Company Operations - Tennant Company operates 11 global manufacturing locations across the Americas, EMEA, and APAC regions[16]. - The company has a diverse product portfolio including manual and mechanized cleaning equipment, sustainable cleaning technologies, and aftermarket parts[17]. - As of December 31, 2023, Tennant Company employed approximately 4,457 employees[25]. Financial Performance - Consolidated net sales in 2023 totaled $1,243.6 million, a 13.9% increase compared to $1,092.2 million in 2022[105]. - Gross profit margin improved to 42.4% in 2023 from 38.5% in 2022, reflecting a decrease in the cost of sales as a percentage of net sales[105]. - Operating income increased to $138.6 million in 2023, representing an operating margin of 11.1%, up from 8.0% in 2022[105]. - Net income for 2023 was $109.5 million, an increase of 65.0% compared to $66.3 million in 2022[105]. - Basic net income per share increased to $5.92 in 2023, up from $3.58 in 2022, demonstrating strong earnings growth[175]. - Comprehensive income for 2023 was $117.4 million, compared to $54.0 million in 2022, indicating overall financial health improvement[177]. - Total equity as of December 31, 2023, was $577.0 million, up from $470.8 million in 2022, reflecting an increase of 22.6%[183]. Research and Development - Research and development expenses are crucial for product innovation and enhancing existing product functionality[21]. - Research and development expenses increased to $36.6 million in 2023, up from $31.1 million in 2022, reflecting a commitment to innovation[105]. - Research and Development expenses were $36.6 million in 2023, representing 2.9% of net sales, remaining nearly flat compared to 2022[114]. Market and Competitive Environment - The company faces potential adverse impacts from geopolitical tensions and public health epidemics, which have historically affected economic markets and supply chains[48]. - Competitive pressures and macroeconomic factors, such as inflation, may hinder the company's ability to achieve pricing targets, affecting demand and gross margins[50]. - The company is at risk of losing market share if it cannot compete effectively with lower-priced products from competitors, which could lead to declines in sales volume and revenues[51]. Supply Chain and Cost Management - The company has experienced cost inflation and supply constraints for raw materials, prompting local manufacturing and sourcing strategies[19]. - Supply chain disruptions and increased costs of raw materials and labor could negatively impact operating results and financial condition[54]. - The company continues to adapt to supply chain challenges by employing local-for-local manufacturing strategies to contain costs[100]. - The company is focused on mitigating future raw material cost increases through supplier negotiations and supply chain optimization[148]. Employee and Governance - Women represent 50% of the executive management team and 33% of the Board of Directors as of December 31, 2023[33]. - The most recent gender wage gap assessment indicated that the median total income for females was 99.6% of that for males, suggesting no significant gender pay gap[34]. Shareholder Returns - The company paid cash dividends for 79 consecutive years, with a 2023 annual cash dividend payout of $1.075 per share, a $0.06 increase over 2022[90]. - During the twelve months ended December 31, 2023, the company repurchased 290,920 shares of its common stock for $21.7 million[91]. - The company has a repurchase program authorized by the Board of Directors, allowing the repurchase of up to 821,413 shares of common stock[203]. Risk Management - Cybersecurity threats pose risks to critical data and business operations, potentially resulting in financial loss and reputational damage[65]. - The company has not encountered any cybersecurity incidents that materially impaired its operations or financial standing[78]. - Increased compliance costs and legal risks arise from the complex international regulatory environment, potentially eroding profit margins[49]. Asset and Liability Management - Cash, cash equivalents, and restricted cash totaled $117.1 million at December 31, 2023, compared to $77.4 million at the end of 2022[122]. - The effective tax rate decreased to 11.6% in 2023 from 16.6% in 2022, primarily due to nonrecurring tax items[118]. - The company reported a decrease in long-term debt to $194.2 million in 2023 from $295.1 million in 2022, reflecting improved financial leverage[179]. International Operations - Net sales in the Americas reached $840.3 million in 2023, a 19.0% increase from 2022, with organic sales growing 18.9% driven by price realization and increased volume[108]. - EMEA net sales were $314.4 million in 2023, up 4.2% from 2022, with organic sales growth of 2.6% despite lower volumes due to weaker market conditions[109]. - APAC net sales totaled $88.9 million in 2023, a 5.0% increase from 2022, with organic sales growing 8.6% driven by price realization and volume increases in Australia and China[110].

