Delivers Robust Growth of 13.9% in Net Sales
and 65.2% in Net Income
Achieves Strong Net Income to Free Cash Flow
Conversion
Introduces Full-Year Guidance for
2024
Tennant Company (“Tennant” or the “Company”) (NYSE: TNC) today
reported its fourth-quarter and full-year financial results for
2023.
(In millions, except per share data)
Three Months Ended
December 31,
Twelve Months Ended
December 31,
2023
2022
% Change
2023
2022
% Change
Net sales
$
311.4
$
291.0
7.0
%
$
1,243.6
$
1,092.2
13.9
%
Net income
$
31.0
$
23.8
30.3
%
$
109.5
$
66.3
65.2
%
Diluted EPS
$
1.64
$
1.27
29.1
%
$
5.83
$
3.55
64.2
%
Adjusted diluted EPS
$
1.92
$
1.46
31.5
%
$
6.57
$
4.10
60.2
%
Adjusted EBITDA
$
41.5
$
41.7
(0.5
)%
$
192.9
$
133.7
44.3
%
Adjusted EBITDA margin %
13.3
%
14.3
%
(100 bps)
15.5
%
12.2
%
330 bps
Highlights
- Delivered record full-year net sales of $1,243.6 million,
marking a 13.9% increase from 2022. Organic growth of 13.6% driven
by growth across all geographies and product categories.
- Fourth-quarter net sales increased 7.0% to $311.4 million.
Organic growth of 5.4% resulted from price realization across all
geographies.
- Achieved full-year adjusted EBITDA of $192.9 million, a 44.3%
increase compared to 2022. Full-year adjusted EBITDA margin of
15.5% improved by 330 basis points, driven by strong sales growth
and improved gross margins.
- Generated full-year operating cash flow of $188.4 million.
Represents a $213.5 million increase compared to 2022 enabling the
Company to return over $40 million of capital to shareholders in
2023 through dividends and share repurchases. Strengthened
financial position by repaying $100.0 million of debt during 2023.
The Company's net leverage ratio reduced to 0.43x adjusted
EBITDA.
- Introduced the T1581 Ride-on Scrubber in January – Tennant's
newest addition to its product portfolio – a medium-sized floor
cleaning machine designed to revolutionize light industrial
cleaning and demonstrates Tennant Company's commitment to
innovation and providing its customers a comprehensive portfolio of
solutions to solve their cleaning challenges.
- Signed an exclusive technology agreement in February with Brain
Corp to fuel the next generation of AI-enabled robotic cleaning
technologies, enhance customer Return on Investment, and accelerate
Autonomous Mobile Robotic ("AMR") revenue growth.
“We are pleased to report Tennant's strong fourth-quarter
results, continuing the trend of positive results over the past six
quarters," said Dave Huml, Tennant president and chief executive
officer. "Our full-year results represent record achievements for
the company in terms of net sales, adjusted EBITDA and EBITDA
margin. We saw full-year organic growth across all geographies and
product categories as our price realization effectively offset
inflationary pressures. The exceptional teamwork and dedication
displayed across the company, particularly in efforts to
meaningfully reduce backlog, have been pivotal to our success this
year."
"As we enter 2024, our strategic focus centers on our new
enterprise strategy," continued Huml. "We are targeting to deliver
long-term revenue growth, expand margins, and continue to generate
strong cash flow. We have already begun to activate specific growth
initiatives in the areas of new product innovation, expanded
go-to-market strategies and disciplined pricing. We are excited
about our position and have confidence in our ability to drive
sustained long-term growth."
