What changed in this filing

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Item 1. Financial Statements

2023-08-04 compared with 2023-04-28 · 126 added, 61 removed, 439 unchanged (30% of the section changed)

3 unchanged sentences

(In millions, except shares and per share data) Three Months Ended

June 30, Six Months Ended

2023 2022 2023 2022

Net sales $ 321.7 $ 280.2 $ 627.5 $ 538.3

3 unchanged sentences

Research and development expense 9.0 7.9 16.9 15.6

Gain on sale of assets — ( 3.7 ) — ( 3.7 )

Operating income 43.5 22.8 79.4 37.4

Interest expense, net ( 4.0 ) ( 1.2 ) ( 7.7 ) ( 1.5 )

Net foreign currency transaction (loss) gain ( 0.1 ) 0.6

Net foreign currency transaction gain (loss) 1.0 ( 1.0 ) 0.9 ( 0.4 )

Other expense, net ( 0.6 ) ( 0.3 ) ( 0.7 ) ( 0.5 )

11 unchanged sentences

(In millions) Three Months Ended

June 30, Six Months Ended

2023 2022 2023 2022

Net income $ 31.3 $ 16.6 $ 55.6 $ 26.9

1 unchanged sentence

Foreign currency translation adjustments (net of related tax benefit (expense) of $ 0.2 , $( 1.0 ), $ 0.3 , and $( 1.4 ), respectively)

Derivative financial instruments (net of related tax benefit of $ 0.2 and $ 0.1 , respectively)

0.1 ( 16.9 ) 5.4 ( 20.7 )

Derivative financial instruments (net of related tax expense of $ 0.4 , $ 0.3 , $ 0.2 , and $ 0.2 , respectively)

1.1 0.8 0.5 0.6

Total other comprehensive income (loss), net of tax 1.2 ( 16.1 ) 5.9 ( 20.1 )

3 unchanged sentences

CONSOLIDATED BALANCE SHEETS

(In millions, except shares and per share data) March 31,

(In millions, except shares and per share data) June 30,

2023 December 31,

37 unchanged sentences

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions) Three Months Ended

(In millions) Six Months Ended

OPERATING ACTIVITIES

6 unchanged sentences

Bad debt and returns expense 1.7 0.7

Gain on sale of assets — ( 3.7 )

Other, net 0.4 0.5

8 unchanged sentences

Purchases of property, plant and equipment ( 11.8 ) ( 10.5 )

Proceeds from sale of assets, net of cash divested — 4.1

Investment in leased assets ( 0.5 ) ( 4.0 )

4 unchanged sentences

Repayments of borrowings ( 42.5 ) ( 16.6 )

Change in finance lease obligations 0.2 —

Proceeds (repurchases) from exercise of stock options, net of employee tax withholdings obligations 4.2 ( 1.4 )

1 unchanged sentence

Dividends paid ( 9.8 ) ( 9.2 )

Net cash (used in) provided by financing activities ( 10.3 ) 8.3

Net cash used in financing activities ( 38.1 ) ( 12.2 )

Effect of exchange rate changes on cash, cash equivalents and restricted cash ( 1.7 ) ( 3.9 )

2 unchanged sentences

Cash, cash equivalents and restricted cash at end of period $ 95.8 $ 73.8

SUPPLEMENTAL CASH FLOW INFORMATION Three Months Ended

SUPPLEMENTAL CASH FLOW INFORMATION Six Months Ended

Cash paid for income taxes $ 12.3 $ 10.7

2 unchanged sentences

Operating cash flows from operating leases 9.2 9.5

Financing cash flows from financing leases — 0.1

Lease assets obtained in exchange for new operating lease liabilities 7.4 6.5

Lease assets obtained in exchange for new financing lease liabilities 0.4 —

Supplemental non-cash investing and financing activities:

24 unchanged sentences

Balance, March 31, 2023 18,541,033 $ 7.0 $ 53.0 $ 477.4 $ ( 45.5 ) $ 491.9 $ 1.3 $ 493.2

Net income — — 31.3 — 31.3 — 31.3

Other comprehensive income — — — 1.2 1.2 — 1.2

Issue stock for directors, employee benefit and stock plans, net of related tax withholdings of 4,258 shares

69,345 — 3.4 — — 3.4 — 3.4

Share-based compensation — 2.7 — — 2.7 — 2.7

Repurchases of common stock ( 69,780 ) — ( 5.0 ) — — ( 5.0 ) — ( 5.0 )