Exhibit 99 Tennant Company Reports Record 2023 Fourth-Quarter and Full-Year Results 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 MINNEAPOLIS, MN (Feb. 22, 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 | | | | Twelve Months Ended | | | ...

Tennant Company (NYSE:TNC) Q3 2023 Earnings Conference Call October 31, 2023 11:00 AM ET Company Participants Lorenzo Bassi - Vice President, Finance and Investor Relations Dave Huml - President and Chief Executive Officer Fay West - Senior Vice President and Chief Financial Officer Conference Call Participants Chris Moore - CJS Steve Ferazani - Sidoti Tim Moore - EF Hutton Operator Good morning. My name is Krista, and I'll be your conference operator today. At this time, I would like to welcome everyone to ...

| --- | --- | --- | |-------|-------|-------| | | | | | | | | | | | | | | | | 2 Forward-Looking Statements & Non-GAAP Measures 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. The ...

Financial Performance - Consolidated net sales for Q3 2023 reached $304.7 million, a 15.9% increase from $262.9 million in Q3 2022[85] - Organic sales growth for Q3 2023 was 13.9%, primarily driven by equipment sales growth in the Americas and APAC[86] - Gross profit margin for Q3 2023 was 43.3%, up 500 basis points from Q3 2022, attributed to pricing realization offsetting inflation impacts[92] - Americas net sales for Q3 2023 were $211.2 million, a 21.4% increase from Q3 2022, driven by organic sales growth[88] - EMEA net sales for Q3 2023 were $72.0 million, a 4.3% increase from Q3 2022, reflecting stable demand in the region[89] - APAC net sales for Q3 2023 were $21.5 million, an 8.0% increase from Q3 2022, supported by price realization and volume growth[89] Expenses and Costs - Selling and administrative expenses for Q3 2023 were $88.2 million, an increase of $16.8 million compared to Q3 2022, with S&A as a percentage of net sales rising to 28.9%[94] - Research and development expenses for Q3 2023 were $9.1 million, maintaining 3.0% of net sales, indicating continued investment in innovation[96] - Interest expense for Q3 2023 was $3.3 million, up from $2.2 million in Q3 2022, due to higher interest rates on variable interest debt[98] - Interest expense for the third quarter of 2023 was $4.3 million, up from $2.2 million in the third quarter of 2022, reflecting increased borrowing costs[99] Cash Flow and Financing - Cash, cash equivalents, and restricted cash totaled $97.0 million at September 30, 2023, an increase from $77.4 million at December 31, 2022[104] - Net cash provided by operating activities during the nine months ended September 30, 2023, was $124.6 million, compared to a net cash used of $38.8 million in the same period of 2022[106] - Net cash used in financing activities was $87.1 million for the nine months ended September 30, 2023, significantly higher than $1.2 million in the same period of 2022, primarily due to share repurchases[108] Debt and Capital Structure - The weighted average outstanding borrowings as of September 30, 2023, were $262.4 million, with an average interest rate of 6.48%, compared to 3.34% in the same period of 2022[99] - The company had a debt-to-capital ratio of 28.9% as of September 30, 2023, down from 38.9% at December 31, 2022, indicating improved capital structure[104] - The company has $120 million in notional amount of interest rate swaps to manage floating rate debt exposure, with a fixed interest rate of 4.076%[99] Tax and Currency - The effective tax rate for the third quarter of 2023 was 23.4%, up from 21.2% in the third quarter of 2022, mainly due to a decrease in discrete tax benefits[101] - The net foreign currency transaction loss was $0.4 million in Q3 2023, compared to less than $0.1 million in Q3 2022, primarily due to the strengthening of the U.S. dollar[100] Outlook and Market Conditions - The company remains confident in long-term growth trends despite ongoing global economic volatility and supply chain challenges[83] - The order backlog decreased to $213.9 million as of September 30, 2023, from $326.4 million at December 31, 2022, due to improved component availability and production levels[103]

