TENNANT CO 10-Q

Item 1. Financial Statements TENNANT COMPANY CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (In millions, except shares and per share data) Three Months Ended March 31, 2026 2025 Net sales $ 297.9 $ 290.0 Cost of sales 184.3 170.0 Gross profit 113.6 120.0 Selling and administrative expense 98.1 90.7 Research and development expense 10.6 9.7 Operating income 4.9 19.6 Interest expense, net ( 3.4 ) ( 2.3 ) Net foreign currency transaction loss ( 0.4 ) ( 0.2 ) Other (expense) income, net ( 0.2 ) 0.1 Income before income taxes 0.9 17.2 Income tax expense 0.7 4.1 Net income $ 0.2 $ 13.1 Net income per share Basic $ 0.01 $ 0.70 Diluted $ 0.01 $ 0.69 Weighted average shares outstanding Basic 17,558,556 18,702,438 Diluted 17,804,603 18,960,007 See accompanying notes to consolidated financial statements. 3 Table of Contents TENNANT COMPANY CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) (In millions) Three Months Ended March 31, 2026 2025 Net income $ 0.2 $ 13.1 Other comprehensive (loss) income: Foreign currency translation adjustments (net of related tax (expense) benefit of $( 0.3 ) and $ 0.2 , respectively) ( 4.8 ) 15.5 Pension and postretirement medical benefits (net of related tax expense of $ 0 and $ 0 , respectively) — ( 0.1 ) Derivative financial instruments (net of related tax (expense) benefit of $( 0.2 ) and $ 0.0 , respectively) 0.7 ( 0.1 ) Total other comprehensive (loss) income, net of tax ( 4.1 ) 15.3 Total comprehensive (loss) income including noncontrolling interest ( 3.9 ) 28.4 Foreign currency translation adjustments attributable to noncontrolling interest — 0.4 Comprehensive (loss) income attributable to Tennant Company $ ( 3.9 ) $ 28.0 See accompanying notes to consolidated financial statements. 4 Table of Contents TENNANT COMPANY CONSOLIDATED BALANCE SHEETS (Unaudited) (In millions, except shares and per share data) March 31, 2026 December 31, 2025 ASSETS Cash and cash equivalents $ 82.6 $ 106.4 Receivables, less allowances of $ 10.5 and $ 10.4 , respectively 280.6 256.8 Inventories 204.6 198.5 Prepaid and other current assets 43.3 38.0 Total current assets 611.1 599.7 Property, plant and equipment, less accumulated depreciation of $ 297.1 and $ 289.0 , respectively 185.4 189.8 Operating lease assets 55.6 56.9 Goodwill 209.9 208.6 Intangible assets, net 52.5 52.6 Other assets 162.1 161.3 Total assets $ 1,276.6 $ 1,268.9 LIABILITIES AND EQUITY Current portion of long-term debt $ 0.4 $ 0.4 Accounts payable 123.1 127.5 Employee compensation and benefits 39.6 40.9 Other current liabilities 125.5 124.3 Total current liabilities 288.6 293.1 Long-term debt 358.3 273.2 Long-term operating lease liabilities 33.8 35.5 Employee benefits 15.4 15.7 Deferred income taxes 4.2 3.3 Other liabilities 43.3 44.7 Total long-term liabilities 455.0 372.4 Total liabilities $ 743.6 $ 665.5 Commitments and contingencies (Note 13) Common Stock, $ 0.375 par value; 60,000,000 shares authorized; 17,037,788 and 17,846,681 shares issued and outstanding, respectively 6.4 6.7 Additional paid-in capital — — Retained earnings 562.1 628.1 Accumulated other comprehensive loss ( 37.3 ) ( 33.2 ) Total Tennant Company shareholders' equity 531.2 601.6 Noncontrolling interest 1.8 1.8 Total equity 533.0 603.4 Total liabilities and total equity $ 1,276.6 $ 1,268.9 See accompanying notes to consolidated financial statements. 