Company posts record sales for a fourth quarter of $216.3 million;
Net
sales in quarter increased 10.8 percent, or 13.8 percent organically;
Diluted
quarterly EPS rose 43.1 percent to $0.93 versus prior year of $0.65, as
adjusted;
Record 2014 full year sales of $822.0
million, up 9.3 percent, or 10.3 percent organically;
2014
full year diluted EPS up 19.5 percent to $2.70 versus prior year of
$2.26, as adjusted;
Company provides 2015 full year
net sales and earnings outlook
MINNEAPOLIS--(BUSINESS WIRE)--
Tennant Company (NYSE: TNC), a world leader in designing, manufacturing
and marketing of solutions that help create a cleaner, safer, healthier
world, today reported net earnings of $17.5 million, or $0.93 per
diluted share, on net sales of $216.3 million for the fourth quarter
ended December 31, 2014. In the 2013 fourth quarter, Tennant reported
net earnings of $10.3 million, or $0.55 per diluted share, on net sales
of $195.1 million. The 2013 fourth quarter included a $1.6 million
pre-tax restructuring charge, or $0.10 per diluted share, to rightsize
Tennant’s cost structure and enhance its go-to-market approach,
primarily in Europe. Excluding this special item, adjusted 2013 fourth
quarter net earnings totaled $12.2 million, or $0.65 per diluted share.
(See the Supplemental Non-GAAP Financial Table.)
Commented
Chris Killingstad
, Tennant Company's president and chief
executive officer: “We have invested for growth and we are seeing the
benefits. The company posted double-digit gains in sales and EPS in the
fourth quarter. Organic sales rose approximately 14 percent to a record
for a fourth quarter, with higher revenues in all equipment categories
and organic sales increases in all of our geographic regions. Notably,
this was our highest organic sales growth quarter of the year. Despite
the continued supply chain challenges stemming from increased volume and
new product launches, we achieved leverage in Tennant’s gross and
operating profit margins in the quarter.”
Added Killingstad: “The new growth strategies we outlined at the
beginning of 2014 are working and spurred broad-based sales gains in
each quarter of 2014. Sales grew ahead of plan over the year and we are
on track to reach our organic growth goal of $1 billion in sales by
2017, and we remain committed to the goal of a 12 percent or above
operating profit margin.”
Tennant plans to meet its growth objectives through a strong new product
pipeline in both the core business and in the Orbio Technologies Group,
continued gains in emerging markets, growth in Europe, focus on
strategic accounts and an enhanced go-to-market strategy, designed to
significantly expand its global market coverage and customer base.
Fourth Quarter Operating Review
The
company's 2014 fourth quarter consolidated net sales of $216.3 million
rose 10.8 percent versus the prior year quarter. Unfavorable foreign
currency exchange reduced consolidated net sales by approximately 3.0
percent. All geographic regions grew organically. Organic net sales,
which exclude the impact of foreign currency exchange (and acquisitions
when applicable), increased approximately 13.8 percent. Contributing to
2014 fourth quarter results were robust sales to strategic accounts and
through distribution, and continued demand for new products such as the
mid-size T17 rider scrubber and walk-behind burnishers. Sales of
scrubbers equipped with ec-H2O™ technology rose 10.8 percent in the
fourth quarter.
Geographically, sales increased 14.5 percent in Tennant’s largest
region, the Americas. Unfavorable foreign currency exchange reduced
sales by approximately 1.5 percent. Organic sales increased
approximately 16.0 percent. Sales in Europe, Middle East and Africa
(EMEA) were flat, but up approximately 8.0 percent organically,
excluding an unfavorable foreign currency exchange impact of about 8.0
percent. Sales in the Asia Pacific (APAC) region rose 9.0 percent, or
approximately 14.5 percent organically, excluding an unfavorable foreign
currency exchange impact of about 5.5 percent.
In the 2014 fourth quarter, gross margin rose slightly to 43.0 percent,
up from 42.9 percent in the prior year quarter, and within the company’s
target gross margin range of 43 percent to 44 percent. Gross margin
improved despite being constrained by channel mix, supply chain
challenges and foreign currency impact.