Financial Data and Key Metrics Changes - The company achieved record net sales of $321.7 million in Q2 2023, representing a 14.8% increase year-over-year or 15% on an organic basis [19] - Gross margins expanded to 43.4%, an improvement of 550 basis points compared to the prior year [22] - Adjusted EBITDA was $57.6 million, an increase of $27.3 million versus the prior year, with an adjusted EBITDA margin of 17.9% [21][22] - Net income increased to $31.3 million, up $14.7 million from the prior year [17] Business Line Data and Key Metrics Changes - Equipment sales grew 18.1% year-over-year, contributing significantly to overall sales growth [21] - Parts and consumables, as well as service and other categories, also experienced growth compared to the prior year [21] Market Data and Key Metrics Changes - Net sales in the Americas grew 21.4% to $216.6 million, driven by strong equipment and parts sales [20] - EMEA net sales increased 3.5% to $80 million, primarily due to price realization despite volume declines [20] - Asia-Pacific region saw a 2.4% increase in net sales to $25.1 million, driven by price realization in Australia and volume growth in China [20] Company Strategy and Development Direction - The company is focused on reducing backlog and improving production efficiency, with a goal to further reduce backlog in the second half of the year [9][26] - New product innovations include the launch of the S680 and S880 ride-on sweepers and the T16 AMR floor scrubber, aimed at enhancing market reach and customer satisfaction [12][14] - The company has introduced a sustainability framework, aiming for net zero greenhouse gas emissions by 2040 and increasing diversity in leadership roles [15][16] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding inflation and the global economy, anticipating continued demand resilience [11][26] - The company raised its full-year guidance, expecting net sales to be in the range of $1.2 billion to $1.25 billion, reflecting organic sales growth of 10% to 14% [28] - Management noted that while backlog remains elevated, it is concentrated in North America, particularly in industrial products [26] Other Important Information - The company reported a cash balance of $95.8 million and $261.9 million of unused borrowing capacity at the end of Q2 [25] - Capital expenditures were approximately $5 million, in line with expectations, and the company returned capital to shareholders through dividends and share repurchases [24][25] Q&A Session Summary Question: What is the optimal backlog range? - Management indicated that a normal backlog is around $50 million, with current backlog at $255 million, expected to reduce to around $200 million by year-end [30] Question: How did orders in Q2 year-over-year look? - Orders were described as surprisingly resilient, with sequential orders flat, and management is closely monitoring them as an indication of underlying demand [31] Question: Are there capacity constraints affecting guidance? - Management clarified that there are no capacity constraints, but backlog is concentrated in fewer production lines, making it more challenging to reduce [35][36] Question: What is the status of the Asia-Pacific market? - Management noted strong performance in Australia and New Zealand, but expressed caution regarding softening demand in China due to macroeconomic conditions [39][40] Question: How is the aftermarket service model performing? - Management emphasized the importance of service as part of an integrated ecosystem, investing in service capabilities and technician training to enhance customer experience [43][45] Question: What is the status of the equipment as a service model? - Management reported success in specific regions with the equipment as a service model and is exploring opportunities to scale it profitably [47][49] Question: Any updates on M&A strategy? - Management is actively engaged in defining its M&A strategy, assessing potential opportunities for value creation, and plans to provide more details in upcoming quarters [51][52]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Table of Contents For the quarterly period ended June 30, 2023 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________ to __________ Commission File Number 1-16191 __________________________________________ TENNANT COMPANY (Exact name of registrant as specifi ...

Tennant Company (NYSE:TNC) Q1 2023 Results Conference Call April 28, 2022 10:00 AM ET Company Participants Lorenzo Bassi - Vice President of Finance Dave Huml - President and Chief Executive Officer Fay West - Senior Vice President and Chief Financial Officer Conference Call Participants Christopher Moore - CJS Securities Steve Ferazani - Sidoti Tim Moore - EF Hutton Brett Kearney - Gabelli Funds Operator Good morning. My name is Devon and I will be your conference operator today. At this time, I would like ...

