Tennant Company Reports Record 2023 Fourth-Quarter and Full-Year Results
Delivers Robust Growth of 13.9% in
Achieves Strong Net Income to Free Cash Flow Conversion
Introduces Full-Year Guidance for 2024
(In millions, except per share data) |
Three Months Ended
|
|
Twelve Months Ended
|
||||||||||||||||||
|
2023 |
|
2022 |
|
% Change |
|
2023 |
|
2022 |
|
% Change |
||||||||||
Net sales |
$ |
311.4 |
|
|
$ |
291.0 |
|
|
7.0 |
% |
|
$ |
1,243.6 |
|
|
$ |
1,092.2 |
|
|
13.9 |
% |
Net income |
$ |
31.0 |
|
|
$ |
23.8 |
|
|
30.3 |
% |
|
$ |
109.5 |
|
|
$ |
66.3 |
|
|
65.2 |
% |
Diluted EPS |
$ |
1.64 |
|
|
$ |
1.27 |
|
|
29.1 |
% |
|
$ |
5.83 |
|
|
$ |
3.55 |
|
|
64.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Adjusted diluted EPS |
$ |
1.92 |
|
|
$ |
1.46 |
|
|
31.5 |
% |
|
$ |
6.57 |
|
|
$ |
4.10 |
|
|
60.2 |
% |
Adjusted EBITDA |
$ |
41.5 |
|
|
$ |
41.7 |
|
|
(0.5 |
)% |
|
$ |
192.9 |
|
|
$ |
133.7 |
|
|
44.3 |
% |
Adjusted EBITDA margin % |
|
13.3 |
% |
|
|
14.3 |
% |
|
(100 bps) |
|
|
15.5 |
% |
|
|
12.2 |
% |
|
330 bps |
Highlights
-
Delivered record full-year net sales of
$1,243.6 million , marking a 13.9% increase from 2022. Organic growth of 13.6% driven by growth across all geographies and product categories. -
Fourth-quarter net sales increased 7.0% to
$311.4 million . Organic growth of 5.4% resulted from price realization across all geographies. -
Achieved full-year adjusted EBITDA of
$192.9 million , a 44.3% increase compared to 2022. Full-year adjusted EBITDA margin of 15.5% improved by 330 basis points, driven by strong sales growth and improved gross margins. -
Generated full-year operating cash flow of
$188.4 million . Represents a$213.5 million increase compared to 2022 enabling the Company to return over$40 million of capital to shareholders in 2023 through dividends and share repurchases. Strengthened financial position by repaying$100.0 million of debt during 2023. The Company's net leverage ratio reduced to 0.43x adjusted EBITDA. -
Introduced the T1581 Ride-on Scrubber in January – Tennant's newest addition to its product portfolio – a medium-sized floor cleaning machine designed to revolutionize light industrial cleaning and demonstrates
Tennant Company's commitment to innovation and providing its customers a comprehensive portfolio of solutions to solve their cleaning challenges. -
Signed an exclusive technology agreement in February with
Brain Corp to fuel the next generation of AI-enabled robotic cleaning technologies, enhance customer Return on Investment, and accelerate Autonomous Mobile Robotic ("AMR") revenue growth.
“We are pleased to report Tennant's strong fourth-quarter results, continuing the trend of positive results over the past six quarters," said
"As we enter 2024, our strategic focus centers on our new enterprise strategy," continued Huml. "We are targeting to deliver long-term revenue growth, expand margins, and continue to generate strong cash flow. We have already begun to activate specific growth initiatives in the areas of new product innovation, expanded go-to-market strategies and disciplined pricing. We are excited about our position and have confidence in our ability to drive sustained long-term growth."
