[
ü
]
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2011
|
OR
|
|
[
]
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________.
|
Minnesota
|
41-0572550
|
|
State or other jurisdiction of
|
(I.R.S. Employer
|
|
incorporation or organization
|
Identification No.)
|
701 North Lilac Drive, P.O. Box 1452
Minneapolis, Minnesota 55440
|
(Address of principal executive offices) (Zip Code)
|
Name of exchange on which registered
|
||
Common Stock, par value $0.375 per share
|
New York Stock Exchange
|
|
Preferred Share Purchase Rights
|
New York Stock Exchange
|
Securities registered pursuant to Section 12(g) of the Act:
None
|
||||
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined by Rule 405 of the Securities Act.
|
ü |
Yes
|
No
|
|
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
|
Yes
|
ü
|
No
|
|
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months
|
||||
(or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
|
ü
|
Yes
|
No
|
|
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and | ||||
posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit | ||||
and post such files). | ü | Yes |
No
|
|
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [
ü
]
|
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
|
Yes
|
ü
|
No
|
|
The aggregate market value of the voting and non-voting common equity held by non-affiliates as of June 30, 2011, was $744,989,320.
|
||||
As of February 16, 2012, there were 18,866,419 shares of Common Stock outstanding.
|
PART I
|
Page
|
||||||
Item 1
|
|||||||
Item 1A
|
|||||||
Item 1B
|
|||||||
Item 2
|
|||||||
Item 3
|
|||||||
Item 4
|
|||||||
PART II
|
|||||||
Item 5
|
|||||||
Item 6
|
|||||||
Item 7
|
|||||||
Item 7A
|
|||||||
Item 8
|
|||||||
1
|
|||||||
2
|
|||||||
3
|
|||||||
4
|
|||||||
5
|
|||||||
6
|
|||||||
7
|
|||||||
8
|
|||||||
9
|
|||||||
10
|
|||||||
11
|
|||||||
12
|
|||||||
13
|
|||||||
14
|
|||||||
15
|
|||||||
16
|
|||||||
17
|
|||||||
18
|
|||||||
19
|
|||||||
20
|
|||||||
Item 9
|
|||||||
Item 9A
|
|||||||
Item 9B
|
|||||||
|
|||||||
PART III
|
|||||||
Item 10
|
|||||||
Item 11
|
|||||||
Item 12
|
|||||||
Item 13
|
|||||||
Item 14
|
|||||||
PART IV
|
|||||||
Item 15
|
2011
|
2010
|
|||||||||||||||
High
|
Low
|
High
|
Low
|
|||||||||||||
First
|
$ | 43.24 | $ | 35.66 | $ | 28.38 | $ | 21.84 | ||||||||
Second
|
42.82 | 33.51 | 37.42 | 27.17 | ||||||||||||
Third
|
44.25 | 34.36 | 38.13 | 28.82 | ||||||||||||
Fourth
|
41.98 | 32.92 | 38.82 | 30.30 |
For the Quarter Ended
December 31, 2011
|
Total Number of Shares Purchased
(1)
|
Average Price Paid Per Share
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
|
||||||||||||
October 1–31, 2011
|
283 | $ | 35.37 | - | 731,235 | |||||||||||
November 1–30, 2011
|
11,665 | 37.50 | 11,665 | 719,570 | ||||||||||||
December 1–31, 2011
|
- | - | - | 719,570 | ||||||||||||
Total
|
11,948 | $ | 37.45 | 11,665 | 719,570 |
2006
|
2007
|
2008
|
2009
|
2010
|
2011
|
|||||||||||||||||||
Tennant Company
|
$ | 100 | $ | 155 | $ | 55 | $ | 96 | $ | 143 | $ | 147 | ||||||||||||
Morningstar U.S. Market
*
|
$ | 100 | $ | 106 | $ | 67 | $ | 86 | $ | 100 | $ | 102 | ||||||||||||
S&P SmallCap 600
*
|
$ | 100 | $ | 100 | $ | 69 | $ | 86 | $ | 109 | $ | 110 | ||||||||||||
Morningstar Industrials Sector**
|
$ | 100 | $ | 112 | $ | 68 | $ | 84 | $ | 104 | $ | 104 |
Years Ended December 31
|
2011
|
2010
|
2009
|
2008
|
2007
|
||||||||||||||||
Financial Results:
|
|||||||||||||||||||||
Net Sales
|
$ | 753,998 | $ | 667,667 | $ | 595,875 | $ | 701,405 | $ | 664,218 | |||||||||||
Cost of Sales
|
434,817 | (1) | 383,341 | (2) | 349,767 | 415,155 | 385,234 | ||||||||||||||
Gross Margin - %
|
42.3 | 42.6 | 41.3 | 40.8 | 42.0 | ||||||||||||||||
Research and Development Expense
|
27,911 | 25,957 | 22,978 | 24,296 | 23,869 | ||||||||||||||||
% of Net Sales
|
3.7 | 3.9 | 3.9 | 3.5 | 3.6 | ||||||||||||||||
Selling and Administrative Expense
|
241,625 | (1) | 221,235 | (2) | 245,623 | (3) | 243,385 | (4) | 200,270 | (5) | |||||||||||
% of Net Sales
|
32.0 | 33.1 | 41.2 | 34.7 | 30.2 | ||||||||||||||||
Profit (Loss) from Operations
|
49,645 | (1) | 37,134 | (2) | (22,493 | ) (3) | 18,569 | (4) | 54,845 | (5) | |||||||||||
% of Net Sales
|
6.6 | 5.6 | (3.8 | ) | 2.6 | 8.3 | |||||||||||||||
Total Other (Expense) Income, Net
|
(915 | ) | (2,407 | ) | (1,827 | ) | (994 | ) | 2,867 | (5) | |||||||||||
Income Tax Expense
|
16,017 | (1) | (76 | ) (2) | 1,921 | (3) | 6,951 | (4) | 17,845 | (5) | |||||||||||
Effective Tax Rate - %
|
32.9 | (0.2 | ) | 7.9 | 39.6 | 30.9 | |||||||||||||||
Net Earnings (Loss)
|
32,713 | (1) | 34,803 | (2) | (26,241 | ) (3) | 10,624 | (4) | 39,867 | (5) | |||||||||||
% of Net Sales
|
4.3 | 5.2 | (4.4 | ) | 1.5 | 6.0 | |||||||||||||||
Per Share Data:
|
|||||||||||||||||||||
Basic Net Earnings (Loss)
|
$ | 1.74 | (1) | $ | 1.85 | (2) | $ | (1.42 | ) (3) | $ | 0.58 | (4) | $ | 2.41 | (5) | ||||||
Diluted Net Earnings (Loss)
|
$ | 1.69 | (1) | $ | 1.80 | (2) | $ | (1.42 | ) (3) | $ | 0.57 | (4) | $ | 2.08 | (5) | ||||||
Diluted Weighted Average Shares
|
19,360,428 | 19,332,103 | 18,507,772 | 18,581,840 | 19,146,000 | ||||||||||||||||
Cash Dividends
|
$ | 0.68 | $ | 0.59 | $ | 0.53 | $ | 0.52 | $ | 0.48 | |||||||||||
Financial Position:
|
|||||||||||||||||||||
Total Assets
|
$ | 424,262 | $ | 403,668 | $ | 377,726 | $ | 456,604 | $ | 382,070 | |||||||||||
Total Debt
|
36,455 | 30,828 | 34,211 | 95,339 | 4,597 | ||||||||||||||||
Total Shareholders’ Equity
|
220,852 | 216,133 | 184,279 | 209,904 | 252,431 | ||||||||||||||||
Current Ratio
|
2.2 | 2.1 | 1.9 | 2.3 | 2.5 | ||||||||||||||||
Debt-to-Capital Ratio
|
14.2 | % | 12.5 | % | 15.7 | % | 31.2 | % | 1.8 | % | |||||||||||
Cash Flows:
|
|||||||||||||||||||||
Net Cash Provided by Operations
|
$ | 56,909 | $ | 42,530 | $ | 75,185 | $ | 37,394 | $ | 39,640 | |||||||||||
Capital Expenditures, Net of Disposals
|
(13,301 | ) | (9,934 | ) | (11,172 | ) | (19,982 | ) | (21,466 | ) | |||||||||||
Free Cash Flow
|
43,608 | 32,596 | 64,013 | 17,412 | 18,174 | ||||||||||||||||
Other Data:
|
|||||||||||||||||||||
Depreciation and Amortization
|
$ | 21,418 | $ | 21,192 | $ | 22,803 | $ | 22,959 | $ | 18,054 | |||||||||||
Number of employees at year-end
|
2,865 | 2,793 | 2,786 | 3,002 | 2,774 |
2011
|
%
|
2010
|
%
|
2009
|
%
|
|||||||||||||||||||
Net Sales
|
$ | 753,998 | 100.0 | $ | 667,667 | 100.0 | $ | 595,875 | 100.0 | |||||||||||||||
Cost of Sales
|
434,817 | 57.7 | 383,341 | 57.4 | 349,767 | 58.7 | ||||||||||||||||||
Gross Profit
|
319,181 | 42.3 | 284,326 | 42.6 | 246,108 | 41.3 | ||||||||||||||||||
Operating Expense:
|
||||||||||||||||||||||||
Research and Development Expense
|
27,911 | 3.7 | 25,957 | 3.9 | 22,978 | 3.9 | ||||||||||||||||||
Selling and Administrative Expense
|
241,625 | 32.0 | 221,235 | 33.1 | 202,260 | 33.9 | ||||||||||||||||||
Goodwill Impairment Charge
|
- | - | - | - | 43,363 | 7.3 | ||||||||||||||||||
Total Operating Expenses
|
269,536 | 35.7 | 247,192 | 37.0 | 268,601 | 45.1 | ||||||||||||||||||
Profit (Loss) from Operations
|
49,645 | 6.6 | 37,134 | 5.6 | (22,493 | ) | (3.8 | ) | ||||||||||||||||
Other Income (Expense):
|
||||||||||||||||||||||||
Interest Income
|
752 | 0.1 | 133 | - | 393 | 0.1 | ||||||||||||||||||
Interest Expense
|
(2,238 | ) | (0.3 | ) | (1,619 | ) | (0.2 | ) | (2,830 | ) | (0.5 | ) | ||||||||||||
Net Foreign Currency Transaction Gains (Losses)
|
559 | 0.1 | (902 | ) | (0.1 | ) | (412 | ) | (0.1 | ) | ||||||||||||||
ESOP Income
|
- | - | - | - | 990 | 0.2 | ||||||||||||||||||
Other Income (Expense), Net
|
12 | - | (19 | ) | - | 32 | - | |||||||||||||||||
Total Other (Expense) Income, Net
|
(915 | ) | (0.1 | ) | (2,407 | ) | (0.4 | ) | (1,827 | ) | (0.3 | ) | ||||||||||||
Profit (Loss) Before Income Taxes
|
48,730 | 6.5 | 34,727 | 5.2 | (24,320 | ) | (4.1 | ) | ||||||||||||||||
Income Tax Expense
|
16,017 | 2.1 | (76 | ) | - | 1,921 | 0.3 | |||||||||||||||||
Net Earnings (Loss)
|
$ | 32,713 | 4.3 | $ | 34,803 | 5.2 | $ | (26,241 | ) | (4.4 | ) | |||||||||||||
Net Earnings (Loss) per Diluted Share
|
$ | 1.69 | $ | 1.80 | $ | (1.42 | ) |
·
|
An increase in Net Sales of 12.9%, primarily driven by equipment unit volume increases.
