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Tennant Gains Momentum from First Quarter Sales Growth
Print Article Contributed by BSM Staff

MINNEAPOLIS -- Tennant Company, a provider of solutions that help create a cleaner, safer, healthier world, said it has “momentum” going into the rest of the year as organic sales rose by 6.5 percent in the first quarter.

The company reports a profit of $3.3 million, or 18 cents a share, on sales of $273 million, compared to a loss of $4 million, or 22 cents a share, on sales of $191 million in last year’s first quarter. 

The results reflect $2.3 million in pre-tax charges, or $0.09 per share, related to non-operational special items, including IPC acquisition integration costs.

Additionally, the 2018 first quarter results included a pre-tax charge of $5.5 million, or $0.22 per share, from amortization of the intangible assets related to the IPC acquisition. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) in the first quarter were $25.2 million, or 9.2 percent of sales, compared to $13.0 million, or 6.8 percent of sales, in the year-ago quarter.

“We are very pleased with our strong start to the year and are well positioned for additional momentum throughout the rest of 2018,” said Chris Killingstad, Tennant Company's president and CEO. “In the first quarter, we made important, ongoing progress against our growth and value-creation initiatives by improving field-service utilization and manufacturing efficiencies, introducing new products, developing strategic relationships to drive innovation, and executing on our sales strategy across all of our geographies, especially with our strategic accounts. We are confident in the platform we are building to enhance both top- and bottom-line performance, as well as the long-term success of the business.”

The 42.8 percent increase in profits over the same period last year includes a 33.2 percent increase due to acquisitions, a foreign currency benefit of 3.1 percent and a 6.5 percent increase in organic sales. Organic growth during the period was driven by all regions, particularly the Americas.

Geographically, sales in the Americas region improved 13.9 percent, up 8.2 percent organically, reflecting the impact of strategic accounts and improved sales in the company’s service, parts and consumables business in the North America region, as well as 11.4 percent organic growth in the Latin American region from strong growth in Brazil.

Sales in the Europe, Middle East and Africa (EMEA) region were up 166.9 percent, or 2.1 percent organically, reflecting solid growth in the France, Netherlands and Iberian markets, as well as strategic accounts. Sales in the Asia Pacific (APAC) region rose 42.5 percent, up 1.0 percent organically, reflecting strong results in Australia.

Research and development (R&D) expense for the 2018 first quarter totaled $8.0 million, or 2.9 percent of sales, versus $8.4 million, or 4.4 percent of sales, a year ago.

In 2018, Tennant Company plans to introduce new products and product variants to help drive its vitality index above the stated goal of 30 percent. So far this year, the company:

Launched its newest family of automatic scrubbers: the Tennant T600 Series. Each unit is designed with the latest in cleaning technology and innovation to deliver consistent, high-quality performance to exceed the needs of today’s facility managers and to deliver consistent results, reliable operation and quality assurance.

Announced its plans to launch its first autonomous floor care machine designed to operate in complex, real-world environments without direct operator control.

The first Tennant autonomous solution is expected to be available in North America on the T7 floor scrubber in late 2018 with further expansion into global markets and additional models to follow.

The company has assets of $1 billion, and liabilities of $708 million.