Q2 2024 Tennant Co Earnings Call Transcript
Key Points
- Tennant Co (TNC) achieved a 2.9% increase in net sales to $331 million and an increase in adjusted EBITDA to $58.6 million, resulting in a margin of 17.7%.
- The company reported strong order demand with double-digit growth compared to both the first quarter of 2024 and the second quarter of 2023.
- Tennant Co (TNC) is increasing its full-year guidance for both net sales and adjusted EBITDA due to strong first-half performance.
- The company successfully launched the X4 ROVR, its first purpose-built autonomous floor-cleaning machine, and increased manufacturing capacity due to strong customer interest.
- Tennant Co (TNC) is making significant progress in sustainability, reducing Scope 1 and 2 greenhouse gas emissions by 13% and sourcing 92% of global electricity from renewable sources.
- Net income decreased to $27.9 million from $31.3 million in the prior year period, partly due to volume declines in EMEA and APAC regions.
- The APAC region faced a difficult quarter with an 11.9% decline in organic sales, primarily due to volume declines in China and Australia.
- Operating expenses increased due to ERP implementation and costs associated with investments in Brain Corp and the acquisition of TCS.
- Gross margin decreased by 30 basis points to 43.1% due to higher inflation, despite price realization and cost-saving activities.
- Free cash flow decreased to $14.4 million from $39.1 million in the prior year period, driven by increases in working capital and ERP modernization costs.
Good morning. My name is Karen, and I'll be your conference operator today. At this time, I'd like to welcome everyone to Tennant Company's second-quarter 2024 earnings conference call. This call is being recorded. (Operator Instructions) Thank you for participating in Tennant Company's second-quarter 2024 earnings conference call.
Beginning today's meeting is Mr. Lorenzo Bassi, Vice President, Finance and Investor Relations for Tennant Company. Mr. Bassi, you may begin.
Good morning, everyone, and welcome to Tennant Company's second-quarter 2024 earnings conference call. I'm Lorenzo Bassi, Vice President, Finance and Investor Relations. Joining me on the call today are Dave Huml, Tennant's President and CEO; and Fay West, Senior Vice President and CFO.
Today, we will provide an update on our 2024 second-quarter performance. Dave will discuss our results and enterprise strategy, and Fay will cover our financials. After our prepared remarks, we will open the call to questions. Our earnings
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