In This Article:
-
Net Sales: Increased 3.6% to $315.8 million in Q3 2024.
-
Adjusted EBITDA: Rose to $47.9 million, with a margin of 15.2%.
-
GAAP Net Income: $20.8 million, compared to $22.9 million in the prior year period.
-
Adjusted Net Income: $26.6 million, a 4.7% year-over-year increase.
-
Adjusted EPS: Increased 3.7% to $1.39 per diluted share.
-
Gross Margin: 42.4%, a 90 basis point decrease from the prior year quarter.
-
Free Cash Flow: $26.4 million for the quarter.
-
Capital Expenditures: $4.3 million in Q3 2024.
-
Dividend Increase: 5.4% increase to $0.295 per share.
-
Cash and Cash Equivalents: $91.3 million at the end of Q3 2024.
-
Net Leverage: 0.56x adjusted EBITDA.
-
2024 Guidance: Net sales of $1.280 billion to $1.305 billion; adjusted EPS of $6.15 to $6.55; adjusted EBITDA of $205 million to $215 million.
Release Date: November 01, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
-
Tennant Co (NYSE:TNC) reported a 3.6% increase in net sales for the third quarter of 2024, reaching $315.8 million.
-
Adjusted EBITDA rose to $47.9 million, with an adjusted EBITDA margin of 15.2%.
-
Order rates increased significantly, with high single-digit growth compared to the same period in 2023.
-
The company successfully reduced its backlog by $130 million, exceeding initial expectations.
-
Tennant Co (NYSE:TNC) continues to see strong performance from its AMR products, with over 2,200 units deployed in the first nine months of 2024.
Negative Points
-
Net income decreased to $20.8 million from $22.9 million in the prior year period.
-
Volume declines were noted in EMEA and APAC regions, impacting overall performance.
-
Operating expenses increased due to ERP implementation and integration costs related to the TCS acquisition.
-
The company faced inflationary pressures on materials and elevated freight costs, impacting gross margins.
-
There is ongoing market softness in China and Australia, affecting sales in the APAC region.
Q & A Highlights
Q: Can you clarify the impact of the X4 ROVR on AMR sales and its future potential? A: The X4 ROVR is a significant driver for our AMR sales, but its impact is not fully reflected yet as it was launched mid-year in North America and later in EMEA. We expect its contribution to grow as it continues to ramp up, supported by a strong pipeline of orders.
Q: How is the backlog reduction progressing, and what are the implications for future sales? A: We have reduced our backlog by $109 million and expect to reach $130 million by year-end. This reduction is partly due to slower industrial orders, which may pose challenges for sales comps next year, but we are confident in our strategic initiatives to drive future growth.