The Toro Company designs, manufactures, markets and sells professional turf maintenance equipment and services; turf irrigation systems; landscaping equipment and lighting products; snow and ice management products; agricultural irrigation (‘ag-irrigation’) systems; rental, specialty and underground construction equipment; and residential yard and snow thrower products.
The company’s products are marketed and sold worldwide through a network of distributors, dealers, mass retailers, hardware re...
The Toro Company designs, manufactures, markets and sells professional turf maintenance equipment and services; turf irrigation systems; landscaping equipment and lighting products; snow and ice management products; agricultural irrigation (‘ag-irrigation’) systems; rental, specialty and underground construction equipment; and residential yard and snow thrower products.
The company’s products are marketed and sold worldwide through a network of distributors, dealers, mass retailers, hardware retailers, equipment rental centers, and home centers, as well as online and direct to end-users under the primary trademarks of Toro, Ditch Witch, eXmark, Spartan, BOSS, Ventrac, American Augers, Trencor, Subsite, HammerHead, Radius, Perrot, Hayter, Unique Lighting Systems, Irritrol, and Lawn-Boy, most of which are registered in the United States (‘U.S.’) and/or in the primary countries outside the U.S. where the company markets its products branded under such trademarks.
The company focuses on innovation and quality in its products, customer service, manufacturing, and marketing. The company strives to provide innovative, well-built, and dependable products supported by an extensive service network.
The company has continued to complement its brands, enhance the company’s product portfolios. The company plans to continue to leverage a strategic and disciplined approach to pursue targeted acquisitions that add value to TTC by complementing the company’s existing brands, enhancing its product portfolio, and/or improving the company’s technologies.
The company classifies its operations into two reportable business segments: Professional and Residential. The company’s remaining activities are presented as ‘Other’ due to their insignificance. These Other activities consist of earnings (loss) from a wholly-owned domestic distribution company.
The company’s focus on alternative power, smart connected, and autonomous solutions, as well as the company’s continued efforts to address environmental, social, and governance priorities, are embedded as part of the company’s commitment to advancing its sustainability goals.
Products by Market
The company strives to be a leader in adapting advanced technologies to products and services that provide innovative solutions for turf maintenance; landscape and lighting; rental, specialty, and underground construction; snow and ice management; agricultural; and residential demands. The following is a summary of the company’s products, by market, for its Professional segment and the company’s products for its Residential segment.
Professional Segment
The company designs professional turf maintenance; landscape and lighting; rental, specialty, and underground construction; snow and ice management; and agricultural products. The company markets and sells Professional segment products worldwide through a network of distributors and dealers, as well as directly to government customers, rental companies, and large retailers. These channel partners then sell or rent the company’s products to professional and other users, including homeowners, engaged in maintaining turf, such as golf courses, sports fields, municipal properties, as well as residential and commercial landscapes; installing, repairing, and replacing underground pipe and utilities; managing snow and ice demands; irrigating turf and agricultural fields; and creating, renovating, and illuminating landscapes. The following sections describe the company’s Professional segment products by market.
Golf Market
The company offers both equipment and irrigation products for the golf market, and are a market leader in both. The company designs, manufactures, markets, and sells equipment products under the Toro and Ventrac brands that are intended to provide innovative solutions for golf course turf maintenance. Equipment products for the golf market include large reel and rotary riding mowers for fairway, rough, and trim cutting; riding and walking mowers for greens and specialty areas; greens rollers; all-wheel drive articulating tractors; turf sprayer equipment; utility vehicles; aeration equipment; bunker maintenance equipment, and other specialty turf equipment. The company also markets and sells irrigation products for the golf market under the Toro brand that are designed to provide innovative water application solutions for golf course turf maintenance. These irrigation products predominantly consist of sprinkler heads, controllers, turf sensors, valves and operating software. These equipment and irrigation products are primarily sold to distributors and dealers, who then sell to owners, managers and/or superintendents of golf courses.
