Tennant Company Reports Third Quarter 2024 Results
Tennant Company (NYSE: TNC) reported Q3 2024 financial results with net sales of $315.8 million, up 3.6% year-over-year. The company achieved an Adjusted EBITDA of $47.9 million, representing a 4.4% increase. Net income decreased 9.2% to $20.8 million, while adjusted diluted EPS grew 3.7% to $1.39. Growth was driven by strong pricing across regions and volume growth in Americas, though partially offset by declines in EMEA and APAC. The company generated $30.7 million in operating cash flow and reaffirmed its 2024 guidance, projecting net sales of $1,280-$1,305 million with organic growth of 2.5-4.5%.
Tennant Company (NYSE: TNC) ha riportato i risultati finanziari del Q3 2024 con vendite nette di 315,8 milioni di dollari, in aumento del 3,6% rispetto all'anno precedente. L'azienda ha raggiunto un Adjusted EBITDA di 47,9 milioni di dollari, che rappresenta un incremento del 4,4%. L'utile netto è diminuito del 9,2% a 20,8 milioni di dollari, mentre l'utile per azione diluito rettificato è cresciuto del 3,7% a 1,39 dollari. La crescita è stata sostenuta da una forte determinazione dei prezzi in tutte le regioni e da un aumento del volume nelle Americhe, sebbene parzialmente compensata dai cali in EMEA e APAC. L'azienda ha generato 30,7 milioni di dollari di flusso di cassa operativo e ha confermato le previsioni per il 2024, prevedendo vendite nette tra 1.280 e 1.305 milioni di dollari con una crescita organica del 2,5-4,5%.
Tennant Company (NYSE: TNC) reportó resultados financieros del Q3 2024 con ventas netas de 315,8 millones de dólares, un aumento del 3,6% en comparación con el año anterior. La empresa logró un EBITDA ajustado de 47,9 millones de dólares, representando un incremento del 4,4%. El ingreso neto disminuyó un 9,2% a 20,8 millones de dólares, mientras que las ganancias por acción diluidas ajustadas crecieron un 3,7% a 1,39 dólares. El crecimiento fue impulsado por un fuerte aumento de precios en todas las regiones y un crecimiento del volumen en las Américas, aunque parcialmente contrarrestado por caídas en EMEA y APAC. La empresa generó 30,7 millones de dólares en flujo de efectivo operativo y reafirmó su guía para 2024, proyectando ventas netas de 1.280-1.305 millones de dólares con un crecimiento orgánico del 2,5-4,5%.
테넌트 회사 (NYSE: TNC)는 2024년 3분기 재무 결과를 보고하며 순매출 3억 1,580만 달러를 기록하여 전년 대비 3.6% 증가했습니다. 이 회사는 조정된 EBITDA 4,790만 달러를 달성하여 4.4% 늘어난 것으로 나타났습니다. 순이익은 9.2% 감소하여 2,080만 달러를 기록했으며, 조정 후 희석 주당순이익(EPS)은 3.7% 증가하여 1.39달러에 도달했습니다. 성장은 모든 지역에서 강력한 가격 책정과 미주 지역에서의 물량 증가에 의해 주도되었으나, EMEA와 APAC에서의 감소로 인해 부분적으로 상쇄되었습니다. 이 회사는 3,070만 달러의 운영 현금 흐름을 생성하였으며, 2024년 가이던스를 재확인하여 순매출 12억 8천만 달러에서 13억 5천만 달러를 예상하며 유기적 성장률 2.5-4.5%를 전망하고 있습니다.
Tennant Company (NYSE: TNC) a annoncé des résultats financiers pour le T3 2024 avec des ventes nettes de 315,8 millions de dollars, en hausse de 3,6% par rapport à l'année précédente. L'entreprise a réalisé un EBITDA ajusté de 47,9 millions de dollars, représentant une augmentation de 4,4%. Le bénéfice net a diminué de 9,2% pour atteindre 20,8 millions de dollars, tandis que le bénéfice par action dilué ajusté a augmenté de 3,7% pour atteindre 1,39 dollar. La croissance a été soutenue par une forte augmentation des prix dans toutes les régions et par une croissance du volume dans les Amériques, bien qu'elle ait été partiellement compensée par des baisses en EMEA et APAC. L'entreprise a généré un flux de trésorerie opérationnel de 30,7 millions de dollars et a réaffirmé ses prévisions pour 2024, projetant des ventes nettes entre 1 280 et 1 305 millions de dollars avec une croissance organique de 2,5-4,5%.
