|
[
ü
]
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
For the quarterly period ended March 31, 2018
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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 incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
Yes
|
ü
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No
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Yes
|
ü
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No
|
|
Large accelerated filer
|
ü
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|
Accelerated filer
|
|
Non-accelerated filer
|
|
(Do not check if a smaller reporting company)
|
Smaller reporting company
|
|
Emerging growth company
|
|
|
|
|
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Yes
|
|
No
|
ü
|
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PART I - FINANCIAL INFORMATION
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Page
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Item 1.
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Item 2.
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|||||
Item 3.
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Item 4.
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PART II - OTHER INFORMATION
|
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Item 1.
|
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Item 1A.
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Item 2.
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||||
Item 6.
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Item 1.
|
Financial Statements
|
TENNANT COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
|
||||||||
|
|
Three Months Ended
|
||||||
(In thousands, except shares and per share data)
|
|
March 31
|
||||||
|
|
2018
|
|
2017
|
||||
Net Sales
|
|
$
|
272,847
|
|
|
$
|
191,059
|
|
Cost of Sales
|
|
162,210
|
|
|
111,323
|
|
||
Gross Profit
|
|
110,637
|
|
|
79,736
|
|
||
|
|
|
|
|
||||
Operating Expense:
|
|
|
|
|
||||
Research and Development Expense
|
|
7,996
|
|
|
8,446
|
|
||
Selling and Administrative Expense
|
|
92,269
|
|
|
73,956
|
|
||
Total Operating Expense
|
|
100,265
|
|
|
82,402
|
|
||
Profit (Loss) from Operations
|
|
10,372
|
|
|
(2,666
|
)
|
||
|
|
|
|
|
||||
Other Income (Expense):
|
|
|
|
|
||||
Interest Income
|
|
749
|
|
|
84
|
|
||
Interest Expense
|
|
(5,745
|
)
|
|
(794
|
)
|
||
Net Foreign Currency Transaction Losses
|
|
(749
|
)
|
|
(1,197
|
)
|
||
Other (Expense) Income, Net
|
|
(250
|
)
|
|
32
|
|
||
Total Other Expense, Net
|
|
(5,995
|
)
|
|
(1,875
|
)
|
||
|
|
|
|
|
||||
Profit (Loss) Before Income Taxes
|
|
4,377
|
|
|
(4,541
|
)
|
||
Income Tax Expense (Benefit)
|
|
1,077
|
|
|
(584
|
)
|
||
Net Earnings (Loss) Including Noncontrolling Interest
|
|
3,300
|
|
|
(3,957
|
)
|
||
Net Earnings Attributable to Noncontrolling Interest
|
|
26
|
|
|
—
|
|
||
Net Earnings (Loss) Attributable to Tennant Company
|
|
$
|
3,274
|
|
|
$
|
(3,957
|
)
|
|
|
|
|
|
||||
Net Earnings (Loss) Attributable to Tennant Company per Share:
|
|
|
|
|
||||
Basic
|
|
$
|
0.18
|
|
|
$
|
(0.22
|
)
|
Diluted
|
|
$
|
0.18
|
|
|
$
|
(0.22
|
)
|
|
|
|
|
|
||||
Weighted Average Shares Outstanding:
|
|
|
|
|
||||
Basic
|
|
17,790,989
|
|
|
17,596,546
|
|
||
Diluted
|
|
18,245,359
|
|
|
17,596,546
|
|
||
|
|
|
|
|
||||
Cash Dividend Declared per Common Share
|
|
$
|
0.21
|
|
|
$
|
0.21
|
|
TENNANT COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Unaudited)
|
|||||||
|
Three Months Ended
|
||||||
(In thousands)
|
March 31
|
||||||
|
2018
|
|
2017
|
||||
Net Earnings (Loss) Including Noncontrolling Interest
|
$
|
3,300
|
|
|
$
|
(3,957
|
)
|
Other Comprehensive Income (Loss):
|
|
|
|
|
|
||
Foreign currency translation adjustments
|
8,381
|
|
|
2,400
|
|
||
Pension and retiree medical benefits
|
82
|
|
|
10
|
|
||
Cash flow hedge
|
(2,715
|
)
|
|
(73
|
)
|
||
Income Taxes:
|
|
|
|
||||
Foreign currency translation adjustments
|
(17
|
)
|
|
—
|
|
||
Pension and retiree medical benefits
|
(151
|
)
|
|
(18
|
)
|
||
Cash flow hedge
|
(501
|
)
|
|
27
|
|
||
Total Other Comprehensive Income, net of tax
|
5,079
|
|
|
2,346
|
|
||
|
|
|
|
||||
Total Comprehensive Income (Loss) Including Noncontrolling Interest
|
8,379
|
|
|
(1,611
|
)
|
||
Comprehensive Income Attributable to Noncontrolling Interest
|
26
|
|
|
—
|
|
||
Comprehensive Income (Loss) Attributable to Tennant Company
|
$
|
8,353
|
|
|
$
|
(1,611
|
)
|
TENNANT COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
|
|||||||
|
March 31,
|
|
December 31,
|
||||
(In thousands, except shares and per share data)
|
2018
|
|
2017
|
||||
ASSETS
|
|
|
|
||||
Current Assets:
|
|
|
|
||||
Cash and Cash Equivalents
|
$
|
54,001
|
|
|
$
|
58,398
|
|
Restricted Cash
|
645
|
|
|
653
|
|
||
Accounts Receivable, less Allowances of $2,706 and $3,241, respectively
|
212,265
|
|
|
209,516
|
|
||
Inventories
|
140,290
|
|
|
127,694
|
|
||
Prepaid Expenses
|
21,537
|
|
|
19,351
|
|
||
Other Current Assets
|
5,942
|
|
|
7,503
|
|
||
Total Current Assets
|
434,680
|
|
|
423,115
|
|
||
Property, Plant and Equipment
|
387,130
|
|
|
382,768
|
|
||
Accumulated Depreciation
|
(209,204
|
)
|
|
(202,750
|
)
|
||
Property, Plant and Equipment, Net
|
177,926
|
|
|
180,018
|
|
||
Deferred Income Taxes
|
14,832
|
|
|
11,134
|
|
||
Goodwill
|
196,165
|
|
|
186,044
|
|
||
Intangible Assets, Net
|
172,297
|
|
|
172,347
|
|
||
Other Assets
|
20,002
|
|
|
21,319
|
|
||
Total Assets
|
$
|
1,015,902
|
|
|
$
|
993,977
|
|
LIABILITIES AND TOTAL EQUITY
|
|
|
|
||||
Current Liabilities:
|
|
|
|
||||
Current Portion of Long-Term Debt
|
$
|
30,902
|
|
|
$
|
30,883
|
|
Accounts Payable
|
102,702
|
|
|
96,082
|
|
||
Employee Compensation and Benefits
|
34,674
|
|
|
37,257
|
|
||
Income Taxes Payable
|
2,800
|
|
|
2,838
|
|
||
Other Current Liabilities
|
70,293
|
|
|
69,447
|
|
||
Total Current Liabilities
|
241,371
|
|
|
236,507
|
|
||
Long-Term Liabilities:
|
|
|
|
||||
Long-Term Debt
|
342,420
|
|
|
345,956
|
|
||
Employee-Related Benefits
|
23,394
|
|
|
23,867
|
|
||
Deferred Income Taxes
|
53,412
|
|
|
53,225
|
|
||
Other Liabilities
|
47,934
|
|
|
35,948
|
|
||
Total Long-Term Liabilities
|
467,160
|
|
|
458,996
|
|
||
Total Liabilities
|
708,531
|
|
|
695,503
|
|
||
Commitments and Contingencies (Note 13)
|
|
|
|
|
|
||
Equity:
|
|
|
|
||||
Common Stock, $0.375 par value; 60,000,000 shares authorized; 17,910,440 and 17,881,177 shares issued and outstanding, respectively
|
6,717
|
|
|
6,705
|
|
||
Additional Paid-In Capital
|
18,295
|
|
|
15,089
|
|
||
Retained Earnings
|
297,717
|
|
|
297,032
|
|
||
Accumulated Other Comprehensive Loss
|
(17,244
|
)
|
|
(22,323
|
)
|
||
Total Tennant Company Shareholders' Equity
|
305,485
|
|
|
296,503
|
|
||
Noncontrolling Interest
|
1,886
|
|
|
1,971
|
|
||
