Tennant Company (TNC) investor relations material

Executive summary

• Orders increased 10% year-over-year, with backlog up $32 million, reflecting robust demand and strong robotics momentum; robotics sales reached $27 million, now 9% of total net sales, driven by new product launches and expanded partnerships.

• Net sales grew 2.7% year-over-year to $297.9 million, driven by favorable currency, pricing, and acquisitions, offset by lower North American volumes due to ERP disruption.

• ERP stabilization in North America improved operational execution, with sequential improvement in gross margin and throughput.

• Net income dropped to $0.2 million from $13.1 million year-over-year, with diluted EPS at $0.01 versus $0.69, impacted by gross margin compression and higher expenses.

• $60 million in share repurchases (~5% of shares) and $5.5 million in dividends were returned to shareholders in Q1.

Financial highlights

• Adjusted EBITDA was $29.1 million (9.8% margin), down from $41 million (14.1%) year-over-year, primarily due to gross margin compression and higher S&A expenses.

• Adjusted diluted EPS was $0.58, down from $1.12 year-over-year.

• Gross margin was 38.1%, down 330 bps year-over-year but improved sequentially; exited March at ~40%.

• Operating cash flow was -$31.2 million, impacted by ERP disruption and working capital build.

• Net leverage ratio was 1.78x trailing 12-month adjusted EBITDA, within target range.

Outlook and guidance

• Full-year 2026 guidance reaffirmed: net sales $1.24–$1.28 billion (3–6.5% organic growth), adjusted EBITDA $175–$190 million (14.1–14.8% margin), adjusted EPS $4.70–$5.30, GAAP EPS $4.05–$4.65.

• Gross margin expected to expand progressively, with second-half margins in the low 40% range.

• Capital expenditures projected at ~$25 million; effective tax rate 24–29%.

• Results expected to be weighted toward the second half of the year.

• Management expects continued uncertainty from global economic conditions, energy and logistics costs, and evolving U.S. tariff programs.