Toro 2013 Annual Report Download - page 9

PART I
expect will continue to be, attributable to new and enhanced prod-
ITEM 1. BUSINESS
ucts. We define new products as those introduced in the current
and previous two fiscal years. We plan to continue to pursue
Introduction
targeted acquisitions using a disciplined approach that adds value
The Toro Company was incorporated in Minnesota in 1935 as a
while supplementing our existing brands and product portfolio.
successor to a business founded in 1914 and reincorporated in
Our purpose is to help our customers enrich the beauty, produc-
Delaware in 1983. Unless the context indicates otherwise, the
tivity, and sustainability of the land. Our mission is to be the lead-
terms ‘‘company,’’ ‘‘Toro,’’ ‘‘we,’’ ‘‘us,’’ and ‘‘our’’ refer to The Toro
ing worldwide provider of outdoor landscaping products, support
Company and its consolidated subsidiaries. Our executive offices
services, and integrated systems that help customers preserve and
are located at 8111 Lyndale Avenue South, Bloomington, Minne-
beautify their outdoor landscapes with environmentally responsible
sota, 55420-1196, and our telephone number is [phone].
solutions of customer-valued quality and innovation.
Our web site for corporate and investor information is
www.thetorocompany.com, which also contains links to our
Products by Market
branded product sites. The information contained on our web sites
We strive to be a leader in adapting advanced technologies to
or connected to our web sites is not incorporated by reference into
products and services that provide solutions for turf care mainte-
this Annual Report on Form 10-K and should not be considered
nance, landscapes, agricultural fields, construction, and residential
part of this report.
demands. The following is a summary of our products, by market,
We design, manufacture, and market professional turf mainte-
for the Professional segment and our products for the Residential
nance equipment and services, turf irrigation systems, landscaping
segment:
equipment and lighting, agricultural micro-irrigation systems, rental
and construction equipment, and residential yard and snow Professional – We design professional turf, landscape, construc-
removal products. We produced our first mower for golf course use tion, and agricultural products and market them worldwide through
in 1921 when we mounted five reel mowers on a Toro tractor, and a network of distributors and dealers as well as directly to govern-
we introduced our first lawn mower for residential use in 1935. We ment customers, rental companies, and large retailers. These
have continued to enhance our product lines ever since. We clas- channel partners then sell our products primarily to professional
sify our operations into three reportable business segments: Pro- users engaged in creating and renovating landscapes; irrigating
fessional, Residential, and Distribution. Our Distribution segment, turf and agricultural fields; installing, repairing, and replacing under-
which consists of our company-owned domestic distributorships, ground utilities; and maintaining turf, such as golf courses, sports
has been combined with our corporate activities and is shown as fields, municipal properties, and residential and commercial
‘‘Other.’’ Net sales of our three reportable segments accounted for landscapes.
the following percentages of our consolidated net sales for fiscal
Landscape Contractor Market. We market products to land-
2013: Professional, 70 percent; Residential, 29 percent; and Other,
scape contractors under the Toro and Exmark brands. Products for
1 percent.
the landscape contractor market include zero-turn radius riding
Our products are advertised and sold at the retail level under the
mowers, heavy-duty walk behind mowers, mid-size walk behind
primary trademarks of Toro, Exmark, Irritrol, Hayter, Pope,
mowers, stand-on mowers, and turf renovation and tree care
Unique Lighting Systems, Lawn-Boy, and Lawn Genie, most of
equipment. We also offer some products with electronic fuel injec-
which are registered in the United States and/or in the primary
tion engine options, which provide improved fuel efficiency and
countries outside the United States where we market such prod-
lower emissions. In fiscal 2013, we enhanced our line of Toro Z
ucts. This report also contains trademarks, trade names, and ser-
Master Commercial 3000 Series mowers, featuring our TURBO
vice marks that are owned by other persons or entities, such as
FORCE cutting deck, integrated pump, and wheel motors
The Home Depot.
designed for professional results, performance, and dependability.
We emphasize quality and innovation in our products, customer
We also introduced a 30’’ walk behind mower under the Toro and
service, manufacturing, and marketing. We strive to provide
Exmark brands, which features a wider deck that increases pro-
well-built, dependable products supported by an extensive service
ductivity yet maintains durability and contains a timed, twin-blade
network. We have committed funding for research, development,
cutting system. In fiscal 2013, we introduced the RED Onboard
and engineering in order to improve existing products and develop
Intelligence Platform, which is featured as part of the Exmark
new products. Through these efforts, we seek to be responsive to
Lazer Z X-Series zero-turn riding mowers. The platform enables
trends that may affect our target markets now and in the future. A
communication and response between key systems, and safe-
significant portion of our revenues have historically been, and we
guards machine health through monitoring and controlling key
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