Research and development (R&D) expense for the 2014 fourth quarter
totaled $7.5 million, or 3.4 percent of sales, compared to $7.2 million,
or 3.7 percent of sales, in the prior year quarter. The company
continued to invest in developing innovative new products for its
traditional core business, as well as in its Orbio Technologies Group,
which is focused on advancing a suite of sustainable cleaning
technologies.
Selling and administrative (S&A) expense in the 2014 fourth quarter
totaled $63.0 million, or 29.1 percent of sales. S&A in the 2013 fourth
quarter totaled $58.9 million, or 30.2 percent of sales, or $57.3
million, or 29.4 percent of sales, as adjusted to exclude the $1.6
million restructuring charge. Tennant continued to make investments in
direct sales, distribution and marketing, and still achieved improvement
in S&A as a percent of sales.
Tennant's 2014 fourth quarter operating profit was $22.6 million, or
10.5 percent of sales, versus an operating profit of $17.7 million, or
9.1 percent of sales, and $19.2 million or 9.9 percent, as adjusted, in
the year ago quarter. As the U.S. dollar strengthened throughout the
2014 fourth quarter, foreign currency exchange reduced operating profit
by approximately $1.3 million.
Product and Technology Pipeline
Tennant
Company continues to execute against a strong new product pipeline. In
2014, Tennant introduced 18 new products, including eight products
unveiled in the fourth quarter. The company is on track to introduce 36
new products in 2015, on top of 55 new products launched from 2012 to
2014.
“New products continued to gain momentum and contributed significantly
to sales in the 2014 fourth quarter and full year,” stated Killingstad.
“In early November, we were excited to preview upcoming introductions at
the ISSA industry trade show, including a prototype of our next
generation ec-H2O technology that we anticipate offering on select
scrubbers at the end of the first quarter of 2015.”
In the 2014 fourth quarter, Tennant Company’s Orbio Technologies Group
received the ISSA Innovation Award for the Orbio® os3 On-Site
Generation System. The Orbio os3 delivers on-site generation of an
antimicrobial solution, as well as an effective multi-surface cleaner,
for use in a wide variety of customer segments.
Tennant remains committed to being an industry innovation leader and
aims to set the standard for sustainable cleaning around the world.
2014 Full Year Results
For the
2014 full year, Tennant reported record consolidated net sales of $822.0
million compared to $752.0 million in 2013. Tennant’s 2014 net sales
increased 9.3 percent versus the prior year and organic net sales rose
10.3 percent, excluding unfavorable foreign currency exchange of
approximately 1.0 percent.
For 2014, Tennant reported net earnings of $50.7 million, or $2.70 per
diluted share, up from net earnings of $40.2 million, or $2.14 per
diluted share in 2013. Excluding special items, the company’s 2013
adjusted full year net earnings were $42.6 million, or $2.26 per diluted
share.
Tennant’s gross margin for the 2014 full year was 42.9 percent compared
to gross margin in 2013 of 43.3 percent. The 40 basis point decline was
primarily due to increased costs related to hiring and training
additional manufacturing employees and temporary workers to support
higher production levels, including the continued ramp-up to meet the
growing demand for new products.
R&D expense in 2014 was $29.4 million, or 3.6 percent of sales, compared
to $30.5 million, or 4.1 percent of sales in the previous year. S&A
expense in 2014 totaled $250.9 million, or 30.5 percent of sales, versus
$233.0 million, or 31.0 percent of sales, and $230.0 million or 30.6
percent of sales, as adjusted, in 2013.
Operating profit in 2014 rose to $72.1 million, or 8.8 percent of sales,
compared to $62.4 million, or 8.3 percent of sales, and $65.4 million,
or 8.7 percent of sales, as adjusted, in 2013.
Tennant continued to have a strong balance sheet and generated $59.4
million in cash from operations in 2014. Cash and cash equivalents at
December 31, 2014, totaled $93.0 million, up from $81.0 million in the
prior year, and debt decreased to $28.1 million, down from $31.8 million
at the end of 2013. During 2014, Tennant paid a total of $14.5 million
in cash dividends to shareholders and repurchased 225,034 shares of
common stock at a cost of $14.1 million.