PART I - FINANCIAL INFORMATION [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents Tennant Company's unaudited consolidated financial statements for Q1 2023 and 2022, including income, balance sheets, cash flows, equity, and detailed accounting notes [Consolidated Statements of Income](index=4&type=section&id=Consolidated%20Statements%20of%20Income) Q1 2023 saw significant growth in net sales, gross profit, operating income, and net income, with diluted EPS rising to **$1.30** from **$0.55** year-over-year Q1 2023 vs Q1 2022 Income Statement Highlights | Metric | Q1 2023 (In millions) | Q1 2022 (In millions) | YoY Change | | :--- | :--- | :--- | :--- | | Net Sales | $305.8 | $258.1 | +18.5% | | Gross Profit | $125.5 | $98.9 | +26.9% | | Operating Income | $35.9 | $14.6 | +145.9% | | Net Income | $24.3 | $10.3 | +135.9% | | Diluted EPS | $1.30 | $0.55 | +136.4% | [Consolidated Balance Sheets](index=6&type=section&id=Consolidated%20Balance%20Sheets) As of March 31, 2023, total assets increased to **$1.1 billion**, total liabilities marginally decreased, and total equity rose to **$493.2 million** from **$472.1 million** at year-end 2022 Balance Sheet Summary | Metric (In millions) | March 31, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Total Current Assets | $582.4 | $575.3 | | Total Assets | $1,100.7 | $1,085.1 | | Total Current Liabilities | $256.8 | $261.6 | | Long-term Debt | $293.8 | $295.1 | | Total Liabilities | $607.5 | $613.0 | | Total Equity | $493.2 | $472.1 | [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Q1 2023 operating cash flow significantly improved to **$31.1 million** from a **$10.1 million** use in Q1 2022, driven by higher net income and better working capital management Cash Flow Summary (Q1 2023 vs Q1 2022) | Activity (In millions) | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $31.1 | $(10.1) | | Net cash used in investing activities | $(6.8) | $(8.6) | | Net cash (used in) provided by financing activities | $(10.3) | $8.3 | | Net increase (decrease) in cash | $14.0 | $(13.2) | [Notes to Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) These notes detail significant accounting policies, revenue disaggregation, debt structure, and derivative instruments, highlighting strong revenue growth across all regions and product categories Q1 Net Sales by Geographic Area (In millions) | Region | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | Americas | $204.4 | $160.3 | | Europe, Middle East and Africa | $82.1 | $78.7 | | Asia Pacific | $19.4 | $19.1 | | **Total** | **$305.8** | **$258.1** | Q1 Net Sales by Product/Service (In millions) | Category | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | Equipment | $186.4 | $158.1 | | Parts and consumables | $73.4 | $60.6 | | Service and other | $46.0 | $39.4 | | **Total** | **$305.8** | **$258.1** | - As of March 31, 2023, total debt outstanding was **$299.1 million**, with **$242.3 million** of unused borrowing capacity on the revolving credit facility[52](index=52&type=chunk)[53](index=53&type=chunk) - The company uses interest rate swaps to manage floating rate debt exposure, with an aggregate notional amount of **$120 million** effective December 1, 2022, exchanging a variable rate for a fixed rate of **4.076%**[60](index=60&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=24&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes strong Q1 2023 performance to **21.0%** organic sales growth, driven by price and volume, with gross profit margin improving to **41.0%** due to effective pricing [Results of Operations](index=25&type=section&id=Results%20of%20Operations) Q1 2023 consolidated net sales increased **18.5%** to **$305.8 million**, driven by **21.0%** organic growth, with gross margin expanding to **41.0%** and operating income rising to **$35.9 million** Components of Consolidated Net Sales Change (Q1 2023 vs. Q1 2022) | Component | Percentage Change | | :--- | :--- | | Price | 10.7% | | Volume | 10.3% | | **Organic growth** | **21.0%** | | Foreign currency | (2.5)% | | **Total growth** | **18.5%** | - Gross profit margin increased by **270 basis points** to **41.0%** in Q1 2023, driven by pricing realization that offset multi-year inflation on materials and labor[86](index=86&type=chunk) - S&A expense as a percentage of net sales decreased by **300 basis points** to **26.7%**, driven by