Sports Fields and Grounds Market
The company designs, manufactures, markets, and sells Toro and Ventrac-branded equipment products that are intended to provide turf maintenance solutions to sports fields and grounds customers. Equipment products for the sports fields and grounds market primarily include riding rotary and reel mowers and attachments, aerators, infield grooming equipment, all-wheel drive articulating tractors, multipurpose vehicles and debris management products, which include versatile debris vacuums, blowers, and sweepers. In addition to equipment products, the company also markets and sells irrigation products under the Toro and Perrot brands that are designed to provide innovative water application solutions for sports fields and grounds turf maintenance. These irrigation products primarily include sprinkler heads, controllers, turf sensors, valves and operating software. These products are primarily sold to distributors and dealers, who then sell to owners and/or managers of sports fields, governmental properties, and residential and commercial landscapes, as well as directly to government customers.
Landscape Contractor Market
The company designs, manufactures, markets, and sells equipment products under the Toro, eXmark, Spartan and Ventrac brands that are intended to provide innovative turf management solutions to landscape contractors. Equipment products for the landscape contractor market include zero-turn radius riding mowers, heavy-duty walk behind mowers, mid-size walk behind mowers, stand-on mowers, and all-wheel drive articulating tractors, as well as turf application, turf renovation, and tree care equipment. These equipment products are primarily sold to distributors and dealers, who then sell to landscape contractors engaged in turf maintenance activities.
Underground Construction Market
The company designs, manufactures, markets, and sells a range of professional grade products to serve the underground construction market under the Ditch Witch, American Augers, Trencor, HammerHead, Subsite, and Radius brands, including horizontal directional drills, walk and ride trenchers, vacuum excavators, horizontal directional drilling guidance and support equipment, utility locators, utility inspection systems, pipe rehabilitation and replacement solutions, as well as after-market tools, including drive chucks and sub savers, drill pipe, starter rods and quick connects, bits and blades, rock tools, reamers, and swivels. Such products are utilized by specialty contractors worldwide to install water, gas, electric, telecommunication, fiber optic, broadband, and other utility distribution systems.
Rental and Specialty Construction Market
The company designs, manufactures, markets, and sells Toro and Ditch Witch-branded equipment products that are intended to provide innovative solutions to serve the rental and specialty construction market. These products primarily consist of stand-on skid steers, walk-behind trenchers, stump grinders, and turf renovation products. The company also has a line of Toro-branded rental products that feature material handlers and other concrete construction equipment. The company’s rental and specialty construction equipment products are mainly sold to rental companies and large retailers who subsequently rent the products to end-users, as well as to dealers who market and sell to end-customers primarily consisting of landscape contractors, municipalities, and other government entities.
Snow and Ice Management Market
The company designs, manufactures, markets, and sells equipment products under the BOSS, Ventrac, and Toro brands that are intended to provide innovative snow removal and ice management solutions for the snow and ice management market. These equipment products primarily consist of snowplows; salt and brine ice control products; accessories for light and medium duty trucks, all-terrain vehicles, utility task vehicles, skid steers, and front-end loaders; and all-wheel drive articulating tractors, sidewalk snow and ice solution vehicles, and related attachments and accessories. These products are mainly sold through distributors and dealers who market and sell to end-customers primarily consisting of landscape contractors, municipalities, and other government entities.
Irrigation and Lighting Market
Irrigation products are designed, manufactured, marketed, and sold under the Toro and Irritrol brands and primarily include rotors; sprinkler bodies and nozzles; plastic, brass, and hydraulic valves; drip tubing and subsurface irrigation; electric control devices; and wired and wireless rain, freeze, climate, and soil sensors. These irrigation products are designed to provide innovative water application solutions for both commercial and residential landscapes. Both the Toro and Irritrol brands have received several U.S. Environmental Protection Agency (‘EPA’) WaterSense awards, as well as the EPA WaterSense certification for numerous irrigation controller families and models. In addition to the company’s irrigation products, the company markets and sells Unique Lighting Systems-branded products primarily consisting of a line of lighting fixtures and transformers designed for commercial and residential landscapes. The company’s commercial irrigation and lighting products are predominantly sold to distributors and dealers who market and sell to end-customers primarily consisting of landscape contractors that professionally install these products as new systems or use these products to replace or retrofit existing systems.
