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Mar 31, 2022
Tennant Q1 2022 Earnings Report
Tennant reported first quarter results aligning with expectations, with strong demand offset by supply chain constraints and inflationary pressures.
Key Takeaways
Tennant Company's first quarter 2022 results showed a slight decrease in net sales compared to the previous year, driven by foreign currency exchange impacts and the divestiture of the Coatings business, though organic sales increased. Gross margin decreased due to material inflation and higher freight costs. The company lowered its full-year guidance for adjusted EBITDA due to anticipated continued challenges with parts availability.
Consolidated net sales decreased by 2.0% to $258.1 million compared to Q1 2021.
Organic sales increased by 0.8%, driven by higher selling prices, but offset by volume declines due to supply chain constraints.
Gross margin decreased to 38.3% from 43.0% in the prior-year period due to material inflation and higher freight costs.
Net income attributable to Tennant Company decreased to $10.3 million, driven by lower margins.
Revenue by Geographic Location
Forward Guidance
Tennant provides the following guidance for 2022: Net sales between $1,125.0 - $1,170.0 million, organic net sales growth of 4-6%, diluted net income per share between $3.65 - $4.25, Adjusted diluted net income per share between $4.15 - $4.75, Adjusted EBITDA between $140.0 - $155.0 million, and Capital expenditures between $25.0 - $30.0 million.
Positive Outlook
- Strong continuing demand for Tennant products.
- Commitment and agility of teams in addressing the changing market landscape to meet demand.
- Well positioned to capitalize on any improvement in parts availability.
- Focus on overcoming challenges creatively and diligently.
- Guidance includes organic net sales growth of 4-6%.
Challenges Ahead
- Macroeconomic headwinds and geopolitical risk factors have worsened.
- Revised guidance reflects current operating environment constrained by parts availability and higher inflation.
- Lowered full-year guidance for adjusted EBITDA from $145 to $160 million to $140 to $155 million.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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