What changed in this filing

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Item 1. Financial Statements

2025-05-01 compared with 2024-11-01 · 142 added, 204 removed, 451 unchanged (43% of the section changed)

3 unchanged sentences

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

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

Net sales $ 290.0 $ 311.0

5 unchanged sentences

Interest expense, net ( 2.3 ) ( 2.3 )

Net foreign currency transaction (loss) gain ( 0.4 ) ( 0.4 ) 0.1 0.5

Other (expense) income, net — ( 1.1 ) 0.2 ( 1.8 )

Net foreign currency transaction loss ( 0.2 ) ( 0.2 )

Other income, net 0.1 0.1

Income before income taxes 17.2 35.1

11 unchanged sentences

(In millions) Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

Net income $ 13.1 $ 28.4

1 unchanged sentence

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

12.9 ( 10.6 ) ( 2.4 ) ( 5.2 )

Pension and postretirement medical benefits (net of related tax expense of $ 0.0 and $ 0.0 , respectively)

( 0.2 ) — ( 0.2 ) —

Derivative financial instruments (net of related tax benefit (expense) of $ 0.0 and $( 0.3 ), respectively)

( 1.7 ) 0.2 ( 0.4 ) 0.7

Total other comprehensive income (loss), net of tax 15.3 ( 7.2 )

Total comprehensive income $ 31.8 $ 12.5 $ 74.1 $ 74.0

Total comprehensive income including noncontrolling interest 28.4 21.2

Foreign currency translation adjustments attributable to noncontrolling interest 0.4 —

Comprehensive income attributable to Tennant Company $ 28.0 $ 21.2

See accompanying notes to consolidated financial statements.

1 unchanged sentence

CONSOLIDATED BALANCE SHEETS

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

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

2025 December 31,

Cash, cash equivalents, and restricted cash $ 91.3 $ 117.1

Cash and cash equivalents $ 79.5 $ 99.8

Receivables, less allowances of $ 7.5 and $ 7.1 , respectively

35 unchanged sentences

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions) Nine Months Ended

September 30,

(In millions) Three Months Ended

OPERATING ACTIVITIES

13 unchanged sentences

Other assets and liabilities ( 11.6 ) ( 15.5 )

Net cash provided by operating activities 52.2 124.6

Net cash (used in) provided by operating activities ( 0.4 ) 2.9

INVESTING ACTIVITIES

8 unchanged sentences

Repayments of borrowings ( 0.8 ) ( 26.2 )

Payment of debt financing costs ( 2.2 ) —

Proceeds from exercise of stock options, net of employee tax withholdings obligations 19.6 18.1

(Repurchases) proceeds from exercise of stock options, net of employee tax withholdings obligations of $ 2.6 and $ 3.5 , respectively

Repurchases of common stock ( 20.2 ) ( 1.1 )

Dividends paid ( 5.6 ) ( 5.3 )

Net cash used in financing activities ( 8.1 ) ( 87.1 )

Effect of exchange rate changes on cash, cash equivalents and restricted cash ( 0.8 ) ( 2.7 )

Net (decrease) increase in cash, cash equivalents and restricted cash ( 25.8 ) 19.6

Cash, cash equivalents and restricted cash at beginning of period 117.1 77.4

Cash, cash equivalents and restricted cash at end of period $ 91.3 $ 97.0

Net cash (used in) provided by financing activities ( 13.7 ) 26.9

Effect of exchange rate changes on cash and cash equivalents 0.7 2.5

Net decrease in cash and cash equivalents ( 20.3 ) ( 28.3 )

Cash and cash equivalents at beginning of period 99.8 117.1

Cash and cash equivalents at end of period $ 79.5 $ 88.8

SUPPLEMENTAL CASH FLOW INFORMATION

Nine Months Ended

September 30,

Three Months Ended

(In millions) 2025 2024

3 unchanged sentences

Operating cash flows from operating leases 5.8 4.7

Financing cash flows from financing leases 0.1 —

Lease assets obtained in exchange for new operating lease liabilities 4.0 3.8

25 unchanged sentences

— — ( 5.6 ) — ( 5.6 ) — ( 5.6 )

Other — — — — — 0.4 0.4

Balance, March 31, 2025 18,703,285 $ 7.0 $ 57.6 $ 617.2 $ ( 57.4 ) $ 624.4 $ 1.7 $ 626.1

