TENNANT CO
For the period ended Jun 30, 2025. Filed Aug 7, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Aug 7, 2025
TNC$71.50+0.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-05-01.
0000097134-25-000014
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-07.
0000097134-25-000027
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 71 previous paragraphs and 85 current paragraphs.
38 unchanged; 19 reworded; 25 added; 13 removed; 1 previous and 3 current paragraphs rearranged.
Tables are not compared: 4 previous and 4 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (25)
Current report
As a company with a global presence, we are subject to risks and uncertainties caused by significant events with macroeconomic impacts, including, but not limited to, geopolitical tensions, elevated interest rates, monetary policy changes, and foreign currency fluctuations.
Current report
The global business landscape continues to be shaped by volatility, including heightened uncertainty in trade policy. Previously implemented U.S. tariffs and the potential for future actions could increase input costs, disrupt supply chains, and impact customer demand as end users absorb cost increases. These trade dynamics may also create competitive shifts within the market. Future policy changes or retaliatory measures could increase manufacturing costs and pressure pricing, potentially reducing product demand. We are carefully monitoring these developments to assess potential impacts and will continue to adapt as the situation evolves.
Current report
Demand trends across our key markets remain mixed. In China, recovery is slow due to market saturation impacting product sales and driving pricing competition. In other regions like Mexico, uncertainty and rising interest rates are leading to delayed spending decisions and increased rental solutions. In Europe, heightened competitive pressures have tempered demand for our products.
Current report
To manage these challenges, we are focused on cost control, operational improvements, and diversifying sourcing. We are taking proactive pricing actions alongside supply-chain initiatives to mitigate the impact of tariffs, although some margin pressure may persist as the full benefits of our cost-out and pricing initiatives are phased in, leading to a gradual improvement in margin rates. At the same time, we are adapting our product and service offerings to meet evolving customer needs and continuing to invest in innovation to support long-term demand, while maintaining disciplined spending across the organization.
Current report
Amid ongoing economic uncertainty, we are actively managing margins through market-based pricing actions and targeted supply-chain strategies, including supplier negotiations, dual sourcing, and logistics shifts to mitigate tariff-related cost inflation. While timing mismatches between cost increases and realization of both price increases and cost-out initiatives may pressure margins in the near term, diligent management of both levers is crucial for sustained profitability. We continuously strive to optimize our financial performance to achieve sustainable profitability and expand our margins.
Current report
•A net unfavorable impact from foreign currency exchange of approximately 0.7%; partly offset by
Current report
Americas net sales were $213.5 million for the second quarter of 2025, a decrease of 6.3% from the second quarter of 2024 driven by:
Current report
•A net unfavorable impact from foreign currency exchange of approximately 0.8%.
Current report
Americas net sales were $410.8 million for the first six months of 2025, a decrease of 7.4% from the first six months of 2024 driven by:
Current report
•Organic sales decline of 6.2% was driven by volume declines, particularly in North America industrial equipment, which was lapping a significant backlog reduction benefit in the prior year period, partly offset by volume increases in commercial equipment and price realization; and
Current report
•A net unfavorable impact from foreign currency exchange of approximately 1.2%.
Current report
EMEA net sales were $84.7 million for the second quarter of 2025, an increase of 3.9% from the second quarter of 2024 driven by:
Current report
•A net favorable impact from foreign currency exchange of approximately 5.3%; partly offset by
Current report
•Organic sales decline of 1.4% was primarily due to volume declines in Germany and the Middle East region, partly offset by volume increases in the UK and Iberia, and price realization.
Current report
EMEA net sales were $160.7 million for the first six months of 2025, an increase of 1.5% from the first six months of 2024 driven by:
Current report
•A net favorable impact from foreign currency exchange of approximately 1.2%;
Current report
•Organic sales decline of 0.4% was primarily due to volume declines in Germany and the Middle East region, partly offset by volume increases in the UK and Iberia, and price realization.
Current report
APAC net sales were $20.4 million for the second quarter of 2025, a decrease of 6.0% from the second quarter of 2024 driven by:
Current report
•Organic sales decline of 5.0% driven primarily by decreased volumes in China, partly offset by increased equipment volume in Australia; and
Current report
•A net unfavorable impact from foreign currency exchange of approximately 1.0%.