5 Table of Contents TENNANT COMPANY CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In millions) Three Months Ended March 31, 2026 2025 OPERATING ACTIVITIES Net income $ 0.2 $ 13.1 Adjustments to reconcile net income to net cash used in operating activities: Depreciation expense 11.4 10.6 Amortization expense 3.5 3.4 Deferred income tax benefit 3.3 0.5 Share-based compensation expense 1.5 3.2 Bad debt and returns expense 0.5 0.7 Other, net 0.1 0.2 Changes in operating assets and liabilities: Receivables ( 25.2 ) 10.9 Inventories ( 11.7 ) ( 8.2 ) Accounts payable ( 2.5 ) ( 8.7 ) Employee compensation and benefits ( 2.1 ) ( 14.5 ) Other assets and liabilities ( 10.2 ) ( 11.6 ) Net cash used in operating activities ( 31.2 ) ( 0.4 ) INVESTING ACTIVITIES Purchases of property, plant and equipment ( 3.2 ) ( 7.0 ) Payments made in connection with business acquisition, net of cash acquired ( 7.2 ) — Investment in leased assets ( 0.1 ) ( 0.1 ) Cash received from leased assets 0.2 0.2 Net cash used in investing activities ( 10.3 ) ( 6.9 ) FINANCING ACTIVITIES Proceeds from borrowings 105.0 15.0 Repayments of borrowings ( 20.0 ) ( 0.8 ) Repurchases from exercise of stock options, net of employee tax withholdings obligations of $ 2.9 and $ 2.6 , respectively ( 2.3 ) ( 2.1 ) Repurchases of common stock ( 60.0 ) ( 20.2 ) Dividends paid ( 5.5 ) ( 5.6 ) Net cash provided by (used in) financing activities 17.2 ( 13.7 ) Effect of exchange rate changes on cash and cash equivalents 0.5 0.7 Net decrease in cash and cash equivalents ( 23.8 ) ( 20.3 ) Cash and cash equivalents at beginning of period 106.4 99.8 Cash and cash equivalents at end of period $ 82.6 $ 79.5 6 Table of Contents SUPPLEMENTAL CASH FLOW INFORMATION Three Months Ended March 31, (In millions) 2026 2025 Cash (received) paid for income taxes $ ( 1.9 ) $ 3.5 Cash paid for interest 4.1 2.9 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases 6.7 5.8 Financing cash flows from financing leases 0.1 — Lease assets obtained in exchange for new operating lease liabilities 4.2 4.0 Lease assets obtained in exchange for new financing lease liabilities 0.2 0.1 Supplemental non-cash investing and financing activities: Capital expenditures in accounts payable 1.5 1.6 See accompanying notes to consolidated financial statements. 7 Table of Contents TENNANT COMPANY CONSOLIDATED STATEMENTS OF EQUITY (Unaudited) (In millions, except shares and per share data) Tennant Company Shareholders Common Shares Common Stock Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Loss Tennant Company Shareholders' Equity Noncontrolling Interest Total Equity Balance, December 31, 2025 17,846,681 $ 6.7 $ — $ 628.1 $ ( 33.2 ) $ 601.6 $ 1.8 $ 603.4 Net income — — — 0.2 — 0.2 — 0.2 Other comprehensive loss — — — — ( 4.1 ) ( 4.1 ) — ( 4.1 ) Issue stock for directors, employee benefit and stock plans, net of related tax withholdings of 46,646 shares 140,877 — ( 2.3 ) — — ( 2.3 ) — ( 2.3 ) Share-based compensation — — 1.5 — — 1.5 — 1.5 Repurchases of common stock, including excise tax ( 949,770 ) ( 0.3 ) 0.8 ( 60.5 ) — ( 60.0 ) — ( 60.0 ) Dividends paid $ 0.310 per common share — — — ( 5.5 ) — ( 5.5 ) — ( 5.5 ) Other — — ( 0.2 ) — ( 0.2 ) — ( 0.2 ) Balance, March 31, 2026 17,037,788 $ 6.4 $ — $ 562.1 $ ( 37.3 ) $ 531.2 $ 1.8 $ 533.0 Tennant Company Shareholders Common Shares Common Stock Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Loss Tennant Company Shareholders' Equity Noncontrolling Interest Total Equity Balance, December 31, 2024 18,849,456 $ 7.1 $ 76.7 $ 609.7 $ ( 72.7 ) $ 620.8 $ 1.3 $ 622.1 Net income — — — 13.1 — 13.1 — 13.1 Other comprehensive income — — — — 15.3 15.3 — 15.3 Issue stock for directors, employee benefit and stock plans, net of related tax withholdings of 29,497 shares 89,695 ( 0.1 ) ( 2.1 ) — — ( 2.2 ) — ( 2.2 ) Share-based compensation — — 3.2 — — 3.2 — 3.2 Repurchases of common stock, including excise tax ( 235,866 ) — ( 20.2 ) — — ( 20.2 ) — ( 20.2 ) Dividends paid $ 0.295 per common share — — — ( 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 See accompanying notes to consolidated financial statements. 