The Toro Company (TTC): history, ownership, mission, how it works & makes money

A Brief History of The Toro Company

Company Overview

The Toro Company, founded in 1914, has established itself as a leader in the outdoor environment solutions industry. The company designs, manufactures, and markets a variety of products for turf maintenance, landscape maintenance, and irrigation. As of 2024, Toro operates globally and serves both residential and professional markets.

Financial Performance

In the third quarter of fiscal 2024, Toro reported consolidated net sales of $1,156.9 million, reflecting a 6.9 percent increase from $1,081.8 million in the third quarter of fiscal 2023. For the nine-month period ending August 2, 2024, net sales totaled $3,507.8 million, a decrease of 1.7 percent compared to $3,570.0 million for the same period in the prior year.

Segment Performance

The company operates through two primary segments: Professional and Residential. In Q3 2024, the Professional segment generated $880.9 million in net sales, while the Residential segment contributed $267.5 million. The following table summarizes the segment earnings before income taxes:

Cash Flow and Capital Management

Net cash provided by operating activities for the nine months ending August 2, 2024, was $329.8 million, compared to $154.7 million for the same period in fiscal 2023. The increase was attributed to favorable fluctuations in working capital.

Stockholder Returns

The Toro Company has a history of returning value to its shareholders through dividends and share repurchase programs. In Q3 2024, Toro declared a cash dividend of $0.36 per share, up from $0.34 per share in the same quarter of 2023. The total cash returned to shareholders for the first nine months of fiscal 2024 was $221.8 million.

Debt and Liquidity Position

As of August 2, 2024, Toro's total long-term debt stood at $991.9 million, with a significant portion attributable to term loans and senior notes. The company reported available liquidity of $818.4 million, comprising cash and cash equivalents along with availability under its revolving credit facility.

Recent Developments

In July 2024, Toro completed the divestiture of its Pope Products garden watering and irrigation business, which was deemed immaterial to the overall financial condition of the company. Additionally, Toro continues to focus on productivity initiatives aimed at enhancing operational efficiency.

A Who Owns The Toro Company (TTC)

Ownership Structure

As of 2024, The Toro Company (TTC) is publicly traded on the New York Stock Exchange under the ticker symbol TTC. The company's ownership is divided among institutional investors, individual shareholders, and company insiders.

Major Shareholders

The following table outlines the major shareholders of The Toro Company as of 2024:

Top Institutional Investors

The following table lists the top institutional investors holding shares of The Toro Company:

Insider Ownership

As of 2024, the following table summarizes the ownership of company insiders:

Recent Stock Performance

As of August 2, 2024, The Toro Company's stock price was approximately $110.50 per share. The stock has experienced a year-to-date increase of 15%, reflecting positive market sentiment and strong earnings reports. The company reported net earnings of $329 million for the first nine months of fiscal 2024, equating to $3.14 per diluted share, compared to $259.4 million, or $2.46 per diluted share, in the same period of the prior fiscal year.

Ownership Trends

Over recent years, ownership trends have shown a gradual increase in institutional investment, with institutional shareholders increasing their stake from 75% to 83.5% over the last five years. This shift indicates a growing confidence among institutional investors in The Toro Company's long-term growth prospects.

The Toro Company (TTC) Mission Statement

Mission Statement Overview

The Toro Company's mission is to deliver innovative solutions that enhance the quality of life for its customers and communities through superior products and services in the lawn and garden, landscape, and construction markets. This commitment is reflected in their dedication to continuous improvement, sustainability, and customer satisfaction.

Financial Performance

As of the third quarter of fiscal 2024, Toro reported consolidated net sales of $1,156.9 million, reflecting a 6.9% increase compared to $1,081.8 million in the third quarter of fiscal 2023. The increase was primarily driven by higher shipments in the Residential segment.

Segment Performance

Earnings Overview

Net earnings for the third quarter of fiscal 2024 were $119.3 million, equivalent to $1.14 per diluted share, compared to a net loss of $15.0 million or $(0.14) per diluted share for Q3 2023. Adjusted net earnings for Q3 2024 were $123.7 million, or $1.18 per diluted share, compared to $99.4 million, or $0.95 per diluted share for Q3 2023.

Year-to-Date Financials

For the first nine months of fiscal 2024, consolidated net sales totaled $3,507.8 million, down 1.7% from $3,570.0 million in the same period of the previous year. Net earnings for the first nine months were $329.0 million, or $3.14 per diluted share, compared to $259.4 million, or $2.46 per diluted share for the corresponding period in fiscal 2023.

