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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
[X] Annual Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the Fiscal Year Ended July 31, 1994
---------------
OR
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from to
-------------- ---------------
Commission File Number 1-8649
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THE TORO COMPANY
(Exact name of registrant as specified in its charter)
DELAWARE 41-0580470
(State of incorporation) (I.R.S. Employer Identification Number)
8111 LYNDALE AVENUE SOUTH
BLOOMINGTON, MINNESOTA 55420
TELEPHONE NUMBER: (612) 888-8801
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
------------------
Securities registered pursuant to Section 12(b) of the Act:
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH REGISTERED
Common Stock New York Stock Exchange
par value $1.00 per share
Preferred Share Purchase Rights New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
--------- ---------
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
The aggregate market value of the voting stock held by nonaffiliates of the
Registrant, based upon the close price of the Common Stock on September 30, 1994
as reported on the New York Stock Exchange, was approximately $314,586,300.
The number of shares of Common Stock outstanding as of September 30, 1994 was
12,583,452.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant's Annual Report to Stockholders for the fiscal year
ended July 31, 1994, are incorporated by reference into Parts I, II and IV.
Portions of the Registrant's Proxy Statement for the Annual Meeting of
Stockholders to be held December 15, 1994, are incorporated by reference into
Part III.
PART I
ITEM 1. BUSINESS
INTRODUCTION
The company designs, manufactures and markets consumer and commercial lawn and
turf maintenance equipment, snow removal products and turf irrigation systems,
including products for maintenance of golf courses, parks and other large turf
areas. The company produced its first lawn mower for golf course fairways in
1922 and its first lawn mower for home use in 1939 and has continued to enhance
its product lines and expand its market ever since.
The company was incorporated in Minnesota in 1935 as a successor to a business
founded in 1914. It was reincorporated in Delaware in 1983. The company's
executive offices are located at 8111 Lyndale Avenue South, Bloomington,
Minnesota 55420-1196, telephone number (612) 888-8801. Unless the context
indicates otherwise, the terms "company" and "Toro" refer to The Toro Company
and its subsidiaries. The company finances a significant portion of its
receivables through Toro Credit Company ("Toro Credit"), its wholly-owned
finance subsidiary.
YARD MAINTENANCE EQUIPMENT
The company classifies its operations into one industry segment, yard
maintenance equipment. The company has been a leader in transforming advanced
technologies into products and services that provide solutions to lawn and turf
care maintenance and beautification demands.
MANUFACTURING
The company's consumer spring and summer products are generally manufactured in
the winter and spring months and its consumer fall and winter products are
generally manufactured in the summer and fall months. The company's irrigation
and commercial products are manufactured throughout the year.
In some areas of its business the company is primarily an assembler while in
others it is a fully integrated manufacturer. Most of the components for the
company's products are commercially available from a number of sources and the
company is generally not dependent on any one supplier. The largest component
costs are generally engines, transmissions and electric motors. The company
purchases most of its engines and motors for consumer and commercial products
from several suppliers. In addition, the company manufactures three types of
two-cycle engines for its consumer products.
Management continues to seek greater efficiencies and improve work processes
throughout the company. Toro's total quality process is focused upon improving
product quality, customer response time and reducing overall product cost and
inventory levels both within Toro and in the company's distribution channels.
- 2 -
TRADEMARKS AND PATENTS
Products manufactured by the company are nationally advertised and sold at the
retail level under the trademarks "Toro", "Wheel Horse" and "Lawn-Boy", all of
which are registered in the United States and in the principal foreign countries
in which the company markets its products. The company holds patents for many
of its products in the United States and foreign countries and applies for
patents on new products as new products are developed. Although management
believes patents have value to the company, patent protection sometimes does not
deter competitors from attempting to develop similar products. Management
believes that factors such as innovation, quality and its distribution systems
are significant in protecting its competitive position. Although patent
protection is considered to be very beneficial, the company is not dependent on
any one or more of its patents.
