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Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549

FORM 10-Q

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

For the Quarterly Period Ended February 3, 2023

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

For the Transition Period from           to          
Commission File Number: 1-8649

THE TORO COMPANY
(Exact name of registrant as specified in its charter)
Delaware41-0580470
State or Other Jurisdiction of
Incorporation or Organization		I.R.S. Employer Identification No.

 8111 Lyndale Avenue South
Bloomington, Minnesota 55420-1196
Telephone Number: (952) 888-8801
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $1.00 per shareTTCNew York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes  ☒  No  ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes  ☒  No  ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer☒Accelerated filer☐
Non-accelerated filer☐Smaller reporting company☐
Emerging growth company☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  ☐  No  ☒
The number of shares of the registrant’s common stock outstanding as of March 2, 2023 was 104,284,643.

Table of Contents
THE TORO COMPANY
FORM 10-Q
TABLE OF CONTENTS
 
Description Page Number
   
 
   
 
   
 
   
 
   
 
   
 
   
 
 
   
   
   
   
 
   
   
   
   
 

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains not only historical information, but also forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. In addition, we or others on our behalf may make forward-looking statements from time to time in oral presentations, including telephone conferences and/or web casts open to the public, in press releases or reports, on our web sites or otherwise. Statements that are not historical are forward-looking and reflect expectations and assumptions that we believe to be reasonable. Forward-looking statements are based on our current expectations of future events and often can be identified in this report and elsewhere by using words such as "expect," "strive," "outlook," "guidance," "forecast," "goal," "anticipate," "continue," "plan," "estimate," "project," "target," "improve," "believe," "become," "should," "could," "will," "would," "possible," "may," "likely," "intend," "can," "pursue," "potential," "pro forma," variations of such words or the negative thereof, and similar expressions or future dates. Our forward-looking statements generally relate to our future performance, including our anticipated operating results, liquidity requirements and financial condition; the anticipated impacts of current global supply chain disruptions, the inflationary environment, the war between Ukraine and Russia and the related sanctions and geopolitical tensions, tight labor markets and other macroeconomic factors; our business strategies, priorities, goals, and commitments; acquisitions and business initiatives; and the effect of laws, rules, policies, regulations, tax reform, new accounting pronouncements, and outstanding litigation on our business and future performance.
Forward-looking statements are only projections and involve risks and uncertainties that could cause actual results to differ materially from those projected or implied in the forward-looking statements. The following are some of the factors known to us that could cause our actual results to differ materially from what we have anticipated in our forward-looking statements:
•Adverse economic conditions and outlook in the United States and in other countries in which we conduct business, including as a result of the war between Ukraine and Russia and the related sanctions and geopolitical tensions or pandemics and/or epidemics, such as but not limited to: business closures, slowdowns, suspensions or delays of production and commercial activity; slow or negative economic growth rates or recessionary conditions; reduced or negative consumer confidence; reduced consumer spending levels; increased or prolonged high or low unemployment rates and tight labor markets; higher costs, longer lead times and reduced availability of commodities, components, parts, and accessories, including as a result of transportation-related costs, inflation, changing prices, foreign currency fluctuations, tariffs, and/or duties; inflationary or deflationary pressures; slowdowns or reductions in levels of interest in the game of golf or golf course activity, development, renovation, or improvement; golf course closures; reduced governmental or municipal spending; reduced infrastructure spending; reduced levels of home ownership, construction, or sales; home foreclosures; the impact of U.S. federal debt, state debt, and sovereign debt defaults; reduced credit availability or unfavorable credit terms for us or our distributors, dealers, or end-user customers; higher short-term, mortgage, and other interest rates; and general economic and political conditions and expectations;
•Continuing disruption, and/or shortages in the availability of and the cost of commodities, components, parts, or accessories used in our products;
•Our ability to continue to enhance existing products and develop and market new products that respond to customer needs and preferences and achieve market acceptance;
•Effect that weather conditions or climate change have on demand for our products and operations, including our supply chain;
•Changes in our product mix;
•Effect of competition;
•Our ability to cost-effectively expand and renovate existing facilities, open and manage new or acquired facilities, move production between manufacturing facilities, and/or any disruption at or near any of our facilities or other operations or those of our suppliers, distribution channel customers, mass retailers, or home centers where our products are sold;
