10-K annual report · filed Dec 21, 2018

Toro Co (TTC) FY2018 10-K Annual Report

Short answer

Toro Co (TTC) filed its fiscal 2018 10-K annual report with the SEC on Dec 21, 2018. It reported revenue of $2.6B (+4.5% year over year) and net income of $272M.

  • Top risk flagged: U.S. and international trade-policy changes, including tariffs on imported steel, aluminum, components and parts, threatening profit margins

FY2018 key financial metrics · XBRL

Revenue
$2.6B
+4.5% YoY
Net income
$272M
+1.6% YoY
Operating margin
14.2%
+0.1 pp YoY
Gross margin
35.9%
−0.8 pp YoY
EPS (diluted)
$2.50
+3.7% YoY
ROE
40.7%
−2.7 pp YoY
Operating cash flow
$365M
+1.1% YoY

Source: XBRL data from the Toro Co (TTC) FY2018 10-K on SEC EDGAR. USD.

Toro Co FY2018 10-K analysis

AI summary of each section, grounded in the filing text

Business Overview

  • Core model: Professional and Residential outdoor equipment, irrigation, lighting, and services sold globally through distributors, dealers, retailers, and online channels
  • Fiscal 2018 launches: Outcross 9060, Lynx Smart Module, DD2226 directional drill, Irritrol KD2 controller, and PowerJet corded blower
  • Strategic expansion: L.T. Rich acquisition broadened landscape contractor turf-renovation and snow-management offerings
  • International reach: Manufacturing in 9 countries, sales offices across 9 countries, products marketed in more than 125 countries
  • Employees: 6,715 at October 31, 2018, with 16% covered by collective bargaining agreements

Management Discussion & Analysis

  • Revenue $2,618.7M, up 4.5% YoY from $2,505.2M, driven by Professional products and new introductions
  • Net earnings $271.9M, up 1.6%; gross margin 35.9% vs 36.8%, operating margin 14.2% vs 14.2%
  • Best segment Professional: sales $1,947.0M, up 7.5%; worst Residential: sales $654.4M, down 2.8%
  • Operating cash flow $364.8M; capex $90.1M; buybacks $160.4M; quarterly dividend $0.20 per share
  • Outlook: fiscal 2019 capex approximately $85.0M; risks from higher commodity costs, tariffs, freight, supply challenges, and unfavorable weather

Risk Factors

  • U.S. and international trade-policy changes, including tariffs on imported steel, aluminum, components and parts, threatening profit margins
  • International exposure: non-U.S. sales at 24.6% of fiscal 2018 consolidated net sales, vulnerable to Brexit and sovereign-debt instability
  • Supply-chain concentration: certain raw materials, components, parts and accessories sourced from single suppliers
  • Competitive disruption: larger manufacturers able to commercialize emerging technologies faster and pursue low-cost-country pricing
  • Financing dependence: $600 million revolving credit facility and debt covenants including maximum leverage ratio requirements

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