SEASONALITY
Sales of the company's consumer products, which accounted for approximately 54%
of total sales in fiscal 1994, are highly seasonal with greater sales of yard
maintenance equipment occurring in the spring. Sales of snow removal equipment
in the fall and winter months and contra seasons in some global markets somewhat
moderate this seasonality in consumer product sales. Seasonality in irrigation
and commercial product sales also exists, but is tempered because the selling
season in west coast and southern states continues for a longer portion of the
year than in northern states. Overall, worldwide sales levels are highest in
the third quarter. Historically, accounts receivable balances increase
throughout the winter months as a result of extended payment terms made
available to the company's customers. Accounts receivable balances decrease in
the late spring when payments are due. The seasonal requirements of the
business are financed from operations and with short-term bank lines of credit
and off-balance sheet financing.
DISTRIBUTION AND MARKETING
The company markets the majority of its products principally through
approximately 48 domestic and 55 foreign distributors and mass merchandisers
worldwide. Distributors resell consumer products to approximately 10,800 retail
dealers throughout the United States. Riding products are sold primarily to
approximately 4,000 retail service dealers throughout the United States through
existing distributors acting as sales agents worldwide. Home appliance and
Lawn-Boy products are sold directly to mass merchandisers and "do-it-yourself"
home improvement retailers. Distributors sell commercial and irrigation
products directly to end users, including irrigation contractors. Irrigation
products are also sold through distributors to irrigation dealers and direct to
general line distributors, mass merchandisers and "do-it-yourself" home
improvement retailers for resale to contractors and end-users. Consumer
products are sold to international distributors who resell to approximately
2,000 retail dealers outside the United States, principally in Canada, Western
Europe, Japan and Australia. Additionally, some irrigation and consumer
products are sold directly to approximately 700 retail dealers in Canada,
Australia and Western Europe.
The company's current marketing strategy is to maintain distinct and separate
brands and brand identification for Toro, Toro/Wheel Horse and Lawn-Boy
products.
The company's distribution systems for the sale of its products are intended to
assure quality of sales and market presence as well as effective after-market
service. The company considers its distribution network to be a significant
competitive asset in marketing Toro, Toro/Wheel Horse and Lawn-Boy products.
The company advertises its products during appropriate seasons throughout the
year on television, radio and in print. Most of the company's advertising
emphasizes its brand names. Advertising is directly paid by Toro as well as
through cooperative programs with distributors and dealers.
- 3 -
BACKLOG OF ORDERS
The order backlog at July 31, 1994 and 1993 was as follows:
July 31
-------------------------------
1994 1993
----------- -----------
Consumer. . . . . . . . . $107,848,000 $43,190,000
Commercial. . . . . . . . 40,279,000 33,037,000
Irrigation. . . . . . . . 10,214,000 7,916,000
The increase in consumer product backlog reflects the fiscal 1994 sell-out of
gas snow products and strong demand for snow products in anticipation of another
hard winter season. The increase for commercial products reflects a strong
first quarter for fiscal 1995 core product sales. Favorable weather conditions
and rebounding economies in Europe and the Far East is exhibited by the increase
in irrigation product backlog. The existing backlog is expected to be filled in
the succeeding fiscal year.
COMPETITION
The principal competitive factors in the company's markets are product
innovation, quality, service and pricing. Management believes the company
offers high quality products with the latest technology and design innovations.
Also, by selling Toro, Toro/Wheel Horse and Lawn-Boy brand products through a
network of distributors and dealers who provide service, the company offers
competitive service during and after the relevant warranty period.
The company competes in all product lines with numerous manufacturers, many of
which have substantially greater financial resources than the company.
CONSUMER
The principal competitors for walk-behind mowers are American Yard Products,
Inc. (a subsidiary of Electrolux AB), Deere & Company, Honda Motor Co.,
Ltd., MTD Products, Inc., Murray Ohio Manufacturing Co., Inc. (a subsidiary
of Tompkins Corp.), Sears, Roebuck and Co. and Snapper Power Equipment (a
division of ACT). The principal competitors in riding mowers and lawn and
garden tractors are Ariens Company, Bolens Corporation (a division of Garden
Way, Incorporated), Deere & Company, Honda Motor Co., Ltd., Murray Ohio
Manufacturing Co., Inc., MTD Products, Inc., Noma Outdoor Products, Sears,
Roebuck and Co., Simplicity Manufacturing Company and Snapper Power
Equipment. The principal competitors for snow throwers are Ariens Company,
Bolens Corporation, Honda Motor Co., Ltd., Noma Outdoor Products, Sears,
Roebuck and Co., Simplicity Manufacturing Company, Snapper Power Equipment
and Yamaha Motor Corporation, USA. The principal competitors in home
improvement products are Black and Decker Corporation, K & S Industries,
Inc., Malibu Lighting (a registered trademark of Intermatic, Inc.) and
Poulan/Weed Eater (a division of Electrolux AB).