Business Outlook
Tennant
Company estimates 2015 full year net sales in the range of $825 million
to $855 million, up 0.4 percent to 4.0 percent, or approximately 5
percent to 9 percent organically, assuming an unfavorable foreign
currency exchange impact on sales in the range of 4 percent to 6
percent. The company expects 2015 full year earnings in the range of
$2.40 to $2.70 per diluted share. Foreign currency exchange headwinds in
2015 are estimated to negatively impact operating profit in the range of
$10 million to $12 million, or approximately $0.37 to $0.44 earnings per
diluted share. The estimated higher effective tax rate in 2015 is
anticipated to negatively impact earnings per diluted share by
approximately $0.14. The company expects its 2015 financial results to
be stronger in the second half of the year. For the 2014 full year,
diluted earnings per share totaled $2.70 on net sales of $822 million.
Tennant’s 2015 annual financial outlook includes the following
assumptions:
-
Economic strength in North America and modest improvement in Europe,
and growth in emerging markets;
-
Increased foreign currency impact on sales for the full year in the
range of an unfavorable 4 percent to 6 percent, with a $10 million to
$12 million negative effect on operating profit;
-
Gross margin performance of approximately 43 percent;
-
R&D expense of approximately 4 percent of sales, as the company
continues to invest in its core products and in water-based cleaning
technologies;
-
Capital expenditures in the range of $25 million to $28 million; and
-
An effective tax rate of approximately 31 percent, including the
anticipated enactment of the 2015 Federal R&D tax credit.
“We are encouraged by our performance in 2014 against our growth agenda
and we remain on track to deliver further organic sales and operating
profit margin gains in 2015,” said Killingstad. “While we anticipate
that foreign exchange rates will unfavorably impact sales and earnings
in 2015, we are focused on controlling what we can control. We will
continue to focus on creating value by introducing new products, and
expanding our global sales and marketing initiatives to increase our
global market share, while concurrently running a more efficient
business to raise productivity. We are excited about Tennant’s future.”
Conference Call
Tennant will
host a conference call to discuss the 2014 results today, February 24,
2015, at 10 a.m. Central Time (11 a.m. Eastern Time). The conference
call will be available via webcast on the investor portion of Tennant's
website. To listen to the call live, go to www.tennantco.com
and click on Company, Investors. A taped replay of the conference call
will be available at www.tennantco.com
for approximately two weeks after the call.
About Tennant Company
Minneapolis-based
Tennant Company (NYSE: TNC) is a world leader in designing,
manufacturing and marketing solutions that empower customers to achieve
quality cleaning performance, significantly 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; chemical-free and other sustainable cleaning
technologies; and coatings for protecting, repairing and upgrading
surfaces. Tennant's global field service network is the most extensive
in the industry. Tennant has manufacturing operations in Minneapolis,
Minn.; Holland, Mich.; Louisville, Ky.; Uden, The Netherlands; the
United Kingdom; São Paulo, Brazil; and Shanghai, China; and sells
products directly in 15 countries and through distributors in more than
80 countries. For more information, visit www.tennantco.com.
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: the competition in our business; foreign
currency exchange rate fluctuations, particularly the relative strength
of the U.S. dollar against other major currencies; geopolitical and
economic uncertainty throughout the world; our ability to attract and
retain key personnel; our ability to successfully upgrade, evolve and
protect our information technology systems; fluctuations in the cost,
quality, or availability of raw materials and purchased components; our
ability to effectively manage organizational changes; our ability to
comply with laws and regulations; the occurrence of a significant
business interruption; our ability to develop and commercialize new
innovative products and services; and unforeseen product liability
claims or product quality issues.
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. 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. For additional information about
factors that could materially affect Tennant's results, please see our
other Securities and Exchange Commission filings, including disclosures
under “Risk Factors.”
We do not undertake to update any forward-looking statement, and
investors are advised to consult any further disclosures by us on this
matter in our filings with the Securities and Exchange Commission and in
other written statements we make from time to time. 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 includes presentations 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. See the Supplemental Non-GAAP
Financial Table.