Total Equity
|
307,371
|
|
|
298,474
|
|
||
Total Liabilities and Total Equity
|
$
|
1,015,902
|
|
|
$
|
993,977
|
|
TENNANT COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
|
|||||||
|
Three Months Ended
|
||||||
(In thousands)
|
March 31
|
||||||
|
2018
|
|
2017
|
||||
OPERATING ACTIVITIES
|
|
|
|
||||
Net Earnings (Loss) Including Noncontrolling Interest
|
$
|
3,300
|
|
|
$
|
(3,957
|
)
|
Adjustments to Reconcile Net Earnings (Loss) to Net Cash Provided by (Used in) Operating Activities:
|
|
|
|
||||
Depreciation
|
7,708
|
|
|
4,493
|
|
||
Amortization of Intangible Assets
|
5,838
|
|
|
244
|
|
||
Amortization of Debt Issuance Costs
|
501
|
|
|
—
|
|
||
Deferred Income Taxes
|
(3,151
|
)
|
|
(2,650
|
)
|
||
Share-Based Compensation Expense
|
2,748
|
|
|
2,573
|
|
||
Allowance for Doubtful Accounts and Returns
|
723
|
|
|
251
|
|
||
Other, Net
|
137
|
|
|
18
|
|
||
Changes in Operating Assets and Liabilities, Net of Assets Acquired:
|
|
|
|
||||
Receivables, Net
|
(359
|
)
|
|
12,419
|
|
||
Inventories
|
(10,787
|
)
|
|
(8,631
|
)
|
||
Accounts Payable
|
5,734
|
|
|
1,882
|
|
||
Employee Compensation and Benefits
|
(3,403
|
)
|
|
(13,630
|
)
|
||
Other Current Liabilities
|
(1,810
|
)
|
|
1,699
|
|
||
Income Taxes
|
(217
|
)
|
|
(1,513
|
)
|
||
Other Assets and Liabilities
|
(1,423
|
)
|
|
(4,307
|
)
|
||
Net Cash Provided by (Used in) Operating Activities
|
5,539
|
|
|
(11,109
|
)
|
||
INVESTING ACTIVITIES
|
|
|
|
||||
Purchases of Property, Plant and Equipment
|
(3,480
|
)
|
|
(4,673
|
)
|
||
Proceeds from Disposals of Property, Plant and Equipment
|
16
|
|
|
53
|
|
||
Proceeds from Principal Payments Received on Long-Term Note Receivable
|
167
|
|
|
—
|
|
||
Issuance of Long-Term Note Receivable
|
—
|
|
|
(1,500
|
)
|
||
Acquisition of Business, Net of Cash Acquired
|
—
|
|
|
(304
|
)
|
||
Purchase of Intangible Asset
|
(1,000
|
)
|
|
(2,500
|
)
|
||
Net Cash Used in Investing Activities
|
(4,297
|
)
|
|
(8,924
|
)
|
||
FINANCING ACTIVITIES
|
|
|
|
||||
Proceeds from Issuance of Long-Term Debt
|
—
|
|
|
20,000
|
|
||
Payments of Long-Term Debt
|
(4,037
|
)
|
|
(11,151
|
)
|
||
Change in Capital Lease Obligations
|
81
|
|
|
—
|
|
||
Proceeds from Issuance of Common Stock
|
794
|
|
|
1,655
|
|
||
Dividends Paid
|
(3,758
|
)
|
|
(3,722
|
)
|
||
Net Cash (Used in) Provided by Financing Activities
|
(6,920
|
)
|
|
6,782
|
|
||
Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash
|
1,273
|
|
|
330
|
|
||
Net Decrease in Cash, Cash Equivalents and Restricted Cash
|
(4,405
|
)
|
|
(12,921
|
)
|
||
Cash, Cash Equivalents and Restricted Cash at Beginning of Period
|
59,051
|
|
|
58,550
|
|
||
Cash, Cash Equivalents and Restricted Cash at End of Period
|
$
|
54,646
|
|
|
$
|
45,629
|
|
|
|
|
|
||||
Supplemental Disclosure of Cash Flow Information:
|
|
|
|
||||
Cash Paid for Income Taxes
|
$
|
1,659
|
|
|
$
|
3,289
|
|
Cash Paid for Interest
|
$
|
1,023
|
|
|
$
|
758
|
|
Supplemental Non-cash Investing and Financing Activities:
|
|
|
|
||||
Capital Expenditures in Accounts Payable
|
$
|
1,328
|
|
|
$
|
1,582
|
|
1.
|
Summary of Significant Accounting Policies
|
2.
|
Newly Adopted Accounting Pronouncements
|
|
As Reported
|
|
Balances Without Adoption of ASC 606
|
|
Effect of Change
Higher/(Lower)
|
||||||
ASSETS
|
|
|
|
|
|
||||||
Accounts Receivable
|
$
|
212,265
|
|
|
$
|
211,204
|
|
|
$
|
1,061
|
|
Total Current Assets
|
434,680
|
|
|
433,619
|
|
|
1,061
|
|
|||
Total Assets
|
$
|
1,015,902
|
|
|
$
|
1,014,841
|
|
|
$
|
1,061
|
|
LIABILITIES
|
|
|
|
|
|
||||||
Other Current Liabilities
|
$
|
70,293
|
|
|
$
|
69,232
|
|
|
$
|
1,061
|
|
Total Current Liabilities
|
241,371
|
|
|
240,310
|
|
|
1,061
|
|
|||
Total Liabilities
|
$
|
708,531
|
|
|
$
|
707,470
|
|
|
$
|
1,061
|
|
|
March 31,
|
||
|
2018
|
||
Cash and Cash Equivalents
|
$
|
54,001
|
|
Restricted Cash
|
645
|
|
|
Total Cash, Cash Equivalents and Restricted Cash at end of period shown in the Condensed Consolidated Statements of Cash Flows
|
$
|
54,646
|
|
3.
|
Revenue from Contracts with Customers
|
|
Three Months Ended
|
||||||
|
March 31
|
||||||
|
2018
|
|
2017
|
||||
Americas
|
$
|
162,638
|
|
|
$
|
142,770
|
|
Europe, Middle East and Africa
|
88,816
|
|
|
33,276
|
|
||
Asia Pacific
|
21,393
|
|
|
15,013
|
|
||
Total
|
$
|
272,847
|
|
|
$
|
191,059
|
|
|
Three Months Ended
|
||||||
|
March 31
|
||||||
|
2018
|
|
2017
|
||||
Equipment
|
$
|
172,074
|
|
|
$
|
113,341
|
|
Parts and Consumables
|
57,441
|
|
|
42,803
|
|
||
Specialty Surface Coatings
|
6,455
|
|
|
6,681
|
|
||
Service and Other
|
36,877
|
|
|
28,234
|
|
||
Total
|
$
|
272,847
|
|
|
$
|
191,059
|
|
|
Three Months Ended
|
||||||
|
March 31
|
||||||
|
2018
|
|
2017
|
||||
Sales Direct to Consumer
|
$
|
178,710
|
|
|
$
|
143,623
|
|
Sales to Distributors
|
94,137
|
|
|
47,436
|
|
||
Total
|
$
|
272,847
|
|
|
$
|
191,059
|
|
Remaining 2018
|
$
|
3,799
|
|
2019
|
1,835
|
|
|
2020
|
1,115
|
|
|
2021
|
416
|
|
|
2022
|
230
|
|
|
Thereafter
|
6
|
|
|
Total
|
$
|
7,401
|
|
4.
|
Management Actions
|
|
|
Severance and Related Costs
|
||
2017 restructuring actions
|
|
$
|
9,558
|
|
Cash payments
|
|
(6,312
|
)
|
|
Foreign currency adjustments
|
|
190
|
|
|
December 31, 2017 balance
|
|
$
|
3,436
|
|
2018 utilization:
|
|
|
||
Cash payments
|
|
(714
|
)
|
|
Foreign currency adjustments
|
|
104
|
|
|
March 31, 2018 balance
|
|
$
|
2,826
|
|
5.
|
Acquisition
|
ASSETS
|
|
|
||
Receivables
|
|
$
|
39,984
|
|
Inventories
|
|
46,442
|
|
|
Other Current Assets
|
|
7,456
|
|
|
Assets Held for Sale
|
|
2,247
|
|
|
Property, Plant and Equipment
|
|
63,890
|
|
|
Intangible Assets Subject to Amortization:
|
|
|
||
Trade Name
|
|
26,753
|
|
|
Customer Lists
|
|
123,061
|
|
|
Technology
|
|
9,631
|
|
|
Other Assets
|
|
2,000
|
|
|
Total Identifiable Assets Acquired
|
|
321,464
|
|
|
LIABILITIES
|
|
|
||
Accounts Payable
|
|
32,227
|
|
|
Accrued Expenses
|
|
18,130
|
|
|
Deferred Income Taxes
|
|
56,950
|
|
|
Other Liabilities
|
|
10,964
|
|
|
Total Identifiable Liabilities Assumed
|
|
118,271
|
|
|
Net Identifiable Assets Acquired
|
|
203,193
|
|
|
Noncontrolling Interest
|
|
(1,896
|
)
|
|
Goodwill
|
|
152,472
|
|
|
Total Purchase Price, net of Cash Acquired
|
|
$
|
353,769
|
|
•
|
incremental depreciation and amortization expense related to the fair value of the property, plant and equipment and identified intangible assets;
|
•
|
exclusion of the purchase accounting impact of the inventory step-up related to the sale of acquired inventory;
|
•
|
incremental interest expense related to additional debt used to finance the acquisition;
|
•
|
exclusion of non-recurring acquisition-related transaction and financing costs; and
|
•
|
pro forma adjustments tax affected based on the jurisdiction where the costs were incurred.
|
6.