Current report
APAC net sales were $37.1 million for the first six months of 2025, a decrease of 7.9% from the first six months of 2024 driven by:
Current report
•Organic sales decline of 6.2% driven primarily by decreased volumes in China, partly offset by increased equipment volume in Australia; and
Current report
•A net unfavorable impact from foreign currency exchange of approximately 1.7%.
Current report
S&A expense was $184.4 million for the first six months of 2025, an increase of $1.6 million compared to the first six months of 2024. As a percentage of net sales, S&A expense for the first six months of 2025 increased 180 basis points to 30.3% from 28.5% in the first six months of 2024. The S&A expense increase was driven by higher costs linked to our strategic investments, including ERP costs and restructuring-related charges, and a bad debt charge, partly offset by lower variable compensation expense and discretionary spending.
Current report
Net cash used in investing activities during the six months ended June 30, 2025 was $10.6 million compared to net cash used in investing activities of $64.9 million during the six months ended June 30, 2024. The decrease was primarily due to one-time cash outflows in the prior year related to a $32.1 million investment in Brain, Corp and a $25.7 million net cash outlay for the acquisition of TCS.
Removed paragraphs (13)
Previous report
Ongoing geopolitical tensions, including conflicts in the Middle East and Eastern Europe, along with evolving global trade dynamics, continue to contribute to economic uncertainty and market volatility. In March 2025, the U.S. imposed additional tariffs on a wide range of imports, with the potential for further tariff actions. These trade measures, along with updates to export controls and sanctions regimes, pose ongoing risks to global supply chains, potentially increasing the cost of goods, straining procurement cycles, and impacting customer demand.
Previous report
We are closely monitoring the evolving trade landscape, and our analysis of the potential impact of tariffs on our operations is actively underway. Future trade policy shifts or retaliatory measures could raise manufacturing costs, affect product pricing, or contribute to inflationary pressures on our customers, which may in turn reduce demand for our products.
Previous report
Our business remains sensitive to global demand trends. In China, market saturation has contributed to declining sales of mid-tier products and intensified pricing competition. In certain other markets, including Australia and Mexico, shifting customer behavior has led to deferred purchases or a greater reliance on rental solutions. In response, we continue to pursue operational efficiencies, refine cost management strategies, and monitor global developments closely to mitigate potential risks.
Previous report
Amid the uncertainties of a slowing global economy, rising inflation, and ongoing geopolitical challenges, our focus remains on building long-term resilience. With our global footprint, supply chain, and customer base, we are working to navigate the effects of shifting trade policies, such as tariffs, alongside broader geopolitical and macroeconomic uncertainties. While the full impact of these factors is uncertain and difficult to predict, we are committed to supporting our customers, ensuring operational stability, and navigating these volatile conditions with a focus on long-term growth.
Previous report
Americas net sales were $197.3 million for the first quarter of 2025, a decrease of 8.5% from the first quarter of 2024 driven by:
Previous report
•A net unfavorable impact from foreign currency exchange of approximately 1.6%.
Previous report
EMEA net sales were $76.0 million for the first quarter of 2025, a decrease of 1.0% from the first quarter of 2024 driven by:
Previous report
•A net unfavorable impact from foreign currency exchange of approximately 3.0%; partly offset by
Previous report
•Organic sales growth of 0.6% was primarily due to price realization in parts and consumables and service, partly offset by volume declines in equipment.
Previous report
APAC net sales were $16.7 million for the first quarter of 2025, a decrease of 10.2% from the first quarter of 2024 driven by:
Previous report
•Organic sales decline of 7.5% driven primarily by net volume declines in parts and consumables and the impact of negative product mix; and
Previous report
•A net unfavorable impact from foreign currency exchange of approximately 2.7%.
Previous report
Net cash used in investing activities during the three months ended March 31, 2025 was $6.9 million compared to net cash used in investing activities of $60.6 million during the three months ended March 31, 2024. The cash used was driven by capital expenditures.
