Tennant Company (TNC) Q4 2024 earnings summary

Executive summary

• Achieved record 2024 net sales of $1.287B, with adjusted EBITDA up 8.2% to $208.8M and margin expanding to 16.2%, driven by price and volume growth, especially in the Americas and AMR segment.

• Orders increased 6.4% year-over-year, with backlog reduced by $125M to normalized levels, improving lead times.

• Launched innovative AMR products (X4 ROVR, X6 ROVR, i-mop, T1581, T291), expanded sales to 30 new countries, and targeted AMR segment to exceed $100M in annual net sales by 2027.

• Returned $41M to shareholders via dividends and buybacks; board authorized a new 2M share repurchase program.

• APAC faced demand declines, especially in China and Australia, while Americas and EMEA showed resilience and growth.

Financial highlights

• Full-year net sales up 3.5% to $1.287B; adjusted EBITDA up $15.9M to $208.8M; adjusted EBITDA margin up 70 bps to 16.2%.

• Q4 net sales rose 5.6% to $328.9M; organic sales up 6.3%, led by Americas (+10%) and EMEA (+4%), offset by APAC (-19%).

• Full-year GAAP net income was $83.7M (down from $109.5M in 2023); adjusted EPS flat at $6.57.

• Adjusted gross margin for 2024 increased 20 bps to 42.7%; S&A expense as % of sales improved 60 bps to 27.4%.

• Free cash flow was $68.8M; net leverage at 0.48x adjusted EBITDA; free cash flow conversion at 113%.

Outlook and guidance

• 2025 guidance: net sales $1.210B–$1.250B, organic sales decline of -1% to -4% due to backlog headwind, FX impact of -2%.

• Adjusted EPS $5.70–$6.20; adjusted EBITDA $196M–$209M; adjusted EBITDA margin 16.2%–16.7%.

• Order growth expected at 3.5%–7% in 2025, with focus on margin expansion and cost management.

• Capital expenditures planned at ~$20M; ERP modernization costs expected at ~$50M in 2025.