COMMERCIAL
The company's commercial products compete with products from numerous
manufacturers, but the principal competitors across most of the company's
commercial product lines are Deere & Company, Jacobsen and Ransomes Sims &
Jefferies PLC, based in the United Kingdom.
- 4 -
IRRIGATION
The principal competitors in irrigation products are James Hardie
Irrigation, Inc. (a subsidiary of James Hardie Industries Limited, based in
Australia), Hunter Industries and Rain Bird Sprinkler Manufacturing
Corporation. Management believes that its commitment to product innovation,
its distribution systems and its focus on its target markets, position it
well to compete in these various markets.
INTERNATIONAL
The international market is generally fragmented so that the degree of
competition varies among the different countries in which the company
markets its consumer, commercial and irrigation products. Most competitors
in the irrigation and commercial product lines are based in the United
States. Consumer product lines face more competition because foreign
competitors can manufacture and market competing products in their countries
at a lower cost. In addition, fluctuations in the value of the U.S. dollar
may affect the price of the company's products in such markets, thereby
affecting their competitiveness.
RESEARCH AND DEVELOPMENT
The company conducts research and development activities in an effort to improve
existing products and to develop new products. Amounts expended on such
activities aggregated approximately $30.9 million, or 3.9% of sales in 1994,
$25.3 million, or 3.7% of sales in 1993 and $26.9 million, or 4.2% of sales in
1992. Management believes that the company's research and development efforts
are important to the quality, mix and growth of its businesses and plans to
continue its strong commitment to such activities.
GOVERNMENTAL REGULATION
The company's products are subject to various federal statutes designed to
protect consumers and are subject to the administrative jurisdiction of the
Federal Consumer Product Safety Commission. The company is also subject to
certain federal and state environmental, occupational safety and other
regulations, none of which has had a material adverse affect on its operations
or business. Management believes the company is in substantial compliance with
all such regulations. The Environmental Protection Agency (EPA) released
proposed regulations for small engine emissions in May 1994. Toro has been
working with industry associations and the EPA on the proposed rules for more
than two years and is positioned to respond to whatever final rules are adopted.
EMPLOYEES
During 1994 the company employed an average of 3,434 employees. The total
number of employees at July 31, 1994 was 2,800, reflecting the company's normal
seasonal fluctuation in employment. Approximately one-quarter of the company's
employees are covered by three collective bargaining agreements expiring in
September 1994, November 1996 and May 1997, respectively. Management considers
its overall relations with its employees to be good.
FINANCIAL INFORMATION ABOUT FOREIGN AND DOMESTIC OPERATIONS
All of Toro's production facilities are located within the United States and
Belgium. Except for the sales of the company's foreign subsidiaries which are
not significant when compared to total company sales, substantially all
financial transactions are made in U.S. dollars. Consequently, the company did
not realize any significant impact to earnings due to fluctuations in foreign
currencies.
Export sales were $109,344,000, $111,263,000 and $109,076,000 in fiscal 1994,
1993 and 1992, respectively. The identifiable assets attributable to foreign
operations are not significant.
- 5 -
ITEM 2. PROPERTIES
The Toro Company utilizes owned manufacturing and office facilities which
totaled approximately 2,199,000 square feet of space. The manufacturing
facilities operated at about 89% of total capacity in fiscal 1994. The
following schedule outlines the owned facilities by location, plant size and
function:
Location Square Feet Products Manufactured/Use
- - - - ------------------ ----------- ---------------------------------------
Plymouth, WI 463,000 Parts distribution center, office
Tomah, WI 274,000 Consumer and Commercial products
Bloomington, MN 244,000 Corporate headquarters
Riverside, CA 222,000 Irrigation products
Sardis, MS (a) 244,000 Consumer products
Windom, MN 253,000 Consumer components and products
South Bend, IN(b) 226,000 Closed facility
Shakopee, MN 146,000 Components for consumer and commercial
products
Oxford, MS 64,000 Components for consumer products
Oevel, Belgium 63,000 Consumer products
---------
Total Square Feet 2,199,000
---------
---------
(a) Facility closed in 1993 due to restructuring. Will be reopened in
1995.
