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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 July 30, 2021

         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 filerAccelerated filer
Non-accelerated filerSmaller 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 August 26, 2021 was 106,444,673.


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

2

Table of Contents
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 EndedNine Months Ended
July 30, 2021July 31, 2020July 30, 2021July 31, 2020
Net sales$976,836 $840,972 $2,998,929 $2,537,853 
Cost of sales645,719 546,398 1,949,823 1,648,474 
Gross profit331,117 294,574 1,049,106 889,379 
Selling, general and administrative expense209,178 178,622 604,986 556,503 
Operating earnings121,939 115,952 444,120 332,876 
Interest expense(7,016)(8,304)(21,662)(25,119)
Other income, net2,528 3,345 8,062 10,746 
Earnings before income taxes117,451 110,993 430,520 318,503 
Provision for income taxes21,131 22,025 80,748 60,998 
Net earnings$96,320 $88,968 $349,772 $257,505 
Basic net earnings per share of common stock$0.90 $0.83 $3.25 $2.39 
Diluted net earnings per share of common stock$0.89 $0.82 $3.21 $2.37 
Weighted-average number of shares of common stock outstanding — Basic107,130 107,710 107,667 107,561 
Weighted-average number of shares of common stock outstanding — Diluted108,363 108,543 108,818 108,569 

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 EndedNine Months Ended
July 30, 2021July 31, 2020July 30, 2021July 31, 2020
Net earnings$96,320 $88,968 $349,772 $257,505 
Other comprehensive income (loss), net of tax: 
Foreign currency translation adjustments(5,314)14,011 6,685 8,120 
Derivative instruments, net of tax of $2,641; $(4,589); $140; and $(3,558), respectively
8,035 (14,885)886 (11,559)
Pension benefits   912 
Other comprehensive income (loss), net of tax2,721 (874)7,571 (2,527)
Comprehensive income$99,041 $88,094 $357,343 $254,978 

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)
July 30, 2021July 31, 2020October 31, 2020
ASSETS   
Cash and cash equivalents$535,330 $394,141 $479,892 
Receivables, net301,234 294,672 261,135 
Inventories, net665,648 656,208 652,433 
Prepaid expenses and other current assets43,577 39,225 34,188 
Total current assets1,545,789 1,384,246 1,427,648 
Property, plant, and equipment, net456,992 457,891 467,919 
Goodwill421,958 424,228 424,075 
Other intangible assets, net426,497 413,270 408,305 
Right-of-use assets72,236 81,634 78,752 
Investment in finance affiliate19,272 22,580 19,745 
Deferred income taxes6,362 9,772 6,466 
Other assets18,943 20,242 20,318 
Total assets$2,968,049 $2,813,863 $2,853,228 
LIABILITIES AND STOCKHOLDERS’ EQUITY   
Current portion of long-term debt$104,217 $108,869 $99,873 
Accounts payable411,413 268,747 363,953 
Accrued liabilities427,407 404,314 376,524 
Short-term lease liabilities15,403 15,182 15,447 
Total current liabilities958,440 797,112 855,797 
Long-term debt, less current portion587,345 782,036 691,250 
Long-term lease liabilities60,002 69,752 66,641 
Deferred income taxes74,381 71,346 70,435 
Other long-term liabilities50,703 39,585 54,277 
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 106,440,513 shares as of July 30, 2021, 107,264,098 shares as of July 31, 2020, and 107,582,670 shares as of October 31, 2020
106,441 107,264 107,583 
Retained earnings1,157,428 981,344 1,041,507 
Accumulated other comprehensive loss(26,691)(34,576)(34,262)
Total stockholders’ equity1,237,178 1,054,032 1,114,828 
Total liabilities and stockholders’ equity$2,968,049 $2,813,863 $2,853,228 