Ag-Irrigation Market
Irrigation products for the ag-irrigation market are designed, manufactured, marketed, and sold under the Toro brand and are intended to provide an efficient means of water application and usage in agricultural and greenhouse applications. These irrigation products primarily consist of drip tape, polyethylene tubing, drip line, emitters, filters, and fitting solutions. In addition to these core products, the company offers a complement of design software and connection options to complete the ag-irrigation system. The company’s ag-irrigation products are sold through dealers and distributors who then sell to end-users for use primarily in vegetable fields, fruit and nut orchards, and vineyard applications.
Residential Segment
The company markets and sells its Residential segment products to homeowners through a variety of distribution channels, including outdoor power equipment distributors and dealers, mass retailers, hardware retailers, and home centers, as well as online and direct to end-users. The company also licenses its trademark on certain yard tools and garden equipment products as a means of expanding the company’s brand presence. The following sections describe the company’s Residential segment products.
Walk Power Mower Products
The company designs, manufactures, markets, and sells walk power mower equipment products under the company’s Toro and Lawn-Boy brand names, as well as the Hayter brand in the United Kingdom. The company’s walk power mower equipment products are designed to provide innovative turf cutting solutions primarily to homeowners. Models differ as to cutting width, type of starter mechanism, method of grass clipping discharge, deck type, operational controls, and power sources, and are either self-propelled or operator-propelled push mowers.
Zero-Turn Riding Mower Products
The company’s residential zero-turn riding mower equipment products are designed, manufactured, marketed, and sold under the Toro brand name and are intended to provide innovative and time saving turf cutting solutions by using superior maneuverability to navigate around obstacles more efficiently and effectively than tractor technology. Many models of the company’s residential zero-turn riding mowers are available with a variety of engines, decks, transmissions, and accessories.
Snow Thrower Products
The company designs, manufactures, markets, and sells a range of Toro-branded battery, electric, and gas-powered single-stage and two-stage snow thrower equipment products, as well as battery and electric-powered power shovel equipment products. Single-stage snow throwers are walk behind units that are generally designed for small areas of light snow and the company’s two-stage snow throwers are generally designed for relatively large areas of deep and heavy snow. The company’s battery and electric-powered power shovels are designed to be lightweight and ideal for clearing light snow from decks, steps, sidewalks, and small driveways.
Yard Tools and Garden Equipment Products
The company’s yard tools and garden equipment products are designed, manufactured, marketed, and sold under the Toro brand name. The company’s Toro-branded yard tools and garden equipment products consist of a variety of battery, electric, and/or gas-powered options and primarily consist of grass trimmers, hedge trimmers, blower-vacuums, chainsaws, edgers, cultivators, string mowers, and related parts and accessories that are designed to provide innovative yard maintenance solutions to homeowners.
International Operations
The company manufactures its products in the U.S., Mexico, the United Kingdom, Italy, Romania, Germany, Poland, Australia, and China for sale throughout the world. The company maintains sales offices in the U.S., the United Kingdom, Australia, Japan, China, Italy, Poland, Germany, Spain, and Belgium. New product development is pursued primarily in the U.S. with the intention of global distribution.
Manufacturing and Production
The company’s manufacturing facilities are designed to provide efficient and flexible assembly-line manufacturing of the company’s products. In addition to most final assembly, the company has strategically identified specific core manufacturing competencies for vertical integration, such as injection molding, extrusion, welding, stamping, fabrication, laser cutting, painting, machining, and aluminum die casting, and have chosen outside vendors to provide other services, where applicable. The company designs component parts through collaboration with the company’s vendors, contract with them for the development of tooling, and subsequently enter into agreements with such vendors to purchase component parts manufactured using the tooling. The company also has agreements with third-party manufacturers to produce certain standalone end-products on the company’s behalf. In addition, the company’s vendors regularly test new technologies to be applied in the design and production of component parts. The company’s manufacturing operations include robotic and computer-automated equipment intended to speed production, reduce costs, and improve resource use and the quality, fit, and finish of the company’s products. The company’s operations are also designed to be flexible enough to accommodate product design changes that are necessary to respond to market conditions and changing customer requirements.
In order to utilize the company’s manufacturing facilities and technology more efficiently and effectively, the company pursues continuous improvements in its manufacturing processes with the use of Lean methods that are intended to streamline work and eliminate waste. Additionally, the company uses computer-aided design and manufacturing systems to shorten the time between initial concept and final production.