|
·
|
A decrease in S&A Expense as a percentage of Net Sales of 110 basis points due to continued tight cost controls and improved operating efficiencies.
|
·
|
An increase in Net Sales of 12.0%, primarily driven by equipment unit volume increases.
|
·
|
A 130 basis point increase in Gross Profit margin to 42.6% due to higher sales volume, continued tight spending controls and flexible production management.
|
·
|
A decrease in S&A Expense as a percentage of Net Sales of 80 basis points due to continued tight spending controls and leveraging our existing resources.
|
·
|
A tax benefit from an international entity restructuring contributed $0.56 per diluted share.
|
Growth Elements
|
2011 v. 2010
|
2010 v. 2009
|
||
Organic Growth:
|
||||
Volume
|
8.9%
|
12.0%
|
||
Price
|
1.5%
|
-
|
||
Organic Growth
|
10.4%
|
12.0%
|
||
Foreign Currency
|
2.5%
|
-
|
||
Acquisitions
|
-
|
-
|
||
Total
|
12.9%
|
12.0%
|
2011
|
%
|
2010
|
%
|
2009
|
%
|
|||||||||||||||||||
Americas
|
$ | 481,426 | 13.4 | $ | 424,462 | 16.0 | $ | 366,034 | (15.2 | ) | ||||||||||||||
Europe, Middle East and Africa
|
188,338 | 9.1 | 172,619 | (2.9 | ) | 177,829 | (18.3 | ) | ||||||||||||||||
Asia Pacific
|
84,234 | 19.3 | 70,586 | 35.7 | 52,012 | (0.5 | ) | |||||||||||||||||
Total
|
$ | 753,998 | 12.9 | $ | 667,667 | 12.0 | $ | 595,875 | (15.0 | ) |
2011
|
2010
|
2009
|
||||||||||
Operating Activities
|
$ | 56,909 | $ | 42,530 | $ | 75,185 | ||||||
Investing Activities:
|
||||||||||||
Purchases of Property, Plant and Equipment, Net of Disposals
|
(13,301 | ) | (9,934 | ) | (11,172 | ) | ||||||
Acquisitions of Businesses, Net of Cash Acquired
|
(2,917 | ) | (86 | ) | (2,162 | ) | ||||||
Restricted Cash
|
(3,279 | ) | - | - | ||||||||
Financing Activities
|
(24,247 | ) | (10,342 | ) | (74,068 | ) | ||||||
Effect of Exchange Reate Changes on Cash and Cash Equivalents
|
(355 | ) | (701 | ) | 994 | |||||||
Net Increase (Decrease) in Cash and Cash Equivalents
|
$ | 12,810 | $ | 21,467 | $ | (11,223 | ) |
2011
|
2010
|
2009
|
||||
DSO
|
58
|
59
|
67
|
|||
DIOH
|
88
|
83
|
87
|
·
|
a covenant requiring us to maintain an indebtedness to EBITDA ratio as of the end of each quarter of not greater than 3.00 to 1;
|
·
|
a covenant requiring us to maintain an EBITDA to interest expense ratio as of the end of each quarter of no less than 3.50 to 1;
|
·
|
a covenant restricting us from paying dividends or repurchasing stock if, after giving effect to such payments, our leverage ratio is greater than 2.00 to 1, in such case limiting such payments to an amount ranging from $50.0 million to $75.0 million during any fiscal year based on our leverage ratio after giving effect to such payments; and
|
·
|
a covenant restricting our ability to make acquisitions, if, after giving pro-forma effect to such acquisition, our leverage ratio is greater than 2.75 to 1, in such case limiting acquisitions to $25.0 million.
|
·
|
elimination of the security interest in our personal property and subsidiaries;
|
·
|
an amendment to the maximum leverage ratio to not greater than 3.00 to 1 for any period ending on or after March 31, 2011;
|
·
|
an amendment to our restriction regarding the payment of dividends or repurchase of stock to restrict us from paying dividends or repurchasing stock if, after giving effect to such payments, our leverage ratio is greater than 2.00 to 1, in such case limiting such payments to an amount ranging from $50.0 million to $75.0 million during any fiscal year based on our leverage ratio after giving effect to such payments; and
|
·
|
an amendment to Permitted Acquisitions restricting our ability to make acquisitions, if, after giving pro-forma effect to such acquisition, our leverage ratio is greater than 2.75 to 1, in such case limiting acquisitions to $25.0 million.
|
Total
|
Less Than 1 Year
|
1 - 3 Years
|
3 - 5 Years
|
More Than 5 Years
|
||||||||||||||||
Long-term debt
(1)
|
$ | 31,549 | $ | 775 | $ | 2,774 | $ | 16,857 | $ | 11,143 | ||||||||||
Interest payments on long-term debt
(1)
|
5,162 | 995 | 1,927 | 1,388 | 852 | |||||||||||||||
Capital leases
|
4,779 | 3,321 | 1,458 | - | - | |||||||||||||||
Interest payments on capital leases
|
285 | 194 | 91 | - | - | |||||||||||||||
Retirement benefit plans
(2)
|
1,008 | 1,008 | - | - | - | |||||||||||||||
Deferred compensation arrangements
(3)
|
6,713 | 537 | 944 | 450 | 4,782 | |||||||||||||||
Operating leases
(4)
|
18,629 | 7,937 | 7,439 | 2,396 | 857 | |||||||||||||||
Purchase obligations
(5)
|
46,867 | 46,867 | - | - | - | |||||||||||||||
Other
(6)
|
1,021 | 731 | 290 | - | ||||||||||||||||
Total contractual obligations
|
$ | 116,013 | $ | 62,365 | $ | 14,923 | $ | 21,091 | $ | 17,634 |
·
|
Geopolitical and economic uncertainty throughout the world.
|
·
|
Competition in our business.
|
·
|
Ability to effectively manage organizational changes.
|
·
|
Ability to comply with laws and regulations.
|
·
|
Ability to effectively maintain and manage the data in our computer systems.
|
·
|
Unforeseen product liability claims or product quality issues.
|
·
|
Ability to develop and fund new innovative products and services.
|
·
|
Ability to attract and retain key personnel.
|
·
|
Ability to successfully upgrade and evolve the capabilities of our computer systems.
|
·
|
Occurrence of a significant business interruption.
|
·
|
Fluctuations in the cost or availability of raw materials and purchased components.
|
·
|
Ability to acquire, retain and protect proprietary intellectual property rights.
|
·
|
Relative strength of the U.S. dollar, which affects the cost of our materials and products purchased and sold internationally.
