Net sales of $280.7 million, increase of 2.8
percent organically
Third-quarter GAAP net income of $14.6
million, or $0.79 diluted earnings per share; adjusted diluted EPS
of $0.63 per share
Adjusted EBITDA growth of 7.2% to $31.4
million, up 50 basis points to 11.2% of sales
Cash flow from operations of $35.3
million
Company updates 2019 guidance for net sales,
Adjusted EBITDA and EPS
Tennant Company (“Tennant”) (NYSE: TNC), a world leader in
designing, manufacturing and marketing of solutions that help
create a cleaner, safer, healthier world, today reported its
third-quarter 2019 results. Tennant Company reported net sales of
$280.7 million for the 2019 third quarter, representing a 2.7
percent improvement year over year. Excluding the impact of the
Company’s Gaomei acquisition and foreign currency, organic sales
grew 2.8 percent, led by solid growth in North and Latin America.
Net earnings were $14.6 million, or $0.79 per diluted share,
compared to $9.7 million, or $0.52 per diluted share, in the 2018
third quarter. Excluding non-operational items, adjusted net
earnings grew 15.8 percent to $11.7 million, or $0.63 per diluted
share, compared to $10.1 million, or $0.54 per diluted share, in
the 2018 third quarter. (See the Supplemental Non-GAAP Financial
Table.)
“During the third quarter, we continued to make progress across
our three strategic pillars—winning where we have competitive
advantage, reducing complexity and building scalable processes, and
building on our position as an innovation leader—to drive
profitable growth amid mixed economic and market conditions
worldwide,” said Chris Killingstad, Tennant Company’s president and
chief executive officer. “Sales growth in the quarter was driven by
continued strength in the Americas, partially offset by market
softness in Europe and Asia Pacific, and unfavorable currency
impacts. Demand for our autonomous cleaning machine, the T7 AMR,
also contributed to the quarterly sales performance. This
innovative robotic solution addresses the labor challenges faced by
an increasing number of our customers and demonstrates our
commitment to advancing our position as an innovation leader. Our
gross margin gains during the quarter reflect our ongoing operating
model improvement efforts, which substantially improved our cash
flow and EBITDA performance.”
Third-Quarter Operating
Review
Regional Sales Highlights
- Americas – Sales in the Americas rose 6.2 percent, and were up
6.7 percent organically, reflecting strong performance in North and
Latin America. North America growth was driven by demand for
Tennant’s autonomous cleaning machine, strength in the direct
channel related to industrial equipment, along with continued
growth in the service and parts and consumables businesses. Latin
America reported year-over-year organic growth for the ninth
consecutive quarter and was driven by strength in Mexico and South
America.
- EMEA – Sales in EMEA declined 6.2 percent, down 2.8 percent
organically, as a result of persistent market weakness across the
region, with specific sales weakness within the United Kingdom and
CEEMEA regions.
- APAC – Sales in APAC increased 5.1% while declining 9.4 percent
organically, primarily as a result of significant softening in
China.
Profitability Measures and Related Factors
- (See the Supplemental Non-GAAP Financial Table)
- Gross margin – Gross margin in the 2019 third quarter was 40.6
percent compared to 39.0 percent in the 2018 third quarter.
Adjusted gross margin in the 2019 third quarter was 40.8 percent, a
180-basis-point improvement year over year, reflecting pricing
actions, favorable geographic and channel mix, freight costs and
cost-reduction efforts, which more than offset the negative effect
of material inflation and tariffs.
- Adjusted EBITDA – Adjusted earnings before interest, taxes,
depreciation and amortization during the 2019 third quarter grew
7.2 percent, an improvement of 50 basis points, to 11.2 percent of
sales. (See the Supplemental Non-GAAP Financial Table.)
Cash Flow, Capital Allocation and Other
Items
During the quarter, Tennant generated cash flow from operations
of $35.3 million, primarily driven by strong business performance
and improved collections of outstanding account receivables. During
the same period, the company reduced its outstanding debt by $12.0
million and paid $4.0 million in cash dividends to
shareholders.
2019 Business Outlook
“Looking to the fourth quarter, we are lowering our top-line
expectations as a result of softening global market conditions,”
added Killingstad. “At the same time, as a result of the success of
our operating model improvement efforts, we are raising our EPS and
EBITDA guidance ranges. We remain focused on our three strategic
pillars with an ultimate goal of achieving reasonable growth,
improving EBITDA margin and driving shareholder value.”