Dividends paid $ 0.265 per common share

— — ( 4.9 ) — ( 4.9 ) — ( 4.9 )

Balance, June 30, 2023 18,540,598 $ 7.0 $ 54.1 $ 503.8 $ ( 44.3 ) $ 520.6 $ 1.3 $ 521.9

Tennant Company Shareholders

16 unchanged sentences

Balance, March 31, 2022 18,579,816 $ 7.0 $ 54.6 $ 416.3 $ ( 41.9 ) $ 436.0 $ 1.3 $ 437.3

Net income — — 16.6 — 16.6 — 16.6

Other comprehensive income — — — ( 16.1 ) ( 16.1 ) — ( 16.1 )

Issue stock for directors, employee benefit and stock plans, net of related tax withholdings of 2,071 shares

9,859 — ( 0.1 ) — — ( 0.1 ) — ( 0.1 )

Share-based compensation — 0.9 — — 0.9 — 0.9

Dividends paid $ 0.25 per common share

— — ( 4.6 ) — ( 4.6 ) — ( 4.6 )

Balance, June 30, 2022 18,589,675 $ 7.0 $ 55.4 $ 428.3 $ ( 58.0 ) $ 432.7 $ 1.3 $ 434.0

See accompanying notes to consolidated financial statements.

19 unchanged sentences

The guidance was effective upon issuance and can generally be applied through December 31, 2024.

There has been no material impact to our financial condition, results of operations, or cash flows from reference rate reform as of March 31, 2023.

See Note 7 for information on the replacement of LIBOR with the Secured Overnight Financing Rate ("SOFR") in our Credit Agreements (defined below).

There has been no material impact to our financial condition, results of operations, or cash flows from reference rate reform as of June 30, 2023.

See Note 7 for information on the replacement of LIBOR with the Secured Overnight Financing Rate ("SOFR") in our Credit Agreements.

Disaggregation of Revenue

2 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2023 2022 2023 2022

Americas $ 216.6 $ 178.4 $ 421.0 $ 338.7

5 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2023 2022 2023 2022

Equipment $ 203.2 $ 172.1 $ 389.6 $ 330.2

4 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2023 2022 2023 2022

Sales direct to consumer $ 218.7 $ 179.7 $ 423.8 $ 343.5

10 unchanged sentences

Sales incentives given to our customers are recorded using the most likely amount approach for estimating the amount of consideration to which the Company will be entitled.

We forecast the most likely amount of the incentive to be paid at the time of sale, update this forecast quarterly, and adjust

the transaction price accordingly to reflect the new amount of incentives expected to be earned by the customer.

We forecast the most likely amount of the incentive to be paid at the time of sale, update this forecast quarterly, and adjust the transaction price accordingly to reflect the new amount of incentives expected to be earned by the customer.

A majority of our customer incentives are settled within one year.

1 unchanged sentence

The change in our sales incentive accrual balance was as follows:

Three Months Ended

Six Months Ended

Beginning balance $ 20.0 $ 19.9

8 unchanged sentences

The change in the deferred revenue balance was as follows:

Three Months Ended

Six Months Ended

Beginning balance $ 9.3 $ 11.2

3 unchanged sentences

Ending balance $ 8.9 $ 11.7

At March 31, 2023, $ 7.9 million and $ 2.3 million of deferred revenue was reported in other current liabilities and other liabilities, respectively, on our consolidated balance sheets.

At June 30, 2023, $ 6.7 million and $ 2.2 million of deferred revenue was reported in other current liabilities and other liabilities, respectively, on our consolidated balance sheets.

Of these amounts, we expect to recognize the following approximate amounts in net sales in the following periods:

4 unchanged sentences

Restructuring Actions

During the three months ended March 31, 2022, we incurred restructuring expenses as part of our ongoing global reorganization efforts.

The pre-tax charge of $ 0.8 million consisted of severance-related costs included in selling and administrative expense in the consolidated statements of income.

During the three and six months ended June 30, 2023 and June 30, 2022, we incurred restructuring expenses as part of our ongoing global reorganization efforts.

The following pre-tax restructuring charges were included in selling and administrative expense in the consolidated statements of income.

Three Months Ended

June 30, Six Months Ended

2023 2022 2023 2022

Severance-related costs $ 1.2 $ 0.1 $ 1.2 $ 0.3

Other costs — 0.3 — 0.3

Total pre-tax restructuring costs $ 1.2 $ 0.4 $ 1.2 $ 0.6

The charge in 2023 impacted the Europe, Middle East and Africa (EMEA) and Asia Pacific (APAC) operating segments.