8 Table of Contents TENNANT COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (In millions, except shares and per share data) 1. Nature of Business 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 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. The Company reaches these customers through the industry's largest direct sales and service organization and through a strong and well-supported network of authorized distributors worldwide. 2. Significant Accounting Policies Basis of Presentation – The accompanying unaudited consolidated financial statements have been prepared in accordance with the U.S. Securities and Exchange Commission (“SEC”) requirements for interim reporting. In our opinion, the consolidated financial statements contain all adjustments (consisting of only normal recurring adjustments) necessary for the fair presentation of our financial position and results of operations. These statements should be read in conjunction with the consolidated financial statements and notes included in our annual report on Form 10-K for the year ended December 31, 2025. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. There are no newly adopted accounting pronouncements during the three months ended March 31, 2026 that impacted the Company. 3 . Revenue Disaggregation of Revenue The following tables illustrate the disaggregation of revenue by geographic area, groups of similar products and services and sales channels: Net sales by geographic area Three Months Ended March 31, 2026 2025 Americas $ 194.0 $ 197.3 Europe, Middle East and Africa 86.9 76.0 Asia Pacific 17.0 16.7 Total $ 297.9 $ 290.0 Net sales are attributed to each geographic area based on the end-user country and are net of intercompany sales. 9 Table of Contents Net sales by groups of similar products and services Three Months Ended March 31, 2026 2025 Equipment $ 178.1 $ 172.8 Parts and consumables 64.6 67.3 Service and other 55.2 49.9 Total $ 297.9 $ 290.0 Net sales by sales channel Three Months Ended March 31, 2026 2025 Sales direct to consumer $ 210.2 $ 205.1 Sales to distributors 87.7 84.9 Total $ 297.9 $ 290.0 Contract Liabilities Sales Returns The right of return may exist explicitly or implicitly with our customers. When the right of return exists, we adjust the transaction price for the estimated effect of returns. We estimate the expected returns using the expected value method by assessing historical sales levels and the timing and magnitude of historical sales return levels as a percent of sales and projecting this experience into the future. 10 Table of Contents Sales Incentives Our sales contracts may contain various customer incentives, such as volume-based rebates or other promotions. We reduce the transaction price for certain customer programs and incentive offerings that represent variable consideration. 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. A majority of our customer incentives are settled within one year. We record our accruals for volume-based rebates and other promotions in other current liabilities on our consolidated balance sheets. The change in our sales incentive accrual balance was as follows: Three Months Ended March 31, 2026 2025 Beginning balance $ 14.8 $ 16.1 Additions to sales incentive accrual 5.8 5.7 Contract payments ( 9.9 ) ( 7.9 ) Foreign currency fluctuations ( 0.1 ) ( 0.3 ) Ending balance $ 10.6 $ 13.6 Deferred Revenue Deferred revenue represents consideration received or billed in advance of satisfying performance obligations that are recognized over time. Our deferred revenue balance primarily consists of (i) amounts related to autonomous robotic machine ("AMR") arrangements that are recognized over time and (ii) prepaid service and maintenance contracts for our