Financial Data and Key Metrics Changes - In Q4 2025, the company reported a GAAP net loss of $4.4 million, compared to a net income of $6.6 million in the prior year period [21] - Full year 2025 GAAP net income was $43.8 million, down from $83.7 million in 2024, primarily impacted by a 6.5% decrease in net sales and a contraction in gross margin [21][22] - Adjusted EBITDA for Q4 2025 was $25.6 million, a decrease of $21.8 million from the prior year, including an estimated $22 million negative impact from ERP implementation [26] - Full year 2025 Adjusted EBITDA was $167.4 million, a decrease of $41.4 million from the prior year, with an Adjusted EBITDA margin of 13.9%, a 230 basis point decrease [29] Business Line Data and Key Metrics Changes - Equipment sales declined 11.6% year-over-year, while service grew 4.7% and parts and consumables were modestly higher [28] - The Americas experienced a 22.3% organic sales decline, primarily due to the ERP implementation impact of $30 million on net sales [25] - EMEA saw a 5.1% increase in organic sales, driven by equipment volume growth in France, the U.K., and Spain [25] - APAC reported an 11% increase in organic sales, fueled by volume growth in Australia, China, South Korea, and India [25] Market Data and Key Metrics Changes - The company noted that the international teams delivered solid execution, with EMEA growing 5.1% year-over-year and APAC returning to improved performance late in the year [13] - The North American market faced significant disruptions due to the ERP transition, leading to a backlog and limited ability to provide reliable shipment dates [9][20] Company Strategy and Development Direction - The company is focusing on restoring full operating capability in North America and driving steady improvement in efficiency as system performance strengthens [17] - A dedicated TNC robotics group was launched to accelerate the adoption and scaling of autonomous robotic cleaning solutions, with a goal of reaching approximately $250 million in AMR revenue by 2028 [15][16] - The company remains committed to disciplined capital allocation, including share repurchases and dividends, while pursuing strategic acquisition opportunities [14][33] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the significant impact of the ERP transition on operations and customer relationships, emphasizing a commitment to stabilizing the system and improving efficiency [41] - The company expects challenges associated with the ERP transition to ease through the first half of 2026, with a return to a more normalized operating rhythm by mid-year [35][36] - Management expressed confidence in the fundamentals of the business, highlighting strong global execution and a healthy balance sheet [41] Other Important Information - The company invested approximately $98 million in the ERP program since 2023, with expectations for ERP-related spending in 2026 to exceed $20 million [11] - The company recorded an incremental accrued expense of $6 million related to a legal contingency for an intellectual property dispute, which does not impact product sales [24] Q&A Session Summary Question: Is the ERP system stable as of now? - Management indicated that the system is stable in terms of core processes, with improvements in order management and fulfillment capabilities [46][47] Question: What is the outlook for the $30 million sales impact from the ERP disruption? - Management estimated that about $15 million of the impact is in backlog, while the other half is considered unrecoverable due to the nature of the business [48][53] Question: What are the objectives for the robotics group in FY 2026? - The robotics group aims to accelerate product development, improve adoption efficiency, and generate demand, with a target of $250 million in sales by 2028 [58][62] Question: How will gross margins progress through 2026? - Management expects Q1 gross margins to be comparable to Q4 2025, with gradual improvement anticipated throughout the year [63][64]

Financial Data and Key Metrics Changes - In Q4 2025, Tennant reported a GAAP net loss of $4.4 million, compared to a net income of $6.6 million in the prior year period [23] - Full year 2025 GAAP net income was $43.8 million, down from $83.7 million in 2024, primarily impacted by a 6.5% decrease in net sales and a contraction in gross margin [23] - Adjusted EBITDA for Q4 2025 was $25.6 million, a decrease of $21.8 million from the prior year period, including an estimated $22 million negative impact from ERP implementation [28][29] - Full year adjusted EBITDA was $167.4 million, a decrease of $41.4 million from the prior year, with an adjusted EBITDA margin of 13.9%, a 230 basis point decrease from the prior year [32] Business Line Data and Key Metrics Changes - Orders were reduced by approximately $15 million due to challenges in parts, consumables, and equipment, resulting in an estimated $30 million impact on net sales [10][22] - Equipment sales declined 11.6% year-over-year, while service grew 4.7% and parts and consumables were modestly higher [31] - The robotics portfolio delivered approximately $85 million in sales, inclusive of recurring autonomy fees, indicating strong customer adoption [15] Market Data and Key Metrics Changes - EMEA grew 5.1% year-over-year, supported by price realization and steady commercial execution across multiple markets [14] - APAC returned to improved performance late in the year, with growth in Australia and India offsetting softer demands in parts of East Asia [14] - Organic sales in the Americas declined 22.3%, primarily