Heather Hille - Director, Investor Relations and External Communications Mike Hoffman - Chairman and Chief Executive Officer Renee Peterson - Vice President, Treasurer and Chief Financial Officer Tom Larson - Vice President and Corporate Controller

Sam Darkatsh - Raymond James Jim Barrett - CL King & Associates Evan Barry - Longbow Research

Thank you and good morning. Our earnings release was issued this morning by Business Wire, and a copy can be found in the Investor Information section of our corporate Web site, thetorocompany.com. On our call today are Mike Hoffman, Chairman and Chief Executive Officer; Renee Peterson, Vice President, Treasurer and Chief Financial Officer; and Tom Larson, Vice President and Corporate Controller. We begin with our customary forward-looking statement policy. During this call, we will make forward-looking statements regarding our business and future financial and operating results. You all are 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 from those in our predictions. Please note that we do not have a duty to update our forward-looking statements. With that, I will now turn the call over to Mike.

Thank you Heather, and good morning to all our listeners again. As you noticed, we have a new leader of our investor relations team with this morning Heather Hille, Heather joined us from our legal team were she has served with distinction for a number of years. I want to welcome Heather and congratulate her on the recent promotion to Director, Investor Relations and External Communications, I am sure you will enjoy working with Heather in her new role. And also take a moment to recognize and thank her predecessor Amy Dahl for her contributions to our Investor Relations efforts. Amy is taking an important new duty as Vice President, Human Resources; I want to congratulate Amy on her promotion as well. And now let's take a look at our second quarter results. Although, we faced a challenging currency and segment mixed conditions that company achieved record sales and earnings for the quarter. Net sales increased 10.9% and net earnings per share grew 8.6%. Retail demand for both our residential and professional products delivered solid gains across our businesses with the residential segment enjoying particularly robust results going almost 30% due to new product an increased placements. Sales for the six months of the year grew 9.2%, residential segment sales posted a 12.5% gain year-to-date as a result of strong retail and strong demand for our innovative zero-turn riders and walk power mowers as well as late season demand personal stores. Professional segment sales for the first half of the year grew 8.3% due to the addition of the BOSS snow and ice management line and strong demand for landscape contractor golf and ground's equipment, resulting both in our professional and residential segments were impacted by unfavorable currency exchange rates. Following a brief commentary on the state of our businesses to the first half of the fiscal year, Renee will discuss our financial and operating results in more detail. Residential equipment sales rebounded from their slow start at the beginning of the year, as we set up the time the slow start was caused by supply inefficiencies, production ramp up issues with the new riding products and additional snow productions ones displaced riders. We managed through these issues and zero-turn riding equipment shipments accelerated in the second quarter as a result of strong open order position. The momentum our walk power mower sales enjoyed during the first quarter carried on through the second. Sales once again increased due to continued demand for new products most notably our All-Wheel Drive Recycler walk power mower. Recently both our new steering well zero-turn tractor and our All-Wheel Drive Recycler received very positive reviews in a leading consumer testing publication, the zero-turn tractor was praised for its ease of operation, quality of cut and other safety and convenience features. The article on our All-Wheel Drive Recycler walk power mower stated that when compared to competitors unit overall the Toro performed the best. Such timely unbiased positive reviews will likely spark additional consumer interest and help extend the sales momentum. Turning to our professional businesses, the BOSS line of snow and ice management products delivered solid sales results for the quarter. Our BOSS team mates and the innovative products and services they provide have proven to be a good match with the company's culture and growth goals. The BOSS integration is progressing well and we're pleased by the ongoing contributions of this new business. Next our landscape contractor business has continued to increase sales for the year due to strong demand for zero-turn riding equipment our stand on spreader/sprayer units and our new side by side off road utility vehicles. Contractors continue to invest in our ever expanding offerings of innovative solutions to enhance productivity and customer satisfaction. Progression on golf and ground equipment businesses were up for the quarter based as strong retail in channel demand, especially for utility vehicles in sprayer products. Our Sand Pro product line Greens and Fairway Mowers also made nice contributions year-to-date. The latest industry reports offer positive signaled as golf rounds played, days open for play and golf revenues are all up year-to-date, we're also pleased by the successful launch of our new Reelmaster 5010-H hybrid fairway mower. Sales of our residential and commercial irrigation products mirrored industry results as unfavorable weather patterns slow demand, we did however, continue to benefit from strong retail demand of our new elements sliding line. Finally, as sales in our international businesses as well as our micro-irrigation sales outside the U.S. decreased for the quarter due to primarily unfavorable currency rates. We did experience, heightened demand for new zero-turn residential riders as well as good sales of our golf and grounds equipment in certain regions. We're not for the currency impact our international sales would have posted slight gains. Now I'll turn the call over to Renee for more detailed discussion of our financial results.