(b) Facility closed in 1993 due to restructuring. Building held for sale.
In 1994, the company leased the following warehouse space for its finished good
distribution centers: 304,000 square feet in Lakeville, Minnesota and 228,000
square feet in Baraboo, Wisconsin. The company also leased manufacturing space
of 145,000 square feet in Mound, Minnesota and 176,000 square feet in Olathe,
Kansas. Other leased office and warehouse space located in various cities in
the United States, Australia, Canada, France, Singapore and United Kingdom
totaled approximately 92,000 square feet.
ITEM 3. LEGAL PROCEEDINGS
The company is routinely a party to various litigation in the ordinary course of
its business. This ongoing litigation primarily involves claims for damages
arising out of the use of the company's products, some of which include claims
for punitive as well as compensatory damages. The company is also subject to
administrative proceedings in respect of certain claims involving the discharge
of hazardous substances into the environment. Certain of these claims assert
damages and liability for remedial investigations and clean up costs.
Management is of the opinion that the amounts which may be awarded or assessed
in connection with these matters will not have a material effect on the
company's financial position. Further, the company maintains insurance against
product liability losses (other than for punitive damages). Such insurance
presently covers claims in excess of $1,000,000 per claim or $2,000,000 in the
aggregate during any fiscal year. The company regularly reviews these dollar
limits.
ITEM 4. SUBMISSIONS OF MATTERS TO A VOTE OF THE SECURITY HOLDERS
None.
- 6 -
PART II
All information incorporated herein by reference in this Part II is from the
Registrant's Annual Report to Stockholders for the fiscal year ended July 31,
1994 ("Annual Report").
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS
Toro common stock (including related Preferred Share Purchase Rights) is listed
for trading on the New York Stock Exchange. The number of common stockholders
of record as of July 31, 1994 was 7,541.
See "Quarterly Financial Data" on page 28 of the Annual Report for dividends
paid and range of high and low quotations, which are incorporated herein by
reference.
ITEM 6. SELECTED FINANCIAL DATA
See financial data for fiscal years 1994, 1993, 1992, 1991 and 1990 included in
"Eleven-Year Selected Financial Data" on pages 12 and 13 of the Annual Report
which information for this five-year period is incorporated herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
See "Management's Discussion and Analysis of Financial Condition and Results of
Operations" on pages 14 through 18 of the Annual Report which is incorporated
herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements described in Item 14(a)1 of this report are
incorporated herein by reference.
See "Quarterly Financial Data" appearing on page 28 of the Annual Report which
is incorporated herein by reference.
ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
-7-
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information regarding the directors of The Toro Company contained in the Proxy
Statement for the Annual Meeting of Stockholders to be held December 15, 1994,
is incorporated herein by reference to such proxy statement which will be filed
within 120 days after the end of the fiscal year covered by this Form 10-K.
EXECUTIVE OFFICERS - A complete list of all officers of the company is found on
the inside back cover of the Registrant's Annual Report for the year ended July
31, 1994. Those persons deemed "EXECUTIVE OFFICERS" are listed below in
alphabetical order. The list below includes their age and position with the
company as of October 17, 1994, and positions held by them during the last five
years. Officers are elected or appointed annually. Additional information
regarding certain of the executive officers is contained in the Proxy Statement
for the Annual Meeting of Stockholders to be held December 15, 1994.
Name, Age and Position
with the Company Business Experience During the Last Five Years
- - - - ---------------------- ----------------------------------------------
Calvin R. Hendrix Appointed Vice President, Irrigation Division in
43, Vice President and September 1993. From 1988 to September 1993, held
General Manager various management positions with Masco Corporation.
Irrigation Products
Randy B. James Appointed Vice President, Controller in December 1988.