Net Sales Results
Consolidated net sales for the fourth quarter 2023 totaled
$311.4 million, a 7.0% increase compared to $291.0 million in the
fourth quarter of 2022. Consolidated net sales for the full year
2023 totaled $1,243.6 million, a 13.9% increase compared to
$1,092.2 million in 2022. The components of the consolidated net
sales change were as follows:
Three Months Ended December
31,
Twelve Months Ended December
31,
2023 vs. 2022
2023 vs. 2022
Price
5.9%
8.7%
Volume
(0.5)%
4.9%
Organic growth
5.4%
13.6%
Foreign currency
1.6%
0.3%
Total growth
7.0%
13.9%
Organic Sales
Organic sales, which excludes the effects of foreign currency,
grew in both the fourth quarter and full year 2023 compared to
2022. This growth was driven by price realization across all
regions and by volume growth in equipment sales, particularly in
the Americas. At December 31, 2023, the Company's backlog was
approximately $186 million, a reduction of $28 million in the
fourth quarter and $140 million for the full year.
Three Months Ended December
31, 2023
Twelve Months Ended December
31, 2023
Americas
EMEA
APAC
Total
Americas
EMEA
APAC
Total
Organic net sales growth
7.3
%
(0.6
)%
9.6
%
5.4
%
18.9
%
2.6
%
8.6
%
13.6
%
Americas: The 7.3% growth in the Americas during the fourth
quarter resulted from price realization in North America partially
offset by volume declines. The 18.9% growth during the full year
was driven equally by price realization and increased volume across
all geographies.
EMEA: The 0.6% decline in EMEA during the fourth quarter was
driven by volume declines in equipment sales partially offset by
growth in parts and consumables and service. The 2.6% increase
during the full year was propelled by price realization in all
product categories, though EMEA volumes were impacted by
weaker-than-expected market conditions.
APAC: The 9.6% increase in APAC during the fourth quarter and
8.6% increase during the full year were driven by price realization
in Australia and volume increases in Australia and China.
Operating Results
Gross profit margin increased to 42.0% in the fourth quarter, a
240-basis-point improvement from 2022. Adjusted gross profit margin
increased to 42.2% in the fourth quarter of 2023, a 250-basis-point
improvement from 2022. For the full year 2023, gross profit margin
increased to 42.4% compared to 38.5% in 2022. Adjusted gross profit
margin increased to 42.5% for the full year 2023, a 390-basis-point
improvement compared to 2022. The increase in both periods was
driven primarily by price realization, but also cost-out activities
and plant productivity, which offset inflation in the year.
In the fourth quarter of 2023, selling and administrative
("S&A") expense as a percentage of sales increased to 30.7%, up
from 27.2% in 2022. Adjusted S&A expense as a percentage of
sales for the fourth quarter 2023 increased to 29.9%, up from 27.0%
in 2022. Full-year S&A expense as a percentage of sales
increased to 28.4% in 2023, compared to 28.0% in 2022. Adjusted
S&A expense as a percentage of sales increased to 28.0% in
2023, compared to 27.9% in 2022. Rate increases in both periods
were primarily attributed to higher variable costs linked to
improved operating performance as well as strategic investments to
deliver future growth.
Adjusted EBITDA was $41.5 million in the fourth quarter of 2023,
down slightly compared to $41.7 million in 2022. Adjusted EBITDA
margin for the fourth quarter 2023 was 13.3%, a 100-basis-point
decline from 2022. The decline was primarily driven by higher
variable costs linked to improved operating performance, strategic
growth investments within S&A, and elevated research and
development (R&D) expense due to timing of project spend.
Adjusted EBITDA was $192.9 million for the full year 2023,
compared to $133.7 million in the prior-year period. The
improvement in adjusted EBITDA was primarily due to strong sales
growth, driven by both volume and price, and gross margin
expansion. Adjusted EBITDA margin was 15.5% in 2023, a
330-basis-point increase over the prior-year period benefiting from
operating leverage created by sales growth.
Net income was $31.0 million in the fourth quarter of 2023, a
$7.2 million increase compared to the fourth quarter of 2022. The
increase was primarily driven by a lower effective tax rate due to
a discrete nonrecurring and noncash item. Net income for the full
year 2023 was $109.5 million, an increase of $43.2 million compared
to 2022. The increase was primarily driven by favorable operating
results and a lower tax rate discussed above partly offset by
higher interest expense.