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)
 Nine Months Ended
July 30, 2021July 31, 2020
Cash flows from operating activities:  
Net earnings$349,772 $257,505 
Adjustments to reconcile net earnings to net cash provided by operating activities:  
Non-cash income from finance affiliate(4,694)(6,161)
Distributions from finance affiliate, net5,167 7,729 
Depreciation of property, plant and equipment55,301 55,272 
Amortization of other intangible assets17,493 14,591 
Fair value step-up adjustment to acquired inventory 3,951 
Stock-based compensation expense16,176 10,322 
Deferred income taxes699 (3,425)
Other(26)521 
Changes in operating assets and liabilities, net of the effect of acquisitions:  
Receivables, net(42,217)(17,687)
Inventories, net(20,080)18,248 
Prepaid expenses and other assets(1,019)7,827 
Accounts payable, accrued liabilities, and other liabilities100,563 (42,817)
Net cash provided by operating activities477,135 305,876 
Cash flows from investing activities:  
Purchases of property, plant and equipment(47,961)(46,627)
Business combinations, net of cash acquired(14,874)(138,225)
Asset acquisitions, net of cash acquired(27,176) 
Proceeds from asset disposals588 204 
Proceeds from sale of a business18,732  
Net cash used in investing activities(70,691)(184,648)
Cash flows from financing activities:  
Borrowings under debt arrangements 636,025 
Repayments under debt arrangements(100,000)(446,025)
Proceeds from exercise of stock options12,535 11,939 
Payments of withholding taxes for stock awards(1,875)(2,102)
Purchases of TTC common stock(177,152) 
Dividends paid on TTC common stock(84,677)(80,683)
Net cash (used in) provided by financing activities(351,169)119,154 
Effect of exchange rates on cash and cash equivalents163 1,931 
Net increase in cash and cash equivalents55,438 242,313 
Cash and cash equivalents as of the beginning of the fiscal period479,892 151,828 
Cash and cash equivalents as of the end of the fiscal period$535,330 $394,141 

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 April 30, 2021$107,043 $1,151,786 $(29,412)$1,229,417 
Cash dividends paid on common stock - $0.2625 per share
— (28,075)— (28,075)
Issuance of 64,260 shares for exercised stock options and vested restricted stock units
65 1,605 — 1,670 
Stock-based compensation expense— 5,831 — 5,831 
Purchase of 666,672 shares of common stock
(667)(70,039)— (70,706)
Other comprehensive income— — 2,721 2,721 
Net earnings— 96,320 — 96,320 
Balance as of July 30, 2021$106,441 $1,157,428 $(26,691)$1,237,178 
Balance as of October 31, 2020$107,583 $1,041,507 $(34,262)$1,114,828 
Cash dividends paid on common stock - $0.7875 per share
— (84,677)— (84,677)
Issuance of 587,723 shares for exercised stock options and vested restricted stock units and performance share awards
588 10,462 — 11,050 
Stock-based compensation expense— 16,176 — 16,176 
Contribution of 22,700 shares to a deferred compensation trust
23 1,462 — 1,485 
Purchase of 1,752,579 shares of common stock
(1,753)(177,274)— (179,027)
Other comprehensive income— — 7,571 7,571 
Net earnings— 349,772 — 349,772 
Balance as of July 30, 2021$106,441 $1,157,428 $(26,691)$1,237,178 
Balance as of May 1, 2020$107,111 $911,541 $(33,702)$984,950 
Cash dividends paid on common stock - $0.25 per share
— (26,939)— (26,939)
Issuance of 162,488 shares for exercised stock options and vested restricted stock units
162 3,430 — 3,592 
Stock-based compensation expense— 4,955 — 4,955 
Purchase of 9,206 shares of common stock
(9)(611)— (620)
Other comprehensive loss— — (874)(874)
Net earnings— 88,968 — 88,968 
Balance as of July 31, 2020$107,264 $981,344 $(34,576)$1,054,032 
Balance as of October 31, 2019$106,742 $784,885 $(32,049)$859,578 
Cash dividends paid on common stock - $0.75 per share
— (80,683)— (80,683)
Issuance of 550,835 shares for exercised stock options and vested restricted stock units and performance share awards
551 8,820 — 9,371 
Stock-based compensation expense— 10,322 — 10,322 
Contribution of stock to a deferred compensation trust— 2,568 — 2,568 
Purchase of 28,818 shares of common stock
(29)(2,073)— (2,102)
Other comprehensive loss— — (2,527)(2,527)
Net earnings— 257,505 — 257,505 
Balance as of July 31, 2020$107,264 $981,344 $(34,576)$1,054,032 

See accompanying Notes to Condensed Consolidated Financial Statements.
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THE TORO COMPANY AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Unaudited)
July 30, 2021
 