machines. Service and maintenance contracts generally provide routine maintenance, parts coverage, and support services and are recognized ratably over the contractual service period, which typically ranges from 12 months to 60 months. Prior to March 1, 2026, certain AMR customer arrangements required an active autonomy subscription for customers to benefit from autonomous functionality. Amounts allocated to these subscription-based arrangements were recognized over the contractual subscription period and included in deferred revenue. Effective March 1, 2026, the Company amended its AMR arrangements such that customers receive full rights to the embedded autonomy software upon delivery of the machine along with ongoing connectivity services. Revenue associated with the embedded autonomy software is recognized at the time of sale. Revenue related to connectivity services (which include cloud connectivity, software updates, diagnostic, monitoring and support services) is recognized on a straight line basis over the period the services are made available. In arrangements that include multiple performance obligations, the transaction price is allocated to each performance obligation based on relative standalone selling prices. 11 Table of Contents The change in the deferred revenue balance was as follows: Three Months Ended March 31, 2026 2025 Beginning balance $ 32.4 $ 20.6 Increase in deferred revenue representing our obligation to satisfy future performance obligations 8.3 5.7 Decrease in deferred revenue for amounts recognized in net sales for satisfied performance obligations ( 6.2 ) ( 3.9 ) Foreign currency fluctuations ( 0.1 ) 0.1 Ending balance $ 34.4 $ 22.5 As of March 31, 2026, $ 16.9 million and $ 17.5 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: Remaining 2026 $ 14.6 2027 8.3 2028 5.8 2029 3.9 2030 1.7 Thereafter 0.1 Total $ 34.4 As of December 31, 2025, $ 16.6 million and $ 15.8 million of deferred revenue was reported in other current liabilities and other liabilities, respectively, on our consolidated balance sheets. 12 Table of Contents 4. Management Actions Restructuring Actions During the three months ended March 31, 2026, 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 March 31, 2026 2025 Severance-related costs $ 0.3 $ 1.5 Total pre-tax restructuring costs $ 0.3 $ 1.5 Our restructuring actions represent the execution of a multi-year enterprise strategy to drive increased productivity throughout our operations. The charges in 2026 and 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: Three Months Ended March 31, 2026 2025 Beginning balance $ 7.4 $ 8.6 New charges 1.0 1.7 Cash payments ( 2.5 ) ( 3.0 ) Foreign currency fluctuations ( 0.1 ) 0.2 Adjustments to accrual ( 0.7 ) ( 0.2 ) Ending balance $ 5.1 $ 7.3 5. Acquisitions Clean Machine On February 2, 2026, we acquired 100 % of Clean Machine Falkenberg AB and Repax AB (collectively, "Clean Machine"), as we continue to expand our footprint in the EMEA region. The total purchase price was $7.7 million. The financial results for Clean Machine have been included in our consolidated financial statements since the acquisition date. The acquisition was not material to our consolidated financial statements. R4Y On September 1, 2025, we acquired 100 % of Reinigungstechnik 4 You GmbH ("R4Y"), as we continue to expand our footprint in the EMEA region. The total purchase price was $ 3.6 million. The financial results for R4Y have been included in our consolidated financial statements since the acquisition date. The acquisition was not material to our consolidated financial statements. 