Net Sales Results
Consolidated net sales for the fourth quarter 2023 totaled
|
|
Three Months Ended
|
|
Twelve Months Ended
|
|
|
2023 vs. 2022 |
|
2023 vs. 2022 |
Price |
|
5.9% |
|
8.7% |
Volume |
|
(0.5)% |
|
4.9% |
Organic growth |
|
5.4% |
|
13.6% |
Foreign currency |
|
1.6% |
|
0.3% |
Total growth |
|
7.0% |
|
13.9% |
Organic Sales
Organic sales, which excludes the effects of foreign currency, grew in both the fourth quarter and full year 2023 compared to 2022. This growth was driven by price realization across all regions and by volume growth in equipment sales, particularly in the
|
Three Months Ended |
|
Twelve Months Ended |
||||||||||||||||||||
|
|
|
EMEA |
|
APAC |
|
Total |
|
|
|
EMEA |
|
APAC |
|
Total |
||||||||
Organic net sales growth |
7.3 |
% |
|
(0.6 |
)% |
|
9.6 |
% |
|
5.4 |
% |
|
18.9 |
% |
|
2.6 |
% |
|
8.6 |
% |
|
13.6 |
% |
EMEA: The 0.6% decline in EMEA during the fourth quarter was driven by volume declines in equipment sales partially offset by growth in parts and consumables and service. The 2.6% increase during the full year was propelled by price realization in all product categories, though EMEA volumes were impacted by weaker-than-expected market conditions.
APAC: The 9.6% increase in APAC during the fourth quarter and 8.6% increase during the full year were driven by price realization in
Operating Results
Gross profit margin increased to 42.0% in the fourth quarter, a 240-basis-point improvement from 2022. Adjusted gross profit margin increased to 42.2% in the fourth quarter of 2023, a 250-basis-point improvement from 2022. For the full year 2023, gross profit margin increased to 42.4% compared to 38.5% in 2022. Adjusted gross profit margin increased to 42.5% for the full year 2023, a 390-basis-point improvement compared to 2022. The increase in both periods was driven primarily by price realization, but also cost-out activities and plant productivity, which offset inflation in the year.
In the fourth quarter of 2023, selling and administrative ("S&A") expense as a percentage of sales increased to 30.7%, up from 27.2% in 2022. Adjusted S&A expense as a percentage of sales for the fourth quarter 2023 increased to 29.9%, up from 27.0% in 2022. Full-year S&A expense as a percentage of sales increased to 28.4% in 2023, compared to 28.0% in 2022. Adjusted S&A expense as a percentage of sales increased to 28.0% in 2023, compared to 27.9% in 2022. Rate increases in both periods were primarily attributed to higher variable costs linked to improved operating performance as well as strategic investments to deliver future growth.
Adjusted EBITDA was
Adjusted EBITDA was
Net income was
Cash Flow, Capital Allocation and Liquidity
Cash generated from operations for the full year 2023 totaled
Liquidity remained strong with a balance of
The Company continues to allocate capital with a disciplined approach and consistent priorities, which include making strategic investments in our business to drive long-term profitable growth, returning cash to shareholders through dividends and share repurchases, and managing within our debt leverage goals. The Company invested
Guidance
The Company is introducing full-year 2024 guidance.
"Building on the momentum of a record 2023, our focus in 2024 is on rigorous execution in the first year of our new enterprise growth strategy, continuing to meaningfully reduce backlog, allocating capital in line with our stated capital priorities, and actively pursuing accretive acquisitions aligned to our M&A strategy," said Huml.
