Toro 2007 Annual Report Download - page 21

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(WEEE) and Restriction on the use of Hazardous Substances
(RoHS). Both directives are transposed into legislation in the
27 EU member states. The WEEE directive mandates the labeling,
collection, and disposal of electrical and electronic equipment. The
RoHS directive bans the sale of electrical and electronic equip-
ment containing certain, or certain levels of, hazardous
substances, such as lead, mercury, chromium, cadmium, and
brominated-flame retardants. We believe that we are in substantial
compliance with these regulations.
The United States Environmental Protection Agency (EPA) and
the California Air Resources Board (CARB) have adopted emis-
sion regulations setting maximum emission standards for certain
off-road equipment. New engine emission regulations are being
phased in by the federal government and the State of California.
Our products are also subject to international laws and regulations
related to emissions in places where we sell our products outside
the United States. We are currently unable to predict the ultimate
impact of the adopted and proposed regulations on our business.
Our residential products are subject to various United States
statutes designed to protect consumers and are subject to the
administrative jurisdiction of the Consumer Product Safety Com-
mission. We are also subject to international, federal and state
environmental, occupational safety, transportation, and other
regulations. We believe we are in substantial compliance with all
such regulations, none of which has had a material adverse effect
on our operations or business.
Customer Financing
Wholesale Financing – Toro Credit Company, our wholly owned
finance subsidiary, provides financing for select products we
manufacture for North American Toro distributors and approxi-
mately 180 selected U.S. dealers. Toro Credit Company
purchases select receivables from our distributors for extended
periods that assist the distributors and dealers to carry representa-
tive inventories of equipment. Down payments are not required
and, depending on the finance program for each product line,
finance charges are incurred by us, shared between us and the
distributor and/or the dealer, or paid by the distributor or dealer. A
security interest is retained in the distributors’ and dealers’ invento-
ries, and those inventories are monitored regularly. Terms to the
distributors and dealers require payment as the equipment, which
secures the indebtedness, is sold to customers, or when payment
terms become due, whichever occurs first. Rates are based on
prime rate plus a fixed percentage that differs based on whether
the financing is for a distributor or dealer. Rates may also vary
based on the product that is financed.
Independent Toro dealers that do not finance through Toro
Credit Company finance their inventories with third party sources.
The finance charges represent interest for a pre-established length
of time based on a predefined rate by a contract with third party
financing sources. Exmark and some international products sold
through dealers are financed primarily with third party financing
sources or by the distributor.
End-User Financing – We have agreements with a third party
financing company to provide lease-financing options to golf
course and sports fields and grounds equipment customers and
micro-irrigation customers in North America, Europe, and
Australia. The purpose of these agreements is to increase sales by
giving buyers of our products alternative financing options when
purchasing our products.
We also have a multi-year agreement with a third party financ-
ing company to provide financing programs under a private label
program in the U.S. This program, offered primarily to Toro and
Exmark dealers, provides end-user customers a revolving line of
credit for Toro and Exmark products, parts, and services.
Distributor Financing – Occasionally, we enter into long-term
loan agreements with some distributors. These transactions are
used for expansion of the distributors’ businesses, acquisitions,
refinancing working capital agreements, or ownership changes.
Employees
During fiscal 2007, we employed an average of 5,320 employees.
The total number of employees as of October 31, 2007 was 5,273.
We consider our employee relations to be good. Three collective
bargaining agreements cover approximately 17 percent of these
employees. These three agreements expire in October 2008,
May 2010, and October 2010. From time to time, we also retain
consultants, independent contractors, and temporary and part-time
workers.
Available Information
Filings with the SEC – We are a reporting company under the
Securities Exchange Act of 1934, as amended, and file reports,
proxy statements, and other information with the Securities and
Exchange Commission (SEC). Copies of these reports, proxy
statements, and other information can be inspected and copied at
the SEC’s Public Reference Room at 100 F Street N.E.,
Room 1580, Washington, D.C. 20549. You may obtain information
on the operation of the Public Reference Room by calling the SEC
at 1-800-SEC-0330. Because we make filings to the SEC elec-
tronically, you may also access this information from the SEC’s
home page on the Internet at http://www.sec.gov.
We make available, free of charge on our Internet web site
www.thetorocompany.com (select the “Investor Information” link
and then the “Financials” link), our Annual Reports on Form 10-K,
Quarterly Reports on Form 10-Q, Current Reports on Form 8-K,
proxy statements on Schedule 14A, amendments to those reports,
and other documents filed or furnished pursuant to Sec-
tion 13(a) or 15(d) of the Securities Exchange Act of 1934, as
amended, as soon as reasonably practicable after we electroni-
cally file such material with, or furnish it to, the SEC. The