51, Vice President, Previously held various management positions within
Controller the company.
Gerald T. Knight Elected Vice President-Finance in April 1992. From
47, Vice President- December 1990 to April 1992, was Executive Director -
Finance, Chief Finance and Corporate Controller of
Financial Officer NeXT Computer, Inc. Prior to December 1990, held
various management positions with The Pillsbury
Company (a subsidiary of Grand Metropolitan).
Charles B. Lounsbury Appointed Vice President, Distribution Parts and
51, Vice President, Debris Management in November 1993. From
Distribution, Parts May 1991 to November 1993 was President and Chief
and Debris Management Operating Officer of Leaseway Transportation
Corporation. While Mr. Lounsbury served as
President and a director of Leaseway, it filed for
protection under Chapter 11 and was, during that
period, discharged. From August 1987 to May 1991
was Senior Vice President of Leaseway
Transportation Corporation.
J. David McIntosh Appointed Vice President, Consumer Division in
51, Vice President February 1992. Appointed Vice President and General
and General Manager, Manager, Home Improvement Division in May 1986.
Consumer Products
J. Lawrence McIntyre Elected Vice President in July 1993. Elected Secretary
52, Vice President, and General Counsel in August 1993. Prior to
Secretary and July 1993, was a shareholder with
General Counsel Doherty, Rumble & Butler Professional Association.
-8-
Name, Age and Position
with the Company Business Experience During the Last Five Years
- - - - ---------------------- ----------------------------------------------
Kendrick B. Melrose Elected Chairman of the Board in December 1987.
54, Chairman of the Elected Chief Executive Officer in December 1983.
Board and Chief
Executive Officer
Karen M. Meyer Elected Vice President, Human Resources/Administrative
44, Vice President Services in December 1991. Appointed Vice President,
Human Resources/ Human Resources/Administrative Services in December,
Administrative Services 1988. Previously held various management positions
within the company.
David H. Morris Elected President in December 1988. Elected Chief
53, President and Operating Officer in August 1988.
Chief Operating Officer
Richard R. Pollick Appointed Vice President, International Division in
55, Vice President and March 1990. Previously held various management
General Manager positions within the company.
International Equipment
John G. Szafranski Appointed Vice President, Commercial Products in
59, Vice President December 1984.
and General Manager,
Commercial Equipment
ITEM 11. EXECUTIVE COMPENSATION
Information contained under the heading "Compensation" in the Proxy Statement
for the Annual Meeting of the Stockholders to be held December 15, 1994, is
incorporated herein by reference to such proxy statement which will be filed
within 120 days after the end of the fiscal year covered by this Form 10-K.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Information regarding the security ownership of certain beneficial owners and
management of The Toro Company contained in the Proxy Statement for the Annual
Meeting of the Stockholders to be held December 15, 1994, is incorporated herein
by reference to such proxy statement which will be filed within 120 days after
the end of the fiscal year covered by this Form 10-K.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None.
- 9 -
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) 1. INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Incorporated by reference into Part II, Item 8 of this report:
Pages in Fiscal 1994
Annual Report
to Stockholders
Independent Auditors' Report . . . . . . . . . . . . . . . . . . . . . . 19
Consolidated Statements of Operations for the years ended
July 31, 1994, 1993 and 1992 . . . . . . . . . . . . . . . . . . . . 19
Consolidated Balance Sheets
as of July 31, 1994 and 1993 . . . . . . . . . . . . . . . . . . . . 20
Consolidated Statements of Cash Flows for the
years ended July 31, 1994, 1993 and 1992 . . . . . . . . . . . . . . 21
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . 22-28
(a) 2. INDEX TO CONSOLIDATED FINANCIAL STATEMENT SCHEDULES
Included in Part IV of this report:
Independent Auditors' Report . . . . . . . . . . . . . . . . . . . . 13
Schedule VIII - Valuation and Qualifying Accounts. . . . . . . . . . 14
Schedule IX - Short-term Borrowing . . . . . . . . . . . . . . . . . 15
Schedule X - Supplementary Income Statement Information. . . . . . . 16
All other schedules are omitted as the required information is inapplicable or
the information is presented in the consolidated financial statements or related
notes.