For 2019, Tennant revised its previously provided guidance as
follows:
- Net sales of $1.135 billion to $1.145 billion, reflecting
organic sales growth of 1.8 to 2.6 percent;
- GAAP earnings in the range of $2.40 to $2.50 per diluted
share;
- Adjusted EPS of $2.80 to $2.90 per diluted share;
- Adjusted EBITDA of $134 million to $136 million;
- Capital expenditures in the range of $30 million to $35
million; and
- An effective tax rate of approximately 16 percent.
Conference Call
The company will host a conference call to discuss its
third-quarter results at 10:00 a.m. Central Time on Wednesday,
October 30. The company’s earnings release will be issued before
the call and will be posted at investors.tennantco.com under News
and Events, Press Releases. To listen to the live call and view the
accompanying slide presentation, go to investors.tennantco.com at least 10 minutes before
the scheduled start time and, if necessary, download and install
audio software. A taped replay of the conference call with slides
will also be posted at investors.tennantco.com.
Company Profile
Founded in 1870, Tennant Company (TNC), headquartered in
Minneapolis, Minnesota, is a world leader in designing,
manufacturing and marketing solutions that empower customers to
achieve quality cleaning performance, reduce their environmental
impact and help create a cleaner, safer, healthier world. Its
products include equipment for maintaining surfaces in industrial,
commercial and outdoor environments; detergent-free and other
sustainable cleaning technologies; cleaning tools and supplies; and
coatings for protecting, repairing and upgrading surfaces.
Tennant's global field service network is the most extensive in the
industry. Tennant Company had sales of $1.12 billion in 2018 and
has approximately 4,300 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. The Tennant Company logo and
other trademarks designated with the symbol “®” are trademarks of
Tennant Company registered in the United States and/or other
countries.
Forward-Looking
Statements
Certain statements contained in this document, as well as other
written and oral statements made by us from time to time, 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: our ability to effectively develop and manage strategic
planning and growth processes and the related operational plans;
our ability to successfully upgrade and evolve our information
technology systems; fluctuations in the cost, quality or
availability of raw materials and purchased components;
geopolitical and economic uncertainty throughout the world; our
ability to attract, retain and develop key personnel and create
effective succession planning strategies; our ability to develop
and commercialize new innovative products and services; our ability
to integrate acquisitions, including IPC and Gaomei; the
competition in our business; our ability to successfully protect
our information technology systems from cybersecurity risks; the
potential disruption of our business from actions of activist
investors or others; the occurrence of a significant business
interruption; our ability to comply with laws and regulations;
unforeseen product liability claims or product quality issues; our
ability to generate sufficient cash to satisfy our debt
obligations; and the relative strength of the U.S. dollar, which
affects the cost of our materials and products purchased and sold
internationally.
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. Information
about factors that could materially affect our results can be found
in our 2018 Form 10-K or 2019 Form 10-Qs. 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.
We undertake 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 us in our 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. 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.
We believe that disclosing Gross Profit – as adjusted, Gross
Margin – as adjusted, Selling and Administrative Expense – as
adjusted, Selling and Administrative Expense as a percent of Net
Sales – as adjusted, Profit from Operations – as adjusted,
Operating Margin – as adjusted, Profit Before Income Taxes – as
adjusted, Income Tax Expense – as adjusted, Net Earnings
Attributable to Tennant Company – as adjusted and Net Earnings
Attributable to Tennant Company per Share – as adjusted
(collectively, the “Non-GAAP Measures”), excluding the impacts from
the discontinuation of product lines, acquisition and integration
costs, certain non-operational professional services, restructuring
charges and a note receivable write down are useful to investors as
a measure of operating performance. We use these as one measure to
monitor and evaluate operating performance. The non-GAAP measures
are financial measures that do not reflect United States Generally
Accepted Accounting Principles (GAAP). We calculate Gross Profit –
as adjusted, Gross Margin – as adjusted, Selling and Administrative
Expense – as adjusted, Selling and Administrative Expense as a
percent of Net Sales – as adjusted, Profit from Operations – as
adjusted, Operating Margin – as adjusted, and Profit Before Income
Taxes – as adjusted by adding back the pre-tax effect of the
discontinuation of product lines, acquisition and integration
costs, certain non-operational professional services, restructuring
charges and a note receivable write down. We calculate Income Tax
Expense – as adjusted by adding back the tax effect of the
discontinuation of product lines, acquisition and integration
costs, certain non-operational professional services, restructuring
charges and a note receivable write down. We calculate Net Earnings
Attributable to Tennant Company – as adjusted by adding back the
after-tax effect of the discontinuation of product lines,
acquisition and integration costs, certain non-operational
professional services, restructuring charges and a note receivable
write down. We calculate Net Earnings Attributable to Tennant
Company per Share – as adjusted by adding back the after-tax effect
of the discontinuation of product lines, acquisition and
integration costs, certain non-operational professional services,
restructuring charges and a note receivable write down, and
dividing the result by the diluted weighted average shares
outstanding.
