Toro 2012 Annual Report Download - page 15
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Please find page 15 of the 2012 Toro annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.requirements; worker and product user health and safety; energy
Backlog of Orders
efficiency; product life-cycles; and the generation, use, handling,
Our backlog of orders is dependent upon when customers place
labeling, collection, management, storage, transportation, treat-
orders, and is not necessarily an indicator of our expected results
ment, and disposal of hazardous substances, wastes, and other
for our fiscal 2013 net sales. The approximate backlog of orders as
regulated materials. For example:
of October 31, 2012 and 2011 was $123.9 million and $85.2 mil-
•
The United States EPA, the California Air Resources Board, and
lion, respectively, an increase of 45.4 percent. This increase was
similar regulators in other U.S. states and foreign jurisdictions in
primarily from strong orders for our professional segment diesel
which we sell our products have phased in, or are phasing in,
engine products subject to Tier 4 emission requirements. As we
emission regulations setting maximum emission standards for
prepare for the new emission requirements, we intend to imple-
certain equipment. Specifically, the EPA has adopted increas-
ment price increases for our products subject to these regulations;
ingly stringent engine emission regulations, including Tier 4
therefore, many customers placed orders in advance of when price
emission requirements applicable to diesel engines in specified
increases go into effect for products impacted by the new emission
horsepower ranges that are used in some of our professional
requirements, which resulted in the increase in backlog of orders
segment products. Beginning January 1, 2013, such require-
as of October 31, 2012 compared to October 31, 2011. We expect
ments expand to additional horsepower categories and, accord-
the existing backlog of orders will be filled in early fiscal 2013.
ingly, apply to more of our products.
Competition
•
The United States federal government, several U.S. states, and
Our products are sold in highly competitive markets throughout the certain international jurisdictions in which we sell our products,
world. The principal competitive factors in our markets are product including the European Union (‘‘EU’’) and each of its member
innovation, quality and reliability, pricing, product support and cus- states, have implemented one or more of the following: (i) the
tomer service, warranty, brand awareness, reputation, distribution, Waste Electrical and Electronic Equipment (‘‘WEEE’’) directive or
shelf space, and financing options. We believe we offer total solu- similar product life-cycle management laws, rules, or regulations,
tions and full service packages with high quality products that have which mandate the labeling, collection, and disposal of specified
the latest technology and design innovations. In addition, by selling waste electrical and electronic equipment, including some of our
our products through a network of distributors, dealers, hardware products; (ii) the Restriction on the use of Hazardous Sub-
retailers, home centers, and mass retailers, we offer comprehen- stances (‘‘RoHS’’) directive or similar substance level laws, rules,
sive service support during and after the warranty period. We com- or regulations, which restrict the use of several specified hazard-
pete in many product lines with numerous manufacturers, some of ous materials in the manufacture of specific types of electrical
which have larger operations and financial resources than us. We and electronic equipment, including some of our products;
believe that we have a competitive advantage because we manu- (iii) country of origin laws, rules, or regulations, which require
facture a broad range of product lines, we are committed to prod- certification of the geographic origin of our finished goods prod-
uct innovation and customer service, we have a strong history in ucts and/or components used in our products through documen-
and focus on maintaining turf and landscapes, and our distribution tation and/or physical markings, as applicable; (iv) energy effi-
channels position us well to compete in various markets. ciency laws, rules, or regulations, which are intended to reduce
Internationally, residential segment products face more competi- the use and inefficiencies associated with energy and natural
tion because many foreign competitors design, manufacture, and resource consumption and require specified efficiency ratings
market products in their respective countries. We experience this and capabilities for certain products, including some of our prod-
competition primarily in Europe. In addition, fluctuations in the ucts; and (v) product life-cycle laws, rules, or regulations, which
value of the U.S. dollar may affect the price of our products in are intended to reduce waste and environmental and human
foreign markets, thereby impacting their competitiveness. We pro- health impact, and require manufacturers to collect, dispose, and
vide pricing support, as needed, to foreign customers to remain recycle certain products, including some of our products, at the
competitive in international markets. end of their useful life.
•
Our products, when used by residential customers, may be sub-
Environmental Matters and Other Governmental ject to various federal, state, and international laws, rules, and
Regulation regulations that are designed to protect consumers, including
We are subject to numerous federal, international, states, and rules and regulations of the Consumer Product Safety
other governmental laws, rules, and regulations relating to, among Commission.
others, climate change; emissions to air and discharges to water; Although we believe that we are in substantial compliance with
product and associated packaging; restricted substances, including currently applicable laws, rules, and regulations, we are unable to
recently-promulgated ‘‘conflict minerals’’ disclosure rules; import predict the ultimate impact of adopted or future laws, rules, and
and export compliance, including country of origin certification regulations on our business. Such laws, rules, or regulations may
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