The charge in 2022 primarily impacted the Americas operating segments.

1 unchanged sentence

A reconciliation of the beginning and ending liability balances for severance-related costs is as follows:

Three Months Ended

Six Months Ended

Beginning balance $ 1.7 $ 4.9

22 unchanged sentences

Goodwill and Intangible Assets

The changes in the carrying amount of goodwill for the three months ended March 31, 2023 were as follows:

The changes in the carrying amount of goodwill for the six months ended June 30, 2023 were as follows:

Goodwill Accumulated

2 unchanged sentences

Foreign currency fluctuations 5.8 ( 2.2 ) 3.6

Balance as of March 31, 2023

Balance as of June 30, 2023

$ 224.6 $ ( 39.0 ) $ 185.6

1 unchanged sentence

Customer Lists Trade Names Technology Total

Balance as of March 31, 2023

Balance as of June 30, 2023

Original cost $ 148.8 $ 29.0 $ 16.2 $ 194.0

7 unchanged sentences

Weighted average original life (in years) 15 11 11

Amortization expense on intangible assets for the three months ended March 31, 2023 and 2022 was $ 3.9 million and $ 4.5 million, respectively.

Amortization expense on intangible assets for the three and six months ended June 30, 2023 was $ 3.6 million and $ 7.5 million, respectively.

Amortization expense on intangible assets for the three and six months ended June 30, 2022 was $ 3.9 million and $ 8.4 million, respectively.

Estimated aggregate amortization expense based on the current carrying value of amortizable intangible assets for each of the five succeeding years and thereafter is as follows:

4 unchanged sentences

as administrative agent.

The 2021 Credit Agreement provides us and certain of our foreign subsidiaries access to a senior secured credit facility until April 3, 2026, consisting of a term loan facility in an amount up to $ 100.0 million and a revolving facility in an amount up to $ 450.0 million with an option to expand the credit facility by up to $ 275.0 million, with the consent of the lenders willing to provide additional borrowings in the form of increases to their revolving facility

commitment or funding of incremental term loans.

Borrowings may be denominated in U.S.

15 unchanged sentences

Debt outstanding consisted of the following:

March 31, 2023 December 31, 2022

June 30, 2023 December 31, 2022

Credit facility borrowings:

7 unchanged sentences

Long-term debt $ 272.7 $ 295.1

(a) As of March 31, 2023, the Company is required to repay $ 5.0 million in outstanding credit facility borrowings and $ 0.3 million of finance lease liabilities over the next 12 months.

As of March 31, 2023, we had outstanding borrowings of $ 205.0 million and $ 93.7 million under our revolving facility and term loan facility, respectively.

(a) As of June 30, 2023, the Company is required to repay $ 5.0 million in outstanding credit facility borrowings and $ 0.3 million of finance lease liabilities over the next 12 months.

As of June 30, 2023, we had outstanding borrowings of $ 185.0 million and $ 92.5 million under our revolving facility and term loan facility, respectively.

We had letters of credit and bank guarantees outstanding in the amount of $ 3.1 million, leaving approximately $ 261.9 million of unused borrowing capacity on our revolving facility.

Commitment fees on unused lines of credit for the three months ended March 31, 2023 were $ 0.2 million.

The overall weighted average cost of debt was approximately 5.8 % and net of related cross-currency swap instruments was approximately 4.9 %.

Commitment fees on unused lines of credit for the six months ended June 30, 2023 were $ 0.4 million.

The overall weighted average cost of debt was approximately 6.3 % and net of related cross-currency swap instruments and fixed rate interest rate swap instruments was approximately 5.2 %.

Further details regarding the cross-currency swap instrument are discussed in Note 9.

4 unchanged sentences

The changes in warranty reserves were as follows:

Three Months Ended

Six Months Ended

Beginning balance $ 10.9 $ 10.4

10 unchanged sentences

We hedge our net recognized foreign currency denominated assets and liabilities with foreign exchange forward contracts to reduce the risk that the value of these assets and liabilities will be adversely affected by changes in exchange rates.

These contracts hedge assets and liabilities that are denominated in foreign currencies and are carried at fair value as either assets or liabilities on the consolidated balance sheets with changes in the fair value recorded to net foreign currency transaction (loss) gain in our consolidated statements of income.