FINANCIAL TABLES FOLLOW
TENNANT COMPANY
|
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited)
|
|
|
|
|
|
(In thousands, except shares and per share data)
|
|
Three Months Ended
|
|
Twelve Months Ended
|
|
|
December 31
|
|
December 31
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
Net Sales
|
|
$
|
216,277
|
|
|
$
|
195,140
|
|
|
$
|
821,983
|
|
|
$
|
752,011
|
|
Cost of Sales
|
|
123,193
|
|
|
111,358
|
|
|
469,556
|
|
|
426,103
|
|
Gross Profit
|
|
93,084
|
|
|
83,782
|
|
|
352,427
|
|
|
325,908
|
|
Gross Margin
|
|
43.0
|
%
|
|
42.9
|
%
|
|
42.9
|
%
|
|
43.3
|
%
|
Operating Expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and Development Expense
|
|
7,456
|
|
|
7,220
|
|
|
29,432
|
|
|
30,529
|
|
Selling and Administrative Expense
|
|
63,013
|
|
|
58,893
|
|
|
250,898
|
|
|
232,976
|
|
Total Operating Expense
|
|
70,469
|
|
|
66,113
|
|
|
280,330
|
|
|
263,505
|
|
Profit from Operations
|
|
22,615
|
|
|
17,669
|
|
|
72,097
|
|
|
62,403
|
|
Operating Margin
|
|
10.5
|
%
|
|
9.1
|
%
|
|
8.8
|
%
|
|
8.3
|
%
|
Other Income (Expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest Income
|
|
48
|
|
|
95
|
|
|
302
|
|
|
390
|
|
Interest Expense
|
|
(421
|
)
|
|
(443
|
)
|
|
(1,722
|
)
|
|
(1,761
|
)
|
Net Foreign Currency (Losses) Gains
|
|
(534
|
)
|
|
375
|
|
|
(690
|
)
|
|
(671
|
)
|
Other Expense, Net
|
|
(167
|
)
|
|
(245
|
)
|
|
(449
|
)
|
|
(483
|
)
|
Total Other Expense, Net
|
|
(1,074
|
)
|
|
(218
|
)
|
|
(2,559
|
)
|
|
(2,525
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit Before Income Taxes
|
|
21,541
|
|
|
17,451
|
|
|
69,538
|
|
|
59,878
|
|
Income Tax Expense
|
|
4,000
|
|
|
7,150
|
|
|
18,887
|
|
|
19,647
|
|
Net Earnings
|
|
$
|
17,541
|
|
|
$
|
10,301
|
|
|
$
|
50,651
|
|
|
$
|
40,231
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Earnings per Share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.96
|
|
|
$
|
0.56
|
|
|
$
|
2.78
|
|
|
$
|
2.20
|
|
Diluted
|
|
$
|
0.93
|
|
|
$
|
0.55
|
|
|
$
|
2.70
|
|
|
$
|
2.14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Shares Outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
18,273,349
|
|
|
18,324,933
|
|
|
18,217,384
|
|
|
18,297,371
|
|
Diluted
|
|
18,789,506
|
|
|
18,853,382
|
|
|
18,740,858
|
|
|
18,833,453
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Dividends Declared per Common Share
|
|
$
|
0.20
|
|
|
$
|
0.18
|
|
|
$
|
0.78
|
|
|
$
|
0.72
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GEOGRAPHICAL NET SALES(1) (Unaudited)
|
|
|
|
|
|
|
|
|
|
(In thousands)
|
|
Three Months Ended
|
|
Twelve Months Ended
|
|
|
December 31
|
|
December 31
|
|
|
2014
|
|
2013
|
|
%
|
|
2014
|
|
2013
|
|
%
|
Americas
|
|
$
|
150,769
|
|
|
$
|
131,667
|
|
|
14.5
|
|
$
|
569,004
|
|
|
$
|
514,544
|
|
|
10.6
|
Europe, Middle East and Africa
|
|
40,740
|
|
|
40,743
|
|
|
—
|
|
165,686
|
|
|
157,208
|
|
|
5.4
|
Asia Pacific
|
|
24,768
|
|
|
22,730
|
|
|
9.0
|
|
87,293
|
|
|
80,259
|
|
|
8.8
|
Total
|
|
$
|
216,277
|
|
|
$
|
195,140
|
|
|
10.8
|
|
$
|
821,983
|
|
|
$
|
752,011
|
|
|
9.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Net of intercompany sales.
