TENNANT CO
For the period ended Sep 30, 2025. Filed Nov 4, 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.
Sep 30, 2025 · Filed Nov 4, 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 2025-06-30; filed 2025-08-07.
0000097134-25-000027
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-09-30; filed 2025-11-04.
0000097134-25-000036
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 85 previous paragraphs and 87 current paragraphs.
39 unchanged; 32 reworded; 16 added; 12 removed; 2 previous and 0 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 (16)
Current report
Slower global growth and the uncertain effects of higher tariffs on our international and domestic trade are forcing us to aggressively manage our margins. Our core strategy involves market-based pricing actions and targeted supply chain initiatives, including supplier negotiations, dual sourcing, and logistics shifts, which are critical to mitigating tariff-related cost inflation and other input cost pressures. While near-term results may reflect timing mismatches between the realization of price increases, tariff impacts, and cost-out initiatives, which could pressure margins, our disciplined execution across pricing and cost management remains essential to sustaining profitability and driving long-term margin expansion.
Current report
•Organic sales decline of 5.4% primarily due to volume declines in North America, which lapped a significant backlog-reduction benefit in the prior-year period, partly offset by price realization; and
Current report
Americas net sales were $203.6 million for the third quarter of 2025, a decrease of 6.9% from the third quarter of 2024 driven by:
Current report
•Organic sales decline of 7.0% primarily due to volume declines in North America, a result of lapping a significant backlog-reduction benefit in the prior-year period, and the emerging trend of softening customer sentiment. This was partially offset by price realization; and
Current report
•A net favorable impact from foreign currency exchange of approximately 0.1%.
Current report
Americas net sales were $614.4 million for the first nine months of 2025, a decrease of 7.2% from the first nine months of 2024 driven by:
Current report
EMEA net sales were $80.5 million for the third quarter of 2025, an increase of 5.5% from the third quarter of 2024 driven by:
Current report
•A net favorable impact from foreign currency exchange of approximately 5.9%; partly offset by
Current report
EMEA net sales were $241.2 million for the first nine months of 2025, an increase of 2.8% from the first nine months of 2024 driven by:
Current report
•A net favorable impact from foreign currency exchange of approximately 2.8%;
Current report
APAC net sales were $19.2 million for the third quarter of 2025, a decrease of 7.7% from the third quarter of 2024 driven by:
Current report
•A net unfavorable impact from foreign currency exchange of approximately 1.3%.
Current report
•A net unfavorable impact from foreign currency exchange of approximately 1.6%.
Current report
Gross profit margin of 42.7% was 30 basis points higher in the third quarter of 2025 compared to the third quarter of 2024. The margin rate improved primarily due to strong price realization driven by strategic pricing actions, supplemented by additional tariff-related pricing adjustments. This was partially offset by lower productivity.
Current report
Gain on Sale
Current report
We recognized a gain on sale of a building of $0.4 million in the third quarter of 2025. The gain was recorded in other (expense) income, net on our consolidated statements of income.
Removed paragraphs (12)
Previous 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.
Previous report
•A net unfavorable impact from foreign currency exchange of approximately 0.7%; partly offset by
Previous 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:
Previous 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:
Previous report
•A net unfavorable impact from foreign currency exchange of approximately 1.2%.
Previous 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:
Previous report
•A net favorable impact from foreign currency exchange of approximately 5.3%; partly offset by
Previous 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:
Previous report
•A net favorable impact from foreign currency exchange of approximately 1.2%;
Previous 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:
Previous report
•A net unfavorable impact from foreign currency exchange of approximately 1.0%.
Previous report
•A net unfavorable impact from foreign currency exchange of approximately 1.7%.
Reworded paragraphs (32)
Previous wording
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 wording
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, persistent geopolitical tensions, elevated interest rates, monetary policy changes, and foreign currency fluctuations.