|
Years ended December 31
|
2011
|
2010
|
2009
|
|||||||||
Net Sales
|
$ | 753,998 | $ | 667,667 | $ | 595,875 | ||||||
Cost of Sales
|
434,817 | 383,341 | 349,767 | |||||||||
Gross Profit
|
319,181 | 284,326 | 246,108 | |||||||||
Operating Expense:
|
||||||||||||
Research and Development Expense
|
27,911 | 25,957 | 22,978 | |||||||||
Selling and Administrative Expense
|
241,625 | 221,235 | 202,260 | |||||||||
Goodwill Impairment Charge
|
- | - | 43,363 | |||||||||
Total Operating Expense
|
269,536 | 247,192 | 268,601 | |||||||||
Profit (Loss) from Operations
|
49,645 | 37,134 | (22,493 | ) | ||||||||
Other Income (Expense):
|
||||||||||||
Interest Income
|
752 | 133 | 393 | |||||||||
Interest Expense
|
(2,238 | ) | (1,619 | ) | (2,830 | ) | ||||||
Net Foreign Currency Transaction Gains (Losses)
|
559 | (902 | ) | (412 | ) | |||||||
ESOP Income
|
- | - | 990 | |||||||||
Other Income (Expense), Net
|
12 | (19 | ) | 32 | ||||||||
Total Other Expense, Net
|
(915 | ) | (2,407 | ) | (1,827 | ) | ||||||
Profit (Loss) Before Income Taxes
|
48,730 | 34,727 | (24,320 | ) | ||||||||
Income Tax Expense (Benefit)
|
16,017 | (76 | ) | 1,921 | ||||||||
Net Earnings (Loss)
|
$ | 32,713 | $ | 34,803 | $ | (26,241 | ) | |||||
Net Earnings (Loss) per Share:
|
||||||||||||
Basic
|
$ | 1.74 | $ | 1.85 | $ | (1.42 | ) | |||||
Diluted
|
$ | 1.69 | $ | 1.80 | $ | (1.42 | ) | |||||
Weighted Average Shares Outstanding:
|
||||||||||||
Basic
|
18,832,693 | 18,805,494 | 18,507,772 | |||||||||
Diluted
|
19,360,428 | 19,332,103 | 18,507,772 | |||||||||
Cash Dividends Declared per Common Share
|
$ | 0.68 | $ | 0.59 | $ | 0.53 |
December 31
|
2011
|
2010
|
||||||
ASSETS
|
||||||||
Current Assets:
|
||||||||
Cash and Cash Equivalents
|
$ | 52,339 | $ | 39,529 | ||||
Restricted Cash
|
3,279 | - | ||||||
Receivables:
|
||||||||
Trade, less Allowances of $4,828 and $4,311, respectively
|
123,920 | 123,830 | ||||||
Other
|
4,953 | 3,712 | ||||||
Net Receivables
|
128,873 | 127,542 | ||||||
Inventories
|
65,912 | 61,746 | ||||||
Prepaid Expenses
|
10,320 | 7,993 | ||||||
Deferred Income Taxes, Current Portion
|
10,358 | 11,459 | ||||||
Other Current Assets
|
1,015 | - | ||||||
Total Current Assets
|
272,096 | 248,269 | ||||||
Property, Plant and Equipment
|
286,949 | 287,751 | ||||||
Accumulated Depreciation
|
(199,795 | ) | (200,123 | ) | ||||
Property, Plant and Equipment, Net
|
87,154 | 87,628 | ||||||
Deferred Income Taxes, Long-Term Portion
|
15,014 | 14,182 | ||||||
Goodwill
|
20,303 | 20,423 | ||||||
Intangible Assets, Net
|
23,758 | 25,339 | ||||||
Other Assets
|
5,937 | 7,827 | ||||||
Total Assets
|
$ | 424,262 | $ | 403,668 | ||||
LIABILITIES AND SHAREHOLDERS' EQUITY
|
||||||||
Current Liabilities:
|
||||||||
Current Portion of Long-Term Debt
|
$ | 4,166 | $ | 3,154 | ||||
Accounts Payable
|
46,869 | 40,498 | ||||||
Employee Compensation and Benefits
|
32,934 | 31,281 | ||||||
Income Taxes Payable
|
619 | 509 | ||||||
Other Current Liabilities
|
39,404 | 40,702 | ||||||
Total Current Liabilities
|
123,992 | 116,144 | ||||||
Long-Term Liabilities:
|
||||||||
Long-Term Debt
|
32,289 | 27,674 | ||||||
Employee-Related Benefits
|
40,089 | 33,898 | ||||||
Deferred Income Taxes, Long-Term Portion
|
3,189 | 4,525 | ||||||
Other Liabilities
|
3,851 | 5,294 | ||||||
Total Long-Term Liabilities
|
79,418 | 71,391 | ||||||
Total Liabilities
|
203,410 | 187,535 | ||||||
Commitments
and Contingencies (Note 13)
|
||||||||
Shareholders' Equity:
|
||||||||
Preferred Stock of $0.02 par value per share, 1,000,000 shares authorized; no shares | ||||||||
issued or outstanding
|
- | - | ||||||
Common Stock, $0.375 par value per share, 60,000,000 shares authorized; 18,834,940
|
||||||||
and 19,038,843 issued and outstanding, respectively
|
7,063 | 7,140 | ||||||
Additional Paid-In Capital
|
15,082 | 10,876 | ||||||
Retained Earnings
|
227,944 | 220,391 | ||||||
Accumulated Other Comprehensive Loss
|
(29,237 | ) | (22,274 | ) | ||||
Total Shareholders’ Equity
|
220,852 | 216,133 | ||||||
Total Liabilities and Shareholders’ Equity
|
$ | 424,262 | $ | 403,668 |
Years ended December 31
|
2011
|
2010
|
2009
|
|||||||||
OPERATING ACTIVITIES
|
||||||||||||
Net Earnings (Loss)
|
$ | 32,713 | $ | 34,803 | $ | (26,241 | ) | |||||
Adjustments to reconcile Net Earnings (Loss) to Net Cash Provided by Operating Activities:
|
||||||||||||
Depreciation
|
18,088 | 18,026 | 19,632 | |||||||||
Amortization
|
3,330 | 3,166 | 3,171 | |||||||||
Impairment of Intangible Assets
|
2,058 | - | - | |||||||||
Goodwill Impairment Charge
|
- | - | 43,363 | |||||||||
Deferred Income Taxes
|
(1,352 | ) | (11,412 | ) | (1,433 | ) | ||||||
Stock-Based Compensation Expense
|
5,407 | 4,639 | 2,291 | |||||||||
ESOP Income
|
- | - | 426 | |||||||||
Tax Benefit on ESOP
|
- | - | 6 | |||||||||
Allowance for Doubtful Accounts and Returns
|
1,879 | 1,403 | 1,253 | |||||||||
Other, Net
|
508 | 503 | (77 | ) | ||||||||
Changes in Operating Assets and Liabilities, Excluding the Impact of Acquisitions:
|
||||||||||||
Accounts Receivable
|
(4,451 | ) | (7,931 | ) | 1,889 | |||||||
Inventories
|
(7,665 | ) | (4,391 | ) | 10,476 | |||||||
Accounts Payable
|
4,612 | (1,445 | ) | 16,409 | ||||||||
Employee Compensation and Benefits
|
1,177 | 1,162 | 4,015 | |||||||||
Other Current Liabilities
|
1,711 | 6,058 | (5,288 | ) | ||||||||
Income Taxes
|
1,668 | (1,716 | ) | 4,320 | ||||||||
Other Assets and Liabilities
|
(2,774 | ) | (335 | ) | 973 | |||||||
Net Cash Provided by Operating Activities
|
56,909 | 42,530 | 75,185 | |||||||||
INVESTING ACTIVITIES
|
||||||||||||
Purchases of Property, Plant and Equipment
|
(13,902 | ) | (10,529 | ) | (11,483 | ) | ||||||
Proceeds from Disposals of Property, Plant and Equipment
|
601 | 595 | 311 | |||||||||
Acquisition of Businesses, Net of Cash Acquired
|
(2,917 | ) | (86 | ) | (2,162 | ) | ||||||
Increase in Restricted Cash
|
(3,279 | ) | - | - | ||||||||
Net Cash Used for Investing Activities
|
(19,497 | ) | (10,020 | ) | (13,334 | ) | ||||||
FINANCING ACTIVITIES
|
||||||||||||
Change in Short-Term Borrowings, Net
|
- | (7 | ) | 3 | ||||||||
Payments of Long-Term Debt
|
(19,272 | ) | (4,192 | ) | (67,212 | ) | ||||||
Issuance of Long-Term Debt
|
20,000 | - | 82 | |||||||||
Purchases of Common Stock
|
(17,603 | ) | (3,153 | ) | - | |||||||
Proceeds from Issuances of Common Stock
|
4,214 | 6,467 | 914 | |||||||||
Tax Benefit on Stock Plans
|
1,266 | 1,724 | 114 | |||||||||
Dividends Paid
|
(12,852 | ) | (11,181 | ) | (9,861 | ) | ||||||
Principal Payment from ESOP
|
- | - | 1,892 | |||||||||
Net Cash Used for Financing Activities
|
(24,247 | ) | (10,342 | ) | (74,068 | ) | ||||||
Effect of Exchange Rate Changes on Cash and Cash Equivalents
|
(355 | ) | (701 | ) | 994 | |||||||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
12,810 | 21,467 | (11,223 | ) | ||||||||
Cash and Cash Equivalents at Beginning of Year
|
39,529 | 18,062 | 29,285 | |||||||||
CASH AND CASH EQUIVALENTS AT END OF YEAR
|
$ | 52,339 | $ | 39,529 | $ | 18,062 | ||||||
SUPPLEMENTAL CASH FLOW INFORMATION
|
||||||||||||
Cash Paid (Received) During the Year for:
|
||||||||||||
Income Taxes
|
$ | 13,158 | $ | 13,908 | $ | (4,319 | ) | |||||
Interest
|
$ | 2,059 | $ | 1,559 | $ | 2,779 | ||||||
Supplemental Non-Cash Investing and Financing Activities:
|
||||||||||||
Capital Expenditures Funded Through Capital Leases
|
$ | 2,893 | $ | 2,398 | $ | 5,784 | ||||||
Capital Expenditures in Accounts Payable
|
$ | 1,979 | $ | 363 | $ | 805 | ||||||
Collateralized Borrowings
|
$ | 127 | $ | 471 | $ | 1,342 | ||||||
Notes Payable Related to Water Star, Inc. Acquisition
|
$ | 1,500 | $ | - | $ | - |
Common Shares
|
Common
Stock
|
Additional Paid-in Capital
|
Retained Earnings
|
Accumulated Other Comprehensive Income (Loss)
|
Receivable from ESOP
|
Total Shareholders' Equity
|
||||||||||||||||||||||
Balance, December 31, 2008
|
18,284,746 | $ | 6,857 | $ | 6,649 | $ | 223,692 | $ | (26,391 | ) | $ | (903 | ) | $ | 209,904 | |||||||||||||
Net Loss
|
- | - | - | (26,241 | ) | - | - | (26,241 | ) | |||||||||||||||||||
Foreign Currency Translation Adjustments
|
- | - | - | - | 5,104 | - | 5,104 | |||||||||||||||||||||
Pension Adjustments, net of income | ||||||||||||||||||||||||||||
taxes of $1,048
|
- | - | - | - | (1,822 | ) | - | (1,822 | ) | |||||||||||||||||||
Comprehensive Loss
|
(22,959 | ) | ||||||||||||||||||||||||||
Issue Stock for Directors,
|
||||||||||||||||||||||||||||
Employee Benefit and Stock Plans
|
466,082 | 175 | 4,327 | - | - | - | 4,502 | |||||||||||||||||||||
Share-Based Compensation
|
- | - | 1,670 | - | - | - | 1,670 | |||||||||||||||||||||
Dividends paid, $0.53 per Common Share
|
- | - | - | (9,861 | ) | - | - | (9,861 | ) | |||||||||||||||||||
Tax Benefit on Stock Plans
|
- | - | 114 | - | - | - | 114 | |||||||||||||||||||||
Tax Benefit on ESOP
|
- | - | - | 6 | - | - | 6 | |||||||||||||||||||||
Principal Payments from ESOP
|
- | - | - | - | - | 1,892 | 1,892 | |||||||||||||||||||||
Shares Allocated
|
- | - | - | - | - | (989 | ) | (989 | ) | |||||||||||||||||||
Reclassification
|
- | - | (4,988 | ) | 4,988 | - | - | - | ||||||||||||||||||||
Balance, December 31, 2009
|
18,750,828 | $ | 7,032 | $ | 7,772 | $ | 192,584 | $ | (23,109 | ) | $ | - | $ | 184,279 | ||||||||||||||
Net Earnings
|
- | - | - | 34,803 | - | - | 34,803 | |||||||||||||||||||||
Foreign Currency Translation Adjustments
|
- | - | - | - | 762 | - | 762 | |||||||||||||||||||||
Pension Adjustments, net of income tax | ||||||||||||||||||||||||||||
benefit of $98
|
- | - | - | - | 73 | - | 73 | |||||||||||||||||||||
Comprehensive Income
|
35,638 | |||||||||||||||||||||||||||
Issue Stock for Directors,
|
||||||||||||||||||||||||||||
Employee Benefit and Stock Plans
|
388,015 | 146 | 6,029 | - | - | - | 6,175 | |||||||||||||||||||||
Share-Based Compensation
|
- | - | 2,651 | - | - | - | 2,651 | |||||||||||||||||||||
Dividends paid, $0.59 per Common Share
|
- | - | - | (11,181 | ) | - | - | (11,181 | ) | |||||||||||||||||||
Tax Benefit on Stock Plans
|
- | - | 1,724 | - | - | - | 1,724 | |||||||||||||||||||||
Purchases of Common Stock
|
(100,000 | ) | (38 | ) | (3,115 | ) | - | - | - | (3,153 | ) | |||||||||||||||||
Reclassification
|
- | - | (4,185 | ) | 4,185 | - | - | |||||||||||||||||||||
Balance, December 31, 2010
|
19,038,843 | $ | 7,140 | $ | 10,876 | $ | 220,391 | $ | (22,274 | ) | $ | - | $ | 216,133 | ||||||||||||||
Net Earnings
|
- | - | - | 32,713 | - | - | 32,713 | |||||||||||||||||||||
Foreign Currency Translation Adjustments
|
- | - | - | - | (3,141 | ) | - | (3,141 | ) | |||||||||||||||||||
Pension Adjustments, net of income | ||||||||||||||||||||||||||||
taxes of $1,266
|
- | - | - | - | (3,822 | ) | - | (3,822 | ) | |||||||||||||||||||
Comprehensive Income
|
25,750 | |||||||||||||||||||||||||||
Issue Stock for Directors,
|
||||||||||||||||||||||||||||
Employee Benefit and Stock Plans
|
265,401 | 99 | 4,019 | - | - | - | 4,118 | |||||||||||||||||||||
Share-Based Compensation
|
- | - | 4,041 | - | - | - | 4,041 | |||||||||||||||||||||
Dividends paid, $0.68 per Common Share
|
- | - | - | (12,852 | ) | - | - | (12,852 | ) | |||||||||||||||||||
Tax Benefit on Stock Plans
|
- | - | 1,265 | - | - | - | 1,265 | |||||||||||||||||||||
Purchases of Common Stock
|
(469,304 | ) | (176 | ) | (17,427 | ) | - | - | - | (17,603 | ) | |||||||||||||||||
Reclassification
|
- | - | 12,308 | (12,308 | ) | - | - | - | ||||||||||||||||||||
Balance, December 31, 2011
|
18,834,940 | $ | 7,063 | $ | 15,082 | $ | 227,944 | $ | (29,237 | ) | $ | - | $ | 220,852 |
1.