Tennant Company (NYSE: TNC) hat die Finanzzahlen für das Q3 2024 veröffentlicht, mit Nettoverkaufszahlen von 315,8 Millionen US-Dollar, was einem Anstieg von 3,6% im Jahresvergleich entspricht. Das Unternehmen erzielte ein bereinigtes EBITDA von 47,9 Millionen US-Dollar, was einem Anstieg von 4,4% entspricht. Der Nettogewinn sank um 9,2% auf 20,8 Millionen US-Dollar, während der bereinigte verwässerte Gewinn je Aktie um 3,7% auf 1,39 US-Dollar stieg. Das Wachstum wurde durch starke Preissteigerungen in allen Regionen sowie durch ein Volumenwachstum in den Amerikas getrieben, wurde jedoch teilweise durch Rückgänge in EMEA und APAC kompensiert. Das Unternehmen erwirtschaftete einen operativen Cashflow von 30,7 Millionen US-Dollar und bestätigte seine Prognose für 2024, mit einer Schätzung für Nettoverkäufe zwischen 1.280 und 1.305 Millionen US-Dollar und einem organischen Wachstum von 2,5-4,5%.
- Net sales increased 3.6% to $315.8 million
- Adjusted EBITDA grew 4.4% to $47.9 million
- Adjusted diluted EPS increased 3.7% to $1.39
- Strong pricing realization across all regions
- Quarterly dividend increased by 5.4% to $0.295 per share
- Strong balance sheet with net leverage ratio of 0.56x Adjusted EBITDA
- Net income declined 9.2% to $20.8 million
- Gross profit margin decreased 90 basis points
- Volume declines in EMEA and APAC regions
- Operating cash flow decreased by $23.7 million year-over-year
- Experiencing market saturation in China leading to decreased demand
Insights
The Q3 results demonstrate mixed performance with notable strengths and challenges. Net sales grew 3.6% to
Key positives include strong cash flow generation with over
The gross margin compression of 90 basis points warrants attention, as it reflects ongoing inflationary pressures and elevated freight costs. However, the company's pricing power and strategic expansion through the TCS acquisition position it well for sustainable growth.
The regional performance variations reveal important market dynamics. The Americas region shows strength with
The launch of the T291 small walk-behind scrubber demonstrates continued innovation focus, targeting growth segments in retail, healthcare and education. The robust order growth across all geographies for two consecutive quarters indicates improving market conditions, though backlog normalization continues to impact near-term results.
Delivers Net Sales Growth
Reaffirms 2024 Guidance
(In millions, except per share data) |
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||||||||
|
2024 |
|
2023 |
|
Incr /
|
|
2024 |
|
2023 |
|
Incr /
|
||||||||||
Net sales |
$ |
315.8 |
|
|
$ |
304.7 |
|
|
3.6 |
% |
|
$ |
957.8 |
|
|
$ |
932.2 |
|
|
2.7 |
% |
Net income |
$ |
20.8 |
|
|
$ |
22.9 |
|
|
(9.2 |
)% |
|
$ |
77.1 |
|
|
$ |
78.5 |
|
|
(1.8 |
)% |
Diluted EPS |
$ |
1.09 |
|
|
$ |
1.21 |
|
|
(9.9 |
)% |
|
$ |
4.03 |
|
|
$ |
4.19 |
|
|
(3.8 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Adjusted diluted EPS |
$ |
1.39 |
|
|
$ |
1.34 |
|
|
3.7 |
% |
|
$ |
5.05 |
|
|
$ |
4.65 |
|
|
8.6 |
% |
Adjusted EBITDA |
$ |
47.9 |
|
|
$ |
45.9 |
|
|
4.4 |
% |
|
$ |
161.4 |
|
|
$ |
151.4 |
|
|
6.6 |
% |
Adjusted EBITDA margin % |
|
15.2 |
% |
|
|
15.1 |
% |
|
10 bps |
|
|
16.9 |
% |
|
|
16.2 |
% |
|
70 bps |
||
Highlights
-
Delivered net sales of
$315.8 million 3.6% increase from the third quarter of 2023, or2.7% on an organic basis, driven primarily by strong pricing realization in all regions and volume growth in theAmericas . -
Achieved Adjusted EBITDA of
$47.9 million $2.0 million 4.4% , primarily due to strong sales growth. -
Generated operating cash flow of
$30.7 million 100% conversion of net income to free cash flow. -
Announced a
5.4% increase in the Company's quarterly cash dividend to$0.29 5 - Expanded the Company's portfolio of innovative products and solutions with the launch of the new T291 small walk-behind scrubber. Designed for use in both hard-to-reach spaces and open areas, the T291's versatility and compact size make it an excellent fit for mid-size retail, healthcare, and education environments.
