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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported):		December 8, 2004

The Toro Company
__________________________________________
(Exact name of registrant as specified in its charter)

Delaware	1-8649	41-0580470
_____________________ (State or other jurisdiction	_____________ (Commission	______________ (I.R.S. Employer
of incorporation)	File Number)	Identification No.)
8111 Lyndale Avenue South, Bloomington, Minnesota		55420
_________________________________ (Address of principal executive offices)		___________ (Zip Code)

Registrant’s telephone number, including area code:		952-888-8801

Not Applicable
______________________________________________
Former name or former address, if changed since last report

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[  ]  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[  ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[  ]  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[  ]  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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Item 2.02. Results of Operations and Financial Condition.

On December 8, 2004, The Toro Company announced its earnings for the three and twelve months ended October 31, 2004. Attached to this Current Report on Form 8-K as Exhibit 99 is a copy of The Toro Company’s press release in connection with the announcement. The information in this report is being furnished and shall not be deemed to be filed for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section, and shall not be deemed to be incorporated by reference by any general statements by The Toro Company incorporating by reference this report or future filings into any filings under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent The Toro Company specifically incorporates the information by reference.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

		The Toro Company
December 8, 2004		By:		Stephen P. Wolfe
				Name: Stephen P. Wolfe
				Title: Vice President Finance, Treasurer and Chief Financial Officer

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Exhibit Index

Exhibit No.		Description
99		Other - Registrant's press release dated December 8, 2004 (furnished herewith).

STRONG FOURTH QUARTER BOOSTS TORO TO ANOTHER RECORD YEAR

2004 Net Earnings Per Diluted Share Total $4.04

Board Doubles Quarterly Dividend to $0.12 Per Common Share

LIVE CONFERENCE CALL
December 8, 10:00 a.m. CT
www.thetorocompany.com/invest

BLOOMINGTON, Minn. (Dec. 8, 2004) – The Toro Company (NYSE: TTC) today reported record net earnings of $102.7 million, or $4.04 per diluted share, on record net sales of $1,652.5 million for the fiscal year ended October 31, 2004. In fiscal 2003, also a record year, the company reported net earnings of $81.6 million, or $3.12 per diluted share, on net sales of $1,496.6 million.

For its fiscal 2004 fourth quarter ended October 31, 2004, Toro reported net earnings of $6.9 million, or $0.28 per diluted share, on net sales of $336.9 million. In the comparable 2003 period, the company reported net earnings of $5.6 million, or $0.21 per diluted share, on net sales of $310.3 million.

Kendrick B. Melrose, The Toro Company Chairman and Chief Executive Officer, said that the company’s fourth quarter and full year performance benefited from generally favorable market conditions that contributed to continued sales growth in most product categories, as well as the earnings leverage from the company’s ongoing profitability improvement and growth initiatives. “Our record sales and profit performance reflects solid growth in each of our business segments. We are extremely pleased to report another strong quarter and record results in a milestone year for our company, marking our 90^th year in business,” said Melrose.

Melrose noted that in the first year of a planned three-year initiative to accelerate revenue growth and further improve after-tax profit, Toro exceeded both goals. “Our after-tax profit margin increased to 6.2% in fiscal 2004 on a 10.4% increase in net sales, exceeding the targets of our ‘6+8’ continuous improvement program,” said Melrose. “While the company benefited from

1 growth in our major markets, these strong results also attest to the breadth and depth of our company-wide commitment to continuous improvement and to the solid foundation we built with our prior profit-improvement initiative.”

A significant contributor to the revenue growth for the year was an 18.1% increase in the international business. This increase gives support to the long-term strategy to build this part of Toro’s business to better balance our portfolio. The company also generated record cash flow from operating activities in fiscal 2004, further strengthening its balance sheet and improving overall asset utilization.

“While we remain mindful of the uncertainties in our markets, we are also increasingly confident in our ability to deliver strong results in spite the unplanned challenges we may encounter,” said Melrose. “Recognizing that the company is well-positioned to sustain continued improvement in our financial performance, the Board of Directors voted to double our quarterly dividend to $0.12 per common share, payable Jan. 10, 2005 to shareholders of record on Dec. 20, 2004.”