|
Summary
of Significant Accounting Policies
|
2.
|
Newly
Adopted Accounting Pronouncements
|
3.
|
Management
Actions
|
Severance, Early Retirement and Related Costs
|
||||
2010 restructuring action
|
$ | 1,671 | ||
Cash payments
|
(87 | ) | ||
December 31, 2010 balance
|
$ | 1,584 | ||
2011 utilization:
|
||||
Cash payments
|
(1,534 | ) | ||
Foreign currency adjustments
|
(54 | ) | ||
Change in estimate
|
110 | |||
December 31, 2011 balance
|
$ | 106 |
4.
|
Acquisitions
and Divestitures
|
Current Assets
|
$ | 426 | ||
Property, Plant and Equipment, net
|
167 | |||
Identified Intangible Assets
|
3,800 | |||
Goodwill
|
472 | |||
Total Assets Acquired
|
4,865 | |||
Current Liabilities
|
409 | |||
Total Liabilities Assumed
|
409 | |||
Net Assets Acquired
|
$ | 4,456 |
5.
|
2011
|
2010
|
|||||||
Inventories carried at LIFO:
|
||||||||
Finished goods
|
$ | 32,648 | $ | 31,355 | ||||
Raw materials, production parts and work-in-process
|
16,611 | 15,414 | ||||||
LIFO reserve
|
(27,926 | ) | (26,462 | ) | ||||
Total LIFO inventories
|
21,333 | 20,307 | ||||||
Inventories carried at FIFO:
|
||||||||
Finished goods
|
31,912 | 23,770 | ||||||
Raw materials, production parts and work-in-process
|
12,667 | 17,669 | ||||||
Total FIFO inventories
|
44,579 | 41,439 | ||||||
Total Inventories
|
$ | 65,912 | $ | 61,746 |
6.
|
Property,
Plant and Equipment
|
2011
|
2010
|
|||||||
Land
|
$ | 4,383 | $ | 4,397 | ||||
Buildings and improvements
|
49,931 | 49,578 | ||||||
Machinery and manufacturing equipment
|
135,794 | 137,246 | ||||||
Office equipment
|
86,740 | 90,844 | ||||||
Work in progress
|
10,101 | 5,686 | ||||||
Total Property, Plant and Equipment
|
286,949 | 287,751 | ||||||
Less: Accumulated Depreciation
|
(199,795 | ) | (200,123 | ) | ||||
Net Property, Plant and Equipment
|
$ | 87,154 | $ | 87,628 |
7.
|
Goodwill
and Intangible Assets
|
Accumulated
|
||||||||||||
Impairment
|
||||||||||||
Goodwill
|
Losses
|
Total
|
||||||||||
Balance as of December 31, 2010
|
$ | 67,008 | $ | (46,585 | ) | $ | 20,423 | |||||
Additions
|
688 | - | 688 | |||||||||
Foreign currency fluctuations
|
(1,173 | ) | 365 | (808 | ) | |||||||
Balance as of December 31, 2011
|
$ | 66,523 | $ | (46,220 | ) | $ | 20,303 | |||||
Balance as of December 31, 2009
|
$ | 68,706 | $ | (48,525 | ) | $ | 20,181 | |||||
Adjustments
|
(117 | ) | - | (117 | ) | |||||||
Foreign currency fluctuations
|
(1,581 | ) | 1,940 | 359 | ||||||||
Balance as of December 31, 2010
|
$ | 67,008 | $ | (46,585 | ) | $ | 20,423 |
Customer Lists
|
||||||||||||||||
and
|
Trade
|
|||||||||||||||
Service Contracts
|
Name
|
Technology
|
Total
|
|||||||||||||
Balance as of December 31, 2011
|
||||||||||||||||
Original cost
|
$ | 25,987 | $ | 4,583 | $ | 7,136 | $ | 37,706 | ||||||||
Accumulated amortization
|
(10,387 | ) | (1,209 | ) | (2,352 | ) | (13,948 | ) | ||||||||
Carrying amount
|
$ | 15,600 | $ | 3,374 | $ | 4,784 | $ | 23,758 | ||||||||
Weighted-average original life (in years)
|
14 | 14 | 13 | |||||||||||||
Balance as of December 31, 2010
|
||||||||||||||||
Original cost
|
$ | 26,662 | $ | 4,709 | $ | 3,441 | $ | 34,812 | ||||||||
Accumulated amortization
|
(7,344 | ) | (901 | ) | (1,228 | ) | (9,473 | ) | ||||||||
Carrying amount
|
$ | 19,318 | $ | 3,808 | $ | 2,213 | $ | 25,339 | ||||||||
Weighted-average original life (in years)
|
14 | 14 | 11 |
2012
|
$ | 2,459 | ||
2013
|
2,343 | |||
2014
|
2,281 | |||
2015
|
2,269 | |||
2016
|
2,229 | |||
Thereafter
|
12,177 | |||
Total
|
$ | 23,758 |
8.
|
2011
|
2010
|
|||||||
Short-term borrowings:
|
||||||||
Bank borrowings
|
$ | - | $ | - | ||||
Long-Term Debt:
|
||||||||
Bank borrowings
|
49 | 128 | ||||||
Credit facility borrowings
|
30,000 | 25,000 | ||||||
Notes Payable
|
1,500 | - | ||||||
Collateralized borrowings
|
127 | 471 | ||||||
Capital lease obligations
|
4,779 | 5,229 | ||||||
Total Long-Term Debt
|
36,455 | 30,828 | ||||||
Less: current portion
|
4,166 | 3,154 | ||||||
Long-term portion
|
$ | 32,289 | $ | 27,674 |
·
|
a covenant requiring us to maintain an indebtedness to EBITDA ratio as of the end of each quarter of not greater than 3.00 to 1;
|
·
|
a covenant requiring us to maintain an EBITDA to interest expense ratio as of the end of each quarter of no less than 3.50 to 1;
|
·
|
a covenant restricting us from paying dividends or repurchasing stock if, after giving effect to such payments, our leverage ratio is greater than 2.00 to 1, in such case limiting such payments to an amount ranging from $50,000 to $75,000 during any fiscal year based on our leverage ratio after giving effect to such payments; and
|
·
|
a covenant restricting our ability to make acquisitions, if, after giving pro-forma effect to such acquisition, our leverage ratio is greater than 2.75 to 1, in such case limiting acquisitions to $25,000.
|
·
|
elimination of the security interest in our personal property and subsidiaries;
|
·
|
an amendment to the maximum leverage ratio to not greater than 3.00 to 1 for any period ending on or after March 31, 2011;
|
·
|
an amendment to our restriction regarding the payment of dividends or repurchase of stock to restrict us from paying dividends or repurchasing stock if, after giving effect to such payments, our leverage ratio is greater than 2.00 to 1, in such case limiting such payments to an amount ranging from $50,000 to $75,000 during any fiscal year based on our leverage ratio after giving effect to such payments; and
|
·
|
an amendment to Permitted Acquisitions restricting our ability to make acquisitions, if, after giving pro-forma effect to such acquisition, our leverage ratio is greater than 2.75 to 1, in such case limiting acquisitions to $25,000.
|
2012
|
$ | 5,354 | ||
2013
|
3,096 | |||
2014
|
3,211 | |||
2015
|
4,252 | |||
2016
|
13,994 | |||
Thereafter
|
11,995 | |||
Total minimum obligations
|
$ | 41,902 | ||
Less: amount representing interest
|
(5,447 | ) | ||
Total
|
$ | 36,455 |
9.
