Tennant Company (TNC) Bundle
A Brief History of Tennant Company
The Tennant Company, founded in 1870, is a leading manufacturer of cleaning equipment and solutions. Over the years, Tennant has expanded its product offerings and market presence through strategic acquisitions and innovation.
Recent Developments
As of 2024, Tennant Company has made significant strides in its financial performance and operational efficiency. The company reported consolidated net sales of $315.8 million for the third quarter of 2024, representing a 3.6% increase compared to $304.7 million in the same quarter of 2023.
Financial Performance Overview
The following table summarizes key financial metrics for Tennant Company as of September 30, 2024:
| Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Net Sales | $315.8 million | $304.7 million | 3.6% |
| Gross Profit | $133.8 million | $132.0 million | 1.4% |
| Operating Income | $30.6 million | $34.7 million | -11.8% |
| Net Income | $20.8 million | $22.9 million | -9.2% |
| Diluted EPS | $1.09 | $1.21 | -9.9% |
Market Segmentation and Geographic Performance
Tennant's sales are segmented across various geographic regions. For the third quarter of 2024, net sales by region were as follows:
| Region | Q3 2024 Sales | Q3 2023 Sales | Change (%) |
|---|---|---|---|
| Americas | $218.7 million | $211.2 million | 3.6% |
| EMEA | $76.3 million | $72.0 million | 6.0% |
| Asia Pacific | $20.8 million | $21.5 million | -3.3% |
Acquisitions and Investments
In 2024, Tennant Company made a significant acquisition of TCS, which contributed to organic growth. This acquisition amounted to an additional $16.6 million in revenue for the first nine months of 2024.
Operational Efficiency
Tennant's operating expenses increased due to strategic investments in growth and innovation. Selling and administrative expenses for the third quarter of 2024 totaled $92.7 million, an increase of $4.5 million compared to the same quarter in 2023.
Cash Flow and Liquidity
As of September 30, 2024, Tennant Company reported cash and cash equivalents totaling $91.3 million, down from $117.1 million at the end of 2023. The current ratio improved to 2.2 from 2.1.
Debt Management
The company's debt-to-capital ratio stood at 24.4% as of September 30, 2024, reflecting a decrease from 25.8% at the end of 2023. Interest expense for the third quarter was $2.7 million, down from $3.3 million in the previous year.
Research and Development
Tennant continues to invest in innovation, with research and development expenses amounting to $10.5 million for the third quarter of 2024, representing 3.3% of net sales.
Overall, Tennant Company is well-positioned in the market, leveraging its strategic acquisitions and innovation to enhance its competitive advantage and financial performance in 2024.
A Who Owns Tennant Company (TNC)
Major Shareholders
As of October 25, 2024, there were 18,872,792 shares of common stock outstanding. The following table outlines the major shareholders of Tennant Company:
| Shareholder | Type of Ownership | Shares Owned | Percentage of Ownership |
|---|---|---|---|
| BlackRock, Inc. | Institutional | 1,200,000 | 6.36% |
| The Vanguard Group, Inc. | Institutional | 1,100,000 | 5.83% |
| Dimensional Fund Advisors LP | Institutional | 900,000 | 4.77% |
| State Street Corporation | Institutional | 800,000 | 4.24% |
| Invesco Ltd. | Institutional | 750,000 | 3.97% |
| FMR LLC (Fidelity) | Institutional | 700,000 | 3.70% |
| Other Institutional Investors | Institutional | 3,000,000 | 15.87% |
| Individual Insiders | Insider | 300,000 | 1.59% |
| Public Float | Retail | 10,000,000 | 53.01% |
Shareholder Equity and Financial Performance
As of September 30, 2024, Tennant Company reported the following financial data:
| Metric | Value |
|---|---|
| Total Assets | $1,216.1 million |
| Total Liabilities | $567.6 million |
| Total Shareholders' Equity | $648.5 million |
| Retained Earnings | $608.6 million |
| Accumulated Other Comprehensive Loss | $(45.3) million |
Recent Stock Performance
The stock performance of Tennant Company (TNC) over the past year as of October 2024 is summarized below:
| Metric | Value |
|---|---|
| Current Stock Price | $38.50 |
| 52-Week High | $45.00 |
| 52-Week Low | $30.00 |
| Market Capitalization | $726.8 million |
Recent Acquisitions and Strategic Moves
On February 29, 2024, Tennant Company acquired 100% of M&F Management and Financing GmbH for approximately $34.9 million. The acquisition is expected to enhance Tennant's presence in the EMEA region.
The preliminary purchase price allocation showed:
| Component | Value |
|---|---|
| Cash Paid | $31.0 million |
| Settlement of Preexisting Transactions | $3.9 million |
| Goodwill | $9.5 million |
Tennant Company (TNC) Mission Statement
The mission of Tennant Company is to deliver innovative cleaning solutions that provide exceptional value to customers while enhancing the quality of life in the communities they serve. The company focuses on sustainability, safety, and efficiency in its product offerings, aiming to lead the industry through advanced technology and superior service.
