Tennant(US:TNC)2023-10-31 16:29Financial Performance - Consolidated net sales for Q3 2023 reached $304.7 million, a 15.9% increase from $262.9 million in Q3 2022[85] - Organic sales growth for Q3 2023 was 13.9%, primarily driven by equipment sales growth in the Americas and APAC[86] - Gross profit margin for Q3 2023 was 43.3%, up 500 basis points from Q3 2022, attributed to pricing realization offsetting inflation impacts[92] - Americas net sales for Q3 2023 were $211.2 million, a 21.4% increase from Q3 2022, driven by organic sales growth[88] - EMEA net sales for Q3 2023 were $72.0 million, a 4.3% increase from Q3 2022, reflecting stable demand in the region[89] - APAC net sales for Q3 2023 were $21.5 million, an 8.0% increase from Q3 2022, supported by price realization and volume growth[89] Expenses and Costs - Selling and administrative expenses for Q3 2023 were $88.2 million, an increase of $16.8 million compared to Q3 2022, with S&A as a percentage of net sales rising to 28.9%[94] - Research and development expenses for Q3 2023 were $9.1 million, maintaining 3.0% of net sales, indicating continued investment in innovation[96] - Interest expense for Q3 2023 was $3.3 million, up from $2.2 million in Q3 2022, due to higher interest rates on variable interest debt[98] - Interest expense for the third quarter of 2023 was $4.3 million, up from $2.2 million in the third quarter of 2022, reflecting increased borrowing costs[99] Cash Flow and Financing - Cash, cash equivalents, and restricted cash totaled $97.0 million at September 30, 2023, an increase from $77.4 million at December 31, 2022[104] - Net cash provided by operating activities during the nine months ended September 30, 2023, was $124.6 million, compared to a net cash used of $38.8 million in the same period of 2022[106] - Net cash used in financing activities was $87.1 million for the nine months ended September 30, 2023, significantly higher than $1.2 million in the same period of 2022, primarily due to share repurchases[108] Debt and Capital Structure - The weighted average outstanding borrowings as of September 30, 2023, were $262.4 million, with an average interest rate of 6.48%, compared to 3.34% in the same period of 2022[99] - The company had a debt-to-capital ratio of 28.9% as of September 30, 2023, down from 38.9% at December 31, 2022, indicating improved capital structure[104] - The company has $120 million in notional amount of interest rate swaps to manage floating rate debt exposure, with a fixed interest rate of 4.076%[99] Tax and Currency - The effective tax rate for the third quarter of 2023 was 23.4%, up from 21.2% in the third quarter of 2022, mainly due to a decrease in discrete tax benefits[101] - The net foreign currency transaction loss was $0.4 million in Q3 2023, compared to less than $0.1 million in Q3 2022, primarily due to the strengthening of the U.S. dollar[100] Outlook and Market Conditions - The company remains confident in long-term growth trends despite ongoing global economic volatility and supply chain challenges[83] - The order backlog decreased to $213.9 million as of September 30, 2023, from $326.4 million at December 31, 2022, due to improved component availability and production levels[103]