“We are pleased to report Tennant's strong third quarter results, continuing the trend from the first half of 2024 of delivering growth in organic net sales and Adjusted EBITDA as we progress toward normalized backlog levels by the end of 2024," said Dave Huml, Tennant President and Chief Executive Officer. "This quarter benefited from strong pricing realization across all regions and represents the second consecutive quarter with strong order growth in each of our geographies. Given the robust reception to our recent product introductions and a solid pipeline of upcoming products, combined with expanded go-to-market strategies and a disciplined pricing approach, we are well positioned to achieve our 2024 guidance and execute our enterprise growth strategy effectively."
Net Sales |
||||||
Consolidated net sales for the third quarter of 2024 totaled |
||||||
|
|
Three Months Ended
|
|
Nine Months Ended
|
||
|
|
2024 vs. 2023 |
||||
Price |
|
1.8 |
% |
|
3.1 |
% |
Volume |
|
0.9 |
% |
|
(1.0 |
)% |
Organic growth |
|
2.7 |
% |
|
2.1 |
% |
Acquisitions |
|
1.3 |
% |
|
0.8 |
% |
Foreign currency |
|
(0.4 |
)% |
|
(0.2 |
)% |
Total growth |
|
3.6 |
% |
|
2.7 |
% |
Organic Sales |
|||||||||||||||||||||||
Organic sales, which exclude the effects of foreign currency and acquisitions, increased |
|||||||||||||||||||||||
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||||||||||
|
|
|
EMEA |
|
APAC |
|
Total |
|
|
|
EMEA |
|
APAC |
|
Total |
||||||||
Organic net sales growth |
4.6 |
% |
|
(0.8 |
)% |
|
(4.3 |
)% |
|
2.7 |
% |
|
5.0 |
% |
|
(3.6 |
)% |
|
(6.2 |
)% |
|
2.1 |
% |
EMEA: The
APAC: The
Operating Results
The gross profit margin of
Selling and Administrative ("S&A") expense totaled
Adjusted EBITDA was
Net income was
Cash Flow, Liquidity and Capital Allocation
Tennant generated
Liquidity remained strong with a balance of
The Company continues to strategically deploy cash flow to meet operational capital requirements and to return capital to shareholders in alignment with its capital allocation priorities. During the third quarter, the Company invested
2024 Guidance |
|
For 2024, Tennant affirms the following guidance ranges: |
|
(In millions, except per share data) |
2024
|
Net sales |
|
Organic net sales growth |
2.5 % - 4.5 % |
Adjusted diluted net income per share* |
|
Adjusted EBITDA* |
|
Adjusted EBITDA margin |
16.0 % - 16.5 % |
Capital expenditures |
|
Adjusted effective tax rate* |
22 % - 27 % |
*Excludes ERP modernization costs, other certain nonoperational items and amortization expense. |
|
Conference Call
Tennant will host a conference call to discuss its 2024 third quarter results on November 1, 2024, at 9 a.m. Central Time (10 a.m. Eastern Time). The conference call and accompanying slides will be available via webcast on Tennant's investor website. To listen to the call live and view the slide presentation, go to investors.tennantco.com and click on the link at the bottom of the overview page. A replay of the conference call, with slides, will be available at investors.tennantco.com.
Company Profile
Founded in 1870, Tennant Company (TNC), headquartered in
Forward-Looking Statements
Certain statements contained in this document are considered “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act. These statements do not relate to strictly historical or current facts and provide current expectations or forecasts of future events. Any such expectations or forecasts of future events are subject to a variety of factors. These include factors that affect all businesses operating in a global market as well as matters specific to us and the markets the Company serves. Particular risks and uncertainties presently facing it include: economic uncertainty throughout the world; geopolitical tensions or health epidemics; the Company's ability to comply with global laws and regulations; the Company's ability to adapt pricing to the competitive marketplace and customer pricing sensitivities; the competition in the Company's business; fluctuations in the cost, quality or availability of raw materials and purchased components; increasing cost pressures; unforeseen product liability claims or product quality issues; the Company's ability to attract, retain and develop key personnel and create effective succession planning strategies; the Company's ability to effectively develop and manage strategic planning and growth processes and the related operational plans; the Company's ability to successfully upgrade and evolve its information technology systems; the Company's ability to successfully protect our information technology systems from cybersecurity risks; the occurrence of a significant business interruption; the Company's ability to maintain the health and safety of its workers; the Company's ability to integrate acquisitions; and the Company's ability to develop and commercialize new innovative products and services.
The Company cautions that forward-looking statements must be considered carefully and that actual results may differ in material ways due to risks and uncertainties both known and unknown. Information about factors that could materially affect the Company's results can be found in its 2023 Form 10-K. Shareholders, potential investors and other readers are urged to consider these factors in evaluating forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements.