|
Other
Current Liabilities
|
2011
|
2010
|
|||||||
Taxes, other than income taxes
|
$ | 5,629 | $ | 5,654 | ||||
Warranty
|
8,759 | 7,043 | ||||||
Deferred revenue
|
3,159 | 2,740 | ||||||
Rebates
|
5,185 | 4,927 | ||||||
Freight
|
3,945 | 4,257 | ||||||
Restructuring
|
835 | 1,798 | ||||||
Miscellaneous accrued expenses
|
8,974 | 11,401 | ||||||
Other
|
2,918 | 2,882 | ||||||
Total
|
$ | 39,404 | $ | 40,702 |
2011
|
2010
|
2009
|
||||||||||
Beginning balance
|
$ | 7,043 | $ | 5,985 | $ | 6,018 | ||||||
Product warranty provision
|
12,815 | 10,506 | 8,092 | |||||||||
Acquired reserves
|
10 | - | 17 | |||||||||
Foreign currency
|
(63 | ) | (88 | ) | 133 | |||||||
Claims paid
|
(11,046 | ) | (9,360 | ) | (8,275 | ) | ||||||
Ending balance
|
$ | 8,759 | $ | 7,043 | $ | 5,985 |
10.
|
Fair
Value Measurements
|
·
|
Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.
|
·
|
Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.
|
·
|
Level 3: Unobservable inputs that reflect the reporting entity’s own assumptions.
|
Fair
|
Valuation
|
||||||||||||||||
value
|
Level 1
|
Level 2
|
Level 3
|
Technique
|
|||||||||||||
Assets:
|
|||||||||||||||||
Water Star technology
|
$ | 3,800 | $ | - | $ | - | $ | 3,800 |
(a)
|
||||||||
Foreign currency forward exchange contracts
|
1,015 | - | 1,015 | - |
(b)
|
||||||||||||
Total Assets
|
$ | 4,815 | $ | - | $ | 1,015 | $ | 3,800 | |||||||||
Liabilities:
|
|||||||||||||||||
Foreign currency forward exchange contracts
|
$ | 102 | $ | - | $ | 102 | $ | - |
(b)
|
||||||||
Total Liabilities
|
$ | 102 | $ | - | $ | 102 | $ | - |
11.
|
Retirement
Benefit Plans
|
Asset Category
|
Total
|
Quoted Prices in Active Markets for Identical Assets
(Level 1)
|
Significant Observable Inputs
(Level 2)
|
Significant Unobservable Inputs
(Level 3)
|
||||||||||||
Cash and Cash Equivalents
|
$ | 533 | $ | 533 | $ | - | $ | - | ||||||||
Equity Securities:
|
||||||||||||||||
U.S. Small-Cap
(1)
|
445 | 445 | - | - | ||||||||||||
U.S. Mid-Cap
(1)
|
2,761 | 2,761 | - | - | ||||||||||||
U.S. Large-Cap
(1)
|
179 | 179 | - | - | ||||||||||||
International Small-Cap
(2)
|
116 | 116 | - | - | ||||||||||||
Mutual Funds:
|
||||||||||||||||
Corporate Bonds
|
11,557 | 11,557 | - | - | ||||||||||||
U.S. Large-Cap
(3)
|
12,646 | 12,646 | - | - | ||||||||||||
Investment Account held by Pension Plan
(4)
|
7,738 | - | 7,738 | - | ||||||||||||
Total
|
$ | 35,975 | $ | 28,237 | $ | 7,738 | $ | - |
(1)
|
This category is comprised of actively managed domestic common stocks.
|
(2)
|
This category is comprised of actively managed international common stocks.
|
(3)
|
This category is comprised of funds not actively managed that track the S&P 500.
|
(4)
|
This category is comprised of foreign and domestic equities and foreign and domestic fixed interest assets.
|
U.S. Pension Benefits
|
Non-U.S.
Pension Benefits
|
Postretirement
Medical Benefits
|
||||||||||||||||||||||
2011
|
2010
|
2011
|
2010
|
2011
|
2010
|
|||||||||||||||||||
Discount rate
|
4.39 | % | 5.39 | % | 4.94 | % | 5.39 | % | 4.20 | % | 5.00 | % | ||||||||||||
Rate of compensation increase
|
3.00 | % | 3.00 | % | 4.60 | % | 5.10 | % | - | - |
U.S. Pension Benefits
|
Non-U.S.
Pension Benefits
|
Postretirement
Medical Benefits
|
||||||||||||||||||||||||||||||||||
2011
|
2010
|
2009
|
2011
|
2010
|
2009
|
2011
|
2010
|
2009
|
||||||||||||||||||||||||||||
Discount rate
|
5.39 | % | 5.88 | % | 6.90 | % | 5.39 | % | 5.69 | % | 6.16 | % | 5.00 | % | 5.60 | % | 6.90 | % | ||||||||||||||||||
Expected long-term rate of return on plan assets
|
7.70 | % | 7.70 | % | 8.75 | % | 5.20 | % | 5.50 | % | 4.90 | % | - | - | - | |||||||||||||||||||||
Rate of compensation increase
|
3.00 | % | 3.00 | % | 4.00 | % | 5.10 | % | 5.10 | % | 4.50 | % | - | - | - |
2011
|
2010
|
|||||||
U.S. Pension Plans
|
$ | 42,909 | $ | 37,472 | ||||
U.K. Pension Plan
|
7,858 | 7,498 | ||||||
German Pension Plan
|
652 | 676 |
U.S. Pension Plans
|
Non-U.S. Plans
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Projected benefit obligation
|
$ | 44,280 | $ | 38,885 | $ | 8,775 | $ | 8,394 | ||||||||
Accumulated benefit obligation
|
42,909 | 37,472 | 8,510 | 8,174 | ||||||||||||
Fair value of plan assets
|
28,237 | 29,483 | 7,738 | 6,917 |
2011
|
2010
|
|||||||
Healthcare cost trend rate assumption for the next year
|
10.14 | % | 11.25 | % | ||||
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)
|
5.00 | % | 5.00 | % | ||||
Year that the rate reaches the ultimate trend rate
|
2031 | 2031 |
1-Percentage-
|
1-Percentage-
|
|||||||
Point
|
Point
|
|||||||
Decrease
|
Increase
|
|||||||
Effect on total of service and interest cost components
|
$ | (65 | ) | $ | 75 | |||
Effect on postretirement benefit obligation
|
$ | (1,121 | ) | $ | 1,288 |
U.S. Pension Benefits
|
Non-U.S.
Pension Benefits
|
Postretirement
Medical Benefits
|
||||||||||||||||||||||
2011
|
2010
|
2011
|
2010
|
2011
|
2010
|
|||||||||||||||||||
Change in benefit obligation:
|
||||||||||||||||||||||||
Benefit obligation at beginning of year
|
$ | 38,885 | $ | 36,034 | $ | 8,394 | $ | 7,994 | $ | 13,423 | $ | 14,323 | ||||||||||||
Service cost
|
651 | 657 | 133 | 117 | 132 | 121 | ||||||||||||||||||
Interest cost
|
2,013 | 2,032 | 465 | 434 | 612 | 681 | ||||||||||||||||||
Plan participants' contributions
|
- | - | 24 | 25 | - | - | ||||||||||||||||||
Plan amendments
|
233 | - | - | - | - | - | ||||||||||||||||||
Actuarial loss (gain)
|
4,216 | 1,842 | 40 | 250 | 72 | (892 | ) | |||||||||||||||||
Foreign exchange
|
- | - | (63 | ) | (294 | ) | - | - | ||||||||||||||||
Benefits paid
|
(1,718 | ) | (1,680 | ) | (218 | ) | (132 | ) | (531 | ) | (810 | ) | ||||||||||||
Benefit obligation at end of year
|
$ | 44,280 | $ | 38,885 | $ | 8,775 | $ | 8,394 | $ | 13,708 | $ | 13,423 | ||||||||||||
Change in fair value of plan assets and net accrued liabilities:
|
||||||||||||||||||||||||
Fair value of plan assets at beginning of year
|
$ | 29,483 | $ | 27,438 | $ | 6,917 | $ | 6,451 | $ | - | $ | - | ||||||||||||
Actual return on plan assets
|
357 | 3,610 | 715 | 454 | - | - | ||||||||||||||||||
Employer contributions
|
115 | 115 | 352 | 338 | 531 | 810 | ||||||||||||||||||
Plan participants' contributions
|
- | - | 24 | 25 | - | - | ||||||||||||||||||
Foreign exchange
|
- | - | (52 | ) | (219 | ) | - | - | ||||||||||||||||
Benefits paid
|
(1,718 | ) | (1,680 | ) | (218 | ) | (132 | ) | (531 | ) | (810 | ) | ||||||||||||
Fair value of plan assets at end of year
|
28,237 | 29,483 | 7,738 | 6,917 | - | - | ||||||||||||||||||
Funded status at end of year
|
$ | (16,043 | ) | $ | (9,402 | ) | $ | (1,037 | ) | $ | (1,477 | ) | $ | (13,708 | ) | $ | (13,423 | ) | ||||||
Amounts recognized in the consolidated balance sheets consist of:
|
||||||||||||||||||||||||
Current liabilities
|
$ | (129 | ) | $ | (131 | ) | $ | (38 | ) | $ | (38 | ) | $ | (841 | ) | $ | (855 | ) | ||||||
Noncurrent liabilities
|
(15,914 | ) | (9,271 | ) | (999 | ) | (1,439 | ) | (12,867 | ) | (12,568 | ) | ||||||||||||
Net accrued liability
|
$ | (16,043 | ) | $ | (9,402 | ) | $ | (1,037 | ) | $ | (1,477 | ) | $ | (13,708 | ) | $ | (13,423 | ) | ||||||
Amounts recognized in accumulated other comprehensive income (loss) consist of:
|
||||||||||||||||||||||||
Prior service cost
|
$ | 606 | $ | 923 | $ | - | $ | - | $ | (689 | ) | $ | (1,268 | ) | ||||||||||
Net actuarial loss
|
12,488 | 6,331 | 2,000 | 302 | 1,921 | 1,849 | ||||||||||||||||||
Accumulated other comprehensive income
|
$ | 13,094 | $ | 7,254 | $ | 2,000 | $ | 302 | $ | 1,232 | $ | 581 |
U.S. Pension Benefits
|
Non-U.S.
