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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 7, 2006

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 7, 2006, The Toro Company announced its earnings for the three and twelve months ended October 31, 2006. 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 7, 2006		By:		Stephen P. Wolfe
				Name: Stephen P. Wolfe
				Title: Vice President Finance and Chief Financial Officer

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Exhibit Index

Exhibit No.		Description
99		Other - Registrant's press release dated December 7, 2006 (furnished herewith).

The Toro Company
8111 Lyndale Ave South
Bloomington, MN 55420

Investor Relations
John Wright , Director, Investor Relations
(952) 887-8865

Media Relations
Connie Kotke
Manager, Corporate Communications
(952) 887-8984, pr@toro.com
www.thetorocompany.com

For immediate Release

TORO REPORTS RECORD FISCAL 2006 NET SALES AND NET EARNINGS
Net Earnings Per Diluted Share Up 18.8 Percent to $2.91
Board Raises Quarterly Dividend From $0.09 to $0.12 Per Common Share

BLOOMINGTON, Minn. (Dec. 7, 2006) – The Toro Company (NYSE: TTC) today reported record net sales and net earnings for the fiscal year ended October 31, 2006.

Net earnings for the year totaled $129.1 million, or $2.91 per diluted share, compared with net earnings of $114.1 million, or $2.45 per diluted share, in fiscal 2005. Net sales for fiscal 2006 increased 3.2 percent to $1,836.0 million from $1,779.4 million last year.

For the fourth quarter ended October 31, 2006, Toro reported net earnings of $4.5 million, or $0.10 per diluted share, on net sales of $329.5 million. In the comparable fiscal 2005 period, the Company reported net earnings of $6.6 million, or $0.14 per diluted share, on net sales of $337.1 million.

Continued strong cash flows from operations enabled the Company to use $147 million for share repurchases and $15 million for dividend payments during fiscal 2006.  Additionally, the Company’s board of directors increased the quarterly dividend from $0.09 to $0.12 per common share, payable January 12, 2007 to shareholders of record on December 18, 2006.

“We completed a solid 2006 with increased net sales and earnings,” said Michael J. Hoffman, chairman and chief executive officer. “Our ability to achieve record results in a challenging environment demonstrates the fundamental strength of the business and our commitment to drive profitable growth.” The Company reported that worldwide growth in its professional segment net sales helped offset lower net sales in the domestic residential segment. International net sales increased 12.6 percent over 2005 and accounted for 27 percent of total revenues, up from 24.8 percent in 2005.

Completion of fiscal 2006 marks the conclusion of the Company’s three-year profitability and revenue growth initiative. Hoffman noted that Toro exceeded the 6 percent profit-after-tax goal and fell just short of the 8 percent three-year compounded revenue growth goal for the 6+8 initiative.

SEGMENT RESULTS
Segment data are provided in the table following the “Condensed Consolidated Statements of Earnings.”

Professional

•

Professional segment net sales for fiscal 2006 increased 6.9 percent to $1,224.8 million. Increases in worldwide net sales in golf and sports fields and grounds markets combined with double-digit growth in nearly all international professional segment categories comprised the majority of the increase.

•

Professional segment net earnings for fiscal 2006 increased 9.8 percent to $227.7 million.

•

For the fiscal 2006 fourth quarter, professional segment net sales were up modestly to $212.3 million compared with $208.6 million in the fiscal 2005 fourth quarter.

•

Professional segment net earnings for the fiscal 2006 fourth quarter totaled $20.5 million compared with $24.0 million in the corresponding quarter last year. The decline in the fiscal fourth quarter earnings was due to increased warranty costs and continued investments in marketing and service areas.

Residential

•

Residential segment net sales for fiscal 2006 declined 2.9 percent to $566.6 million from $583.3 million in fiscal 2005. For the year, solid increases in domestic riding mower sales and residential products for international markets were more than offset by lower sales in most other domestic residential product categories.

•

Residential segment net earnings for fiscal 2006 were $34.1 million, a 32.0 percent decline from $50.2 million in fiscal 2005.

•

For the fiscal 2006 fourth quarter, residential segment net sales were $102.9 million compared to $111.1 million in the fiscal 2005 fourth quarter.

•

Residential segment net earnings for the fiscal 2006 fourth quarter were $0.9 million, compared to $6.7 million in the 2005 fourth quarter. The decline in the fiscal fourth quarter earnings resulted from a charge for customs duties and lower sales volumes.

