Company First Quarter Earnings Conference Call. My name is Maria and I will be your audio 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, Mr. Michael J. Hoffman, Chairman and CEO of the Toro Company. Please proceed Mr. Hoffman. Michael J. Hoffman - President and Chief Executive Officer: Thank you Maria. Good morning ladies and gentlemen and thank you for joining us for our first quarter earnings conference call. Here with me this morning are Steve Wolfe, our Chief Financial Officer; Tom Larson, Treasurer; and John Wright, Director of Investor Relations. Let's begin with our forward-looking statement policy. Please keep in mind that during the call we will make certain forward-looking statements as of today, which are intended to assist you in understanding the company's results. You are all aware of the inherent difficulties, risks and uncertainties in making predictive statements. So the Safe Harbor portion of the company's earnings release as well as SEC filings detail some of the important risk factors that may cause actual results to differ from those in our predictions. Our earnings release was issued this morning by Business Wire and can also be found in the investor information section of our corporate web site, thetorocompany.com. Here in the upper Midwest, the snow season started early and it has yet to let up. We are seeing considerable snowfall with several significant events to date. In fact major storms have occurred not only here in the US but also throughout Canada, driving strong retail activity for Toro's snowthrowers across North America. At the same time, on the Professional side of our business, golf customers are already looking to spring and warmer weather. Earlier this month, we returned from the annual Golf Industry Show in Orlando where once again we introduced several innovative new products and feature enhancements to our line-up. Toro has long held the leadership position in this important industry where our domestic customer sentiment for the upcoming season is cautiously optimistic. We've also been very successful in leveraging our strong brand recognition in growing international golf business. We had an opportunity to visit with a number of our international customers during the show and they remain quite positive about the golf business. As a result, they continue to invest in Toro's turf maintenance equipment and irrigation systems for renovations and new course constructions around the world. We will talk more about some of these new products and other developments in a moment. First, let's take a closer look at our consolidated results for the first quarter ended February 1, 2008. This is a small quarter where we prepare for the selling season ahead. Early indications show we are off to a solid start with a strong product lineup. Even so, we are sharply attuned to the uncertain environment and are managing for the potential effects of a weakening economy. Let me touch on a few of the highlights from this morning's earnings release. First, net sales rose 7% for the quarter to $405.8 million. These gains occurred in both our Professional and Residential segments, with the majority of the increases once again coming from outside the US. An ongoing strategy has been to raise the international portion of our total revenue to 30% or more. This is now benefiting us as the domestic market slows, but the international markets remain strong. Overall, international sales rose 19.5% compared to the first quarter last year. Excluding the effect of currency, international sales grew over 13% in the quarter driven by the growth in the golf and grounds markets, and new products we've launched during the past two years. Earnings from operations increased 15.2%. We had a slight decline in gross margin, but benefited nicely from an improvement in selling, general and administrative expenses both as a percent of sales. Although we had a higher tax rate in the quarter, we finished with an improvement in earnings per share of 6.8% or $0.47. Finally, I want to highlight the improving position in accounts receivable and inventory. As you know, we're increasing our focus to reduce both items throughout the supply chain as part of our GrowLean initiative to improve working capital and asset management. We believe our inventories and field inventory levels combined with forecasted retail demand position us well for the months ahead. While that's an overview for the first quarter, now let's review the segment results. Worldwide sales for the Professional segment rose 7.7% to $293.2 million. As I mentioned earlier, revenue growth was exceptionally strong outside the US, where new golf course construction continued to drive demand for our innovative irrigation systems and turf maintenance equipment. At this year's Golf Industry Show, once again we unveiled new product offerings to strengthen Toro's worldwide market leadership. First, we are very excited about the new Turf Guard wireless soil monitoring system, our most recent acquisition. This new technology measures soil moisture, salinity and temperature, then transmits the data to a web-based interface. Our customers can use the data to analyze turf conditions and determine the most cost-effective and environmentally responsible irrigation methods to maintain healthy turf. The bottom line, this system will help customers use less water and less energy. Second, New ProCore Aerators help reduce [inaudible] and build stronger root systems while offering greater productivity to the golf course superintendents. These new aerators when coupled with our new core processor, result in a labor saving one pass operation. Third, we introduced a new line of Workman mid-duty vehicles with a suspension system that offers a superior ride in all applications. And finally the new Groundsmaster 5900 series, Toro's next generation of 16-foot wide rotary mowers. These are all new from the ground up with precise maneuverability and four-wheel