Pension Benefits
|
Postretirement
Medical Benefits
|
||||||||||||||||||||||||||||||||||
2011
|
2010
|
2009
|
2011
|
2010
|
2009
|
2011
|
2010
|
2009
|
||||||||||||||||||||||||||||
Service cost
|
$ | 651 | $ | 657 | $ | 648 | $ | 133 | $ | 117 | $ | 97 | $ | 132 | $ | 121 | $ | 141 | ||||||||||||||||||
Interest cost
|
2,013 | 2,032 | 2,116 | 465 | 434 | 406 | 612 | 681 | 854 | |||||||||||||||||||||||||||
Expected return on plan assets
|
(2,325 | ) | (2,340 | ) | (2,767 | ) | (376 | ) | (346 | ) | (276 | ) | - | - | - | |||||||||||||||||||||
Amortization of net actuarial loss (gain)
|
27 | 22 | (151 | ) | - | - | - | - | - | - | ||||||||||||||||||||||||||
Amortization of transition (asset) obligation
|
- | - | (20 | ) | - | - | - | - | - | - | ||||||||||||||||||||||||||
Amortization of prior service cost
|
550 | 554 | 555 | - | - | - | (580 | ) | (579 | ) | (580 | ) | ||||||||||||||||||||||||
Foreign currency
|
- | - | - | (18 | ) | (65 | ) | 61 | - | - | - | |||||||||||||||||||||||||
Net periodic benefit cost
|
$ | 916 | $ | 925 | $ | 381 | $ | 204 | $ | 140 | $ | 288 | $ | 164 | $ | 223 | $ | 415 |
U.S. Pension Benefits
|
Non-U.S.
Pension Benefits
|
Postretirement
Medical Benefits
|
||||||||||||||||||||||||||||||||||
2011
|
2010
|
2009
|
2011
|
2010
|
2009
|
2011
|
2010
|
2009
|
||||||||||||||||||||||||||||
Prior service cost
|
$ | 233 | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||||||||
Net actuarial loss (gain)
|
6,184 | 573 | 387 | (300 | ) | 143 | 502 | 72 | (892 | ) | 1,823 | |||||||||||||||||||||||||
Amortization of prior service cost
|
(550 | ) | (554 | ) | (555 | ) | - | - | - | 580 | 580 | 580 | ||||||||||||||||||||||||
Amortization of prior transition asset
|
- | - | 20 | - | - | - | - | - | - | |||||||||||||||||||||||||||
Amortization of net actuarial (loss) gain
|
(27 | ) | (22 | ) | 151 | - | - | - | - | - | - | |||||||||||||||||||||||||
Total recognized in other comprehensive income
|
$ | 5,840 | $ | (3 | ) | $ | 3 | $ | (300 | ) | $ | 143 | $ | 502 | $ | 652 | $ | (312 | ) | $ | 2,403 | |||||||||||||||
Total recognized in net periodic benefit cost
|
||||||||||||||||||||||||||||||||||||
and other comprehensive income
|
$ | 6,756 | $ | 922 | $ | 384 | $ | (96 | ) | $ | 283 | $ | 790 | $ | 816 | $ | (89 | ) | $ | 2,818 |
U.S. Pension Benefits
|
Non-U.S.
Pension Benefits
|
Postretirement
Medical Benefits
|
||||||||||
2012
|
$ | 1,659 | $ | 178 | $ | 841 | ||||||
2013
|
1,846 | 183 | 914 | |||||||||
2014
|
2,088 | 187 | 1,012 | |||||||||
2015
|
2,368 | 192 | 1,096 | |||||||||
2016
|
2,541 | 196 | 1,166 | |||||||||
2017 to 2021
|
14,423 | 1,059 | 5,888 | |||||||||
Total
|
$ | 24,925 | $ | 1,995 | $ | 10,917 |
Postretirement
|
||||||||
Pension
|
Medical
|
|||||||
Benefits
|
Benefits
|
|||||||
Net loss
|
$ | 1,030 | $ | 67 | ||||
Net prior service cost (credit)
|
388 | (580 | ) |
12.
|
Shareholders’
Equity
|
13.
|
Commitments
and Contingencies
|
2012
|
$ | 7,937 | ||
2013
|
4,628 | |||
2014
|
2,811 | |||
2015
|
1,622 | |||
2016
|
774 | |||
Thereafter
|
857 | |||
Total
|
$ | 18,629 |
14.
|
Income
Taxes
|
2011
|
2010
|
2009
|
||||||||||
U.S. operations
|
$ | 40,282 | $ | 26,297 | $ | 12,103 | ||||||
Foreign operations
|
8,448 | 8,430 | (36,423 | ) | ||||||||
Total
|
$ | 48,730 | $ | 34,727 | $ | (24,320 | ) |
2011
|
2010
|
2009
|
||||||||||
Current:
|
||||||||||||
Federal
|
$ | 10,321 | $ | 6,756 | $ | (337 | ) | |||||
Foreign
|
2,277 | 3,005 | 1,284 | |||||||||
State
|
1,450 | 1,214 | 236 | |||||||||
$ | 14,048 | $ | 10,975 | $ | 1,183 | |||||||
Deferred:
|
||||||||||||
Federal
|
$ | 2,330 | $ | (10,541 | ) | $ | 1,897 | |||||
Foreign
|
(203 | ) | (248 | ) | (1,444 | ) | ||||||
State
|
(158 | ) | (262 | ) | 285 | |||||||
$ | 1,969 | $ | (11,051 | ) | $ | 738 | ||||||
Total:
|
||||||||||||
Federal
|
$ | 12,651 | $ | (3,785 | ) | $ | 1,560 | |||||
Foreign
|
2,074 | 2,757 | (160 | ) | ||||||||
State
|
1,292 | 952 | 521 | |||||||||
$ | 16,017 | $ | (76 | ) | $ | 1,921 |
2011
|
2010
|
2009
|
||||||||||
Tax at statutory rate
|
35.0 | % | 35.0 | % | (35.0 | %) | ||||||
Increases (decreases) in the tax rate from:
|
||||||||||||
State and local taxes, net of federal benefit
|
2.0 | 0.7 | 1.1 | |||||||||
Effect of foreign operations
|
0.5 | 0.5 | (7.0 | ) | ||||||||
International restructuring
|
- | (31.4 | ) | (9.4 | ) | |||||||
Goodwill impairment - non-deductible
|
- | - | 56.9 | |||||||||
Effect of changes in valuation allowances
|
- | 0.1 | (0.7 | ) | ||||||||
Domestic production activities deduction
|
(1.6 | ) | (3.0 | ) | 0.8 | |||||||
Other, net
|
(3.0 | ) | (2.1 | ) | 1.2 | |||||||
Effective income tax rate
|
32.9 | % | (0.2 | %) | 7.9 | % |
2011
|
2010
|
2009
|
||||||||||
Deferred tax assets:
|
||||||||||||
Inventories, principally due to additional costs inventoried for | ||||||||||||
tax purposes and changes in inventory reserves
|
$ | 426 | $ | 1,081 | $ | 867 | ||||||
Employee wages and benefits, principally due to accruals for | ||||||||||||
financial reporting purposes
|
20,910 | 17,948 | 16,050 | |||||||||
Warranty reserves accrued for financial reporting purposes
|
2,625 | 2,175 | 1,803 | |||||||||
Accounts receivable, principally due to allowance for doubtful | ||||||||||||
accounts and tax accounting method for equipment rentals
|
1,464 | 1,252 | 1,396 | |||||||||
Tax loss carryforwards
|
5,915 | 12,725 | 12,987 | |||||||||
Valuation allowance
|
(3,229 | ) | (9,170 | ) | (9,131 | ) | ||||||
Tax credit carryforwards
|
8,554 | 10,119 | 2,385 | |||||||||
Other
|
1,777 | 1,937 | 1,177 | |||||||||
Total deferred tax assets
|
$ | 38,442 | $ | 38,067 | $ | 27,534 | ||||||
Deferred tax liabilities:
|
||||||||||||
Property, Plant and Equipment, principally due to differences in | ||||||||||||
depreciation and related gains
|
$ | 9,167 | $ | 8,562 | $ | 8,592 | ||||||
Goodwill and Intangible Assets
|
7,093 | 8,390 | 9,086 | |||||||||
Total deferred tax liabilities
|
$ | 16,260 | $ | 16,952 | $ | 17,678 | ||||||
Net deferred tax assets
|
$ | 22,182 | $ | 21,115 | $ | 9,856 |
Balance at January 1, 2011
|
$ | 5,272 | ||
Decreases as a result of tax positions taken during a prior period
|
(765 | ) | ||
Increases as a result of tax positions taken during the current year
|
828 | |||
Decreases for tax positions related to acquired entities during a prior period
|
- | |||
Decreases relating to settlements with taxing authorities
|
(193 | ) | ||
Reductions as a result of a lapse of the applicable statute of limitations
|
(1,551 | ) | ||
Decreases as a result of foreign currency fluctuations
|
(167 | ) | ||
Balance at December 31, 2011
|
$ | 3,424 |
15.
|
Stock
-Based Compensation
|
2011
|
2010
|
2009
|
||||||||||
Expected volatility
|
49 - 50 | % | 46 - 68 | % | 38 - 66 | % | ||||||
Weighted-average expected volatility
|
49 | % | 46 | % | 39 | % | ||||||
Expected dividend yield
|
1.7 - 1.8 | % | 1.9 - 2.5 | % | 2.0 - 4.7 | % | ||||||
Weighted-average expected dividend yield
|
1.8 | % | 2.4 | % | 4.7 | % | ||||||
Expected term, in years
|
6 | 1 - 6 | 2 - 6 | |||||||||
Risk-free interest rate
|
1.3 - 2.5 | % | 0.4 - 2.9 | % | 1.1 - 2.8 | % |
Shares
|
Weighted-Average Exercise Price
|
|||||||
Outstanding at beginning of year
|
1,402,452 | $ | 17.74 | |||||
Granted
|
153,936 | 40.28 | ||||||
Exercised
|
(242,597 | ) | 17.51 | |||||
Forfeited
|
(44,871 | ) | 20.87 | |||||
Outstanding at end of year
|
1,268,920 | $ | 20.40 | |||||
Exercisable at end of year
|
694,872 | $ | 17.51 |
Shares
|
Weighted-Average Grant Date Fair Value
|
|||||||
Nonvested at beginning of year
|
145,641 | $ | 24.50 | |||||
Granted
|
29,365 | 40.43 | ||||||
Vested
|
(18,152 | ) | 35.83 | |||||
Forfeited
|
(6,773 | ) | 21.19 | |||||
Nonvested at end of year
|
150,081 | $ | 26.39 |
16.
