Toro (TTC) risk factors, FY2024 10-K

Other

1. 01If we are unable to continue to enhance existing products and develop and market new products, demand for our products may decrease
2. 02Disruption and/or shortages in the availability of commodities, components, parts, or accessories has, and could continue to, adversely affect our business
3. 03Weather conditions, including conditions exacerbated by global climate change, present chronic and acute physical risks, and have previously impacted, and may continue to impact, demand for some of our products and/or cause disruptions in our operations
4. 04Our Professional segment includes a variety of products that depend on certain and varied factors
5. 05Our Residential segment net sales depend on several factors, including product placement, consumer confidence and spending levels, changing buying patterns of customers, and the impact of significant sales or promotional events
6. 06Changes in product mix could adversely impact our financial performance, including profit margins and net earnings
7. 07We face intense competition, which could harm our business and operating results
8. 08Increases in the cost of commodities, components, parts, and accessories or our other costs of doing business, have, and could continue to, adversely affect our profit margins and businesses
9. 09We are dependent upon the efficient operation of our facilities and those of our suppliers, channel customers, mass retailers, and home centers where our products are sold
10. 10Any failure by us, or our suppliers or channel partners, to hire and/or retain an adequate labor force could adversely affect our business, operating results, and reputation
11. 11Our net sales and/or working capital are negatively impacted when we underestimate or overestimate demand for our products or do not maintain appropriate inventory levels
12. 12Our business and operating results are subject to the inventory management decisions of our channel customers
13. 13Changes in composition of, financial viability of, and the relationships with, our channel customers could negatively impact our business and operating results
14. 14We are dependent upon the availability and terms of credit offered to our customers
15. 15We are dependent upon the effective operation of our information systems, software, or information security practices and those of our business partners or third-party service providers
16. 16Our international operations require significant management attention and financial resources, expose us to difficulties presented by international economic, political, legal, regulatory, accounting, and business factors, and may not be successful or produce desired levels of net sales and earnings
17. 17We are renovating and expanding certain office, manufacturing, and other facilities and could experience disruptions to our operations in connection with such efforts

Strategic Risks

1. 18Our strategy to pursue acquisitions and alliances, strong customer relations, and new joint ventures, investments, and partnerships and our recent activities in this regard involve risk and may not prove to be successful
2. 19Failure to successfully complete divestitures or other restructuring activities could negatively affect our operations
3. 20Increased scrutiny regarding our ESG practices could impact our reputation

Financial Risks

1. 21We incurred non-cash impairment charges during the third quarter of fiscal 2023 which adversely affected our third quarter and full year fiscal 2023 operating results and we may be required to incur additional future impairment and other charges, which could adversely affect our operating results
2. 22Fluctuations in foreign currency exchange rates have adversely affected and could continue to adversely affect our operating results
3. 23We are subject to financial and operating restrictions and counterparty risk as a result of our credit arrangements
4. 24If we do not comply with the terms of our credit arrangements and indentures, they could be terminated and amounts thereunder could become due and payable
5. 25A downgrade in our credit ratings could increase our cost of funding and/or adversely affect our access to funding
6. 26Changes in accounting or tax standards and policies and/or assumptions utilized in determining accounting or tax estimates could adversely affect our results of operations and financial condition

Legal, Regulatory, and Compliance Risks

1. 27Our patents, trademarks, and contractual provisions may be insufficient to protect our proprietary rights and intellectual property from others who may sell similar products and our products may infringe the valid proprietary rights of others
2. 28We are subject to extensive laws, rules, policies, and regulations, with which our compliance is costly and not guaranteed
3. 29Climate change legislation, regulations, accords, mitigation efforts, or other legislation may adversely impact our operations and could impact the competitive landscape within our markets and affect demand for our products
4. 30Our compliance with applicable environmental laws is costly and not guaranteed
5. 31We are subject to product quality issues, product liability claims, and other litigation from time to time that could adversely affect our business, reputation, operating results, or financial condition
6. 32We operate in many different jurisdictions and we could be adversely affected by violations of the U.S. Foreign Corrupt Practices Act ("FCPA") and similar worldwide anti-corruption laws
7. 33We may not achieve our financial projections, sustainability goals, or other business and productivity initiatives, which could have an adverse effect on our business, operating results, and financial condition
8. 34We are dependent upon our ability to attract and retain key executive and employees and successfully implement key employee transitions