•Our ability to retain our executive officers or other key employees, attract and retain other qualified employees or successfully implement executive officer, key employee or other leadership or employee transitions and any failure by us, or our suppliers or distribution channel partners, to hire and/or retain a labor force to enhance existing products and develop and market new products, adequately staff manufacturing operations, perform service or warranty work or other necessary activities, or allow employees to adequately and safely perform their jobs;
•Our inability to maintain appropriate inventory levels, including as a result of global supply chain disruptions, and if we underestimate or overestimate demand for our products, and the effect of inventory management decisions of our distribution channel customers;
•Changes in composition of, financial viability of, and the relationships with, our distribution channel customers;
•Risks associated with our credit arrangements and ratings and any material change in the availability or terms of, or termination or disruption of, credit offered to our customers, distributors, and dealers;
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•Risks associated with our international operations, including but not limited to the effect of foreign currency exchange rate fluctuations and compliance with foreign legal and regulatory requirements, the war between Ukraine and Russia and the related sanctions and geopolitical tensions, and other potential conflicts;
•Our failure to comply with all applicable legal and regulatory requirements and the effect of product quality issues, product liability claims, and other litigation to which we are or may be subject;
•Risks associated with our acquisitions and alliances, joint ventures, investments, or partnerships and our failure to successfully complete divestitures or other restructuring activities;
•Our ability to obtain and protect our intellectual property and other proprietary rights or operate our business without infringing upon the intellectual property or other proprietary rights of others;
•Failure of our information systems or information security practices or those of our business partners or third-party service providers to adequately perform and/or protect sensitive or confidential information;
•Our ability to achieve our financial projections or other business initiatives in the time periods that we anticipate or at all;
•Changes in accounting or tax standards and policies and/or assumptions utilized in determining accounting tax estimates; and
•Impact of increased scrutiny on our environmental, social and governance (“ESG”) practices and SEC rule making on ESG disclosures.
For more information regarding these and other uncertainties and factors that could cause our actual results to differ materially from what we have anticipated in our forward-looking statements or otherwise could materially adversely affect our business, financial condition, or operating results, see our most recently filed Annual Report on Form 10-K, Part I, Item 1A, "Risk Factors;" Part II, Item 1A, "Risk Factors" of this report; and our subsequent filings with the SEC.
All forward-looking statements included in this report are expressly qualified in their entirety by the foregoing cautionary statements. We caution readers not to place undue reliance on any forward-looking statement which speaks only as of the date made and to recognize that forward-looking statements are predictions of future results, which may not occur as anticipated. Actual results could differ materially from those anticipated in the forward-looking statements and from historical results, due to the risks and uncertainties described above, the risks described in our most recent Annual Report on Form 10-K, Part I, Item 1A, "Risk Factors" and Part II, Item 1A, "Risk Factors" of this report, and our subsequent SEC filings, as well as others that we may consider immaterial or do not anticipate at this time. These risks and uncertainties are not exclusive and further information concerning the company and our businesses, including factors that potentially could materially affect our financial results or condition, may emerge from time to time. We make no commitment to revise or update any forward-looking statements in order to reflect actual results, events or circumstances occurring or existing after the date any forward-looking statement is made, or changes in factors or assumptions affecting such forward-looking statements. We advise you, however, to consult any further disclosures we make on related subjects in our future Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K we file with or furnish to the SEC.
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
THE TORO COMPANY AND SUBSIDIARIES
Condensed Consolidated Statements of Earnings (Unaudited)
(Dollars and shares in thousands, except per share data)
 Three Months Ended
February 3, 2023January 28, 2022
Net sales$1,148,840 $932,650 
Cost of sales752,916 632,174 
Gross profit395,924 300,476 
Selling, general and administrative expense259,497 208,850 
Operating earnings136,427 91,626 
Interest expense(14,124)(7,013)
Other income, net9,011 2,534 
Earnings before income taxes131,314 87,147 
Provision for income taxes24,454 17,637 
Net earnings$106,860 $69,510 
Basic net earnings per share of common stock$1.02 $0.66 
Diluted net earnings per share of common stock$1.01 $0.66 
Weighted-average number of shares of common stock outstanding — Basic104,501 105,037 
Weighted-average number of shares of common stock outstanding — Diluted105,577 106,048 

