On February 18, 2025, Tennant Co (TNC, Financial) released its 8-K filing detailing its financial results for the fourth quarter and full year of 2024. Tennant Co, a leading manufacturer of floor cleaning equipment and related products, operates across North America, Latin America, Europe, the Middle East, Africa, and the Asia Pacific regions.
Performance Overview
Tennant Co reported fourth-quarter net sales of $328.9 million, surpassing the analyst estimate of $323.27 million, marking a 5.6% increase from the previous year. However, the company's diluted earnings per share (EPS) for the quarter was $0.35, falling short of the estimated $1.10. For the full year, net sales reached a record $1,286.7 million, a 3.5% increase from 2023, while the diluted EPS was $4.38, below the annual estimate of $5.13.
Financial Achievements and Challenges
Tennant Co achieved a full-year adjusted EBITDA of $208.8 million, an 8.2% increase from 2023, with an expanded adjusted EBITDA margin of 16.2%. This growth was driven by strong sales and improved operating leverage. Despite these achievements, the company faced challenges with a 78.7% decline in fourth-quarter net income to $6.6 million, primarily due to higher non-operating costs and increased income tax expenses.
Income Statement Highlights
| Metric | Q4 2024 | Q4 2023 | Change |
|---|---|---|---|
| Net Sales | $328.9 million | $311.4 million | 5.6% |
| Net Income | $6.6 million | $31.0 million | (78.7)% |
| Diluted EPS | $0.35 | $1.64 | (78.7)% |
Geographical Sales Performance
In the Americas, Tennant Co experienced a robust 10% growth in organic net sales during the fourth quarter, driven by volume increases in equipment and service. The EMEA region saw a 4% increase, while the APAC region faced a significant 19% decline due to volume decreases and market saturation challenges in China and Australia.
Cash Flow and Capital Allocation
The company generated $89.7 million in operating cash flow for 2024, impacted by investments in ERP modernization and working capital. Tennant Co returned $41.0 million to shareholders through dividends and share repurchases and maintained a strong liquidity position with $99.8 million in cash and cash equivalents.
Outlook and Strategic Initiatives
Looking ahead to 2025, Tennant Co anticipates a stable demand environment outside of the APAC region, with plans to deliver mid-single-digit order growth. The company introduced the X6 ROVR, a new autonomous scrubber, expected to be commercially available in the second quarter of 2025, aiming to strengthen its product portfolio and market presence.
We are pleased to report on Tennant's strong finish to a successful 2024. We achieved record results in 2024 with strong organic sales growth and margin expansion aligned with our long-range targets," said Dave Huml, Tennant President and Chief Executive Officer.
For more detailed insights and financial data, visit the full 8-K filing.
Explore the complete 8-K earnings release (here) from Tennant Co for further details.
