Financial Data and Key Metrics Changes - For Q1 2024, consolidated net sales totaled $311 million, a 1.7% increase compared to $305.8 million in Q1 2023 [15] - Adjusted EBITDA for Q1 2024 was $54.9 million, or 17.7% of sales, up from $47.9 million, or 15.7% of sales in Q1 2023 [16] - Adjusted EPS for Q1 2024 increased 24.8% to $1.81 per diluted share compared to the prior year period [14] - Gross margin increased to 44.2% in Q1 2024, a 320 basis point improvement from the prior year [16] Business Line Data and Key Metrics Changes - Equipment net sales grew 1.8% and service grew 10% in Q1 2024 compared to the prior year [38] - Parts and consumables declined 3.8%, primarily driven by volume decreases in North America and EMEA [56] - Organic sales in the Americas increased 5.1%, driven by price realization and favorable product mix [56] - Organic sales declined 9.2% in EMEA due to volume declines, partially offset by price realization [39] Market Data and Key Metrics Changes - In EMEA, the company faced a challenging first quarter with declining macroeconomic conditions [28] - APAC performance was impacted by customer order timing, but demand is expected to remain strong [29] - The Americas region showed strong order rates, particularly in industrial machines [5] Company Strategy and Development Direction - The company is focused on three pillars of its enterprise strategy: growth, performance, and people [7] - New product innovations, such as the X4 ROVR autonomous floor cleaning machine, are central to driving revenue growth [8] - The acquisition of TCS is expected to enhance market share and strengthen the company's position in high-growth regions [11][33] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's performance and reaffirmed full-year guidance despite varying results by geography [4][45] - The company anticipates stronger results in EMEA in the latter half of the year through new product launches [6] - Management highlighted the importance of maintaining a strong balance sheet and disciplined capital allocation for future growth [34] Other Important Information - The average interest rate net of hedging for Q1 2024 was 3.94%, down from 4.29% in the prior year [14] - The company plans to invest in ERP implementation, with an expected spend of about $37 million in 2024 [66] - The company ended Q1 2024 with $88.8 million in cash and cash equivalents and $321.8 million of unused borrowing capacity [58] Q&A Session Summary Question: What is the outlook for sales growth and margin expectations? - Management shared optimism about early demand signs and the potential for robotics adoption, indicating a strong start to the year [45][48] Question: Can you provide details on the i-mop international expansion? - Management confirmed the expansion of the i-mop family of products into Brazil, France, Portugal, and Spain, highlighting its significance in the small space cleaning market [9][65] Question: What is the status of the ERP modernization plan? - The company is on track with its ERP implementation, spending about $7.5 million in Q1 and anticipating a total spend of $37 million for the year [66]

OR o 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 Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2024 (Exact name of registrant as specif ...

[First Quarter 2024 Financial Results Overview](index=1&type=section&id=First%20Quarter%202024%20Financial%20Results%20Overview) [Executive Summary & Key Financial Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Key%20Financial%20Highlights) Tennant Company reported strong first-quarter 2024 results, with net sales increasing by 1.7% to $311.0 million and net income growing by 16.9% to $28.4 million, alongside significant adjusted EPS and EBITDA margin expansion Q1 2024 Key Financial Performance (YoY) | Metric | 2024 (Millions) | 2023 (Millions) | Increase (%) | | :---------------------- | :-------------- | :-------------- | :----------- | | Net sales | $311.0 | $305.8 | 1.7 % | | Net income | $28.4 | $24.3 | 16.9 % | | Diluted EPS | $1.49 | $1.30 | 14.6 % | | Adjusted diluted EPS | $1.81 | $1.45 | 24.8 % | | Adjusted EBITDA | $54.9 | $47.9 | 14.6 % | | Adjusted EBITDA margin % | 17.7 % | 15.7 % | 200 bps | [Strategic & Operational Highlights](index=1&type=section&id=Strategic%20%26%20Operational%20Highlights) The company delivered strong Q1 performance, driven by multi-year investments in core growth and innovative products, including two acquisitions and