TENNANT COMPANY
|
|
|
|
|
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
|
|
|
|
|
|
(In thousands)
|
|
December 31,
|
|
December 31,
|
|
|
2014
|
|
2013
|
ASSETS
|
|
|
|
|
|
|
Current Assets:
|
|
|
|
|
|
|
Cash and Cash Equivalents
|
|
$
|
92,962
|
|
|
$
|
80,984
|
|
Restricted Cash
|
|
352
|
|
|
393
|
|
Net Receivables
|
|
152,383
|
|
|
140,182
|
|
Inventories
|
|
80,511
|
|
|
66,906
|
|
Prepaid Expenses
|
|
9,552
|
|
|
11,426
|
|
Deferred Income Taxes, Current Portion
|
|
9,738
|
|
|
13,723
|
|
Other Current Assets
|
|
1,591
|
|
|
1,682
|
|
Total Current Assets
|
|
347,089
|
|
|
315,296
|
|
Property, Plant and Equipment
|
|
262,214
|
|
|
300,906
|
|
Accumulated Depreciation
|
|
(175,671
|
)
|
|
(217,430
|
)
|
Property, Plant and Equipment, Net
|
|
86,543
|
|
|
83,476
|
|
Deferred Income Taxes, Long-Term Portion
|
|
8,165
|
|
|
2,423
|
|
Goodwill
|
|
18,355
|
|
|
18,929
|
|
Intangible Assets, Net
|
|
15,588
|
|
|
19,028
|
|
Other Assets
|
|
11,192
|
|
|
17,154
|
|
Total Assets
|
|
$
|
486,932
|
|
|
$
|
456,306
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
|
|
|
Current Liabilities:
|
|
|
|
|
|
|
Short-Term Borrowings and Current Portion of Long-Term Debt
|
|
$
|
3,566
|
|
|
$
|
3,803
|
|
Accounts Payable
|
|
61,627
|
|
|
53,079
|
|
Employee Compensation and Benefits
|
|
33,842
|
|
|
29,756
|
|
Income Taxes Payable
|
|
1,087
|
|
|
812
|
|
Other Current Liabilities
|
|
45,508
|
|
|
44,076
|
|
Total Current Liabilities
|
|
145,630
|
|
|
131,526
|
|
Long-Term Liabilities:
|
|
|
|
|
|
|
Long-Term Debt
|
|
24,571
|
|
|
28,000
|
|
Employee-Related Benefits
|
|
25,711
|
|
|
25,173
|
|
Deferred Income Taxes, Long-Term Portion
|
|
5,989
|
|
|
2,870
|
|
Other Liabilities
|
|
4,380
|
|
|
4,891
|
|
Total Long-Term Liabilities
|
|
60,651
|
|
|
60,934
|
|
Total Liabilities
|
|
206,281
|
|
|
192,460
|
|
Shareholders’ Equity:
|
|
|
|
|
|
|
Preferred Stock
|
|
—
|
|
|
—
|
|
Common Stock
|
|
6,906
|
|
|
6,934
|
|
Additional Paid-In Capital
|
|
26,247
|
|
|
31,956
|
|
Retained Earnings
|
|
286,091
|
|
|
249,927
|
|
Accumulated Other Comprehensive Loss
|
|
(38,593
|
)
|
|
(24,971
|
)
|
Total Shareholders’ Equity
|
|
280,651
|
|
|
263,846
|
|
Total Liabilities and Shareholders’ Equity
|
|
$
|
486,932
|
|
|
$
|
456,306
|
|
|
|
|
|
|
|
|
|
|
TENNANT COMPANY
|
|
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
|
|
|
|
(In thousands)
|
|
Twelve Months Ended
|
|
|
December 31
|
|
|
2014
|
|
2013
|
OPERATING ACTIVITIES
|
|
|
|
|
|
|
Net Earnings
|
|
$
|
50,651
|
|
|
$
|
40,231
|
|
Adjustments to reconcile Net Earnings to Net Cash Provided by
Operating Activities:
|
|
|
|
|
|
|
Depreciation
|
|
17,694
|
|
|
17,686
|
|
Amortization
|
|
2,369
|
|
|
2,560
|
|
Deferred Income Taxes
|
|
129
|
|
|
5,622
|
|
Share-Based Compensation Expense
|
|
7,314
|
|
|
6,116
|
|
Allowance for Doubtful Accounts and Returns
|
|
1,504
|
|
|
1,279
|
|
Other, Net
|
|
24
|
|
|
219
|
|
Changes in Operating Assets and Liabilities:
|
|
|
|
|
|
|
Receivables
|
|
(18,811
|
)
|
|
(7,618
|
)
|
Inventories
|
|
(21,155
|
)
|
|
(11,967
|
)
|
Accounts Payable
|
|
10,192
|
|
|
6,120
|
|
Employee Compensation and Benefits
|
|
1,927
|
|
|
(4,178
|
)
|
Other Current Liabilities
|
|
2,782
|
|
|
5,552
|
|
Income Taxes
|
|
3,466
|
|
|
(248
|
)
|
Other Assets and Liabilities
|
|
1,276
|
|
|
(1,560
|
)
|
Net Cash Provided by Operating Activities
|
|
59,362
|
|
|
59,814
|
|
|
|
|
|
|
|
|
INVESTING ACTIVITIES
|
|
|
|
|
|
|
Purchases of Property, Plant and Equipment
|
|
(19,583
|
)
|
|
(14,775
|
)
|
Proceeds from Disposals of Property, Plant and Equipment
|
|
291
|
|
|
120
|
|
Acquisition of Business, Net of Cash Acquired
|
|
—
|
|
|
(750
|
)
|
Proceeds from Sale of Business
|
|
1,416
|
|
|
4,261
|
|
Decrease (Increase) in Restricted Cash
|
|
6
|
|
|
(253
|
)
|
Net Cash Used for Investing Activities
|
|
(17,870
|
)
|
|
(11,397
|
)
|
|
|
|
|
|
|
|
FINANCING ACTIVITIES
|
|
|
|
|
|
|
Payments of Short-Term Debt
|
|
(1,500
|
)
|
|
—
|
|
Short-Term Debt Borrowings
|
|
—
|
|
|
1,500
|
|
Payments of Long-Term Debt
|
|
(2,016
|
)
|
|
(1,096
|
)
|
Purchases of Common Stock
|
|
(14,097
|
)
|
|
(22,157
|
)
|
Proceeds from Issuances of Common Stock
|
|
2,269
|
|
|
8,313
|
|
Tax Benefit on Stock Plans
|
|
1,793
|
|
|
5,178
|
|
Dividends Paid
|
|
(14,487
|
)
|
|
(13,233
|
)
|
Net Cash Used for Financing Activities
|
|
(28,038
|
)
|
|
(21,495
|
)
|
|
|
|
|
|
|
|
Effect of Exchange Rate Changes on Cash and Cash Equivalents
|
|
(1,476
|
)
|
|
122
|
|
|
|
|
|
|
|
|
Net Increase (Decrease) in Cash and Cash Equivalents
|
|
11,978
|
|
|
27,044
|
|
|
|
|
|
|
|
|
Cash and Cash Equivalents at Beginning of Period
|
|
80,984
|
|
|
53,940
|
|
|
|
|
|
|
|
|
Cash and Cash Equivalents at End of Period
|
|
$
|
92,962
|
|
|
$
|
80,984
|
|
|
|
|
|
|
|
|
|
|
TENNANT COMPANY
|
|
|
|
|
SUPPLEMENTAL NON-GAAP FINANCIAL TABLE
|
|
|
|
|
|
|
|
|
|
(In thousands, except per share data)
|
|
Three Months Ended
|
|
Twelve Months Ended
|
|
|
December 31
|
|
December 31
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Sales
|
|
$
|
216,277
|
|
|
$
|
195,140
|
|
|
$
|
821,983
|
|
|
$
|
752,011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of Sales
|
|
123,193
|
|
|
111,358
|
|
|
469,556
|
|
|
426,103
|
|
Gross Profit - as reported
|
|
93,084
|
|
|
83,782
|
|
|
352,427
|
|
|
325,908
|
|
Gross Margin
|
|
43.0
|
%
|
|
42.9
|
%
|
|
42.9
|
%
|
|
43.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and Development Expense
|
|
7,456
|
|
|
7,220
|
|
|
29,432
|
|
|
30,529
|
|
Selling and Administrative Expense
|
|
63,013
|
|
|
58,893
|
|
|
250,898
|
|
|
232,976
|
|
Total Operating Expense
|
|
70,469
|
|
|
66,113
|
|
|
280,330
|
|
|
263,505
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit from Operations - as reported
|
|
$
|
22,615
|
|
|
$
|
17,669
|
|
|
$
|
72,097
|
|
|
$
|
62,403
|
|
Operating Margin - as reported
|
|
10.5
|
%
|
|
9.1
|
%
|
|
8.8
|
%
|
|
8.3
|
