Tennant’s ERP Launch Hurts Top, Bottom Lines

MINNEAPOLIS -- Tennant Company, a manufacturer of floor-care equipment and cleaning solutions, blamed production disruptions for fourth quarter results that fell short of the company’s expectations.

The company posted a fourth quarter loss of $4.4 million, or 23 cents a share, on sales of $291.6 million, compared to a profit of $6.6 million, or 36 cents a share, on sales of $328.9 million in the fourth quarter last year.

“Our fourth‑quarter performance fell short of expectations due to production disruptions during the North America ERP transition,” said Dave Huml, Tennant President and CEO. “We have taken targeted and decisive actions to stabilize operations, and we are seeing steady improvement across our core processes. As we continue to strengthen system performance and support our customers, we expect to return to a more normalized operating rhythm and predictable performance through the first half of 2026.

Tennant went live with its new ERP system in its largest region, North America, in the first week of November 2025. The transition introduced unexpected challenges that constrained operating capacity, including:

• Order‑management and fulfillment disruptions;
• Manufacturing scheduling issues and reduced inventory visibility, particularly in Parts and Consumables and Service;
• Slower transaction processing and prolonged customer delays;
• Customers experienced challenges as ERP‑related constraints in November limited our ability to fulfill orders or provide reliable shipment visibility. To help limit further customer impact, Tennant deployed cross‑functional recovery teams, implemented interim workarounds, increased on‑site ERP support, and prioritized production scheduling to restore throughput.

"While the near‑term impact from the ERP transition is meaningful, we are closely managing our recovery efforts and believe we will achieve the long-term benefits of this ERP modernization,” said Huml. “Our ERP investment will ultimately strengthen our operational foundation, enable scalable growth and operating efficiency, improve data consistency, and enhance how we serve customers. In addition to this digital transformation, we have continued to make investments in and executed on our growth strategies including the expansion of our robotics portfolio, targeted go‑to‑market initiative and strategic pricing actions.”

Fourth quarter net sales of $291.6 million, down 13.9 percent organically, reflect November shipment constraints, the lapping of prior‑year backlog reduction, as well as demand softness in our North America industrial business.

For the full year, net sales of $1.2 billion, including a 0.7% foreign currency tailwind, a 7.3% organic decline and below the $1.21–$1.25 billion guidance range, were primarily driven by fourth quarter results.

Net sales for the Americas division were $177.6 million in the fourth quarter, compared to $226 million in the same period last year.

Full year sales in the Americas was $792 million, compared to $888.5 million in 2024.

The company has assets of $1.268 billion, and liabilities of $665 million.