Toro’s Red Iron originations dip 1.1% YoY

The Toro Co. reported modest shifts in dealer inventory financing activity in its fiscal first quarter while maintaining a sizable financing presence through its Red Iron Acceptance joint venture with Huntington Distribution Finance.

Toro owns a 45% stake in Red Iron, which provides floorplan financing for dealers and distributors of Toro equipment, according to the company’s March 5 10-Q filing with the Securities and Exchange Commission. Investment in the joint venture totaled $40.6 million as of Jan. 30, the end of the company’s fiscal Q1, declining 15.4% year over year.

Dealer and distributor receivables financed, or originations, through Red Iron during Q1 fell 1.1% YoY to $546.8 million, according to the 10-Q. Outstanding receivables under the program declined 17% YoY to $797.4 million, while amounts owed to Toro by Red Iron totaled $22.6 million, down 28.5% YoY.

Toro also relies on Huntington Commercial Finance and other third-party financial institutions to provide additional inventory financing for dealers, according to the 10-Q. Originations through those partners during the quarter totaled $147.4 million, down 1% YoY, while outstanding receivables financed by those institutions increased 6.2% YoY to $283 million.

Toro also maintains limited inventory repurchase agreements tied to its dealer financing programs, according to the 10-Q. As of Jan. 30, the company was contingently liable to repurchase up to $27.5 million of inventory tied to financed receivables, a 2.1% YoY decline, while repurchases during the quarter were immaterial.

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