These contracts hedge assets and liabilities that are denominated in foreign currencies and are carried at fair value as either assets or liabilities on the consolidated balance sheets with changes in the fair value recorded to net foreign currency transaction gain (loss) in our consolidated statements of income.

These contracts do not subject us to material balance sheet risk due to exchange rate movements because gains and losses on these derivatives are intended to offset gains and losses on the assets and liabilities being hedged.

March 31, 2023 and December 31, 2022, the notional amounts of foreign currency forward exchange contracts outstanding not designated as hedging instruments were $ 100.1 million and $ 83.7 million, respectively.

At June 30, 2023 and December 31, 2022, the notional amounts of foreign currency forward exchange contracts outstanding not designated as hedging instruments were $ 106.7 million and $ 83.7 million, respectively.

Cash Flow Hedges

9 unchanged sentences

These cross-currency swaps are designated as fair value hedges.

As of March 31, 2023 and December 31, 2022, these cross-currency swaps included € 84.2 million and € 84.8 million of total notional value, respectively.

As of March 31, 2023, the aggregated scheduled interest payments over the course of the loan and related swaps amounted to € 9.2 million.

As of June 30, 2023 and December 31, 2022, these cross-currency swaps included € 83.6 million and € 84.8 million of total notional value, respectively.

As of June 30, 2023, the aggregated scheduled interest payments over the course of the loan and related swaps amounted to € 8.6 million.

The scheduled maturity and principal payment of the loan and related swaps of € 75.0 million are due in April 2027.

5 unchanged sentences

These cross-currency swaps are designated as net investment hedges.

As of December 31, 2022 and March 31, 2023, the cross-currency swaps included € 75.0 million of total notional values.

As of June 30, 2023 and December 31, 2022, the cross-currency swaps included € 75.0 million of total notional values.

These swaps are scheduled to mature in April 2027.

1 unchanged sentence

Derivative Assets Derivative Liabilities

Balance Sheet Location March 31, 2023 December 31, 2022 Balance Sheet Location March 31, 2023 December 31, 2022

Balance Sheet Location June 30, 2023 December 31, 2022 Balance Sheet Location June 30, 2023 December 31, 2022

Derivatives designated as cash flow hedges:

9 unchanged sentences

Foreign currency forward contracts Other current assets $ 0.5 $ 0.1 Other current liabilities $ 0.5 $ 0.3

As of March 31, 2023, we anticipate reclassifying $ 1.9 million of gains from accumulated other comprehensive loss to net income during the next 12 months.

The following tables includes the amounts in the consolidated statements of income in which the effects of derivatives designated as hedging instruments are recorded:

Three Months Ended

Total Amount of Gain on Hedging

Activity Total Amount of Gain on Hedging

As of June 30, 2023, we anticipate reclassifying $ 2.7 million of gains from accumulated other comprehensive loss to net income during the next 12 months.

The following tables include the amounts in the consolidated statements of income in which the effects of derivatives designated as hedging instruments are recorded:

Three Months Ended June 30,

Total Gain (Loss) on Hedging Total Gain (Loss) on Hedging

Derivatives designated as cash flow hedges:

Interest expense, net $ ( 4.0 ) $ 0.2 $ ( 1.2 ) $ —

Net foreign currency transaction (loss) gain ( 0.1 ) — 0.6 4.5

Net foreign currency transaction gain (loss) 1.0 — ( 1.0 ) 0.2

Derivatives designated as fair value hedges:

Interest expense, net ( 4.0 ) 0.2 ( 1.2 ) 0.4

Net foreign currency transaction (loss) gain ( 0.1 ) 1.2 0.6 —

Net foreign currency transaction gain (loss) 1.0 ( 0.4 ) ( 1.0 ) 4.3

Derivatives designated as net investment hedges:

Interest expense, net $ ( 4.0 ) $ 0.3 $ ( 1.2 ) $ 0.3

Six Months Ended

Total Gain (Loss) on Hedging Total Gain (Loss) on Hedging

Derivatives designated as cash flow hedges:

Net sales $ 627.5 $ — $ 538.3 $ —

Interest expense, net ( 7.7 ) 0.3 ( 1.5 ) 0.7

Net foreign currency transaction gain (loss) 0.9 — ( 0.4 ) 4.7

Derivatives designated as fair value hedges:

Interest expense, net ( 7.7 ) 1.4 ( 1.5 ) 0.4

Net foreign currency transaction gain (loss) 0.9 0.8 ( 0.4 ) 4.3

Derivatives designated as net investment hedges:

Interest expense, net $ ( 7.7 ) $ 1.2 $ ( 1.5 ) $ 0.3

The effect of derivative instruments designated as hedges and derivative instruments not designated as hedges in our consolidated statements of income was as follows:

Three Months Ended

June 30, Six Months Ended

2023 2022 2023 2022

Derivatives designated as cash flow hedges:

Net (loss) gain recognized in other comprehensive income (loss), net of tax (a)

Net gain recognized in other comprehensive income, net of tax (a)

$ 2.3 $ — $ 1.4 $ 3.8

Net gain reclassified from accumulated other comprehensive loss into income, net of tax, effective portion to interest expense, net 0.2 — 0.3 0.5

Net gain reclassified from accumulated other comprehensive loss into income, net of tax, effective portion to net foreign currency transaction gain — 3.5

Net gain reclassified from accumulated other comprehensive loss into income, net of tax, effective portion to net foreign currency transaction gain (loss) — 0.1 — 3.6

Derivatives designated as fair value hedges:

Net gain recognized in other comprehensive income (loss), net of tax (a)

Net (loss) gain recognized in other comprehensive income (loss), net of tax (a)

( 0.7 ) 4.7 — 4.7

Net gain reclassified from accumulated other comprehensive loss into income, net of tax, effective portion to interest expense, net 0.3 0.3 0.6 0.3

Net gain reclassified from accumulated other comprehensive loss into income, net of tax, effective portion to net foreign currency transaction gain (loss) — 3.3 — 3.3

Derivatives designated as net investment hedges:

Net loss recognized in other comprehensive income (loss), net of tax (a)

Net (loss) gain recognized in other comprehensive income (loss), net of tax (a)

( 1.0 ) — ( 1.1 ) —

Net gain reclassified from accumulated other comprehensive loss into income, net of tax, effective portion to interest expense, net 0.3 0.2 0.5 0.2

1 unchanged sentence

Net gain recognized in income (b)

$ 0.1 $ 4.2 $ 0.9 $ 2.6

(a) Net change in the fair value of the effective portion classified in other comprehensive income (loss).

(b) Classified in net foreign currency transaction (loss) gain.

(b) Classified in net foreign currency transaction gain (loss).

Fair Value Measurements

8 unchanged sentences

Unobservable inputs that reflect the reporting entity’s own assumptions.

Our population of assets and liabilities subject to fair value measurements at March 31, 2023 was as follows:

Our population of assets and liabilities subject to fair value measurements at June 30, 2023 was as follows:

Value Level 1 Level 2 Level 3

Foreign currency forward exchange contracts $ 0.5 $ — $ 0.5 $ —

Cross-currency swaps 2.9 — 2.9 —

13 unchanged sentences

Total liabilities $ 2.1 $ — $ 2.1 $ —

Our foreign currency forward exchange contracts and cross-currency swaps are valued using observable Level 2 market expectations at the measurement date and standard valuation techniques to convert future amounts to a single present value amount.

Our foreign currency forward exchange contracts, cross-currency swaps and interest rate swaps are valued using observable Level 2 market expectations at the measurement date and standard valuation techniques to convert future amounts to a single present value amount.

Further details regarding our derivative instruments are discussed in Note 9.

The carrying amounts reported in the consolidated balance sheets for cash and cash equivalents, restricted cash, accounts receivable, other current assets, accounts payable and other current liabilities approximate fair value due to their short-term nature.

The fair value and carrying value of total debt, including current portion, was $ 297.8 million and $ 299.1 million, respectively, as of March 31, 2023.

The fair value and carrying value of total debt, including current portion, was $ 277.1 million and $ 278.0 million, respectively, as of June 30, 2023.

The fair value and carrying value of total debt, including current portion, was $ 301.8 million and $ 300.3 million, respectively, as of December 31, 2022.

2 unchanged sentences

In the ordinary course of business, we may become liable with respect to pending and threatened litigation, tax, environmental and other matters.

While the ultimate results of current claims, investigations and lawsuits involving us are unknown at this time, we do not expect that these matters will have a material adverse effect on our consolidated financial position or results of operations.

While the ultimate results of current claims, investigations and lawsuits involving us are unknown at this time, we do not expect that these matters will have a material adverse effect on

our consolidated financial position or results of operations.

Legal costs associated with such matters are expensed as incurred.

