Toro 2012 Annual Report Download - page 32
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Gross margin was 34.4 percent in fiscal 2012, an increase of 60
Summary of Fiscal 2012 Results
basis points from 33.8 percent in fiscal 2011. Price increases on
In fiscal 2012, we achieved record net sales and double digit net
some products and manufacturing efficiencies from increased
earnings growth. Our fiscal 2012 results included the following
production and demand for our products contributed to the
items of significance:
improvement in gross margin. However, higher average com-
•
Net sales for fiscal 2012 increased by 4.0 percent compared to
modity prices and unfavorable product mix hindered our gross
fiscal 2011 to a record of $1,958.7 million. This increase was
margin growth rate in fiscal 2012 as compared to fiscal 2011.
primarily attributable to increased demand for our products
•
Although selling, general, and administrative (‘‘SG&A’’) expense
largely resulting from the successful introduction of new and
was up 3.4 percent in fiscal 2012 compared to fiscal 2011,
enhanced products that were well received by customers, as
SG&A expense as a percentage of net sales in fiscal 2012 was
well as incremental sales of $22.1 million from acquisitions.
down to 23.9 percent compared to 24.0 percent in fiscal 2011,
However, a continuing sluggish economy in Europe hampered
reflecting further leveraging of our SG&A costs over higher sales
our international net sales in fiscal 2012 compared to fiscal
volumes.
2011.
•
Receivables decreased slightly by 0.5 percent as of the end of
•
Professional segment net sales, which represented 68 percent of
fiscal 2012 compared to the end of fiscal 2011. However, our
our total consolidated net sales in fiscal 2012, grew 7.3 percent
inventory levels were up by 12.6 percent as of the end of fiscal
in fiscal 2012 compared to fiscal 2011. Shipments increased due
2012 compared to fiscal 2011 as we prebuilt inventory for antici-
to higher demand for most of our domestic professional segment
pated higher demand before Tier 4 emission requirements go
products largely resulting from the successful introduction of new
into effect, which impact our products having diesel engines with
and enhanced products, strong demand for domestic golf and
greater than 25 but less than 75 horsepower manufactured after
landscape contractor equipment, continued growth in the micro-
January 1, 2013, as well as $12.6 million of incremental inven-
irrigation market, and incremental sales of $22.1 million from
tory from acquisitions as of the end of fiscal 2012. Average net
acquisitions.
working capital (accounts receivable plus inventory less trade
•
In fiscal 2012, we completed three acquisitions within our profes-
payables) as a percent of net sales was 15.2 percent as of the
sional segment to help us expand our presence in the rental and
end of fiscal 2012 compared to 15.0 percent as of the end of
construction market and add to our golf product line-up. Specifi-
fiscal 2011. This increase was due mainly to higher average
cally, we acquired a product line that includes vibratory plows,
inventory levels in fiscal 2012 compared to fiscal 2011 as we
trenchers, and horizontal directional drills; a line of concrete and
prebuilt inventory in anticipation of strong demand for our prod-
mortar mixers, material handlers, compaction equipment, and
ucts, mainly for products impacted by new Tier 4 emissions
other concrete power tools; and a greens roller product line for
requirements, as well as incremental inventory from acquisitions.
the golf market.
Our domestic field inventory levels were slightly higher as of the
•
Our residential segment net sales were down by 2.6 percent in
end of fiscal 2012 compared to the end of fiscal 2011 due in
fiscal 2012 compared to fiscal 2011 due primarily from lower
part to anticipated increase in retail demand.
shipments of snow thrower products and service parts due to
•
On May 24, 2012, our Board of Directors declared a two-for-one
reduced demand resulting from the lack of snowfall during the
stock split of our common stock, effected in the form of a
2011-2012 winter season. However, sales of walk power
100 percent stock dividend paid on June 29, 2012. This was our
mowers, zero-turn radius riding mowers, and trimmers were up
third stock split in the past ten fiscal years. Earnings and divi-
due to positive customer response to newly introduced products
dends declared per share and weighted average shares out-
and favorable weather conditions that drove strong demand.
standing are presented in this report after the effect of the
•
International net sales for fiscal 2012 were down 5.6 percent
100 percent stock dividend. The two-for-one stock split is also
compared to fiscal 2011 due mainly to lower sales in Europe as
reflected in the share amounts in all periods presented in this
a result of continuing economic weakness and uncertainty in that
report.
region. In fiscal 2012, we began operations at our new micro-
•
We continued our history of paying quarterly cash dividends in
irrigation manufacturing facility in Romania for our water con-
fiscal 2012. We increased our fiscal 2012 quarterly cash divi-
serving drip irrigation products for agricultural markets. Interna-
dend by 10 percent to $0.11 per share compared to our quar-
tional net sales comprised 30.3 percent of our total consolidated
terly cash dividend in fiscal 2011 of $0.10 per share.
net sales in fiscal 2012 compared to 32.3 percent in fiscal 2011
•
Our stock repurchase program returned $92.7 million in cash to
and 31.8 percent in fiscal 2010.
our shareholders during fiscal 2012, which reduced our number
•
Fiscal 2012 net earnings of $129.5 million rose 10.1 percent
of shares outstanding. This reduction resulted in a benefit to our
compared to fiscal 2011, and diluted net earnings per share
diluted net earnings per share of approximately $0.10 per share
increased 15.7 percent in fiscal 2012 to $2.14 compared to
in fiscal 2012 compared to fiscal 2011.
$1.85 in fiscal 2011.
26