Tennant Company (NYSE:TNC) Q3 2020 Earnings Conference Call October 29, 2020 11:00 AM ET Company Participants William Prate - Senior Director of Global Financial Planning & Analysis and IR Chris Killingstad - President and CEO Dave Huml - COO Andy Cebulla - Interim CFO Conference Call Participants Michael Shlisky - Colliers Securities Marco Rodriguez - Stonegate Capital Partners Brendan Popson - CJS Securities Brett Kearney - Gabelli Funds Operator Good morning. My name is Chris and I'll be your conference ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________ to __________ Commission File Number 1-16191 ____________________________________ TENNANT COMPANY (Exact name of registrant as specified in its charter) ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________ to __________ Commission File Number 1-16191 ____________________________________ Securities registered pursuant to Section 12(b) of the Act: TENNANT COMPANY ...

Financial Performance - Consolidated Net Sales for Q1 2020 totaled $252.1 million, a 4.0% decrease from $262.5 million in Q1 2019[124] - Organic Net Sales decreased by approximately 2.4%, primarily due to declines in the EMEA and APAC regions, largely driven by the impact of COVID-19[124] - Gross Profit margin was 41.3%, a 10 basis point increase compared to Q1 2019, driven by pricing actions and cost-reduction initiatives[128] - Research and Development Expense was $7.4 million, or 2.9% of Net Sales, essentially flat compared to Q1 2019[130] - Selling and Administrative Expense decreased by $7.9 million to $82.3 million, with a percentage of Net Sales decreasing to 32.6% from 34.4% in Q1 2019[132] Cash Flow and Financial Position - Cash, Cash Equivalents, and Restricted Cash totaled $192.1 million at March 31, 2020, up from $74.6 million at December 31, 2019[140] - Operating Activities provided $8.7 million of cash for Q1 2020, driven by inflows from Net Earnings and a decrease in Accounts Receivables[141] - Net cash provided by financing activities was $123.0 million, primarily from credit facility borrowings of $125.0 million[143] - The debt-to-capital ratio increased to 56.5% as of March 31, 2020, compared to 48.5% at December 31, 2019[140] Tax and Accounting - The effective tax rate for Q1 2020 was 18.0%, compared to 17.7% in Q1 2019[137] - No new accounting pronouncements are expected to have a material impact on the company's results of operations or financial position[145] Risks and Forward-Looking Statements - The company faces various risks including the impacts of the COVID-19 pandemic and geopolitical uncertainties[146] - The company has no obligation to update or revise any forward-looking statements unless required by law[147] - There have been no material changes in the company's market risk since December 31, 2019[148]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2019 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________. Commission File Number 001-16191 TENNANT COMPANY (Exact name of registrant as specified in its charter) | Minnesota | 41-0572550 | | --- ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 TENNANT COMPANY (Zip Code) For the quarterly period ended September 30, 2019 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________ to __________ (Exact name of registrant as specified in its charter) Minnesota 41-0572550 (State or other jurisdiction of inco ...

