Tennant Announces Cost-Reduction Actions
Third Quarter to Include Severance Charge of $1.9 Million, $0.21 Per Share
MINNEAPOLIS, Oct. 8 /PRNewswire-FirstCall/ -- Tennant Company (NYSE:TNC) said
today that it is taking actions to permanently reduce costs as part of a
continuing effort to improve profitability. The actions include the
elimination of a net 65 management and administrative positions company-wide on
a base of approximately 2,500 employees. The workforce reductions will result
in a severance charge of approximately $1.9 million after tax, or $0.21 per
diluted share, which the company is recognizing in its third quarter ended
September 30, 2004. The workforce reductions are expected to produce net
annualized savings totaling $2 million to $3 million pre-tax in 2005,
increasing to $4 million to $5 million pre-tax in 2006 and beyond.
Taking into account the third quarter severance charge, Tennant now expects to
report earnings per diluted share of $1.34 to $1.49 for the full year.
Excluding the third quarter severance charge, this revised forecast of 2004
earnings per diluted share is within the lower half of the company's previous
full year guidance of $1.55 to $1.85.
The company also said that earnings per diluted share for the 2004 third
quarter, including the severance charge, are expected to range from $0.07 to
$0.10. Excluding the severance charge, earnings per diluted share for the 2004
third quarter are expected to range from $0.28 to $0.31. In the comparable
2003 period, the company reported net earnings of $3.3 million, or $0.36 per
diluted share. Third quarter net earnings were dampened by soft volume early
in the quarter, higher than expected steel and petroleum-related materials
costs, and increased selling and administrative expenses, including higher
marketing costs for products being launched in the second half of 2004 and
Sarbanes-Oxley compliance costs.
"The actions we took during the third quarter reflect our previously stated
commitment to complement revenue growth initiatives with concerted efforts to
leverage our cost structure to improve our overall profitability," said Janet
M. Dolan, Tennant Company's president and chief executive officer. "While sales
volume is recovering, we are further reducing our overall cost structure to
achieve our economic profit goals and fund our growth initiatives." Tennant plans to report results for the 2004 third quarter on October 21,
before the start of trading on the New York Stock Exchange. The company will
conduct a conference call to discuss the results at 10:00 a.m. Central Time on
October 21. The company's results announcement will be issued before the call
and will be posted to the Tennant Web site, http://www.tennantco.com/ . The
conference call will be available via webcast on the investor portion of
Tennant's Web site. To listen to the call live on the web, go to
http://www.tennantco.com/ at least 15 minutes before the scheduled start time
and, if necessary, download and install audio software. A taped replay of the
conference call will also be available at http://www.tennantco.com/ for about
two weeks after the call ends.
Company Profile Minneapolis-based Tennant Company (NYSE:TNC) is a world leader in designing,
manufacturing and marketing solutions that help create a cleaner, safer world.
Its products include equipment for maintaining surfaces in industrial,
commercial and outdoor environments; and coatings for protecting, repairing and
upgrading concrete floors. Tennant's global field service network is the most
extensive in the industry. Tennant has manufacturing operations in
Minneapolis, Minn., Holland, Mich., Uden, The Netherlands and Northampton,
United Kingdom and sells products directly in 15 countries and through
distributors in more than 50 countries. For more information, visit
http://www.tennantco.com/ .
This news release contains statements that 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 we serve. Particular risks
and uncertainties presently facing us include: the potential for soft markets
in certain regions, including North America, Asia, Latin America and Europe;
geo-political and economic uncertainty throughout the world; changes in laws
and regulations, including changes in accounting standards, taxation changes,
and the potential repeal of the foreign export benefit; inflationary pressures;
the potential for increased competition in our business; the relative strength
of the U.S. dollar, which affects the cost of our products sold
internationally; fluctuations in the cost or availability of raw materials; the
success and timing of new products; our ability to achieve projections of
future financial and operating results; successful integration of acquisitions;
the ability to achieve operational efficiencies, including synergistic and
other benefits of acquisitions; unforeseen product quality problems; the
effects of litigation, including threatened or pending litigation; and our
plans for growth. We caution 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. 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. For additional information about factors that
could materially affect Tennant's results, please see the company's Securities
and Exchange Commission filings.
We do not undertake to update any forward-looking statement, and investors are
advised to consult any further disclosures by us on this matter in our filings
with the Securities and Exchange Commission and in other written statements we
make from time to time. It is not possible to anticipate or foresee all risk
factors, and investors should not consider that any list of such factors to be
an exhaustive or complete list of all risks or uncertainties. DATASOURCE: Tennant Company CONTACT: Investors, Tony Brausen, Vice President, Chief Financial Officer & Treasurer, +1-763-540-1553, or Media, Kathryn Lovik, Corporate Communications Manager, +1-763-540-1212, both for Tennant Company Web site: http://www.tennantco.com/
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