See accompanying Notes to Condensed Consolidated Financial Statements.



THE TORO COMPANY AND SUBSIDIARIES
Condensed Consolidated Statements of Comprehensive Income (Unaudited)
(Dollars in thousands)
 Three Months Ended
February 3, 2023January 28, 2022
Net earnings$106,860 $69,510 
Other comprehensive income (loss), net of tax: 
Foreign currency translation adjustments21,182 (5,990)
Derivative instruments, net of tax of $(5,903) and $2,032, respectively
(16,662)6,372 
Other comprehensive income, net of tax4,520 382 
Comprehensive income$111,380 $69,892 

See accompanying Notes to Condensed Consolidated Financial Statements.
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THE TORO COMPANY AND SUBSIDIARIES
Condensed Consolidated Balance Sheets (Unaudited)
(Dollars in thousands, except per share data)
February 3, 2023January 28, 2022October 31, 2022
ASSETS   
Cash and cash equivalents$174,037 $192,959 $188,250 
Receivables, net377,262 366,270 332,713 
Inventories, net1,131,438 832,072 1,051,109 
Prepaid expenses and other current assets74,957 45,962 103,279 
Total current assets1,757,694 1,437,263 1,675,351 
Property, plant, and equipment, net584,147 507,549 571,661 
Goodwill584,550 576,940 583,297 
Other intangible assets, net577,064 600,797 585,832 
Right-of-use assets74,573 78,306 76,121 
Investment in finance affiliate45,726 24,119 39,349 
Deferred income taxes11,747 3,938 5,310 
Other assets19,445 24,133 19,077 
Total assets$3,654,946 $3,253,045 $3,555,998 
LIABILITIES AND STOCKHOLDERS’ EQUITY   
Current portion of long-term debt$— $100,000 $— 
Accounts payable475,218 474,483 578,624 
Accrued liabilities496,793 395,739 469,242 
Short-term lease liabilities15,962 15,842 15,747 
Total current liabilities987,973 986,064 1,063,613 
Long-term debt, less current portion1,091,015 991,354 990,768 
Long-term lease liabilities60,680 65,760 63,604 
Deferred income taxes31,444 50,382 44,272 
Other long-term liabilities39,663 39,936 42,040 
Stockholders’ equity:   
Preferred stock, par value $1.00 per share, authorized 1,000,000 voting and 850,000 non-voting shares, none issued and outstanding
— — — 
Common stock, par value $1.00 per share, authorized 175,000,000 shares; issued and outstanding 104,283,002 shares as of February 3, 2023, 104,528,510 shares as of January 28, 2022, and 103,969,805 shares as of October 31, 2022
104,283 104,529 103,970 
Retained earnings1,368,493 1,040,634 1,280,856 
Accumulated other comprehensive loss(28,605)(25,614)(33,125)
Total stockholders’ equity1,444,171 1,119,549 1,351,701 
Total liabilities and stockholders’ equity$3,654,946 $3,253,045 $3,555,998 