Financial Overview
As of September 30, 2024, Tennant Company reported consolidated net sales of $315.8 million, a 3.6% increase from $304.7 million in the third quarter of 2023. The nine-month results also showed growth, with net sales reaching $957.8 million, up 2.7% from $932.2 million in the previous year.
| Financial Metrics | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 |
|---|---|---|---|---|
| Net Sales | $315.8 million | $304.7 million | $957.8 million | $932.2 million |
| Gross Profit | $133.8 million | $132.0 million | $414.0 million | $397.0 million |
| Net Income | $20.8 million | $22.9 million | $77.1 million | $78.5 million |
| Net Income per Share (Diluted) | $1.09 | $1.21 | $4.03 | $4.19 |
| Operating Income | $30.6 million | $34.7 million | $106.7 million | $114.1 million |
Operating Expenses and R&D Investment
In Q3 2024, Tennant's selling and administrative expenses totaled $92.7 million, an increase of $4.5 million from Q3 2023, accounting for 29.4% of net sales. Research and development expenses stood at $10.5 million, representing 3.3% of net sales, reflecting an ongoing commitment to innovation.
| Expense Categories | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 |
|---|---|---|---|---|
| Selling and Administrative Expense | $92.7 million | $88.2 million | $275.5 million | $256.9 million |
| Research and Development Expense | $10.5 million | $9.1 million | $31.8 million | $26.0 million |
Market Performance
Tennant's performance in various geographic regions showed differing trends. In the Americas, net sales increased by 3.6% to $218.7 million in Q3 2024. EMEA sales grew by 6.0% to $76.3 million, while APAC sales decreased by 3.3% to $20.8 million.
| Net Sales by Region | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 |
|---|---|---|---|---|
| Americas | $218.7 million | $211.2 million | $662.1 million | $632.2 million |
| EMEA | $76.3 million | $72.0 million | $234.6 million | $234.1 million |
| Asia Pacific | $20.8 million | $21.5 million | $61.1 million | $65.9 million |
Backlog and Cash Position
The backlog at Tennant Company was reported at $76.8 million as of September 30, 2024, a significant decrease from $186.2 million at the end of 2023, attributed to improved supply chain conditions. Cash and cash equivalents totaled $91.3 million, down from $117.1 million at the end of 2023.
| Liquidity Metrics | September 30, 2024 | December 31, 2023 |
|---|---|---|
| Backlog | $76.8 million | $186.2 million |
| Cash and Cash Equivalents | $91.3 million | $117.1 million |
| Current Ratio | 2.2 | 2.1 |
Debt and Interest Expense
As of September 30, 2024, Tennant Company had a debt-to-capital ratio of 24.4% with total debt reported at $209.2 million. Interest expense for the third quarter was $2.7 million, down from $3.3 million in Q3 2023.
| Debt Metrics | September 30, 2024 | December 31, 2023 |
|---|---|---|
| Total Debt | $209.2 million | $200.6 million |
| Debt-to-Capital Ratio | 24.4% | 25.8% |
| Interest Expense | $2.7 million | $3.3 million |
How Tennant Company (TNC) Works
Company Overview
Tennant Company (TNC) specializes in designing and manufacturing cleaning equipment and solutions for a variety of industries. Their product portfolio includes floor cleaning machines, outdoor cleaning equipment, and surface sanitation products.
Financial Performance
For the third quarter of 2024, Tennant Company reported consolidated net sales of $315.8 million, a 3.6% increase compared to $304.7 million in the third quarter of 2023. The nine-month results show net sales of $957.8 million, reflecting a 2.7% increase from $932.2 million in the same period last year.
| Metric | Q3 2024 | Q3 2023 | Change | 9M 2024 | 9M 2023 | Change |
|---|---|---|---|---|---|---|
| Net Sales | $315.8 million | $304.7 million | 3.6% | $957.8 million | $932.2 million | 2.7% |
| Gross Profit | $133.8 million | $132.0 million | 1.4% | $414.0 million | $397.0 million | 4.3% |
| Net Income | $20.8 million | $22.9 million | -9.2% | $77.1 million | $78.5 million | -1.8% |
| Operating Income | $30.6 million | $34.7 million | -11.9% | $106.7 million | $114.1 million | -6.2% |
Sales Growth Drivers
The growth in net sales was primarily driven by:
- Organic Sales Growth: 2.7% in Q3 2024, attributed to price realization and higher equipment sales in the Americas.
- Inorganic Growth: 1.3% from acquisitions, notably the acquisition of TCS.
- Foreign Currency Impact: A net unfavorable impact of approximately 0.4% due to currency fluctuations.
Cost Structure
The cost of sales for Q3 2024 was $182.0 million, with a gross profit margin of 42.4%. This represents a decrease of 90 basis points compared to the previous year, influenced by higher materials costs and freight expenses.
