Toro 2014 Annual Report Download - page 42

Cash Flow
•
Average accounts payable increased by 17.0 percent in fiscal
Cash flows provided by (used in) operating, investing, and financ-
2014 compared to fiscal 2013 mainly due to higher volume of
ing activities during the past three fiscal years are shown in the
purchases from increased sales and demand in fiscal 2014 com-
following table.
pared to fiscal 2013.
In fiscal 2015, we intend to continue to place emphasis on
Cash Provided by
improving asset utilization and reducing the amount of working (Used in)
(Dollars in millions)
capital in the supply chain. Notwithstanding these efforts, we Fiscal years ended October 31 2014 2013 2012
expect average receivables to increase and average inventory
Operating activities $182.4 $ 221.9 $185.8
turnover to improve in fiscal 2015 compared to fiscal 2014 due to Investing activities (65.7) (44.8) (47.3)
anticipated higher sales volumes. We also expect average inven- Financing activities 17.0 (118.3) (93.0)
tory levels in fiscal 2015 to be higher as compared to fiscal 2014 Effect of exchange rates on cash (1.8) (1.7) (0.5)
due, in part, to incremental inventory levels from our recent acqui- Net cash increase $131.9 $ 57.1 $ 45.0
sition of the BOSS professional snow and ice management busi- Cash and cash equivalents as of fiscal year end $314.9 $ 183.0 $125.9
ness. Additionally, we anticipate average inventory in fiscal 2015 to
be higher as compared to average inventory in fiscal 2014 Cash Flows From Operating Activities. Our primary source of
because inventory levels as of the end of fiscal 2014 were higher funds is cash generated from operations. In fiscal 2014, cash pro-
compared to inventory levels as of the end of fiscal 2013, mainly vided by operating activities decreased $39.5 million, or 17.8 per-
for certain products impacted by Tier 4 diesel engine emission cent, from fiscal 2013. This decrease was due to cash utilized for
requirements and other regulations in Europe. We also anticipate increased working capital needs, mainly as a result of an increase
average accounts payable to increase in fiscal 2015 as compared in inventory levels and a decline in accounts payable, partially off-
to fiscal 2014, driven by higher purchases to meet expected set by higher net earnings.
increase in demand for our products. In fiscal 2013, cash provided by operating activities increased
$36.1 million, or 19.4 percent, from fiscal 2012. This improvement
Capital Expenditures and was due to a decrease in inventory levels and higher net earnings,
Other Long-Term Assets somewhat offset by an increase in accounts receivable.
Fiscal 2014 capital expenditures of $71.1 million were higher by
Cash Flows From Investing Activities. Capital expenditures
$21.7 million compared to fiscal 2013. This increase was primarily
and acquisitions are a significant use of our capital resources.
attributable to capital expenditures for the construction of our
These investments are intended to enable sales growth in new and
expanded new corporate facility located in Bloomington, Minne-
expanding markets, help us to meet product demand, and increase
sota, new product tooling, and replacement production equipment.
our manufacturing efficiencies and capacity. Cash used in investing
Capital expenditures for fiscal 2015 are planned to be approxi-
activities in fiscal 2014 increased $20.9 million, or 46.7 percent,
mately $75 million as we expect to continue to invest in new prod-
from fiscal 2013 mainly due to higher purchases of property, plant,
uct tooling, new technology in production processes and equip-
and equipment, including our new corporate facility, as previously
ment, replacement production equipment, as well as renovations of
discussed.
our original corporate facility located in Bloomington, Minnesota to
Cash used in investing activities was down 5.4 percent in fiscal
accommodate expansion needs for our product development and
2013 compared to fiscal 2012 due to lower amounts of cash uti-
test capacities.
lized for acquisitions, somewhat offset by an increase in purchases
Long-term assets as of October 31, 2014 were $368.4 million
of property, plant, and equipment.
compared to $349.5 million as of October 31, 2013, an increase of
5.4 percent. This increase was mainly attributable to higher invest- Cash Flows From Financing Activities. Cash provided by
ments of capital expenditures in fiscal 2014 compared to fiscal financing activities was $17.0 million in fiscal 2014 compared to
2013, as discussed above. Included in long-term assets as of cash used in financing activities of $118.3 million in fiscal 2013.
October 31, 2014 and 2013 was goodwill in the amount of The increase in cash provided by financing activities included an
$91.9 million. Based on our annual impairment analysis, we deter- increase in short-term and long-term debt, partially offset by higher
mined there was no goodwill impairment for any of our reporting amounts of cash paid for dividends and stock repurchases in fiscal
units as their related fair values were substantially in excess of 2014 compared to fiscal 2013.
their carrying values. Cash used in financing activities increased by 27.1 percent in
fiscal 2013 compared to fiscal 2012 due to higher amounts of cash
paid for dividends and repurchases of our common stock, as well
as lower amounts of proceeds from exercises of stock options.
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