due to the ERP implementation impact and volume declines in Latin America [27] Company Strategy and Development Direction - The company has paused the EMEA ERP go-live timeline to focus on North America recovery as a priority, reinforcing the long-term value of ERP transformation [13] - A dedicated TNC Robotics group was launched to accelerate the adoption and scaling of autonomous robotic cleaning solutions, aiming for $250 million in AMR revenue by 2028 [17][19] - The company remains committed to disciplined capital allocation, including share repurchases and dividends, while pursuing strategic acquisition opportunities [16] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that the ERP transition challenges are expected to ease through the first half of 2026, with a focus on restoring full operating capability in North America [19][36] - The company anticipates mid-single-digit growth across geographies in 2026, driven by pricing actions and volume increases [39] - Management expressed confidence in the fundamentals of the business, highlighting a healthy backlog and stable commercial activity across global regions [20][42] Other Important Information - The company invested approximately $98 million in the ERP program since 2023, with expected spending in 2026 likely to exceed $20 million due to additional stabilization and support resources [12] - The effective tax rate for the full year was 24.3%, up from 20.1% in 2024, primarily due to the non-recurrence of certain non-cash discrete items [24] Q&A Session Summary Question: Is the ERP system stable as of late February? - Management indicated that the system is stable in terms of core processes, with improvements in efficiency and stability compared to the initial disruptions in November [48][49] Question: What portion of the $30 million sales impact is considered unrecoverable? - Management stated that approximately half of the $30 million impact is viewed as unrecoverable, with about $15 million in backlog [50][52] Question: What are the objectives for the TNC Robotics group in FY 2026? - The TNC Robotics group aims to accelerate product development, improve adoption efficiency, and enhance demand generation to achieve $250 million in sales by 2028 [59][60][63] Question: How does the company expect gross margins to progress in 2026? - Management expects gross margins in Q1 2026 to be comparable to Q4 2025, with year-over-year gross margin expansion anticipated as operational efficiency improves [64]

Financial Data and Key Metrics Changes - In Q1 2025, the company reported net sales of $290 million, reflecting a 6.8% decrease from $311 million in Q1 2024, with an organic decline of 5% [6][25] - Adjusted EBITDA for Q1 2025 was $41 million, or 14.1% of sales, down from $54.9 million and 17.7% in the prior year [31] - GAAP net income was $13.1 million compared to $28.4 million in the prior year, impacted by lower net sales and increased costs related to ERP projects and restructuring [23][24] Business Line Data and Key Metrics Changes - Equipment sales declined by 9%, and parts and consumables sales decreased by 4.7%, while service and other saw organic growth, but overall service revenue was down by 1.4% due to unfavorable foreign exchange impacts [26][27] - The AMR (Autonomous Mobile Robot) segment saw a 30% increase in sales compared to Q1 2024, contributing approximately 5% to net sales [16] Market Data and Key Metrics Changes - In The Americas, organic net sales decreased by 6.9%, but order rates increased by 20% compared to the prior year [10][28] - EMEA experienced a 2% growth on a constant currency basis, driven by acquisitions and pricing realization, while APAC saw a 7.5% decline due to demand issues in China and Australia [11][12][28] Company Strategy and Development Direction - The company is focused on executing its enterprise strategy, which includes pricing discipline, launching innovative products, and investing in go-to-market opportunities [12][15] - The introduction of the Clean360 program aims to make AMR adoption more accessible by offering a subscription model that includes equipment, software, and maintenance [19][75] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the impact of tariffs and economic uncertainty but noted stable demand for products and strong order rates [20][21] - The company expects to grow orders by 3.5% to 7% in 2025, despite challenges in translating order growth into equivalent organic sales growth due to prior backlog reductions [9][22] Other Important Information - The company anticipates a full-year impact of approximately $40 million from tariffs, representing around 5% of total cost of goods sold, and is implementing mitigation strategies [34][35] - The company maintains a strong liquidity position with approximately $80 million in cash and $434 million in unused borrowing capacity [32] Q&A Session Summary Question: Concerns about margin guidance and inflationary pressures - Management explained that the margin decline was due to a backlog headwind and a mix of strategic customer shipments at lower margins, but they expect a return to a more normalized mix in future quarters [40][46] Question: Impact of price hikes on demand - Management noted that it is too early to assess the impact of announced price hikes on demand, but they are closely monitoring customer behavior [62] Question: Clarification on the Clean360 program - The program was developed in response to customer feedback regarding high initial costs of AMR products, aiming to provide a more accessible option for customers [72][75]