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 business operates and the current COVID-19 pandemic, among other factors, operating results for the nine months ended July 30, 2021 cannot be annualized to determine the expected results for the fiscal year ending October 31, 2021.
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, 2020. The policies described in that report are used for preparing the company's quarterly reports on Form 10-Q.
Impact of COVID-19 Pandemic
In March 2020, the World Health Organization declared the novel coronavirus ("COVID-19," "virus," or "the pandemic") outbreak a global pandemic. COVID-19 has negatively impacted public health and portions of the global economy, significantly disrupted global supply chains, and created volatility in financial markets. The continuing implications of COVID-19 on the company remain uncertain and will depend on certain future developments, including the duration of the pandemic; any adverse impact due to variants of the virus; its impact on market demand for the company's products; its impact on the company's employees, customers, and suppliers; the range of government mandated restrictions and other measures; and the success of the deployment of approved COVID-19 vaccines, their effectiveness against the novel strain and related variants, and their rate of adoption. This uncertainty could have a material impact on accounting estimates and assumptions utilized to prepare the Condensed Consolidated Financial Statements as of and for the nine months ended July 30, 2021 and in future reporting periods, which could result in a material adverse impact on the company's Consolidated Financial Position, Results of Operations, and Cash Flows.
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, 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, including those impacted by COVID-19, actual amounts could differ significantly from those estimated at the time the Condensed Consolidated Financial Statements are prepared.
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New Accounting Pronouncements Adopted
In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which modifies the measurement approach for credit losses on financial assets measured on an amortized cost basis from an 'incurred loss' method to an 'expected loss' method. Such modification of the measurement approach for credit losses eliminates the requirement that a credit loss be considered probable, or incurred, to impact the valuation of a financial asset measured on an amortized cost basis. The amended guidance requires the measurement of expected credit losses to be based on relevant information, including historical experience, current conditions, and a reasonable and supportable forecast that affects the collectability of the related financial asset. This amendment affects trade receivables, off-balance-sheet credit exposures, and any other financial assets not excluded from the scope of this amendment that have the contractual right to receive cash. The amended guidance was adopted in the first quarter of fiscal 2021, under the modified retrospective transition method. The adoption of the amended guidance did not have a material impact on the company's Condensed Consolidated Financial Statements.
In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820) - Changes to the Disclosure Requirements for Fair Value Measurement, which modifies the disclosure requirements for fair value measurements by removing, modifying, or adding certain disclosures. The amended guidance was adopted in the first quarter of fiscal 2021 and did not have a material impact on the company's Condensed Consolidated Financial Statements.
In August 2018, the FASB issued ASU No. 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans (Topic 715), which modifies the disclosure requirements for defined benefit pension plans and other post-retirement plans. The amended guidance was adopted in the first quarter of fiscal 2021 and did not have a material impact on the company's Condensed Consolidated Financial Statements.
New Accounting Pronouncements Not Yet Adopted
In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which eliminates certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period, and the recognition of deferred tax liabilities for outside basis differences. The amended guidance also clarifies and simplifies other aspects of the accounting for income taxes under accounting standards codification Topic 740, Income Taxes. The amended guidance will become effective for the company in the first quarter of fiscal 2022. Early adoption is permitted. The company is currently evaluating the impact of this new standard on its Condensed Consolidated Financial Statements.
In January 2020, the FASB issued ASU No. 2020-01, Investments - Equity Securities (Topic 321), Investments - Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815), which clarified that before applying or upon discontinuing the equity method of accounting for an investment in equity securities, an entity should consider observable transactions that require it to apply or discontinue the equity method of accounting for the purposes of applying the fair value measurement alternative. The amended guidance will become effective for the company in the first quarter of fiscal 2022. Early adoption is permitted. The company is currently evaluating the impact of this standard on its Condensed Consolidated Financial Statements.
