Toro 2013 Annual Report Download - page 27

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medium-term debt under our credit arrangements. If our credit rat- Our business is subject to a number of other
ing falls below investment grade and/or our average debt to earn- miscellaneous risks that may adversely affect our
ings before interest, tax, depreciation, and amortization (‘‘EBITDA’’) operating results, financial condition, or business.
ratio rises above 2.00, the interest rate we currently pay on out- Other miscellaneous risks that could affect our business include:
standing debt under our credit arrangements would increase, which
•
our ability to achieve the revenue growth and operating earnings
could adversely affect our operating results. goals of our ‘‘Destination 2014’’ initiative;
•
natural or man-made disasters or global pandemics, which may
We are expanding our corporate facilities and could result in shortages of raw materials and components, higher fuel
experience disruptions to our operations in connection and commodity costs, delays in shipments to customers, and
with such expansion efforts. increases in insurance premiums;
We are currently expanding our corporate facilities, driven by our
•
financial viability of distributors and dealers, changes in distribu-
need to expand the space available for our product development tor ownership, changes in channel distribution of our products,
and test capacities, as well as our need for additional information relationships with our distribution channel partners, our success
technology and office space. We expect the expansion of our cor- in partnering with new dealers, and our customers’ ability to pay
porate facilities to be completed in fiscal 2014. We are financing amounts owed to us;
such expansion efforts with cash on hand and cash from operating
•
a decline in retail sales or financial difficulties of our distributors
activities. The expansion of our corporate facilities entails risks that or dealers, which could cause us to repurchase financed prod-
could cause disruption in the operations of our business. Such uct; and
risks include potential interruption in data flow; unforeseen con-
•
the threat of terrorist acts and war, which may result in height-
struction, scheduling, engineering, environmental, or geological ened security and higher costs for import and export shipments
problems; and unanticipated cost increases. of components or finished goods, reduced leisure travel, and
contraction of the U.S. and worldwide economies.
ITEM 1B.UNRESOLVED STAFF COMMENTS
None.
21