Tennant Company has announced preliminary financial results for its first quarter ended March 31, 2020 and provided a business update related to the impact of the coronavirus pandemic.

“First and foremost, the health and safety of our employees, customers, and business partners is of paramount importance to Tennant Company,” Chris Killingstad, the company’s president and CEO, said.

“We take very seriously our commitment to provide the equipment, parts, and service our customers need to keep their facilities clean and safe. The current market conditions continue to be very fluid, and we have a dedicated response team in place, led by our chief operating officer, to support our locations around the world in managing potential business impacts.

“We are monitoring developments closely and will provide a full update on our first-quarter earnings call. I am proud of our team members around the world in the way they have met challenges that were simply unimaginable a short time ago.

“Tennant is a highly resilient 150-year-old business, and we are committed to doing what is necessary to emerge from this crisis in a strong position to serve the needs of our customers,”

Business update

To date, the primary impact of the pandemic on the company’s business has been related to temporary plant shutdowns, as well as a slowdown in sales to some end markets.

Tennant’s China factories were closed for two weeks in February, and the Company temporarily suspended operations at its plants in Italy and the United States at times during the month of March.

The company has established work-from-home processes for much of its workforce and has suspended a significant amount of business-related travel.

Tennant has also taken a number of measures globally to minimise the financial impact of the pandemic, which includes a combination of reduced work schedules and furlough programs for all employees globally, while operating within the local laws and regulations, and maintaining health coverage for all impacted employees.

Additionally, Tennant’s CEO will forgo 100 per cent of his salary, senior leaders within the organisation will forgo 35 per cent of their salaries and the board of directors will take a 50 per cent cut in pay, through the second quarter of 2020.

CFO departure

Tennant also announced the resignation of senior vice president and CFO, Keith Woodward.

Woodward will continue to work with Tennant until July 31, 2020. Andy Cebulla, Tennant’s vice president of finance and corporate controller, will act in an interim capacity until a permanent CFO is named.

“On behalf of everyone at Tennant, I would like to thank Keith for his contributions during his time with the Company. We wish him the best in his future endeavors.” Killingstad said.

Preliminary first-quarter results

The company is providing the following preliminary results for the first quarter of 2020:

• Net sales of $252 million;
• GAAP EPS in the range of $0.26 to $0.29 per diluted share;
• Adjusted EPS in the range of $0.55 to $0.58 per diluted share, which excludes certain non-operational items and amortization expense;
• Adjusted EBITDA of $25.4 million to $26.4 million.

Given the uncertain impact of the coronavirus pandemic, the company is withdrawing the full-year guidance it provided on February 20, 2020.

Tennant Company will report its 2020 first quarter results on Wednesday, May 6, 2020. The company will conduct a conference call to discuss the results.

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