REVIEW OF OPERATIONS
Gross margin for fiscal 2006 was 35.0 percent compared with 34.6 percent in fiscal 2005. The improvement was derived from a larger percentage of professional segment products in consolidated sales, cost reductions resulting from lean initiatives and price increases somewhat offset by higher commodity costs and customs duties.

For the fiscal 2006 fourth quarter, gross margin was 33.6 percent, down slightly from 33.8 percent in the fiscal 2005 fourth quarter primarily due to higher customs duties.

Selling, general and administrative (SG&A) expenses for fiscal 2006 improved to 24.0 percent of net sales compared to 24.3 percent in fiscal 2005. The improvement resulted from lower insurance costs and incentive compensation, as well as expense leveraging from the ongoing profitability improvement efforts throughout the Company. For the fiscal 2006 fourth quarter, SG&A expenses were 30.4 percent compared to 30.3 percent in the same period last year.

Accounts receivable at year end totaled $294.8 million, down $0.9 million from the end of fiscal 2005 on a net sales decrease of 2.3 percent in the quarter. Net inventory at fiscal year end increased 1.4 percent, or $3.2 million, to $238.5 million. The Company generated $190.3 million in cash flow from operations during fiscal 2006 which represents a 9.3 percent increase over fiscal 2005.

BUSINESS OUTLOOK

“As we enter fiscal 2007, our year end balance sheet is strong and we continue to generate healthy operating cash flows,” said Hoffman. “We have increased our profit-after-tax yield from 5.5 percent to 7.0 percent over the past three years, thanks to the committed efforts of our more than 5,000 employees worldwide. With the conclusion of our 6+8 initiative, we are challenging ourselves to build on this momentum and further improve our financial performance while continuously increasing our focus to deliver innovative, market-leading products and increased value to our customers. Toro’s next three-year initiative will emphasize both internal growth and growth through acquisitions using a disciplined approach. Additionally, we will continue to drive efficiencies and improvements in our operations and SG&A via our Lean Enterprise efforts.”

The Company currently expects to report a 10 to 12 percent increase in fiscal 2007 net earnings per diluted share, on revenue growth of 5 to 7 percent. For its fiscal first quarter, typically a small revenue period, Toro currently expects to report diluted net earnings of $0.30 to $0.33 per share.

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

LIVE CONFERENCE CALL
December 7, 2006 10:00 a.m. CST
www.thetorocompany.com/invest

The Toro Company will conduct a conference call and webcast for investors beginning at 10:00 a.m. Central Time (CST) on December 7, 2006. 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.

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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 that could cause actual results to differ materially from those projected or implied. These uncertainties include factors that affect all businesses operating in a global market as well as matters specific to Toro. Particular risks and uncertainties that may affect the company’s operating results or overall financial position at the present include: slow growth rates in global and domestic economies, resulting in rising unemployment and weakened consumer confidence; the threat of further terrorist acts and war, which may result in contraction of the U.S. and worldwide economies; fluctuations in the cost and availability of raw materials, including steel and other commodities; rising costs of transportation; the impact of abnormal weather patterns and natural disasters; level of growth in the golf market; reduced government spending for grounds maintenance equipment due to reduced tax revenue and tighter government budgets; dependence on The Home Depot as a customer for the residential segment; elimination of shelf space for our products at retailers; unforeseen inventory adjustments or changes in purchasing patterns by our customers; market acceptance of existing and new products; increased competition; our ability to achieve the goals for the new three-year 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 net sales and net earnings per diluted share growth in fiscal 2007; our increased dependence on international sales and the risks attendant to international operations; interest rates and currency movements including, in particular, our exposure to foreign currency risk; financial viability of distributors and dealers; our ability to successfully achieve our plans for and integrate acquisitions and manage alliances; the costs and effects of complying with changes in tax, fiscal, government and other regulatory policies, including rules relating to environmental, health and safety matters; unforeseen product quality problems in the development, production and usage of new and existing products; loss of or changes in executive management; ability of management to manage around unplanned events; the occurrence of litigation or claims, including 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, although an adverse result might be material to operating results in a particular reporting period.  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)

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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)

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

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THE TORO COMPANY AND SUBSIDIARIES

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

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