|
Inventories
|
|
March 31,
2018 |
|
December 31,
2017 |
||||
Inventories carried at LIFO:
|
|
|
|
||||
Finished goods
|
$
|
47,131
|
|
|
$
|
43,439
|
|
Raw materials, production parts and work-in-process
|
26,375
|
|
|
23,694
|
|
||
LIFO reserve
|
(28,788
|
)
|
|
(28,429
|
)
|
||
Total LIFO inventories
|
44,718
|
|
|
38,704
|
|
||
Inventories carried at FIFO:
|
|
|
|
|
|
||
Finished goods
|
55,747
|
|
|
54,161
|
|
||
Raw materials, production parts and work-in-process
|
39,825
|
|
|
34,829
|
|
||
Total FIFO inventories
|
95,572
|
|
|
88,990
|
|
||
Total inventories
|
$
|
140,290
|
|
|
$
|
127,694
|
|
7.
|
Goodwill and Intangible Assets
|
|
Goodwill
|
|
Accumulated
Impairment
Losses
|
|
Total
|
||||||
Balance as of December 31, 2017
|
$
|
227,224
|
|
|
$
|
(41,180
|
)
|
|
$
|
186,044
|
|
Purchase accounting adjustments
|
4,627
|
|
|
—
|
|
|
4,627
|
|
|||
Foreign currency fluctuations
|
7,047
|
|
|
(1,553
|
)
|
|
5,494
|
|
|||
Balance as of March 31, 2018
|
$
|
238,898
|
|
|
$
|
(42,733
|
)
|
|
$
|
196,165
|
|
|
Customer Lists
|
|
Trade Names
|
|
Technology
|
|
Total
|
||||||||
Balance as of March 31, 2018
|
|
|
|
|
|
|
|
||||||||
Original cost
|
$
|
154,096
|
|
|
$
|
32,818
|
|
|
$
|
15,894
|
|
|
$
|
202,808
|
|
Accumulated amortization
|
(23,303
|
)
|
|
(3,293
|
)
|
|
(3,915
|
)
|
|
(30,511
|
)
|
||||
Carrying value
|
$
|
130,793
|
|
|
$
|
29,525
|
|
|
$
|
11,979
|
|
|
$
|
172,297
|
|
Weighted average original life (in years)
|
15
|
|
|
10
|
|
|
11
|
|
|
|
|
||||
Balance as of December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|||||
Original cost
|
$
|
149,355
|
|
|
$
|
31,968
|
|
|
$
|
14,589
|
|
|
$
|
195,912
|
|
Accumulated amortization
|
(17,870
|
)
|
|
(2,436
|
)
|
|
(3,259
|
)
|
|
(23,565
|
)
|
||||
Carrying value
|
$
|
131,485
|
|
|
$
|
29,532
|
|
|
$
|
11,330
|
|
|
$
|
172,347
|
|
Weighted average original life (in years)
|
15
|
|
|
10
|
|
|
11
|
|
|
|
|
Remaining 2018
|
$
|
17,115
|
|
2019
|
22,388
|
|
|
2020
|
20,853
|
|
|
2021
|
19,170
|
|
|
2022
|
16,928
|
|
|
Thereafter
|
75,843
|
|
|
Total
|
$
|
172,297
|
|
8.
|
Debt
|
|
March 31,
2018 |
|
December 31,
2017 |
||||
Long-Term Debt:
|
|
|
|
||||
Senior unsecured notes
|
$
|
300,000
|
|
|
$
|
300,000
|
|
Credit facility borrowings
|
76,000
|
|
|
80,000
|
|
||
Capital lease obligations
|
3,416
|
|
|
3,279
|
|
||
Total Long-Term Debt
|
379,416
|
|
|
383,279
|
|
||
Less: unamortized debt issuance costs
|
(6,094
|
)
|
|
(6,440
|
)
|
||
Less: current maturities of credit facility borrowings, net of debt issuance costs
(1)
|
(29,460
|
)
|
|
(29,413
|
)
|
||
Less: current maturities of capital lease obligations
(1)
|
(1,442
|
)
|
|
(1,470
|
)
|
||
Long-term portion
|
$
|
342,420
|
|
|
$
|
345,956
|
|
(1)
|
Current maturities of long-term debt include
$30,000
of current maturities, less
$540
of unamortized debt issuance costs, under our 2017 Credit Agreement and
$1,442
of current maturities of capital lease obligations.
|
9.
|
Warranty
|
|
Three Months Ended
|
||||||
|
March 31
|
||||||
|
2018
|
|
2017
|
||||
Beginning balance
|
$
|
12,676
|
|
|
$
|
10,960
|
|
Additions charged to expense
|
3,334
|
|
|
2,072
|
|
||
Foreign currency fluctuations
|
86
|
|
|
50
|
|
||
Claims paid
|
(3,288
|
)
|
|
(2,800
|
)
|
||
Ending balance
|
$
|
12,808
|
|
|
$
|
10,282
|
|
10.
|
Derivatives
|
|
|
March 31, 2018
|
|
December 31, 2017
|
||||||||||||
|
|
Fair Value Asset Derivatives
|
|
Fair Value Liability Derivatives
|
|
Fair Value Asset Derivatives
|
|
Fair Value Liability Derivatives
|
||||||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency option contracts
(1)
|
|
$
|
160
|
|
|
$
|
—
|
|
|
$
|
86
|
|
|
$
|
—
|
|
Foreign currency forward contracts
(1)
|
|
5,590
|
|
|
41,224
|
|
|
7,218
|
|
|
34,961
|
|
||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency forward contracts
(1)
|
|
$
|
515
|
|
|
$
|
1,364
|
|
|
$
|
442
|
|
|
$
|
425
|
|
(1)
|
Contracts that mature within the next 12 months are included in Other Current Assets and Other Current Liabilities for asset derivatives and liabilities derivatives, respectively, on our Condensed Consolidated Balance Sheets. Contracts with maturities greater than 12 months are included in Other Assets and Other Liabilities for asset derivatives and liability derivatives, respectively, in our Condensed Consolidated Balance Sheets. Amounts included in our Condensed Consolidated Balance Sheets are recorded net where a right of offset exists with the same derivative counterparty.
|
|
|
Three Months Ended
|
||||||
|
|
March 31, 2018
|
||||||
|
|
Foreign Currency Option Contracts
|
|
Foreign Currency Forward Contracts
|
||||
Derivatives in cash flow hedging relationships:
|
|
|
|
|
||||
Net gain (loss) recognized in Other Comprehensive Income (Loss), net of
tax
(1)
|
|
$
|
16
|
|
|
$
|
(5,697
|
)
|
Net loss reclassified from Accumulated Other Comprehensive Loss into earnings, net of tax, effective portion to Net Sales
|
|
(41
|
)
|
|
(14
|
)
|
||
Net gain reclassified from Accumulated Other Comprehensive Loss into earnings, net of tax, effective portion to Interest Income
|
|
—
|
|
|
391
|
|
||
Net loss reclassified from Accumulated Other Comprehensive Loss into earnings, net of tax, effective portion to Net Foreign Currency Transaction Losses
|
|
—
|
|
|
(3,927
|
)
|
||
Net gain recognized in earnings
(2)
|
|
7
|
|
|
3
|
|
||
Derivatives not designated as hedging instruments:
|
|
|
|
|
||||
Net loss recognized in earnings
(3)
|
|
$
|
—
|
|
|
$
|
(1,378
|
)
|
|
|
Three Months Ended
|
||||||
|
|
March 31, 2017
|
||||||
|
|
Foreign Currency Option Contracts
|
|
Foreign Currency Forward Contracts
|
||||
Derivatives in cash flow hedging relationships:
|
|
|
|
|
||||
Net loss recognized in Other Comprehensive Income (Loss), net of tax
(1)
|
|
$
|
(90
|
)
|
|
$
|
(17
|
)
|
Net loss reclassified from Accumulated Other Comprehensive Loss into earnings, net of tax, effective portion to Net Sales
|
|
(42
|
)
|
|
(19
|
)
|
||
Net (loss) gain recognized in earnings
(2)
|
|
(1
|
)
|
|
2
|
|
||
Derivatives not designated as hedging instruments:
|
|
|
|
|
||||
Net loss recognized in earnings
(3)
|
|
$
|
(1,132
|
)
|
|
$
|
(1,368
|
)
|
(1)
|
Net change in the fair value of the effective portion classified in Other Comprehensive Income (Loss).
|
(2)
|
Ineffective portion and amount excluded from effectiveness testing classified in Net Foreign Currency Transaction Losses.
|
(3)
|
Classified in Net Foreign Currency Transaction Losses.
|
11.