Financial Performance - Consolidated Net Sales for Q2 2019 totaled $299.7 million, a 2.6% increase from $292.2 million in Q2 2018[141] - For the first six months of 2019, consolidated Net Sales were $562.1 million, a 0.5% decrease from $565.0 million in the same period of 2018[141] - Organic Net Sales increased by 3.8% in Q2 2019 and 1.6% for the first six months compared to the same periods in 2018[142] - Net Sales in the Americas for Q2 2019 were $189.5 million, a 6.0% increase from Q2 2018, while EMEA Net Sales decreased by 7.4% to $80.9 million[143][147] - APAC Net Sales increased by 12.7% to $29.3 million in Q2 2019, with an unfavorable foreign currency impact of approximately 5.6%[149] Profitability - Gross Profit margin for Q2 2019 was 40.3%, a 20 basis point increase from Q2 2018, driven by pricing actions and favorable product mix[151] - Research and Development Expense for Q2 2019 was $8.4 million, or 2.8% of Net Sales, remaining flat compared to Q2 2018[153] - Selling and Administrative Expense for Q2 2019 was $92.5 million, maintaining a flat percentage of 30.9% of Net Sales compared to Q2 2018[155] - S&A Expense was $182.7 million for the first six months of 2019, an increase of $1.7 million compared to the same period in 2018, representing 32.5% of Net Sales, up from 32.0%[158] Foreign Currency Impact - EMEA experienced a 5.9% unfavorable impact from foreign currency exchange in the first six months of 2019[148] - Net Foreign Currency Transaction Losses were $0.2 million in Q2 2019, down from $0.3 million in Q2 2018, and less than $0.1 million for the first six months of 2019 compared to $1.1 million in the same period of 2018[161] Interest and Other Income - Interest Income remained flat at $0.9 million in Q2 2019, consistent with Q2 2018, and totaled $1.7 million for the first six months of 2019, unchanged from the same period in 2018[159] - Interest Expense decreased to $5.4 million in Q2 2019 from $6.0 million in Q2 2018, and for the first six months of 2019, it was $10.5 million compared to $11.8 million in the same period of 2018, due to lower debt levels[160] - Other Income (Expense), Net was $1.4 million in Q2 2019, an increase of $1.9 million compared to Q2 2018, primarily due to a $1.8 million acquisition-related indemnification settlement[162] Taxation - The effective tax rate for Q2 2019 was 10.8%, up from 2.8% in Q2 2018, influenced by non-recurring expenses and changes in taxable earnings by country[163] Cash Flow and Liquidity - Cash, Cash Equivalents, and Restricted Cash totaled $55.4 million as of June 30, 2019, down from $86.1 million at the end of 2018, with a current ratio of 1.8[168] - Operating Activities provided $10.9 million of cash for the first six months of 2019, driven by net earnings and non-cash items, despite cash outflows from increased inventories and accounts receivable[169] - Investing activities used $34.6 million in the first six months of 2019, primarily for capital expenditures and the acquisition of Gaomei businesses[171] - Net cash used by financing activities was $8.3 million during the first six months of 2019, with significant debt repayments and dividend payments[173]

Financial Performance - Consolidated Net Sales for Q1 2019 totaled $262.5 million, a 3.8% decrease from $272.8 million in Q1 2018[119] - Gross Profit margin increased to 41.2%, up 120 basis points compared to Q1 2018, driven by pricing actions and a favorable product mix[124] - Net Earnings attributable to Tennant Company were $5.4 million, or $0.29 per diluted share, compared to $3.3 million, or $0.18 per diluted share in Q1 2018[118] - The effective tax rate decreased to 17.7% in Q1 2019 from 24.6% in Q1 2018, influenced by the mix of expected taxable earnings by country[131] - The debt-to-capital ratio was 53.1% as of March 31, 2019, slightly up from 53.0% at the end of 2018[135] Expenses - Research and Development Expense was $7.2 million, representing 2.8% of Net Sales, remaining flat as a percentage compared to Q1 2018[125] - Selling and Administrative Expense was $90.2 million, increasing to 34.4% of Net Sales from 33.2% in Q1 2018, primarily due to a $4.3 million restructuring charge[126] - Operating Activities used $11.6 million of cash in Q1 2019, driven by a $20.3 million increase in Inventories[136] - Investing activities used $29.6 million, including $20.5 million for net capital expenditures and $9.0 million for the acquisition of Gaomei businesses[138] Cash and Liquidity - Cash, Cash Equivalents, and Restricted Cash totaled $46.9 million as of March 31, 2019, down from $86.1 million at the end of 2018[135] Risks and Uncertainties - The company has identified various risks and uncertainties that could impact future performance, including strategic planning, IT system upgrades, and geopolitical factors[143] - The company faces challenges related to cybersecurity risks that could disrupt operations[144] - The strength of the U.S. dollar affects the cost of materials and products sold internationally, impacting financial performance[144] - There have been no material changes in market risk since December 31, 2018, indicating stability in this area[146] Forward-Looking Statements - The company emphasizes the importance of considering forward-looking statements carefully, as actual results may differ significantly due to known and unknown risks[144] - The company has no obligation to update forward-looking statements unless required by law, highlighting the unpredictability of future events[145] Strategic Focus - Key personnel retention and succession planning are critical for the company's growth and stability[143] - The company is focused on developing and commercializing innovative products and services to drive future growth[143] - There is a need for effective integration of acquisitions to enhance overall business performance[143] - The company must navigate compliance with laws and regulations, which is essential for maintaining operational integrity[144]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 001-16191 TENNANT COMPANY (Exact name of registrant as specified in its charter) Minnesota 41-0572550 State or other jurisdiction of (I.R.S. Employer incorporation or organization Identification No.) 701 North Lilac Drive, P.O. Box 1452 Minneapolis, Minnesota 55440 (Address of principal executive offices) (Zip ...