Shareholder Returns

The Toro Company has consistently returned cash to shareholders through dividends and share repurchases. In Q3 2024, the company declared a cash dividend of $0.36 per share, an increase of 5.9% from $0.34 per share paid in Q3 2023. Total cash returned to shareholders in the first nine months of fiscal 2024 amounted to $221.8 million.

Liquidity and Capital Resources

As of August 2, 2024, Toro had available liquidity of $818.4 million, consisting of cash and cash equivalents of $221.1 million and availability under its revolving credit facility of $597.3 million.

Debt Position

Toro’s long-term debt as of August 2, 2024, was $991.9 million, with no outstanding borrowings under its revolving credit facility at that time. The company is in compliance with all debt covenants and requirements.

How The Toro Company (TTC) Works

Business Segments

The Toro Company operates primarily through two reportable segments: Professional and Residential. The Professional segment focuses on products and services for landscape contractors, golf courses, and other commercial applications, while the Residential segment caters to home users.

Financial Performance

As of the third quarter of fiscal 2024, Toro reported consolidated net sales of $1,156.9 million, representing a 6.9% increase compared to $1,081.8 million in the third quarter of fiscal 2023. The breakdown of net sales is as follows:

For the year-to-date period of fiscal 2024, consolidated net sales were $3,507.8 million, down 1.7% compared to $3,570.0 million for the same period in the prior fiscal year. The Professional segment reported a decline in net sales of 7.1%, while the Residential segment saw an increase of 19.5%.

Segment Earnings

Segment earnings for the third quarter of fiscal 2024 are summarized below:

Net Earnings

Net earnings for the third quarter of fiscal 2024 reached $119.3 million, or $1.14 per diluted share, compared to a net loss of $15.0 million, or $0.14 per diluted share, for the same period in fiscal 2023. Adjusted net earnings were $123.7 million, or $1.18 per diluted share, versus $99.4 million, or $0.95 per diluted share, in Q3 2023.

Cash Dividends and Share Repurchases

Toro's Board of Directors approved a cash dividend of $0.36 per share for the third quarter of fiscal 2024, a 5.9% increase from $0.34 per share in Q3 2023. In the first nine months of fiscal 2024, the company repurchased 1,178,074 shares of common stock, and as of August 2, 2024, there were 5,771,417 shares remaining available for repurchase under the Board authorized program.

Liquidity and Capital Resources

As of August 2, 2024, Toro's available liquidity was $818.4 million, consisting of cash and cash equivalents of $221.1 million and availability under its revolving credit facility of $597.3 million. The company believes this liquidity position will be sufficient for its anticipated working capital needs, debt repayments, and other financial commitments for at least the next twelve months.

Indebtedness

The following table summarizes Toro's indebtedness as of August 2, 2024:

The Toro Company continues to maintain compliance with its debt covenants and obligations.

How The Toro Company (TTC) Makes Money

Revenue Segments

The Toro Company operates primarily through two reportable segments: Professional and Residential. As of fiscal year 2024, these segments contributed significantly to the company’s revenue.

Professional Segment

The Professional segment, which includes products for landscape maintenance, irrigation, and turf care, generated net sales of $2,643.0 million for the first nine months of fiscal 2024, a decrease of 7.1% compared to the same period in fiscal 2023. This decline was primarily driven by lower shipments of snow and ice management products and lawn care equipment.

Residential Segment

The Residential segment saw significant growth, with net sales of $843.2 million for the first nine months of fiscal 2024, reflecting a 19.5% increase from the previous year. The growth is attributed to higher shipments to mass channel partners, particularly in lawn care equipment.

Cost of Sales and Gross Profit

For Q3 2024, the cost of sales was $754.1 million, leading to a gross profit of $402.8 million, resulting in a gross margin of 34.8%.

Earnings Performance

Net earnings for Q3 2024 were reported at $119.3 million, or $1.14 per diluted share, compared to a net loss of $15.0 million, or $0.14 per diluted share, for the same quarter in 2023.

Cash Flow and Shareholder Returns

During the first nine months of fiscal 2024, Toro returned $221.8 million to shareholders through cash dividends and share repurchases. The quarterly cash dividend was increased by 5.9% to $0.36 per share.

International Sales

Net sales in international markets decreased by $16.8 million for Q3 2024, primarily due to lower shipments of both Residential and Professional segment products. The total international net sales for the first nine months of fiscal 2024 were $691.4 million, down from $756.7 million in the previous year.

Financial Position

As of August 2, 2024, Toro's total assets amounted to $3,585.9 million. The company has maintained compliance with its debt covenants and has $597.3 million of unutilized availability under its revolving credit facility.