Net income — — 27.9 — 27.9 — 27.9

Other comprehensive income — — — ( 6.8 ) ( 6.8 ) — ( 6.8 )

Issue stock for directors, employee benefit and stock plans, net of related tax withholdings of 5,132 shares

21,337 — 0.1 — — 0.1 — 0.1

Share-based compensation — 2.1 — — 2.1 — 2.1

Repurchases of common stock ( 77,514 ) — ( 8.0 ) — — ( 8.0 ) — ( 8.0 )

Dividends paid $ 0.280 per common share

— — ( 5.3 ) — ( 5.3 ) — ( 5.3 )

Balance, June 30, 2024 18,950,661 $ 7.1 $ 80.7 $ 593.1 $ ( 56.3 ) $ 624.6 $ 1.3 $ 625.9

Net income — — 20.8 — 20.8 — 20.8

Other comprehensive income — — — 11.0 11.0 — 11.0

Issue stock for directors, employee benefit and stock plans, net of related tax withholdings of 1,026 shares

2,246 — — — — — — —

Share-based compensation — 4.1 — — 4.1 — 4.1

Repurchases of common stock ( 80,115 ) — ( 8.0 ) — — ( 8.0 ) — ( 8.0 )

Dividends paid $ 0.280 per common share

— — ( 5.3 ) — ( 5.3 ) — ( 5.3 )

Balance, September 30, 2024 18,872,792 $ 7.1 $ 76.8 $ 608.6 $ ( 45.3 ) $ 647.2 $ 1.3 $ 648.5

See accompanying notes to consolidated financial statements.

Tennant Company Shareholders

17 unchanged sentences

Balance, March 31, 2024 19,006,838 $ 7.1 $ 86.5 $ 570.5 $ ( 49.5 ) $ 614.6 $ 1.3 $ 615.9

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

Net income — 22.9 — 22.9 — 22.9

Other comprehensive income — — ( 10.4 ) ( 10.4 ) — ( 10.4 )

Issue stock for directors, employee benefit and stock plans, net of related tax withholdings of 148 shares

222,566 — 13.9 — — 13.9 — 13.9

Share-based compensation — 4.7 — — 4.7 — 4.7

Repurchases of common stock ( 21,793 ) — ( 1.7 ) — — ( 1.7 ) — ( 1.7 )

Dividends paid $ 0.265 per common share

— — ( 5.0 ) — ( 5.0 ) — ( 5.0 )

Balance, September 30, 2023 18,741,371 $ 7.0 $ 71.0 $ 521.7 $ ( 54.7 ) $ 545.0 $ 1.3 $ 546.3

See accompanying notes to consolidated financial statements.

3 unchanged sentences

Summary of Significant Accounting Policies

Tennant Company ("the Company", "we", "us", or "our") is a world leader in designing, manufacturing and marketing solutions that empower customers to achieve quality cleaning performance, reduce environmental impact and help create a cleaner, safer, healthier world.

Tennant Company ("the Company", "we", "us", or "our") is a world leader in designing, manufacturing and marketing solutions that help create a cleaner, safer, healthier world.

The Company is committed to creating and commercializing breakthrough, sustainable cleaning innovations to enhance its broad suite of products, including floor maintenance and cleaning equipment, detergent-free and other sustainable cleaning technologies, aftermarket parts and consumables, equipment maintenance and repair service, and asset management solutions.

Our products are used in many types of environments, including retail establishments, distribution centers, factories and warehouses, public venues such as arenas and stadiums, office buildings, schools and universities, hospitals and clinics, and more.

Our products are used in many types of environments, including factories and warehouses, distribution centers, office buildings, public venues such as arenas and stadiums, schools and universities, hospitals and clinics, and more.

Customers include contract cleaners to whom organizations outsource facilities maintenance as well as businesses that perform facilities maintenance themselves.

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The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year.

Reclassification – Certain prior period amounts have been reclassified to conform to the current period presentation (e.g.

payroll tax accruals are now classified from Employee Compensation and Benefits to Other Current Liabilities).

These reclassifications had no effect on previously reported results of operations, total assets, total liabilities or stockholders' equity.

Newly Adopted Accounting Pronouncements

There are no newly adopted accounting pronouncements during the nine months ended September 30, 2024 that impacted the Company.