|
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
Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Foreign currency forward exchange contracts
|
$
|
6,105
|
|
|
$
|
—
|
|
|
$
|
6,105
|
|
|
$
|
—
|
|
Foreign currency option contracts
|
160
|
|
|
—
|
|
|
160
|
|
|
—
|
|
||||
Total Assets
|
$
|
6,265
|
|
|
$
|
—
|
|
|
$
|
6,265
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Foreign currency forward exchange contracts
|
$
|
42,588
|
|
|
$
|
—
|
|
|
$
|
42,588
|
|
|
$
|
—
|
|
Total Liabilities
|
$
|
42,588
|
|
|
$
|
—
|
|
|
$
|
42,588
|
|
|
$
|
—
|
|
|
Fair
Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Foreign currency forward exchange contracts
|
$
|
7,660
|
|
|
$
|
—
|
|
|
$
|
7,660
|
|
|
$
|
—
|
|
Foreign currency option contracts
|
86
|
|
|
—
|
|
|
86
|
|
|
—
|
|
||||
Total Assets
|
$
|
7,746
|
|
|
$
|
—
|
|
|
$
|
7,746
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Foreign currency forward exchange contracts
|
$
|
35,386
|
|
|
$
|
—
|
|
|
$
|
35,386
|
|
|
$
|
—
|
|
Total Liabilities
|
$
|
35,386
|
|
|
$
|
—
|
|
|
$
|
35,386
|
|
|
$
|
—
|
|
12.
|
Retirement Benefit Plans
|
|
|
Three Months Ended
|
||||||||||||||||||||||
|
|
March 31
|
||||||||||||||||||||||
|
|
Pension Benefits
|
|
Postretirement
|
||||||||||||||||||||
|
|
U.S. Plans
|
|
Non-U.S. Plans
|
|
Medical Benefits
|
||||||||||||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||||||
Service cost
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
37
|
|
|
$
|
24
|
|
|
$
|
14
|
|
|
$
|
20
|
|
Interest cost
|
|
11
|
|
|
390
|
|
|
71
|
|
|
90
|
|
|
75
|
|
|
91
|
|
||||||
Expected return on plan assets
|
|
—
|
|
|
(585
|
)
|
|
(109
|
)
|
|
(96
|
)
|
|
—
|
|
|
—
|
|
||||||
Amortization of net actuarial loss
|
|
13
|
|
|
10
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Amortization of prior service cost
|
|
—
|
|
|
—
|
|
|
74
|
|
|
47
|
|
|
—
|
|
|
—
|
|
||||||
Foreign currency
|
|
—
|
|
|
—
|
|
|
(71
|
)
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
||||||
Net periodic cost (benefit)
|
|
24
|
|
|
(185
|
)
|
|
2
|
|
|
60
|
|
|
89
|
|
|
111
|
|
||||||
Settlement charge
|
|
50
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Net benefit cost (credit)
|
|
$
|
74
|
|
|
$
|
(185
|
)
|
|
$
|
2
|
|
|
$
|
60
|
|
|
$
|
89
|
|
|
$
|
111
|
|
13.
|
Commitments and Contingencies
|
14.
|
Accumulated Other Comprehensive Loss
|
|
March 31, 2018
|
|
December 31, 2017
|
||||
Foreign currency translation adjustments
|
$
|
(7,414
|
)
|
|
$
|
(15,778
|
)
|
Pension and retiree medical benefits
|
(1,679
|
)
|
|
(1,610
|
)
|
||
Cash flow hedge
|
(8,151
|
)
|
|
(4,935
|
)
|
||
Total Accumulated Other Comprehensive Loss
|
$
|
(17,244
|
)
|
|
$
|
(22,323
|
)
|
|
Foreign Currency Translation Adjustments
|
|
Pension and Post Retirement Benefits
|
|
Cash Flow Hedge
|
|
Total
|
||||||||
December 31, 2017
|
$
|
(15,778
|
)
|
|
$
|
(1,610
|
)
|
|
$
|
(4,935
|
)
|
|
$
|
(22,323
|
)
|
Other comprehensive income (loss) before reclassifications
|
8,364
|
|
|
19
|
|
|
(5,681
|
)
|
|
2,702
|
|
||||
Amounts reclassified from Accumulated Other Comprehensive Loss
|
—
|
|
|
49
|
|
|
3,591
|
|
|
3,640
|
|
||||
Adjustments to Accumulated Other Comprehensive Loss for disproportionate income tax effects recognized from the adoption of ASU 2018-02
|
—
|
|
|
(137
|
)
|
|
(1,126
|
)
|
|
(1,263
|
)
|
||||
Net current period other comprehensive income (loss)
|
8,364
|
|
|
(69
|
)
|
|
(3,216
|
)
|
|
5,079
|
|
||||
March 31, 2018
|
$
|
(7,414
|
)
|
|
$
|
(1,679
|
)
|
|
$
|
(8,151
|
)
|
|
$
|
(17,244
|
)
|
15.
|
Income Taxes
|
16.
|
Share-Based Compensation
|
17.
|
Earnings (Loss) Attributable to Tennant Company Per Share
|
|
Three Months Ended
|
||||||
|
March 31
|
||||||
|
2018
|
|
2017
|
||||
Numerator:
|
|
|
|
||||
Net Earnings (Loss) Attributable to Tennant Company
|
$
|
3,274
|
|
|
$
|
(3,957
|
)
|
Denominator:
|
|
|
|
||||
Basic - Weighted Average Shares Outstanding
|
17,790,989
|
|
|
17,596,546
|
|
||
Effect of dilutive securities:
|
|
|
|
||||
Share-based compensation plans
|
454,370
|
|
|
—
|
|
||
Diluted - Weighted Average Shares Outstanding
|
18,245,359
|
|
|
17,596,546
|
|
||
Basic Earnings (Loss) per Share
|
$
|
0.18
|
|
|
$
|
(0.22
|
)
|
Diluted Earnings (Loss) per Share
|
$
|
0.18
|
|
|
$
|
(0.22
|
)
|
18.
|
Segment Reporting
|
19.
|
Separate Financial Information of Guarantor Subsidiaries
|
Condensed Consolidated Statement of Operations
|
|||||||||||||||||||
For the three months ended March 31, 2018
|
|||||||||||||||||||
(in thousands)
|
Parent
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Total Tennant Company
|
||||||||||
Net Sales
|
$
|
113,690
|
|
|
$
|
148,433
|
|
|
$
|
140,395
|
|
|
$
|
(129,671
|
)
|
|
$
|
272,847
|
|
Cost of Sales
|
77,231
|
|
|
123,125
|
|
|
90,245
|
|
|
(128,391
|
)
|
|
162,210
|
|
|||||
Gross Profit
|
36,459
|
|
|
25,308
|
|
|
50,150
|
|
|
(1,280
|
)
|
|
110,637
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Operating Expense:
|
|
|
|
|
|
|
|
|
|
||||||||||
Research and Development Expense
|
6,107
|
|
|
204
|
|
|
1,685
|
|
|
—
|
|
|
7,996
|
|
|||||
Selling and Administrative Expense
|
29,088
|
|
|
19,717
|
|
|
43,464
|
|
|
—
|
|
|
92,269
|
|
|||||
Total Operating Expense
|
35,195
|
|
|
19,921
|
|
|
45,149
|
|
|
—
|
|
|
100,265
|
|
|||||
Profit from Operations
|
1,264
|
|
|
5,387
|
|
|
5,001
|
|
|
(1,280
|
)
|
|
10,372
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Other Income (Expense):
|
|
|
|
|
|
|
|
|
|
||||||||||
Equity in Earnings of Affiliates
|
4,375
|
|
|
506
|
|
|
2,647
|
|
|
(7,528
|
)
|
|
—
|
|
|||||
Interest (Expense) Income, Net
|
(5,108
|
)
|
|
—
|
|
|
121
|
|
|
(9
|
)
|
|
(4,996
|
)
|
|||||
Intercompany Interest Income (Expense)
|
3,725
|
|
|
(1,422
|
)
|
|
(2,303
|
)
|
|
—
|
|
|
—
|
|
|||||
Net Foreign Currency Transaction Gains (Losses)
|
354
|
|
|
(1
|
)
|
|
(1,102
|
)
|
|
—
|
|
|
(749
|
)
|
|||||
Other (Expense) Income, Net
|
(233
|
)
|
|
(591
|
)
|
|
598
|
|
|
(24
|
)
|
|
(250
|
)
|
|||||
Total Other Income (Expense), Net
|
3,113
|
|
|
(1,508
|
)
|
|
(39
|
)
|
|
(7,561
|
)
|
|
(5,995
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Profit (Loss) Before Income Taxes
|
4,377
|
|
|
3,879
|
|
|
4,962
|
|
|
(8,841
|
)
|
|
4,377
|
|
|||||
Income Tax Expense (Benefit)
|
1,077
|
|
|
899
|
|
|
1,589