|
Employee
Stock Ownership Plan
|
17.
|
Earnings
(Loss) Per Share
|
2011
|
2010
|
2009
|
||||||||||
Numerator:
|
||||||||||||
Net Earnings (Loss)
|
$ | 32,713 | $ | 34,803 | $ | (26,241 | ) | |||||
Denominator:
|
||||||||||||
Basic - Weighted Average Shares Outstanding
|
18,832,693 | 18,805,494 | 18,507,772 | |||||||||
Effect of dilutive securities:
|
||||||||||||
Employee stock options
|
527,735 | 526,609 | - | |||||||||
Diluted - Weighted Average Shares Outstanding
|
19,360,428 | 19,332,103 | 18,507,772 | |||||||||
Basic Earnings (Loss) per Share
|
$ | 1.74 | $ | 1.85 | $ | (1.42 | ) | |||||
Diluted Earnings (Loss) per Share
|
$ | 1.69 | $ | 1.80 | $ | (1.42 | ) |
18.
|
Segment
Reporting
|
2011
|
2010
|
2009
|
||||||||||
Net Sales:
|
||||||||||||
Americas
|
$ | 481,426 | $ | 424,462 | $ | 366,034 | ||||||
Europe, Middle East, Africa
|
188,338 | 172,619 | 177,829 | |||||||||
Asia Pacific
|
84,234 | 70,586 | 52,012 | |||||||||
Total
|
$ | 753,998 | $ | 667,667 | $ | 595,875 |
2011
|
2010
|
2009
|
||||||||||
Long-lived assets:
|
||||||||||||
Americas
|
$ | 98,855 | $ | 98,258 | $ | 106,080 | ||||||
Europe, Middle East, Africa
|
29,390 | 34,497 | 41,016 | |||||||||
Asia Pacific
|
5,183 | 4,312 | 4,706 | |||||||||
Total
|
$ | 133,428 | $ | 137,067 | $ | 151,802 |
2011
|
2010
|
2009
|
||||||||||
Net Sales:
|
||||||||||||
Equipment
|
$ | 452,398 | $ | 389,137 | $ | 329,871 | ||||||
Parts and consumables
|
177,999 | 160,994 | 151,932 | |||||||||
Service and other
|
100,650 | 96,828 | 95,046 | |||||||||
Specialty surface coatings
|
22,951 | 20,708 | 19,026 | |||||||||
Total
|
$ | 753,998 | $ | 667,667 | $ | 595,875 |
19.
|
Consolidated
Quarterly Data (Unaudited)
|
2011
|
||||||||||||||||
Q1 | Q2 | Q3 | Q4 | |||||||||||||
Net Sales
|
$ | 172,591 | $ | 201,259 | $ | 186,990 | $ | 193,158 | ||||||||
Gross Profit
|
$ | 71,931 | $ | 83,468 | $ | 80,253 | $ | 83,529 | ||||||||
Net Earnings
|
$ | 5,866 | $ | 5,855 | $ | 9,728 | $ | 11,264 | ||||||||
Basic Earnings per Share
|
$ | 0.31 | $ | 0.31 | $ | 0.52 | $ | 0.60 | ||||||||
Diluted Earnings per Share
|
$ | 0.30 | $ | 0.30 | $ | 0.50 | $ | 0.59 |
2010
|
||||||||||||||||
Q1 | Q2 | Q3 | Q4 | |||||||||||||
Net Sales
|
$ | 150,106 | $ | 166,137 | $ | 168,637 | $ | 182,789 | ||||||||
Gross Profit
|
$ | 63,760 | $ | 71,543 | $ | 71,862 | $ | 77,162 | ||||||||
Net Earnings
|
$ | 4,091 | $ | 6,175 | $ | 7,526 | $ | 17,012 | ||||||||
Basic Earnings per Share
|
$ | 0.22 | $ | 0.33 | $ | 0.40 | $ | 0.91 | ||||||||
Diluted Earnings per Share
|
$ | 0.21 | $ | 0.32 | $ | 0.39 | $ | 0.89 |
20.
|
Related
Party Transactions
|
/s/ H. Chris Killingstad
|
||
H. Chris Killingstad
President and Chief Executive Officer
|
||
/s/ Thomas Paulson
|
||
Thomas Paulson
Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)
|
A.
|
The following documents are filed as a part of this report:
|
1.
|
Financial
Statements
|
2.
|
Financial Statement Schedule
|
|
Schedule II – Valuation and Qualifying Accounts
|
(In thousands)
|
2011
|
2010
|
2009
|
|||||||||
Allowance for Doubtful Accounts and Returns:
|
||||||||||||
Balance at beginning of year
|
$ | 4,311 | $ | 5,077 | $ | 7,319 | ||||||
Charged to costs and expenses
|
1,888 | 1,403 | 996 | |||||||||
Charged to other accounts
(1)
|
(91 | ) | (200 | ) | 257 | |||||||
Deductions
(2)
|
(1,279 | ) | (1,969 | ) | (3,495 | ) | ||||||
Balance at end of year
|
$ | 4,829 | $ | 4,311 | $ | 5,077 | ||||||
Inventory Reserves:
|
||||||||||||
Balance at beginning of year
|
$ | 3,693 | $ | 3,997 | $ | 5,127 | ||||||
Charged to costs and expenses
|
4,212 | 3,462 | 2,674 | |||||||||
Charged to other accounts
(1)
|
(102 | ) | (263 | ) | 173 | |||||||
Deductions
(3)
|
(3,630 | ) | (3,503 | ) | (3,977 | ) | ||||||
Balance at end of year
|
$ | 4,173 | $ | 3,693 | $ | 3,997 | ||||||
Valuation Allowance for Deferred Tax Assets:
|
||||||||||||
Balance at beginning of year
|
$ | 9,170 | $ | 9,131 | $ | 9,303 | ||||||
Charged to other accounts
(4)
|
(5,941 | ) | 39 | (172 | ) | |||||||
Balance at end of year
|
$ | 3,229 | $ | 9,170 | $ | 9,131 |
3.
|
Exhibits
|
|||
Item #
|
Description
|
Method of Filing
|
||
2.1
|
Share Purchase Agreement dated February 15, 2008 among the Sellers identified therein and Tennant Scotland Limited (excluding schedules and exhibits, which the Company agrees to furnish supplementally to the Securities and Exchange Commission upon request)
|
Incorporated by reference to Exhibit 2.1 to the Company's Form 8-K dated February 29, 2008.
|
||
3i
|
Restated Articles of Incorporation
|
Incorporated by reference to Exhibit 3i to the Company’s report on Form 10-Q for the quarterly period ended June 30, 2006.
|
||
3ii
|
Certificate of Designation
|
Incorporated by reference to Exhibit 3.1 to the Company's Form 10-K for the year ended December 31, 2006.
|
||
3iii
|
Amended and Restated By-Laws
|
Incorporated by reference to Exhibit 3(iii) to the Company’s Form 8-K dated December 14, 2010.
|
||
4.1
|
Rights Agreement, dated as of November 10, 2006, between the Company and Wells Fargo Bank, N.A., as Rights Agent
|
Incorporated by reference to Exhibit 1 to Form 8-A dated November 14, 2006.
|
||
10.1
|
Tennant Company 1995 Stock Incentive Plan*
|
Incorporated by reference to Exhibit 4.4 to the Company’s Registration Statement No. 33-62003, Form S-8, dated August 22, 1995.
|
||
10.2
|
Tennant Company Executive Nonqualified Deferred Compensation Plan, as restated effective January 1, 2005*
|
Incorporated by reference to Exhibit 10.4 to the Company’s Form 10-K for the year ended December 31, 2007.
|
||
10.3
|
Form of Amended and Restated Management Agreement and Executive Employment Agreement*
|
Filed herewith electronically.
|
||
10.4
|
Schedule of parties to Management and Executive Employment Agreement
|
Filed herewith electronically.
|
||
10.5
|
Tennant Company Non-Employee Director Stock Option Plan (as amended and restated effective May 6, 2004)*
|
Incorporated by reference to Exhibit 10.6 to the Company’s Form 10-Q for the quarterly period ended June 30, 2004.
|
||
10.6
|
Tennant Company Amended and Restated 1999 Stock Incentive Plan*
|
Incorporated by reference to Appendix A to the Company’s proxy statement for the 2006 Annual Meeting of Shareholders filed on March 15, 2006.
|
||
10.7
|
Long-Term Incentive Plan 2008*
|
Incorporated by reference to Exhibit 10.2 to the Company’s Form 10-Q for the quarterly period ended March 31, 2008.
|
||
10.8
|
Services Agreement and Management Agreement between the Company and Karel Huijser*
|
Incorporated by reference to Exhibit 10.15 to the Company’s Form 10-K for the year ended December 31, 2008.
|
||
10.9
|
Amendment No. 1 dated as of December 17, 2008 to Services Agreement and Management Agreement between the Company and Karel Huijser*
|
Incorporated by reference to Exhibit 10.16 to the Company’s Form 10-K for the year ended December 31, 2008.
|
||
10.10
|
Settlement Agreement, dated June 28, 2011, between Tennant Company, Tennant N.V. and Carolus Hubertus Huijser*
|
Incorporated by reference to Exhibit 10.1 to the Company's Form 8-K/A dated June 28, 2011.
|
||
10.11
|
Tennant Company 2007 Stock Incentive Plan*
|
Incorporated by reference to Appendix A to the Company’s proxy statement for the 2007 Annual Meeting of Shareholders filed on March 15, 2007.
|
||
10.12
|
Credit Agreement dated as of May 5, 2011
|
Incorporated by reference to Exhibit 10.1 to the Company's Form 10-Q for the quarter ended June 30, 2011.
|
||
10.13
|
Deferred Stock Unit Agreement (awards in and after 2008)*
|
Incorporated by reference to Exhibit 10.17 to the Company’s Form 10-K for the year ended December 31, 2007.
|
||
10.14
|
Tennant Company 2009 Short-Term Incentive Plan*
|
Incorporated by reference to Appendix A to the Company's Proxy statement for the 2008 Annual Meeting of Shareholder's filed on March 14, 2008.
