Tennant(US:TNC)2025-11-04 17:48Financial Performance - Consolidated net sales for Q3 2025 were $303.3 million, a 4.0% decrease from $315.8 million in Q3 2024[111] - For the first nine months of 2025, consolidated net sales totaled $911.9 million, a 4.8% decrease from $957.8 million in the same period of 2024[111] - The Americas region reported net sales of $203.6 million in Q3 2025, a decrease of 6.9% from Q3 2024, primarily due to organic sales decline[113] - EMEA net sales increased by 5.5% to $80.5 million in Q3 2025 compared to Q3 2024, driven by improved performance in the region[117] - APAC net sales decreased by 7.7% to $19.2 million in Q3 2025, reflecting challenges in the market[117] Profitability and Expenses - Gross profit margin for Q3 2025 was 42.7%, a 30 basis points increase compared to Q3 2024, driven by strong price realization[118] - Selling and administrative expenses for Q3 2025 were $96.6 million, an increase of $3.9 million from Q3 2024, with S&A as a percentage of net sales rising to 31.8%[120] - Research and development expenses for Q3 2025 were $10.5 million, consistent with Q3 2024, indicating continued investment in innovation[120] - R&D expense was $10.5 million, or 3.5% of net sales, for Q3 2025, an increase of 20 basis points from Q3 2024[123] - Interest expense, net decreased to $2.4 million in Q3 2025 from $2.7 million in Q3 2024, with a weighted average outstanding borrowing of $220.6 million[125] Cash Flow and Investments - Net cash provided by operating activities was $50.8 million for the nine months ended September 30, 2025, down from $52.2 million in the same period of 2024[133] - Net cash used in investing activities was $18.3 million for the nine months ended September 30, 2025, significantly lower than $69.1 million in the same period of 2024[134] - Net cash used in financing activities was $36.0 million for the nine months ended September 30, 2025, compared to net cash provided of $8.1 million in the same period of 2024[135] Tax and Financial Ratios - The effective tax rate for Q3 2025 was 23.2%, down from 24.4% in Q3 2024, primarily due to discrete tax benefits from additional research credits[128] - The debt-to-capital ratio increased to 27.1% as of September 30, 2025, compared to 24.3% at the end of 2024[131] Other Financial Highlights - Cash and cash equivalents totaled $99.4 million as of September 30, 2025, slightly down from $99.8 million at the end of 2024[131] - The company recognized a gain on the sale of a building amounting to $0.4 million in Q3 2025[127] - Net foreign currency translation loss was $1.0 million for the first nine months of 2025, compared to a gain of $0.1 million in the same period of 2024[126] Market Conditions - The company is actively monitoring macroeconomic conditions, including geopolitical tensions and inflation, which may impact future performance[103] - The company anticipates a gradual improvement in margin rates despite ongoing margin pressure due to cost control and pricing initiatives[106]