|
|
|
(2,488
|
)
|
|
1,077
|
|
|||||
Net Earnings (Loss) Including Noncontrolling Interest
|
3,300
|
|
|
2,980
|
|
|
3,373
|
|
|
(6,353
|
)
|
|
3,300
|
|
|||||
Net Earnings Attributable to Noncontrolling Interest
|
26
|
|
|
—
|
|
|
26
|
|
|
(26
|
)
|
|
26
|
|
|||||
Net Earnings (Loss) Attributable to Tennant Company
|
$
|
3,274
|
|
|
$
|
2,980
|
|
|
$
|
3,347
|
|
|
$
|
(6,327
|
)
|
|
$
|
3,274
|
|
Condensed Consolidated Statement of Operations
|
|||||||||||||||||||
For the three months ended March 31, 2017
|
|||||||||||||||||||
(in thousands)
|
Parent
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Total Tennant Company
|
||||||||||
Net Sales
|
$
|
105,705
|
|
|
$
|
139,080
|
|
|
$
|
68,834
|
|
|
$
|
(122,560
|
)
|
|
$
|
191,059
|
|
Cost of Sales
|
71,597
|
|
|
112,732
|
|
|
48,582
|
|
|
(121,588
|
)
|
|
111,323
|
|
|||||
Gross Profit
|
34,108
|
|
|
26,348
|
|
|
20,252
|
|
|
(972
|
)
|
|
79,736
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Operating Expense:
|
|
|
|
|
|
|
|
|
|
||||||||||
Research and Development Expense
|
7,946
|
|
|
87
|
|
|
413
|
|
|
—
|
|
|
8,446
|
|
|||||
Selling and Administrative Expense
|
32,064
|
|
|
20,072
|
|
|
21,820
|
|
|
—
|
|
|
73,956
|
|
|||||
Total Operating Expense
|
40,010
|
|
|
20,159
|
|
|
22,233
|
|
|
—
|
|
|
82,402
|
|
|||||
(Loss) Profit from Operations
|
(5,902
|
)
|
|
6,189
|
|
|
(1,981
|
)
|
|
(972
|
)
|
|
(2,666
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Other Income (Expense):
|
|
|
|
|
|
|
|
|
|
||||||||||
Equity in Earnings of Affiliates
|
1,650
|
|
|
329
|
|
|
—
|
|
|
(1,979
|
)
|
|
—
|
|
|||||
Interest (Expense) Income, Net
|
(764
|
)
|
|
—
|
|
|
54
|
|
|
—
|
|
|
(710
|
)
|
|||||
Intercompany Interest Income (Expense)
|
1,469
|
|
|
(1,428
|
)
|
|
(41
|
)
|
|
—
|
|
|
—
|
|
|||||
Net Foreign Currency Transaction (Losses) Gains
|
(837
|
)
|
|
2
|
|
|
(362
|
)
|
|
—
|
|
|
(1,197
|
)
|
|||||
Other (Expense) Income, Net
|
(157
|
)
|
|
(75
|
)
|
|
264
|
|
|
—
|
|
|
32
|
|
|||||
Total Other Income (Expense), Net
|
1,361
|
|
|
(1,172
|
)
|
|
(85
|
)
|
|
(1,979
|
)
|
|
(1,875
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
(Loss) Profit Before Income Taxes
|
(4,541
|
)
|
|
5,017
|
|
|
(2,066
|
)
|
|
(2,951
|
)
|
|
(4,541
|
)
|
|||||
Income Tax (Benefit) Expense
|
(584
|
)
|
|
1,571
|
|
|
(1,024
|
)
|
|
(547
|
)
|
|
(584
|
)
|
|||||
Net (Loss) Earnings
|
$
|
(3,957
|
)
|
|
$
|
3,446
|
|
|
$
|
(1,042
|
)
|
|
$
|
(2,404
|
)
|
|
$
|
(3,957
|
)
|
Condensed Consolidated Statement of Comprehensive Income
|
|||||||||||||||||||
For the three months ended March 31, 2018
|
|||||||||||||||||||
(in thousands)
|
Parent
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Total Tennant Company
|
||||||||||
Net Earnings Including Noncontrolling Interest
|
$
|
3,300
|
|
|
$
|
2,980
|
|
|
$
|
3,373
|
|
|
$
|
(6,353
|
)
|
|
$
|
3,300
|
|
Other Comprehensive Income (Loss):
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign currency translation adjustments
|
8,381
|
|
|
(164
|
)
|
|
7,853
|
|
|
(7,689
|
)
|
|
8,381
|
|
|||||
Pension and retiree medical benefits
|
82
|
|
|
—
|
|
|
19
|
|
|
(19
|
)
|
|
82
|
|
|||||
Cash flow hedge
|
(2,715
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,715
|
)
|
|||||
Income Taxes:
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign currency translation adjustments
|
(17
|
)
|
|
—
|
|
|
(16
|
)
|
|
16
|
|
|
(17
|
)
|
|||||
Pension and retiree medical benefits
|
(151
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(151
|
)
|
|||||
Cash flow hedge
|
(501
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(501
|
)
|
|||||
Total Other Comprehensive Income, net of tax
|
5,079
|
|
|
(164
|
)
|
|
7,856
|
|
|
(7,692
|
)
|
|
5,079
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Total Comprehensive Income Including Noncontrolling Interest
|
8,379
|
|
|
2,816
|
|
|
11,229
|
|
|
(14,045
|
)
|
|
8,379
|
|
|||||
Comprehensive Income Attributable to Noncontrolling Interest
|
26
|
|
|
—
|
|
|
26
|
|
|
(26
|
)
|
|
26
|
|
|||||
Comprehensive Income Attributable to Tennant Company
|
$
|
8,353
|
|
|
$
|
2,816
|
|
|
$
|
11,203
|
|
|
$
|
(14,019
|
)
|
|
$
|
8,353
|
|
Condensed Consolidated Statement of Comprehensive Income
|
|||||||||||||||||||
For the three months ended March 31, 2017
|
|||||||||||||||||||
(in thousands)
|
Parent
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Total Tennant Company
|
||||||||||
Net (Loss) Earnings
|
$
|
(3,957
|
)
|
|
$
|
3,446
|
|
|
$
|
(1,042
|
)
|
|
$
|
(2,404
|
)
|
|
$
|
(3,957
|
)
|
Other Comprehensive Income (Loss):
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign currency translation adjustments
|
2,400
|
|
|
101
|
|
|
(20,697
|
)
|
|
20,596
|
|
|
2,400
|
|
|||||
Pension and retiree medical benefits
|
10
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10
|
|
|||||
Cash flow hedge
|
(73
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(73
|
)
|
|||||
Income Taxes:
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign currency translation adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Pension and retiree medical benefits
|
(18
|
)
|
|
—
|
|
|
(14
|
)
|
|
14
|
|
|
(18
|
)
|
|||||
Cash flow hedge
|
27
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
27
|
|
|||||
Total Other Comprehensive Income (Loss), net of tax
|
2,346
|
|
|
101
|
|
|
(20,711
|
)
|
|
20,610
|
|
|
2,346
|
|
|||||
Comprehensive (Loss) Income
|
$
|
(1,611
|
)
|
|
$
|
3,547
|
|
|
$
|
(21,753
|
)
|
|
$
|
18,206
|
|
|
$
|
(1,611
|
)
|
Condensed Consolidated Balance Sheet
|
|||||||||||||||||||
As of March 31, 2018
|
|||||||||||||||||||
(in thousands)
|
Parent
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Total Tennant Company
|
||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
||||||||||
Current Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and Cash Equivalents
|
$
|
14,767
|
|
|
$
|
2,078
|
|
|
$
|
37,156
|
|
|
$
|
—
|
|
|
$
|
54,001
|
|
Restricted Cash
|
—
|
|
|
—
|
|
|
645
|
|
|
—
|
|
|
645
|
|
|||||
Net Receivables
|
605
|
|
|
85,079
|
|
|
126,581
|
|
|
—
|
|
|
212,265
|
|
|||||
Intercompany Receivables
|
54,461
|
|
|
131,279
|
|
|
—
|
|
|
(185,740
|
)
|
|
—
|
|
|||||
Inventories
|
32,287
|
|
|
16,076
|
|
|
102,161
|
|
|
(10,234
|
)
|
|
140,290
|
|
|||||
Prepaid Expenses
|
11,781
|
|