international expansion of new scrubber products - Net sales reached **$311.0 million**, a **1.7%** increase (**0.9%** organic) driven by strong pricing realization[6](index=6&type=chunk) - Adjusted EBITDA increased by **$7.0 million** to **$54.9 million**, with a margin improvement of **200 basis points** to **17.7%**, primarily due to gross margin improvements[6](index=6&type=chunk) - Acquired TCS EMEA GmbH, Tennant Company's largest Central and Eastern Europe distributor, to accelerate growth and expand direct sales channels in the EMEA region[6](index=6&type=chunk) - Acquired a minority stake in Brain Corp and signed an exclusive technology agreement to fuel next-generation AI-enabled robotic cleaning technologies and accelerate Autonomous Mobile Robotic (AMR) revenue growth[6](index=6&type=chunk) - Launched Tennant-branded i-mop Lite and i-mop XL Plus scrubber products in Brazil, France, Portugal, and Spain, expanding accessibility of small-space micro-scrubbers[6](index=6&type=chunk) [Detailed Financial Performance](index=3&type=section&id=Detailed%20Financial%20Performance) [Net Sales Analysis](index=3&type=section&id=Net%20Sales%20Analysis) Consolidated net sales for Q1 2024 increased by 1.7% year-over-year, primarily driven by price realization, with organic sales growing by 0.9% due to strong Americas performance offsetting EMEA and APAC declines [Consolidated Net Sales Growth](index=3&type=section&id=Consolidated%20Net%20Sales%20Growth) Components of Consolidated Net Sales Change (Q1 2024 vs. Q1 2023) | Component | Change (%) | | :-------------- | :--------- | | Price | 4.6% | | Volume | (3.7)% | | Organic growth | 0.9% | | Acquisitions | 0.3% | | Foreign currency | 0.5% | | **Total growth** | **1.7%** | [Organic Sales Growth by Region](index=3&type=section&id=Organic%20Sales%20Growth%20by%20Region) Organic Net Sales Growth by Region (Q1 2024) | Region | Organic Net Sales Growth (%) | | :------- | :--------------------------- | | Americas | 5.1% | | EMEA | (9.2)% | | APAC | (1.1)% | | Total | 0.9% | - Americas' **5.1%** increase was driven by price realization and favorable product/channel mix, partially offset by unit volume decreases in North America's commercial-application machines[10](index=10&type=chunk) - EMEA's **9.2%** decrease was due to volume declines in equipment and parts/consumables, impacted by weaker market conditions in France and Germany[11](index=11&type=chunk) - APAC's **1.1%** decrease was primarily due to volume declines in China and Australia, partially offset by price realization in Australia[12](index=12&type=chunk) [Operating Expenses and Profitability](index=4&type=section&id=Operating%20Expenses%20and%20Profitability) Gross profit margin improved significantly due to price realization and cost-out initiatives, leading to substantial growth in Adjusted EBITDA and Net Income despite increased S&A expenses [Gross Profit Margin](index=4&type=section&id=Gross%20Profit%20Margin) - Gross profit margin was **44.2%** in Q1 2024, a **320 basis point** increase compared to Q1 2023, driven by price realization, cost-out initiatives, favorable product mix, and increased direct sales[14](index=14&type=chunk) [Selling and Administrative (S&A) Expense](index=4&type=section&id=Selling%20and%20Administrative%20(S%26A)%20Expense) - S&A expense totaled **$89.9 million** in Q1 2024, an **$8.2 million** increase from Q1 2023, including **$2.5 million** for ERP modernization and **$1.5 million** for transaction costs[15](index=15&type=chunk) - Adjusted S&A as a percent of net sales was **27.6%** in Q1 2024, up from **26.7%** in Q1 2023, partly due to higher compensation expense from incremental headcount[15](index=15&type=chunk) [Adjusted EBITDA](index=4&type=section&id=Adjusted%20EBITDA) - Adjusted EBITDA improved to **$54.9 million** in Q1 2024 from **$47.9 million** in the prior-year period, primarily due to gross margin expansion[16](index=16&type=chunk) - Adjusted EBITDA margin for Q1 2024 was **17.7%**, a **200-basis-point** increase over the prior-year period[16](index=16&type=chunk) [Net Income](index=4&type=section&id=Net%20Income) - Net income was **$28.4 million** in Q1 2024, up from **$24.3 million** in Q1 2023[17](index=17&type=chunk) - Adjusted net income increased by **$7.6 million** to **$34.7 million** in Q1 2024, driven by operating performance, decreased interest expense, and a discrete tax benefit[17](index=17&type=chunk) [Cash Flow, Liquidity, and Capital