The Company undertakes no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law. Investors are advised to consult any further disclosures by the Company in its filings with the Securities and Exchange Commission and in other written statements on related subjects. It is not possible to anticipate or foresee all risk factors, and investors should not consider any list of such factors to be an exhaustive or complete list of all risks or uncertainties.
Non-GAAP Financial Measures
This news release and the related conference call include presentation of Non-GAAP measures that include or exclude special items of a nonrecurring and/or nonoperational nature (hereinafter referred to as “special items”). Management believes that the Non-GAAP measures provide useful information to investors regarding the Company’s results of operations and financial condition because they permit a more meaningful comparison and understanding of Tennant Company’s operating performance for the current, past or future periods. Management uses these Non-GAAP measures to monitor and evaluate ongoing operating results and trends and to gain an understanding of the comparative operating performance of the Company.
The Company believes that disclosing selling and administrative (“S&A”) expense – as adjusted, S&A expense as a percent of net sales – as adjusted, operating income – as adjusted, operating margin – as adjusted, income before income taxes – as adjusted, income tax expense – as adjusted, net income – as adjusted, net income per diluted share – as adjusted, EBITDA – as adjusted, and EBITDA margin – as adjusted (collectively, the “Non-GAAP measures”), excluding the impacts from special items, is useful to investors as a measure of operating performance. The Company uses these measures to monitor and evaluate operating performance. The Non-GAAP measures are financial measures that do not reflect United States Generally Accepted Accounting Principles (GAAP). The Company calculates the Non-GAAP measures by adjusting for ERP modernization costs, transaction-related costs and amortization expense. The Company calculates income tax expense – as adjusted by adjusting for the tax effect of these Non-GAAP measures. The Company calculates net income per diluted share – as adjusted by adjusting for the after-tax effect of these Non-GAAP measures and dividing the result by the diluted weighted average shares outstanding. The Company calculates EBITDA margin – as adjusted by dividing EBITDA – as adjusted by net sales.
FINANCIAL TABLES FOLLOW
TENNANT COMPANY |
|||||||||||||||
CONSOLIDATED STATEMENTS OF INCOME (Unaudited) |
|||||||||||||||
(In millions, except shares and per share data) |
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
Net sales |
$ |
315.8 |
|
|
$ |
304.7 |
|
|
$ |
957.8 |
|
|
$ |
932.2 |
|
Cost of sales |
|
182.0 |
|
|
|
172.7 |
|
|
|
543.8 |
|
|
|
535.2 |
|
Gross profit |
|
133.8 |
|
|
|
132.0 |
|
|
|
414.0 |
|
|
|
397.0 |
|
Selling and administrative expense |
|
92.7 |
|
|
|
88.2 |
|
|
|
275.5 |
|
|
|
256.9 |
|
Research and development expense |
|
10.5 |
|
|
|
9.1 |
|
|
|
31.8 |
|
|
|
26.0 |
|
Operating income |
|
30.6 |
|
|
|
34.7 |
|
|
|
106.7 |
|
|
|
114.1 |
|