Segment Reporting

In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update (“ASU”) 2023-07, Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which amends the existing segment reporting guidance (ASC Topic 280 — Segment Reporting (“ASC 280”)) to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”) and included within each reported measure of segment profit or loss, an amount for other segment items by reportable segment and a description of its composition, the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources.

We have adopted the new standard effective December 31, 2024.

While the adoption has no impact on our consolidated financial statements, it has resulted in incremental disclosures within the footnotes to our consolidated financial statements.

Refer to Note 17, Segment Reporting, for the inclusion of the new required disclosures.

Disaggregation of Revenue

2 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 % Change 2024 2023 % Change

Americas $ 197.3 $ 215.6

5 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

Equipment $ 172.8 $ 189.8

4 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

Sales direct to consumer $ 205.1 $ 221.4

14 unchanged sentences

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

Nine Months Ended

September 30,

Three Months Ended

Beginning balance $ 16.1 $ 21.2

8 unchanged sentences

The change in the deferred revenue balance was as follows:

Nine Months Ended

September 30,

Three Months Ended

Beginning balance $ 20.6 $ 10.3

3 unchanged sentences

Ending balance $ 22.5 $ 10.9

At September 30, 2024, $ 8.3 million and $ 8.0 million of deferred revenue was reported in other current liabilities and other liabilities, respectively, on our consolidated balance sheets.

As of March 31, 2025, $ 10.8 million and $ 11.7 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:

1 unchanged sentence

Thereafter 0.1

At December 31, 2023, $ 7.9 million and $ 2.4 million of deferred revenue was reported in other current liabilities and other liabilities, respectively, on our consolidated balance sheets.

As of December 31, 2024, $ 9.8 million and $ 10.8 million of deferred revenue was reported in other current liabilities and other liabilities, respectively, on our consolidated balance sheets.

Management Actions

Restructuring Actions

During the three and nine months ended September 30, 2024 and September 30, 2023, we incurred restructuring expenses as part of our ongoing global reorganization efforts.

During the three months ended March 31, 2025, 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

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

Severance-related costs $ 1.5 $ —

Total pre-tax restructuring costs $ 1.5 $ —

The expense in 2024 impacted the Europe, Middle East and Africa (EMEA) operating segment.

The expense in 2023 impacted the EMEA and Asia Pacific (APAC) operating segments.

Our restructuring actions represent the continued execution of a multi-year enterprise strategy to drive increased productivity throughout our operations.

The charges in 2025 impacted all operating segments and were related to a global workforce realignment to support our key strategic initiatives.

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

Nine Months Ended

September 30,

Three Months Ended

Beginning balance $ 8.6 $ 2.4

6 unchanged sentences

Based in Austria, TCS was Tennant Company's largest Central and Eastern Europe distributor.

The acquisition gives Tennant a knowledgeable and experienced sales force and an established direct channel into countries including Romania, Hungary, Czech Republic, and Slovakia, along with an expanded network in Austria, Switzerland, Poland, and other nations in the region, as well as the Middle East and Africa.

Our consolidated financial results for the three months ended September 30, 2024 include $ 7.5 million of revenue and $ 1.1 million of net income related to TCS.

Our consolidated financial results for the nine months ended September 30, 2024 include $ 16.6 million of revenue and $ 2.3 million of net income related to TCS.

The proforma impact of this acquisition is immaterial to our operations.

The purchase price has been preliminarily allocated based on the estimated fair value of assets acquired and liabilities assumed at the date of the acquisition.

The preliminary purchase price allocation is subject to further refinement and may require adjustments to arrive at the final purchase price allocation.

These changes will

primarily relate to the impacts associated with income taxes.

Such finalization may result in material changes from the preliminary purchase price allocation.

The following table summarizes the preliminary fair value measurement of the assets acquired and liabilities assumed as of the date of acquisition:

2024 Adjustments June 30,

Switzerland, Poland, and other nations in the region, as well as the Middle East and Africa.

The pro forma impact of this acquisition is immaterial to our operations.

The purchase price was allocated based on the estimated fair value of assets acquired and liabilities assumed at the date of the acquisition.

The following table summarizes the fair value measurement of the assets acquired and liabilities assumed:

Components of purchase price:

2 unchanged sentences

Total purchase price 34.9

Cash 5.3 0.1 5.4

Other current assets 8.9

1 unchanged sentence

Customer lists 13.2

Backlog 0.6 — 0.6

Other assets 5.7

6 unchanged sentences

Included in the total purchase price is cash paid of $ 31.0 million and the settlement of $ 3.9 million of preexisting transactions.