drive [ph]. Shifting gears to the landscape contractor market. Domestic equipment sales were down slightly due to distribution changes. Also, field inventory levels of these products continue to decrease as part of our ongoing lean and asset management efforts. Overall, field inventory is much improved over last year. On the product side, we're excited to have several new introductions for the landscape and irrigation contractor. For the irrigation contractor, we introduced the Irritrol I-PRO spray heads and nozzles for greater irrigation efficiency, part of our precise irrigation strategy. For landscape contractors, we developed a new Toro Stand on mower. This machine, which will be released in late 2008, caters to contractors who seek a compact machine with exceptional handling. And finally the new Toro TRX series of Tract walk-behind trenchers provide significant benefits to rental yards and contractors. We just introduced this new product at the Renault show last week. These are just some of the innovations creating enthusiasm within our distribution channels and generating interest among our customers. For the Professional segment, pre-tax earnings rose 8.6% to $52.5 million attributable to higher sales, favorable currency exchange rates and improved product mix. In the Residential segment, worldwide sales were up 6.2% for the quarter to $108.2 million. Given the kind of snowy winter weather we prefer, shipments of Toro snowthrowers here in the U.S and in Canada were up significantly to dealers in our [inaudible] retailer. We also enjoyed strong worldwide increases for the Toro TimeCutter Z, zero-turning radius mowers in anticipation of the selling season ahead and continued growth in the Z market. As you will remember from our earlier calls, we have gained valuable floor space at dealers and our major retailer last year for this time saving family of products, and expect their popularity will continue to outpace traditional line and garden tractors. In contrast, [inaudible] shipments declined for the quarter. As you might expect, our retail partners are exercising caution in light of the challenging economy and have shifted their orders closer to retail demand. Subsequently earnings in the Residential segment declined $1.6 million mainly due to lower gross margins as a result of higher freight expense and additional investments and tooling for new products. Now let's talk about the key operating results. Then we'll turn to our outlook for the remainder of the year. As mentioned we experienced a slight decline in gross margins mainly reflecting higher freight cost. We improved our leveraging of SG&A during the quarter. SG&A expense improved to 28.9% compared to 29.6% last year. And even with the SG&A as a percentage of sales being lower, we increased marketing spending and made additional investments in engineering, which were both up over the first quarter of last year. Interest expense for the quarter rose 8.8%, long-term debt was up over the previous year due to a bond placement in April of 2007 and as a result short-term debt declined for the quarter. Effective tax rate for the quarter was 35.4% compared to 28.2% in the first quarter of last year. You'll remember last year we experienced a positive impact on our tax rate from the retroactive extension of the federal research and engineering tax credit. For 2008, this tax credit has expired once again and the outlook is unclear as to if and when the Federal Government may extend it. Given this uncertainty, we now expect our tax rate for the year to be 35.4%. Our balance sheet is in excellent shape with inventory being down nearly 4% and accounts receivable down 3.5% from a year ago. Throughout our GrowLean initiative, we've been focusing on becoming more intentional about asset management, and we are developing enhanced tracking and reporting systems to help us reach our working capital goal. And finally our continuing strong cash flow has allowed us to return additional value to shareholders to dividends and share repurchases. In December our Board of Directors authorized an increase in quarterly dividend from $0.12 to $0.15 per common share, a 25% increase over the prior year. During the quarter, we also purchased 590,000 shares of common stock with $31.8 million and now have 544,000 shares remaining on our current authorization. We expect repurchase activity during the year will result in a reduction of average diluted shares outstanding similar to what we've seen in the past few years. Now let's discuss our outlook for the season. I want to stress once again that while we have built some positive momentum, we're also mindful of the domestic economy. We are joining our channel partners in aggressively driving retail while managing inventory levels, and we will closely track retail velocity as the season plays out. So, while the international business is solid, the domestic market is expected to be somewhat soft, and we're not immune to that weakness. Even with those challenges, I'm confident in our competitive position. Given the number of new products we introduced the last three years including this year, our level of new product sales is at the highest it's been in the past decade. These innovative products developed specifically to meet customer needs put us on the strong platform to continue increasing market share. In the area of margin and SG&A, we expect our fiscal 2008 gross margin to be flat to slightly improved over last year, and we expect SG&A as a percent of sales to be flat to slightly unfavorable compared to the prior year. Therefore, we now expect to report an 8% to 10% increase in net earnings per share for fiscal 2008 and revenue growth of 2% to 4%. For the upcoming second quarter, we anticipate net earnings per share of $1.87 to $1.93. That concludes our formal remarks for the Toro Company's fiscal 2008 first quarter. So, now let's open it up for your questions. Maria, back to you. Question and Answer