|
||
10.15 | Private Shelf Agreement dated as of July 29, 2009 | Incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on July 30, 2009. |
10.16
|
Amendment No. 1 to Private Shelf Agreement dated as of May 5, 2011
|
Incorporated by reference to Exhibit 10.2 to the Company's Form 10-Q for the quarter ended June 30, 2011.
|
||
10.17
|
2010 Stock Incentive Plan*
|
Incorporated by reference to Exhibit 10.1 of the Company's Form 8-K dated April 28, 2010.
|
||
21
|
Subsidiaries of the Registrant
|
Filed herewith electronically.
|
||
23.1
|
Consent of KPMG, LLP Independent Registered Public Accounting Firm
|
Filed herewith electronically.
|
||
31.1
|
Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer
|
Filed herewith electronically.
|
||
31.2
|
Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer
|
Filed herewith electronically.
|
||
32.1
|
Section 1350 Certification of Chief Executive Officer
|
Filed herewith electronically.
|
||
32.2
|
Section 1350 Certification of Chief Financial Officer
|
Filed herewith electronically.
|
||
101
|
The following financial information from Tennant Company’s annual report on Form 10-K for the period ended December 31, 2011, filed with the SEC on February 24, 2012, formatted in Extensible Business Reporting Language (XBRL): (i) the Consolidated Statement of Operations for the years ended December 31, 2011, 2010 and 2009, (ii) the Consolidated Balance Sheet as of December 31, 2011 and 2010, (iii) the Consolidated Statement of Cash Flows for the years ended December 31, 2011, 2010 and 2009, (iv) the Consolidated Statement of Shareholders' Equity and Comprehensive (Loss) Income for the years ended December 31, 2011, 2010, and 2009, and (v) Notes to Consolidated Financial Statements.**
|
Filed herewith electronically.
|
TENNANT COMPANY
|
||||||
By
|
/s/ H. Chris Killingstad
|
|||||
H. Chris Killingstad
President, CEO and
Board of Directors
|
||||||
Date
|
February 24, 2012
|
By
|
/s/ H. Chris Killingstad
|
By
|
/s/ David Mathieson
|
|||||
H. Chris Killingstad
President, CEO and
Board of Directors
|
David Mathieson
Board of Directors
|
|||||||
Date
|
February 24, 2012
|
Date
|
February 24, 2012
|
|||||
By
|
/s/ Thomas Paulson
|
By
|
/s/ Donal L. Mulligan
|
|||||
Thomas Paulson
Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)
|
Donal L. Mulligan
Board of Directors
|
|||||||
Date
|
February 24, 2012
|
Date
|
February 24, 2012
|
|||||
By
|
/s/ William F. Austen
|
By
|
/s/ Stephen G. Shank
|
|||||
William F. Austen
Board of Directors
|
Stephen G. Shank
Board of Directors
|
|||||||
Date
|
February 24, 2012
|
Date
|
February 24, 2012
|
|||||
By
|
/s/ Jeffrey A. Balagna
|
By
|
/s/ Steven A. Sonnenberg
|
|||||
Jeffrey A. Balagna
Board of Directors
|
Steven A. Sonnenberg
Board of Directors
|
|||||||
Date
|
February 24, 2012
|
Date
|
February 24, 2012
|
|||||
By
|
/s/ Carol S. Eicher
|
By
|
/s/ David S. Wichmann
|
|||||
Carol S. Eicher
Board of Directors
|
David S. Wichmann
Board of Directors
|
|||||||
Date
|
February 24, 2012
|
Date
|
February 24, 2012
|
|||||
By
|
/s/ James T. Hale
|
|||||||
James T. Hale
Board of Directors
|
||||||||
Date
|
February 24, 2012
|
|
(i)
|
The Code § 401(a)(17) compensation limit for the year in which the Termination Date occurs; or
|
|
(ii)
|
Executive’s annual compensation (as defined in Treas. Reg. § 1.415-2(d)) for services to the Company for the calendar year prior to the calendar year in which the Termination Date occurs.
|
|
(i)
|
the Company’s material breach of this Agreement; or
|
|
(ii)
|
a material diminution in the Executive’s authority, duties, or responsibilities, other than for Cause or on account of Disability.
|
EMPLOYEE:
Employee’s Signature
Date
Home Address
City State Zip Code
|
TENNANT:
By
Signature
Title
V.P., Administration
Date
701 North Lilac Drive
P. O. Box 1452
Minneapolis, MN 55440-1452
|
Date:
|
|
|
||
Signature | ||||
|
(a)
|
Lump Sum Severance
. The Company (or its Successor) shall pay to Executive a lump sum cash payment equal to three (3) times Executive’s Annual Compensation.
|
|
(b)
|
STIP
. If the Termination Date is any day other than the last day of the STIP plan year, the Company (or its Successor) shall pay to Executive a pro rata portion of the award (based on the number of days in the STIP plan year occurring on or before, and after, the Termination Date) that would have been payable to Executive under the STIP for such plan year had all performance targets been met and Executive remained employed by the Company until the end of the Plan Year.
|
|
(c)
|
Benefits
Premium Payment. The Company (or its Successor) shall pay to Executive a lump sum cash payment equal to eighteen (18) times the Company’s portion of the monthly premiums for group medical, group dental and/or basic group life insurance coverage, to the extent Executive is participating in such plans, and at the premium rates in effect, immediately prior to the Termination Date.
|
|
(d)
|
Timing
. The amounts payable pursuant to Sections 2(a), (b) and (c) above shall be paid to Executive no later than 2 1/2 months after the Termination Date; provided, however, that if Executive’s Termination Date occurs in connection with a First Change in Control described in Section 5(e)(v), but before the occurrence of a Change in Control described in clause (i) through (iv) of Section 5(e), then the amounts payable pursuant to Sections 2(a) and 2(b) above shall be paid to Executive no later than 2 1/2 months after the occurrence of the Change in Control described in clause (i) through (iv) of Section 5(e) (subject to any applicable offsets under Section 4(c)).
|
Name
|
Title
|
||
H. Chris Killingstad
|
President and Chief Executive Officer
|
||
Thomas Paulson
|
Vice President and Chief Financial Officer
|
||
Thomas J. Dybsky
|
Vice President, Administration
|
||
Andrew J. Eckert
|
Vice President, The Americas
|
||
Michael Schaefer | Vice President, Chief Technical Officer | ||
Donald B. Westman
|
Vice President, Global Operations
|
||
Heidi M. Wilson | Vice President, General Counsel and Secretary | ||
Richard H. Zay | Vice President, Global Marketing |
Subsidiaries of the Registrant
|
|
Subsidiary
|
Jurisdiction of Organization
|
Applied Kehmaschinen GmbH
|
Federal Republic of Germany
|
Applied Sweepers Group Leasing (U.K.)
|
United Kingdom
|
Applied Sweepers Holdings. Limited
|
United Kingdom
|
Applied Sweepers International Limited
|
United Kingdom
|
Floorep Limited
|
United Kingdom
|
Hofmans Machinefabriek
|
Netherlands
|
Nobles Floor Machines Limited
|
United Kingdom
|
Recumbrimientos Tennant, S. de R.L. de C.V.
|
United Mexican States
|
Servicios Integrados Tennant, S.A. de C.V.
|
United Mexican States
|
Sociedade Alfa Ltda.
|
Federative Republic of Brazil
|
Tennant Asia Pacific Holdings Private Ltd.
|
Republic of Singapore
|
Tennant Australia Pty Limited
|
Australia
|
Tennant B.V.
|
Netherlands
|
Tennant CEE GmbH
|
Republic of Austria
|
Tennant Cleaning Systems and Equipment (Shanghai) Co., Ltd.
|
People’s Republic of China
|
Tennant Cleaning Systems India Private Limited
|
Republic of India
|
Tennant Company
|
Minnesota
|
Tennant Company Far East Headquarters PTE LTD
|
Republic of Singapore
|
Tennant Europe B.V.
|
Netherlands
|
Tennant Europe N.V.
|
Belgium
|
Tennant France S.A.
|
French Republic
|
Tennant GmbH & Co. KG
|
Federal Republic of Germany
|
Tennant Holding B.V.
|
Netherlands
|
Tennant Holdings LLC
|
Minnesota
|
Tennant International Holding B.V.
|
Netherlands
|
Tennant N.V.
|
Netherlands
|
Tennant Netherland Holding B.V.
|
Netherlands
|
Tennant New Zealand Ltd.
|
New Zealand
|
Tennant Portugal E. de L., S.U., L. da
|
Portuguese Republic
|
Tennant SA Holdings LLC
|
Minnesota
|
Tennant Sales & Service Canada ULC
|
British Columbia, Canada
|
Tennant Sales and Service Company
|
Minnesota
|
Tennant Sales and Service Italy S.R.L.
|
Republic of Italy
|
Tennant Sales and Service Scandinavia ApS
|
Kingdom of Denmark
|
Tennant Sales and Service Spain, S.A.
|
Kingdom of Spain
|
Tennant Scotland Limited
|
United Kingdom
|
Tennant Sverige AB
|
Kingdom of Sweden
|
Tennant UK Cleaning Solutions Limited
|
United Kingdom
|
Tennant UK Limited
|
United Kingdom
|
Tennant Uruguay S.A.
|
Eastern Republic of Uruguay
|
Tennant Ventas & Servicios de Mexico, S.A. de C.V.
|
United Mexican States
|
Tennant Verwaltungs-gesellschaft GmbH
|
Federal Republic of Germany
|
Walter-Broadley Machines Limited
|
United Kingdom
|
Walter-Broadley Limited
|
United Kingdom
|
Water Star, Inc.
|
Ohio
|
1.
|
I have reviewed this annual report on Form 10-K of Tennant Company;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
February 24, 2012
|
/s/ H. Chris Killingstad
|
||||
H. Chris Killingstad
President and Chief Executive Officer
|
1.
|
I have reviewed this annual report on Form 10-K of Tennant Company;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
February 24, 2012
|
/s/ Thomas Paulson
|
||||
Thomas Paulson
Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in this periodic report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date:
|
February 24, 2012
|
/s/ H. Chris Killingstad
|
||
H. Chris Killingstad
|
||||
President and Chief Executive Officer
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in this periodic report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date:
|
February 24, 2012
|
/s/ Thomas Paulson
|
||
Thomas Paulson
|
||||
Vice President and Chief Financial Officer
|