For the full year 2024, the Company is targeting organic net sales growth between 2% and 4% split equally between price and volume growth. The year-over-year growth reflects an expected reduction in backlog between
(In millions except per share data) |
2024
|
Net sales |
|
Organic net sales growth |
2.0 % - 4.0 % |
Adjusted diluted net income per share* |
|
Adjusted EBITDA* |
|
Adjusted EBITDA margin* |
15.6 % - 16.4 % |
Capital expenditures* |
|
Adjusted effective tax rate* |
22 % - 27 % |
*Excludes ERP modernization costs, other certain nonoperational items and amortization expense. |
Conference Call
Tennant will host a conference call to discuss its 2023 fourth-quarter and full-year results today,
About
Founded in 1870,
Forward-Looking Statements
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. These include factors that affect all businesses operating in a global market as well as matters specific to us and the markets the Company serves. Particular risks and uncertainties presently facing it include: geopolitical and economic uncertainty throughout the world; uncertainty surrounding the impacts and duration of the COVID-19 pandemic; the Company's ability to comply with global laws and regulations; the Company's ability to adapt to customer pricing sensitivities; the competition in the Company's business; fluctuations in the cost, quality or availability of raw materials and purchased components; the Company's ability to adjust pricing to respond to cost pressures; unforeseen product liability claims or product quality issues; the Company's ability to attract, retain and develop key personnel and create effective succession planning strategies; the Company's ability to effectively develop and manage strategic planning and growth processes and the related operational plans; the Company's ability to successfully upgrade and evolve its information technology systems; the Company's ability to successfully protect our information technology systems from cybersecurity risks; the occurrence of a significant business interruption; the Company's ability to maintain the health and safety of its workers; the Company's ability to integrate acquisitions; and the Company's ability to develop and commercialize new innovative products and services.
The Company cautions 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 the Company's results can be found in our 2023 Form 10-K, when filed. 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.
The Company undertakes 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 the Company in its filings with the
Non-GAAP Financial Measures
This news release and the related conference call include presentation of Non-GAAP measures that include or exclude special items of a nonrecurring and/or nonoperational nature (hereinafter referred to as “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.