(a) 3. EXHIBITS
3(i)(a) and 4(a) Certificate of Incorporation of the Registrant (incorporated
by reference to Exhibit 4.2 to the Registrant's Registration
Statement on Form S-3, Registration No. 33-16125).
3(i)(b) and 4(b) Certificate of Amendment to Certificate of Incorporation of
the Registrant dated December 9, 1986 (incorporated by
reference to Exhibit 3 to Registrant's Quarterly Report on
Form 10-Q for the quarter ended January 30, 1987, Commission
file No. 1-8649).
3(i)(c) and 4(c) Certificate of Amendment to Certificate of Incorporation of
the Registrant dated December 8, 1987 (incorporated by
reference to Exhibit 3 to the Registrant's Quarterly Report
on Form 10-Q for the quarter ended January 29, 1988,
Commission File No. 1-8649).
- 10 -
3(ii) and 4(d) Bylaws of the Registrant (incorporated by reference to
Exhibit 3.3 to the Registrant's Annual Report on Form 10-K
for the year ended July 31, 1991, Commission file
No. 1-8649)
4(e) Specimen form of Common Stock certificate (incorporated by
reference to Exhibit 4(c) to the Registrant's Registration
Statement on Form S-8, Registration No. 2-94417).
4(f) Rights Agreement dated as of June 14, 1988, between the
Registrant and Norwest Bank Minnesota, National Association
relating to rights to purchase Series B Junior Participating
Voting Preferred Stock, as amended (incorporated by
reference to Exhibit 1 to Registrant's Registration
Statement on Form 8-A dated June 17, 1988, Commission File
No. 1-8649, as amended).
4(g) Indenture dated as of July 15, 1987, between the Registrant
and Manufacturers Hanover Trust Company, Trustee, relating
to the Registrant's 11% Sinking Fund Debentures Due August
1, 2017 (incorporated by reference to Exhibit 4 to the
Registrant's Registration Statement on Form S-3,
Registration No. 44-16175).
10(a) Form of Employment Agreement in effect for certain officers
of the Registrant (incorporated by reference to Exhibit
10(a) to the Registrant's Annual Report on Form 10-K for the
year ended July 31, 1993).
10(b) 1985 Incentive Stock Option Plan and 1989 Stock Option Plan,
both as amended (incorporated by reference Exhibit 10(b) to
the Registrant's Annual Report on Form 10-K for the year
ended July 31, 1993).
10(c) The Toro Company Matching Stock Purchase Plan (incorporated
by reference to Exhibit 28 to the Registrant's Registration
Statement on Form S-8, Registration No. 33-22469).
10(d) 1993 Stock Option Plan (incorporated by reference to Exhibit
A to Registrant's Proxy Statement dated October 29, 1993).
10(e) Continuous Performance Award Plan (incorporated by reference
to Exhibit A to Registrant's Proxy Statement dated
October 31, 1991).
11 Computation of Earnings (Loss) per Share of Common Stock and
Common Stock Equivalent (page 17 of this report).
13 Registrant's Fiscal 1994 Annual Report to Stockholders.
21 Subsidiaries of Registrant (page 18 of this report).
23 Independent Auditors' Consent (page 19 of this report).
(b) REPORTS ON FORM 8-K
None.