SEGMENT RESULTS

Segment data is provided in the table following the “Condensed Consolidated Statements of Earnings.”

Professional

Full year net sales for the professional segment totaled $1,028.9 million, up 10.7% compared with fiscal 2003. Segment sales increased in nearly all product categories, although irrigation product sales in the U.S. were lower than expected. Segment earnings for the year were $173.1 million, up 18.0% compared with fiscal 2003.

Compared with the prior year fourth quarter, fiscal 2004 fourth quarter segment sales increased 9.6% to $194.8 million. Earnings for the fourth quarter totaled $18.6 million, up 39.7% from the same period last year. Earnings for the 2003 period included an impairment charge for certain manufacturing equipment that was phased out in the transition to an improved process.

Residential

For the full year, residential segment sales were $554.3 million, up 9.5% compared with fiscal 2003. Most of the increase was attributable to an increase in walk-power mower sales, robust snow thrower demand and expanded retailer placement of electric products. Segment earnings totaled $61.8 million, up 11.4% from fiscal 2003. Full year improvement in this segment was primarily due to expense leveraging and a prior year restructuring charge of $2.2 million.

For the fourth quarter, sales totaled $117.4 million, up 6.4% from the same period last year. Earnings for the fourth quarter totaled $9.1 million, down 1.7% from the 2003 fourth quarter. The decline was primarily due to increased raw material and special consumer product modification costs.

Distribution

For fiscal 2004, distribution segment sales of $152.2 million increased 13.6% compared with fiscal 2003. Distribution segment sales for the fiscal 2004 fourth quarter totaled $40.6 million, up 9.9% compared with the fiscal 2003 period.

Distribution segment earnings totaled $2.2 million for fiscal 2004 and $0.5 million for the fiscal 2004 fourth quarter compared to losses in the corresponding 2003 periods.

REVIEW OF OPERATIONS

For the full year, gross margin improved to 35.9% from 35.8% in fiscal 2003 despite significant increases in steel and other commodity costs. Higher material costs were partially offset by production growth in most categories and the company’s continuing lean manufacturing initiatives. For the fiscal 2004 fourth quarter, gross margin was 34.8% compared to 34.6% in the same period last year.

For fiscal 2004, selling, general and administrative (SG&A) expenses were 25.9% of net sales, compared to 27.2% in 2003. The decrease was primarily from better management of SG&A, over higher sales volumes, and lower warranty and warehousing expenses. SG&A expenses for the fourth quarter were 30.7% of net sales compared to 31.4% of net sales in the same period last year.

Interest expense for the full year declined approximately $0.8 million compared with 2003 as a result of lower average borrowing levels over the course of the year and the use of earnings to retire debt.

Net inventories as of the end of this fiscal year were $227.2 million, down $1.7 million from $228.9 million as of the end of fiscal 2003. Net receivables as of the end of fiscal 2004 totaled $285.7 million, up only 2% from $280.1 million as of the end of last year despite the 8.6% increase in fourth quarter net sales.

The company generated $185.1 million in cash from operating activities during fiscal 2004, up 56.1% from $118.6 million last year. During fiscal 2004, the company spent $169.8 million to repurchase 2.6 million of its common shares. Cash and cash equivalents as of the end of fiscal 2004 totaled $90.8 million compared with $110.3 million as of the end of fiscal 2003.

BUSINESS OUTLOOK

“Our employees have enthusiastically embraced our ‘6+8’ profitability improvement initiative,” said Melrose. “Once again, their commitment and performance delivered outstanding results, as was evident in the solid fourth quarter performance. Our industry’s outlook continues to be favorable, and we expect the continuing economic recovery will once again boost demand, providing Toro another opportunity to build market share and continue strong revenue growth.”