We believe that disclosing Earnings Before Interest, Taxes,
Depreciation and Amortization (EBITDA) and EBITDA Margin, excluding
the impact from the discontinuation of product lines, acquisition
and integration costs, certain non-operational professional
services, restructuring charges, and a note receivable write down
(EBITDA – as adjusted) and EBITDA Margin – as adjusted, is useful
to investors as a measure of operating performance. We use these
measures to monitor and evaluate operating performance. EBITDA – as
adjusted and EBITDA Margin – as adjusted are financial measures
that do not reflect GAAP. We calculate EBITDA – as adjusted by
adding back the pre-tax effect of the discontinuation of product
lines, acquisition and integration costs, certain non-operational
professional services, restructuring charges, and a note receivable
write down, Interest Income, Interest Expense, Income Tax Expense,
Depreciation Expense and Amortization Expense to Net Earnings
(Loss) – as reported. We calculate EBITDA Margin – as adjusted by
dividing EBITDA – as adjusted by Net Sales.
Investors should consider these non-GAAP financial measures in
addition to, not as a substitute for, or better than, financial
measures prepared in accordance with GAAP. Reconciliations of the
components of these measures to the most directly comparable GAAP
financial measures are included in the Supplemental Non-GAAP
Financial Table to this earnings release.
TENNANT COMPANY CONSOLIDATED STATEMENTS
OF EARNINGS (Unaudited)
(In millions, except shares and per share
data)
Three Months Ended
Nine Months Ended
September 30
September 30
2019
2018
2019
2018
Net Sales
$
280.7
$
273.3
$
842.8
$
838.3
Cost of Sales
166.7
166.7
499.8
505.4
Gross Profit
114.0
106.6
343.0
332.9
Gross Margin
40.6%
39.0%
40.7%
39.7%
Operating Expense:
Research and Development Expense
8.2
7.5
23.8
23.4
Selling and Administrative Expense
84.3
83.7
267.0
264.7
Total Operating Expense
92.5
91.2
290.8
288.1
Profit from Operations
21.5
15.4
52.2
44.8
Operating Margin
7.7%
5.6%
6.2%
5.3%
Other Income (Expense):
Interest Income
0.8
0.8
2.5
2.5
Interest Expense
(5.2)
(6.0)
(15.7)
(17.7)
Net Foreign Currency Transaction
Losses
(0.6)
(0.3)
(0.6)
(1.4)
Other Income (Expense), Net
0.1
—
1.4
(0.8)
Total Other Expense, Net
(4.9)
(5.5)
(12.4)
(17.4)
Profit Before Income Taxes
16.6
9.9
39.8
27.4
Income Tax Expense
2.0
0.2
5.0
1.6
Net Earnings Including Noncontrolling
Interest
14.6
9.7
34.8
25.8
Net Earnings Attributable to
Noncontrolling interest
—
—
—
0.1
Net Earnings Attributable to Tennant
Company
$
14.6
$
9.7
$
34.8
$
25.7
Net Earnings Attributable to Tennant
Company per Share:
Basic
$
0.81
$
0.54
$
1.93
$
1.43
Diluted
$
0.79
$
0.52
$
1.89
$
1.40
Weighted Average Shares Outstanding:
Basic
18,134,909
17,998,917
18,086,962
17,911,880
Diluted
18,487,948
18,439,621
18,402,929
18,344,813
GEOGRAPHICAL NET SALES(1)
(Unaudited)
(In millions)
Three Months Ended
Nine Months Ended
September 30
September 30
2019
2018
%
2019
2018
%
Americas
$
186.1
$
175.3
6.2
$
536.4
$
516.7
3.8
Europe, Middle East and Africa
69.7
74.3
(6.2)
228.6
250.5
(8.7)
Asia Pacific
24.9
23.7
5.1
77.8
71.1
9.4
Total
$
280.7
$
273.3
2.7
$
842.8
$
838.3
0.5
(1) Net of intercompany sales.