Cash Flow, Capital Allocation and
Liquidity
Cash generated from operations for the full year 2023 totaled
$188.4 million, a $213.5 million increase compared to 2022. The
increase was driven by strong operating performance and moderating
investments in working capital. The Company converted 150% of net
income to free cash flow in 2023.
Liquidity remained strong with a balance of $117.1 million in
cash and cash equivalents as of the end of 2023 and $336.8 million
of unused borrowing capacity on the Company’s revolving credit
facility.
The Company continues to allocate capital with a disciplined
approach and consistent priorities, which include making strategic
investments in our business to drive long-term profitable growth,
returning cash to shareholders through dividends and share
repurchases, and managing within our debt leverage goals. The
Company invested $22.8 million in capital expenditures and reduced
outstanding debt by $100.0 million in 2023. The Company returned
$41.8 million to shareholders through a combination of $20.1
million in dividends and repurchasing 290,920 shares for $21.7
million.
Guidance
The Company is introducing full-year 2024 guidance.
"Building on the momentum of a record 2023, our focus in 2024 is
on rigorous execution in the first year of our new enterprise
growth strategy, continuing to meaningfully reduce backlog,
allocating capital in line with our stated capital priorities, and
actively pursuing accretive acquisitions aligned to our M&A
strategy," said Huml.
For the full year 2024, the Company is targeting organic net
sales growth between 2% and 4% split equally between price and
volume growth. The year-over-year growth reflects an expected
reduction in backlog between $80 and $100 million for the full year
2024 compared to $140 million in 2023. The Company expects
continued strong price realization and cost-out activities to
favorably impact gross margins and will remain disciplined in
spending, focusing on areas that position it for growth and
enhanced operating efficiencies.
(In millions except per share data)
2024 Guidance
Range
Net sales
$1,270 - $1,295
Organic net sales growth
2.0 % - 4.0 %
Adjusted diluted net income per share*
$6.05 - $6.65
Adjusted EBITDA*
$198 - $213
Adjusted EBITDA margin*
15.6 % - 16.4 %
Capital expenditures*
$20 - $25
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 2023
fourth-quarter and full-year results today, February 22, 2024, at
10 a.m. Central Time (11 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 home page. A replay of the conference call,
with slides, will be available at investors.tennantco.com.
About Tennant Company
Founded in 1870, Tennant Company (NYSE: TNC), headquartered in
Eden Prairie, Minnesota, is a world leader in the design,
manufacture and marketing of solutions that help create a cleaner,
safer and healthier world. Its innovative products include
equipment for maintaining surfaces in industrial, commercial and
outdoor environments; detergent-free and other sustainable cleaning
technologies; and cleaning tools and supplies. Tennant's global
field service network is the most extensive in the industry.
Tennant Company had sales of $1.24 billion in 2023 and has
approximately 4,457 employees. Tennant has manufacturing operations
throughout the world and sells products directly in 15 countries
and through distributors in more than 100 countries. For more
information, visit www.tennantco.com and www.ipcworldwide.com.
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: geopolitical and economic uncertainty throughout the
world; uncertainty surrounding the impacts and duration of the
COVID-19 pandemic; the Company's ability to comply with global laws
and regulations; the Company's ability to adapt to customer pricing
sensitivities; the competition in the Company's business;
fluctuations in the cost, quality or availability of raw materials
and purchased components; the Company's ability to adjust pricing
to respond to 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 our 2023 Form 10-K, when filed.