Interest expense, net |
|
(2.7 |
) |
|
|
(3.3 |
) |
|
|
(7.5 |
) |
|
|
(11.0 |
) |
Net foreign currency transaction (loss) gain |
|
(0.4 |
) |
|
|
(0.4 |
) |
|
|
0.1 |
|
|
|
0.5 |
|
Other (expense) income, net |
|
— |
|
|
|
(1.1 |
) |
|
|
0.2 |
|
|
|
(1.8 |
) |
Income before income taxes |
|
27.5 |
|
|
|
29.9 |
|
|
|
99.5 |
|
|
|
101.8 |
|
Income tax expense |
|
6.7 |
|
|
|
7.0 |
|
|
|
22.4 |
|
|
|
23.3 |
|
Net income |
$ |
20.8 |
|
|
$ |
22.9 |
|
|
$ |
77.1 |
|
|
$ |
78.5 |
|
|
|
|
|
|
|
|
|
||||||||
Net income per share |
|
|
|
|
|
|
|
||||||||
Basic |
$ |
1.11 |
|
|
$ |
1.23 |
|
|
$ |
4.10 |
|
|
$ |
4.25 |
|
Diluted |
$ |
1.09 |
|
|
$ |
1.21 |
|
|
$ |
4.03 |
|
|
$ |
4.19 |
|
|
|
|
|
|
|
|
|
||||||||
Weighted average shares outstanding |
|
|
|
|
|
|
|
||||||||
Basic |
|
18,810,267 |
|
|
|
18,570,293 |
|
|
|
18,790,824 |
|
|
|
18,485,806 |
|
Diluted |
|
19,093,873 |
|
|
|
18,878,311 |
|
|
|
19,120,455 |
|
|
|
18,747,128 |
|
GEOGRAPHICAL NET SALES(1) (Unaudited) |
|||||||||||||||||
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||||
|
2024 |
2023 |
|
% Change |
|
|
2024 |
|
2023 |
|
% Change |
||||||
|
$ |
218.7 |
|
$ |
211.2 |
|
3.6 |
% |
|
$ |
662.1 |
|
$ |
632.2 |
|
4.7 |
% |
|
|
76.3 |
|
|
72.0 |
|
6.0 |
% |
|
|
234.6 |
|
|
234.1 |
|
0.2 |
% |
|
|
20.8 |
|
|
21.5 |
|
(3.3 |
)% |
|
|
61.1 |
|
|
65.9 |
|
(7.3 |
)% |
Total |
$ |
315.8 |
|
$ |
304.7 |
|
3.6 |
% |
|
$ |
957.8 |
|
$ |
932.2 |
|
2.7 |
% |
(1) Net of intercompany sales. |
|||||||||||||||||
TENNANT COMPANY |
|||||||
CONSOLIDATED BALANCE SHEETS (Unaudited) |
|||||||
(In millions, except shares and per share data) |
September 30,
|
|
December 31,
|
||||
ASSETS |
|
|
|
||||
Cash, cash equivalents, and restricted cash |
$ |
91.3 |
|
|
$ |
117.1 |
|
Receivables, less allowances of |
|
260.2 |
|
|
|
247.6 |
|
Inventories |
|
201.8 |
|
|
|
175.9 |
|
Prepaid and other current assets |
|
40.6 |
|
|
|
28.5 |
|
Total current assets |
|
593.9 |
|
|
|
569.1 |
|
Property, plant and equipment, less accumulated depreciation of |
|
183.7 |
|
|
|
187.7 |
|
Operating lease assets |
|
52.1 |
|
|
|
41.7 |
|
Goodwill |
|
198.4 |
|
|
|
187.4 |
|
Intangible assets, net |
|
66.4 |
|
|
|
63.1 |
|
Other assets |
|
121.6 |
|
|
|
64.4 |
|
Total assets |
$ |
1,216.1 |
|
|
$ |
1,113.4 |
|
LIABILITIES AND EQUITY |
|
|
|
||||
Current portion of long-term debt |
$ |
0.6 |
|
|
$ |
6.4 |
|
Accounts payable |
|
128.0 |
|
|
|
111.4 |
|
Employee compensation and benefits |
|
59.4 |
|
|
|
67.3 |
|
Other current liabilities |
|
85.5 |
|
|
|
88.6 |
|
Total current liabilities |
|
273.5 |
|
|
|
273.7 |
|
Long-term debt |
|
208.6 |
|
|
|
194.2 |
|
Long-term operating lease liabilities |
|
35.2 |
|
|
|
27.4 |
|
Employee benefits |
|
13.8 |
|
|
|
13.3 |
|
Deferred income taxes |
|
7.9 |
|
|
|
5.0 |
|
Other liabilities |
|
28.6 |
|
|
|
21.5 |
|
Total long-term liabilities |
|
294.1 |
|
|
|
261.4 |
|
Total liabilities |
$ |
567.6 |
|
|
$ |
535.1 |
|
Common Stock, |
|
7.1 |
|
|
|
7.0 |
|
Additional paid-in capital |
|
76.8 |
|
|
|
64.9 |
|
Retained earnings |
|
608.6 |
|
|
|
547.4 |
|
Accumulated other comprehensive loss |
|
(45.3 |
) |
|
|
(42.3 |
) |
Total Tennant Company shareholders' equity |
|
647.2 |
|
|
|
577.0 |
|
Noncontrolling interest |
