Tennant Company lifts second quarter sales

Tennant Company reports 2.6 per cent increase on previous year.

Tennant Company has reported second quarter sales of $299.7 million, a 2.6 per cent increase on the previous year.

The company reported net earnings of $14.8 million, compared to $12.7 million, in the 2018 second quarter.

Organic sales grew 3.8 per cent, led by the Americans region, however excluded the impact of the recent Gaomei acquisition.

Included in the results were non-operational charges of $5.1 million related to the exit of the Green Machine and Orbio product lines.

Excluding non-operational items, adjusted net earnings grew 37.7 per cent to $20.8 million, or $1.13 per diluted share, compared to adjusted net earnings of $15.1 million in the 2018 second quarter, or $0.82 per diluted share.

Chris Killingstad, Tennant Company president and CEO, said the company was pleased with its performance, which had exceeded internal expectations.

“Tennant Company’s transition from a period of strategic expansion to a heightened focus on profitable growth is supported by three strategic pillars: winning where we have the strongest value proposition; reducing complexity and building scalable processes; and building on our position as an innovation leader,” Killingstad said.

“We continued to make progress on these efforts in the second quarter, amid mixed economic and global market conditions. Sales in the period reflected a blend of factors: strength in the Americas, market softness in Europe, timing considerations in Asia Pacific and negative currency impacts; while our profitability gains illustrate our strategic focus and more deliberate approach to margin improvement.

“These efforts continue to develop and mature and resulted in strong earnings performance during the second quarter of 2019 that bolstered our confidence in our outlook.”

Sales in the Americas rose 6 per cent, 7.8 per cent organically, which the company said reflected strength across both Latin America and North America, primarily driven by a combination of growth in strategic accounts, strength in service, parts and consumables, contributions from the newly introduced autonomous cleaning machine and pricing.

Sales in APAC rose 12.7 per cent, reflecting the contribution from recently acquired Gaomei, but declined 0.5 per cent organically. However, year-to-date organic sales rose 3.6 per cent.

Sales in EMEA declined 7.4 per cent, down 2.9 per cent organically, reflecting general market weakness across the entire region.

Killingstad said the company continues to face mixed market conditions and various economic headwinds, while internally, remains a company in transition.

“We are tightly focused on our three strategic pillars, which are guiding how we evolve our business portfolio, deepening our operational rigor and investing in innovation, all toward improving our ongoing EBITDA margin and driving shareholder value. We are making additional investments in these strategies in the back half of 2019, which is reflected in our updated 2019 outlook.”

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