In connection with the acquisition, we paid cash totaling $ 30.8 million on the acquisition date of February 29, 2024 and $ 0.2 million in the second quarter of 2024.

There were no adjustments to purchase price allocation in the third quarter of 2024.

The goodwill is not expected to be deductible for income tax purposes.

The expected lives of the acquired intangible assets is 3 months and 10 years for backlog and customer lists, respectively, and are being amortized on a straight-line basis.

The goodwill is not deductible for income tax purposes.

The useful lives of the acquired intangible assets is 3 months and 10 years for backlog and customer lists, respectively, and are being amortized on a straight-line basis.

Inventories are valued at the lower of cost or net realizable value and consisted of the following:

September 30,

2025 December 31,

15 unchanged sentences

Goodwill and Intangible Assets

The changes in the carrying amount of goodwill for the nine months ended September 30, 2024 were as follows:

The changes in the carrying amount of goodwill for the three months ended March 31, 2025 were as follows:

Goodwill Accumulated

1 unchanged sentence

$ 218.1 $ ( 32.5 ) $ 185.6

Additions 9.5 — 9.5

Foreign currency fluctuations 8.3 ( 1.1 ) 7.2

Balance as of September 30, 2024

Balance as of March 31, 2025

$ 226.4 $ ( 33.6 ) $ 192.8

The additions to goodwill recorded during the first nine months of 2024 were related to our acquisition of TCS, as described further in Note 5.

The balances of acquired intangible assets, excluding goodwill, were as follows:

Customer Lists Trade Names Technology Total

Balance as of September 30, 2024

Balance as of March 31, 2025

Original cost $ 160.8 $ 28.7 $ 15.6 $ 205.1

7 unchanged sentences

Weighted average original life (in years) 15 11 11

As part of our acquisition of TCS, we acquired customer lists and backlog with a combined fair value of $ 13.8 million.

Further details regarding the preliminary purchase price allocation of TCS are described further in Note 5.

Amortization expense on intangible assets for the three and nine months ended September 30, 2024 was $ 3.6 million and $ 11.4 million, respectively.

Amortization expense on intangible assets for the three and nine months ended September 30, 2023 was $ 3.5 million and $ 11.0 million, respectively.

Amortization expense on intangible assets for the three months ended March 31, 2025 and 2024 was $ 3.4 million and $ 3.9 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:

1 unchanged sentence

Thereafter 14.4

On April 5, 2021, we and certain of our foreign subsidiaries entered into an Amended and Restated Credit Agreement (the “2021 Credit Agreement”) with JPMorgan Chase Bank, N.A.

as administrative agent.

On April 5, 2021, we and certain of our foreign subsidiaries entered into an Amended and Restated Credit Agreement (the “2021 Credit Agreement”).

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.

3 unchanged sentences

Pursuant to the Amendment, borrowings denominated in U.S.

(iii) the adjusted Term SOFR Rate for a one month period, but in any case, not less than 1.0 %, plus, in any such case, 1.0 %, plus an additional spread of 0.10 % to 0.70 %, depending on our leverage ratio.

dollars bear interest at a rate per annum equal to (a) the Term SOFR Rate (as defined in the Amendment) plus a credit spread adjustment of 0.10 % per annum, but in any case, not less than 0 %, plus an additional spread of 1.10 % to 1.70 %, depending on our leverage ratio, or (b) the Alternate Base Rate (as defined in the Amendment), which is the greatest of (i) the prime rate, (ii) the federal funds rate plus 0.50 % and (iii) the adjusted Term SOFR Rate for a one month period, but in any case, not less than 1.0 %, plus, in any such case, 1.0 %, plus an additional spread of 0.10 % to 0.70 %, depending on our leverage ratio.

All other material terms included in the 2021 Credit Agreement remain unchanged as a result of the Amendment.

On August 7, 2024, we and certain of our foreign subsidiaries entered into an Amended and Restated Credit Agreement (the "2024 Credit Agreement") with JPMorgan Chase Bank, N.A.

as administrative agent, which amends and restates the 2021 Credit Agreement as amended by the Amendment.