The Company believes that disclosing gross profit – as adjusted, gross margin – as adjusted, selling and administrative (“S&A”) expense – as adjusted, S&A expense as a percent of net sales – as adjusted, operating income – as adjusted, operating margin – as adjusted, income before income taxes – as adjusted, income tax expense – as adjusted, net income – as adjusted, net income per diluted share – as adjusted, EBITDA – as adjusted, and EBITDA margin – as adjusted (collectively, the “Non-GAAP measures”), excluding the impacts from special items, is useful to investors as a measure of operating performance. The Company use these measures to monitor and evaluate operating performance. The Non-GAAP measures are financial measures that do not reflect United States Generally Accepted Accounting Principles (GAAP). The Company calculates the Non-GAAP measures by adjusting for gain on sale of assets, restructuring-related charges, acquisition-contingent consideration, loss on extinguishment of debt, and amortization expense. The Company calculates
income tax expense – as adjusted by adjusting for the tax effect of these Non-GAAP measures. The Company calculates net income per diluted share – as adjusted by adjusting for the after-tax effect of these Non-GAAP measures and dividing the result by the diluted weighted average shares outstanding. The Company calculates EBITDA margin – as adjusted by dividing EBITDA – as adjusted by net sales.
FINANCIAL TABLES FOLLOW
CONSOLIDATED STATEMENTS OF INCOME (Unaudited) |
|||||||||||||||
(In millions, except shares and per share data) |
Three Months Ended
|
|
Twelve Months Ended
|
||||||||||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
Net sales |
$ |
311.4 |
|
|
$ |
291.0 |
|
|
$ |
1,243.6 |
|
|
$ |
1,092.2 |
|
Cost of sales |
|
180.6 |
|
|
|
175.8 |
|
|
|
715.8 |
|
|
|
671.3 |
|
Gross profit |
|
130.8 |
|
|
|
115.2 |
|
|
|
527.8 |
|
|
|
420.9 |
|
Selling and administrative expense |
|
95.7 |
|
|
|
79.2 |
|
|
|
352.6 |
|
|
|
306.3 |
|
Research and development expense |
|
10.6 |
|
|
|
7.6 |
|
|
|
36.6 |
|
|
|
31.1 |
|
Gain on sale of assets |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(3.7 |
) |
Operating income |
|
24.5 |
|
|
|
28.4 |
|
|
|
138.6 |
|
|
|
87.2 |
|
Interest expense, net |
|
(2.5 |
) |
|
|
(3.4 |
) |
|
|
(13.5 |
) |
|
|
(7.1 |
) |
Net foreign currency transaction (loss) gain |
|
(0.2 |
) |
|
|
(0.8 |
) |
|
|
0.3 |
|
|
|
(1.2 |
) |
Other income (expense), net |
|
0.2 |
|
|
|
0.5 |
|
|
|
(1.6 |
) |
|
|
0.6 |
|
Income before income taxes |
|
22.0 |
|
|
|
24.7 |
|
|
|
123.8 |
|
|
|
79.5 |
|
Income tax (benefit) expense |
|
(9.0 |
) |
|
|
0.9 |
|
|
|
14.3 |
|
|
|
13.2 |
|
Net income |
$ |
31.0 |
|
|
$ |
23.8 |
|
|
$ |
109.5 |
|
|
$ |
66.3 |
|
|
|
|
|
|
|
|
|
||||||||
Net income per share |
|
|
|
|
|
|
|
||||||||
Basic |
$ |
1.67 |
|
|
$ |
1.29 |
|
|
$ |
5.92 |
|
|
$ |
3.58 |
|
Diluted |
$ |
1.64 |
|
|
$ |
1.27 |
|
|
$ |
5.83 |
|
|
$ |
3.55 |
|
|
|
|
|
|
|
|
|
||||||||
Weighted average shares outstanding |
|
|
|
|
|
|
|
||||||||
Basic |
|
18,579,763 |
|
|
|
18,490,547 |
|
|
|
18,509,523 |
|
|
|
18,494,356 |
|
Diluted |
|
18,906,887 |
|
|
|
18,685,605 |
|
|
|
18,783,633 |
|
|
|
18,697,255 |
|
GEOGRAPHICAL |
|||||||||||||||||
|
Three Months Ended
|
Twelve Months Ended
|
|||||||||||||||
|
2023 |
2022 |
% Change |
2023 |
2022 |
% Change |
|||||||||||
|
$ |
208.1 |
$ |
193.2 |
7.7 |
% |
$ |
840.3 |
$ |
705.9 |
19.0 |
% |
|||||
|
|
80.3 |
|
76.6 |
4.8 |
% |
|
314.4 |
|
301.6 |
4.2 |
% |
|||||
|
|
23.0 |
|
21.2 |
8.5 |
% |
|
88.9 |
|
84.7 |
5.0 |
% |
|||||
Total |
$ |
311.4 |
$ |
291.0 |
7.0 |
% |
$ |
1,243.6 |
$ |
1,092.2 |
13.9 |
% |
|||||
(1) Net of intercompany sales. |
CONSOLIDATED BALANCE SHEETS (Unaudited) |
|||||||
(In millions) |
|
|
|
||||
|
2023 |
|
2022 |
||||
ASSETS |
|
|
|
||||
Cash, cash equivalents, and restricted cash |
$ |
117.1 |
|
|
$ |
77.4 |
|
Receivables, less allowances of |
|
247.6 |
|
|
|
251.5 |
|
Inventories |
|
175.9 |
|
|
|
206.6 |
|
Prepaid and other current assets |
|
28.5 |
|
|
|
39.8 |
|
Total current assets |
|
569.1 |
|
|
|
575.3 |
|
Property, plant and equipment, less accumulated depreciation of |
|
187.7 |
|
|
|
179.9 |
|
Operating lease assets |
|
41.7 |
|
|
|
31.8 |
|
|
|
187.4 |
|
|
|
182.0 |
|
Intangible assets, net |
|
63.1 |
|
|
|
76.4 |
|
Other assets |
|
64.4 |
|
|
|
39.7 |
|
Total assets |
$ |
1,113.4 |
|
|
$ |
1,085.1 |
|
LIABILITIES AND TOTAL EQUITY |
|
|
|
||||
Current portion of long-term debt |
$ |
6.4 |
|
|
$ |
5.2 |
|
Accounts payable |
|
111.4 |
|
|
|
126.1 |
|
Employee compensation and benefits |
|
67.3 |
|
|
|
44.0 |
|
Other current liabilities |
|
88.6 |
|
|
|
86.3 |
|
Total current liabilities |
|
273.7 |
|
|
|
261.6 |
|
Long-term debt |
|
194.2 |
|
|
|
295.1 |
|
Long-term operating lease liabilities |
|
27.4 |
|
|
|
17.1 |
|
Employee-related benefits |
|
13.3 |
|
|
|
13.2 |
|
Deferred income taxes |
|
5.0 |
|
|
|
11.5 |
|
Other liabilities |
|
21.5 |
|
|
|
14.5 |
|
Total long-term liabilities |
|
261.4 |
|
|
|
351.4 |
|
Total liabilities |
|
535.1 |
|
|
|
613.0 |
|
Common stock, |
|
7.0 |
|
|
|
7.0 |
|
Additional paid-in capital |
|
64.9 |
|
|
|
56.0 |
|
Retained earnings |
|
547.4 |
|
|
|
458.0 |
|
Accumulated other comprehensive loss |
|
(42.3 |
) |
|
|
(50.2 |
) |
|
|
577.0 |
|
|
|
470.8 |
|
Noncontrolling interest |
|
1.3 |
|
|
|
1.3 |
|
Total equity |
|
578.3 |
|
|
|
472.1 |
|
Total liabilities and total equity |
$ |
1,113.4 |
|
|
$ |
1,085.1 |
|
|
|
|
|
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) |
|||||||
(In millions) |
|
||||||
Years ended |
2023 |
|
2022 |
||||
OPERATING ACTIVITIES |
|
|
|
||||
Net income |
$ |
109.5 |
|
|
$ |
66.3 |
|
Adjustments to reconcile net income to net cash provided by (used in) operating activities: |
|
|
|
||||
Depreciation expense |
|
36.4 |
|
|
|
32.8 |
|