TENNANT COMPANY
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In millions)
September 30,
December 31,
2019
2018
ASSETS
Current Assets:
Cash, Cash Equivalents and Restricted
Cash
$
71.7
$
86.1
Receivables:
Trade, less Allowances of $3.2 and $2.5,
respectively
204.9
208.0
Other
7.8
8.2
Net Receivables
212.7
216.2
Inventories
160.9
135.1
Prepaid and Other Current Assets
34.2
31.2
Total Current Assets
479.5
468.6
Property, Plant and Equipment
411.6
386.6
Accumulated Depreciation
(244.1)
(223.2)
Property, Plant and Equipment, Net
167.5
163.4
Operating Lease Assets
46.2
—
Goodwill
185.4
182.7
Intangible Assets, Net
139.5
146.5
Other Assets
27.0
31.3
Total Assets
$
1,045.1
$
992.5
LIABILITIES AND TOTAL EQUITY
Current Liabilities:
Current Portion of Long-Term Debt
$
20.2
$
27.0
Accounts Payable
93.9
98.4
Employee Compensation and Benefits
52.9
56.1
Other Current Liabilities
102.9
67.4
Total Current Liabilities
269.9
248.9
Long-Term Liabilities:
Long-Term Debt
322.2
328.1
Long-Term Operating Lease Liabilities
29.8
—
Employee-Related Benefits
19.5
21.1
Deferred Income Taxes
42.4
46.0
Other Liabilities
21.5
32.1
Total Long-Term Liabilities
435.4
427.3
Total Liabilities
705.3
676.2
Equity:
Common Stock
6.8
6.8
Additional Paid-In Capital
39.7
28.5
Retained Earnings
339.1
316.3
Accumulated Other Comprehensive Loss
(47.3)
(37.2)
Total Tennant Company Shareholders’
Equity
338.3
314.4
Noncontrolling Interest
1.5
1.9
Total Equity
339.8
316.3
Total Liabilities and Total Equity
$
1,045.1
$
992.5
TENNANT COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In millions)
Nine Months Ended
September 30
2019
2018
OPERATING ACTIVITIES
Net Earnings Including Noncontrolling
Interest
$
34.8
$
25.8
Adjustments to reconcile Net Earnings to
Net Cash Provided by Operating Activities:
Depreciation
24.0
24.1
Amortization of Intangible Assets
16.6
17.4
Amortization of Debt Issuance Costs
1.0
1.9
Fair Value Step-Up Adjustment to Acquired
Inventory
0.9
—
Deferred Income Taxes
(2.7)
(9.9)
Share-Based Compensation Expense
8.7
6.0
Allowance for Doubtful Accounts and
Returns
1.6
0.8
Acquisition Contingent Consideration
Adjustment
(1.8)
—
Note Receivable Write-down
2.7
—
Other, Net
(0.7)
(0.5)
Changes in Operating Assets and
Liabilities, Net of Assets Acquired:
Receivables, Net
(0.8)
(0.3)
Inventories
(31.4)
(19.5)
Accounts Payable
(2.3)
(1.8)
Employee Compensation and Benefits
(0.8)
4.2
Other Current Liabilities
(0.8)
(0.2)
Other Assets and Liabilities
(2.8)
(4.4)
Net Cash Provided by Operating
Activities
46.2
43.6
INVESTING ACTIVITIES
Purchases of Property, Plant and
Equipment
(28.3)
(12.7)
Proceeds from Disposals of Property, Plant
and Equipment
0.1
0.1
Proceeds from Principal Payments Received
on Long-Term Note Receivable
0.1
0.8
Acquisition of Business, Net of Cash, Cash
Equivalents and Restricted Cash Acquired
(8.9)
—
Proceeds from Sale of Business
—
4.0
Purchase of Intangible Assets
(0.5)
(2.6)
Net Cash Used in Investing Activities
(37.5)
(10.4)
FINANCING ACTIVITIES
Proceeds from Credit Facility
Borrowings
25.0
—
Repayments of Debt
(37.9)
(30.2)
Change in Finance Lease Obligations
(0.2)
—
Proceeds from Issuances of Common
Stock
2.8
5.7
Purchase of Noncontrolling Owner