- 11 -
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
THE TORO COMPANY
-------------------------------------
(Registrant)
Dated: October 18, 1994
/s/ Gerald T. Knight
-------------------------------------
Gerald T. Knight
Vice President - Finance
Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ Kendrick B. Melrose Chairman, Chief Executive October 18, 1994
- - - - ------------------------- Officer and Director
Kendrick B. Melrose
/s/ David H. Morris President, Chief Operating October 18, 1994
- - - - ------------------------- Officer and Director
David H. Morris
/s/ Gerald T. Knight Vice President - Finance, October 18, 1994
- - - - ------------------------- Chief Financial Officer
Gerald T. Knight (principal financial officer)
/s/ Randy B. James Vice President, Controller October 18, 1994
- - - - ------------------------- (principal accounting officer)
Randy B. James
/s/ Janet K. Cooper Director October 18, 1994
- - - - -------------------------
Janet K. Cooper
/s/ William W. George Director October 18, 1994
- - - - -------------------------
William W. George
/s/ Alex A. Meyer Director October 18, 1994
- - - - -------------------------
Alex A. Meyer
/s/ Robert H. Nassau Director October 18, 1994
- - - - -------------------------
Robert H. Nassau
/s/ Dale R. Olseth Director October 18, 1994
- - - - -------------------------
Dale R. Olseth
/s/ Dale W. Turnbull Director October 18, 1994
- - - - -------------------------
Dale W. Turnbull
/s/ Edwin H. Wingate Director October 18, 1994
- - - - -------------------------
Edwin H. Wingate
- 12 -
[KPMG Peat Marwick LLP Letterhead]
INDEPENDENT AUDITORS' REPORT
The Board of Directors
The Toro Company:
Under date of September 8, 1994, we reported on the consolidated balance sheets
of The Toro Company and subsidiaries as of July 31, 1994 and 1993, and the
related consolidated statements of operations and cash flows for each of the
years in the three-year period ended July 31, 1994, as contained in the 1994
annual report to stockholders. These consolidated financial statements and our
report thereon are incorporated by reference in the annual report on Form 10-K
for the fiscal year 1994. In connection with our audits of the aforementioned
consolidated financial statements, we also have audited the related financial
statement schedules as listed in the accompanying index. These financial
statement schedules are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statement schedules
based on our audits.
In our opinion, such financial statement schedules, when considered in relation
to the basic consolidated financial statements taken as a whole, present fairly,
in all material respects, the information set forth therein.
/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Minneapolis, Minnesota
September 8, 1994
Schedule VIII
THE TORO COMPANY AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
BALANCE AT CHARGED TO
BEGINNING OF COSTS AND BALANCE AT
DESCRIPTION YEAR EXPENSES OTHER (a) DEDUCTIONS (b) END OF YEAR
- - - - ------------ ------------- ----------- ------------- --------------- --------------
Year Ended July 31, 1994
- - - - --------------------------
Allowance
for doubtful
accounts $5,589,000 $3,032,000 $ 765,000 $ 1,684,000 $7,702,000
------------- ----------- ------------- --------------- --------------
Year Ended July 31, 1993
- - - - -------------------------
Allowance
for doubtful
accounts $6,358,000 $2,500,000 $ - $ 3,269,000 $5,589,000
------------- ----------- ------------- --------------- --------------
Year Ended July 31, 1992
- - - - -------------------------
Allowance
for doubtful
accounts $3,564,000 $4,083,000 $ - $ 1,289,000 $6,358,000
------------- ----------- ------------- --------------- --------------
(a) Additions to allowance for doubtful accounts during 1995 due to
reclassification and acquisitions.
(b) Uncollectible accounts charged off, net of recoveries.
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Schedule IX
THE TORO COMPANY AND SUBSIDIARIES
Short-term Borrowing
Year Ended July 31,
------------------------------
1994 1993
----------- -----------
Balance at End of Period $ - $ -
----------- -----------
Weighted Average Interest Rate at End N/A N/A
of Period
----------- -----------
Maximum Amount Outstanding During the
Period $49,600,000 $45,500,000
----------- -----------
Average Amount Outstanding During the
Period (1) $12,900,000 $10,600,000
----------- -----------
Weighted Average Interest Rate During
the Period (2) 6.45% 8.08%
----------- -----------
(1) The average amount outstanding during the period represents total
monthly borrowing divided by 12 months.
(2) The weighted average interest rate represents total annual short-term
interest expense, including facility fees, divided by the average
daily debt outstanding.
Short-term borrowing are unsecured borrowing under bank lines of credit.
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Schedule X
THE TORO COMPANY AND SUBSIDIARIES
Supplementary Income Statement Information
Charged to Costs and Expenses:
Year Ended July 31,
-------------------------------------------
1994 1993 1992
----------- ------------- -----------
Maintenance and repairs $10,650,000 $ 8,515,000 $ 7,074,000
Depreciation and amortization of
intangible assets * * *
Taxes, other than payroll and
income taxes * * *
Royalties * * *
Advertising $26,282,000 $17,248,000 $22,058,000
* Less than 1% of net sales for applicable year.
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