Reworded paragraphs (19)
Previous wording
The following table compares the results of operations for the three months ended March 31, 2025 and 2024, respectively (in millions, except per share data and percentages):
Current wording
The following table compares the results of operations for the three and six months ended June 30, 2025 and 2024, respectively (in millions, except per share data and percentages):
Previous wording
Consolidated net sales for the first quarter of 2025 totaled $290.0 million, a 6.8% decrease as compared to consolidated net sales of $311.0 million in the first quarter of 2024. The components of the consolidated net sales change were as follows:
Current wording
Consolidated net sales for the second quarter of 2025 totaled $318.6 million, a 3.7% decrease as compared to consolidated net sales of $331.0 million in the second quarter of 2024. The components of the consolidated net sales change were as follows:
Previous wording
The 6.8% decrease in consolidated net sales in the first quarter of 2025 as compared to the same period in 2024 was driven by:
Current wording
The 3.7% decrease in consolidated net sales in the second quarter of 2025 as compared to the same period in 2024 was driven by:
Previous wording
•Organic sales decline of 5.0% was primarily due to broad volume declines across all geographies, particularly in North America, which was lapping a significant backlog reduction benefit in the prior year period; and
Current wording
•Organic sales decline of 4.5% was primarily due to volume declines across all geographies, particularly in North America, which was lapping a significant backlog-reduction benefit in the prior-year period, partly offset by price realization; and
Previous wording
•A net unfavorable impact from foreign currency exchange of approximately 2.1% due primarily to the strengthening of the Brazilian Real and Euro relative to the U.S. dollar; partly offset by
Current wording
•A net favorable impact from foreign currency exchange of approximately 0.8% primarily due to the strengthening of the Euro relative to the U.S. dollar.
Previous wording
•Acquisition-related growth of 0.3% driven by TCS.
Current wording
•Acquisition-related growth of 0.2% driven by TCS.
Previous wording
The following table sets forth the net sales by geographic area for the three months ended March 31, 2025 and 2024 (in millions, except percentages):
Current wording
The following table sets forth the net sales by geographic area for the three and six months ended June 30, 2025 and 2024 (in millions, except percentages):
Previous wording
•Organic sales decline of 6.9% was driven by volume declines, particularly in North America, which was lapping a significant backlog reduction benefit in the prior year period, partly offset by price realization in Latin America; and
Current wording
•Organic sales decline of 5.5% was driven by volume declines, particularly in North America industrial equipment, which was lapping a significant backlog reduction benefit in the prior year period, partly offset by price realization and volume increases in commercial equipment; and
Previous wording
•Acquisition-related growth of 1.4% due to TCS; and
Current wording
•Acquisition-related growth of 0.7% due to TCS; partly offset by
Previous wording
Gross profit margin of 41.4% was 280 basis points lower in the first quarter of 2025 compared to the first quarter of 2024. The margin rate decrease was primarily attributed to a shift in product and channel mix as well as ongoing inflation. The prior-year quarter includes benefits from a significant reduction in the backlog, largely consisting of higher-margin industrial products sold to direct customers.
Current wording
Gross profit margin of 42.1% was 100 basis points lower in the second quarter of 2025 compared to the second quarter of 2024. Gross profit margin of 41.8% was 180 basis points lower in the first six months of 2025 compared to first six months of 2024. The margin rate decrease in both periods was primarily attributed to a shift in product and customer mix as well as ongoing inflation and lower productivity. This was partly offset by price realization. The prior-year periods include benefits from a significant reduction in the backlog, largely consisting of higher-margin industrial products sold through direct channels.
Previous wording
Selling and administrative expense ("S&A expense") was $90.7 million for the first quarter of 2025, an increase of $0.8 million compared to the first quarter of 2024. As a percentage of net sales, S&A expense for the first quarter of 2025 increased 240 basis points to 31.3% from 28.9% in the first quarter of 2024. The S&A expense increase was driven by higher costs linked to our strategic investments, including Enterprise Resource Planning ("ERP") modernization costs and restructuring-related charges, partly offset by lower compensation and benefit expense and discretionary spending.