See accompanying Notes to Condensed Consolidated Financial Statements.
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THE TORO COMPANY AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows (Unaudited)
(Dollars in thousands)
 Three Months Ended
February 3, 2023January 28, 2022
Cash flows from operating activities:  
Net earnings$106,860 $69,510 
Adjustments to reconcile net earnings to net cash used in operating activities:  
Non-cash income from finance affiliate(3,809)(1,398)
Contributions to finance affiliate, net(2,568)(2,050)
Depreciation of property, plant, and equipment19,152 18,487 
Amortization of other intangible assets9,129 6,456 
Stock-based compensation expense5,224 5,225 
Other(5)146 
Changes in operating assets and liabilities, net of the effect of acquisitions:  
Receivables, net(42,495)(50,599)
Inventories, net(76,769)(59,171)
Prepaid expenses and other assets(1,588)(4,187)
Accounts payable, accrued liabilities, and other liabilities(81,980)(72,462)
Net cash used in operating activities(68,849)(90,043)
Cash flows from investing activities:  
Purchases of property, plant, and equipment(29,329)(11,903)
Proceeds from insurance claim7,114 — 
Business combinations, net of cash acquired— (401,494)
Proceeds from asset disposals265 26 
Net cash used in investing activities(21,950)(413,371)
Cash flows from financing activities:  
Borrowings under debt arrangements170,000 400,000 
Repayments under debt arrangements(70,000)— 
Proceeds from exercise of stock options14,029 1,150 
Payments of withholding taxes for stock awards(2,647)(1,381)
Purchases of TTC common stock— (75,000)
Dividends paid on TTC common stock(35,516)(31,469)
Other(1,475)— 
Net cash provided by financing activities74,391 293,300 
Effect of exchange rates on cash and cash equivalents2,195 (2,539)
Net decrease in cash and cash equivalents(14,213)(212,653)
Cash and cash equivalents as of the beginning of the fiscal period188,250 405,612 
Cash and cash equivalents as of the end of the fiscal period$174,037 $192,959 

See accompanying Notes to Condensed Consolidated Financial Statements.
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THE TORO COMPANY AND SUBSIDIARIES
Condensed Consolidated Statements of Stockholders' Equity (Unaudited)
(Dollars in thousands, except per share data)
 Common
Stock		Retained
Earnings		Accumulated Other
Comprehensive Loss		Total Stockholders'
Equity
Balance as of October 31, 2022$103,970 $1,280,856 $(33,125)$1,351,701 
Cash dividends paid on common stock - $0.34 per share
— (35,516)— (35,516)
Issuance of 351,032 shares of common stock under stock-based compensation plans
351 13,692 — 14,043 
Stock-based compensation expense— 5,224 — 5,224 
Contribution of 14,270 shares of common stock to a deferred compensation trust
(14)— — (14)
Purchase of 23,565 shares of common stock
(24)(2,623)— (2,647)
Other comprehensive income— 4,520 4,520 
Net earnings— 106,860 106,860 
Balance as of February 3, 2023$104,283 $1,368,493 $(28,605)$1,444,171 
Balance as of October 31, 2021$105,206 $1,071,922 $(25,996)$1,151,132 
Cash dividends paid on common stock - $0.30 per share
— (31,469)— (31,469)
Issuance of 109,658 shares of common stock under stock-based compensation plans
109 1,074 — 1,183 
Stock-based compensation expense— 5,225 — 5,225 
Contribution of 33,162 shares of common stock to a deferred compensation trust
(33)— — (33)
Purchase of 752,519 shares of common stock
(753)(75,628)— (76,381)
Other comprehensive income— — 382 382 
Net earnings— 69,510 — 69,510 
Balance as of January 28, 2022$104,529 $1,040,634 $(25,614)$1,119,549 

See accompanying Notes to Condensed Consolidated Financial Statements.
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THE TORO COMPANY AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Unaudited)
February 3, 2023
 
