Tennant(US:TNC)2022-02-26 19:41Financial Data and Key Metrics Changes - Fourth quarter net income was $7.9 million, up $5.2 million from the prior year [19] - Full year 2021 net income reached $64.9 million compared to $33.7 million in 2020 [19] - Adjusted earnings per diluted share for Q4 2021 was $0.71 compared to $0.48 in the prior year [20] - Full year 2021 adjusted earnings per diluted share was $4.39 compared to $2.91 in 2020, an increase of $1.48 [20] - Adjusted EBITDA for the full year 2021 was $140.2 million, or 12.9% of sales, compared to $119.4 million, or 11.9% of sales in 2020 [24] Business Line Data and Key Metrics Changes - Sales in the Americas grew 4.3% year-over-year or 7.4% organically, driven by service, parts, and consumables [22] - EMEA sales grew 19.3% year-over-year or 14.2% organically, with growth across all countries and product categories [23] - Asia Pacific sales increased 9.6% year-over-year or 5.6% organically, with strong demand in Australia and Korea [23] - Fourth quarter sales in the Americas grew 1.3% year-over-year or 4.9% organically [26] - EMEA sales in Q4 were up 3.9% year-over-year or 7.4% organically [27] Market Data and Key Metrics Changes - The company ended 2021 with a backlog of 3x to 5x normal ranges, indicating strong demand for 2022 [51] - The company anticipates continued supply chain constraints impacting production and delivery throughout 2022 [32] Company Strategy and Development Direction - The company focuses on three strategic pillars: winning where there is competitive advantage, reducing complexity, and innovating for profitable growth [11] - The company is prioritizing local-for-local manufacturing to mitigate supply chain disruptions [10] - The launch of the Inventory Scan product represents a move into an attractive adjacency, enhancing customer value [14][62] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to deliver on 2022 targets despite macroeconomic headwinds [6] - The company expects organic net sales growth between 4.5% and 8.5% for 2022, with adjusted EBITDA between $145 million and $160 million [9][34] - Management noted that pricing is being driven by inflation, with robust demand and a significant backlog available for monetization [41] Other Important Information - The company generated cash flow from operations of approximately $70 million in 2021 and returned over 60% of net cash flows to shareholders [9] - The company refinanced its debt, resulting in annual interest savings exceeding $12 million [30] Q&A Session Summary Question: Revenue guidance breakdown between volume and price - Management indicated that the guidance for 2022 is weighted more towards price than volume, but both factors contribute [39][40] Question: Impact of the Russia-Ukraine situation - Management noted no direct assets in affected regions but acknowledged potential ripple effects on the macro economy [44][45] Question: M&A opportunities - Management is always exploring M&A opportunities but prioritizes protecting the core business and addressing short-term challenges [46][47] Question: Top line guidance support - Management highlighted strong organic growth and significant backlog as key factors supporting the guidance [51] Question: Autonomous market development - Management reported high interest levels in the Autonomous market, with expectations for significant sales growth in 2022 [56][68]