sales leverage and cost-containment initiatives[87](index=87&type=chunk) - The order backlog decreased to approximately **$298.5 million** at March 31, 2023, from **$326.4 million** at December 31, 2022, as the company improved its ability to obtain key components and increase production[94](index=94&type=chunk) [Liquidity and Capital Resources](index=27&type=section&id=Liquidity%20and%20Capital%20Resources) Q1 2023 liquidity strengthened with cash increasing to **$91.4 million**, operating cash flow improving to **$31.1 million**, and the debt-to-capital ratio improving to **37.8%** - Net cash provided by operating activities was **$31.1 million** for Q1 2023, a significant improvement from a net cash use of **$10.1 million** in Q1 2022, driven by improved operating performance and moderating working capital investments[97](index=97&type=chunk) - The company repurchased **73,525 shares** of common stock for **$5.0 million** during the first quarter of 2023[99](index=99&type=chunk) Key Liquidity Metrics | Metric | March 31, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Cash, cash equivalents and restricted cash | $91.4M | $77.4M | | Current Ratio | 2.3 | 2.2 | | Debt-to-Capital Ratio | 37.8% | 38.9% | [Quantitative and Qualitative Disclosures About Market Risk](index=29&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No material changes in market risk have occurred since the end of fiscal year 2022, with further details available in the annual Form 10-K - There have been no material changes in the company's market risk since December 31, 2022[105](index=105&type=chunk) [Controls and Procedures](index=29&type=section&id=Item%204.%20Controls%20and%20Procedures) As of March 31, 2023, disclosure controls and procedures were deemed effective, with no material changes in internal controls over financial reporting during the quarter - Management concluded that as of March 31, 2023, the company's disclosure controls and procedures were effective[106](index=106&type=chunk) - No changes in internal controls over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, internal control[107](index=107&type=chunk) PART II - OTHER INFORMATION [Legal Proceedings](index=29&type=section&id=Item%201.%20Legal%20Proceedings) The company reports no material pending legal proceedings beyond ordinary routine litigation incidental to its business - There are no material pending legal proceedings other than ordinary routine litigation incidental to the business[108](index=108&type=chunk) [Risk Factors](index=29&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors have occurred since the filing of the annual report on Form 10-K for December 31, 2022 - No material changes to risk factors have occurred since the filing of the 2022 Form 10-K[109](index=109&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=29&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) In Q1 2023, the company repurchased **91,993** shares at an average price of **$68.91**, with **1,038,808** shares remaining authorized for future repurchase Share Repurchases for Q1 2023 | Period | Total Shares Purchased | Average Price Paid Per Share | Shares Purchased Under Plan | | :--- | :--- | :--- | :--- | | January 2023 | 34,637 | $65.90 | 34,637 | | February 2023 | 37,188 | $71.00 | 21,355 | | March 2023 | 20,168 | $70.23 | 17,533 | | **Total** | **91,993** | **$68.91** | **73,525** | - As of March 31, 2023, **1,038,808 shares** remain available for repurchase under the company's authorized plans[112](index=112&type=chunk) [Exhibits](index=30&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with Form 10-Q, including CEO and CFO certifications and iXBRL financial data - Exhibits filed with the report include CEO and CFO certifications under Rule 13a-14(a)/15d-14(a) and Section 1350, as well as iXBRL financial statements[113](index=113&type=chunk)

Tennant Company (NYSE:TNC) Q4 2022 Earnings Conference Call February 23, 2023 11:00 AM ET Company Participants Lorenzo Bassi - Vice President, Finance Dave Huml - President and Chief Executive Officer Fay West - Senior Vice President and Chief Financial Officer Conference Call Participants Chris Moore - CJS Securities Steve Ferazani - Sidoti Tim Moore - EF Hutton Operator Good morning. My name is Devon and I will be your conference operator today. At this time, I would like to welcome everyone to Tennant Co ...