2 unchanged sentences

The changes in components of accumulated other comprehensive loss, net of tax, are as follows:

Three Months Ended March 31, 2023 Three Months Ended March 31, 2022

Six Months Ended June 30, 2023

Foreign Currency

1 unchanged sentence

Retirement Medical

Benefits Derivative Financial Instruments Total Foreign Currency

Benefits Derivative Financial Instruments Total

Beginning balance $ ( 53.9 ) $ 2.7 $ 1.0 $ ( 50.2 )

Other comprehensive income before reclassifications 5.9 — 1.4 7.3

Amounts reclassified from accumulated other comprehensive loss ( 0.5 ) — ( 0.9 ) ( 1.4 )

Net current period other comprehensive income 5.4 — 0.5 5.9

Ending balance $ ( 48.5 ) $ 2.7 $ 1.5 $ ( 44.3 )

Six Months Ended June 30, 2022

Foreign Currency

Adjustments Pension and Post-

2 unchanged sentences

Beginning balance $ ( 36.0 ) $ ( 2.1 ) $ 0.2 $ ( 37.9 )

Other comprehensive income (loss) before reclassifications 5.5 — ( 0.2 ) 5.3 ( 3.8 ) — 3.8 —

Other comprehensive (loss) income before reclassifications ( 20.7 ) — 8.5 ( 12.2 )

Amounts reclassified from accumulated other comprehensive loss — — ( 7.9 ) ( 7.9 )

Net current period other comprehensive income (loss) 5.3 — ( 0.6 ) 4.7 ( 3.8 ) — ( 0.2 ) ( 4.0 )

Net current period other comprehensive (loss) income ( 20.7 ) — 0.6 ( 20.1 )

Ending balance $ ( 56.7 ) $ ( 2.1 ) $ 0.8 $ ( 58.0 )

8 unchanged sentences

We recognize potential accrued interest and penalties related to unrecognized tax benefits in income tax expense.

In addition to the liability of $ 4.1 million for unrecognized tax benefits as of March 31, 2023, there was approximately $ 0.6 million for accrued interest and penalties.

The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate as of March 31, 2023 was $ 3.9 million.

In addition to the liability of $ 3.6 million for unrecognized tax benefits as of June 30, 2023, there was approximately $ 0.4 million for accrued interest and penalties.

The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate as of June 30, 2023 was $ 3.3 million.

To the extent interest and penalties are not assessed with respect to uncertain tax positions, amounts accrued will be revised and reflected as an adjustment of the income tax expense.

1 unchanged sentence

Our share-based compensation plans are described in Note 18 of our annual report on Form 10-K for the year ended December 31, 2022.

During the three months ended March 31, 2023 and 2022, we recognized total share-based compensation expense of $ 1.2 million and $ 1.8 million, respectively.

The total excess tax benefit recognized for share-based compensation arrangements during the three months ended March 31, 2023 and 2022 was less than $ 0.1 million and $ 0.3 million, respectively.

During the three months ended June 30, 2023 and 2022, we recognized total share-based compensation expense of $ 2.7 million and $ 0.9 million, respectively.

During the six months ended June 30, 2023 and 2022, we recognized total share-based compensation expense of $ 3.9 million and $ 2.7 million, respectively.

The total excess tax recognized for share-based compensation arrangements during the six months ended June 30, 2023 and 2022 was a tax deficiency of $ 0.2 million and tax benefit of $ 0.3 million, respectively.

Earnings Per Share

1 unchanged sentence

Three Months Ended

June 30, Six Months Ended

2023 2022 2023 2022

Net income $ 31.3 $ 16.6 $ 55.6 $ 26.9

5 unchanged sentences

Diluted earnings per share $ 1.68 $ 0.89 $ 2.98 $ 1.44

Excluded from the dilutive securities shown above were options to purchase and shares to be paid out under share-based compensation plans of 393,242 and 191,587 shares of common stock during the three months ended March 31, 2023 and 2022, respectively.

Excluded from the dilutive securities shown above were options to purchase and shares to be paid out under share-based compensation plans of 261,376 and 698,378 shares of common stock during the three months ended June 30, 2023 and 2022, respectively.

Excluded from the dilutive securities shown above were options to purchase and shares to be paid out under share-based compensation plans of 449,763 and 402,696 shares of common stock during the six months ended June 30, 2023 and 2022, respectively.

These exclusions were made if the exercise prices of the options are greater than the average market price of our common stock for the period, if the number of shares we can repurchase under the treasury stock method exceeds the weighted average shares outstanding in the options or if we have a net loss, as these effects would be anti-dilutive.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements