Tennant Company · NYSE:TNC
Tennant — Q3 2019 Earnings Presentation
17 slides from Tennant's earnings presentation, Oct 30, 2019
Slide 1: Earnings Release Conference Call Third Quarter 2019
TENNANT COMPANY Earnings Release Conference Call Third Quarter 2019 Wednesday, October 30, 2019 TENNANT COMPANY 1
Slide 2: On the Call Today
On the Call Today Chris Killingstad Keith Woodward President and CEO Senior VP and CFO TENNANT COMPANY 2
Slide 3: Forward-Looking Statements & Non-GAAP Measures
Forward-Looking Our remarks this morning and our answers to questions may contain forward-looking statements regarding the company’s expectations of future performance. Such statements are subject to risks and uncertainties, and our actual results may differ Statements & materially from those contai
Slide 4: Earnings Release Conference Call Third Quarter 2019
TENNANT COMPANY Earnings Release Conference Call Third Quarter 2019 Wednesday, October 30, 2019 TENNANT COMPANY 4
Slide 5: Third Quarter 2019 – Overview
Third Quarter 2019 – Overview Balancing Organic Growth of EBITDA 11.2% reasonable growth 2.8% Up 50 bps with stronger EBITDA expansion TENNANT COMPANY 5
Slide 6: Third Quarter 2019 – Strategic Pillars
Third Quarter 2019 – Strategic Pillars Winning where we have a Reducing complexity and Building on our position as competitive advantage building scalable processes an innovation leader • Evaluating all aspects of • Across products and • Creative, new and compelling business portfolio: operational/b
Slide 7: Third Quarter 2019 – Product Exits
Third Quarter 2019 – Product Exits ATLV – all-terrain outdoor vacuum Sentinel – outdoor vacuum sweeper TENNANT COMPANY 7
Slide 8: Third Quarter 2019 – Products
Third Quarter 2019 – Products Optimizing the Portfolio: Product Exits Innovation: T7 Autonomous Machine • Products required significant investment • Commercialized in Q4 2018 • Changes are customer-centric and allow • Introducing to EMEA region this month us to refocus investments • Simplifying the
Slide 9: Earnings Release Conference Call Third Quarter 2019
TENNANT COMPANY Earnings Release Conference Call Third Quarter 2019 Wednesday, October 30, 2019 TENNANT COMPANY 9
Slide 10: Third Quarter 2019 – Sales | Adjusted EPS
Third Quarter 2019 – Sales | Adjusted EPS Q3 '19 Organic Growth of +2.8% Q3 '19 Q3 '18 CHANGE SALES $280.7 M $273.3 M +2.7% EPS Adjusted* $0.63 $0.54 +16.7% Q3 2019 Results • Mixed end-market conditions • Tough comparison to Q3 2018 of 6.1% organic growth • Softness in European and Asia Pacific mark
Slide 11: Third Quarter 2019 – Geographies
Third Quarter 2019 – Geographies The Americas • Sales increased 6.2%, or +6.7% organically, driven by: • Broad-based strength across North America and Latin America • Strength in industrial equipment in Direct Channel • Continued strength in Service, Parts and Consumables • Autonomous T7 demand EMEA
Slide 12: Third Quarter 2019 – Sales | Adjusted Gross Margin
Third Quarter 2019 – Sales | Adjusted Gross Margin Q3 '19 Q3 '18 CHANGE SALES $280.7 M $273.3 M +2.7% Gross Margin Adjusted* 40.8% 39.0% +180 bps 2019 Adjusted Results • 180 bps improvement – Positive pricing actions – Favorable sales mix – Lower freight costs – Cost-reduction efforts to offset macr
Slide 13: Third Quarter 2019 – Sales | S&A
Third Quarter 2019 – Sales | S&A Q3 '19 Q3 '18 CHANGE SALES $280.7 M $273.3 M +2.7% S&A Expense (% of sales) - Adjusted* 31.2% 30.3% +90 bps • Higher compensation and benefit costs due to stronger 2019 performance TENNANT COMPANY * See the Supplemental Non-GAAP Financial Table within Q3'19 Earnings
Slide 14: Third Quarter 2019 – EBITDA | Other Financial Metrics
Third Quarter 2019 – EBITDA | Other Financial Metrics Q3 '19 Q3 '18 CHANGE Adjusted EBITDA* $31.4M $29.3 M +7.2% Adjusted EBITDA Margin* 11.2% 10.7% +50 bps Third Quarter Other Results • Tax rate of 16.1% • Cash from operations generation of $35.3 million • Cash dividends of $4.0 million • Reduced o
Slide 15: 2019 Guidance – Updates
2019 Guidance – Updates • Full Year Sales of $1.135 billion to $1.145 billion (1.8% to 2.6% organic) • Adjusted Earnings per Share of $2.80 to $2.90 • GAAP Earnings per Share of $2.40 to $2.50 • Adjusted EBITDA of $134 million to $136 million • Other Key Assumptions • Capital expenditures of approxi
Slide 16: Questions
Questions TENNANT COMPANY 16
Slide 17: Thank You
Thank You TENNANT COMPANY LENNANT : =g