In the 2011 third quarter, Tennant reported net earnings of $9.7 million, or $0.50 per diluted share, on record net sales for a third quarter of $187.0 million.
According to Chris Killingstad, Tennant Company's president and chief executive officer, after rising 4.7% in the 2012 first half, Tennant's sales in North America declined 3.3% in the third quarter due to economic uncertainty. However, the company expects the North America region to return to organic growth in the 2012 fourth quarter.
Positive results in the 2012 third quarter included the continued global expansion of Tennant’s strategic accounts business, higher sales of scrubbers equipped with sustainable ec-H2O water-based cleaning technology, and continued market penetration in the emerging markets of Latin America and China.
At the 2012 third quarter end, Tennant had $63 million in cash on its balance sheet. In a separate release issued, Tennant announced that it was raising its quarterly cash dividend to $0.18 per share, up 6% from $0.17 per share.
Third Quarter Operating Review
Tennant's 2012 third quarter consolidated net sales of $178.3 million decreased 4.7% compared to the prior year quarter. Organic net sales, which exclude the impact of foreign currency exchange (and acquisitions when applicable), declined approximately 1.7%. Organic sales were down approximately 0.7% in Tennant's Americas region, excluding an unfavourable foreign currency exchange impact of approximately 1.5%, and down 5.5% in the Europe, Middle East and Africa region, excluding an unfavourable foreign currency exchange impact of approximately 8.5%.
Organic sales grew 1.3% in the Asia Pacific region, excluding an unfavourable foreign currency exchange impact of approximately 0.5%. Sales were higher in most markets, offset somewhat by lower sales in Japan. Sales in China and Latin America remained robust, growing organically approximately 10% and 30%, respectively, in the 2012 third quarter.
Contributing to 2012 third quarter sales was Tennant's strategic accounts business, including an expansion of business with Sodexo, a global leader in providing facility services to a broad array of industries.
Sales of scrubbers equipped with ec-H2O electrically activated water technology also positively benefited results in the 2012 third quarter, growing approximately 9%.
The company's 2012 third quarter operating profit was $13.8 million, or 7.7% of sales, on a GAAP and as-adjusted basis, versus an operating profit of $15.8 million, or 8.4% of sales, in the year ago quarter. Tennant continues to leverage its existing global workforce of about 2,800 employees, and has maintained this staffing level for the past three years, while growing sales.
Pipeline of Innovative New Products and Technologies
Tennant anticipates launching 17 new products in the 2012 fourth quarter and an additional 25 in 2013.
The company recently exhibited several new products at the cleaning industry's ISSA trade show:
- T12 rider scrubber, the first new product in Tennant's redesigned modular large equipment portfolio
- T3 orbital scrubber provides a chemical-free way to clean and strip floors
- Tennant's first rider burnisher, the B10 enables rapid cleaning and polishing of large areas
- Walk-behind sweepers clean multiple surfaces in both indoor and outdoor environments
- Vacuums including lightweight backpack and dry canister models