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 gross profit – as adjusted,
gross margin – as adjusted, 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 use 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 gain on sale of
assets, restructuring-related charges, acquisition-contingent
consideration, loss on extinguishment of debt, 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
December 31,
Twelve Months Ended
December 31,
2023
2022
2023
2022
Net sales
$
311.4
$
291.0
$
1,243.6
$
1,092.2
Cost of sales
180.6
175.8
715.8
671.3
Gross profit
130.8
115.2
527.8
420.9
Selling and administrative expense
95.7
79.2
352.6
306.3
Research and development expense
10.6
7.6
36.6
31.1
Gain on sale of assets
—
—
—
(3.7
)
Operating income
24.5
28.4
138.6
87.2
Interest expense, net
(2.5
)
(3.4
)
(13.5
)
(7.1
)
Net foreign currency transaction (loss)
gain
(0.2
)
(0.8
)
0.3
(1.2
)
Other income (expense), net
0.2
0.5
(1.6
)
0.6
Income before income taxes
22.0
24.7
123.8
79.5
Income tax (benefit) expense
(9.0
)
0.9
14.3
13.2
Net income
$
31.0
$
23.8
$
109.5
$
66.3
Net income per share
Basic
$
1.67
$
1.29
$
5.92
$
3.58
Diluted
$
1.64
$
1.27
$
5.83
$
3.55
Weighted average shares outstanding
Basic
18,579,763
18,490,547
18,509,523
18,494,356
Diluted
18,906,887
18,685,605
18,783,633
18,697,255
GEOGRAPHICAL NET SALES(1)
(Unaudited)
Three Months Ended
December 31,
Twelve Months Ended
December 31,
2023
2022
% Change
2023
2022
% Change
Americas
$
208.1
$
193.2
7.7
%
$
840.3
$
705.9
19.0
%
Europe, Middle East and Africa
80.3
76.6
4.8
%
314.4
301.6
4.2
%
Asia Pacific
23.0
21.2
8.5
%
88.9
84.7
5.0
%
Total
$
311.4
$
291.0
7.0
%
$
1,243.6
$
1,092.2
13.9
%
(1) Net of intercompany sales.
TENNANT COMPANY
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In millions)
December 31
2023
2022
ASSETS
Cash, cash equivalents, and restricted
cash
$
117.1
$
77.4
Receivables, less allowances of $7.2 and
$6.1, respectively
247.6
251.5
Inventories
175.9
206.6
Prepaid and other current assets
28.5
39.8
Total current assets
569.1
575.3
Property, plant and equipment, less
accumulated depreciation of $304.0 and $279.3, respectively
187.7
179.9
Operating lease assets
41.7
31.8
Goodwill
187.4
182.0
Intangible assets, net
63.1
76.4
Other assets
64.4
39.7
Total assets
$
1,113.4
$
1,085.1
LIABILITIES AND TOTAL EQUITY
Current portion of long-term debt
$
6.4
$
5.2
Accounts payable
111.4
126.1
Employee compensation and benefits
67.3
44.0
Other current liabilities
88.6
86.3
Total current liabilities
273.7
261.6
Long-term debt
194.2
295.1
Long-term operating lease liabilities
27.4
17.1
Employee-related benefits
13.3
13.2
Deferred income taxes
5.0
11.5
Other liabilities
21.5
14.5
Total long-term liabilities
261.4
351.4
Total liabilities
535.1
613.0
Common stock, $0.375 par value per share,
60,000,000 shares authorized; 18,631,384 and 18,521,485 issued and
outstanding, respectively
7.0
7.0
Additional paid-in capital
64.9
56.0
Retained earnings
547.4
458.0
Accumulated other comprehensive loss
(42.3
)
(50.2
)
Total Tennant Company shareholders'
equity
577.0
470.8
Noncontrolling interest
1.3
1.3
Total equity
578.3
472.1
Total liabilities and total equity
$
1,113.4
$
1,085.1