[Operator Instructions] The first question comes from the line of Eric Bosshard with Cleveland Research. Please proceed.

Good morning, this is Mark standing in for Eric. Michael J. Hoffman - President and Chief Executive Officer: Good morning Mark.

First question. Obviously a solid 1Q beat, but you lowered revenue and EPS guidance for the year. Is there anything here in February that you are seeing that is causing some concern or is it just simply the headlines that everyone is reading each and everyday? Michael J. Hoffman - President and Chief Executive Officer: I think we are all reading similar headlines, and so as you step back a quarter the... certainly the economic environment is softer than it was 90 days ago, we are being mindful of that, we are heading into the heart of our selling season in kind of the March to June time period, and so we are going to be very focused on driving retail, kind of in spite of some of the... as you say the headlines, but we recognize that is in fact, I guess the word is headwind we are facing.

Can you add some color on exactly what you are doing to drive retail? Is it lower prices, increased promotions? Michael J. Hoffman - President and Chief Executive Officer: Well the first thing it starts with is having the right products, and so the new products we are going to introduce certainly position us very well to continue to take… we believe to take share. So, it is the right products at the right price points. As part of that then we certainly look across the... across the businesses that what other ways could we accelerate some of the retail, and so in the residential areas certainly there are promotions we look at using not necessarily different than prior years. We may accelerate some of those on the professional side, it may be as much about just working with customers to try to get their commitments earlier. So, we can count on those.

Are you seeing anything different with your distribution channel, the overall financial stability of the dealer network, anything that would be a cause of concern today versus maybe 90 days ago? Michael J. Hoffman - President and Chief Executive Officer: No.

And then finally your snow outperformance in the first quarter. Does your full year guidance include the expected selling, strength in selling that we should see in the third and fourth quarter due to low inventory out in the channel? Michael J. Hoffman - President and Chief Executive Officer: Well, it does. Certainly snow is on the side of the ledger, there is a strength, a positive factor offset by some of the other factors. And remember snow is a very small part of our business. So, we like the business, it has been strong in the US, or I should say North America. It hasn't been particularly strong in Europe. They haven't had the kind of snowfalls we've had here. So, we are counting on some improvement there, but there are other things on the other side of the ledger.

Thanks guys. Michael J. Hoffman - President and Chief Executive Officer: Thanks Mark.

Your next question comes from the line of Sam Darkatsh with Raymond James. Please proceed. Michael J. Hoffman - President and Chief Executive Officer: Good morning Sam. Sam Darkatsh - Raymond James: Thanks Steve. How are you? Stephen P. Wolfe - Chief Financial Officer, Vice President, Finance: Good. Sam Darkatsh - Raymond James: I unfortunately signed on a little late. So, I apologize if these questions are redundant based on your early remarks. Receivables being down with sales being up, is that indicative of things slowing down as the quarter progressed or is that a matter of better collections or how should I look at that? Stephen P. Wolfe - Chief Financial Officer, Vice President, Finance: This is Steve Sam. A couple of things there. Mike mentioned field inventory and how good a shape field is in. Receivables is a very good proxy for field inventory. So field is down, therefore receivables are down. It depends on the mix of sales, what... how many sales went out to Toro Credit Company financed products and what went out to GE. So, you have got to look at that. And then the other piece is the timing, you know, if it goes out earlier in the quarter versus later in this quarter, you may collect those one period over the other. The other piece on receivables. As you remember a year ago, we had little higher receivables than we did the prior year, and we worked that through, through the first six months. So, the comparison there would be a little better this time period, but it is a little of all those things. Sam Darkatsh - Raymond James: Taking the sales assumption from three to five to a two to four, is it something that you are literally seeing in your order book or is it again just reading the press clippings and listening to the Nightly News? Michael J. Hoffman - President and Chief Executive Officer: Hi Sam, this is Mike. I think our orders are solid. The fact is as we've said, the first and second quarter are largely about selling and the retail that follows after that peak season influences strongly the business we will get in the third quarter and the fourth quarter is used for some adjustment if you will. And so, we certainly see the timing moving a little closer to market, the retail timing and so we are going to watch that closely. There is nothing that we haven't seen softness if you will or the retail softness, but it is early in the... just almost too early to answer that question. So we're being cautious I think. Sam Darkatsh - Raymond James: Any change to your assumptions in terms of price realization? Selling price realization as you are still 1% to 2%? Stephen P. Wolfe - Chief Financial Officer, Vice President, Finance: That is correct, yes. Sam Darkatsh - Raymond James: Okay. And the last thing, again I caught this a little bit maybe mid-sense. You mentioned that the landscape contractor business was soft and that was due to a change in distribution. Could you help explain what that means? Stephen P. Wolfe - Chief Financial Officer, Vice President, Finance: We are constantly looking at our distribution model and what is going on competitively, what we need to do for the future. In some of our dealer businesses we have now gone in some territories to a commissioned basis versus a two-step basis. So, when you do that, that can have an impact based on how it flows in, what inventory you have to take back to convert to that model. But basically going to a more commission type based selling model than a two-step distribution model. Sam Darkatsh - Raymond James: How long does that transition take before you see more normalized demand patterns? Stephen P. Wolfe - Chief Financial Officer, Vice President, Finance: Well, this we are just starting, actually it’s the first couple of steps and this will probably be over in a couple of years before we get through the whole, this is mostly domestic by the way, or it could be a period of a couple of three years before we get through the whole country. Sam Darkatsh - Raymond James: That is it. Thank you gentlemen. Michael J. Hoffman - President and Chief Executive Officer: Thanks Sam.