In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides temporary optional guidance to ease the potential burden of accounting for reference rate reform due to the cessation of the London Interbank Offered Rate, commonly referred to as "LIBOR." The temporary guidance provides optional expedients and exceptions for applying U.S. GAAP to contracts, relationships, and transactions affected by reference rate reform if certain criteria are met. The provisions of the temporary optional guidance are only available until December 31, 2022, when the reference rate reform activity is expected to be substantially complete. When adopted, entities may apply the provisions as of the beginning of the reporting period when the election is made. The company is currently evaluating the impact of this standard on its Condensed Consolidated Financial Statements and has yet to elect an adoption date.
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.
2Business Combination and Asset Acquisitions
Venture Products, Inc. ("Venture Products")
On March 2, 2020, the company completed its acquisition of Venture Products, the manufacturer of Ventrac-branded products. Venture Products designs, manufactures, markets, and sells articulating turf, landscape, and snow and ice management equipment for grounds, landscape contractor, golf, municipal, and rural acreage customers and provides innovative product
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offerings that broadened and strengthened the company's Professional segment and expanded its dealer network. On the closing date of the acquisition, the company paid preliminary merger consideration of $165.9 million, which consisted of a cash payment of $136.4 million ("initial cash payment") and a $29.5 million holdback to satisfy any indemnification or certain other obligations of Venture Products to the company. The preliminary merger consideration was subject to certain customary adjustments, which were finalized during the third quarter of fiscal 2020 and resulted in an aggregate merger consideration of $163.2 million and at such time, $4.5 million of the holdback set aside for such customary adjustments was released accordingly. During the second quarter of fiscal 2021, $14.9 million of the remaining holdback was released and the remaining holdback of $10.0 million is expected to expire during the fourth quarter of fiscal 2021. As of the closing date of the acquisition, the company funded the initial cash payment with borrowings under its unsecured senior revolving credit facility.
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 Venture Products based on their fair values as of the closing date of the acquisition. Such fair values were based on internal company and independent external third-party valuations. The following table summarizes the allocation of the purchase price to the fair values assigned to the Venture Products assets acquired and liabilities assumed:
(Dollars in thousands)March 2, 2020
Cash and cash equivalents$3,476 
Receivables6,342 
Inventories23,000 
Prepaid expenses and other current assets239 
Property, plant and equipment26,976 
Goodwill61,225 
Other intangible assets:
Finite-lived customer-related19,100 
Indefinite-lived trade name56,200 
Accounts payable(4,075)
Accrued liabilities(5,196)
Deferred income tax liabilities(20,586)
Total fair value of net assets acquired166,701 
Less: cash and cash equivalents acquired(3,476)
Total purchase price$163,225 
The goodwill recognized is primarily attributable to the value of the workforce, the reputation of Venture Products, expected future cash flows, and expected synergies, including customer and dealer growth opportunities and integrating and expanding existing product lines. 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 Venture Products acquisition was recognized within the company's Professional segment and is non-deductible for tax purposes. During the first quarter of fiscal 2021, the company completed its valuation of income taxes to finalize the purchase price allocation, which resulted in a decrease to the carrying amount of goodwill of $1.0 million from the amounts reported within the company's Annual Report on Form 10-K for the fiscal year ended October 31, 2020. Such purchase accounting adjustment did not impact the company's Condensed Consolidated Statements of Earnings for the three and nine month periods ended July 30, 2021.
The allocation of the purchase price to the net assets acquired resulted in the recognition of $75.3 million of other intangible assets as of the closing date of the acquisition. The fair values of the acquired trade name and customer-related 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. The fair value of the indefinite-lived trade name was determined using the relief from royalty method, which is based on the hypothetical royalty stream that would be received if the company were to license the trade name and was based on expected future revenues. The fair value of the customer-related intangible asset was determined using the excess earnings method and was based on the expected operating cash flows attributable to the customer-related intangible asset, which was determined by deducting expected economic costs, including operating expenses and contributory asset charges, from the revenue expected to be generated from the customer-related intangible asset. As of the closing date of the acquisition, the weighted-average useful life of the customer-related intangible asset was determined to be 16.0 years.
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Asset Acquisitions