|
275
|
|
|
9,481
|
|
|
—
|
|
|
21,537
|
|
|||||
Other Current Assets
|
3,864
|
|
|
404
|
|
|
1,674
|
|
|
—
|
|
|
5,942
|
|
|||||
Total Current Assets
|
117,765
|
|
|
235,191
|
|
|
277,698
|
|
|
(195,974
|
)
|
|
434,680
|
|
|||||
Property, Plant and Equipment
|
224,426
|
|
|
12,738
|
|
|
149,966
|
|
|
—
|
|
|
387,130
|
|
|||||
Accumulated Depreciation
|
(148,975
|
)
|
|
(6,502
|
)
|
|
(53,727
|
)
|
|
—
|
|
|
(209,204
|
)
|
|||||
Property, Plant and Equipment, Net
|
75,451
|
|
|
6,236
|
|
|
96,239
|
|
|
—
|
|
|
177,926
|
|
|||||
Deferred Income Taxes
|
2,178
|
|
|
3,233
|
|
|
9,421
|
|
|
—
|
|
|
14,832
|
|
|||||
Investment in Affiliates
|
408,509
|
|
|
11,562
|
|
|
22,260
|
|
|
(442,331
|
)
|
|
—
|
|
|||||
Intercompany Loans
|
314,905
|
|
|
—
|
|
|
3,690
|
|
|
(318,595
|
)
|
|
—
|
|
|||||
Goodwill
|
12,869
|
|
|
1,739
|
|
|
181,557
|
|
|
—
|
|
|
196,165
|
|
|||||
Intangible Assets, Net
|
2,974
|
|
|
2,862
|
|
|
166,461
|
|
|
—
|
|
|
172,297
|
|
|||||
Other Assets
|
9,083
|
|
|
(427
|
)
|
|
11,346
|
|
|
—
|
|
|
20,002
|
|
|||||
Total Assets
|
$
|
943,734
|
|
|
$
|
260,396
|
|
|
$
|
768,672
|
|
|
$
|
(956,900
|
)
|
|
$
|
1,015,902
|
|
LIABILITIES AND TOTAL EQUITY
|
|
|
|
|
|
|
|
|
|
||||||||||
Current Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Current Portion of Long-Term Debt
|
$
|
29,460
|
|
|
$
|
—
|
|
|
$
|
1,442
|
|
|
$
|
—
|
|
|
$
|
30,902
|
|
Accounts Payable
|
42,583
|
|
|
4,029
|
|
|
56,090
|
|
|
—
|
|
|
102,702
|
|
|||||
Intercompany Payables
|
131,279
|
|
|
1,360
|
|
|
53,101
|
|
|
(185,740
|
)
|
|
—
|
|
|||||
Employee Compensation and Benefits
|
8,976
|
|
|
8,194
|
|
|
17,504
|
|
|
—
|
|
|
34,674
|
|
|||||
Income Taxes Payable
|
341
|
|
|
—
|
|
|
2,459
|
|
|
—
|
|
|
2,800
|
|
|||||
Other Current Liabilities
|
27,447
|
|
|
10,780
|
|
|
32,066
|
|
|
—
|
|
|
70,293
|
|
|||||
Total Current Liabilities
|
240,086
|
|
|
24,363
|
|
|
162,662
|
|
|
(185,740
|
)
|
|
241,371
|
|
|||||
Long-Term Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Long-Term Debt
|
340,447
|
|
|
—
|
|
|
1,973
|
|
|
—
|
|
|
342,420
|
|
|||||
Intercompany Loans
|
3,690
|
|
|
128,000
|
|
|
186,905
|
|
|
(318,595
|
)
|
|
—
|
|
|||||
Employee-Related Benefits
|
12,576
|
|
|
1,869
|
|
|
8,949
|
|
|
—
|
|
|
23,394
|
|
|||||
Deferred Income Taxes
|
—
|
|
|
—
|
|
|
53,412
|
|
|
—
|
|
|
53,412
|
|
|||||
Other Liabilities
|
39,564
|
|
|
2,669
|
|
|
5,701
|
|
|
—
|
|
|
47,934
|
|
|||||
Total Long-Term Liabilities
|
396,277
|
|
|
132,538
|
|
|
256,940
|
|
|
(318,595
|
)
|
|
467,160
|
|
|||||
Total Liabilities
|
636,363
|
|
|
156,901
|
|
|
419,602
|
|
|
(504,335
|
)
|
|
708,531
|
|
|||||
Equity:
|
|
|
|
|
|
|
|
|
|
||||||||||
Common Stock
|
6,717
|
|
|
—
|
|
|
11,131
|
|
|
(11,131
|
)
|
|
6,717
|
|
|||||
Additional Paid-In Capital
|
18,295
|
|
|
77,551
|
|
|
384,460
|
|
|
(462,011
|
)
|
|
18,295
|
|
|||||
Retained Earnings
|
297,717
|
|
|
26,777
|
|
|
(17,872
|
)
|
|
(8,905
|
)
|
|
297,717
|
|
|||||
Accumulated Other Comprehensive Loss
|
(17,244
|
)
|
|
(833
|
)
|
|
(30,535
|
)
|
|
31,368
|
|
|
(17,244
|
)
|
|||||
Total Tennant Company Shareholders' Equity
|
305,485
|
|
|
103,495
|
|
|
347,184
|
|
|
(450,679
|
)
|
|
305,485
|
|
|||||
Noncontrolling Interest
|
1,886
|
|
|
—
|
|
|
1,886
|
|
|
(1,886
|
)
|
|
1,886
|
|
|||||
Total Equity
|
307,371
|
|
|
103,495
|
|
|
349,070
|
|
|
(452,565
|
)
|
|
307,371
|
|
|||||
Total Liabilities and Total Equity
|
$
|
943,734
|
|
|
$
|
260,396
|
|
|
$
|
768,672
|
|
|
$
|
(956,900
|
)
|
|
$
|
1,015,902
|
|
Condensed Consolidated Balance Sheet
|
|||||||||||||||||||
As of December 31, 2017
|
|||||||||||||||||||
(in thousands)
|
Parent
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Total Tennant Company
|
||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
||||||||||
Current Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and Cash Equivalents
|
$
|
18,469
|
|
|
$
|
507
|
|
|
$
|
39,422
|
|
|
$
|
—
|
|
|
$
|
58,398
|
|
Restricted Cash
|
—
|
|
|
—
|
|
|
653
|
|
|
—
|
|
|
653
|
|
|||||
Net Receivables
|
683
|
|
|
88,629
|
|
|
120,204
|
|
|
—
|
|
|
209,516
|
|
|||||
Intercompany Receivables
|
53,444
|
|
|
133,778
|
|
|
—
|
|
|
(187,222
|
)
|
|
—
|
|
|||||
Inventories
|
29,450
|
|
|
12,695
|
|
|
94,542
|
|
|
(8,993
|
)
|
|
127,694
|
|
|||||
Prepaid Expenses
|
8,774
|
|
|
1,172
|
|
|
9,405
|
|
|
—
|
|
|
19,351
|
|
|||||
Other Current Assets
|
4,030
|
|
|
—
|
|
|
3,473
|
|
|
—
|
|
|
7,503
|
|
|||||
Total Current Assets
|
114,850
|
|
|
236,781
|
|
|
267,699
|
|
|
(196,215
|
)
|
|
423,115
|
|
|||||
Property, Plant and Equipment
|
225,064
|
|
|
12,155
|
|
|
145,549
|
|
|
—
|
|
|
382,768
|
|
|||||
Accumulated Depreciation
|
(146,320
|
)
|
|
(6,333
|
)
|
|
(50,097
|
)
|
|
—
|
|
|
(202,750
|
)
|
|||||
Property, Plant and Equipment, Net
|
78,744
|
|
|
5,822
|
|
|
95,452
|
|
|
—
|
|
|
180,018
|
|
|||||
Deferred Income Taxes
|
1,308
|
|
|
2,669
|
|
|
7,157
|
|
|
—
|
|
|
11,134
|
|
|||||
Investment in Affiliates
|
392,486
|
|
|
11,273
|
|
|
20,811
|
|
|
(424,570
|
)
|
|
—
|
|
|||||
Intercompany Loans
|
304,822
|
|
|
—
|
|
|
4,983
|
|
|
(309,805
|
)
|
|
—
|
|
|||||
Goodwill
|
12,869
|
|
|
1,739
|
|
|
171,436
|
|
|
—
|
|
|
186,044
|
|
|||||
Intangible Assets, Net
|
2,105
|
|
|
2,898
|
|
|
167,344
|
|
|
—
|
|
|
172,347
|
|
|||||
Other Assets
|
10,363
|
|
|
—
|
|
|
10,956
|
|
|
—
|
|
|
21,319
|
|
|||||
Total Assets
|
$
|
917,547
|
|
|
$
|
261,182
|
|
|
$
|
745,838
|
|
|
$
|
(930,590
|
)
|
|
$
|
993,977
|
|
LIABILITIES AND TOTAL EQUITY
|
|
|
|
|
|
|
|
|
|
||||||||||
Current Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Current Portion of Long-Term Debt
|
$
|
29,413
|
|
|
$
|
—
|
|
|
$
|
1,470
|
|
|
$
|
—
|
|
|
$
|
30,883
|
|
Accounts Payable
|
39,927
|
|
|
3,018
|
|
|
53,137
|
|
|
—
|
|
|
96,082
|
|
|||||
Intercompany Payables
|
133,778
|
|
|
1,963
|
|
|
51,481
|
|
|
(187,222
|
)
|
|
—
|
|
|||||
Employee Compensation and Benefits
|
8,311
|
|
|
10,355
|
|
|
18,591
|
|
|
—
|
|
|
37,257
|
|
|||||
Income Taxes Payable
|
366
|
|
|
—
|
|
|
2,472
|
|
|
—
|
|
|
2,838
|
|
|||||
Other Current Liabilities
|
20,183
|
|
|
15,760
|
|
|
33,504
|
|
|
—
|
|
|
69,447
|
|
|||||
Total Current Liabilities
|
231,978
|
|
|
31,096
|
|
|
160,655
|
|
|
(187,222
|
)
|
|
236,507
|
|
|||||
Long-Term Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Long-Term Debt