Allocation](index=4&type=section&id=Cash%20Flow%2C%20Liquidity%2C%20and%20Capital%20Allocation) Cash flow from operations decreased due to higher variable compensation payouts and ERP modernization investments, yet liquidity remained strong as the company deployed capital for operations, shareholder returns, and strategic acquisitions - Cash flow from operations was **$2.9 million** in Q1 2024, a **$28.2 million** decrease from the prior year, mainly due to increased variable compensation payouts and **$7.2 million** in ERP modernization costs[18](index=18&type=chunk) - Liquidity remained strong with **$88.8 million** in cash and cash equivalents and approximately **$321.8 million** of unused borrowing capacity on its revolving credit facility[19](index=19&type=chunk) - The company invested **$3.0 million** in capital expenditures and returned **$6.4 million** to shareholders through dividends and share repurchases[20](index=20&type=chunk) - Strategic acquisitions included **$32.1 million** for a minority investment in Brain Corp and **$25.5 million** to acquire TCS[20](index=20&type=chunk) [2024 Financial Guidance](index=5&type=section&id=2024%20Financial%20Guidance) [2024 Guidance](index=5&type=section&id=2024%20Guidance) Tennant Company reaffirms its full-year 2024 financial guidance, projecting net sales between $1,270 million and $1,295 million, with organic net sales growth of 2.0% to 4.0%, adjusted diluted EPS between $6.05 and $6.65, and Adjusted EBITDA between $198 million and $213 million 2024 Guidance Ranges | Metric | 2024 Guidance Ranges | | :---------------------------- | :------------------- | | Net sales ($ Millions) | $1,270 - $1,295 | | Organic net sales growth (%) | 2.0 % - 4.0 % | | Adjusted diluted net income per share* ($) | $6.05 - $6.65 | | Adjusted EBITDA* ($ Millions) | $198 - $213 | | Adjusted EBITDA margin (%) | 15.6 % - 16.4 % | | Capital expenditures ($ Millions) | $20 - $25 | | Adjusted effective tax rate* (%) | 22 % - 27 % | [Company Information](index=5&type=section&id=Company%20Information) [Company Profile](index=5&type=section&id=Company%20Profile) Tennant Company, founded in 1870 and headquartered in Eden Prairie, Minnesota, is a global leader in cleaning solutions, offering equipment, sustainable cleaning technologies, and tools, with $1.24 billion in 2023 sales and approximately 4,500 employees operating globally - Founded in 1870, Tennant Company is a world leader in designing, manufacturing, and marketing solutions for cleaner, safer, and healthier environments[24](index=24&type=chunk) - Products include equipment for industrial, commercial, and outdoor surface maintenance; detergent-free and sustainable cleaning technologies; and cleaning tools/supplies[24](index=24&type=chunk) - Reported sales of **$1.24 billion** in 2023 and has approximately **4,500** employees, with manufacturing operations worldwide and sales in over 100 countries[24](index=24&type=chunk) [Forward-Looking Statements](index=5&type=section&id=Forward-Looking%20Statements) This section contains forward-looking statements subject to various risks and uncertainties, including economic conditions, regulatory compliance, competition, supply chain fluctuations, and the ability to integrate acquisitions and innovate, cautioning readers against undue reliance - Statements are forward-looking and subject to factors affecting global businesses, as well as specific risks to Tennant and its markets[25](index=25&type=chunk) - Key risks include economic uncertainty, geopolitical tensions, compliance with global laws, pricing adaptation, competition, raw material costs, product liability, talent retention, strategic planning, IT system upgrades/cybersecurity, business interruptions, and the ability to integrate acquisitions and develop new products[25](index=25&type=chunk) - The company cautions that actual results may differ materially due to known and unknown risks and uncertainties, as detailed in its 2023 Form 10-K[26](index=26&type=chunk) [Non-GAAP Financial Measures & Reconciliations](index=6&type=section&id=Non-GAAP%20Financial%20Measures%20%26%20Reconciliations) [Explanation of Non-GAAP Measures](index=6&type=section&id=Explanation%20of%20Non-GAAP%20Measures) Tennant Company uses Non-GAAP financial measures to provide investors with a more meaningful understanding of its operating performance by excluding special items of a nonrecurring and/or nonoperational nature, such as ERP modernization costs, transaction-related costs, and amortization expense - Non-GAAP measures are used to provide useful information to investors by permitting a more meaningful comparison of operating performance, excluding special items of a nonrecurring and/or nonoperational nature[28](index=28&type=chunk) - The company adjusts for ERP modernization costs, transaction-related costs, and amortization expense when calculating Non-GAAP measures such as Adjusted S&A, Operating Income, Net Income, EPS, and EBITDA[29](index=29&type=chunk) [Reconciliation of Reported to Adjusted Financials](index=10&type=section&id=Reconciliation%20of%20Reported%20to%20Adjusted%20Financials) This section provides detailed reconciliations from GAAP reported figures to Non-GAAP adjusted figures for key financial metrics, including net income, EPS, EBITDA, S&A expense, operating income, income before taxes, and free cash flow, highlighting the impact of specific adjustments [Net Income and Diluted EPS Reconciliation](index=10&type=section&id=Net%20Income%20and%20Diluted%20EPS%20Reconciliation) Reported to Adjusted Net Income and Net Income Per Share (Q1 2024 vs. Q1 2023) | (In millions, except per share data) | 2024 ($ Millions) | 2023 ($ Millions) | | :----------------------------------- | :---- | :---- | | Net income - as reported | $28.4 | $24.3 | | Adjustments: | | | | Amortization expense | 2.9 | 2.8 | | ERP modernization costs (S&A expense) | 1.9 | — | | Transaction-related costs (S&A expense) | 1.5 | — | | **Net income - as adjusted** | **$34.7** | **$27.1** | | Net income per share - as reported: | | | | Diluted ($) | $1.49 | $1.30 | | Adjustments: | | | | Amortization expense ($) | 0.15 | 0.15 | | ERP modernization costs (S&A expense) ($) | 0.10 | — | | Transaction-related costs (S&A expense) ($) | 0.08 | — | | **Net income per diluted share - as adjusted ($)** | **$1.81** | **$1.45** | [EBITDA Reconciliation](index=10&type=section&id=EBITDA%20Reconciliation) Reported Net Income to Adjusted EBITDA (Q1 2024 vs. Q1 2023) | (In millions) | 2024 ($ Millions) | 2023 ($ Millions) | | :-------------------------------- | :---- | :---- | | Net income - as reported | $28.4 | $24.3 | | Less: | | | | Interest expense, net | 2.3 | 3.7 | | Income tax expense | 6.7 | 7.7 | | Depreciation expense | 9.6 | 8.3 | | Amortization expense | 3.9 | 3.9 | | **EBITDA** | **50.9** | **47.9** | | Adjustments: | | | | ERP modernization costs (S&A expense) | 2.5 | — | | Transaction-related costs (S&A expense) | 1.5 | — | | **EBITDA - as adjusted** | **$54.9** | **$47.9** | | **EBITDA margin - as adjusted (%)** | **17.7 %** | **15.7 %** | [S&A Expense and Operating Income Reconciliation](index=11&type=section&id=S%26A%20Expense%20and%20Operating%20Income%20Reconciliation) Reported to Adjusted Selling and Administrative Expense and Operating Income (Q1 2024 vs. Q1 2023) | (In millions) | 2024 ($ Millions) | 2023 ($ Millions) | | :------------------------------------------ | :---- | :---- | | S&A expense - as reported | $89.9 | $81.7 | | S&A expense as a percent of net sales - as reported (%) | 28.9 % | 26.7 % | | Adjustments: | | | | ERP modernization costs (S&A expense) | (2.5) | — | | Transaction-related costs (S&A expense) | (1.5) | — | | **S&A expense - as adjusted** | **$85.9** | **$81.7** | | **S&A expense as a percent of net sales - as adjusted (%)** | **27.6 %** | **26.7 %** | | Operating income - as reported | $37.5 | $35.9 | | Operating margin - as reported (%) | 12.1 % | 11.7 % | | Adjustments: | | | | ERP modernization costs (S&A expense) | 2.5 | — | | Transaction-related costs (S&A expense) | 1.5 | — | | **Operating income - as adjusted** | **$41.5** | **$35.9** | | **Operating margin - as adjusted (%)** | **13.3 %** | **11.7 %** | [Income Before Income Taxes and Income Tax Expense Reconciliation](index=11&type=section&id=Income%20Before%20Income%20Taxes%20and%20Income%20Tax%20Expense%20Reconciliation) Reported to Adjusted Income Before Income Taxes and Income Tax Expense (Q1 2024 vs. Q1 2023) | (In millions) | 2024 ($ Millions) | 2023 ($ Millions) | | :------------------------------------------ | :---- | :---- | | Income before income taxes - as reported | $35.1 | $32.0 | | Adjustments: | | | | Amortization expense | 3.9 | 3.9 | | ERP modernization costs (S&A expense) | 2.5 | — | | Transaction-related costs (S&A expense) | 1.5 | — | | **Income before income taxes - as adjusted** | **$43.0** | **$35.9** | | Income tax expense - as reported | $6.7 | $7.7 | | Effective tax rate - as reported (%) | 19.1 % | 24.1 % | | Adjustments (1): | | | | Amortization expense | 1.0 | 1.1 | | ERP modernization costs (S&A expense) | 0.6 | — | | **Income tax expense - as adjusted** | **$8.3** | **$8.8** | | **Effective tax rate - as adjusted (%)** | **19.3 %** | **24.5 %** | [Free Cash Flow Reconciliation](index=12&type=section&id=Free%20Cash%20Flow%20Reconciliation) Reported to Adjusted Free Cash Flows (Q1 2024 vs. Q1 2023) | (In millions) | 2024 ($ Millions) | 2023 ($ Millions) | | :-------------------------------------- | :---- | :---- | | Cash provided by operating activities - as reported | $2.9 | $31.1 | | Less: | | | | Capitalized expenditures | (3.0) | (6.8) | | **Free cash flows** | **$(0.1)** | **$24.3** | | Adjustments: | | | | ERP modernization spend | 7.2 | — | | **Free cash flows - as adjusted** | **$7.1** | **$24.3** | [Unaudited Consolidated Financial Statements](index=7&type=section&id=Unaudited%20Consolidated%20Financial%20Statements) [Consolidated Statements of Income](index=7&type=section&id=Consolidated%20Statements%20of%20Income) The unaudited consolidated statements of income show a 1.7% increase in net sales and a 16.9% increase in net income for Q1 2024 compared to Q1 2023, driven by higher gross profit and operating income Consolidated Statements of Income (Unaudited) - Three Months Ended March 31 | (In millions, except shares and per share data) | 2024 ($ Millions) | 2023 ($ Millions) | | :---------------------------------------------- | :---------- | :---------- | | Net sales | $311.0 | $305.8 | | Cost of sales | 173.5 | 180.3 | | Gross profit | 137.5 | 125.5 | | Selling and administrative expense | 89.9 | 81.7 | | Research and development expense | 10.1 | 7.9 | | Operating income | 37.5 | 35.9 | | Interest expense, net | (2.3) | (3.7) | | Net foreign currency transaction loss | (0.2) | (0.1) | | Other income (expense), net | 0.1 | (0.1) | | Income before income taxes | 35.1 | 32.0 | | Income tax expense | 6.7 | 7.7 | | **Net income** | **$28.4** | **$24.3** | | Net income per share | | | | Basic ($) | $1.52 | $1.32 | | Diluted ($) | $1.49 | $1.30 | | Weighted average shares outstanding | | | | Basic | 18,665,570 | 18,449,430 | | Diluted | 19,077,767 | 18,682,268 | [Geographical Net Sales](index=7&type=section&id=Geographical%20Net%20Sales) Geographical net sales for Q1 2024 show growth in the Americas region, while EMEA and Asia Pacific experienced declines compared to the prior year Geographical Net Sales (Unaudited) - Three Months Ended March 31 | Region | 2024 (Millions) | 2023 (Millions) | % Change | | :-------------------------- | :-------------- | :-------------- | :------- | | Americas | $215.6 | $204.4 | 5.5 % | | Europe, Middle East and Africa | 76.8 | 82.1 | (6.5)% | | Asia Pacific | 18.6 | 19.3 | (3.6)% | | **Total** | **$311.0** | **$305.8** | **1.7 %** | [Consolidated Balance Sheets](index=8&type=section&id=Consolidated%20Balance%20Sheets) As of March 31, 2024, total assets increased to $1,151.7 million from $1,113.4 million at December 31, 2023, primarily driven by increases in receivables, inventories, goodwill, and intangible assets, with total equity also increasing to $615.9 million Consolidated Balance Sheets (Unaudited) - As of March 31, 2024 and December 31, 2023 | (In millions, except shares and per share data) | March 31, 2024 ($ Millions) | December 31, 2023 ($ Millions) | | :---------------------------------------------- | :------------- | :---------------- | | **ASSETS** | | | | Cash, cash equivalents, and restricted cash | $88.8 | $117.1 | | Receivables, less allowances | 257.3 | 247.6 | | Inventories | 181.4 | 175.9 | | Prepaid and other current assets | 33.6 | 28.5 | | Total current assets | 561.1 | 569.1 | | Property, plant and equipment, net | 184.7 | 187.7 | | Operating lease assets | 40.4 | 41.7 | | Goodwill | 192.2 | 187.4 | | Intangible assets, net | 72.3 | 63.1 | | Other assets | 101.0 | 64.4 | | **Total assets** | **$1,151.7** | **$1,113.4** | | **LIABILITIES AND EQUITY** | | | | Current portion of long-term debt | $7.2 | $6.4 | | Accounts payable | 124.9 | 111.4 | | Employee compensation and benefits | 46.7 | 67.3 | | Other current liabilities | 81.6 | 88.6 | | Total current liabilities | 260.4 | 273.7 | | Long-term debt | 207.4 | 194.2 | | Long-term operating lease liabilities | 27.1 | 27.4 | | Employee benefits | 13.7 | 13.3 | | Deferred income taxes | 8.4 | 5.0 | | Other liabilities | 18.8 | 21.5 | | Total long-term liabilities | 275.4 | 261.4 | | **Total liabilities** | **$535.8** | **$535.1** | | Common Stock, $0.375 par value | 7.1 | 7.0 | | Additional paid-in capital | 86.5 | 64.9 | | Retained earnings | 570.5 | 547.4 | | Accumulated other comprehensive loss | (49.5) | (42.3) | | Total Tennant Company shareholders' equity | 614.6 | 577.0 | | Noncontrolling interest | 1.3 | 1.3 | | **Total equity** | **615.9** | **578.3** | | **Total liabilities and total equity** | **$1,151.7** | **$1,113.4** | [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash provided by operating activities significantly decreased in Q1 2024 compared to the prior year, while investing activities saw a substantial increase in cash usage due to strategic acquisitions, and financing activities provided net cash primarily from borrowings and stock option exercises Consolidated Statements of Cash Flows (Unaudited) - Three Months Ended March 31 | (In millions) | 2024 ($ Millions) | 2023 ($ Millions) | | :---------------------------------------------- | :---- | :---- | | **OPERATING ACTIVITIES** | | | | Net income | $28.4 | $24.3 | | Adjustments to reconcile net income to net cash provided by operating activities: | | | | Depreciation expense | 9.6 | 8.3 | | Amortization expense | 3.9 | 3.9 | | Deferred income tax benefit | (1.0) | (2.0) | | Share-based compensation expense | 3.2 | 1.2 | | Bad debt and returns expense | 0.3 | 1.0 | | Other, net | 0.1 | 0.2 | | Changes in operating assets and liabilities: | | | | Receivables | (10.1) | (2.5) | | Inventories | (9.2) | (1.5) | | Accounts payable | 13.9 | (6.6) | | Employee compensation and benefits | (20.3) | 0.5 | | Other assets and liabilities | (15.9) | 4.3 | | **Net cash provided by operating activities** | **2.9** | **31.1** | | **INVESTING ACTIVITIES** | | | | Purchases of property, plant and equipment | (3.0) | (6.8) | | Purchase of investment | (32.1) | — | | Payments made in connection with business acquisition, net of cash acquired | (25.5) | — | | Investment in leased assets | (0.2) | (0.2) | | Cash received from leased assets | 0.2 | 0.2 | | **Net cash used in investing activities** | **(60.6)** | **(6.8)** | | **FINANCING ACTIVITIES** | | | | Proceeds from borrowings | 40.0 | 20.0 | | Repayments of borrowings | (26.2) | (21.4) | | Change in finance lease obligations | — | 0.2 | | Proceeds from exercise of stock options, net of employee tax withholdings obligations | 19.5 | 0.8 | | Repurchases of common stock | (1.1) | (5.0) | | Dividends paid | (5.3) | (4.9) | | **Net cash provided by (used) in financing activities** | **26.9** | **(10.3)** | | Effect of exchange rate changes on cash, cash equivalents and restricted cash | 2.5 | — | | Net (decrease) increase in cash, cash equivalents and restricted cash | (28.3) | 14.0 | | Cash, cash equivalents and restricted cash at beginning of period | 117.1 | 77.4 | | **Cash, cash equivalents and restricted cash at end of period** | **$88.8** | **$91.4** | [Investor Information](index=5&type=section&id=Investor%20Information) [Conference Call Details](index=5&type=section&id=Conference%20Call%20Details) Tennant Company hosted a conference call on May 3, 2024, to discuss its first-quarter results, with a webcast and accompanying slides available on its investor website - Tennant hosted a conference call on May 3, 2024, at 10 a.m. Central Time (11 a.m. Eastern Time) to discuss Q1 2024 results[23](index=23&type=chunk) - The conference call and accompanying slides are available via webcast on Tennant's investor website (investors.tennantco.com)[23](index=23&type=chunk) [Investor Relations Contact](index=6&type=section&id=Investor%20Relations%20Contact) For investor relations inquiries, Lorenzo Bassi, Vice President of Finance and Investor Relations, can be contacted via email or phone - Investor Relations Contact: Lorenzo Bassi, Vice President, Finance and Investor Relations[30](index=30&type=chunk) - Contact information: investors@tennantco.com, 763-540-1242[30](index=30&type=chunk)

February 22, 2024 SAFE HARBOR STATEMENT 2 Executive Summary Full year organic sales growth of ~14% ~9% price growth and 5% volume growth $140 million backlog reduction during 2023 | --- | --- | --- | |----------------------|---------------------------------------|----------------------------| | Net Sales | Fourth-Quarter Results \nAdj. EBITDA* | Adj. Diluted EPS* | | $311.4M | $41.5M | $1.92/share | | +5.4% Organic Growth | 13.3% Adj. EBITDA Margin | +31.5% higher than Q4 2022 | *Non-GAAP Measures: refer to ...

Financial Data and Key Metrics Changes - For the full year 2023, net sales reached $1.243 billion, with adjusted EBITDA rising to $192.9 million, resulting in an EBITDA margin of 15.5% [8][19][57] - GAAP net income for Q4 2023 was $31 million, a 30.3% increase year-over-year, while adjusted net income was $36.2 million, up from $27.2 million in the prior year [19][57] - Adjusted EPS for Q4 2023 increased 31.5% to $1.92 per diluted share compared to the prior year [19] Business Line Data and Key Metrics Changes - Equipment sales grew by 9.6% in Q4 2023, leading the growth in product categories [59] - For the full year, net sales in the Americas were $840.3 million, a 19% increase, driven by strong equipment sales in North America [45] - Adjusted gross margin for the full year 2023 increased to 42.5%, a 390 basis point improvement compared to 2022 [47] Market Data and Key Metrics Changes - Organic sales in the Americas increased 7.3% year-over-year, while organic sales in EMEA declined 0.6% due to volume declines [42] - Organic sales in APAC increased 9.6%, driven by price realization in Australia and volume increases in China [42] - The company ended 2023 with approximately $186 million of backlog, a reduction of $28 million from the end of Q3 [41] Company Strategy and Development Direction - The new enterprise strategy for 2024-2026 focuses on three pillars: growth, performance, and people [31] - The company plans to launch the X4 ROVR, a purpose-built Autonomous Mobile Robot, in Q2 2024 [32] - The investment in Brain Corp aims to enhance the development and adoption of next-generation robots in the floor cleaning industry [33][34] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for 2024, expecting net sales growth of 2% to 4% with price and volume contributing equally [66] - The company anticipates reducing backlog by $80 million to $100 million in 2024, while monitoring global order rates closely [51] - Management highlighted the importance of maintaining a strong balance sheet and disciplined capital allocation strategy [49][70] Other Important Information - The company achieved a record GAAP net income of $109.5 million for the full year 2023, a 65.2% increase from the prior year [57] - Adjusted EBITDA margin for 2023 was 15.5%, benefiting from operating leverage created by sales growth [62] - The company plans to invest approximately $75 million in ERP modernization through 2025 [16] Q&A Session Summary Question: What is the outlook for orders and seasonality? - Management noted that orders have remained resilient and expects a significant return to normal seasonality in 2024 [77] Question: Can you elaborate on the bundling strategy with Brain Corp? - The bundling strategy aims to offer a comprehensive solution that includes equipment and software, enhancing customer value [83][84] Question: How is the company addressing the equipment-as-a-service model? - Management is exploring the potential of the equipment-as-a-service model, particularly for smaller and medium-sized customers [112][126] Question: What are the expectations for gross margin improvement in 2024? - Management anticipates gross margin improvement in 2024, supported by strategic pricing and cost management initiatives [118] Question: What is the company's approach to capital allocation and M&A? - The company is focused on strategic M&A opportunities and has activated discussions with potential partners [120]

Company Operations - Tennant Company operates 11 global manufacturing locations across the Americas, EMEA, and APAC regions[16]. - The company has a diverse product portfolio including manual and mechanized cleaning equipment, sustainable cleaning technologies, and aftermarket parts[17]. - As of December 31, 2023, Tennant Company employed approximately 4,457 employees[25]. Financial Performance - Consolidated net sales in 2023 totaled $1,243.6 million, a 13.9% increase compared to $1,092.2 million in 2022[105]. - Gross profit margin improved to 42.4% in 2023 from 38.5% in 2022, reflecting a decrease in the cost of sales as a percentage of net sales[105]. - Operating income increased to $138.6 million in 2023, representing an operating margin of 11.1%, up from 8.0% in 2022[105]. - Net income for 2023 was $109.5 million, an increase of 65.0% compared to $66.3 million in 2022[105]. - Basic net income per share increased to $5.92 in 2023, up from $3.58 in 2022, demonstrating strong earnings growth[175]. - Comprehensive income for 2023 was $117.4 million, compared to $54.0 million in 2022, indicating overall financial health improvement[177]. - Total equity as of December 31, 2023, was $577.0 million, up from $470.8 million in 2022, reflecting an increase of 22.6%[183]. Research and Development - Research and development expenses are crucial for product innovation and enhancing existing product functionality[21]. - Research and development expenses increased to $36.6 million in 2023, up from $31.1 million in 2022, reflecting a commitment to innovation[105]. - Research and Development expenses were $36.6 million