Commenting on the outlook for fiscal 2005, Melrose said the company expects to encounter additional commodity cost pressures and a continued slow pace for new golf course construction. In addition, the company plans to invest more aggressively in innovation and technology, product development, process improvement and overall business and brand development. “There are clearly some uncertainties ahead, but we are now more effective at anticipating and managing through them while delivering steadily improving financial performance for our shareholders,” said Melrose. “Our ongoing profitability improvement and revenue growth initiatives position us well for another excellent year in sales and earnings.”

For fiscal 2005, Toro currently expects to deliver earnings per diluted share growth of 12 to 15% on sales growth of 7 to 9%. For its fiscal first quarter, typically the smallest revenue period, Toro expects to report diluted earnings per share of $0.38 to $0.43.

The Toro Company is a leading worldwide provider of outdoor maintenance and beautification products for home, recreation and commercial landscapes.

The Toro Company will conduct a conference call and webcast for investors beginning at 10:00 a.m. Central Time (CST) on December 8, 2004. The webcast will be available at www.streetevents.com or at www.thetorocompany.com/invest. Webcast participants will need to complete a brief registration form and should allocate extra time before the webcast begins to register and, if necessary, download and install audio software.

Safe Harbor
Statements made in this news release, which are forward-looking, are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve risks and uncertainties. These uncertainties include factors that affect all businesses operating in a global market as well as matters specific to Toro. Particular risks and uncertainties facing the company’s overall financial position at the present include the threat of further terrorist acts and war, which may result in contraction of the U.S. and worldwide economies; slow growth rate in global and domestic economies, resulting in rising unemployment and weakened consumer confidence; our ability to achieve the goals for the “6+8” growth and profit improvement initiative which is intended to improve our revenue growth and after-tax return on sales; the company’s ability to achieve sales and earnings per share growth in fiscal 2005; ability of management to manage around unplanned events; unforeseen product quality problems in the development and production of new and existing products; potential issues with moving production between facilities; fluctuations in the cost and availability of raw materials, including steel; rising cost of transportation; level of growth in the golf market; increased dependence on The Home Depot as a customer for the residential segment; reduced government spending for grounds maintenance equipment due to reduced tax revenue and tighter government budgets; increased competition; elimination of shelf space for our products at retailers; financial viability of distributors and dealers; market acceptance of existing and new products; unforeseen inventory adjustments or changes in purchasing patterns by our customers; the impact of abnormal weather patterns; and the previously disclosed pending litigation against the company and other defendants that challenges the horsepower ratings of lawnmowers, of which the company is currently unable to assess whether the litigation would have a material adverse effect on the company’s consolidated operating results or financial condition. In addition to the factors set forth in this paragraph, market, economic, financial, competitive, weather, production and other factors identified in Toro’s quarterly and annual reports filed with the Securities and Exchange Commission, could affect the forward-looking statements in this press release. Toro undertakes no obligation to update forward-looking statements made in this release to reflect events or circumstances after the date of this statement.

(Financial tables follow)

2

THE TORO COMPANY AND SUBSIDIARIES
Condensed Consolidated Statements of Earnings (Unaudited)

(Dollars and shares in thousands, except per-share data)

3

THE TORO COMPANY AND SUBSIDIARIES

Segment Data (Unaudited)
(Dollars in thousands)

Earnings (Loss) Before Income Taxes by Segment (Unaudited)
(Dollars in thousands)

¹ Includes restructuring and other income of $499 thousand and $551 thousand for the three-month period and fiscal year ended October 31, 2004, respectively. Includes restructuring and other income of $273 thousand and $358 thousand for the three-month period and fiscal year ended October 31, 2003, respectively.
² Includes restructuring and other expense (income) of $131 thousand and $(131) thousand for the three-month period and fiscal year ended October 31, 2004, respectively. Includes restructuring and other expense of $623 thousand and $2,184 thousand for the three-month period and fiscal year ended October 31, 2003, respectively.

4

THE TORO COMPANY AND SUBSIDIARIES

Condensed Consolidated Balance Sheets (Unaudited)
(Dollars in thousands)

5

THE TORO COMPANY AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows (Unaudited)
(Dollars in thousands)

6