Based on its 2011 results and expectations of future performance, Tennant Company estimates 2012 full year earnings in the range of US$2.30 to US$2.45 per diluted share on net sales in the range of US$790 million to US$805 million. That compares with 2011’s net sales of US$754.0 million and US$1.69 per diluted share.
“In 2011, Tennant benefited from increased sales of ec-H2O and industrial equipment to strategic accounts, as well as growth in emerging markets. Higher sales volume and our ongoing commitment to operational excellence led to the improved earnings performance over 2010,” said CEO Chris Killingstad.
Tennant says it will continue to manage its business with a focus on operational excellence and strong cost controls, and make selective investments in innovative technologies and other key strategic priorities.
The company’s 2012 annual financial outlook includes the following expectations:
•Global economy stabilises with modest improvement in North America, continued uncertainty in Europe, and steady growth in emerging markets;
•Foreign currency impact on sales for the full year that is flat to slightly unfavourable;
•Minimal inflation net of cost-saving initiatives and selling price increases;
•A gross margin at the high end of the targeted range of 42 to 43 percent;
•R&D expense of about 4 percent of sales, as the company continues to invest in its core products and increases investment in its water-based cleaning business; and
•Capital expenditures in the range of US$16 million to US$18 million.
“We are bullish on our future, despite the prevailing uncertainty in the global economy,” Killingstad stated. “We remain on track to achieve our goal of a 12 percent operating profit margin in the fourth quarter of 2013.”
For the 2011 full year, Tennant reported net earnings of US$32.7 million, or US$1.69 per diluted share, on net sales of US$754.0 million. Tennant’s 2011 net sales increased 12.9 percent versus the prior year. Organic net sales grew about 10.4 percent in 2011, excluding favourable foreign currency exchange effects of some 2.5 percent. Organic sales rose about 12.9 percent in the Americas region, 4.6 percent in EMEA and 10.3 percent in the Asia Pacific region.
Full year 2011 operating profit increased to US$49.6 million, or 6.6 percent of sales, and US$55.2 million, or 7.3 percent of sales, as adjusted, versus an operating profit of US$37.1 million, or 5.6 percent of sales, and US$39.2 million and 5.9 percent of sales, as adjusted, in the prior year.
In reporting record fourth quarter sales, which resulted in 48 percent growth in adjusted diluted earnings per share compared to the prior year quarter, Killingstad explained, “Tennant’s robust financial performance was driven in part by strong sales of industrial equipment in the Americas region and increased global sales of scrubbers equipped with our sustainable, water-based ec-H2OTM cleaning technology.”
Scrubbers equipped with Tennant’s ec-H2O technology again posted double-digit sales gains, growing approximately 22 percent in the 2011 fourth quarter compared to the prior year quarter. For the 2011 full year, sales of ec-H2O equipped scrubbers rose some 46 percent to $140 million, up from $96 million in 2010.
Commented Killingstad: “Our full year sales of scrubbers equipped with ec-H2O hit the top end of our stated revenue range for the year, demonstrating that this technology continues to be widely adopted by customers around the world. As a result, ec-H2O sales were a key contributor to Tennant’s 13 percent revenue increase for the 2011 full year versus 2010.”