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TORO EXPECTS LOSS IN FOURTH QUARTER: WILL TAKE CHARGES FOR PROPOSED FACILITY CLOSINGS

 TORO EXPECTS LOSS IN FOURTH QUARTER: WILL TAKE CHARGES
 FOR PROPOSED FACILITY CLOSINGS
 MINNEAPOLIS, July 30 /PRNewswire/ -- Citing charges against earnings related to the proposed closing of three facilities, continued softness in sales of its consumer products, increased promotional expenses to improve sluggish retail activity and additional operating costs associated with its irrigation and consumer businesses, The Toro Co. (NYSE: TTC) today said it expects an operating loss for the fourth quarter ending July 31, 1992. The company said it expects a net loss in the quarter of 56 cents per share from the facility closings, plus a net loss from operations in the 65 cents per share range. Toro reported a net loss from operations of 11 cents per share in the year-ago quarter.
 Toro said it has tentative plans to close its Toro-branded riding products manufacturing plant in South Bend, Ind., and to move the manufacturing operation to existing plants in Windom, Minn., and Tomah, Wis. A distribution center in Mountain Top, Pa., will also be closed. Additionally, the company said it will integrate a Riverside, Calif., irrigation controller assembly operation into a neighboring irrigation facility.
 "These actions reflect a strategy to posture the company's consumer business to be more competitive and responsive to the changing trends that are occurring in the market," said Toro Chairman and Chief Executive Officer Kendrick B. Melrose. "The South Bend plant and Mountain Top distribution center represent excess manufacturing and warehouse capacity, paralleling our industry in general, and our long term strategies clearly indicated a need to rationalize our fixed assets. Similarly, closing the irrigation controller facility will help change the way we do business and permit Toro to remain competitive in this important business segment. By integrating these operations into existing Toro facilities, we will greatly improve capacity utilization, achieve additional manufacturing efficiencies and permanently reduce fixed costs. These actions are necessary to achieve our performance goals for fiscal 1993 and beyond under the company's assumption that the economy will continue to be sluggish," he said.
 "As the result of these closings and other restructuring and strategic actions taken during the past 18 months, Toro is poised to return to profitability in fiscal 1993," Melrose said. "We anticipate a profitable year even if sales should show no increase. Because of our continuing investments to meet customer requirements, the changing complexity of the marketplace and our emphasis on inventory turnover, we expect the first quarter of fiscal 1993 to be a loss with significant improvement occurring in the third and fourth quarters concurrent with our sales pattern," Melrose said.
 Expenses associated with the closings will result in a one-time pretax charge estimated to be about $9.9 million, or 56 cents per share, against earnings for the fiscal year ending July 31, 1992, Toro said. The charge reflects the disposition of facilities, employee severance at South Bend, and other one-time costs related to the closings. The company said employees were notified today of the company's plans to close the South Bend, Mountain Top, and Riverside facilities and its intention to terminate approximately 270 employees.
 The closings, which should be completed by early calendar year 1993, are expected to yield substantial operating savings during fiscal 1993, with the full benefit in fiscal 1994.
 Toro is the world's largest independent manufacturer and marketer of outdoor maintenance and beautification equipment.
 To receive The Toro Company's latest news release and other corporate documents, free of charge via fax, simply dial 1-800-PRO-INFO. Use company code 154.
 -0- 7/30/92
 /CONTACT: Dennis Himan, 612-887-8411, or Stephen D. Keating, 612-887-8526, both of Toro; or Fred Nachman, 312-266-7800, or Karen Griffiths, 212-661-8030, both of the Financial Relations Board/
 (TTC) CO: The Toro Company ST: Minnesota IN: SU: ERP


AL -- MN021 -- 5329 07/30/92 17:35 EDT
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Publication:PR Newswire
Date:Jul 30, 1992
Words:628
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