Thank you, Mike, and good morning, everyone. As we reported earlier this morning, net sales for the quarter were record $826.2 million compared to $745 million for the same period a year ago. We also delivered net earnings of $93.8 million or $1.64 per share compared to $1.51 in the second quarter of fiscal 2014. Year-to-date net sales were up 9.2% to $1.3 billion. We achieved net earnings of $124.7 million for the first six months or $2.18 per share compared to $1.95 per share a year ago. Professional segment sales were up 4.6% for the quarter to $552.8 million. The addition of BOSS to our professional portfolio along with strong sales of landscape contractor golf and grounds equipment also drove growth in the quarter. Year-to-date professional sales were up 8.3% to $892.5 million due to the same reasons as the results for the quarter. Unfavorable currency exchange rates had a negative impact on professional sales results for both the quarter and year-to-date. Professional net earnings for the quarter totaled $120.8 million down 1.3% from $122.4 million in the same period last year. Please note there was a slight error in our earnings release which reference first quarter this statement should have noted second quarter. For the first six months professional segment earnings were $176.5 million a 3.9% increase compared to the same period last year. Second quarter residential segment sales increased 27.3% to $267.9 million. Year-to-date residential sales were up 12.5% to $402.6 million the growth for both periods is due to the domestic retail demand for zero-turn riders and walk power mowers. Year-to-date residential results also benefited from the demand for snow throwers. Residential sales growth during both periods was somewhat impacted by unfavorable currency exchange rates. Net earnings in the residential segment for the quarter totaled $34.8 million up 46.2% from last year. Year-to-date earnings were $48.6 million a 15.8% increase compared to the first six months of fiscal 2014. Now to our key operating results. Second quarter gross margin was 34.1% a decrease of 140 basis points. Half of this decrease was due to unfavorable exchange rates and the other half due to the mix impact of stronger sales in our residential segment. Gross margins declined year-to-date by 120 basis points to 34.7% which is primarily due to unfavorable exchange rates. We now anticipate a decrease in gross margin for the year of about 50 to 70 basis points due to unfavorable currency exchange rates. SG&A expense as a percent of sales decreased by 60 basis points for the quarter to 17.3% and by 90 basis points to 20.6% year-to-date. The quarter and year-to-date improvements were due to the leveraging of expenses over higher sales volume. Operating earnings as a percent of sales for the quarter were 16.8% a decrease of 80 basis points and 14.1% year-to-date a decrease of 30 basis points. Interest expense for the quarter was up $1.1 million from a year ago. Year-to-date interest expense was up $2 million. The quarter and year-to-date changes were due to increased debt mainly related to the BOSS acquisition. Our effective tax rate for the quarter was 31.1% compared to 32.6% a year ago. For the first six months, the tax rate decreased to 30% compared to 32.7% for the same period in 2014. The change reflects the benefit realized in our first quarter from the retroactive reenactment of the domestic research tax credit for calendar year 2014. We continued to expect our tax rate for fiscal 2015 to be about 31.5%. Turning to the balance sheet. Accounts receivable for the quarter totaled $351.6 million an increase of 12.2% over the same period a year ago, which is in line with the sales increase. Net inventories for the quarter increased 12.9% to $341.4 million. The increase was primarily due to the BOSS acquisition. Second quarter trade payables increased 8.7% to $256.4 million due to increased purchases for anticipated product demand for the remainder of the year. As you know we remain focused on inventory, accounts receivable and trade payables management. At the end of the second quarter, the company’s 12 month average net working capital as a percent of sales was 15.6% compared to 15.5% a year ago. The company continues to return value to shareholders through dividend and share repurchases. On Tuesday, the Board approved a regular quarterly dividend of $0.25 per share. We repurchased over 500 shares of common stock during the quarter and have approximately 2 million shares remaining in our purchase authorization as of quarter end. I'll now turn the call back to Mike for his concluding comments.