|
1.3 |
|
|
|
1.3 |
|
Total equity |
|
648.5 |
|
|
|
578.3 |
|
Total liabilities and total equity |
$ |
1,216.1 |
|
|
$ |
1,113.4 |
|
TENNANT COMPANY |
|||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) |
|||||||
(In millions) |
Nine Months Ended
|
||||||
|
2024 |
|
2023 |
||||
OPERATING ACTIVITIES |
|
|
|
||||
Net income |
$ |
77.1 |
|
|
$ |
78.5 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
||||
Depreciation expense |
|
29.6 |
|
|
|
26.4 |
|
Amortization expense |
|
11.4 |
|
|
|
11.0 |
|
Deferred income tax benefit |
|
(1.8 |
) |
|
|
(7.4 |
) |
Share-based compensation expense |
|
9.4 |
|
|
|
8.6 |
|
Bad debt and returns expense |
|
1.8 |
|
|
|
3.2 |
|
Other, net |
|
0.5 |
|
|
|
0.5 |
|
Changes in operating assets and liabilities: |
|
|
|
||||
Receivables |
|
(12.3 |
) |
|
|
7.9 |
|
Inventories |
|
(35.7 |
) |
|
|
3.5 |
|
Accounts payable |
|
17.9 |
|
|
|
(25.1 |
) |
Employee compensation and benefits |
|
(8.1 |
) |
|
|
18.3 |
|
Other assets and liabilities |
|
(37.6 |
) |
|
|
(0.8 |
) |
Net cash provided by operating activities |
|
52.2 |
|
|
|
124.6 |
|
INVESTING ACTIVITIES |
|
|
|
||||
Purchases of property, plant and equipment |
|
(11.5 |
) |
|
|
(15.3 |
) |
Purchase of investment |
|
(32.1 |
) |
|
|
— |
|
Payments made in connection with business acquisition, net of cash acquired |
|
(25.7 |
) |
|
|
— |
|
Investment in leased assets |
|
(0.4 |
) |
|
|
(0.5 |
) |
Cash received from leased assets |
|
0.6 |
|
|
|
0.6 |
|
Net cash used in investing activities |
|
(69.1 |
) |
|
|
(15.2 |
) |
FINANCING ACTIVITIES |
|
|
|
||||
Proceeds from borrowings |
|
40.0 |
|
|
|
20.0 |
|
Repayments of borrowings |
|
(32.5 |
) |
|
|
(98.7 |
) |
Payment of debt financing costs |
|
(2.2 |
) |
|
|
— |
|
Proceeds from exercise of stock options, net of employee tax withholdings obligations |
|
19.6 |
|
|
|
18.1 |
|
Repurchases of common stock |
|
(17.1 |
) |
|
|
(11.7 |
) |
Dividends paid |
|
(15.9 |
) |
|
|
(14.8 |
) |
Net cash used in financing activities |
|
(8.1 |
) |
|
|
(87.1 |
) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash |
|
(0.8 |
) |
|
|
(2.7 |
) |
Net (decrease) increase in cash, cash equivalents and restricted cash |
|
(25.8 |
) |
|
|
19.6 |
|
Cash, cash equivalents and restricted cash at beginning of period |
|
117.1 |
|
|
|
77.4 |
|
Cash, cash equivalents and restricted cash at end of period |
$ |
91.3 |
|
|
$ |
97.0 |
|
TENNANT COMPANY |
|||||||||||||||
SUPPLEMENTAL NON-GAAP FINANCIAL TABLES |
|||||||||||||||
Reported to Adjusted Net Income and Net Income Per Share |
|||||||||||||||
(In millions, except per share data) |
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
Net income - as reported |
$ |
20.8 |
|
$ |
22.9 |
|
$ |
77.1 |
|
$ |
78.5 |
||||
Adjustments: |
|
|
|
|
|
|
|
||||||||
Amortization expense |
|
2.6 |
|
|
2.5 |
|
|
8.4 |
|
|
7.9 |
||||
Restructuring-related charge (S&A expense) |
|
— |
|
|
— |
|
|
0.4 |
|
|
0.8 |
||||
ERP modernization costs (S&A expense) |
|
2.5 |
|
|
— |
|
|
7.0 |
|
|
— |
||||
Transaction and integration-related costs (S&A expense) |
|
0.7 |
|
|
— |
|
|
3.6 |
|
|
— |
||||
Net income - as adjusted |
$ |
26.6 |
|
$ |
25.4 |
|
$ |
96.5 |
|
$ |
87.2 |
||||
|
|
|
|
|
|
|
|
||||||||
