TENNANT CO
For the period ended Dec 31, 2025. Filed Feb 24, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Feb 24, 2026
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-K
Period ended 2024-12-31; filed 2025-02-18.
0000097134-25-000006
Item 7. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-12-31; filed 2026-02-24.
0000097134-26-000008
Item 7. 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 109 previous paragraphs and 122 current paragraphs.
66 unchanged; 24 reworded; 30 added; 19 removed; 0 previous and 2 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 (30)
Current report
As a global company, we continue to be exposed to risks and uncertainties stemming from macroeconomic and geopolitical conditions. These factors include inflationary pressures, interest rate volatility, foreign currency exchange rate volatility, changes in capital markets conditions, and shifts in international trade policy. Collectively, these conditions create a dynamic operating environment that may affect the Company’s ability to drive growth, restore margins, and advance its transformation initiatives
Current report
While overall inflationary pressures have generally moderated, the Company continues to experience a more concentrated and direct impact on the cost components of its products, which remain significant to its cost structure. Changes in trade policy, particularly tariffs, pose a significant risk to our operations. Tariff increases, changes to trade agreements, or potential retaliatory actions could raise supplier costs, weaken demand, and disrupt the Company’s operations. The Company has implemented, and expects to continue implementing, pricing actions, cost management initiatives, and supply chain measures to mitigate these pressures; however, such efforts may not fully offset the impact.
Current report
Global geopolitical instability continues to contribute to economic and operational uncertainty. Ongoing conflicts in Ukraine and the Middle East, rising tensions involving China and Taiwan, and the possibility of escalation in regions where the United States may be involved have increased the risk of wider economic disruption. These developments could result in supply chain volatility, logistics constraints, higher input costs, and changes in customer purchasing behavior. The timing, duration, and severity of these potential effects are uncertain and difficult to predict.
Current report
Demand trends across our major markets were mixed throughout the year. In China, after a period marked by uneven economic recovery and pricing pressure, organic growth returned late in the year. In EMEA and the broader APAC region, organic growth also improved in the latter part of the year, reversing earlier declines and reflecting resilience in select markets and effective responses to customer needs despite ongoing macroeconomic and competitive pressures.
Current report
Enterprise Resource Planning (ERP) System Implementation
Current report
In the first week of November 2025, the Company went live with the ERP system in its largest region, North America. The transition introduced unexpected challenges that constrained operating capacity post go-live, including order‑management and fulfillment disruptions, manufacturing scheduling issues, and reduced inventory visibility, particularly within Parts & Consumables and Service. The system transition also resulted in the loss of three weeks of machine order entry and parts shipping capability, as well as contributing to slower transaction processing and prolonged customer delays.
Current report
In response, the Company deployed cross‑functional recovery teams, implemented manual and system‑based workarounds, increased on‑site support, and adjusted production scheduling. Although December showed improvement as our mitigation efforts took hold, we were unable to fully offset the impact of the November disruptions.
Current report
While primary system issues have been addressed, certain customer‑related impacts and incremental support needs continued into early 2026, and we expect some temporary inefficiencies to persist as teams acclimate to the new platform and as optimization efforts continue.
Current report
The Company expects the macroeconomic and demand environment in 2026 to generally reflect the conditions experienced during 2025. Tariff‑related cost increases and inflationary input costs are expected to remain key elements of the cost structure. The Company has implemented targeted pricing and cost‑out initiatives intended to moderate these impacts, though the timing and magnitude of benefits may vary.
Current report
Following the North America ERP implementation in late 2025, certain operational inefficiencies and elevated support needs are expected to persist into the second quarter of 2026. As part of broader system‑stabilization efforts, the Company conducted a comprehensive physical inventory that required a two‑week shutdown of manufacturing operations in early January, which is expected to weigh on first‑quarter sales and costs. The Company also anticipates continued operating inefficiencies during the early stages of system stabilization, resulting in higher costs and margin pressure, most notably in the first quarter. As stabilization progresses and processes mature, the Company expects to transition toward a more normalized operating rhythm by mid‑year.
Current report
While these factors may influence near‑term results, operating margins are expected to improve through 2026 as ERP stabilization advances and as the cumulative benefits of pricing actions, cost‑management measures, and supply‑chain initiatives are realized. Margin performance is expected to strengthen gradually over the course of the year, with first‑quarter margins anticipated to be generally consistent with levels experienced in the fourth quarter of 2025 and improving thereafter as operational efficiency increases. The Company also expects ongoing margin pressure from tariffs implemented in the second half of 2025. To help offset these impacts, it has taken targeted actions across its supply chain and commercial pricing processes.
Current report
Additionally, the Company continues to invest in strategic priorities that support long‑term growth and competitiveness, including the ongoing expansion of its robotics portfolio and autonomous solutions.
Current report
•Organic sales decline of 7.3% primarily due to volume declines in North America, which lapped a significant backlog-reduction benefit in the prior-year period and was affected by transitional impacts related to the new ERP implementation. These factors were partly offset by price realization in the Americas and EMEA;
Current report
•A net favorable impact from foreign currency exchange of approximately 0.7% primarily due to the strengthening of the Euro relative to the U.S. dollar; and
Current report
•Acquisition-related growth of 0.1% driven by TCS.
Current report
•Organic sales decline of 10.5%, primarily due to volume declines in North America, as a result of lapping a significant backlog-reduction benefit in the prior-year period, order fulfillment disruptions associated with our fourth quarter 2025 ERP transition, and softer underlying demand primarily in industrial equipment in the second half of 2025. This was partially offset by price realization; and
Current report
•Organic sales increase of 0.5%, due to price realization, partly offset by volume declines in Germany, Benelux, Scandinavia and France; and
Current report
•Organic sales decrease of 2.2%, reflecting the impact of pricing actions and softer underlying demand primarily in China and Southeast Asia, partly offset by volume growth in Australia and India; and
Current report
•A net unfavorable impact from foreign currency exchange of approximately 1.3%.
Current report
Gross profit margin of 40.2% was 250 basis points lower in 2025 compared to 2024. The margin rate decrease was primarily driven by a shift in volume and mix dynamics. Additionally, the effects of the ERP transition in North America contributed to volume deleverage, as well as broader operational inefficiencies and cost impacts. Margin performance was also affected by higher material costs. The comparison to the prior year was further influenced by a significant backlog reduction in 2024 that carried a higher concentration of higher margin industrial products sold through direct channels. These factors were partially offset by favorable price realization, including pricing actions taken to address tariff-related cost increases.
Current report
Foreign Currency Transaction (Loss) Gain
Current report
Net foreign currency transaction loss was $1.7 million in 2025, compared to a gain of $0.1 million in 2024. The unfavorable impact was primarily attributed to hedging transaction costs associated with increased year-over-year exposure to the Brazilian Real relative to the U.S. dollar.
Current report
In November 2025, the FASB issued ASU 2025-09 Derivatives and Hedging (Topic 815): Hedge Accounting Improvements, which includes amendments to more closely align hedge accounting with the economics of an entity's risk management activities. The ASU is effective for annual periods beginning after December 15, 2026, and interim periods within those fiscal years. Early adoption is permitted. The amendments should be applied on a prospective basis. We are evaluating the impact of the ASU to determine its impact on our consolidated financial statements and related disclosures.
Current report
In December 2025, the FASB issued ASU 2025-11 Interim Reporting (Topic 270): Narrow-Scope Improvements, which clarifies the applicability of the interim reporting guidance, the types of interim reporting, and the form and content of interim financial statements in accordance with U.S. generally accepted accounting principles. The amendment does not intend to change the fundamental nature of interim reporting or expand or reduce current interim reporting disclosure requirements, but rather aims to provide clarity and improve navigability of the existing interim reporting requirements. The update will be effective for interim periods within annual periods beginning after December 15, 2027. Adoption of this ASU can either be applied prospectively or retrospectively to any or all prior periods presented in the financial statements. We are evaluating the impact of the ASU to determine its impact on our consolidated financial statements and related disclosures.
Current report
In December 2025, the FASB issued ASU 2025-12 Codification Improvements, which aims to update the FASB Accounting Standards Codification for a broad range of topics arising from technical corrections, unintended application or the Codification, clarifications, and other minor improvements. The ASU is effective for annual periods beginning after December 15, 2026, including interim periods within those fiscal years. We are evaluating the effect that this guidance will have on our consolidated financial statements and related disclosures.
Current report
For the 2025 annual goodwill impairment test for the North America and Latin America reporting units, we elected to perform a qualitative assessment to determine whether it was more likely than not that the fair value of each reporting unit was less than its carrying amount. In performing this assessment, we considered relevant events and circumstances, including industry, market and macroeconomic conditions, as well as company-specific and reporting unit-specific factors. Based on this evaluation, we concluded that it was not more likely than not that the fair value of either reporting unit was less than its carrying amount. Accordingly, a quantitative goodwill impairment test was not required, and no impairment of goodwill was recognized for these reporting units during 2025.
Current report
For the Europe, Middle East and Africa (“EMEA”) and Asia-Pacific (“APAC”) reporting units, we elected to bypass the qualitative assessment and perform a quantitative goodwill impairment test in accordance with our accounting policy. The quantitative analysis utilized a combination of the income approach and market approach, which reflect management’s current assumptions and inputs, including forecasts of future revenue, profit margins, long-term grown rate, discount rate, and EBITDA multiples.
Current report
The estimated fair value of the EMEA reporting unit exceeded its carrying amount by approximately $36.8 million, or 7.9%, as of the impairment testing date. The carrying amount of goodwill allocated to the EMEA reporting unit as of October 1, 2025 was $172.6 million. As the estimated fair value exceeded the carrying amount, no goodwill impairment was recognized. Although the EMEA reporting unit was not impaired, the reporting unit has a limited excess of fair value over carrying value and may be subject to future impairment if actual results do not meet projections or if assumptions used in the valuation, including discount rates or market conditions, deteriorate.
Current report
The estimated fair value of the APAC reporting unit exceeded its carrying amount by approximately $34.6 million, or 40.8%, as of the impairment testing date. The carrying amount of goodwill allocated to the APAC reporting unit as of October 1, 2025 was $15.4 million. Accordingly, no goodwill impairment was recognized for this reporting unit during 2025.
Current report
•Changes in trade policy.
Removed paragraphs (19)
Previous report
Recent geopolitical and macroeconomic events have led to economic uncertainty and volatility globally. Additionally, shifts in the U.S. and international government policies and priorities such as changes in tariffs, trade barriers, and price and exchange controls could impact demand for our products and services, disrupt supply chain, and ultimately have an adverse effect on our business.
Previous report
Our business is influenced by customer spending and global demand for our products. We are closely monitoring challenging business conditions in APAC, especially in China, which continues to experience market saturation, leading to decreased demand for our mid-tier products and heightened pricing pressures in the region. In Australia, there are signals of reduced demand as customers are delaying equipment orders or moving to rental units. To address these pressures, we've implemented adaptive measures, such as streamlining operations and refining cost management strategies.
Previous report
Amid the uncertainty of a slowing global economy, global inflation, and geopolitical challenges, we continue to remain focused on long-term resilience. While we are unable to predict the full effect of these geopolitical and macroeconomic events and how they might evolve, we are committed to supporting our customers, maintaining operational stability, and navigating the volatile global landscape with a focus on sustainable growth.
Previous report
As we look ahead to 2025, while we expect to face a significant backlog headwind in 2025, the underlying business continues to drive year-over-year order growth. Given the robust reception to our recent product introductions and a solid pipeline of upcoming products, combined with expanded go-to-market strategies and a disciplined pricing approach, we are well positioned to continue to execute our enterprise growth strategy effectively.
Previous report
•Organic sales growth of 3.2% attributed to price realization across all regions, favorable product and channel mix, and higher equipment sales in the Americas, partly offset by volume declines in the EMEA and APAC regions;
Previous report
•Inorganic sales growth of 0.7% driven by the acquisition of TCS; partly offset by
Previous report
•Organic sales growth of 6.3%, primarily due to price realization and volume increases in equipment and service, partly offset by volume declines in parts and consumables in North America; and
Previous report
•A net unfavorable impact from foreign currency exchange of approximately 0.6%.
Previous report
•Organic sales decrease of 1.6%, primarily due to volume declines in both equipment sales and parts and consumables, partly offset by price realization in all categories. EMEA volumes were impacted by weak economic conditions and a small contribution from backlog reduction.
Previous report
•Organic sales decrease of 9.5%, primarily driven by volume declines partly offset by price realization in China and Australia; and
Previous report
•A net unfavorable impact from foreign currency exchange of approximately 0.8%.
Previous report
Backlog
Previous report
Backlog is one of the many indicators of business conditions in the Company's markets. Our order backlog was approximately $61.5 million at December 31, 2024, compared to $186.2 million at December 31, 2023. From 2020 to 2022, our backlog grew to unusually high levels due to supply chain constraints resulting from the COVID-19 pandemic. This trend began to reverse in 2023 as supply chain conditions improved, allowing us to obtain key component parts and increase production levels. As a result, our order backlog at December 31, 2024 reflects a return to normalized levels.
Previous report
Gross profit margin of 42.7% was 30 basis points higher in 2024 compared to 2023. The margin rate increase was the result of pricing and cost-out initiative efforts, which outpaced the impact of inflation in the year. Strong margin rates are also supported by favorable product mix, including the reduction of industrial equipment backlog in the first half of 2024.
Previous report
("ERP") modernization costs, legal contingency costs related to an intellectual property dispute, restructuring-related charges associated with our global workforce realignment, and transaction and integration costs.
Previous report
Foreign Currency Transaction Gain/Loss
Previous report
Net foreign currency transaction gain was $0.1 million in 2024, compared to a $0.3 million gain in 2023. The favorable impact was primarily due to hedging gains on foreign denominated receivables.
Previous report
In December 2021, the Organization for Economic Cooperation and Development ("OECD"), which is an international public policy setting organization comprised of member countries including the U.S., published a proposal for the establishment of a global minimum tax rate of 15% (the "Pillar Two rule"). Member states have begun implementing the rules through local legislation and the OECD continues to refine technical guidance. Member states have begun implementing the rules through local legislation and the OECD continues to refine technical guidance. We have considered the applicable developments under the Pillar Two rules and there is no material impact on the 2024 consolidated financial statements.
Previous report
In December 2023, the FASB issued ASU 2023-09 Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which is intended to enhance the transparency and decision usefulness of income tax disclosures. The amendments in ASU 2023-09 address investor requests for enhanced income tax information primarily through changes to the rate reconciliation and income taxes paid information. The amendments in this ASU are required to be adopted for fiscal years beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued. The amendments should be applied on a prospective basis although retrospective application is permitted. We are currently evaluating the impact of adoption on our financial disclosures.
Reworded paragraphs (24)
Previous wording
Consolidated net sales in 2024 totaled $1,286.7 million, a 3.5% increase as compared to consolidated net sales of $1,243.6 million in 2023. The components of the consolidated net sales change were as follows:
Current wording
Consolidated net sales in 2025 totaled $1,203.5 million, a 6.5% decrease as compared to consolidated net sales of $1,286.7 million in 2024. The components of the consolidated net sales change were as follows:
Previous wording
The 3.5% increase in consolidated net sales was driven by:
Current wording
The 6.5% decrease in consolidated net sales was driven by:
Previous wording
Net sales in the Americas were $888.5 million in 2024, an increase of 5.7% from 2023 driven by:
Current wording
Net sales in the Americas were $792.0 million in 2025, a decrease of 10.9% from 2024 driven by:
Previous wording
EMEA net sales were $318.5 million in 2024, an increase of 1.3% from 2023 driven by:
Current wording
EMEA net sales were $334.6 million in 2025, an increase of 5.1% from 2024 driven by:
Previous wording
•A net favorable impact from foreign currency exchange of approximately 0.3%; partly offset by
Current wording
•A net favorable impact from foreign currency exchange of approximately 4.3%;
Previous wording
•Inorganic sales growth of 2.6% driven by the acquisition of TCS;
Current wording
•Inorganic sales growth of 0.3% driven by the acquisition of TCS.
Previous wording
APAC net sales were $79.7 million in 2024, a decrease of 10.3% from 2023 driven by:
Current wording
APAC net sales were $76.9 million in 2025, a decrease of 3.5% from 2024 driven by:
Previous wording
Selling and Administrative expense ("S&A expense") was $391.9 million in 2024, an increase of $39.3 million compared to 2023. As a percentage of net sales, S&A expense in 2024 increased 210 basis points to 30.5% from 28.4% in 2023. The S&A expense increase was primarily driven by Enterprise Resource Planning
Current wording
Selling and Administrative expense ("S&A expense") was $374.8 million in 2025, a decrease of $17.1 million compared to 2024. The S&A expense decrease was driven by lower compensation-related costs and reductions in certain legal, integration, and restructuring expenses, partially offset by higher ERP spending and increased bad debt expense. As a percentage of net sales, S&A expense in 2025 increased 60 basis points to 31.1% from 30.5% in 2024, primarily due to net sales deleverage.
Previous wording
Research and Development ("R&D") expense was $43.8 million, or 3.4% of net sales, in 2024, with R&D as a percentage of sales increasing 50 basis points compared to 2023.
Current wording
Research and Development ("R&D") expense was $41.2 million, or 3.4% of net sales, in 2025, with R&D as a percentage of sales flat compared to 2024.
Previous wording
Interest expense, net was $9.1 million in 2024, a decrease of $4.4 million compared to 2023. The decrease was the result of lower weighted average outstanding borrowings. The following table compares the weighted average outstanding borrowings, average interest rate, interest expense and interest income for the years ended December 31 (in millions, except percentages):
Current wording
Interest expense, net was $9.0 million in 2025, a decrease of $0.1 million compared to 2024. The decrease was the result of a lower average interest rate. The following table compares the weighted average outstanding borrowings, average interest rate, interest expense and interest income for the years ended December 31 (in millions, except percentages):
Previous wording
The effective tax rate for 2024 was 20.1% compared to 11.6% in 2023. The increase in the effective tax rate was primarily driven by the value of certain non-cash exceptional tax items. Both the 2024 and 2023 tax rates include benefits related to a reduction to a deferred tax liability on undistributed foreign earnings as those cumulative earnings were reduced by current year statutory book losses. We do not expect similar benefits in future years. These non-cash events had impacts of (3.7%) in 2024 and (12.0%) in 2023. Absent these benefits the effective tax rate for 2024 and 2023 would be 23.8% and 23.6%, respectively.
Current wording
The effective tax rate for 2025 was 24.3% compared to 20.1% in 2024. The increase in the effective tax rate was primarily driven by the value of certain non-cash exceptional tax items. The 2024 tax rate includes a benefit related to a reduction to a deferred tax liability on undistributed foreign earnings as those cumulative earnings were reduced by statutory book losses. We do not expect similar benefits in future years. This non-cash event had an impact of (3.7%) in 2024. Absent these benefits the effective tax rate for 2024 would have been 23.8%.
Previous wording
Cash, cash equivalents and restricted cash totaled $99.8 million at December 31, 2024, as compared to $117.1 million as of December 31, 2023. Wherever possible, cash management is centralized and intercompany financing is used to provide working capital to subsidiaries as needed. Our current ratio was 2.0 as of December 31, 2024 and 2.1 as of December 31, 2023. Our primary working capital, which is comprised of accounts receivable, inventories and accounts payable was $316.0 million as of December 31, 2024 and $312.1 million as of December 31, 2023. Our debt-to-capital ratio was 24.3% as of December 31, 2024, compared to 25.8% as of December 31, 2023.
Current wording
Cash, cash equivalents and restricted cash totaled $106.4 million at December 31, 2025, as 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 2.0 as of December 31, 2025 and 2.0 as of December 31, 2024. Our primary working capital, which is comprised of accounts receivable, inventories and accounts payable was $327.8 million as of December 31, 2025 and $316.0 million as of December 31, 2024. Our debt-to-capital ratio was 31.2% as of December 31, 2025, compared to 24.3% as of December 31, 2024.
Previous wording
As of December 31, 2024, we had letters of credit and bank guarantees outstanding in the amount of $3.2 million, leaving approximately $449.3 million of unused borrowing capacity on our revolving facility.
Current wording
As of December 31, 2025, we had letters of credit and bank guarantees outstanding in the amount of $3.2 million, leaving approximately $374.3 million of unused borrowing capacity on our revolving facility.
Previous wording
On February 11, 2025, the Company's Board of Directors authorized a quarterly cash dividend of $0.295 per share payable on March 14, 2025, to shareholders of record at the close of business on February 28, 2025.
Current wording
On February 10, 2026, the Company's Board of Directors authorized a quarterly cash dividend of $0.31 per share payable on March 16, 2026, to shareholders of record at the close of business on February 27, 2026.
Previous wording
Net cash provided by operating activities in 2024 was $89.7 million compared to net cash provided by operating activities of $188.4 million in 2023. The decrease in cash provided was the result of consumption of working capital, mainly related to inventories, accounts receivable and bonus payouts, and spend on our ERP modernization project of $37.3 million.
Current wording
Net cash provided by operating activities in 2025 was $65.0 million compared to net cash provided by operating activities of $89.7 million in 2024. The decrease in cash provided by operating activities was primarily driven by lower operating performance and increased consumption of working capital.
Previous wording
Net cash used in investing activities in 2024 was $78.4 million compared to net cash used in investing activities of $23.2 million in 2023. The increase in cash outflows was primarily driven by cash used for the investment in Brain Corp of $32.1 million and cash used, net of cash acquired, for the acquisition of TCS of $25.7 million.
Current wording
Net cash used in investing activities in 2025 was $22.7 million compared to net cash used in investing activities of $78.4 million in 2024. The decrease was primarily driven by one-time cash outflows in the prior year related to a used $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 in 2024 was $25.2 million compared to net cash used in financing activities of $122.6 million in 2023. The decrease in cash outflows was primarily driven by proceeds from exercises of stock options decreased net repayments of borrowings, partly offset by dividend payments and share repurchases.
Current wording
Net cash used in financing activities in 2025 was $38.7 million compared to net cash used in financing activities of $25.2 million in 2024. The increase in cash outflows was primarily driven by share repurchases and dividend payments, partly offset by increased net proceeds from borrowings.
Previous wording
On February 11, 2025, our board of directors authorized the repurchase of up to 2,000,000 shares of our common stock. This increase was in addition to the remaining authorized shares under our prior common stock repurchase program that was authorized on October 31, 2016 (the "Program"). Share repurchases may be made on an opportunistic basis through open market transactions, privately negotiated transactions, or by other means in accordance with applicable federal securities laws. We are not obligated to purchase any shares, and there is no set date that the program will expire. Our board of directors, at its discretion, may increase or decrease the number of authorized shares or terminate the Program at any time.
Current wording
Share repurchases may be made on an opportunistic basis through open market transactions, privately negotiated transactions, or by other means in accordance with applicable federal securities laws. We are not obligated to purchase any shares, and there is no set date that the program will expire. Our board of directors, at its discretion, may increase or decrease the number of authorized shares or terminate the program at any time.
Previous wording
During the year ended December 31, 2024, we repurchased 198,352 shares under the Program, with 623,061 shares of common stock remaining.
Current wording
During the year ended December 31, 2025, we repurchased 1,108,998 shares under both programs, with 1,514,063 shares of common stock remaining under the 2025 repurchase plan.
Previous wording
The Company believes the liquidity available from the combination of expected cash generated by operating activities, existing cash and available credit under existing credit facilities will be sufficient to meet its short-term and long-term cash requirements. Significant contractual obligations include principal and interest payments on long-term debt (Note 9) and operating lease commitments (Note 15). We also have contractual purchase obligations of approximately $62 million for 2025.
Current wording
The Company believes the liquidity available from the combination of expected cash generated by operating activities, existing cash and available credit under existing credit facilities will be sufficient to meet its short-term and long-term cash requirements. Significant contractual obligations include principal and interest payments on long-term debt (Note 9) and operating lease commitments (Note 16). We also have contractual purchase obligations of approximately $54 million for 2026.
Previous wording
In November 2024, the FASB issued ASU 2024-03 Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Topic 220) - Disaggregation of Income Statement Expenses, which requires disaggregation of certain income statement expense captions into specified categories to be disclosed within the notes to the financial statements, but does not change the expense captions on the consolidated income statement. The ASU is effective for annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Adoption of this ASU can either be applied prospectively to consolidated financial statements issued for reporting periods after the effective date of this ASU or retrospectively to any or all prior periods presented in the consolidated financial statements. We are evaluating the effect that this guidance will have on our consolidated financial statements and related disclosures.
Current wording
In November 2024, the FASB issued ASU 2024-03 Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Topic 220) - Disaggregation of Income Statement Expenses, which requires disaggregation of certain income statement expense captions into specified categories to be disclosed within the notes to the financial statements, but does not change the expense captions on the consolidated income statement. In January 2025, the FASB issued ASU 2025-01 Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosure (Subtopic 220-40): Clarifying the Effective Date, which clarified that ASU 2024-03 is effective for annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. Adoption of this ASU can either be applied prospectively to consolidated financial statements issued for reporting periods after the effective date of this ASU or retrospectively to any or all prior periods presented in the consolidated financial statements. We are evaluating the effect that this guidance will have on our consolidated financial statements and related disclosures.
Previous wording
In 2024, we elected to perform the quantitative test on the EMEA and APAC reporting units. Our test indicated that the fair value was substantially in excess of its carrying value. There was no goodwill impairment in any of our reporting units as of our annual assessment date.
Current wording
During 2024, a qualitative goodwill assessment was performed for the North America and Latin America reporting units while a quantitative assessment was performed for the EMEA and APAC reporting units. Our assessments indicated that there was no goodwill impairment in any of our reporting units as of our annual assessment date.
Previous wording
We had goodwill of $185.6 million and $187.4 million at December 31, 2024 and 2023, respectively.
Current wording
We had goodwill of $208.6 million and $185.6 million at December 31, 2025 and 2024, respectively.
Previous wording
Tax law requires certain items to be included in our tax return at different times than the items are reflected in our results of operations. Some of these differences are permanent, such as expenses that are not deductible in our tax returns, and some differences will reverse over time, such as depreciation expense on property, plant and equipment. These temporary differences result in deferred tax assets and liabilities, which are included within our consolidated balance sheets. Deferred tax assets generally represent items that can be used as a tax deduction or credit in our tax returns in future years but have already been recorded as an expense in our consolidated statements of income. We assess the likelihood that our deferred tax assets will be recovered from future taxable income, and, based on management’s judgment, to the extent we believe that recovery is not more likely than not, we establish a valuation allowance against those deferred tax assets. The deferred tax asset valuation allowance could be materially different from actual results because of changes in the mix of future taxable income, the relationship between book and taxable income and our tax planning strategies. As of December 31, 2024, a valuation allowance of $3.3 million was recorded against foreign and state tax credit carryforwards.
Current wording
Tax law requires certain items to be included in our tax return at different times than the items are reflected in our results of operations. Some of these differences are permanent, such as expenses that are not deductible in our tax returns, and some differences will reverse over time, such as depreciation expense on property, plant and equipment. These temporary differences result in deferred tax assets and liabilities, which are included within our consolidated balance sheets. Deferred tax assets generally represent items that can be used as a tax deduction or credit in our tax returns in future years but have already been recorded as an expense in our consolidated statements of income. We assess the likelihood that our deferred tax assets will be recovered from future taxable income, and, based on management’s judgment, to the extent we believe that recovery is not more likely than not, we establish a valuation allowance against those deferred tax assets. The deferred tax asset valuation allowance could be materially different from actual results because of changes in the mix of future taxable income, the relationship between book and taxable income and our tax planning strategies. As of December 31, 2025, a valuation allowance of $3.9 million was recorded against foreign and state tax credit carryforwards.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
On October 31, 2016, the Board of Directors authorized the repurchase of 1,000,000 shares of our comment stock.
Current report — wording carried from elsewhere
On February 11, 2025, our board of directors authorized the repurchase of up to 2,000,000 shares of our common stock.