Amortization expense |
|
14.7 |
|
|
|
15.9 |
|
Deferred income tax benefit |
|
(26.9 |
) |
|
|
(15.6 |
) |
Share-based compensation expense |
|
11.6 |
|
|
|
7.8 |
|
Bad debt and returns expense |
|
3.4 |
|
|
|
2.3 |
|
Gain on sale of assets |
|
— |
|
|
|
(3.7 |
) |
Other, net |
|
1.3 |
|
|
|
1.0 |
|
Changes in operating assets and liabilities: |
|
|
|
||||
Receivables |
|
4.1 |
|
|
|
(46.3 |
) |
Inventories |
|
14.3 |
|
|
|
(68.3 |
) |
Accounts payable |
|
(15.3 |
) |
|
|
7.7 |
|
Employee compensation and benefits |
|
22.3 |
|
|
|
(14.8 |
) |
Other assets and liabilities |
|
13.0 |
|
|
|
(10.2 |
) |
Net cash provided by (used in) operating activities |
|
188.4 |
|
|
|
(25.1 |
) |
INVESTING ACTIVITIES |
|
|
|
||||
Purchases of property, plant and equipment |
|
(22.8 |
) |
|
|
(25.0 |
) |
Other, net |
|
— |
|
|
|
0.1 |
|
Proceeds from sale of assets, net of cash divested |
|
— |
|
|
|
4.1 |
|
Investment in leased assets |
|
(1.2 |
) |
|
|
(4.3 |
) |
Cash received from leased assets |
|
0.8 |
|
|
|
0.6 |
|
Net cash used in investing activities |
|
(23.2 |
) |
|
|
(24.5 |
) |
FINANCING ACTIVITIES |
|
|
|
||||
Proceeds from borrowings |
|
20.0 |
|
|
|
52.0 |
|
Repayments of borrowings |
|
(120.0 |
) |
|
|
(19.1 |
) |
Change in finance lease obligations |
|
0.2 |
|
|
|
— |
|
Proceeds (repurchases) from exercise of stock options, net of employee tax withholdings obligations |
|
19.0 |
|
|
|
(0.9 |
) |
Dividends paid |
|
(20.1 |
) |
|
|
(18.9 |
) |
Repurchases of common stock |
|
(21.7 |
) |
|
|
(5.0 |
) |
Net cash (used in) provided by financing activities |
|
(122.6 |
) |
|
|
8.1 |
|
Effect of exchange rate changes on cash, cash equivalents and restricted cash |
|
(2.9 |
) |
|
|
(4.7 |
) |
Net increase (decrease) in cash, cash equivalents and restricted cash |
|
39.7 |
|
|
|
(46.2 |
) |
Cash, cash equivalents and restricted cash at beginning of year |
|
77.4 |
|
|
|
123.6 |
|
Cash, cash equivalents and restricted cash at end of year |
$ |
117.1 |
|
|
$ |
77.4 |
|
SUPPLEMENTAL NON-GAAP FINANCIAL TABLES
|
||||||||||||
(In millions, except per share data) |
Three Months Ended
|
|
Twelve Months Ended
|
|||||||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|||||
Net income - as reported |
$ |
31.0 |
|
$ |
23.8 |
|
$ |
109.5 |
|
$ |
66.3 |
|
Adjustments: |
|
|
|
|
|
|
|
|||||
Gain on sale of assets |
|
— |
|
|
— |
|
|
— |
|
|
(2.8 |
) |
Amortization expense |
|
2.7 |
|
|
2.7 |
|
|
10.6 |
|
|
11.5 |
|
Restructuring-related charge (Cost of sales) |
|
0.5 |
|
|
0.2 |
|
|
0.5 |
|
|
0.2 |
|
Restructuring-related charge (S&A expense) |
|
0.8 |
|
|
0.5 |
|
|
1.6 |
|
|
1.3 |
|
ERP modernization (S&A expense) |
|
1.2 |
|
|
— |
|
|
1.2 |
|
|
— |
|
Net income - as adjusted |
$ |
36.2 |
|
$ |
27.2 |
|
$ |
123.4 |
|
$ |
76.5 |
|
|
|
|
|
|
|
|
|
|||||
Net income per share - as reported: |
|
|
|
|
|
|
|
|||||
Diluted |
$ |
1.64 |
|
$ |
1.27 |
|
$ |
5.83 |
|
$ |
3.55 |
|
Adjustments: |