On August 7, 2024, we and certain of our foreign subsidiaries entered into an Amended and Restated Credit Agreement (the "2024 Credit Agreement"), which amends and restates the 2021 Credit Agreement as amended by the Amendment.

The 2024 Credit Agreement provides us and certain of our foreign subsidiaries access to a senior secured credit facility until August 7, 2029, consisting of a revolving facility in an amount up to $ 650.0 million, with an option to expand the revolving facility or obtain incremental term loans by up to $ 325.0 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.

12 unchanged sentences

• a covenant restricting us from paying dividends or repurchasing stock if, after giving effect to such payments and assuming no default exists or would result from such payment, our leverage ratio is greater than 2.50 to 1, in such case limiting such payments to the greater of 10% of consolidated total assets and $ 100.0 million during any fiscal year.

We are in compliance with the covenants as of September 30, 2024.

We were in compliance with the above financial covenants as of March 31, 2025.

Debt Outstanding

Debt outstanding consisted of the following:

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

Credit facility borrowings:

Revolving credit facility borrowings $ 212.5 $ 197.5

Term loan facility borrowings — 90.0

Finance lease liabilities 1.3 1.2

Bank overdrafts — 0.8

Total debt 213.8 199.5

2 unchanged sentences

Long-term debt $ 213.3 $ 198.2

(a) As of September 30, 2024, the Company was required to repay $ 0.6 million of finance lease liabilities, and no amounts in outstanding credit facility borrowings, over the next 12 months.

As of September 30, 2024, we had outstanding borrowings of $ 207.5 million under our revolving credit facility.

(a) As of March 31, 2025, the Company was required to repay $ 0.5 million of finance lease liabilities, and no amounts in outstanding credit facility borrowings, over the next 12 months.

As of March 31, 2025, we had outstanding borrowings of $ 212.5 million under our revolving credit facility.

We had letters of credit and bank guarantees outstanding in the amount of $ 3.2 million, leaving approximately $ 434.3 million of unused borrowing capacity on our revolving facility.

Commitment fees on unused lines of credit for the nine months ended September 30, 2024 were $ 0.4 million.

Commitment fees on unused lines of credit for the three months ended March 31, 2025 were $ 0.2 million.

The overall weighted average cost of debt was approximately 5.7 % and net of related cross-currency swap instruments and fixed rate interest rate swap instruments was approximately 4.2 %.

5 unchanged sentences

The changes in warranty reserves were as follows:

Nine Months Ended

September 30,

Three Months Ended

Beginning balance $ 10.5 $ 11.1

9 unchanged sentences

Balance Sheet Hedges

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.

We hedge our net recognized foreign currency denominated assets and liabilities with foreign currency 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 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.

At September 30, 2024 and December 31, 2023, the notional amounts of foreign currency forward exchange contracts outstanding not designated as hedging instruments were $ 77.0 million and $ 73.0 million, respectively.

At March 31, 2025 and December 31, 2024, the notional amounts of foreign currency forward contracts outstanding not designated as hedging instruments were $ 83.5 million and $ 70.2 million, respectively.

Cash Flow Hedges

9 unchanged sentences

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

As of September 30, 2024 and December 31, 2023, these cross-currency swaps included € 75.0 million of total notional value.

As of September 30, 2024, the aggregated scheduled interest payments over the course of the loan and related swaps amounted to € 5.8 million.

As of March 31, 2025 and December 31, 2024, these cross-currency swaps included € 75.0 million of total notional value.

As of March 31, 2025, the aggregated scheduled interest payments over the course of the loan and related swaps amounted to € 4.7 million.

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

5 unchanged sentences

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

As of September 30, 2024 and December 31, 2023, the cross-currency swaps included € 75.0 million of total notional value.

As of March 31, 2025 and December 31, 2024, the cross-currency swaps included € 75.0 million of total notional value.

These swaps are scheduled to mature in April 2027.