Interest
(0.5)
—
Dividends Paid
(12.0)
(11.3)
Net Cash Used in Financing Activities
(22.8)
(35.8)
Effect of Exchange Rate Changes on Cash,
Cash Equivalents and Restricted Cash
(0.3)
(2.3)
Net Decrease in Cash, Cash Equivalents and
Restricted Cash
(14.4)
(4.9)
Cash, Cash Equivalents and Restricted Cash
at Beginning of Period
86.1
59.0
Cash, Cash Equivalents and Restricted Cash
at End of Period
$
71.7
$
54.1
TENNANT COMPANY
SUPPLEMENTAL NON-GAAP FINANCIAL
TABLE
(In millions, except per share data)
Three Months Ended
Nine Months Ended
September 30
September 30
2019
2018
2019
2018
Gross Profit - as reported
$
114.0
$
106.6
$
343.0
$
332.9
Gross Margin - as reported
40.6%
39.0%
40.7%
39.7%
Adjustments:
Discontinuation of Product Lines
0.4
—
2.8
—
Inventory Step-Up
—
—
0.9
—
Gross Profit - as adjusted
$
114.4
$
106.6
$
346.7
$
332.9
Gross Margin - as adjusted
40.8%
39.0%
41.1%
39.7%
Selling and Administrative Expense - as
reported
$
84.3
$
83.7
$
267.0
$
264.7
Selling and Administrative Expense as a
percent of Net Sales - as reported
30.0%
30.6%
31.7%
31.6%
Adjustments:
Acquisition and Integration Costs (S&A
Expense)
(0.6)
(1.5)
(2.0)
(5.4)
Gain on Sale of Business
—
1.0
—
1.0
Professional Services
—
(0.3)
(0.1)
(1.8)
Restructuring Charge
—
—
(4.3)
—
Note Receivable Write-down
—
—
(2.7)
—
Acquisition Contingent Consideration
Adjustment
3.8
—
1.8
—
Selling and Administrative Expense - as
adjusted
$
87.5
$
82.9
$
259.7
$
258.5
Selling and Administrative Expense as a
percent of Net Sales - as adjusted
31.2%
30.3%
30.8%
30.8%
Profit from Operations - as reported
$
21.5
$
15.4
$
52.2
$
44.8
Operating Margin - as reported
7.7%
5.6%
6.2%
5.3%
Adjustments:
Discontinuation of Product Lines
0.4
—
2.8
—
Inventory Step-Up
—
—
0.9
—
Acquisition and Integration Costs (S&A
Expense)
0.6
1.5
2.0
5.4
Gain on Sale of Business
—
(1.0)
—
(1.0)
Professional Services
—
0.3
0.1
1.8
Restructuring Charge
—
—
4.3
—
Note Receivable Write-down
—
—
2.7
—
Acquisition Contingent Consideration
Adjustment
(3.8)
—
(1.8)
—
Profit from Operations - as adjusted
$
18.7
$
16.2
$
63.2
$
51.0
Operating Margin - as adjusted
6.7%
5.9%
7.5%
6.1%
Profit Before Income Taxes - as
reported
$
16.6
$
9.9
$
39.8
$
27.4
Adjustments:
Discontinuation of Product Lines
0.4
—
2.8
—
Inventory Step-Up
—
—
0.9
—
Acquisition and Integration Costs (S&A
Expense)
0.6
1.5
2.0
5.4
Gain on Sale of Business
—
(1.0)
—
(1.0)
Acquisition and Integration Costs (Other
Income, Net)
—
—
(1.8)
—
Professional Services
—
0.3
0.1
1.8
Restructuring Charge
—
—
4.3
—
Note Receivable Write-down
—
—
2.7
—
Acquisition Contingent Consideration
Adjustment
(3.8)
—
(1.8)
—
Profit Before Income Taxes - as
adjusted
$
13.8
$
10.7
$
49.0
$
33.6
TENNANT COMPANY
SUPPLEMENTAL NON-GAAP FINANCIAL
TABLE
(In millions, except per share data)
Three Months Ended
Nine Months Ended
September 30
September 30
2019
2018
2019
2018
Income Tax Expense - as reported
$
2.0
$
0.2
$
5.0
$
1.6
Adjustments:
Discontinuation of Product Lines(1)
—
—
0.6
—
Tax Rate Legislation and Mandatory
Repatriation
—
0.4
—
0.4
Inventory Step-Up(1)
—
—
0.2
—
Acquisition and Integration Costs (S&A
Expense)(1)
0.1
0.2
0.4
1.1
Gain on Sale of Business
—
(0.2)
—