1Basis of Presentation
The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with the instructions to Form 10-Q and do not include all the information and notes required by United States ("U.S.") generally accepted accounting principles ("GAAP") for complete financial statements. Unless the context indicates otherwise, the terms "company," "TTC," "we," "our," or "us" refer to The Toro Company and its consolidated subsidiaries. All intercompany accounts and transactions have been eliminated from the unaudited Condensed Consolidated Financial Statements.
In the opinion of management, the unaudited Condensed Consolidated Financial Statements include all adjustments, consisting primarily of recurring accruals, considered necessary for the fair presentation of the company's consolidated financial position, results of operations, and cash flows for the periods presented. Due to seasonality within the industries in which the company's businesses operate, among other factors, operating results for the three months ended February 3, 2023 cannot be annualized to determine the expected results for the fiscal year ending October 31, 2023.
The company’s fiscal year ends on October 31 and quarterly results are reported based on three-month periods that generally end on the Friday closest to the calendar quarter end. For comparative purposes, however, the company’s second and third quarters always include exactly 13 weeks of results so that the quarter end date for these two quarters is not necessarily the Friday closest to the calendar month end.
For further information regarding the company's basis of presentation, refer to the Consolidated Financial Statements and Notes to Consolidated Financial Statements included in the company’s Annual Report on Form 10-K for the fiscal year ended October 31, 2022. The policies described in that report are used for preparing the company's quarterly reports on Form 10-Q.
Accounting Policies and Estimates
In preparing the Condensed Consolidated Financial Statements in conformity with U.S. GAAP, management must make decisions that impact the reported amounts of assets, liabilities, revenues, expenses, and the related disclosures, including disclosures of contingent assets and liabilities. Such decisions include the selection of the appropriate accounting principles to be applied and the assumptions on which to base accounting estimates. Estimates are used in determining, among other items, sales promotion and incentive accruals, incentive compensation accruals, income tax accruals, inventory valuation, warranty accruals, allowances for current expected credit losses, pension accruals, self-insurance accruals, legal accruals, right-of-use assets and lease liabilities, useful lives for tangible and finite-lived intangible assets, future cash flows associated with impairment testing for goodwill, indefinite-lived intangible assets and other long-lived assets, and valuations of the assets acquired and liabilities assumed in a business combination or an asset acquisition, when applicable. These estimates and assumptions are based on management’s best estimates and judgments at the time they are made and are generally derived from management's understanding and analysis of the relevant and current circumstances, historical experience, and actuarial and other independent external third-party specialist valuations, when applicable. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors that management believes to be reasonable under the circumstances, including the economic environment. Management adjusts such estimates and assumptions when facts and circumstances dictate. As future events and their effects cannot be determined with certainty, actual amounts could differ significantly from those estimated at the time the Condensed Consolidated Financial Statements are prepared.
New Accounting Pronouncements
In November 2021, the Financial Accounting Standards Board ("FASB") issued ASU No. 2021-10, Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance. The update increases the transparency of government assistance including annual disclosure of the types of assistance, an entity’s accounting for the assistance, and the effect of the assistance on an entity’s financial statements. The amended guidance will become effective for the company for the fiscal 2023 annual period. The company is currently evaluating the impact of this new standard on its Consolidated Financial Statements.
The company believes that all other recently issued accounting pronouncements from the FASB that the company has not noted above will not have a material impact on its Condensed Consolidated Financial Statements or do not apply to its operations.
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2Business Combination
Intimidator Group
On January 13, 2022 ("the closing date"), during the first quarter of fiscal 2022, the company acquired the privately-held Intimidator Group ("Intimidator") for net aggregate purchase consideration of $399.8 million ("the purchase price"). Intimidator primarily designs, manufactures, markets, and sells a commercial-grade line of zero-turn mowers under the Spartan Mowers brand, which are intended to provide innovative turf management solutions to landscape contractors and other customers who require a commercial-grade solution. The acquisition of Intimidator broadened the company's Professional reportable segment and expanded its manufacturing footprint and dealer network.
Purchase Accounting
The company accounted for the acquisition in accordance with the accounting standards codification guidance for business combinations, whereby the purchase price was allocated to the acquired net tangible and intangible assets of Intimidator based on their fair values as of the closing date. During the first quarter of fiscal 2023, the company completed its valuation of income taxes to finalize the purchase price allocation.
The following table summarizes the allocation of the purchase price to the fair values assigned to the assets acquired and liabilities assumed. These fair values are based on internal company and independent external third-party valuations:
(Dollars in thousands)January 13, 2022