Effective November 4, 2020, during the first quarter of fiscal 2021, the company completed the acquisition of Turflynx, Lda, a developer of innovative autonomous solutions for turf management and effective March 1, 2021, during the second quarter of fiscal 2021, the company completed the acquisition of Left Hand Robotics, Inc., a developer of innovative autonomous solutions for turf and snow management. These acquisitions complement and support the development of alternative power, smart-connected, and autonomous products within the company's Professional and Residential segments. Neither of these acquisitions met the definition of a business combination as substantially all of the fair value of the gross assets acquired in each acquisition was concentrated in the respective finite-lived developed technology other intangible asset and as a result, the company accounted for each of these transactions as an asset acquisition. In an asset acquisition, goodwill is not recognized, but rather, any excess purchase consideration over the fair value of the net assets acquired is allocated on a relative fair value basis to the identifiable net assets as of the acquisition date and any direct acquisition-related transaction costs are capitalized as part of the purchase consideration. These asset acquisitions were immaterial in relation to the company's Consolidated Financial Condition and Results of Operations and as a result, additional purchase accounting disclosures have been omitted.
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 management organizes segments for making operating and investment decisions and assessing performance. The company has identified eleven operating segments and has aggregated certain of those 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. As further described in Note 7, Divestiture, during the first quarter of fiscal 2021, the company completed the sale of its Northeastern U.S. distribution company. As a result, for the three and nine month periods ended July 30, 2021, the company's Other activities consisted of the company's wholly-owned domestic distribution company, the company's corporate activities, and the elimination of intersegment revenues and expenses. For the three and nine month periods ended July 31, 2020, the company's Other activities consisted of the company's wholly-owned domestic distribution companies, 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 segments and Other activities (in thousands):
Three Months Ended July 30, 2021ProfessionalResidentialOtherTotal
Net sales$718,477 $252,117 $6,242 $976,836 
Intersegment gross sales (eliminations)8,241 13 (8,254)— 
Earnings (loss) before income taxes$122,331 $31,548 $(36,428)$117,451 
Nine Months Ended July 30, 2021ProfessionalResidentialOtherTotal
Net sales$2,197,058 $784,852 $17,019 $2,998,929 
Intersegment gross sales (eliminations)24,034 39 (24,073)— 
Earnings (loss) before income taxes406,279 109,642 (85,401)430,520 
Total assets$1,949,681 $327,064 $691,304 $2,968,049 
Three Months Ended July 31, 2020ProfessionalResidentialOtherTotal
Net sales$623,615 $204,961 $12,396 $840,972 
Intersegment gross sales (eliminations)12,738 23 (12,761)— 
Earnings (loss) before income taxes$113,652 $28,545 $(31,204)$110,993 
Nine Months Ended July 31, 2020ProfessionalResidentialOtherTotal
Net sales$1,879,423 $632,807 $25,623 $2,537,853 
Intersegment gross sales (eliminations)38,151 84 (38,235)— 
Earnings (loss) before income taxes322,385 87,233 (91,115)318,503 
Total assets$1,967,882 $268,562 $577,419 $2,813,863 
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The following table presents the details of operating loss before income taxes for the company's Other activities:
 Three Months EndedNine Months Ended
(Dollars in thousands)July 30, 2021July 31, 2020July 30, 2021July 31, 2020
Corporate expenses$(33,797)$(29,078)$(78,814)$(76,961)
Interest expense(7,016)(8,304)(21,662)(25,119)
Earnings from wholly-owned domestic distribution companies and other income, net4,385 6,178 15,075 10,965 
Total operating loss$(36,428)$(31,204)$(85,401)$(91,115)
4Revenue
The following tables disaggregate the company's reportable segment net sales by major product type and geographic market (in thousands):
Three Months Ended July 30, 2021ProfessionalResidentialOtherTotal
Revenue by product type:    
Equipment$609,022 $247,152 $3,164 $859,338 
Irrigation109,455 4,965 3,078 117,498 
Total net sales$718,477 $252,117 $6,242 $976,836 
Revenue by geographic market: 
United States$559,907 $219,022 $6,242 $785,171 
International Countries158,570 33,095  191,665 
Total net sales$718,477 $252,117 $6,242 $976,836 
Nine Months Ended July 30, 2021ProfessionalResidentialOtherTotal
Revenue by product type:    
Equipment$1,891,138 $761,724 $11,436 $2,664,298 
Irrigation305,920 23,128 5,583 334,631 
Total net sales$2,197,058 $784,852 $17,019 $2,998,929 
Revenue by geographic market: 
United States$1,681,972 $661,017 $17,019 $2,360,008 
International Countries515,086 123,835  638,921 
Total net sales$2,197,058 $784,852 $17,019 $2,998,929 
Three Months Ended July 31, 2020ProfessionalResidentialOtherTotal
Revenue by product type:    
Equipment$525,285 $199,012 $7,029 $731,326 
Irrigation98,330 5,949 5,367 109,646 
Total net sales$623,615 $204,961 $12,396 $840,972 
Revenue by geographic market: 
United States$500,828 $177,734 $12,396 $690,958 
International Countries122,787 27,227  150,014 
Total net sales$623,615 $204,961 $12,396 $840,972 
Nine Months Ended July 31, 2020ProfessionalResidentialOtherTotal
Revenue by product type:    
Equipment$1,618,337 $608,870 $16,389 $2,243,596 
Irrigation261,086