|
344,147
|
|
|
—
|
|
|
1,809
|
|
|
—
|
|
|
345,956
|
|
|||||
Intercompany Loans
|
—
|
|
|
128,000
|
|
|
181,805
|
|
|
(309,805
|
)
|
|
—
|
|
|||||
Employee-Related Benefits
|
11,160
|
|
|
3,992
|
|
|
8,715
|
|
|
—
|
|
|
23,867
|
|
|||||
Deferred Income Taxes
|
—
|
|
|
—
|
|
|
53,225
|
|
|
—
|
|
|
53,225
|
|
|||||
Other Liabilities
|
31,788
|
|
|
2,483
|
|
|
1,677
|
|
|
—
|
|
|
35,948
|
|
|||||
Total Long-Term Liabilities
|
387,095
|
|
|
134,475
|
|
|
247,231
|
|
|
(309,805
|
)
|
|
458,996
|
|
|||||
Total Liabilities
|
619,073
|
|
|
165,571
|
|
|
407,886
|
|
|
(497,027
|
)
|
|
695,503
|
|
|||||
Equity:
|
|
|
|
|
|
|
|
|
|
||||||||||
Common Stock
|
6,705
|
|
|
—
|
|
|
11,131
|
|
|
(11,131
|
)
|
|
6,705
|
|
|||||
Additional Paid-In Capital
|
15,089
|
|
|
72,483
|
|
|
384,460
|
|
|
(456,943
|
)
|
|
15,089
|
|
|||||
Retained Earnings
|
297,032
|
|
|
23,797
|
|
|
(21,219
|
)
|
|
(2,578
|
)
|
|
297,032
|
|
|||||
Accumulated Other Comprehensive Loss
|
(22,323
|
)
|
|
(669
|
)
|
|
(38,391
|
)
|
|
39,060
|
|
|
(22,323
|
)
|
|||||
Total Tennant Company Shareholders' Equity
|
296,503
|
|
|
95,611
|
|
|
335,981
|
|
|
(431,592
|
)
|
|
296,503
|
|
|||||
Noncontrolling Interest
|
1,971
|
|
|
—
|
|
|
1,971
|
|
|
(1,971
|
)
|
|
1,971
|
|
|||||
Total Equity
|
298,474
|
|
|
95,611
|
|
|
337,952
|
|
|
(433,563
|
)
|
|
298,474
|
|
|||||
Total Liabilities and Total Equity
|
$
|
917,547
|
|
|
$
|
261,182
|
|
|
$
|
745,838
|
|
|
$
|
(930,590
|
)
|
|
$
|
993,977
|
|
Condensed Consolidated Statement of Cash Flows
|
|||||||||||||||||||
For the three months ended March 31, 2018
|
|||||||||||||||||||
(in thousands)
|
Parent
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Total Tennant Company
|
||||||||||
OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
Net Cash Provided by (Used in) Operating Activities
|
$
|
5,815
|
|
|
$
|
1,800
|
|
|
$
|
(2,076
|
)
|
|
$
|
—
|
|
|
$
|
5,539
|
|
INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchases of Property, Plant and Equipment
|
(342
|
)
|
|
(229
|
)
|
|
(2,909
|
)
|
|
—
|
|
|
(3,480
|
)
|
|||||
Proceeds from Disposals of Property, Plant and Equipment
|
11
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
16
|
|
|||||
Proceeds from Principal Payments Received on Long-Term Note Receivable
|
—
|
|
|
—
|
|
|
167
|
|
|
—
|
|
|
167
|
|
|||||
Purchase of Intangible Asset
|
(1,000
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,000
|
)
|
|||||
Loan (Payments) Borrowings from Subsidiaries
|
(1,294
|
)
|
|
—
|
|
|
—
|
|
|
1,294
|
|
|
—
|
|
|||||
Net Cash Used in Investing Activities
|
(2,625
|
)
|
|
(229
|
)
|
|
(2,737
|
)
|
|
1,294
|
|
|
(4,297
|
)
|
|||||
FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
Loan Borrowings (Payments) from Parent
|
—
|
|
|
—
|
|
|
1,294
|
|
|
(1,294
|
)
|
|
—
|
|
|||||
Payments of Long-Term Debt
|
(4,000
|
)
|
|
—
|
|
|
(37
|
)
|
|
—
|
|
|
(4,037
|
)
|
|||||
Change in Capital Lease Obligations
|
—
|
|
|
—
|
|
|
81
|
|
|
—
|
|
|
81
|
|
|||||
Proceeds from Issuances of Common Stock
|
794
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
794
|
|
|||||
Dividends Paid
|
(3,758
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,758
|
)
|
|||||
Net Cash (Used in) Provided by Financing Activities
|
(6,964
|
)
|
|
—
|
|
|
1,338
|
|
|
(1,294
|
)
|
|
(6,920
|
)
|
|||||
Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash
|
72
|
|
|
—
|
|
|
1,201
|
|
|
—
|
|
|
1,273
|
|
|||||
Net (Decrease) Increase in Cash, Cash Equivalents and Restricted Cash
|
(3,702
|
)
|
|
1,571
|
|
|
(2,274
|
)
|
|
—
|
|
|
(4,405
|
)
|
|||||
Cash, Cash Equivalents and Restricted Cash at Beginning of Period
|
18,469
|
|
|
507
|
|
|
40,075
|
|
|
—
|
|
|
59,051
|
|
|||||
Cash, Cash Equivalents and Restricted Cash at End of Period
|
$
|
14,767
|
|
|
$
|
2,078
|
|
|
$
|
37,801
|
|
|
$
|
—
|
|
|
$
|
54,646
|
|
Condensed Consolidated Statement of Cash Flows
|
|||||||||||||||||||
For the three months ended March 31, 2017
|
|||||||||||||||||||
(in thousands)
|
Parent
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Total Tennant Company
|
||||||||||
OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
Net Cash (Used in) Provided by Operating Activities
|
$
|
(14,063
|
)
|
|
$
|
438
|
|
|
$
|
2,516
|
|
|
$
|
—
|
|
|
$
|
(11,109
|
)
|
INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchases of Property, Plant and Equipment
|
(1,188
|
)
|
|
—
|
|
|
(3,485
|
)
|
|
—
|
|
|
(4,673
|
)
|
|||||
Proceeds from Disposals of Property, Plant and Equipment
|
6
|
|
|
—
|
|
|
47
|
|
|
—
|
|
|
53
|
|
|||||
Issuance of Long-Term Note Receivable
|
—
|
|
|
—
|
|
|
(1,500
|
)
|
|
—
|
|
|
(1,500
|
)
|
|||||
Acquisition of Business, Net of Cash Acquired
|
(304
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(304
|
)
|
|||||
Purchase of Intangible Asset
|
(2,500
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,500
|
)
|
|||||
Change in Investments in Subsidiaries
|
(3,500
|
)
|
|
—
|
|
|
—
|
|
|
3,500
|
|
|
—
|
|
|||||
Net Cash Used in Investing Activities
|
(7,486
|
)
|
|
—
|
|
|
(4,938
|
)
|
|
3,500
|
|
|
(8,924
|
)
|
|||||
FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
Change in Subsidiary Equity
|
—
|
|
|
—
|
|
|
3,500
|
|
|
(3,500
|
)
|
|
—
|
|
|||||
Proceeds from Issuance of Long-Term Debt
|
20,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20,000
|
|
|||||
Payments of Long-Term Debt
|
(11,143
|
)
|
|
—
|
|
|
(8
|
)
|
|
—
|
|
|
(11,151
|
)
|
|||||
Proceeds from Issuance of Common Stock
|
1,655
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,655
|
|
|||||
Dividends Paid
|
(3,722
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,722
|
)
|
|||||
Net Cash Provided by Financing Activities
|
6,790
|
|
|
—
|
|
|
3,492
|
|
|
(3,500
|
)
|
|
6,782
|
|
|||||
Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash
|
(102
|
)
|
|
—
|
|
|
432
|
|
|
—
|
|
|
330
|
|
|||||
Net (Decrease) Increase in Cash, Cash Equivalents and Restricted Cash
|
(14,861
|
)
|
|
438
|
|
|
1,502
|
|
|
—
|
|
|
(12,921
|
)
|
|||||
Cash, Cash Equivalents and Restricted Cash at Beginning of Period
|
38,484
|
|
|
226
|
|
|
19,840
|
|
|
—
|
|
|
58,550
|
|
|||||
Cash, Cash Equivalents and Restricted Cash at End of Period
|
$
|
23,623
|
|
|
$
|
664
|
|
|
$
|
21,342
|
|
|
$
|
—
|
|
|
$
|
45,629
|
|
Item 2.