Net income per share - as reported: |
|
|
|
|
|
|
|
||||||||
Diluted |
$ |
1.09 |
|
$ |
1.21 |
|
$ |
4.03 |
|
$ |
4.19 |
||||
Adjustments: |
|
|
|
|
|
|
|
||||||||
Amortization expense |
|
0.14 |
|
|
0.13 |
|
|
0.44 |
|
|
0.42 |
||||
Restructuring-related charge (S&A expense) |
|
— |
|
|
— |
|
|
0.02 |
|
|
0.04 |
||||
ERP modernization costs (S&A expense) |
|
0.13 |
|
|
— |
|
|
0.37 |
|
|
— |
||||
Transaction and integration-related costs (S&A expense) |
|
0.04 |
|
|
— |
|
|
0.19 |
|
|
— |
||||
Net income per diluted share - as adjusted |
$ |
1.39 |
|
$ |
1.34 |
|
$ |
5.05 |
|
$ |
4.65 |
||||
Reported Net Income to Adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization |
|||||||||||||||
(EBITDA) |
|||||||||||||||
(In millions) |
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
Net income - as reported |
$ |
20.8 |
|
|
$ |
22.9 |
|
|
$ |
77.1 |
|
|
$ |
78.5 |
|
Less: |
|
|
|
|
|
|
|
||||||||
Interest expense, net |
|
2.7 |
|
|
|
3.3 |
|
|
|
7.5 |
|
|
|
11.0 |
|
Income tax expense |
|
6.7 |
|
|
|
7.0 |
|
|
|
22.4 |
|
|
|
23.3 |
|
Depreciation expense |
|
10.1 |
|
|
|
9.2 |
|
|
|
29.6 |
|
|
|
26.4 |
|
Amortization expense |
|
3.6 |
|
|
|
3.5 |
|
|
|
11.4 |
|
|
|
11.0 |
|
EBITDA |
|
43.9 |
|
|
|
45.9 |
|
|
|
148.0 |
|
|
|
150.2 |
|
Adjustments: |
|
|
|
|
|
|
|
||||||||
Restructuring-related charge (S&A expense) |
|
— |
|
|
|
— |
|
|
|
0.6 |
|
|
|
1.2 |
|
ERP modernization costs (S&A expense) |
|
3.3 |
|
|
|
— |
|
|
|
9.2 |
|
|
|
— |
|
Transaction and integration-related costs (S&A expense) |
|
0.7 |
|
|
|
— |
|
|
|
3.6 |
|
|
|
— |
|
EBITDA - as adjusted |
$ |
47.9 |
|
|
$ |
45.9 |
|
|
$ |
161.4 |
|
|
$ |
151.4 |
|
EBITDA margin - as adjusted |
|
15.2 |
% |
|
|
15.1 |
% |
|
|
16.9 |
% |
|
|
16.2 |
% |
TENNANT COMPANY |
|||||||||||||||
SUPPLEMENTAL NON-GAAP FINANCIAL TABLES |
|||||||||||||||
Reported to Adjusted Selling and Administrative Expense (S&A expense) and Operating Income |
|||||||||||||||
(In millions) |
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
S&A expense - as reported |
$ |
92.7 |
|
|
$ |
88.2 |
|
|
$ |
275.5 |
|
|
$ |
256.9 |
|
S&A expense as a percent of net sales - as reported |
|
29.4 |
% |
|
|
28.9 |
% |
|
|
28.8 |
% |
|
|
27.6 |
% |
Adjustments: |
|
|
|
|
|
|
|
||||||||
Restructuring-related charge (S&A expense) |
|
— |
|
|
|
— |
|
|
|
(0.6 |
) |
|
|
(1.2 |
) |
ERP modernization costs (S&A expense) |
|
(3.3 |
) |
|
|
— |
|
|
|
(9.2 |
) |
|
|
— |
|
Transaction and integration-related costs (S&A expense) |
|
(0.7 |
) |
|
|
— |
|
|
|
(3.6 |
) |
|
|
— |
|
S&A expense - as adjusted |
$ |
88.7 |
|
|
$ |
88.2 |
|
|
$ |
262.1 |
|
|
$ |
255.7 |
|
S&A expense as a percent of net sales - as adjusted |
|
28.1 |
% |
|
|
28.9 |
% |
|
|
27.4 |
% |
|
|
27.4 |
% |
|
|
|
|
|
|
|
|
||||||||
Operating income - as reported |
$ |
30.6 |
|
|
$ |
34.7 |
|
|
$ |
106.7 |
|
|
$ |
114.1 |
|
Operating margin - as reported |
|
9.7 |
% |
|
|
11.4 |
% |
|
|
11.1 |
% |
|
|
12.2 |
% |
Adjustments: |
|
|
|
|
|
|
|
||||||||
Restructuring-related charge (S&A expense) |
|
— |
|
|
|
— |
|
|
|
0.6 |
|
|
|
1.2 |
|
ERP modernization costs (S&A expense) |
|
3.3 |
|
|
|
— |
|
|
|
9.2 |
|
|
|
— |
|
Transaction and integration-related costs (S&A expense) |
|
0.7 |
|
|
|
— |
|
|
|
3.6 |