The company’s Professional segment products and Residential segment lawn and garden products are generally manufactured throughout the year with peak production generally occurring ahead of the key selling seasons for certain of the company’s businesses and product lines that are more subject to seasonality. However, the company’s Residential segment snow thrower products are generally manufactured in the summer and fall months but may be extended into the winter months, depending upon weather conditions in key regions, the related demand for such products. The company’s production levels and inventory management goals are based on estimates of wholesale and retail demand for the company’s products, taking into account production capacity; commodity, component part, and labor availability; timing of shipments; and field inventory levels. The company’s production system generally utilizes Kanban, supplier pull, and build-to-order methodologies in the company’s manufacturing facilities, as appropriate, for the business units they support in order to better align the production of the company’s products to meet customer demand. This has resulted in improved service levels for the company’s participating suppliers, distributors, dealers, and other channels. The company may also periodically shut down production at the company’s manufacturing facilities in order to allow for maintenance, rearrangement, capital equipment installation, seasonality, and as needed, to adjust for market demand, facility renovation projects, and other factors.
Commodities, Components, Parts, and Accessories
The company purchases commodities, components, parts, and accessories for use in its manufacturing process and end-products or to be sold as stand-alone end-products. The company’s primary cost exposures for such items used in the company’s products are with steel, aluminum, petroleum and natural gas-based resins, linerboard, copper, lead, rubber, engines, transmissions, transaxles, hydraulics, electrification components, and others, all of which the company purchases from several suppliers around the world. The company generally purchases commodities, components, parts, and accessories based upon market prices that are established with suppliers as part of the purchase process and generally attempt to obtain firm pricing from most of the company’s suppliers for volumes consistent with planned production and estimates of wholesale and retail demand for the company’s products. However, most of the commodities, components, parts, and accessories used in the company’s manufacturing process and end-products, or to be sold as stand-alone end-products, are exposed to commodity cost changes, including for example, as a result of inflation, changing prices, foreign currency fluctuations, tariffs, duties, trade regulatory actions, industry actions, changes to international trade policies, agreements, and/or regulation and competitor activity, including antidumping and countervailing duties on certain products imported from foreign countries, including certain engines imported into the U.S. from China.
Most of the commodities, components, parts, and accessories utilized in the company’s products are generally commercially available from a number of sources. Although the company regularly monitors the adequacy of the supply of its commodities, components, parts, and accessories, and the financial health of the companies in the company’s supply chain, and use alternative suppliers when necessary and available, financial hardship, insufficient demand planning, and/or the inability of companies throughout its supply chain to deliver on supply commitments, requirements, and/or demands has caused disruptions in the company’s ability to procure the commodities, components, and parts required to manufacture the company’s products.
Patents and Trademarks
The company reviews certain patents issued by the U.S. Patent and Trademark Office (‘USPTO’) and foreign patent offices to help avoid potential liability with respect to others' patents.
Seasonality
As a result of the company’s global presence in key markets that are subject to seasonal weather patterns, some of the company’s businesses are seasonal. Overall, the company’s seasonal shipment volumes are generally a function of the key selling seasons of the company’s channel partners based on their industry, geographic location, and the nature and intended purpose of the company’s products in relation to the correlating season.
The company’s shipment volumes generally precede and overlap the key selling seasons of the company’s channel partners in order to better allow its channel partners to align field inventory levels with the anticipated retail demand from end-customers. As a result, the company’s shipment volumes have historically been the highest in the company’s fiscal second quarter (year ended October 2024), and retail demand for the company’s products is generally highest in its fiscal third quarter. Typically, the company’s accounts receivable balances increase in the first half of the company’s fiscal year as a result of higher shipment volumes and extended payment terms made available to the company’s customers. Accounts receivable balances typically decrease in the second half of the company’s fiscal year when payments are received. The company’s financing requirements are subject to variations due to seasonal changes in working capital levels, which typically increase in the first half of the company’s fiscal year and decrease in the second half of the company’s fiscal year. Seasonal cash requirements of the company’s business are financed from a combination of cash flows from operations, cash on hand, and borrowings under the company’s revolving credit facility, as applicable.