%
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring Charge
|
|
—
|
|
|
1,577
|
|
|
—
|
|
|
3,017
|
|
Profit from Operations - as adjusted
|
|
$
|
22,615
|
|
|
$
|
19,246
|
|
|
$
|
72,097
|
|
|
$
|
65,420
|
|
Operating Margin - as adjusted
|
|
10.5
|
%
|
|
9.9
|
%
|
|
8.8
|
%
|
|
8.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Income (Expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest Income
|
|
48
|
|
|
95
|
|
|
302
|
|
|
390
|
|
Interest Expense
|
|
(421
|
)
|
|
(443
|
)
|
|
(1,722
|
)
|
|
(1,761
|
)
|
Net Foreign Currency Transaction (Losses) Gains
|
|
(534
|
)
|
|
375
|
|
|
(690
|
)
|
|
(671
|
)
|
Other Expense, Net
|
|
(167
|
)
|
|
(245
|
)
|
|
(449
|
)
|
|
(483
|
)
|
Total Other Expense, Net
|
|
(1,074
|
)
|
|
(218
|
)
|
|
(2,559
|
)
|
|
(2,525
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit Before Income Taxes - as reported
|
|
$
|
21,541
|
|
|
$
|
17,451
|
|
|
$
|
69,538
|
|
|
$
|
59,878
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring Charge
|
|
—
|
|
|
1,577
|
|
|
—
|
|
|
3,017
|
|
Profit Before Income Taxes - as adjusted
|
|
$
|
21,541
|
|
|
$
|
19,028
|
|
|
$
|
69,538
|
|
|
$
|
62,895
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Tax Expense - as reported
|
|
$
|
4,000
|
|
|
$
|
7,150
|
|
|
$
|
18,887
|
|
|
$
|
19,647
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring Charge
|
|
—
|
|
|
(338
|
)
|
|
—
|
|
|
79
|
|
Discrete Tax Item Related to 2012 R&D Tax Credit
|
|
—
|
|
|
—
|
|
|
—
|
|
|
582
|
|
Income Tax Expense - as adjusted
|
|
$
|
4,000
|
|
|
$
|
6,812
|
|
|
$
|
18,887
|
|
|
$
|
20,308
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TENNANT COMPANY
|
|
|
|
|
SUPPLEMENTAL NON-GAAP FINANCIAL TABLE
|
|
|
|
|
|
|
|
|
|
(In thousands, except per share data)
|
|
Three Months Ended
|
|
Twelve Months Ended
|
|
|
December 31
|
|
December 31
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Earnings - as reported
|
|
$
|
17,541
|
|
|
$
|
10,301
|
|
|
$
|
50,651
|
|
|
$
|
40,231
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring Charge
|
|
—
|
|
|
1,915
|
|
|
—
|
|
|
2,938
|
|
Discrete Tax Item Related to 2012 R&D Tax Credit
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(582
|
)
|
Net Earnings - as adjusted
|
|
$
|
17,541
|
|
|
$
|
12,216
|
|
|
$
|
50,651
|
|
|
$
|
42,587
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Earnings per Share - as reported:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.96
|
|
|
$
|
0.56
|
|
|
$
|
2.78
|
|
|
$
|
2.20
|
|
Diluted
|
|
$
|
0.93
|
|
|
$
|
0.55
|
|
|
$
|
2.70
|
|
|
$
|
2.14
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring Charge
|
|
—
|
|
|
0.10
|
|
|
—
|
|
|
0.15
|
|
Discrete Tax Item Related to 2012 R&D Tax Credit
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.03
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Net Earnings per Share - as adjusted
|
|
$
|
0.93
|
|
|
$
|
0.65
|
|
|
$
|
2.70
|
|
|
$
|
2.26
|
|

Source: Tennant Company