|
|
|
— |
|
Operating income - as adjusted |
$ |
34.6 |
|
|
$ |
34.7 |
|
|
$ |
120.1 |
|
|
$ |
115.3 |
|
Operating margin - as adjusted |
|
11.0 |
% |
|
|
11.4 |
% |
|
|
12.5 |
% |
|
|
12.4 |
% |
Reported to Adjusted Income Before Income Taxes and Income Tax Expense |
|||||||||||||||
(In millions) |
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
Income before income taxes - as reported |
$ |
27.5 |
|
|
$ |
29.9 |
|
|
$ |
99.5 |
|
|
$ |
101.8 |
|
Adjustments: |
|
|
|
|
|
|
|
||||||||
Amortization expense |
|
3.6 |
|
|
|
3.5 |
|
|
|
11.4 |
|
|
|
11.0 |
|
Restructuring-related charge (S&A expense) |
|
— |
|
|
|
— |
|
|
|
0.6 |
|
|
|
1.2 |
|
ERP modernization costs (S&A expense) |
|
3.3 |
|
|
|
— |
|
|
|
9.2 |
|
|
|
— |
|
Transaction and integration-related costs (S&A expense) |
|
0.7 |
|
|
|
— |
|
|
|
3.6 |
|
|
|
— |
|
Income before income taxes - as adjusted |
$ |
35.1 |
|
|
$ |
33.4 |
|
|
$ |
124.3 |
|
|
$ |
114.0 |
|
|
|
|
|
|
|
|
|
||||||||
Income tax expense - as reported |
$ |
6.7 |
|
|
$ |
7.0 |
|
|
$ |
22.4 |
|
|
$ |
23.3 |
|
Effective tax rate - as reported |
|
24.4 |
% |
|
|
23.4 |
% |
|
|
22.5 |
% |
|
|
22.9 |
% |
Adjustments(1): |
|
|
|
|
|
|
|
||||||||
Amortization expense |
|
1.0 |
|
|
|
1.0 |
|
|
|
3.0 |
|
|
|
3.1 |
|
Restructuring-related charge (S&A expense) |
|
— |
|
|
|
— |
|
|
|
0.2 |
|
|
|
0.4 |
|
ERP modernization costs (S&A expense) |
|
0.8 |
|
|
|
— |
|
|
|
2.2 |
|
|
|
— |
|
Income tax expense - as adjusted |
$ |
8.5 |
|
|
$ |
8.0 |
|
|
$ |
27.8 |
|
|
$ |
26.8 |
|
Effective tax rate - as adjusted |
|
24.2 |
% |
|
|
24.0 |
% |
|
|
22.4 |
% |
|
|
23.5 |
% |
(1) In determining the tax impact, we applied the statutory rate in effect for each jurisdiction where income or expenses were generated. |
|||||||||||||||
TENNANT COMPANY |
|||||||||||||||
SUPPLEMENTAL NON-GAAP FINANCIAL TABLES |
|||||||||||||||
Free Cash Flow Conversion |
|||||||||||||||
(In millions) |
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
Net income - as reported |
$ |
20.8 |
|
|
$ |
22.9 |
|
|
$ |
77.1 |
|
|
$ |
78.5 |
|
Adjustments: |
|
|
|
|
|
|
|
||||||||
ERP modernization costs (S&A expense) |
|
2.5 |
|
|
|
— |
|
|
|
7.0 |
|
|
|
— |
|
Net income - as adjusted |
$ |
23.3 |
|
|
$ |
22.9 |
|
|
$ |
84.1 |
|
|
$ |
78.5 |
|
|
|
|
|
|
|
|
|
||||||||
Cash provided by operating activities - as reported |
$ |
30.7 |
|
|
$ |
54.4 |
|
|
$ |
52.2 |
|
|
$ |
124.6 |
|
Less: |
|
|
|
|
|
|
|
||||||||
Capital expenditures |
|
(4.3 |
) |
|
|
(3.5 |
) |
|
|
(11.5 |
) |
|
|
(15.3 |
) |
Free cash flows |
$ |
26.4 |
|
|
$ |
50.9 |
|
|
$ |
40.7 |
|
|
$ |
109.3 |
|
Adjustments: |
|
|
|
|
|
|
|
||||||||
ERP modernization spend |
|
9.4 |
|
|
|
— |
|
|
|
25.6 |
|
|
|
— |
|
Free cash flows - as adjusted |
$ |
35.8 |
|
|
$ |
50.9 |
|
|
$ |
66.3 |
|
|
$ |
109.3 |
|
|
|
|
|
|
|
|
|
||||||||
Net income to free cash flows conversion |
|
154 |
% |
|
|
222 |
% |
|
|
79 |
% |
|
|
139 |
% |
View source version on businesswire.com: https://www.businesswire.com/news/home/20241031628084/en/
INVESTOR RELATIONS CONTACT:
Lorenzo Bassi
Vice President, Finance and Investor Relations
investors@tennantco.com
763-540-1242
Source: Tennant Company
FAQ
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