Cash and cash equivalents$975 
Receivables6,954 
Inventories34,608 
Prepaid expenses and other current assets513 
Property, plant, and equipment27,447 
Right-of-use assets344 
Goodwill163,731 
Other intangible assets:
Indefinite-lived trade name99,100 
Finite-lived trade names3,260 
Finite-lived customer-related80,500 
Finite-lived backlog1,340 
Accounts payable(8,535)
Accrued liabilities(9,152)
Short-term lease liabilities(100)
Long-term lease liabilities(244)
Total fair value of net assets acquired400,741 
Less: cash and cash equivalents acquired(975)
Total purchase price$399,766 
The goodwill recognized is primarily attributable to the expected future cash flows, the value of the workforce, and expected synergies, including customer and dealer growth opportunities, expanding existing product lines, and cost reduction initiatives. Key areas of expected cost synergies include increased purchasing power for commodities, components, parts and accessories, and supply chain consolidation. The goodwill resulting from the acquisition of Intimidator was recognized within the company's Professional segment. The acquisition was considered an asset purchase for income tax purposes and as a result, the goodwill arising from the transaction is deductible. There were no purchase accounting adjustments recorded in fiscal 2023 that impacted the carrying value of goodwill acquired.
Other Intangible Assets Acquired
The allocation of the purchase price to the net assets acquired resulted in the recognition of $184.2 million of value for other intangible assets as of the closing date. The fair values of the acquired trade names, customer-related, and backlog intangible assets were determined using the income approach whereby an intangible asset's fair value is equal to the present value of future economic benefits to be derived from ownership of the asset. The useful lives of the other intangible assets were determined based on the period of expected cash flows used to measure the fair value of the intangible assets adjusted as appropriate for entity-specific factors including legal, regulatory, contractual, competitive, economic, and/or other factors that may limit the useful life of the respective intangible asset. As of the closing date, the acquired finite-lived intangible assets had a weighted average useful life of 9.5 years. The fair values of the trade names were determined using the relief from royalty method, which
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is based on the hypothetical royalty stream that would be received if the company were to license the respective trade name and were based on expected future revenues from the respective trade name. The weighted-average useful life of the finite-lived trade name intangible assets was determined to be 9.8 years as of the closing date. The fair values of the customer-related and backlog intangible assets were determined using the excess earnings method and were based on the expected operating cash flows attributable to the respective intangible asset, which were determined by deducting expected economic costs, including operating expenses and contributory asset charges, from the revenue expected to be generated from the respective intangible asset. As of the closing date, the weighted-average useful life of the customer-related and backlog intangible assets were determined to be 9.6 years and 9 months, respectively.
3Segment Data
The company's businesses are organized, managed, and internally grouped into segments based on similarities in products and services. Segment selection is based on the manner in which the company's chief operating decision maker organizes segments for making operating and investment decisions and assessing performance. The company has identified twelve operating segments and has aggregated certain of those operating segments into two reportable segments: Professional and Residential. The aggregation of the company's segments is based on the segments having the following similarities: economic characteristics, types of products and services, types of production processes, type or class of customers, and method of distribution. The company's remaining activities are presented as "Other" due to their insignificance. The company's Other activities consist of the company's wholly-owned domestic distribution company, the company's corporate activities, and the elimination of intersegment revenues and expenses.
The following tables present summarized financial information concerning the company’s reportable business segments and Other activities (dollars in thousands):
Three Months Ended February 3, 2023ProfessionalResidentialOtherTotal
Net sales$880,660 $264,615 $3,565 $1,148,840 
Intersegment gross sales (eliminations)10,855 39 (10,894)— 
Earnings (loss) before income taxes144,076 37,832 (50,594)131,314 
Total assets$2,782,797 $541,214 $330,935 $3,654,946 
Three Months Ended January 28, 2022ProfessionalResidentialOtherTotal
Net sales$672,885 $255,402 $4,363 $932,650 
Intersegment gross sales (eliminations)5,417 15 (5,432)— 
Earnings (loss) before income taxes93,272 31,760 (37,885)87,147 
Total assets$2,486,201 $444,549 $322,295 $3,253,045 
The following table presents the details of operating loss before income taxes for the company's Other activities:
 Three Months Ended
(Dollars in thousands)February 3, 2023January 28, 2022
Corporate expenses$(43,662)$(32,828)
Interest expense(14,124)(7,013)
Earnings from the company's wholly-owned domestic distribution company and other income, net7,192 1,956 
Total operating loss$(50,594)$(37,885)
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4Revenue
The following tables disaggregate the company's reportable segment net sales by major product type and geographic market (dollars in thousands):
Three Months Ended February 3, 2023ProfessionalResidentialOtherTotal
Revenue by product type:    
Equipment$778,251 $253,432 $2,444 $1,034,127 
Irrigation102,409 11,183 1,121 114,713 
Total net sales$880,660 $264,615 $3,565 $1,148,840 
Revenue by geographic market: 
United States$696,494 $203,444 $3,565 $903,503 
International countries184,166 61,171 — 245,337 
Total net sales$880,660 $264,615 $3,565 $1,148,840 

