Toro 2011 Annual Report Download - page 5

the potential to save more than 1 billion gallons of water over
a fi ve year period. This program won a “Best Management
Practices” award in 2011 from the California Municipal
Utilities Association.
Our micro irrigation business achieved strong growth in 2011
with sales particularly strong in North America, Europe and
Central Asia. Growers are becoming more aware of this
effi cient new method of irrigating crops. We have a great
slate of products led by our patented Aqua-Traxx® tape and
BlueLine™ offerings, along with other promising technologies
on the horizon. We continue to invest in the business as
demonstrated by the completion of our new manufacturing
facility in Romania that will help support expansion into new
markets. We believe that we are well positioned to increase
share and become a supplier of choice for growers worldwide.
Outlook
It was a very good year for Toro. I want to take a moment and
thank all employees and channel partners for their continued
commitment and effort to drive results. Their hard work
enabled us to perform exceptionally well against a backdrop
of unfavorable weather, a sluggish economy, and a signifi -
cant rework issue. We delivered record revenues, improved
profi tability, sustained a healthy balance sheet, and have the
access to capital to grow our business.
As we enter the second year of our Destination 2014
initiative, we look ahead to making further progress on our
goals – increasing operating earnings to 12 percent of sales
by the end of 2014 and achieving at least $100 million in
incremental revenue growth each of the next three years.
Once again, we fi nd ourselves at the threshold of reaching
$2 billion in revenue. We are committed to eclipsing that
mark during this important, multi-year initiative.
In the ongoing pursuit of operational excellence, we enter
the coming year with greater focus on quality, cost and
productivity. In what we anticipate to be an environment of
increased pressure from raw material costs, we look to
further leverage our fi xed manufacturing costs and leaner
organization to expand margins. While Toro adopted lean
principles about a decade ago, there is still room for contin-
ued improvement. And, with the new leadership of Renee
Peterson, Toro’s vice president of fi nance and chief fi nancial
offi cer, we have an increased focus on cost and productivity
improvement. Last, the unfortunate quality problems in fi scal
2011 reminded us of the impact these issues have on our
customers, channel partners and margins. Therefore, we
have implemented changes inside the organization. Judy
Altmaier, vice president of operations, and now, quality
management, will lead efforts to sharpen our quality focus.
At Toro, we have a passion for building strong relationships
based on integrity and trust through which we offer the best
in innovative products and services to help our customers
enrich the beauty, productivity and sustainability of the land.
These values have served us well in both good and diffi cult
times, enabling us to drive market leadership and maximize
value for our shareholders. I am confi dent in our team
members and their ability to drive future growth and profi t-
ability. On behalf of our Board of Directors and Toro employ-
ees, I want to thank all of you, our shareholders, for your
continued trust and support of The Toro Company.
Sincerely,
Michael J. Hoffman
Chairman and Chief Executive Offi cer
Performance supports
Destination 2014 goals
We confi dently surge ahead to our centennial year and beyond, pursuing
growth and increased profi tability goals. Encouraged by our accomplish-
ments during the fi rst year of our Destination 2014 initiative, we will push
ahead to deliver even greater fi nancial results, better quality and higher
productivity in the years ahead.