|
Management's Discussion and Analysis of Financial Condition and Results of Operations
|
|
Three Months Ended
|
||||||||||||
|
March 31
|
||||||||||||
|
2018
|
|
%
|
|
2017
|
|
%
|
||||||
Net Sales
|
$
|
272,847
|
|
|
100.0
|
|
|
$
|
191,059
|
|
|
100.0
|
|
Cost of Sales
|
162,210
|
|
|
59.5
|
|
|
111,323
|
|
|
58.3
|
|
||
Gross Profit
|
110,637
|
|
|
40.5
|
|
|
79,736
|
|
|
41.7
|
|
||
Operating Expense:
|
|
|
|
|
|
|
|
|
|
|
|
||
Research and Development Expense
|
7,996
|
|
|
2.9
|
|
|
8,446
|
|
|
4.4
|
|
||
Selling and Administrative Expense
|
92,269
|
|
|
33.8
|
|
|
73,956
|
|
|
38.7
|
|
||
Total Operating Expense
|
100,265
|
|
|
36.7
|
|
|
82,402
|
|
|
43.1
|
|
||
Profit (Loss) from Operations
|
10,372
|
|
|
3.8
|
|
|
(2,666
|
)
|
|
(1.4
|
)
|
||
Other Income (Expense):
|
|
|
|
|
|
|
|
|
|
|
|
||
Interest Income
|
749
|
|
|
0.3
|
|
|
84
|
|
|
—
|
|
||
Interest Expense
|
(5,745
|
)
|
|
(2.1
|
)
|
|
(794
|
)
|
|
(0.4
|
)
|
||
Net Foreign Currency Transaction Losses
|
(749
|
)
|
|
(0.3
|
)
|
|
(1,197
|
)
|
|
(0.6
|
)
|
||
Other (Expense) Income, Net
|
(250
|
)
|
|
(0.1
|
)
|
|
32
|
|
|
—
|
|
||
Total Other Expense, Net
|
(5,995
|
)
|
|
(2.2
|
)
|
|
(1,875
|
)
|
|
(1.0
|
)
|
||
Profit (Loss) Before Income Taxes
|
4,377
|
|
|
1.6
|
|
|
(4,541
|
)
|
|
(2.4
|
)
|
||
Income Tax Expense (Benefit)
|
1,077
|
|
|
0.4
|
|
|
(584
|
)
|
|
(0.3
|
)
|
||
Net Earnings (Loss) Including Noncontrolling Interest
|
3,300
|
|
|
1.2
|
|
|
(3,957
|
)
|
|
(2.1
|
)
|
||
Net Earnings Attributable to Noncontrolling Interest
|
26
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Net Earnings (Loss) Attributable to Tennant Company
|
$
|
3,274
|
|
|
1.2
|
|
|
$
|
(3,957
|
)
|
|
(2.1
|
)
|
Net Earnings (Loss) Attributable to Tennant Company per Share
|
$
|
0.18
|
|
|
|
|
$
|
(0.22
|
)
|
|
|
|
|
2018 v. 2017
|
|
Three Months Ended
|
|
March 31
|
Organic Growth:
|
|
Volume
|
5.0%
|
Price
|
1.5%
|
Organic Growth
|
6.5%
|
Foreign Currency
|
3.1%
|
Acquisitions
|
33.2%
|
Total
|
42.8%
|
•
|
33.2% from the second quarter 2017 acquisition of the IPC Group.
|
•
|
An organic sales increase of approximately
6.5%
which excludes the effects of foreign currency exchange and acquisitions, resulting from an approximate
5.0%
volume increase and a
1.5%
price increase. The volume increase was primarily due to
increased sales of commercial equipment in the Americas and EMEA regions, mostly attributed to strong sales through strategic accounts in these regions. These regions also experienced increased sales of parts and consumables as well as higher service sales. Sales of new products introduced within the past three years totaled 44% of equipment revenue for the first quarter of 2018, compared to 42% in the 2017 first quarter.
The price increase was the result of selling price increases which averaged 3% in most geographies, with an effective date of February 1, 2018. We expect the increase in selling prices to increase Net Sales in the range of 1% to 2% for the 2018 full year. The impact to gross margin is estimated to be minimal as these selling price increases were taken to offset inflation.
|
•
|
A favorable impact from foreign currency exchange of approximately 3.1%.
|
|
|
Three Months Ended
|
||||||||
|
|
March 31
|
||||||||
|
|
2018
|
|
2017
|
|
%
|
||||
Americas
|
|
$
|
162,638
|
|
|
$
|
142,770
|
|
|
13.9
|
Europe, Middle East and Africa
|
|
88,816
|
|
|
33,276
|
|
|
166.9
|
||
Asia Pacific
|
|
21,393
|
|
|
15,013
|
|
|
42.5
|
||
Total
|
|
$
|
272,847
|
|
|
$
|
191,059
|
|
|
42.8
|
•
|
an increase in Net Sales of
42.8%
in the
first
quarter of
2018
compared to the
first
quarter of
2017
;
|
•
|
gross profit margin decline of
120
basis points in the
first
quarter of
2018
compared to the
first
quarter of
2017
;
|
•
|
a
490
basis point decrease in S&A Expense as a percentage of Net Sales in the
first
quarter of
2018
compared to the
first
quarter of
2017
; and
|
•
|
an unfavorable impact of
$5.0 million
from Interest Expense in the
first
quarter of
2018
compared to the
first
quarter of
2017
.
|
|
Three Months Ended
|
||||||
|
March 31
|
||||||
|
2018
|
|
2017
|
||||
Operating Activities
|
$
|
5,539
|
|
|
$
|
(11,109
|
)
|
Investing Activities:
|
|
|
|
||||
Purchases of Property, Plant and Equipment, Net of Disposals
|
(3,464
|
)
|
|
(4,620
|
)
|
||
Proceeds from Principal Payments Received on Long-Term Note Receivable
|
167
|
|
|
—
|
|
||
Issuance of Long-Term Note Receivable
|
—
|
|
|
(1,500
|
)
|
||
Acquisition of Business, Net of Cash Acquired
|
—
|
|
|
(304
|
)
|
||
Purchase of Intangible Asset
|
(1,000
|
)
|
|
(2,500
|
)
|
||
Financing Activities
|
(6,920
|
)
|
|
6,782
|
|
||
Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash
|
1,273
|
|
|
330
|
|
||
Net Decrease in Cash, Cash Equivalents and Restricted Cash
|
$
|
(4,405
|
)
|
|
$
|
(12,921
|
)
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
Item 4.
|
Controls and Procedures
|
Item 1.
|
Legal Proceedings
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
For the Quarter Ended March 31, 2018
|
|
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
|
|||||
January 1 - 31, 2018
|
|
68
|
|
|
$
|
72.65
|
|
|
—
|
|
|
1,393,965
|
|
February 1 - 28, 2018
|
|
3,903
|
|
|
67.70
|
|
|
—
|
|
|
1,393,965
|
|
|
March 1 - 31, 2018
|
|
1,253
|
|
|
66.07
|
|
|
1,073
|
|
|
1,392,892
|
|
|
Total
|
|
5,224
|
|
|
$
|
67.37
|
|
|
1,073
|
|
|
1,392,892
|
|
(1)
|
Includes 4,151 shares delivered or attested to in satisfaction of the exercise price and/or tax withholding obligations by employees who exercised stock options or restricted stock under employee share-based compensation plans.
|
Item 6.
|
Exhibits
|
Item #
|
|
Description
|
|
Method of Filing
|
|
3i
|
|
|
|
Incorporated by reference to Exhibit 3i to the Company’s report on Form 10-Q for the quarterly period ended June 30, 2006.
|
|
3ii
|
|
|
|
Incorporated by reference to Exhibit 3iii to the Company’s Form 8-K dated December 14, 2010.
|
|
3iii
|
|
|
|
Filed herewith electronically.
|
|
4.1
|
|
|
|
Incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed April 24, 2017.
|
|
31.1
|
|
|
|
Filed herewith electronically.
|
|
31.2
|
|
|
|
Filed herewith electronically.
|
|
32.1
|
|
|
|
Filed herewith electronically.
|
|
32.2
|
|
|
|
Filed herewith electronically.
|
|
101
|
|
|
The following financial information from Tennant Company's Quarterly Report on Form 10-Q for the period ended March 31, 2018, formatted in Extensible Business Reporting Language (XBRL): (i) Condensed Consolidated Statements of Operations for the three months ended March 31, 2018 and 2017; (ii) Condensed Consolidated Statements of Comprehensive Income (Loss) for the three months ended March 31, 2018 and 2017; (iii) Condensed Consolidated Balance Sheets as of March 31, 2018 and December 31, 2017; (iv) Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2018 and 2017; and (v) Notes to the Condensed Consolidated Financial Statements.
|
|
Filed herewith electronically.
|
|
|
|
|
TENNANT COMPANY
|
|
|
|
|
|
Date:
|
|
May 1, 2018
|
|
/s/ H. Chris Killingstad
|
|
|
|
|
H. Chris Killingstad
President and Chief Executive Officer
|
|
|
|
|
|
Date:
|
|
May 1, 2018
|
|
/s/ Thomas Paulson
|
|
|
|
|
Thomas Paulson
Senior Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)
|
|
Date:
|
|
May 1, 2018
|
|
/s/ Jeffrey L. Cotter
|
|
|
|
|
Jeffrey L. Cotter, Secretary
|
1.
|
I have reviewed this quarterly report on Form 10-Q 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:
|
|
May 1, 2018
|
|
/s/ H. Chris Killingstad
|
|
|
|
|
H. Chris Killingstad
President and Chief Executive Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q 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:
|
|
May 1, 2018
|
|
/s/ Thomas Paulson
|
|
|
|
|
Thomas Paulson
Senior 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:
|
|
May 1, 2018
|
|
/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:
|
|
May 1, 2018
|
|
/s/ Thomas Paulson
|
|
|
|
|
Thomas Paulson
|
|
|
|
|
Senior Vice President and Chief Financial Officer
|