Toro 2014 Annual Report Download - page 9

PART I
develop new products. Through these efforts, we seek to be
ITEM 1. BUSINESS
responsive to trends that may affect our target markets now and in
the future. A significant portion of our revenues have historically
Introduction
been, and we expect will continue to be, attributable to new and
The Toro Company was incorporated in Minnesota in 1935 as a
enhanced products. We define new products as those introduced
successor to a business founded in 1914 and reincorporated in
in the current and previous two fiscal years. We plan to continue to
Delaware in 1983. Unless the context indicates otherwise, the
pursue targeted acquisitions using a disciplined approach that adds
terms ‘‘company,’’ ‘‘Toro,’’ ‘‘we,’’ ‘‘us,’’ and ‘‘our’’ refer to The Toro
value while supplementing our existing brands and product
Company and its consolidated subsidiaries. Our executive offices
portfolio.
are located at 8111 Lyndale Avenue South, Bloomington, Minne-
Our purpose is to help our customers enrich the beauty, produc-
sota, 55420-1196, and our telephone number is [phone].
tivity, and sustainability of the land. Our vision is to be the most
Our web site for corporate and investor information is
trusted leader in solutions for the outdoor environment. Every day.
www.thetorocompany.com, which also contains links to our
Everywhere. Our mission, or how we strive to make our vision a
branded product sites. The information contained on our web sites
reality and what we intend to accomplish, is to deliver superior
or connected to our web sites is not incorporated by reference into
innovation and to deliver superior customer care.
this Annual Report on Form 10-K and should not be considered
part of this report.
Recent Development
We design, manufacture, and market professional turf mainte-
On November 14, 2014, during the first quarter of fiscal 2015, we
nance equipment and services, turf irrigation systems, landscaping
acquired substantially all of the assets (excluding accounts receiva-
equipment and lighting, agricultural micro-irrigation systems, rental
ble) of the BOSS professional snow and ice management business
and specialty construction equipment, and residential yard and
of privately held Northern Star Industries, Inc. BOSS designs,
snow thrower products. With our recent acquisition of the BOSS
manufactures, and sells a broad line of snowplows, salt and sand
professional snow and ice management business, we also design,
spreaders, and related parts and accessories for light and medium
manufacture, and market professional snow and ice management
duty trucks, all terrain vehicles (‘‘ATVs’’), utility terrain vehicles
products. We produced our first mower for golf course use in 1921
(‘‘UTVs’’), skid steers, and front-end loaders. Through this acquisi-
when we mounted five reel mowers on a Toro tractor, and we
tion, we added another professional contractor brand; a portfolio of
introduced our first lawn mower for residential use in 1935. We
counter-seasonal equipment; manufacturing and distribution facili-
have continued to enhance our product lines over the past
ties located in Iron Mountain, Michigan; and a distribution network
100 years we have been in business. We classify our operations
for these products. We believe that this acquisition positions us to
into three reportable business segments: Professional, Residential,
strengthen and grow our relationships with professional contrac-
and Distribution. Our Distribution segment, which consists of our
tors, municipalities, and other customers by enabling us to provide
company-owned domestic distributorships, has been combined
them with innovative, durable equipment and high-quality service
with our corporate activities and is shown as ‘‘Other.’’ Net sales of
they need for each season.
our three reportable segments accounted for the following percent-
ages of our consolidated net sales for fiscal 2014: Professional,
Products by Market
68 percent; Residential, 31 percent; and Other, 1 percent.
We strive to be a leader in adapting advanced technologies to
Our products are advertised and sold at the retail level under the
products and services that provide solutions for turf care mainte-
primary trademarks of Toro, Exmark, Irritrol, Hayter, Pope,
nance, landscapes, agricultural fields, specialty construction, snow
Unique Lighting Systems, Lawn-Boy, Lawn Genie, and recently
and ice management, and residential demands. The following is a
acquired BOSS, most of which are registered in the United States
summary of our products, by market, for the Professional segment
and/or in the primary countries outside the United States where we
and our products for the Residential segment:
market such products. This report also contains trademarks, trade
names, and service marks that are owned by other persons or Professional – We design professional turf, landscape, specialty
entities, such as The Home Depot. construction, and agricultural products and market them worldwide
We emphasize quality and innovation in our products, customer through a network of distributors and dealers, as well as directly to
service, manufacturing, and marketing. We strive to provide well- government customers, rental companies, and large retailers. With
built, dependable products supported by an extensive service net- our recent acquisition of BOSS, we also design and manufacture a
work. We have committed funding for research, development, and broad line of professional snow and ice removal equipment
engineering in order to improve and enhance existing products and
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