Three Months Ended January 28, 2022ProfessionalResidentialOtherTotal
Revenue by product type:    
Equipment$570,871 $244,589 $3,147 $818,607 
Irrigation102,014 10,813 1,216 114,043 
Total net sales$672,885 $255,402 $4,363 $932,650 
Revenue by geographic market: 
United States$530,734 $202,567 $4,363 $737,664 
International countries142,151 52,835 — 194,986 
Total net sales$672,885 $255,402 $4,363 $932,650 
Contract Liabilities
Contract liabilities relate to deferred revenue recognized for cash consideration received at contract inception in advance of the company's performance under the respective contract and generally relate to the sale of separately priced extended warranty contracts, service contracts, and non-refundable customer deposits. The company recognizes revenue over the term of the contract in proportion to the costs expected to be incurred in satisfying the performance obligations under the separately priced extended warranty and service contracts. For non-refundable customer deposits, the company recognizes revenue as of the point in time in which the performance obligation has been satisfied under the contract with the customer, which typically occurs upon change in control at the time a product is shipped. As of February 3, 2023 and October 31, 2022, $27.0 million and $28.0 million, respectively, of deferred revenue associated with outstanding separately priced extended warranty contracts, service contracts, and non-refundable customer deposits was reported within accrued liabilities and other long-term liabilities in the Condensed Consolidated Balance Sheets. For the three months ended February 3, 2023, the company recognized $6.2 million of the October 31, 2022 deferred revenue balance within net sales in the Condensed Consolidated Statements of Earnings. The company expects to recognize approximately $8.5 million of the October 31, 2022 deferred revenue amount within net sales throughout the remainder of fiscal 2023, $8.1 million in fiscal 2024, and $5.2 million thereafter.
5Goodwill and Other Intangible Assets, Net
Goodwill
The changes in the carrying amount of goodwill by reportable segment for the first three months of fiscal 2023 were as follows:
(Dollars in thousands)ProfessionalResidentialOtherTotal
Balance as of October 31, 2022$573,031 $10,266 $— $583,297 
Translation adjustments1,095 158 — 1,253 
Balance as of February 3, 2023$574,126 $10,424 $— $584,550 
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Other Intangible Assets, Net
The components of other intangible assets, net as of February 3, 2023, January 28, 2022, and October 31, 2022 were as follows (dollars in thousands):
February 3, 2023Weighted-Average Useful Life in YearsGross Carrying AmountAccumulated AmortizationNet
Patents9.9$18,253 $(15,539)$2,714 
Non-compete agreements5.56,889 (6,872)17 
Customer-related16.0321,334 (89,935)231,399 
Developed technology7.1102,125 (55,823)46,302 
Trade names13.710,744 (3,624)7,120 
Backlog and other0.65,730 (5,730)— 
Total finite-lived13.4465,075 (177,523)287,552 