TENNANT COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In millions)
Years ended December 31
2023
2022
OPERATING ACTIVITIES
Net income
$
109.5
$
66.3
Adjustments to reconcile net income to net
cash provided by (used in) operating activities:
Depreciation expense
36.4
32.8
Amortization expense
14.7
15.9
Deferred income tax benefit
(26.9
)
(15.6
)
Share-based compensation expense
11.6
7.8
Bad debt and returns expense
3.4
2.3
Gain on sale of assets
—
(3.7
)
Other, net
1.3
1.0
Changes in operating assets and
liabilities:
Receivables
4.1
(46.3
)
Inventories
14.3
(68.3
)
Accounts payable
(15.3
)
7.7
Employee compensation and benefits
22.3
(14.8
)
Other assets and liabilities
13.0
(10.2
)
Net cash provided by (used in) operating
activities
188.4
(25.1
)
INVESTING ACTIVITIES
Purchases of property, plant and
equipment
(22.8
)
(25.0
)
Other, net
—
0.1
Proceeds from sale of assets, net of cash
divested
—
4.1
Investment in leased assets
(1.2
)
(4.3
)
Cash received from leased assets
0.8
0.6
Net cash used in investing activities
(23.2
)
(24.5
)
FINANCING ACTIVITIES
Proceeds from borrowings
20.0
52.0
Repayments of borrowings
(120.0
)
(19.1
)
Change in finance lease obligations
0.2
—
Proceeds (repurchases) from exercise of
stock options, net of employee tax withholdings obligations
19.0
(0.9
)
Dividends paid
(20.1
)
(18.9
)
Repurchases of common stock
(21.7
)
(5.0
)
Net cash (used in) provided by financing
activities
(122.6
)
8.1
Effect of exchange rate changes on cash,
cash equivalents and restricted cash
(2.9
)
(4.7
)
Net increase (decrease) in cash, cash
equivalents and restricted cash
39.7
(46.2
)
Cash, cash equivalents and restricted cash
at beginning of year
77.4
123.6
Cash, cash equivalents and restricted
cash at end of year
$
117.1
$
77.4
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 December
31,
Twelve Months Ended December
31,
2023
2022
2023
2022
Net income - as reported
$
31.0
$
23.8
$
109.5
$
66.3
Adjustments:
Gain on sale of assets
—
—
—
(2.8
)
Amortization expense
2.7
2.7
10.6
11.5
Restructuring-related charge (Cost of
sales)
0.5
0.2
0.5
0.2
Restructuring-related charge (S&A
expense)
0.8
0.5
1.6
1.3
ERP modernization (S&A expense)
1.2
—
1.2
—
Net income - as adjusted
$
36.2
$
27.2
$
123.4
$
76.5
Net income per share - as
reported:
Diluted
$
1.64
$
1.27
$
5.83
$
3.55
Adjustments:
Gain on sale of assets
—
—
—
(0.15
)
Amortization expense
0.14
0.15
0.56
0.62
Restructuring-related charge (Cost of
sales)
0.03
0.01
0.03
0.01
Restructuring-related charge (S&A
expense)
0.05
0.03
0.09
0.07
ERP modernization (S&A expense)
0.06
—
0.06
—
Net income per diluted share - as
adjusted
$
1.92
$
1.46
$
6.57
$
4.10
TENNANT COMPANY
SUPPLEMENTAL NON-GAAP FINANCIAL
TABLES Reported Net Income to Adjusted Earnings Before
Interest, Taxes, Depreciation, and Amortization (EBITDA)
(In millions)
Three Months Ended December
31,
Twelve Months Ended December
31,
2023
2022
2023
2022
Net income - as reported
$
31.0
$
23.8
$
109.5
$
66.3
Less:
Interest expense, net
2.5
3.4
13.5
7.1
Income tax expense
(9.0
)
0.9
14.3
13.2
Depreciation expense
10.0
8.8
36.4
32.8
Amortization expense
3.7
3.8
14.7
15.9
EBITDA
$
38.2
$
40.7
$
188.4
$
135.3
Adjustments:
Gain on sale of assets
—