Shipments of the company’s Residential segment products tend to be more seasonal than the company’s Professional segment products, with shipments of lawn and garden products occurring primarily between February and June, depending upon seasonal weather conditions and product demand. Shipments of snow thrower products occur primarily between July and January, depending upon pre-season demand, in-season snowfalls, and product availability. Opposite seasons in global markets in which the company sells its Residential products somewhat moderate this seasonality of the company’s Residential segment product sales.
Seasonality of Professional segment product sales also exists but is slightly tempered because the selling season in the Southern U.S. and the company’s markets in the Southern hemisphere generally continue for a longer portion of the year than in Northern regions of the world. The company’s BOSS and Ventrac brands offer a portfolio of counter-seasonal snow and ice management products in the company’s Professional segment with its shipments of snow and ice management products occurring primarily between April and December, which can result in variability of shipment volumes depending upon pre-season demand, in-season snowfalls, and product availability. Additionally, the company’s rental, specialty, and underground construction business is generally less seasonal than certain of the company’s Professional segment businesses primarily due to the strong presence of certain of the underlying brands in the Southern U.S. markets and the inherent nature of the underground construction market being less impacted by seasonal factors.
Customers, Distribution, and Marketing
The company markets and sells the majority of its products through more than 150 distributors worldwide, as well as a large number of equipment dealers, irrigation dealers and distributors, mass retailers, hardware retailers, equipment rental centers, and home centers, as well as online and direct to end-users in more than 125 countries. The company’s distribution networks are intended to assure quality of sales and market presence, as well as to provide effective after-purchase service and support.
Professional segment products are sold to distributors and dealers primarily for resale to golf courses, sports fields, contractors, government customers, and homeowners who prefer professional solutions, and in some markets for resale to dealers. The company sells some Professional segment products directly to government customers and municipalities and rental companies, as well as to end-users in certain markets. Select irrigation and lighting products are sold to professional irrigation and lighting distributors and dealers, and certain professional-grade retail irrigation products are sold to home centers. Products for the rental, specialty, and underground construction markets are sold to dealers and rental companies, as well as direct to end-users in certain markets. Landscape contractor turf products are also sold to dealers. Snow and ice management products are primarily sold to distributors and dealers for resale to contractors.
Residential segment products, such as walk power mowers, zero-turn riding mowers, and snow throwers, are generally sold to home centers, mass retailers, dealers, and hardware retailers, as well as online and direct to end-users. In certain markets, these same products are sold to distributors for resale to hardware retailers and dealers. Yard tools and garden equipment products are primarily sold to home centers, mass retailers, and hardware retailers.
The company operates one wholly-owned domestic distribution company. The company’s primary purpose in owning a domestic distributorship is to improve operations and test and deploy new strategies and business practices that could be replicated by the company’s independent distributors, as well as facilitating ownership transfers.
The company’s marketing strategy is to maintain distinct brands and brand identification for Toro, Ditch Witch, eXmark, Spartan, BOSS, Ventrac, American Augers, Trencor, Subsite, HammerHead, Radius, Perrot, Hayter, Unique Lighting Systems, Irritrol, and Lawn-Boy products. Across the company’s brands, the company markets its Professional and Residential segment products during the appropriate seasons through multiple channels, including digital and online media, radio, print, direct mail, email, television, and social media. Most of the company’s advertising and marketing efforts emphasize the company’s brands, products, features, and other valuable trademarks. Advertising is purchased by the company, through its agency partners, as well as through cooperative programs with distributors, dealers, and retailers.
Customer Financing
Inventory Financing Arrangements
The company is party to a joint venture with Huntington Distribution Finance, Inc. (‘HDF’), a subsidiary of The Huntington National Bank, established as Red Iron Acceptance, LLC (‘Red Iron’), the primary purpose of which is to provide inventory financing to certain distributors and dealers of certain of the company’s products in the U.S.
The company is party to inventory financing arrangements with Red Iron, Huntington Commercial Finance Canada, Inc. (‘HCFC’), and other third-party financial institutions (collectively, the ‘financial institutions’) which provide inventory financing to certain dealers and distributors of certain of the company’s products in the U.S. and internationally.