Your next question comes from the line of Seaver Wang with Utendahl. Please proceed. Seaver Wang - Utendahl Capital Partners: Hi, good morning. A quick question, do you guys have contingency plans with say, you know, later on in the year, there is even greater headwinds that you can increase the amount of lean initiatives, you know, depending on how great the headwinds are to kind of offset that? Michael J. Hoffman - President and Chief Executive Officer: Hi Seaver, this is Mike. I think it is fair to say we're working lean hard and have been for the last several years, and it's as much a case of trying to anticipate where the revenues are going to end up, and then how we need to adjust, whether that adjusts our production on a timely basis all the way back to the areas of SG&A. I think it's probably fair to say as we've improved our performance over the last several years, that gets a little harder, and so we just have to be even more diligent about looking at those spending levels. I think one of the things we've demonstrated again over the last several years is even facing some, I guess some challenges on the revenue side, we have kept... stayed committed to our investment in the area of engineering and driving the new products, and we will continue to do that. But getting back to your question, can we do more with lean, well that is an ongoing journey, we are working lean very hard. Seaver Wang - Utendahl Capital Partners: Okay. And quick question, I'm sorry I got cut off in the call earlier and had to dial back in, so I might have missed this, but do you have a full year tax rate assumption? Stephen P. Wolfe - Chief Financial Officer, Vice President, Finance: Yes, this is Steve. 35.4 is our year's rate right now and as Mike mentioned has to do with the R&E credit, our rate for ' 08 for the first quarter only at two months of the R&E credit in just the November, December time period. It didn't get reused, so we can't book anything for the rest of the year until that is renewed. So, 35.4 is what we have and one other assumption we should probably get on the table to add to Mike's comments is our cash flow from operating activities, and when you look at that for the quarter, we are obviously using cash given the seasonal nature of our business. But when you look at operating activities for the year to go along with Mike's activities or assumptions, we'd expect that to be up slightly, modestly from last year's number, and we should also see CapEx, which is the other piece. When we talk about free cash, we talk about cash from operating activities less CapEx. That will be up slightly too, but we would expect the cash piece of it from operating activities be up higher than CapEx, so we would have a slight improvement to free cash flow for the year. Seaver Wang - Utendahl Capital Partners: Okay. The R&E tax credit, would you say there is a fairly high probability that by say mid-year, that something would happen there? Stephen P. Wolfe - Chief Financial Officer, Vice President, Finance: It is the government. So, I don't think I would even speculate on that, I don't know [inaudible] they have renewed it, whether they will or not we have to wait and see. Seaver Wang - Utendahl Capital Partners: Okay. Thank you. Michael J. Hoffman - President and Chief Executive Officer: Thank you.