|
|
|
|
|
|
|
|||||
Gain on sale of assets |
|
— |
|
|
— |
|
|
— |
|
|
(0.15 |
) |
Amortization expense |
|
0.14 |
|
|
0.15 |
|
|
0.56 |
|
|
0.62 |
|
Restructuring-related charge (Cost of sales) |
|
0.03 |
|
|
0.01 |
|
|
0.03 |
|
|
0.01 |
|
Restructuring-related charge (S&A expense) |
|
0.05 |
|
|
0.03 |
|
|
0.09 |
|
|
0.07 |
|
ERP modernization (S&A expense) |
|
0.06 |
|
|
— |
|
|
0.06 |
|
|
— |
|
Net income per diluted share - as adjusted |
$ |
1.92 |
|
$ |
1.46 |
|
$ |
6.57 |
|
$ |
4.10 |
|
SUPPLEMENTAL NON-GAAP FINANCIAL TABLES
|
|||||||||||||||
(In millions) |
Three Months Ended
|
|
Twelve Months Ended
|
||||||||||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
Net income - as reported |
$ |
31.0 |
|
|
$ |
23.8 |
|
|
$ |
109.5 |
|
|
$ |
66.3 |
|
Less: |
|
|
|
|
|
|
|
||||||||
Interest expense, net |
|
2.5 |
|
|
|
3.4 |
|
|
|
13.5 |
|
|
|
7.1 |
|
Income tax expense |
|
(9.0 |
) |
|
|
0.9 |
|
|
|
14.3 |
|
|
|
13.2 |
|
Depreciation expense |
|
10.0 |
|
|
|
8.8 |
|
|
|
36.4 |
|
|
|
32.8 |
|
Amortization expense |
|
3.7 |
|
|
|
3.8 |
|
|
|
14.7 |
|
|
|
15.9 |
|
EBITDA |
$ |
38.2 |
|
|
$ |
40.7 |
|
|
$ |
188.4 |
|
|
$ |
135.3 |
|
Adjustments: |
|
|
|
|
|
|
|
||||||||
Gain on sale of assets |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(3.7 |
) |
Restructuring-related charge (Cost of sales) |
|
0.7 |
|
|
|
0.3 |
|
|
|
0.7 |
|
|
|
0.3 |
|
Restructuring-related charge (S&A expense) |
|
1.0 |
|
|
|
0.7 |
|
|
|
2.2 |
|
|
|
1.8 |
|
ERP modernization (S&A expense) |
|
1.6 |
|
|
|
— |
|
|
|
1.6 |
|
|
|
— |
|
EBITDA - as adjusted |
$ |
41.5 |
|
|
$ |
41.7 |
|
|
$ |
192.9 |
|
|
$ |
133.7 |
|
EBITDA margin - as adjusted |
|
13.3 |
% |
|
|
14.3 |
% |
|
|
15.5 |
% |
|
|
12.2 |
% |
SUPPLEMENTAL NON-GAAP FINANCIAL TABLES
|
|||||||||||||||
(In millions) |
Three Months Ended
|
|
Twelve Months Ended
|
||||||||||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
Gross profit - as reported |
$ |
130.8 |
|
|
$ |
115.2 |
|
|
$ |
527.8 |
|
|
$ |
420.9 |
|
Gross margin - as reported |
|
42.0 |
% |
|
|
39.6 |
% |
|
|
42.4 |
% |
|
|
38.5 |
% |
Adjustments: |
|
|
|
|
|
|
|
||||||||
Restructuring-related charge (Cost of sales) |
|
0.7 |
|
|
|
0.3 |
|
|
|
0.7 |
|
|
|
0.3 |
|
Gross profit - as adjusted |
$ |
131.5 |
|
|
$ |
115.5 |
|
|
$ |
528.5 |
|
|
$ |
421.2 |
|
Gross margin - as adjusted |
|
42.2 |
% |
|
|
39.7 |
% |
|
|
42.5 |
% |
|
|
38.6 |
% |
|
|
|
|
|
|
|
|
||||||||
S&A expense - as reported |
$ |
95.7 |
|
|
$ |
79.2 |
|
|
$ |
352.6 |
|
|
$ |
306.3 |
|
S&A expense as a percent of net sales - as reported |
|
30.7 |
% |
|
|
27.2 |
% |
|
|
28.4 |
% |
|
|
28.0 |
% |
Adjustments: |
|
|
|
|
|
|
|
||||||||
Restructuring-related charge (S&A expense) |
|
(1.0 |
) |
|
|
(0.7 |
) |
|
|
(2.2 |
) |
|
|
(1.8 |
) |
ERP modernization (S&A expense) |
|
(1.6 |
) |
|
|
— |
|
|
|
(1.6 |
) |
|
|
— |
|
S&A expense - as adjusted |
$ |
93.1 |
|
|
$ |
78.5 |
|
|
$ |
348.8 |
|
|
$ |