in 2023, representing 2.9% of net sales, remaining nearly flat compared to 2022[114]. Market and Competitive Environment - The company faces potential adverse impacts from geopolitical tensions and public health epidemics, which have historically affected economic markets and supply chains[48]. - Competitive pressures and macroeconomic factors, such as inflation, may hinder the company's ability to achieve pricing targets, affecting demand and gross margins[50]. - The company is at risk of losing market share if it cannot compete effectively with lower-priced products from competitors, which could lead to declines in sales volume and revenues[51]. Supply Chain and Cost Management - The company has experienced cost inflation and supply constraints for raw materials, prompting local manufacturing and sourcing strategies[19]. - Supply chain disruptions and increased costs of raw materials and labor could negatively impact operating results and financial condition[54]. - The company continues to adapt to supply chain challenges by employing local-for-local manufacturing strategies to contain costs[100]. - The company is focused on mitigating future raw material cost increases through supplier negotiations and supply chain optimization[148]. Employee and Governance - Women represent 50% of the executive management team and 33% of the Board of Directors as of December 31, 2023[33]. - The most recent gender wage gap assessment indicated that the median total income for females was 99.6% of that for males, suggesting no significant gender pay gap[34]. Shareholder Returns - The company paid cash dividends for 79 consecutive years, with a 2023 annual cash dividend payout of $1.075 per share, a $0.06 increase over 2022[90]. - During the twelve months ended December 31, 2023, the company repurchased 290,920 shares of its common stock for $21.7 million[91]. - The company has a repurchase program authorized by the Board of Directors, allowing the repurchase of up to 821,413 shares of common stock[203]. Risk Management - Cybersecurity threats pose risks to critical data and business operations, potentially resulting in financial loss and reputational damage[65]. - The company has not encountered any cybersecurity incidents that materially impaired its operations or financial standing[78]. - Increased compliance costs and legal risks arise from the complex international regulatory environment, potentially eroding profit margins[49]. Asset and Liability Management - Cash, cash equivalents, and restricted cash totaled $117.1 million at December 31, 2023, compared to $77.4 million at the end of 2022[122]. - The effective tax rate decreased to 11.6% in 2023 from 16.6% in 2022, primarily due to nonrecurring tax items[118]. - The company reported a decrease in long-term debt to $194.2 million in 2023 from $295.1 million in 2022, reflecting improved financial leverage[179]. International Operations - Net sales in the Americas reached $840.3 million in 2023, a 19.0% increase from 2022, with organic sales growing 18.9% driven by price realization and increased volume[108]. - EMEA net sales were $314.4 million in 2023, up 4.2% from 2022, with organic sales growth of 2.6% despite lower volumes due to weaker market conditions[109]. - APAC net sales totaled $88.9 million in 2023, a 5.0% increase from 2022, with organic sales growing 8.6% driven by price realization and volume increases in Australia and China[110].

Exhibit 99 Tennant Company Reports Record 2023 Fourth-Quarter and Full-Year Results Delivers Robust Growth of 13.9% in Net Sales and 65.2% in Net Income Achieves Strong Net Income to Free Cash Flow Conversion Introduces Full-Year Guidance for 2024 MINNEAPOLIS, MN (Feb. 22, 2024)—Tennant Company ("Tennant" or the "Company") (NYSE: TNC) today reported its fourth-quarter and full-year financial results for 2023. | (In millions, except per share data) | | | | Three Months Ended | | | | Twelve Months Ended | | | ...

Tennant Company (NYSE:TNC) Q3 2023 Earnings Conference Call October 31, 2023 11:00 AM ET Company Participants Lorenzo Bassi - Vice President, Finance and Investor Relations Dave Huml - President and Chief Executive Officer Fay West - Senior Vice President and Chief Financial Officer Conference Call Participants Chris Moore - CJS Steve Ferazani - Sidoti Tim Moore - EF Hutton Operator Good morning. My name is Krista, and I'll be your conference operator today. At this time, I would like to welcome everyone to ...

| --- | --- | --- | |-------|-------|-------| | | | | | | | | | | | | | | | | 2 Forward-Looking Statements & Non-GAAP Measures Certain statements contained in this document are considered "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act. These statements do not relate to strictly historical or current facts and provide current expectations or forecasts of future events. Any such expectations or forecasts of future events are subject to a variety of factors. The ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2023 OR o 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 sp ...