[Operator Instructions]. Your next question comes from the line of Jim Lucas with Janney Montgomery Scott. Please proceed. Jim Lucas - Janney Montgomery Scott: All right. Thanks, good morning guys. Michael J. Hoffman - President and Chief Executive Officer: Good morning Jim. Jim Lucas - Janney Montgomery Scott: I'll apologize in advance for asking somewhat of the same question in a different way, but just trying to get to the heart of things here. You made a commentary in your prepared remarks about managing for a potential weakening economy, and I was hoping you might be able to expand a little bit upon that of what exactly is underlying that comment. And then secondly, when we take a look here at the low end and high end of your guidance, if you could perhaps expand a little bit upon what would need to go right for you to be at the upper end? What type of... kind of worst-case scenarios you are building in for the lower end of the expectations? Maybe if you could just talk around that a little bit, so that could help all of us understand what the thought process is going into the important spring season. Michael J. Hoffman - President and Chief Executive Officer: Jim this is Mike, I'm not sure we'll be able to make that a whole lot clear. I think it's fair to say that when we talk about the economic environment, this has particularly a strong impact on our residential business, which again represents a smaller part of our portfolio today than it did a number of years ago, and that's been an intentional strategy. So, if consumer spending falls off, whether they will... they still will... the new customers that will need to buy because their product simply doesn't work, those customers have maybe a more discretionary position about [inaudible] Z Mower, may delay that purchase. So, that would be probably the one area that has the most concern we have, good metrics around that, and we'll be watching that carefully as the season now kind of begins in earnest and will be working with our retailer like the Home Depot and our dealers to really manage that and attract retail velocity, but that we know is going to be one of the areas that will be challenged. And the other one would be probably in our irrigation business, on the residential commercial side of our irrigation business, an important business that we've been kind of rebuilding, if you will, and today we have a... from a product standpoint a stronger position than we've had at any time in the recent past. So, that bodes well on a competitive basis versus the others out there. On the other hand, that business is tied probably more directly to housing and even some of the water restrictions that have gone on. So, within the US market that's a... that's certainly a challenge that we are managing to... you contrast that to the international market, whether it's for Gulf, whether that's for the residential commercial business as infrastructure gets built around the world. We're still counting on that as we look out for the... through the remainder of F '08. I'm not sure that's helping you a lot, but I think the... the most significant challenge we see is on the residential side of the business, it impacts residential equipment business as well as the residential irrigation business. Stephen P. Wolfe - Chief Financial Officer, Vice President, Finance: Jim this is Steve, I'll just add to that the... predicting that consumer spending habit going forward and do they expand, do they close their wallet and not spend, building a production schedule around it, probably a more seasonal piece of our business in some ways, maybe a little more, but as you know [inaudible] we have to have a lot of that product built and ready to ship. So, figuring out how much of that you prebuild, so you see how much retail you're going to get just complicates that whole thing. So, a consumer piece of that to me is a very key piece. The international as Mike says it's going to be relatively stable and really our domestic commercial business ought to be okay. It’s what happens with that residential piece and what happens with the landscape piece. Jim Lucas - Janney Montgomery Scott: Now, that's very helpful and thank you for the color there. We are just again trying to understand the thought process behind it, and if we just switch gears, the ResCom irrigation piece, the product line. If you could just expand a little bit upon what you've done to potentially help you regain some of that lost share that's occurred over the last several years. And finally, with regards to the regional weather commentary, you know we've got a drought in the South East. We've had the snow as you will know and in the parts of the country where the snow has occurred, you know, if you could just talk about how that potentially could paint the picture for the landscape contracting business? Michael J. Hoffman - President and Chief Executive Officer: Okay. Well, I will start with the residential commercial irrigation business. As I said a few minutes ago, that it’s much improved and as you know there was a time when we were… we were in that number one position there and that… that business kind of got away from us and we're working very hard to kind of earn that back, and it starts with the right products and relationships with our customers and the quality that goes with those products. We're introducing more new innovative products, probably the most significant one this year that's been a gap in our line for… we have had some products from a really competitive position has been the Rotor, in the Residential commercial irrigation, the Sprinkler Rotor if you will is one of the key components. In fact, it will be contrasted to our golf business where we have the Rotors, the 835 and 855 Rotors that have been just absolute winners in the marketplace in their performance and their ability to put water on precisely. And so we've now... we have a new rotor this year that we will be manufacturing as planned, that will be very competitive in the marketplace. And so… and if it goes beyond that, we have new spray heads and we have products under the Toro brand as well as our other residential commercial brands Irritrol, and we have more in the work as well and in the new product development pipeline if you will. So, the Residential commercial business is really sound from a product and distribution and relationship standpoint. The issue there is primarily one of market. And so we know that will come back in time and we will be well positioned to take advantage of it. On the snow side, certainly the snow is here in the US and Canada have... for the Professional side of our business have helped many landscapers, they have driven incremental revenue in their areas where we've had the snowfalls. Now that's not a 100%, it depends on what kind of a contract, this landscape contract to put together with our customer. So, those that have a [inaudible] ploughing if you will are doing quite well. Those that put us, put a contract in place, you know, one number I will do it how many times it takes. Well, they probably have a little additional cost, but they are still… they are still in a good position. So, we think throughout, particularly the northeast and the midwest, those landscape contractors are going to be in good shape and we should see that reflected in their purchases as we head into spring. Jim Lucas - Janney Montgomery Scott: Okay. Great, thank you very much. Michael J. Hoffman - President and Chief Executive Officer: Thanks Jim.

