Toro 2009 Annual Report Download - page 15

and electronic equipment, and (iii) country of origin laws, rules, regularly. Floor plan terms to the distributors and dealers require
or regulations, which require certification of the geographic origin payment as the equipment, which secures the indebtedness, is
of finished goods and/or components through documentation sold to customers, or when payment terms become due, whichever
and/or physical markings, as applicable. occurs first. Rates are generally indexed to LIBOR plus a fixed
•
Our residential products are subject to various federal, state, and percentage that differs based on whether the financing is for a
international laws, rules, and regulations that are designed to distributor or dealer. Rates may also vary based on the product
protect consumers and we are subject to the administrative juris- that is financed.
diction of the Consumer Product Safety Commission. We continue to provide inventory financing to mass market retail
Although we believe that we are in substantial compliance with customers; general line irrigation dealers; wholly owned distribu-
applicable laws, rules, and regulations, we are unable to predict tors; international distributors and dealers, excluding the Canadian
the ultimate impact of adopted or future laws, rules, and regula- distributors and dealers that Red Iron provides financing arrange-
tions on our business. Such laws, rules, or regulations may cause ments; and government entity customers. Some independent inter-
us to incur significant expenses to achieve or maintain compliance, national dealers continue to finance their products with third party
may require us to modify our products, may adversely affect the sources.
demand for some of our products, and may ultimately affect the End-User Financing. We have agreements with third party
way we conduct our operations. Failure to comply with these regu- financing companies to provide lease-financing options to golf
lations could lead to fines and other penalties, including restrictions course and sports fields and grounds equipment customers in the
on the importation of our products into, or the sale of our products U.S. and Europe. The purpose of these agreements is to increase
in, one or more jurisdictions until compliance is achieved. sales by giving buyers of our products alternative financing options
We are also involved in the evaluation and clean-up of a limited when purchasing our products.
number of properties currently and previously owned. We do not We also have agreements with third party financing companies
expect that these matters will have a material adverse effect on to provide financing programs under a private label program in the
our consolidated financial position or results of operations. U.S. This program, offered primarily to Toro and Exmark dealers,
provides end-user customers a revolving line of credit for Toro and
Customer Financing Exmark products, parts, and services.
Wholesale Financing. Toro Credit Company (TCC), our wholly
owned finance subsidiary, provided financing throughout most of Distributor Financing. Occasionally, we enter into long-term
fiscal 2009 for select products that we manufacture and sell to our loan agreements with some distributors. These transactions are
U.S. distributors, select distributors of our products in Canada, and used for expansion of the distributors’ businesses, acquisitions,
approximately 150 select U.S. dealers. In October 2009, TCC sold refinancing working capital agreements, or ownership transitions.
its receivable portfolio to Red Iron Acceptance, LLC (Red Iron), a
Employees
recently established joint venture between Toro and TCF Inventory
During fiscal 2009, we employed an average of 4,612 employees.
Finance, Inc. (TCFIF), a subsidiary of TCF National Bank. Red Iron
The total number of employees as of October 31, 2009 was 4,414.
provides inventory financing, including floor plan financing, to dis-
We consider our employee relations to be good. Three collective
tributors and dealers of our products in the U.S. and to select
bargaining agreements cover approximately 17 percent of these
distributors of our products in Canada. Under a separate arrange-
employees. These three agreements expire in May 2010, October
ment, TCF Commercial Finance Canada, Inc. (TCFCFC) imple-
2010, and October 2011. From time to time, we also retain tempo-
mented a program to provide inventory financing to dealers of our
rary and part-time workers, independent contractors, and
products in Canada during the first quarter of fiscal 2010. In con-
consultants.
nection with the establishment of the joint venture, we terminated
our agreement with a third party financing company that previously
Available Information
provided floor plan financing to dealers of our products in the U.S.
Filings with the SEC. We are a reporting company under the
and Canada. Red Iron began financing open account receivables,
Securities Exchange Act of 1934, as amended, and file reports,
as well as floor plan receivables previously financed by such third
proxy statements, and other information with the Securities and
party financing company, during our first quarter of fiscal 2010.
Exchange Commission (SEC). Copies of these reports, proxy
Under these financing arrangements, down payments are not
statements, and other information can be inspected and copied at
required and, depending on the finance program for each product
the SEC’s Public Reference Room at 100 F Street N.E., Washing-
line, finance charges are incurred by us, shared between us and
ton, D.C. 20549. You may obtain information on the operation of
the distributor and/or the dealer, or paid by the distributor or
the Public Reference Room by calling the SEC at
dealer. Red Iron retains a security interest in the distributors’ and
dealers’ financed inventories, and those inventories are monitored
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