1 unchanged sentence

Derivative Assets Derivative Liabilities

Balance Sheet Location September 30, 2024 December 31, 2023 Balance Sheet Location September 30, 2024 December 31, 2023

Balance Sheet Location March 31, 2025 December 31, 2024 Balance Sheet Location March 31, 2025 December 31, 2024

Derivatives designated as cash flow hedges:

8 unchanged sentences

Derivatives not designated as hedging instruments:

Foreign currency forward contracts Other current assets $ 0.1 $ — Other current liabilities $ 0.3 $ 1.6

As of September 30, 2024, we anticipate reclassifying $ 2.3 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 September 30,

Foreign currency forward contracts (a)

Other current assets $ 0.7 $ 0.8 Other current liabilities $ — $ —

(a) Contracts that mature within the next 12 months are included in other current assets and other current liabilities for asset derivatives and liabilities derivatives, respectively, on our consolidated balance sheets.

Contracts with maturities greater than 12 months are included in other assets and other liabilities for asset derivatives and liability derivatives, respectively, in our consolidated balance sheets.

Amounts included in our consolidated balance sheets are recorded net where a right of offset exists with the same derivative counterparty.

As of March 31, 2025, we anticipate reclassifying $ 2.4 million of gains from accumulated other comprehensive loss to net income during the next 12 months.

The following table 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 Gain (Loss) on Hedging Total Gain on Hedging

7 unchanged sentences

Interest expense, net $ ( 2.3 ) $ 0.2 $ ( 2.3 ) $ 1.9

Nine Months Ended September 30,

Total Gain (Loss) on Hedging Total Gain on Hedging

Derivatives designated as cash flow hedges:

Interest expense, net $ ( 7.5 ) $ 0.9 $ ( 11.0 ) $ 0.6

Net foreign currency transaction gain 0.1 — 0.5 —

Derivatives designated as fair value hedges:

Interest expense, net ( 7.5 ) 0.8 ( 11.0 ) 1.7

Net foreign currency transaction gain (loss) 0.1 ( 0.6 ) 0.5 2.8

Derivatives designated as net investment hedges:

Interest expense, net $ ( 7.5 ) $ 0.7 $ ( 11.0 ) $ 1.4

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

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

Derivatives designated as cash flow hedges:

3 unchanged sentences

Derivatives designated as fair value hedges:

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

0.6 ( 0.5 ) 0.9 ( 0.5 )

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

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

Derivatives designated as net investment hedges:

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

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

( 1.9 ) ( 1.3 )

Net gain reclassified from accumulated other comprehensive loss into income, net of tax, effective portion to interest expense, net 0.2 0.2 0.7 0.7

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

Derivatives not designated as hedging instruments:

Net (loss) gain recognized in income (b)

Net loss recognized in income (b)

$ ( 2.5 ) $ —

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

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

(b) Classified in net foreign currency transaction loss.

Fair Value Measurements

Financial Instruments

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

On February 21, 2024, the Company acquired certain investment securities in Brain Corp, a privately held autonomous technology company located in San Diego, California.

The investment will drive the development and adoption of Brain Corp's next generation of robotic and AI technologies.

The investment securities include $ 12.1 million of redeemable convertible preferred stock, accounted for as available-for-sale debt instruments.

The investment securities also include $ 12.2 million of non-redeemable convertible preferred stock and $ 7.8 million of warrants, accounted for as equity instruments under the elected measurement alternative.

The equity and debt securities were recorded at closing at their allocated fair values.

For equity instruments, the carrying amount will be adjusted to fair value through net income each period based upon observable transactions for identical or similar investments of the same issuer and monitored for impairment.

For debt instruments, the carrying amount will be adjusted to fair value each period through accumulated other comprehensive income (loss).

The securities will be measured to fair value based on Level 3 inputs.

As of March 31, 2025 and December 31, 2024, the cost and market values of our debt and equity securities were as follows:

Cost Fair Value Gross Unrealized Gains Gross Unrealized Losses

Balance as of March 31, 2025

Available-for-sale debt securities $ 12.1 $ 12.3 $ — $ —

Equity securities 20.0 20.0 — —

Total debt and equity securities $ 32.1 $ 32.3 $ — $ —

Balance as of December 31, 2024

Available-for-sale debt securities $ 12.1 $ 12.3 $ 0.2 $ —

Equity securities 20.0 20.0 — —

Total debt and equity securities $ 32.1 $ 32.3 $ 0.2 $ —

The aggregate unrealized gains and losses on available-for-sale debt securities, net of tax effects, are classified in accumulated other comprehensive loss within shareholders' equity.

Scheduled maturities of our debt securities were as follows:

Cost Fair Value

After 5 years through 10 years $ 12.1 $ 12.3

Total debt securities $ 12.1 $ 12.3

Fair Value Measurements and Financial Statement Presentation

Estimates of fair value for financial assets and financial liabilities are based on the framework established in the accounting guidance for fair value measurements.

The framework defines fair value, provides guidance for

measuring fair value and requires certain disclosures.

The framework defines fair value, provides guidance for measuring fair value and requires certain disclosures.

The framework discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow) and the cost approach (cost to replace the service capacity of an asset or replacement cost).

The framework utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels.

framework utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels.

The following is a brief description of those three levels:

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

Our population of assets and liabilities subject to fair value measurements at September 30, 2024 was as follows:

Our population of assets and liabilities subject to fair value measurements at March 31, 2025 was as follows:

Value Level 1 Level 2 Level 3

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Cross-currency swaps 2.6 — 2.6 —

Interest rate swaps 0.1 — 0.1 —

Total assets 35.6 — 3.3 32.3

Foreign currency forward contracts 0.3 — 0.3 —

Cross-currency swaps 4.9 — 4.9 —

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Value Level 1 Level 2 Level 3

Equity securities $ 20.0 $ — $ — $ 20.0

Debt securities 12.3 — — 12.3

Foreign currency forward contracts 0.8 — 0.8 —

Cross-currency swaps 3.4 — 3.4 —

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Total assets 36.6 — 4.3 32.3

Foreign currency forward contracts 1.6 — 1.6 —

Cross-currency swaps 6.7 — 6.7 —

Interest rate swaps 0.2 — 0.2 —

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Further details regarding our derivative instruments are discussed in Note 10.

On February 21, 2024, the Company acquired certain investment securities in Brain Corp, a privately held autonomous technology company located in San Diego, California.

The investment will drive the development and adoption of Brain Corp's next generation of robotic and AI technologies.

The investment securities include $ 12.1 million of redeemable convertible preferred stock, accounted for as available-for-sale debt instruments.

The equity and debt securities were recorded at closing at their allocated fair values.

For debt instruments, the carrying amount will be adjusted to fair value each period through other comprehensive income.

The securities will be measured to fair value based on Level 3 inputs.

As of September 30, 2024, the total carrying value of our equity and debt instruments was $ 20.0 million and $ 12.1 million, respectively, which is recorded in other assets on the consolidated balance sheet.

The debt instruments will mature on February 21, 2029.

There have been no remeasurements of the equity securities as of September 30, 2024.

Fair value adjustments for debt securities were not material as of September 30, 2024.

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 $ 209.2 million as of September 30, 2024.

There were no transfers into or out of Level 3 investments in the periods ended March 31, 2025 and December 31, 2024.

The fair value and carrying value of total debt, including current portion, was $ 242.9 million and $ 213.8 million, respectively, as of March 31, 2025.

The fair value and carrying value of total debt, including current portion, was $ 235.9 million and $ 199.5 million, respectively, as of December 31, 2024.

The fair value was estimated using Level 2 inputs based on the borrowing rates currently available to us for bank loans with similar terms and remaining maturities.

The fair value was estimated using

Level 3 inputs based on the borrowing rates currently available to us for bank loans with similar terms and remaining maturities.

Commitments and Contingencies

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.

Legal costs associated with such matters are expensed as incurred.

In the ordinary course of business, we are subject to the effects of certain contractual stipulations, events, transactions, and laws and regulations that may, at times, require the recognition of liabilities, such as those related to self-insurance estimated liabilities and claims, legal and contractual issues, environmental laws and regulations, guarantees, and indemnities.

We establish estimated liabilities when the associated costs related to uncertainties or guarantees become probable and can be reasonably estimated.

For the period ended March 31, 2025, no material changes have occurred in our estimated liabilities for self-insurance, litigation, environmental matters, guarantees, and indemnities, or relevant events and circumstances, from those disclosed in the Commitment and Contingencies footnote of the Notes to Consolidated Financial Statements within our annual report on Form 10-K for the year ended December 31, 2024.