Your next question comes from the line James Bank with Sidoti & Company. Please proceed. Michael J. Hoffman - President and Chief Executive Officer: Good morning James. James Bank - Sidoti & Company: Hi, how are you? Michael J. Hoffman - President and Chief Executive Officer: Good. James Bank - Sidoti & Company: Good. Yes, actually I wanted to circle back to the landscape contractors, but your last comment there answered the question. I'm really there for two... how many, you have 540,000 shares left in your purchase program? Stephen P. Wolfe - Chief Financial Officer, Vice President, Finance: That's correct. James Bank - Sidoti & Company: Okay. Maybe we've... can we assume a new authorization then on the horizon? Stephen P. Wolfe - Chief Financial Officer, Vice President, Finance: Yes, we're always looking at cash usage and where we apply that and we will continue to do that. A lot of things go into that in terms of timing and stock price. But we will... we should expect to see the diluted shares go down relatively the same as you have the last couple of years. James Bank - Sidoti & Company: Okay. Stephen P. Wolfe - Chief Financial Officer, Vice President, Finance: And when that happens and we use up the rest of that authorization, we will go back to the Board and get a new authorization like we have last couple of years. James Bank - Sidoti & Company: Okay. Stephen P. Wolfe - Chief Financial Officer, Vice President, Finance: A similar type of pattern. James Bank - Sidoti & Company: And secondly, in regards to your GrowLean initiative from… please correct me if I'm wrong, from what I understand 8% is really the top line percent you're looking for the top line growth should... can we then assume possibly in acquisitions really. What's going to have to happen in the next year or maybe even in this year to really drive that top line up there kind of given, what you guys did in the '07 and I guess the revised guidance this morning. Is that something I can assume that in '09 to really get that top line growing again? Michael J. Hoffman - President and Chief Executive Officer: James, this is Mike, I think it's... we have and this is always the challenge between goals and guidance. It is the rolling goal to get to a compounded 8%. Now, when you look back at our results for '07 and our projected results for '08, that's going to make that very difficult. And we don't know how fast the... if you will the economic environment will improve. With that said, we are and continue to look much more systematically and consistently have acquisition opportunities, and we will pursue those as appropriate. We will not force them, we will not do anything stupid, but we believe there are some good opportunities that would couple well with Toro and help us accelerate that top line growth. As you know acquisitions, you can't necessarily plug them in each quarter each year. So, we will keep working it and we will let you know when we having something more. James Bank - Sidoti & Company: Okay. Great and just a follow-up on that, will that be something maybe international or domestic or really just when you find something very strategic that can be synergistic to your business? Michael J. Hoffman - President and Chief Executive Officer: Yes, I think what we've said in the past, we continue to want to grow our international portfolio, so that if we find an attractive one internationally, we will pursue that. We've said we continue to want to grow our professional portfolio, and so for the right acquisition, that was an international professional opportunity, that would be great. Maybe what we will find is international Residential opportunity comes at us one way and domestic Professional opportunity comes at us another way. Then we will have to look at that… again the leaning there would probably be on the Professional side. The bottom line is we are looking comprehensively across all of our businesses and over the fence if you will to some degree to... what are the companies or where are the companies and who are they out there that would fit well with Toro and that could ultimately drive higher shareholder value. James Bank - Sidoti & Company: Okay, terrific. Thank you. Michael J. Hoffman - President and Chief Executive Officer: Thanks James.

At this time there are no further questions in the queue. I will now turn the call back over to Mike Hoffman, Chairman and CEO for final remarks. Michael J. Hoffman - President and Chief Executive Officer: Thank you Maria. And thank you once again ladies and gentlemen for your questions. We appreciate your confidence and trust in the Toro Company and we will look forward to talking to you again in May with our second quarter and mid-year results. Thanks and have a great day.

Thank you for your participation in today's conference ladies and gentlemen. All parties may now disconnect. Enjoy your day.