Toro 2015 Annual Report Download - page 22

consolidated net sales for fiscal 2015, 2014, and 2013, respec-
We face intense competition in all of our product lines
tively. International markets have been, and will continue to be, a
with numerous manufacturers, including some that have
focus for us for revenue growth. We believe many opportunities
larger operations and financial resources than us. We
exist in the international markets, and over time, we intend for
may not be able to compete effectively against
international net sales to comprise a larger percentage of our total
competitors’ actions, which could harm our business
consolidated net sales. Several factors, including weakened inter-
and operating results.
national economic conditions or the impact of sovereign debt
Our products are sold in highly competitive markets throughout the defaults by certain European countries, could adversely affect our
world. Principal competitive factors in our markets include product international net sales. Additionally, the expansion of our existing
innovation, quality and reliability, pricing, product support and cus- international operations and entry into additional international mar-
tomer service, warranty, brand awareness, reputation, distribution, kets require significant management attention and financial
product placement and shelf space, and financing options. We resources. Many of the countries in which we manufacture or sell
compete in many product lines with numerous manufacturers, our products, or otherwise have an international presence are, to
some of which have substantially larger operations and financial some degree, subject to political, economic, and/or social instabil-
resources than us. As a result, they may be able to adapt more ity, including drug cartel-related violence, which may disrupt our
quickly to new or emerging technologies and changes in customer production activities and maquiladora operations based in Juarez,
preferences, or devote greater resources to the development, pro- Mexico. Our international operations expose us and our represent-
motion, and sale of their products than we can. In addition, compe- atives, agents, and distributors to risks inherent in operating in for-
tition could increase if new companies enter the market, existing eign jurisdictions. These risks include:
competitors consolidate their operations or if existing competitors
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increased costs of customizing products for foreign countries;
expand their product lines or intensify efforts within existing prod-
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difficulties in managing and staffing international operations and
uct lines. Our current products, products under development, and increases in infrastructure costs including legal, tax, accounting,
our ability to develop new and improved products may be insuffi- and information technology;
cient to enable us to compete effectively with our competitors.
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the imposition of additional U.S. and foreign governmental con-
Internationally, our residential segment products typically face more trols or regulations; new or enhanced trade restrictions and
competition because many foreign competitors design, manufac- restrictions on the activities of foreign agents, representatives,
ture, and market products in their respective countries. We experi- and distributors; and the imposition or increases in import and
ence this competition primarily in Europe. In addition, fluctuations export licensing and other compliance requirements, customs
in the value of the U.S. dollar may affect the price of our products duties and tariffs, import and export quotas and other trade
in foreign markets, thereby impacting their competitiveness. We restrictions, license obligations, and other non-tariff barriers to
may not be able to compete effectively against competitors’ trade;
actions, which may include the movement by competitors with
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the imposition of U.S. and/or international sanctions against a
manufacturing operations to low cost countries for significant cost country, company, person, or entity with whom we do business
and price reductions, and could harm our business and operating that would restrict or prohibit our business with the sanctioned
results. country, company, person, or entity;
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international pricing pressures;
A significant percentage of our consolidated net sales
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laws and business practices favoring local companies;
are generated outside of the United States, a portion of
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adverse currency exchange rate fluctuations;
which are financed by third parties, and we intend to
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longer payment cycles and difficulties in enforcing agreements
continue to expand our international operations. Our and collecting receivables through certain foreign legal systems;
international operations require significant management
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higher tax rates and potentially adverse tax consequences,
attention and financial resources, expose us to including restrictions on repatriating earnings;
difficulties presented by international economic,
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fluctuations in our operating performance based on our geo-
political, legal, accounting, and business factors, and graphic mix of sales;
may not be successful or produce desired levels of net
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transportation delays and interruptions;
sales.
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national and international conflicts, including terrorist acts;
We currently manufacture our products in the U.S., Mexico, Aus-
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difficulties in enforcing or defending intellectual property rights;
tralia, the United Kingdom, Italy, Romania, and China for sale and
throughout the world. We maintain sales offices in the United
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multiple, changing, and often inconsistent enforcement of laws,
States, Belgium, the United Kingdom, Australia, Singapore, Japan, rules, and regulations, including rules relating to environmental,
China, Italy, Korea, and Germany. Our net sales outside the U.S. health, and safety matters.
were 25.5 percent, 28.7 percent, and 30.1 percent of our total
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