Shareholders' Equity

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

Nine Months Ended September 30, 2024

Three Months Ended March 31, 2025

Foreign Currency

Adjustments Pension and Post-

Adjustments (1)

Pension and Post-

Retirement Medical

Benefits Derivative Financial Instruments Total

Benefits Derivative Financial Instruments Unrealized Gain on Debt Securities Total

Beginning balance $ ( 75.2 ) $ 2.8 $ ( 0.5 ) $ 0.2 $ ( 72.7 )

Other comprehensive (loss) income before reclassifications ( 1.7 ) ( 0.2 ) 1.3 ( 0.6 )

Other comprehensive income (loss) before reclassifications 15.7 ( 0.1 ) 0.3 — 15.9

Amounts reclassified from accumulated other comprehensive loss ( 0.2 ) — ( 0.4 ) — ( 0.6 )

Net current period other comprehensive loss ( 2.4 ) ( 0.2 ) ( 0.4 ) ( 3.0 )

Net current period other comprehensive income (loss) 15.5 ( 0.1 ) ( 0.1 ) — 15.3

Ending balance $ ( 59.7 ) $ 2.7 $ ( 0.6 ) $ 0.2 $ ( 57.4 )

Nine Months Ended September 30, 2023

(1) Includes foreign currency translation adjustments attributable to noncontrolling interests of $ 0.4 million.

Three Months Ended March 31, 2024

Foreign Currency

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

In addition to the liability of $ 4.7 million for unrecognized tax benefits as of September 30, 2024, 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 September 30, 2024 was $ 4.1 million.

In addition to the liability of $ 6.1 million for unrecognized tax benefits as of March 31, 2025, there was approximately $ 0.7 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, 2025 was $ 5.5 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.

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Our share-based compensation plans are described in Note 18 of our annual report on Form 10-K for the year ended December 31, 2024.

During the three months ended September 30, 2024 and 2023, we recognized total share-based compensation expense of $ 4.1 million and $ 4.7 million, respectively.

During the nine months ended September 30, 2024 and 2023, we recognized total share-based compensation expense of $ 9.4 million and $ 8.6 million, respectively.

The total excess tax recognized for share-based compensation arrangements during the nine months ended September 30, 2024 and 2023 was a tax benefit of $ 3.0 million and tax expense of $ 0.1 million, respectively.

Earnings Per Share

During the three months ended March 31, 2025 and 2024, we recognized total share-based compensation expense of $ 3.2 million.

The total excess tax recognized for share-based compensation arrangements during the three months ended March 31, 2025 and 2024 was a tax benefit of $ 0.2 million and $ 2.4 million, respectively.

Income Attributable to Tennant Company Per Share

The computations of basic and diluted earnings per share were as follows:

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

Net income $ 13.1 $ 28.4

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Diluted earnings per share $ 0.69 $ 1.49

Excluded from the dilutive securities shown above were options to purchase and shares to be paid out under share-based compensation plans of 4,124 and 169,458 shares of common stock during the three months ended September 30, 2024 and 2023, respectively.

Excluded from the dilutive securities shown above were options to purchase and shares to be paid out under share-based compensation plans of 88,992 and 325,862 shares of common stock during the nine months ended September 30, 2024 and 2023, 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.

Excluded from the dilutive securities presented above were options to purchase and shares to be paid out under share-based compensation plans totaling 83,269 and 37,508 shares of common stock for the three months ended March 31, 2025 and 2024, respectively.

These instruments were excluded when their exercise prices exceeded the average market price of our common stock for the period, when the number of shares we can repurchase under the treasury stock method exceeded the weighted average shares outstanding, or during periods of net loss, as their inclusion would have been anti-dilutive.

Segment Reporting

We are organized into four operating segments:

North America;

Latin America;

Europe, Middle East, Africa;

and Asia Pacific.

We combine our North America and Latin America operating segments into the "Americas" for reporting net sales by geographic area.

In accordance with the objective and basic principles of the applicable accounting guidance, we aggregate our operating segments into one reportable segment that consists of the design, manufacture and sale of products used primarily in the maintenance of nonresidential surfaces.

The Company's chief operating decision maker ("CODM") evaluates segment performance and makes resource allocation decisions using both net income and gross profit.

Net income, which is also reported as consolidated net income on the consolidated statements of income, is regularly reviewed to assess segment performance.

Additionally, the CODM uses gross profit to evaluate pricing and compare actual results to historical and forecasted data.

Significant expenses within net income include cost of sales, research and development, and selling and administrative expenses, which are each separately presented on the Company’s consolidated statements of income.

Other segment items within net income include net foreign currency transaction gain (loss), interest expense, net, other (expense) income, net, and income tax expense.

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