Indefinite-lived - trade names289,512 — 289,512 
Total other intangible assets, net$754,587 $(177,523)$577,064 
January 28, 2022Weighted-Average Useful Life in YearsGross Carrying AmountAccumulated AmortizationNet
Patents9.9$18,291 $(14,858)$3,433 
Non-compete agreements5.56,921 (6,885)36 
Customer-related16.0322,296 (66,325)255,971 
Developed technology7.087,427 (45,748)41,679 
Trade names13.710,762 (3,038)7,724 
Backlog and other0.76,640 (4,390)2,250 
Total finite-lived13.5452,337 (141,244)311,093 
Indefinite-lived - trade names289,704 — 289,704 
Total other intangible assets, net$742,041 $(141,244)$600,797 
October 31, 2022Weighted-Average Useful Life in YearsGross Carrying AmountAccumulated AmortizationNet
Patents9.9$18,210 $(15,317)$2,893 
Non-compete agreements5.56,851 (6,829)22 
Customer-related16.0320,959 (83,805)237,154 
Developed technology7.1101,915 (53,001)48,914 
Trade names13.810,667 (3,395)7,272 
Backlog and other0.65,730 (5,505)225 
Total finite-lived13.4464,332 (167,852)296,480 
Indefinite-lived - trade names289,352 — 289,352 
Total other intangible assets, net$753,684 $(167,852)$585,832 
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Amortization expense for finite-lived intangible assets for the three months ended February 3, 2023 and January 28, 2022 was $9.1 million and $6.5 million, respectively. As of February 3, 2023, estimated amortization expense for the remainder of fiscal 2023 and succeeding fiscal years is as follows:
(Dollars in thousands)February 3, 2023
2023 (remaining)$25,792 
202433,022 
202530,170 
202628,989 
202724,055 
202821,533 
Thereafter123,991 
Total estimated amortization expense287,552 
6Indebtedness
The following is a summary of the company's indebtedness:
(Dollars in thousands)February 3, 2023January 28, 2022October 31, 2022
$600 million revolving credit facility, due October 2026
$100,000 $400,000 $— 
$270 million term loan, due October 2026
270,000 270,000 270,000 
$200 million term loan, due April 2027
200,000 — 200,000 
3.81% series A senior notes, due June 2029
100,000 100,000 100,000 
3.91% series B senior notes, due June 2031
100,000 100,000 100,000 
3.97% senior notes, due June 2032
100,000 — 100,000 
7.8% debentures, due June 2027
100,000 100,000 100,000 
6.625% senior notes, due May 2037
124,117 124,055 124,102 
Less: unamortized debt issuance costs3,102 2,701 3,334 
Total long-term debt1,091,015 1,091,354 990,768 
Less: current portion of long-term debt— 100,000 — 
Long-term debt, less current portion$1,091,015 $991,354 $990,768 
As of February 3, 2023, principal payments required on the company's outstanding indebtedness, based on the maturity dates defined within the company's debt arrangements, for the remainder of fiscal 2023 and succeeding fiscal years are as follows:
(Dollars in thousands)February 3, 2023
2023 (remaining)$— 
2024$— 
2025$37,000 
2026$363,000 
2027$270,000 
2028$— 
Thereafter$425,000 
Total principal payments required$1,095,000 
Covenants
The company is in compliance with all covenants under the company’s outstanding indebtedness as of February 3, 2023.