Toro 2007 Annual Report Download - page 35

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ITEM 6. SELECTED FINANCIAL DATA
(Dollars in thousands, except per share data)
Fiscal years ended October 31 2007 2006 20051 2004 2003
OPERATING RESULTS:
Net sales $ 1,876,904 $ 1,835,991 $ 1,779,387 $ 1,652,508 $ 1,496,588
Net sales growth from prior year 2.2% 3.2% 7.7 % 10.4% 7.0%
Gross profit as a percentage of net sales 36.1% 35.0% 34.6 % 35.9% 35.8%
Selling, general, and administrative expense as a percentage of net sales 24.2% 24.0% 24.3 % 25.9% 27.3%
Earnings from operations $ 223,649 $ 202,876 $ 182,726 $ 165,225 $ 126,994
Interest expense 19,445 17,672 17,733 15,523 16,285
Net earnings 142,436 129,145 114,082 102,666 81,620
As a percentage of net sales 7.6% 7.0% 6.4 % 6.2% 5.5%
Basic net earnings per share2 $ 3.50 $ 3.01 $ 2.55 $ 2.11 $ 1.63
Diluted net earnings per share2 3.40 2.91 2.45 2.02 1.56
Return on average stockholders’ equity 37.4% 33.0% 28.1 % 23.5% 19.8%
SUMMARY OF FINANCIAL POSITION:
Total assets $ 950,837 $ 919,073 $ 914,860 $ 929,846 $ 926,493
Average net working capital as a percentage of net sales3 29.4% 29.5% 30.4 % 30.6% 34.3%
Long-term debt, including current portion $ 229,209 $ 175,000 $ 175,046 $ 175,091 $ 178,921
Stockholders’ equity 370,438 392,029 390,034 420,819 451,523
Debt-to-capitalization ratio 38.3% 30.9% 31.0 % 29.5% 28.6%
CASH FLOW DATA:
Cash provided by operating activities $ 183,574 $ 190,271 $ 174,083 $ 185,149 $ 115,984
Repurchases of Toro common stock 182,843 146,543 156,972 169,821 18,726
Cash dividends per share of Toro common stock2 0.48 0.36 0.24 0.12 0.12
OTHER STATISTICAL DATA:
Market price range –
High sales price2 $ 63.69 $ 52.52 $ 49.02 $ 35.825 $ 25.205
Low sales price2 42.06 36.30 33.90 22.225 15.075
Average number of employees 5,320 5,343 5,185 5,164 5,367
1 The company’s consolidated financial statements include results of Hayter Limited from February 8, 2005, date of acquisition.
2 Per share data has been adjusted for all fiscal years presented to reflect two separate two-for-one stock splits effective on March 28, 2005 and April 1, 2003.
3 Average net working capital is defined as monthly average accounts receivable plus inventory less trade payables.
ITEM 7. MANAGEMENT’S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
This Management’s Discussion and Analysis (MD&A) provides
material historical and prospective disclosures intended to enable
investors and other users to assess our financial condition and
results of operations. Statements that are not historical are
forward-looking and involve risks and uncertainties, including those
discussed in Part I, Item 1A, “Risk Factors” and elsewhere in this
report. These risks could cause our actual results to differ
materially from any future performance suggested below.
This MD&A is organized in the following major sections:
• Overview, Summary of Fiscal 2007 Results, GrowLean Initia-
tive, and Outlook for Fiscal 2008
• Results of Operations
• Performance by Business Segment
• Financial Condition
• Off-Balance Sheet Arrangements and Contractual Obligations
• Critical Accounting Policies and Estimates
OVERVIEW
We design, manufacture, and market professional turf mainte-
nance equipment and services, turf and micro irrigation systems,
landscaping equipment, and residential yard products worldwide.
We sell our products through a network of distributors, dealers,
hardware retailers, home centers, mass retailers, and over the
Internet, mainly through Internet retailers. Our businesses are
organized into two operating segments: professional and residen-
tial. A third segment called “other” consists of domestic distribution
companies and corporate activities, including corporate financing
activities. Our emphasis is to provide well-built, dependable, and
innovative products supported by an extensive service network.
A significant portion of our revenues has historically been, and we
expect it to continue to be, attributable to new and enhanced
products.