Previous wording
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 wording
The global business environment remains volatile and is currently being shaped by ongoing uncertainties, including evolving trade policy dynamics. These trade dynamics are also contributing to competitive shifts within the market. Previously implemented U.S. tariffs and related actions have begun to increase input costs, disrupt supply chains, and affect customer demand as end users absorb higher costs. Ongoing policy changes and retaliatory measures continue to pressure manufacturing costs and pricing, which in turn, are influencing product demand. We are actively monitoring these developments and adapting our operations in response to the changing environment.
Previous wording
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 wording
Demand trends across our key markets remain mixed. In China, while some targeted stimulus measures have been introduced, the overall economic recovery remains uneven, with market saturation continuing to impact product sales and intensify pricing competition. In other regions like Mexico, elevated interest rates and persistent inflationary pressures are contributing to continued economic uncertainty, leading to delayed capital expenditure decisions and a sustained preference for rental solutions. In Europe, softening economic growth combined with heightened competitive pressures have tempered demand for our products.
Previous wording
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 wording
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 and other inflationary pressures. While some margin pressure may persist as the full benefits of our cost-out and pricing initiatives are phased in, we anticipate 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.
Previous 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):
Current wording
The following table compares the results of operations for the three and nine months ended September 30, 2025 and 2024, respectively (in millions, except per share data and percentages):
Previous 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:
Current wording
Consolidated net sales for the third quarter of 2025 totaled $303.3 million, a 4.0% decrease as compared to consolidated net sales of $315.8 million in the third quarter of 2024. The components of the consolidated net sales change were as follows:
Previous 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:
Current wording
The 4.0% decrease in consolidated net sales in the third quarter of 2025 as compared to the same period in 2024 was driven by:
Previous 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.
Current wording
•A net favorable impact from foreign currency exchange of approximately 1.4% primarily due to the strengthening of the Euro relative to the U.S. dollar.
Previous wording
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 wording
The 4.8% decrease in consolidated net sales in the first nine months of 2025 as compared to the same period in 2024 was driven by:
Previous 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
Current wording
•Organic sales decline of 4.9% primarily due to volume declines across all geographies, particularly in North America, which lapped a significant backlog-reduction benefit in the prior-year period, partly offset by price realization; and
Previous wording
•Acquisition-related growth of 0.2% driven by TCS.
Current wording
•Acquisition-related growth of 0.1% driven by TCS.
Previous 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):
Current wording
The following table sets forth the net sales by geographic area for the three and nine months ended September 30, 2025 and 2024 (in millions, except percentages):
Previous 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
Current wording
•Organic sales decline of 6.4% driven by volume declines, particularly in North America industrial equipment, which lapped a significant backlog-reduction benefit in the prior-year period, partly offset by price realization and volume increases in commercial equipment; and
Previous wording
•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 wording
•Organic sales decline of 0.4% primarily due to mixed regional performance with volume declines in certain markets, partly offset by volume increases in the UK and southern Europe, and price realization.
Previous wording
•Acquisition-related growth of 0.7% due to TCS; partly offset by
Current wording
•Acquisition-related growth of 0.4% due to TCS; partly offset by
Previous wording
•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 wording
•Organic sales decline of 0.4% primarily due to mixed regional performance with volume declines in certain markets, partly offset by volume increases in the UK, and price realization.
Previous wording
•Organic sales decline of 5.0% driven primarily by decreased volumes in China, partly offset by increased equipment volume in Australia; and
Current wording
•Organic sales decline of 6.4% driven primarily by decreased commercial equipment volume in China and industrial equipment volume in South Korea; and
Previous wording
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 wording
APAC net sales were $56.3 million for the first nine months of 2025, a decrease of 7.9% from the first nine months of 2024 driven by:
Previous wording
•Organic sales decline of 6.2% driven primarily by decreased volumes in China, partly offset by increased equipment volume in Australia; and
Current wording
•Organic sales decline of 6.3% driven primarily by decreased commercial equipment volume in China and industrial equipment volume in South Korea; and
Previous 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.
Current wording
Gross profit margin of 42.1% was 110 basis points lower in the first nine months of 2025 compared to the first nine months of 2024. The margin rate decrease 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 $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.
Current wording
Selling and administrative expense ("S&A expense") was $96.6 million for the third quarter of 2025, an increase of $3.9 million compared to the third quarter of 2024. As a percentage of net sales, S&A expense for the third quarter of 2025 increased 240 basis points to 31.8% from 29.4% in the third quarter of 2024. The increase in S&A expense was primarily driven by $6.7 million associated with our strategic investments, $5.3 million of legal contingency costs related to an intellectual property dispute, and $1.3 million in restructuring charges. The increase was partially offset by cost savings realized through lower variable compensation and reduced payroll expense following the restructuring actions executed at the end of the prior year.
Previous wording
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 wording
S&A expense was $281.0 million for the first nine months of 2025, an increase of $5.5 million compared to the first nine months of 2024. As a percentage of net sales, S&A expense for the first nine months of 2025 increased 200 basis points to 30.8% from 28.8% in the first nine months of 2024. The increase in S&A expense was primarily driven by $19.4 million related to our strategic investments, $5.7 million of legal contingency costs related to an intellectual property dispute, a bad debt charge of $2.5 million, and $2.5 million restructuring-related charges. This was partially offset by lower variable compensation expense.
Previous 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.
Current wording
Research and development expense ("R&D expense") was $10.5 million, or 3.5% of net sales, for the third quarter of 2025, with R&D expense as a percentage of net sales increasing 20 basis points compared to the third quarter of 2024. R&D expense was $30.0 million, or 3.3% of net sales, for the first nine months of 2025, with R&D expense as a percentage of net sales flat to the first nine months of 2024.
Previous 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):
Current wording
Interest expense, net was $2.4 million in the third quarter of 2025 compared to $2.7 million in the third quarter of 2024. The following table compares the debt levels, average interest rate, interest income and interest expense for the three and nine months ended September 30, 2025 and 2024, respectively (in millions, except percentages):
Previous 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.
Current wording
Net foreign currency transaction loss decreased by $0.4 million compared to the third quarter of 2024. Net foreign currency translation loss was$1.0 million in the first nine months of 2025 compared to a gain of $0.1 million in the first nine 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 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.
Current wording
The effective tax rate for the third quarter of 2025 was 23.2% compared to 24.4% for the third quarter of 2024. The decrease was primarily due to the recognition of discrete tax benefits from additional research credits recognized in the third quarter of 2025.
Previous wording
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.
Current wording
The effective tax rate for the first nine months of 2025 was 24.6% compared to 22.5% for the first nine months of 2024. The increase was primarily due to a decrease in discrete tax benefits associated with share-based compensation recognized in the first nine months of 2024.
Previous 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.
Current wording
Cash and cash equivalents totaled $99.4 million at September 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 September 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 $344.6 million as of September 30, 2025 and $316.0 million as of December 31, 2024. Our debt-to-capital ratio was 27.1% as of September 30, 2025 compared to 24.3% as of December 31, 2024.
Previous wording
As of June 30, 2025, we had letters of credit and bank guarantees outstanding in the amount of $3.2 million, leaving approximately $434.3 million of unused borrowing capacity on our revolving facility.
Current wording
As of September 30, 2025, we had letters of credit and bank guarantees outstanding in the amount of $3.2 million, leaving approximately $409.3 million of unused borrowing capacity on our revolving facility.
Previous 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.
Current wording
Net cash provided by operating activities during the nine months ended September 30, 2025 was $50.8 million compared to net cash provided by operating activities of $52.2 million during the nine months ended September 30, 2024. The decrease was the result of lower operating performance, partly offset by decreased consumption of working capital.
Previous wording
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.
Current wording
Net cash used in investing activities during the nine months ended September 30, 2025 was $18.3 million compared to net cash used in investing activities of $69.1 million during the nine months ended September 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.
Previous 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.
Current wording
Net cash used in financing activities during the nine months ended September 30, 2025 was $36.0 million compared to net cash provided by financing activities of $8.1 million during the nine months ended September 30, 2024. The increase was driven by increased repurchases of common stock and lower proceeds from the exercise of stock options, partly offset by lower repayments of borrowings.
Rearranged previous paragraphs (2)
Previous report — wording carried 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
Previous report — wording carried elsewhere
•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