—
—
(3.7
)
Restructuring-related charge (Cost of
sales)
0.7
0.3
0.7
0.3
Restructuring-related charge (S&A
expense)
1.0
0.7
2.2
1.8
ERP modernization (S&A expense)
1.6
—
1.6
—
EBITDA - as adjusted
$
41.5
$
41.7
$
192.9
$
133.7
EBITDA margin - as adjusted
13.3
%
14.3
%
15.5
%
12.2
%
TENNANT COMPANY
SUPPLEMENTAL NON-GAAP FINANCIAL
TABLES Reported to Adjusted Gross Profit, Selling and
Administrative Expense (S&A expense) and Operating
Income
(In millions)
Three Months Ended December
31,
Twelve Months Ended December
31,
2023
2022
2023
2022
Gross profit - as reported
$
130.8
$
115.2
$
527.8
$
420.9
Gross margin - as reported
42.0
%
39.6
%
42.4
%
38.5
%
Adjustments:
Restructuring-related charge (Cost of
sales)
0.7
0.3
0.7
0.3
Gross profit - as adjusted
$
131.5
$
115.5
$
528.5
$
421.2
Gross margin - as adjusted
42.2
%
39.7
%
42.5
%
38.6
%
S&A expense - as reported
$
95.7
$
79.2
$
352.6
$
306.3
S&A expense as a percent of net sales
- as reported
30.7
%
27.2
%
28.4
%
28.0
%
Adjustments:
Restructuring-related charge (S&A
expense)
(1.0
)
(0.7
)
(2.2
)
(1.8
)
ERP modernization (S&A expense)
(1.6
)
—
(1.6
)
—
S&A expense - as adjusted
$
93.1
$
78.5
$
348.8
$
304.5
S&A expense as a percent of net sales
- as adjusted
29.9
%
27.0
%
28.0
%
27.9
%
Operating income - as reported
$
24.5
$
28.4
$
138.6
$
87.2
Operating margin - as reported
7.9
%
9.8
%
11.1
%
8.0
%
Adjustments:
Restructuring-related charge (Cost of
sales)
0.7
0.3
0.7
0.3
Gain on sale of assets
—
—
—
(3.7
)
Restructuring-related charge (S&A
expense)
1.0
0.7
2.2
1.8
ERP modernization (S&A expense)
1.6
—
1.6
—
Operating income - as adjusted
$
27.8
$
29.4
$
143.1
$
85.6
Operating margin - as adjusted
8.9
%
10.1
%
11.5
%
7.8
%
TENNANT COMPANY
SUPPLEMENTAL NON-GAAP FINANCIAL
TABLES Reported to Adjusted Income Before Income Taxes and
Income Tax Expense
(In millions)
Three Months Ended December
31,
Twelve Months Ended December
31,
2023
2022
2023
2022
Income before income taxes - as
reported
$
22.0
$
24.7
$
123.8
$
79.5
Adjustments:
Gain on sale of assets
—
—
—
(3.7
)
Amortization expense
3.7
3.8
14.7
15.9
Restructuring-related charge (Cost of
sales)
0.7
0.3
0.7
0.3
Restructuring-related charge (S&A
expense)
1.0
0.7
2.2
1.8
ERP modernization (S&A expense)
1.6
—
1.6
—
Income before income taxes - as
adjusted
$
29.0
$
29.5
$
143.0
$
93.8
Income tax expense - as
reported
$
(9.0
)
$
0.9
$
14.3
$
13.2
Effective tax rate - as reported
(40.9
)%
3.6
%
11.6
%
16.6
%
Adjustments(1):
Gain on sale of assets
—
—
(0.9
)
Amortization expense
1.0
1.1
4.1
4.4
Restructuring-related charge (Cost of
sales)
0.2
0.1
0.2
0.1
Restructuring-related charge (S&A
expense)
0.2
0.2
0.6
0.5
ERP modernization (S&A expense)
0.4
—
0.4
—
Income tax expense - as
adjusted
$
(7.2
)
$
2.3
$
19.6
$
17.3
Effective tax rate - as adjusted
(24.8
)%
7.8
%
13.7
%
18.4
%
(1) In determining the tax impact, we
applied the statutory rate in effect for each jurisdiction where
income or expenses were generated.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240222924212/en/
INVESTOR RELATIONS CONTACT: Lorenzo Bassi Vice President,
Finance and Investor Relations investors@tennantco.com
763-540-1242
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