Environmental Matters and Other Governmental Regulation
The company’s business, operations, facilities, and products are subject to numerous international, federal, state, and other governmental laws, rules, and regulations relating to, among others, climate change; emissions to air, including Tier 4 or similar engine emission regulations; discharges to water; restrictions placed on water usage and water availability; product and associated packaging; use of certain chemicals; restricted substances, including ‘conflict minerals’ disclosure rules; recycling and waste disposal; import and export compliance, including country of origin certification requirements; worker and product user health and safety; energy efficiency; product life-cycles; outdoor noise laws; and the generation, use, handling, labeling, collection, management, storage, transportation, treatment, and disposal of hazardous substances, wastes, and other regulated materials. For example:
The U.S. EPA, the California Air Resources Board (‘CARB’), and similar regulators in other U.S. states and international jurisdictions in which the company sells its products have phased in, or are phasing in, emission regulations setting maximum emission standards for certain equipment. Specifically, these agencies from time to time adopt increasingly stringent engine emission regulations. Following the U.S. EPA implementation of Tier 4 emission requirements applicable to diesel engines, China, the European Union (‘EU’) and its member states, and the United Kingdom have adopted similar regulations. CARB's two phase implementation of net-zero emissions requirements for small off-road engines, like those contained in many lawn and garden equipment, will begin for all products with model year 2024 and onward. In September 2024, Australian regulators adopted the Treasury Laws Amendment (Financial Market Infrastructure and Other Measures) Bill 2024, which requires large and medium-sized companies to begin reporting on climate-related risks and opportunities, and greenhouse gas (GHG) emissions, in their annual reports for financial years commencing after January 1, 2025.
The U.S. federal government, several U.S. states, and certain international jurisdictions in which the company sells its products, including the EU and each of its member states, have implemented one or more of the following: product life-cycle laws, rules, or regulations, which are intended to reduce waste and environmental and human health impact, and require manufacturers to label, collect, dispose, and recycle certain products, including some of the company’s products, at the end of their useful life, including but not limited to (i) the Waste Electrical and Electronic Equipment directive, which mandates the labeling, collection, and disposal of specified waste electrical and electronic equipment; (ii) the Restriction on the use of Hazardous Substances directive or similar substance level laws, rules, or regulations, which restrict the use of several specified hazardous materials in the manufacture of specific types of electrical and electronic equipment; (iii) the Registration, Evaluation, Authorization and Restriction of Chemicals directive or similar substance level laws, rules, or regulations that require notification of use of certain chemicals, or ban or restrict the use of certain chemicals; (iv) the Battery Directive, which regulates the manufacture and disposal of batteries; (v) country of origin laws, rules, or regulations, which require certification of the geographic origin of the company’s finished goods products and/or components used in the company’s products through documentation and/or physical markings, as applicable; (vi) energy efficiency laws, rules, or regulations, which are intended to reduce the use and inefficiencies associated with energy and natural resource consumption and require specified efficiency ratings and capabilities for certain products; (vii) outdoor noise laws, which are intended to reduce noise emissions in the environment from outdoor equipment; (viii) conflict minerals laws, such as the Dodd-Frank Wall Street Reform and Consumer Protection Act and the rules promulgated by the SEC, which require specific procedures for the determination and disclosure of the use of certain minerals, known as ‘conflict minerals,’ which are mined from the Democratic Republic of the Congo and adjoining countries; (ix) other product substance restriction laws, some of which require certain labeling of products, such as California Proposition 65; (x) electromagnetic compatibility laws and regulations, such as the EU Electromagnetic Compatibility directive, and similar laws and regulations in other markets; (xi) wireless product type approvals and licenses in global markets and the EU Radio Equipment Directive and similar laws and regulations related to wireless and radio usage; and (xii) supply chain transparency laws and regulations addressing modern slavery and human trafficking.
The manufacture and assembly of products within the company’s facilities must comply with environmental regulations addressing air emissions, wastewater discharge, storm water run-off, and hazardous waste disposal.
Engineering and Research Expense
Costs incurred for the company's engineering and research activities were $173.1 million for the year ended October 31, 2024.
History
The Toro Company was founded in 1914. The company was incorporated in 1935 and reincorporated in Delaware in 1983.