(0.2)
Acquisition and Integration Costs (Other
Income, Net)(1)
—
—
—
—
Professional Services(1)
—
—
—
0.4
Restructuring Charge(1)
—
—
1.2
—
Note Receivable Write-down(1)
—
—
—
—
Acquisition Contingent Consideration
Adjustment(1)
—
—
—
—
Income Tax Expense - as adjusted
$
2.1
$
0.6
$
7.4
$
3.3
Net Earnings Attributable to Tennant
Company - as reported
$
14.6
$
9.7
$
34.8
$
25.7
Adjustments:
Discontinuation of Product Lines
0.4
—
2.2
—
Tax Rate Legislation and Mandatory
Repatriation
—
(0.4)
—
(0.4)
Inventory Step-Up
—
—
0.7
—
Acquisition and Integration Costs (S&A
Expense)
0.5
1.3
1.6
4.2
Gain on Sale of Business
—
(0.8)
—
(0.8)
Acquisition and Integration Costs (Other
Income, Net)
—
—
(1.8)
—
Professional Services
—
0.3
0.1
1.4
Restructuring Charge
—
—
3.1
—
Note Receivable Write-down
—
—
2.7
—
Acquisition Contingent Consideration
Adjustment
(3.8)
—
(1.8)
—
Net Earnings Attributable to Tennant
Company - as adjusted
$
11.7
$
10.1
$
41.6
$
30.1
Net Earnings Attributable to Tennant
Company per Share - as reported:
Diluted
$
0.79
$
0.52
$
1.89
$
1.40
Adjustments:
Discontinuation of Product Lines
0.02
—
0.12
—
Tax Rate Legislation and Mandatory
Repatriation
—
(0.02)
—
(0.02)
Inventory Step-Up
—
—
0.04
—
Acquisition and Integration Costs (S&A
Expense)
0.03
0.07
0.09
0.23
Gain on Sale of Business
—
(0.04)
—
(0.04)
Acquisition and Integration Costs (Other
Income, Net)
—
—
(0.10)
—
Professional Services
—
0.01
—
0.07
Restructuring Charge
—
—
0.17
—
Note Receivable Write-down
—
—
0.15
—
Acquisition Contingent Consideration
Adjustment
(0.21)
—
(0.10)
—
Net Earnings Attributable to Tennant
Company per Share - as adjusted
$
0.63
$
0.54
$
2.26
$
1.64
(1) In determining the tax impact, we
applied the statutory rate in effect for each jurisdiction where
expenses were incurred and deductible for tax purposes.
TENNANT COMPANY
SUPPLEMENTAL NON-GAAP FINANCIAL
TABLE
(In millions, except per share data)
Three Months Ended
Nine Months Ended
September 30
September 30
2019
2018
2019
2018
Net Earnings Including Noncontrolling
Interest - as reported
$
14.6
$
9.7
$
34.8
$
25.8
Adjustments:
Interest Income
(0.8)
(0.8)
(2.5)
(2.5)
Interest Expense
5.2
6.0
15.7
17.7
Income Tax Expense
2.0
0.2
5.0
1.6
Depreciation Expense
8.1
7.7
24.0
24.0
Amortization Expense
5.1
5.7
16.6
17.4
Discontinuation of Product Lines
0.4
—
2.8
—
Inventory Step-Up
—
—
0.9
—
Acquisition and Integration Costs (S&A
Expense)
0.6
1.5
2.0
5.4
Gain on Sale of Business
—
(1.0)
—
(1.0)
Acquisition and Integration Costs (Other
Income, Net)
—
—
(1.8)
—
Professional Services
—
0.3
0.1
1.8
Restructuring Charge
—
—
4.3
—
Note Receivable Write-down
—
—
2.7
—
Acquisition Contingent Consideration
Adjustment
(3.8)
—
(1.8)
—
Earnings Before Interest, Taxes,
Depreciation & Amortization - as adjusted
$
31.4
$
29.3
$
102.8
$
90.2
EBITDA Margin - as adjusted
11.2%
10.7%
12.2%
10.8%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20191030005124/en/
INVESTOR CONTACT: Keith A. Woodward Senior Vice President and
Chief Financial Officer keith.woodward@tennantco.com
763-540-1205
William Prate Director, Investor Relations
william.prate@tennantco.com 763-540-1547
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