Thank you, Renee. And thanks to mother nature for the favorable spring weather we've enjoyed in most markets. That along with customer enthusiasm for our latest innovations and the hard work of our team members around the world enabled us to deliver record results for the quarter. While we cannot control currency exchange rates or demand patterns between business segments we remained focused on taking appropriate measures to adjust to whatever headwinds we had counter while controlling what we can control. And so we will state off course on creating innovative new products that deliver real distinctive value for strong long lasting customer relationships and on executing with excellence. We believe we are well positioned to capitalize on both the existing high demand for our products and the prospects for growth across businesses for the remainder of 2015. The outlook for our residential business for the year is promising as I said during our last call increased placements and strong market demand for spring products presented meaningful opportunities once we moved beyond the early supply and efficiencies and ramped up production our new zero-turn riding equipment of walk power mower line generated solid sales as evidenced in our second quarter results. As long as favorable weather prevails we believe our residential turf maintenance products will finish gain the season strong. Prospects for the upcoming snow pre-season also look encouraging as the late snows earlier this year help clean the pipeline and set the stage for good pre-season demand. Our channels are excited by our new snowmaster snow throwers with inline two stage order technology that readily handles wet heavy snow, these innovative machines are true cross over units, they incorporate features like our well known quick stick and easy turn shoe controls and for the first time our innovative personal pace drive system of walk power mower. The result is the product that performs like a two stage with the maneuverability and ease of single stage. The snowmaster has helped generate strong pre-season bookings. Likewise our strong line up BOSS snow and ice management products is poised for successful pre-season building upon the ongoing demand that has been evident year-to-date. Customers are responding favorably to the new offerings BOSS unveiled for the upcoming winter. These include the industries first 100% LED headlight system know as the FL-3 that delivers twice the traditional lighting capacity for greater visibility. The new HDX half-ton straight blade plough for half ton and smaller trucks and the new BTX-9000 spreader featuring a massive three cubic foot hopper for mid duty trucks. While these customers will be ready for the worst winter can deliver. For those of you who have joined us in San Antonio for the Golf Industry Show in February you witnessed firsthand attention of our exciting new hybrid fairway mower the Reelmaster 5010-H coming under from golf customers. The 5010-H which is the industry's first and only mower with a true hybrid drive system offers the ultimate and precision operation in cutting performance. As anticipated customers around the world have enthusiastically welcome this significant advancement in hybrid design in fact the 5010-H recently won a gold medal for innovation in Germany in connection with one of the most important global exhibitions promoting innovation in the green sector. The 5010-H will be featured as the 2015 exhibition next month in Eisenach, Germany. Innovations like the new Reelmaster help us strengthen our existing customer relationships and to develop new ones. You are familiar with some of the prestigious courses we approach the golf customers like San Andreas in Scotland, the birthplace of golf that in July will host the 144th Open Championship, Toro irrigation and equipment will be there. Beside of next month's 2015 U.S. Open at Chambers Bay in Washington State will likewise be cared for using Toro equipment irrigation systems. We were pleased that the Le Golf National a course 20 miles PRS recently decided to use Toro irrigation products as part of a major system renovation. The course is already preparing to host the 2018 Ryder Cup. Innovative equipment and irrigation products backed by exceptional customer service and able us to continue our legacy of leadership in golf market. Similar to our residential business if the favorable weather continues our landscape contractor zero-turn riding equipment and spreader-sprayer units momentum will likely continue. The coming mid-season launch of the new zero-turn riding equipment featuring an exciting new suspension system should also help our landscape contractor businesses finish the year strong. Our professional grounds business continues to benefit from our focus on working with state and local government agencies to supply their turf maintenance needs. Our team proudly serves all level of sports facilities around the world. Our equipment and irrigation systems will once again help prepare center court and all others at the All England Club for the June opening of 2015 Wimbledon Championship. And other game changing innovation for the professional grounds sport field and golf markets is the new Toro geo link system for our multi-course sprayer, it uses of GPS technology to track this players application path to ensure accurate and consistent coverage and avoid over spraying. This innovative design reduces chemical use which is better for the environment and saves money. Turf managers who have tested the geo link on crest and ready to buy when it hits for market leaders this summer. Next our rental and specialty construction businesses that benefitted from commercial and residential construction activity. Our much awaited Dingo TX 1000 compact utility loader will be released this quarter. Its 1000 pounds less capacity and industry leading 81 inch vertical less capability enables it to fill commercial dumpsters and the beds of one time trucks with these. The TX 1000 enhances productivity and makes it an attractive addition to both rental and contractor fleets. Finally our international businesses faced currency exchange rate challenges however in certain reason we have enjoyed solid demand across our residential and most of our professional portfolios, much like domestic markets many overseas customers are anticipating the arrival of latest innovations. As mentioned earlier irrespective of the currency headwinds we continue to win new business as such places as Le Golf National. We will explore means of mitigating the impact from currency issues through productivity price and cost contentment. In conclusion we believe the stage is set for another successful year. We’ve recognized that unfavorable shifts in the economy or whether quick post challenges to our plans. As always we’re prepared to respond. The company continues to expect revenue growth of about 8% to 10% for fiscal 2015 and net earnings of about $3.35 to $3.45 per share. For the third quarter the company expects net earnings per share of about $0.85 to $0.90. This concludes our formal remarks. We will take your questions at this time. Tony, back to you.

I would like to offer one clarification as we go to Q&A, related share repurchases. I want to clarify that we purchased over 500,000 shares of common stock during the quarter.

[Operator Instructions]. Your first question comes from the line of Mr. Sam Darkatsh of Raymond James. Please proceed.

Couple of housekeeping questions, if I could start there, first off Renee what were BOSS sales in the quarter?

BOSS sales in the quarter were about 20% of our overall sales growth rate.

And what was the FX impact on sales on a by segment basis, if you could help.

Yes, at a company level FX impact for the quarter was about two points of sales growth. Overall what we’re seeing year-to-date Sam is about 1.5 points of sales growth which is up a little bit from what we said before at about one point of sales growth. So as we look at the total year who knows what will happen with currency exchange rates, but we’re anticipating about 1.5 sales impact and a little bit less than half of that fall to the bottom line.

You’re expecting 1.5 for the year, is that what you just said, I’m sorry.

Yes, assuming exchange rates remain about the same as they are right now.

And then two more questions and then I'll differ to others. You mentioned that you wanted to keep a careful eye on both retail demand and field inventory, obviously you always wanted to do that but it was interesting you called it out specifically. Are you particularly concerned about where field inventories are right now Mike, can you give some color around that?

Yes, actually at this point, field inventories are up a little, the fact is retail demand across the portfolio from commercial to landscape to residential is very strong. So part of that keeping an eye on is making sure we’re there in timely basis for replenishment. We're in one of the big months of our year from a retail demand standpoint across both residential and professional side of the business. You are right, we are always keeping an eye on it. There is much to be encouraged about with the retail demand year-to-date. We obviously want that to continue but that something we monitor week-by-week, day-by-day.

So, to follow up on that, in May you didn’t see any meaningful change versus what you saw earlier on in the season?

No, it continues to be very strong.

And then last question if I could, even if it's this directionally, can you help us the 27% growth in residential obviously is really heady. Any way to figure out how much of that is from the placements and how much of that is just real good retail activity?

It’s both, clearly the expanded placement. It helps to drive increased retail. Some of that is even catch up from the first quarter where we didn’t shift some of that products that was in demand but the demand for our riding products in the residential side of the business is been very strong. We’ve got a new platform out there. We’ve got some new control mechanisms on the riders that is creating a lot of interest, the new All-Wheel Drive walk power mowers is creating a lot of interest. And so it’s a combination of new product innovation, good partnerships with our channel partners, retailers and dealers and just good consumer acceptance of those products. We played -- it’s been a bit of challenge keeping up with some of that retail demand. We just want to make sure we're there on the shelves when the customers come into buy that product.

So more than half, less than half of the growth may be coming from the placements, how should we think of it?

I don’t have that number. I think I guess if I had to pick one thing it will be the new products and expanded offerings with the features that are on them, second would be the expanded placement and then third mother nature certainly played a role in that as well.

[Operator Instructions]. Your next question comes from the line of Mr. Jim Barrett of CL King & Associates. Please proceed.

Mike, it feels like the business is gaining market share. Can you go through your various segments and comment on that to the extent that, you have a sense of what -- of being able to measure market share?

Good question Jim and at this point we'll probably characterize just as you said; a sense of it, we'll get more specific results as we wrap up the season and are able to look back at some industry results and so on. With that said, I think it is our sense given the retail demand I talked about just a minute ago, that our market share is moving in the right direction with categories like walk power mowers and residential riders; we think our market share will move in the right direction this fall with our new snow thrower offerings that I mentioned earlier. We have very strong position in the landscape contractor arena and the market share certainly is very sound in larger categories like the zero-turn riders or newer offerings in the spreader sprayers clearly we're taking share there with that, that's largely because we're entering a new category but there is lot to be excited about there as well and as I mentioned in the former remarks, surely we have some new features coming that large category of the zero-turn riders in the third quarter, that is very exciting for our customers and for the channel. So that’s a our sense is that positive moving in the right direction and as this is the same thing on there -- the commercial side, that’s made up of different product lines, if you will think the new hybrid fairway mowers, certainly helping us in that category, the new sprayer systems, that we're bringing out are helping us and those categories. And then last I would just say with the acquisition of BOSS and BOSS is a terrific companies with terrific edition to the portfolio, some of the new products they introduced at the Truck Show last quarter have been very-very well received, so the combination of expecting a good pre-season demand from the channeling and then users, will be accelerated by the new product offerings. There -- I think all MGM, there is a lot to be encouraged about, we'll have more precision around that later in the season.

And I know, you've commented previously on micro irrigation and some of the programs being implemented among home owners, for example, in the state of California, within the U.S. that thinking the western states, if the draught continues for the next continues and these states, start charging agricultural users a higher level of rate to use water, do you foresee a meaningful opportunity for micro irrigation in those locals.

Well first off, I would say that micro irrigations are already an important part of those locals, with that said, there's still a lot of acreage that is not micro irrigated and as using other system from probably to flood being the most inefficient; so clearly that as the regulatory environment changes that will create opportunity, if you are farmer there and only going to get so many acre feet of water than the ability to use that more precisely to maximize your productivities going to matter, that will be slow but it's clearly moving in the right direction and as we said before in micro irrigation side of the business. It's the right end of the continuing to beyond, we just need to manage water more precisely and these products do it better than any other.

And then finally, is your market share in the U.S. in micro irrigation, does it mirror your worldwide share?

I would say, actually our market share in North America is somewhat higher than our worldwide share, there are certain markets, where we don’t have a strong presence, we continue to work on that; we've -- North America would be one of our stronger markets on Western Europe, we open there remaining of them few years back to give us a stronger presence in Eastern Europe, and we've talked about China in the past; but the U.S. actually would be of the group, probably the strongest.

Your next question comes from the line of Mr. Joshua Borstein of Longbow Research. Please proceed.

This is actually Evan Barry here on for Josh this morning. I just wanted to get a feel for the third quarter earnings you guys had released. I guess it kind of implies that the street was modeling a little light in 3Q and a little heavy here. Little light in 4Q and a little heavy in the third quarter. So I guess, I was just kind of looking to see what the discrepancy between the street was and how you guys are kind of seeing the business unfold for the rest of the year?

Well, I guess I'd start off with obviously -- we don’t -- we understand what the street does at ultimately up to the street if you will. I think the starting point for me would be we always ask our investors to look at the Toro Company kind of on an annual basis, just because of the nature of larger quarters and smaller quarters and that kind of variability, things move back and forth to what degree, snow demand, the earlier or later; we have the new factor of the BOSS, snow products in the portfolio and managing channel demand and all of that. And so I think it's really saying right now at this point, we'll see what happens in the quarter but we have sustained our annual number and we believe we're on track to do that, and we expect a pretty good, that was by that -- a pretty good fourth quarter with the addition of BOSS now.

And then just on the contribution margin I guess, that came in a little bit lower than I guess it was modeling. Is there any particular reason you think that that kind of indication may be just how we should think about contribution margins going forward?

Well probably the biggest impact on to our gross margin overall is FX and what you are going to see is that, is more heavily weighted towards the professional side of our business then the residential side. So I think that's probably, the item that you need to factor into -- and as I said earlier, it has turned out to be more significant headwind than we had originally anticipated.

And I guess last one for me, here. I know you have mentioned some of the early traction you're seeing on the Reelmaster. I was wonder if you could just talk about a little more color on how the early sales have been going and maybe if they were kind of meeting or exceeding your expectations so far?

I think we would say they clearly our meeting maybe exceeding our expectations. When you bring something this newer technology, you're never quite sure -- obviously do a lot of market research and voice of the customers, still never quite sure -- this is a great platform that leverages less than 25 horsepower diesel with the hybrid technology and just it's a combination of fuel efficiency coupled with that true hybrid drive system that I think customers are liking, some customers that were focused on the green aspects and I think we're seeing that in Europe and that maybe stronger than anticipated demand. We always have the question when we bring out new products will they wait a while before they try to see how it is -- see how it performs, that doesn't happened here. Customers embrace this whole heartedly. So there is lot to be excited about with this new product.

Thank you for your questions. We will now conclude the Q&A session and hear closing remarks from Miss. Heather Hille. Please proceed.

Thank you for your questions and continued interest in Toro. I look forward to meeting and working with you in the months ahead. We will talk with you again in August to discuss our third quarter results. Thank you and have a good day.