Toro 2012 Annual Report Download - page 37
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Please find page 37 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.business contributed to our professional segment net sales growth Somewhat offsetting the decrease in residential segment net sales
for fiscal 2011 compared to fiscal 2010. included the following factors:
•
Higher shipments and demand of walk power mowers, zero-turn
Operating Earnings. Operating earnings for the professional radius riding mowers, and trimmers due to positive customer
segment in fiscal 2012 increased 13.2 percent compared to fiscal response to newly introduced products and favorable weather
2011 due primarily to higher sales volumes. Expressed as a per- conditions that drove strong demand.
centage of net sales, professional segment operating margins
•
Increased sales of Pope products in Australia due to more
increased 100 basis points to 17.5 percent in fiscal 2012 compared favorable weather conditions in fiscal 2012 compared to fiscal
to 16.5 percent in fiscal 2011. The following factors impacted pro- 2011.
fessional segment operating earnings: Worldwide net sales for the residential segment in fiscal 2011
•
Higher gross margin in fiscal 2012 compared to fiscal 2011 as a were up by 5.8 percent compared to fiscal 2010 primarily as a
result of price increases on some products and manufacturing result of strong demand for our snow thrower products as our
efficiencies from higher plant utilization, mainly related to channel partners purchased product to fill depleted field inventory
increased production and demand for our products. Those gross levels for the 2011-2012 snow season following strong sales from
margin improvements were somewhat offset by higher average heavy snow falls during the 2010-2011 snow season, as well as
commodity prices and lower gross margins on product sales additional product placement. Additionally, an increase in ship-
from acquisitions. ments of zero-turn radius riding mowers attributable to strong
•
A decline in SG&A expense rate in fiscal 2012 compared to demand, resulting primarily from customer acceptance of new
fiscal 2011 due mainly to leveraging fixed SG&A costs over products, as well as a weaker average U.S. dollar compared to
higher sales volumes and a decline in marketing expenses, most other currencies in which we transact business, benefited our
somewhat offset by higher warranty expense. residential segment net sales in fiscal 2011 compared to fiscal
Operating earnings for the professional segment in fiscal 2011 2010. Somewhat offsetting those increases was a decline in sales
increased 18.0 percent compared to fiscal 2010 due primarily to of walk power mowers and electric blowers due mainly to unfavor-
higher sales volumes. Expressed as a percentage of net sales, able weather conditions.
professional segment operating margins increased 50 basis points
to 16.5 percent in fiscal 2011 compared to 16.0 percent in fiscal Operating Earnings. Operating earnings for the residential seg-
2010. The operating profit improvement was due to a decline in ment in fiscal 2012 increased 6.4 percent compared to fiscal 2011.
SG&A expense rate primarily from leveraging fixed SG&A costs Expressed as a percentage of net sales, residential segment oper-
over higher sales volumes and a decline in product liability ating margins increased 80 basis points to 9.5 percent in fiscal
expense. However, lower gross margin as a result of higher aver- 2012 compared to 8.7 percent in fiscal 2011. The following factors
age commodity prices and increased freight expense driven by impacted residential segment operating earnings:
higher fuel prices hampered our professional segment operating
•
Higher gross margins from costs incurred in fiscal 2011 associ-
profit improvement. ated with a rework for a non-safety quality issue that affected a
large number of our walk power mowers that was not duplicated
Residential in fiscal 2012, somewhat offset by unfavorable product mix and
Residential segment net sales represented 31 percent of consoli- higher commodity costs.
dated net sales for fiscal 2012, 33 percent for fiscal 2011, and
•
Lower SG&A expense due to a decrease in marketing and war-
35 percent for fiscal 2010. The following table shows the residen- ranty expense related to costs incurred in fiscal 2011 for incen-
tial segment net sales, operating earnings, and operating earnings tive programs and special warranty modifications, respectively,
as a percent of net sales. that were not duplicated in fiscal 2012.
Operating earnings for the residential segment in fiscal 2011
(Dollars in millions) decreased 6.1 percent compared to fiscal 2010. Expressed as a
Fiscal years ended October 31 2012 2011 2010 percentage of net sales, residential segment operating margins
Net sales $ 607.4 $623.9 $589.7 declined 110 basis points to 8.7 percent in fiscal 2011 compared to
% change from prior year (2.6)% 5.8% 10.7% 9.8 percent in fiscal 2010 due to lower gross margins primarily as
Operating earnings $ 57.9 $ 54.4 $ 58.0
a result of costs associated with a rework for a non-safety quality
As a percent of net sales 9.5% 8.7% 9.8%
issue that affected a large number of our walk power mowers,
Net Sales. Worldwide net sales for the residential segment in higher average commodity prices, and increased freight expense.
fiscal 2012 were down by 2.6 percent compared to fiscal 2011 Those increases were somewhat offset by lower manufacturing
primarily as a result of: costs from higher plant utilization, mainly related to increased
•
Lower shipments and demand for our snow thrower products demand for our products. Additionally, an increase in SG&A
and service parts due to the lack of snowfall during the
2011-2012 winter season.
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