QUOTE AND NEWS
Forbes  Jul 24  Comment 
The Legendary film is slated to hit theaters in October 2015.
Forbes  Jul 15  Comment 
Guillermo del Toro participated in an AMA ("Ask Me Anything") online chat via Reedit over the weekend in order to promote his new FX television series The Strain. One of the subjects that came up was the potential for a third Hellboy picture....
DailyFinance  Jul 10  Comment 
The Toro Company today celebrated its 100th anniversary as more than 2,000 employees, retirees, channel and business partners, and other valued guests gathered at the company’s headquarters in Bloomington, Minnesota. Joining...
Forbes  Jul 7  Comment 
FX is more than just a channel, it’s a brand, and it’s that need for stylistic consistency that makes the not at all fantasy-friendly network’s latest addition, The Strain, stand-out.
OilVoice  Jul 2  Comment 
Woodside advises that the Toro1 exploration well in permit WA430P has intersected approximately 150 metres gross gas and 65 metres net gas within the Mungaroo Formation target. The well reached a
WA Business News  Jul 2  Comment 
Mondo Visione  Jun 23  Comment 
The NASDAQ OMX Group, Inc. (Nasdaq:NDAQ), parent of the world's first electronic stock market and a leading index provider, today announced the results of the annual evaluation of the NASDAQ OMX Global Water Index (Nasdaq:GRNWATERL), which will...
SeekingAlpha  May 22  Comment 
The following audio is from a conference call that will begin on May 22, 2014 at 11:00 AM ET. The audio will stream live while the call is active, and can be replayed upon its completion. Listen now Complete Story »
SeekingAlpha  May 11  Comment 
By Shareholders Unite: While the broader market seems to hold up pretty well, this isn't the case for numerous individual stocks. (click to enlarge) Some of these have been so heavily sold off that they are real bargains. Here are a...
Cloud Computing  May 5  Comment 
Novitex Enterprise Solutions, the industry-leading provider of the Integrated Document Life Cycle™ (IDLC™) in the Document Outsourcing market, announced today Joe Del Toro as its new Chief Financial Officer (CFO). ...
DailyFinance  Apr 1  Comment 
IRVINE, CA -- (Marketwired) -- 04/01/14 -- Stream Realty Partners was recently awarded leasing and management responsibilities of Saddleback Financial Center, a 72,900 square-foot Class A combined medical and office property in Laguna Hills,...




 
TOP CONTRIBUTORS

The Toro Company (TTC) makes lawn mowers, irrigation systems, snow blowers and other equipment aimed at both professional landscapers and residential homeowners. Toro distributes its products through retailers such as Wal-Mart Stores (WMT) and Home Depot (HD), independent hardware stores as well as direct sales through e-commerce.

Demand for Toro's landscaping and irrigation equipment is directly related to the development of new commercial and residential real estate. A prolonged slump due to subprime lending would likely decrease demand for Toro products, which can be expensive (many finance their purchases).

Business Overview

Toro sells lawn mowers, irrigation systems, snow blowers and other landscaping equipment to residential households as well as commercial landscapers. The company distributes its produces through retail stores such as Wal-Mart Stores (WMT) and Home Depot (HD), as well as other hardware stores and directly to consumers via an e-commerce channel.

Business Financials

Total revenues in 2009 were $1.52 billion, a significant decrease from its 2008 revenues of $1.88 billion. This 18.9% decline in net sales was due to lower demand that resulted because of the global recessionary economic climate.[1]As a result, Toro's net income declined from $120 million in 2008 to $63 million in 2009, a 47.5% decrease.

Business Segments

Toro breaks its business into two business segments: i) Professional and, ii) Residential.

Professional (63% of 2009 Revenues)

Toro's Professional segment produces and sells turf and agricultural products to government customers, rental companies, and large retailers. These customers are generally professional users engaged in creating landscapes, irrigating turf and agricultural fields, and maintaining turf, such as golf courses, sports fields, municipal properties, and residential and commercial landscapes. In 2009, this segment had $965.9 million in total sales.[2]

Residential (35% of 2009 Revenues)

The Residential segment sells products to homeowners through a variety of distribution channels, including outdoor power equipment dealers, hardware retailers, home centers, mass retailers, and over the Internet. This segment also licenses Toro's trade name to other manufacturers and retailers on certain products as a means of expanding its brand name and image. During 2009, this segment posted $532.7 million in revenues.[3]

Other (2% of 2009 Revenue)

Toro's Other segment includes sales from subsidiary distribution companies. In 2009, this segment had $24.8 million in total revenues.[4]

Trends and Forces

U.S. Housing and Commercial Construction

The demand for Toro's landscaping and irrigation equipment is directly related to the development of new commercial and residential real estate. A prolonged slump due to subprime lending would likely decrease demand for Toro products. This is especially true for Toro because many of its products are relatively expensive, requiring many customers to make purchases through third-party financing.

The U.S. Dollar Affects Demand from abroad

Toro generates about 29% of revenue outside the United States. A less valuable U.S. dollar makes Toro's American produced products more attractive on the world market. On the other hand, a strengthening Dollar makes Toro's products more expensive to international buyers, and would reduce overall sales. Toro estimates that the strengthening dollar in 2009 reduced their overall sales by $32 million.[5] However foreign currency fluctuations make sales revenues difficult to predict.

Seasonality and Weather affect earnings

Toro's sales are relatively cyclical with regards to its residential products. More specifically, sales are particularly strong in the second and third quarters of each year, as homeowners stock up on gardening and other outdoor home products. Evidence can be seen in Toro's 2009 quarterly earnings, as 59% of its 2009 revenues for residential products came during the second and third quarters.[6]

Worldwide weather patterns also affect demand for Toro products. Evidence of this is weak snow blower sales during the mild winter of 2006-2007. Conversely, worldwide water shortages are increasing demand for Toro's efficient irrigation systems (see also China's Water Scarcity).

Competition

Toro faces competition from companies including Deere & Company (DE), Black & Decker (BDK), and Honda Motor Company (HMC). In order to remain competitive, Toro must continue to devise and produce innovative high quality products that exceed consumer demands. If Toro fails to successfully innovate, these large competitors will undoubtedly use their superior resources to create products that attract new consumers and reduce Toro's market share. On the other hand, many of these large competitors are highly diversified companies that cannot bring the same focus to lawn care products as Toro.

  • MTD Products produces a wide range of lawn care product lines such as Cub Cadet and Troy-Bilt. MTD is a privately held company.
  • Black & Decker (BDK) produces a variety of lawn and garden equipment, including trimmers, lawn mowers, edgers, and pruners.
  • Makita (MKTAY) has a full line of professional power equipment, including a variety of lawn care products.



References

  1. TTC 10-K 2009 Item 7 Pg. 26
  2. TTC 10-K 2009 Item 7 Pg. 29
  3. TTC 10-K 2009 Item 7 Pg. 30
  4. TTC 10-K 2009 Item 7 Pg. 31
  5. TTC 10-K 2009 Item 7 Pg. 28
  6. TTC 10-K 2009 Item 1 Pg. 7
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