Toro 2011 Annual Report Download - page 38

order replenishment and service levels to end users. We expect fixed rate long-term debt, bank credit lines, and cash on hand, will
average receivables to increase in fiscal 2012 compared to fiscal provide us with adequate liquidity to meet our anticipated operating
2011 as we anticipate higher sales volumes in fiscal 2012 com- requirements. We believe that the funds available through existing
pared to fiscal 2011. We anticipate average inventory turnover to financing arrangements and forecasted cash flows will be sufficient
improve and average inventory levels to decrease in fiscal 2012 to provide the necessary capital resources for our anticipated
compared to fiscal 2011 due in part to increased focus on asset working capital needs, capital expenditures, investments, debt
management to limit additional buildup of inventory levels. We also repayments, quarterly cash dividend payments, and stock repur-
anticipate average accounts payable to increase slightly in fiscal chases for at least the next twelve months.
2012 compared to fiscal 2011 driven by our continued focus on our
Cash Dividends
supply chain initiatives.
Each quarter in fiscal 2011, our Board of Directors declared a cash
Capital Expenditures and dividend of $0.20 per share, which was an 11 percent increase
Other Long-Term Assets over our cash dividend of $0.18 per share paid each quarter in
Fiscal 2011 capital expenditures of $57.4 million were 18.0 percent fiscal 2010. As announced on November 30, 2011, our Board of
higher compared to fiscal 2010. This increase was primarily attribu- Directors recently increased our fiscal 2012 first quarter quarterly
table to production equipment and tooling expenditures for new cash dividend by 10 percent to $0.22 per share from the quarterly
products, as well as for a new manufacturing facility in Romania cash dividend paid in the first quarter of fiscal 2011.
that was completed in fiscal 2011 and will increase production of
Cash Flow
our micro-irrigation water conserving products for the agricultural
Cash flows provided by (used in) operating, investing, and financ-
market. Capital expenditures for fiscal 2012 are planned to be
ing activities during the past three fiscal years are shown in the
approximately $45 million as we expect to continue to invest in
following table.
new product tooling and replacement production equipment.
Long-term assets as of October 31, 2011 were $337.8 million
compared to $300.6 million as of October 31, 2010, an increase of Cash Provided by (Used in)
(Dollars in millions)
12.4 percent. This increase was due primarily to the addition of Fiscal years ended October 31 2011 2010 2009
intangible assets from acquisitions. Operating activities $ 113.9 $ 193.5 $ 251.5
Investing activities (69.3) (60.8) (46.0)
Capital Structure Financing activities (140.1) (142.3) (121.3)
Effect of exchange rates on cash (1.0) (0.8) 4.2
The following table details the components of our total capitaliza-
tion and key ratios. Net cash (used) provided $ (96.5) $ (10.4) $ 88.4
Cash and cash equivalents as of fiscal year end $ 80.9 $ 177.4 $ 187.8
(Dollars in millions)
October 31 2011 2010 Cash Flows From Operating Activities. Our primary source of
funds is cash generated from operations. In fiscal 2011, cash pro-
Short-term debt $ 0.0 $ 1.0
Long-term debt, including current portion 227.2 225.5 vided by operating activities decreased $79.6 million, or 41.2 per-
Stockholders’ equity 266.8 275.8 cent, from fiscal 2010. This decrease was due to a lower amount
Debt-to-capitalization ratio 46.0% 45.1% of accounts payable as of the end of fiscal 2011 compared to the
Our debt-to-capitalization ratio increased in fiscal 2011 compared end of fiscal 2010, whereas in fiscal 2010, we had a significant
to fiscal 2010 due to a decrease in stockholders’ equity as we increase in accounts payable as compared to the end of fiscal
continued to repurchase shares of our common stock and a slight 2009, which contributed to an increase in cash provided by operat-
increase in long-term debt that was issued as part of our acquisi- ing activities in fiscal 2010. Additionally, cash used for higher
tions in fiscal 2011. inventory levels, as previously discussed, also contributed to the
decrease in cash provided by operating activities in fiscal 2011
Liquidity and Capital Resources compared to fiscal 2010, somewhat offset by higher net earnings.
Our businesses are seasonally working capital intensive and Cash Flows From Investing Activities. Capital expenditures
require funding for purchases of raw materials used in production, and acquisitions are our primary uses of capital resources. These
replacement parts inventory, payroll and other administrative costs, investments are intended to enable sales growth in new markets
capital expenditures, establishment of new facilities, expansion and and expand existing markets, help us to meet product demand,
upgrading of existing facilities, as well as for financing of receiv- and increase our manufacturing efficiencies and capacity. Cash
ables from customers that are not financed with Red Iron. We used in investing activities was up 13.9 percent in fiscal 2011 com-
believe that cash generated from operations, together with our pared to fiscal 2010 due mainly to an increase in purchases of
32