304.5 |
|
S&A expense as a percent of net sales - as adjusted |
|
29.9 |
% |
|
|
27.0 |
% |
|
|
28.0 |
% |
|
|
27.9 |
% |
|
|
|
|
|
|
|
|
||||||||
Operating income - as reported |
$ |
24.5 |
|
|
$ |
28.4 |
|
|
$ |
138.6 |
|
|
$ |
87.2 |
|
Operating margin - as reported |
|
7.9 |
% |
|
|
9.8 |
% |
|
|
11.1 |
% |
|
|
8.0 |
% |
Adjustments: |
|
|
|
|
|
|
|
||||||||
Restructuring-related charge (Cost of sales) |
|
0.7 |
|
|
|
0.3 |
|
|
|
0.7 |
|
|
|
0.3 |
|
Gain on sale of assets |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(3.7 |
) |
Restructuring-related charge (S&A expense) |
|
1.0 |
|
|
|
0.7 |
|
|
|
2.2 |
|
|
|
1.8 |
|
ERP modernization (S&A expense) |
|
1.6 |
|
|
|
— |
|
|
|
1.6 |
|
|
|
— |
|
Operating income - as adjusted |
$ |
27.8 |
|
|
$ |
29.4 |
|
|
$ |
143.1 |
|
|
$ |
85.6 |
|
Operating margin - as adjusted |
|
8.9 |
% |
|
|
10.1 |
% |
|
|
11.5 |
% |
|
|
7.8 |
% |
SUPPLEMENTAL NON-GAAP FINANCIAL TABLES
|
|||||||||||||||
(In millions) |
Three Months Ended
|
|
Twelve Months Ended
|
||||||||||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
Income before income taxes - as reported |
$ |
22.0 |
|
|
$ |
24.7 |
|
|
$ |
123.8 |
|
|
$ |
79.5 |
|
Adjustments: |
|
|
|
|
|
|
|
||||||||
Gain on sale of assets |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(3.7 |
) |
Amortization expense |
|
3.7 |
|
|
|
3.8 |
|
|
|
14.7 |
|
|
|
15.9 |
|
Restructuring-related charge (Cost of sales) |
|
0.7 |
|
|
|
0.3 |
|
|
|
0.7 |
|
|
|
0.3 |
|
Restructuring-related charge (S&A expense) |
|
1.0 |
|
|
|
0.7 |
|
|
|
2.2 |
|
|
|
1.8 |
|
ERP modernization (S&A expense) |
|
1.6 |
|
|
|
— |
|
|
|
1.6 |
|
|
|
— |
|
Income before income taxes - as adjusted |
$ |
29.0 |
|
|
$ |
29.5 |
|
|
$ |
143.0 |
|
|
$ |
93.8 |
|
|
|
|
|
|
|
|
|
||||||||
Income tax expense - as reported |
$ |
(9.0 |
) |
|
$ |
0.9 |
|
|
$ |
14.3 |
|
|
$ |
13.2 |
|
Effective tax rate - as reported |
|
(40.9 |
)% |
|
|
3.6 |
% |
|
|
11.6 |
% |
|
|
16.6 |
% |
Adjustments (1): |
|
|
|
|
|
|
|
||||||||
Gain on sale of assets |
|
— |
|
|
|
— |
|
|
|
|
|
(0.9 |
) |
||
Amortization expense |
|
1.0 |
|
|
|
1.1 |
|
|
|
4.1 |
|
|
|
4.4 |
|
Restructuring-related charge (Cost of sales) |
|
0.2 |
|
|
|
0.1 |
|
|
|
0.2 |
|
|
|
0.1 |
|
Restructuring-related charge (S&A expense) |
|
0.2 |
|
|
|
0.2 |
|
|
|
0.6 |
|
|
|
0.5 |
|
ERP modernization (S&A expense) |
|
0.4 |
|
|
|
— |
|
|
|
0.4 |
|
|
|
— |
|
Income tax expense - as adjusted |
$ |
(7.2 |
) |
|
$ |
2.3 |
|
|
$ |
19.6 |
|
|
$ |
17.3 |
|
Effective tax rate - as adjusted |
|
(24.8 |
)% |
|
|
7.8 |
% |
|
|
13.7 |
% |
|
|
18.4 |
% |
(1) In determining the tax impact, we applied the statutory rate in effect for each jurisdiction where income or expenses were generated. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240222924212/en/
INVESTOR RELATIONS CONTACT:
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investors@tennantco.com
763-540-1242
Source: