TENNANT CO SEC 10-Q Report

Tennant Co, a leading manufacturer of cleaning solutions and equipment, has released its Form 10-Q report for the third quarter of 2025. The report provides a comprehensive overview of the company's financial performance and operational highlights, reflecting the challenges and strategic initiatives undertaken during the period. Financial Highlights Net Sales: $303.3 million, a 4.0% decrease compared to the third quarter of 2024, primarily due to volume declines in North America and a net favorable impact from foreign currency exchange.Gross Profit: $129.4 million, representing a gross profit margin of 42.7%, which is 30 basis points higher than the third quarter of 2024 due to strong price realization and tariff-related pricing adjustments.Operating Income: $22.3 million, a decrease from $30.6 million in the third quarter of 2024, reflecting increased selling and administrative expenses driven by strategic investments and legal contingency costs.Net Income: $14.9 million, a decrease from $20.8 million in the third quarter of 2024, impacted by lower operating income and increased income tax expense.Net Income Per Share - Diluted: $0.80, compared to $1.09 in the third quarter of 2024, reflecting the decrease in net income. Business Highlights Revenue Segments: The company reported a 4.0% decrease in consolidated net sales for the third quarter of 2025 compared to the same period in 2024. This decline was primarily driven by an 8.2% decrease in volume, partially offset by a 2.8% increase in price. The net sales were also impacted by a 1.4% favorable foreign currency exchange rate.Geographical Performance - Americas: Net sales in the Americas decreased by 6.9% in the third quarter of 2025 compared to the same period in 2024. This decline was primarily due to volume decreases in North America, which lapped a significant backlog-reduction benefit from the prior year, and was partially offset by price realization.Geographical Performance - EMEA: The Europe, Middle East, and Africa region saw a 5.5% increase in net sales for the third quarter of 2025 compared to the same period in 2024. This growth was driven by a favorable foreign currency exchange impact of 5.9%, despite a slight organic sales decline of 0.4%.Geographical Performance - APAC: Asia Pacific net sales decreased by 7.7% in the third quarter of 2025 compared to the same period in 2024, primarily due to a 6.4% decline in organic sales driven by decreased commercial equipment volume in China and industrial equipment volume in South Korea.Sales Units: The company experienced a decline in sales volume across all geographies, particularly in North America, which affected the overall sales performance.Future Outlook: The company is focused on managing margins through market-based pricing actions and targeted supply chain initiatives to mitigate tariff-related cost inflation and other input cost pressures. Despite near-term margin pressures, the company anticipates gradual improvement in margin rates through disciplined execution in pricing and cost management.Operational Challenges: The company is facing macroeconomic challenges such as geopolitical tensions, elevated interest rates, and foreign currency fluctuations, which are impacting demand trends across key markets. In response, the company is focusing on cost control, operational improvements, and diversifying sourcing to manage these challenges.SEC Filing: TENNANT CO [ TNC ] - 10-Q - Nov. 04, 2025