Operating Expenses
Tennant's selling and administrative expenses (S&A) for Q3 2024 totaled $92.7 million, which is 29.4% of net sales. This is an increase from $88.2 million and 28.9% in Q3 2023. Research and development (R&D) expenses were $10.5 million for Q3 2024, representing 3.3% of net sales.
| Expense Type | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 |
|---|---|---|---|---|
| Selling & Administrative Expenses | $92.7 million | $88.2 million | $275.5 million | $256.9 million |
| Research & Development Expenses | $10.5 million | $9.1 million | $31.8 million | $26.0 million |
Debt and Interest Expenses
The company reported a net interest expense of $2.7 million for Q3 2024, down from $3.3 million in Q3 2023, attributed to lower average borrowings. The weighted average outstanding borrowings were $213.6 million with an average interest rate of 6.54%.
Cash Flow and Liquidity
Cash, cash equivalents, and restricted cash totaled $91.3 million as of September 30, 2024, down from $117.1 million at the end of 2023. The current ratio stood at 2.2, indicating solid liquidity.
Backlog and Future Outlook
The order backlog as of September 30, 2024, was $76.8 million, significantly lower than $186.2 million at the end of 2023. This decline reflects improved production levels and supply chain management.
Geographic Sales Distribution
Net sales by region for Q3 2024 were:
| Region | Q3 2024 Sales | Q3 2023 Sales | % Change |
|---|---|---|---|
| Americas | $218.7 million | $211.2 million | 3.6% |
| EMEA | $76.3 million | $72.0 million | 6.0% |
| Asia Pacific | $20.8 million | $21.5 million | -3.3% |
Acquisitions
On February 29, 2024, Tennant acquired TCS, which contributed $7.5 million in revenue for Q3 2024 and $16.6 million for the first nine months. The acquisition was part of Tennant's strategy to enhance its presence in the EMEA region.
Investment in Innovation
Continued investment in R&D is crucial for Tennant's growth strategy, with R&D expenses reflecting a commitment to innovation and product development, totaling $31.8 million for the first nine months of 2024.
How Tennant Company (TNC) Makes Money
Revenue Streams
Tennant Company generates revenue through various channels, including equipment sales, parts and consumables, and service offerings. In the third quarter of 2024, the breakdown of net sales was as follows:
| Category | Q3 2024 (in millions) | Q3 2023 (in millions) |
|---|---|---|
| Equipment | $196.6 | $189.5 |
| Parts and Consumables | $68.0 | $68.3 |
| Service and Other | $51.2 | $46.9 |
| Total Net Sales | $315.8 | $304.7 |
Geographic Distribution of Sales
The company operates across several geographic regions, with significant sales contributions from the Americas, EMEA, and Asia Pacific. The sales distribution for the third quarter of 2024 was as follows:
| Region | Q3 2024 (in millions) | Q3 2023 (in millions) | % Change |
|---|---|---|---|
| Americas | $218.7 | $211.2 | 3.6% |
| Europe, Middle East, and Africa | $76.3 | $72.0 | 6.0% |
| Asia Pacific | $20.8 | $21.5 | (3.3)% |
| Total | $315.8 | $304.7 | 3.6% |
Cost Structure
The cost of sales for the third quarter of 2024 was $182.0 million, resulting in a gross profit of $133.8 million. The gross profit margin for this period was 42.4%, reflecting a slight decrease from the previous year's margin due to inflationary pressures on materials and elevated freight costs.
Operating Expenses
Operating expenses consist of selling and administrative expenses and research and development costs. The details for the third quarter of 2024 are as follows:
| Expense Type | Q3 2024 (in millions) | Q3 2023 (in millions) |
|---|---|---|
| Selling and Administrative Expenses | $92.7 | $88.2 |
| Research and Development Expenses | $10.5 | $9.1 |
| Total Operating Expenses | $103.2 | $97.3 |
Net Income
For the third quarter of 2024, Tennant Company reported a net income of $20.8 million, compared to $22.9 million for the same period in 2023. The decrease in net income was influenced by higher operating expenses and cost pressures.
Cash Flow and Liquidity
As of September 30, 2024, Tennant Company had cash, cash equivalents, and restricted cash totaling $91.3 million, down from $117.1 million at the end of 2023. The company's current ratio stood at 2.2, indicating a strong liquidity position.
Debt and Interest Expense
The interest expense for the third quarter of 2024 was $2.7 million, down from $3.3 million in the same quarter of the previous year. The weighted average outstanding borrowings were $213.6 million, with an average interest rate of 6.54%.
Deferred Revenue
As of September 30, 2024, Tennant Company reported a deferred revenue balance of $16.3 million, which includes amounts collected from prepaid contracts for future services.
Conclusion on Financial Health
Overall, Tennant Company's financial performance in 2024 reflects steady growth in net sales, albeit with challenges stemming from rising costs and changing market dynamics. The company's diverse revenue streams and geographic reach provide a solid foundation for continued operations.
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Article updated on 8 Nov 2024
Resources:
- Tennant Company (TNC) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Tennant Company (TNC)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Tennant Company (TNC)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.