Current wording
Selling and administrative expense ("S&A expense") was $93.7 million for the second quarter of 2025, an increase of $0.8 million compared to the second quarter of 2024. As a percentage of net sales, S&A expense for the second quarter of 2025 increased 130 basis points to 29.4% from 28.1% in the second quarter of 2024. The S&A expense increase was driven by higher costs linked to our strategic investments, including Enterprise Resource Planning ("ERP") costs, and a bad debt charge. This increase was partly offset by lower variable compensation expense and discretionary spending.
Previous wording
Research and development expense ("R&D expense") was $9.7 million, or 3.3% of net sales, for the first quarter of 2025, with R&D expense as a percentage of net sales increasing 10 basis points compared to the first quarter of 2024.
Current wording
Research and development expense ("R&D expense") was $9.8 million, or 3.1% of net sales, for the second quarter of 2025, with R&D expense as a percentage of net sales decreasing 30 basis points compared to the second quarter of 2024. R&D expense was $19.5 million, or 3.2% of net sales, for the first six months of 2025, with R&D expense as a percentage of net sales decreasing 10 basis points compared to the first six months of 2024.
Previous wording
Interest expense, net was $2.3 million in the first quarter of 2025 and 2024. The following table compares the debt levels, average interest rate, interest income and interest expense for the three months ended March 31, 2025 and 2024, respectively (in millions, except percentages):
Current wording
Interest expense, net was $2.2 million in the second quarter of 2025 compared to $2.5 million in the second quarter of 2024. The following table compares the debt levels, average interest rate, interest income and interest expense for the three and six months ended June 30, 2025 and 2024, respectively (in millions, except percentages):
Previous wording
Net foreign currency transaction loss was $0.2 million in the first quarters of 2025 and 2024. The unfavorable impact was primarily due to the strengthening of the Euro relative to the U.S. dollar.
Current wording
Net foreign currency transaction loss was $0.8 million in the second quarter of 2025 compared to a gain of $0.7 million in the second quarter of 2024. Net foreign currency translation loss was$1.0 million in the first six months of 2025 compared to a gain of $0.5 million in the first six months of 2024. The unfavorable impact in both periods was primarily due to the strengthening of the Euro relative to the U.S. dollar.
Previous wording
The effective tax rate for the first quarter of 2025 was 23.8% compared to 19.1% for the first quarter of 2024. The increase was primarily due to a decrease in discrete tax benefits associated with share-based compensation recognized in the first quarter of 2024.
Current wording
The effective tax rate for the second quarter of 2025 was 26.0% compared to 24.4% for the second quarter of 2024. The increase was primarily due to a decrease in discrete tax benefits associated with share-based compensation recognized in the second quarter of 2024.
Previous wording
Cash and cash equivalents totaled $79.5 million at March 31, 2025 compared to $99.8 million as of December 31, 2024. Wherever possible, cash management is centralized and intercompany financing is used to provide working capital to subsidiaries as needed. Our current ratio was 2.1 as of March 31, 2025 and 2.0 as of December 31, 2024. Our primary working capital, which is comprised of accounts receivable, inventories and accounts payables, was $327.2 million as of March 31, 2025 and $316.0 million as of December 31, 2024. Our debt-to-capital ratio was 25.5% as of March 31, 2025 compared to 24.3% as of December 31, 2024.
Current wording
Cash and cash equivalents totaled $80.1 million at June 30, 2025 compared to $99.8 million as of December 31, 2024. Wherever possible, cash management is centralized and intercompany financing is used to provide working capital to subsidiaries as needed. Our current ratio was 2.1 as of June 30, 2025 and 2.0 as of December 31, 2024. Our primary working capital, which is comprised of accounts receivable, inventories and accounts payables, was $338.4 million as of June 30, 2025 and $316.0 million as of December 31, 2024. Our debt-to-capital ratio was 24.6% as of June 30, 2025 compared to 24.3% as of December 31, 2024.
Previous wording
Net cash used in operating activities during the three months ended March 31, 2025 was $0.4 million compared to net cash provided by operating activities of $2.9 million during the three months ended March 31, 2024. The cash used was driven by spend of our ERP modernization project of $12.4 million as well as consumption of working capital and lower operating performance.
Current wording
Net cash provided by operating activities during the six months ended June 30, 2025 was $22.1 million compared to net cash provided by operating activities of $21.5 million during the six months ended June 30, 2024. The increase was the result of decreased consumption of working capital, partly offset by spend on our ERP project of $28.4 million and lower operating performance.
Previous wording
Net cash used in financing activities during the three months ended March 31, 2025 was $13.7 million compared to net cash provided by financing activities of $26.9 million during the three months ended March 31, 2024. The cash used was driven by share repurchases and dividends, partly offset by net proceeds from borrowings.
Current wording
Net cash used in financing activities during the six months ended June 30, 2025 was $32.8 million compared to net cash provided by financing activities of $12.4 million during the six months ended June 30, 2024. The decrease was driven by increased repurchases of common stock and lower proceeds from the exercise of stock options.
Previous wording
Litigation Reform Act of 1995. Forward-looking statements generally can be identified by the use of forward-looking terminology such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe,” “project,” or “continue” or similar words or the negative thereof. These statements do not relate to strictly historical or current facts and provide current expectations of forecasts of future events. Any such expectations or forecasts of future events are subject to a variety of factors. Particular risks and uncertainties presently facing us include: geopolitical and economic uncertainty throughout the world; our ability to comply with global laws and regulations; changes in foreign currency exchange rates; our ability to adapt to customer pricing sensitivities; the competition in our business; fluctuations in the cost, quality or availability of raw materials and purchased components; our ability to adjust pricing to respond to cost pressures; unforeseen product liability claims or product quality issues; our ability to attract, retain and develop key personnel and create effective succession planning strategies; our ability to effectively develop and manage strategic planning and growth processes and the related operational plans; our ability to successfully upgrade and evolve our information technology systems; our ability to successfully protect our information technology systems from cybersecurity risks; complications with our new Enterprise Resource Planning ("ERP") system; the occurrence of a significant business interruption; our ability to maintain the health and safety of our workers; our ability to integrate acquisitions; our ability to develop and commercialize new innovative products and services; and risks related to our business transformation and strategic initiatives.
Current wording
This Quarterly Report, including “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 2, contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally can be identified by the use of forward-looking terminology such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe,” “project,” or “continue” or similar words or the negative thereof. These statements do not relate to strictly historical or current facts and provide current expectations of forecasts of future events. Any such expectations or forecasts of future events are subject to a variety of factors. Particular risks and uncertainties presently facing us include: geopolitical and economic uncertainty throughout the world; our ability to comply with global laws and regulations; changes in foreign currency exchange rates; our ability to adapt to customer pricing sensitivities; the competition in our business; fluctuations in the cost, quality or availability of raw materials and purchased components; our ability to adjust pricing to respond to cost pressures; unforeseen product liability claims or product quality issues; our ability to attract, retain and develop key personnel and create effective succession planning strategies; our ability to effectively develop and manage strategic planning and growth processes and the related operational plans; our ability to successfully upgrade and evolve our information technology systems; our ability to successfully protect our information technology systems from cybersecurity risks; complications with our new Enterprise Resource Planning ("ERP") system; the occurrence of a significant business interruption; our ability to maintain the health and safety of our workers; our ability to integrate acquisitions; our ability to develop and commercialize new innovative products and services; and risks related to our business transformation and strategic initiatives.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
The 5.2% decrease in consolidated net sales in the first six months of 2025 as compared to the same period in 2024 was driven by:
Current report — wording carried from elsewhere
•Organic sales decline of 4.7% was primarily due to volume declines across all geographies, particularly in North America, which was lapping a significant backlog-reduction benefit in the prior-year period, partly offset by price realization; and
Current report — wording carried from elsewhere
The effective tax rate for the first six months of 2025 was 25.2% compared to 21.8% for the first six months of 2024. The increase was primarily due to a decrease in discrete tax benefits associated with share-based compensation recognized in the first six months of 2024.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
This Quarterly Report, including “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 2, contains forward-looking statements within the meaning of the Private Securities