13 Table of Contents 6. Inventories Inventories are valued at the lower of cost or net realizable value and consisted of the following: March 31, 2026 December 31, 2025 Inventories carried at LIFO: Finished goods (a) $ 91.4 $ 85.0 Raw materials and work-in-process 32.6 35.5 Excess of FIFO over LIFO cost (b) ( 59.6 ) ( 54.9 ) Total LIFO inventories $ 64.4 $ 65.6 Inventories carried at FIFO: Finished goods (a) $ 69.3 $ 64.3 Raw materials and work-in-process 70.9 68.6 Total FIFO inventories $ 140.2 $ 132.9 Total inventories $ 204.6 $ 198.5 (a) Finished goods include machines, parts and consumables and component parts that are used in our products. (b) The difference between replacement cost and the stated LIFO inventory value is not materially different from the reserve for the LIFO valuation method. 7. Goodwill and Intangible Assets The changes in the carrying amount of goodwill for the three months ended March 31, 2026 were as follows: Goodwill Accumulated Impairment Losses Total Balance as of December 31, 2025 $ 243.9 $ ( 35.3 ) $ 208.6 Additions 3.7 — 3.7 Foreign currency fluctuations ( 3.0 ) 0.6 ( 2.4 ) Balance as of March 31, 2026 $ 244.6 $ ( 34.7 ) $ 209.9 The balances of acquired intangible assets, excluding goodwill, were as follows: Customer Lists Trade Names Technology Total Balance as of March 31, 2026 Original cost $ 176.3 $ 30.7 $ 16.8 $ 223.8 Accumulated amortization ( 128.9 ) ( 26.9 ) ( 15.5 ) ( 171.3 ) Carrying value $ 47.4 $ 3.8 $ 1.3 $ 52.5 Weighted average original life (in years) 14 10 12 Balance as of December 31, 2025 Original cost $ 174.9 $ 31.1 $ 16.7 $ 222.7 Accumulated amortization ( 128.1 ) ( 26.6 ) ( 15.4 ) ( 170.1 ) Carrying value $ 46.8 $ 4.5 $ 1.3 $ 52.6 Weighted average original life (in years) 14 10 12 14 Table of Contents Amortization expense on intangible assets for the three months ended March 31, 2026 and 2025 was $ 3.5 million and $ 3.4 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: Remaining 2026 $ 9.7 2027 9.2 2028 7.3 2029 6.7 2030 6.1 Thereafter 13.5 Total $ 52.5 8. Debt 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 Amended and Restated Credit Agreement, dated April 5, 2021, as amended on November 10, 2022. 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. Borrowings may be denominated in U.S. dollars or certain other currencies. The fee for undrawn committed funds under the revolving facility of the 2024 Credit Agreement ranges from an annual rate of 0.15 % to 0.30 %, depending on our leverage ratio. Borrowings denominated in U.S. dollars under the 2024 Credit Agreement bear interest at a rate per annum equal to (a) the greatest of (i) the prime rate, (ii) the NYFRB Rate (as defined in the 2024 Credit Agreement) plus 0.50 % and (iii) the Adjusted Term SOFR Rate (as defined in the 2024 Credit Agreement) for a one month period plus 1 %; but in any case not less than 1 %, plus an additional spread of 0.25 % to 1 %, depending on our leverage ratio, (b) the Adjusted Term SOFR Rate plus an additional spread of 1.25 % to 2 %, depending on our leverage ratio, or (c) the Adjusted Daily Simple RFR (as defined in the 2024 Credit Agreement) plus an additional spread of 1.25 % to 2 %, depending on our leverage ratio. In connection with the 2024 Credit Agreement, we reaffirmed our security interest in favor of the lenders in substantially all its personal property and pledged the stock of certain of its domestic and foreign subsidiaries. The obligations under the 2024 Credit Agreement are also guaranteed by certain of the Company’s subsidiaries and those subsidiaries also provided a security interest in their similar personal property. The 2024 Credit Agreement contains customary representations, warranties and covenants, including but not limited to covenants restricting the Company’s ability to incur indebtedness and liens and merge or consolidate with another entity. Further, the 2024 Credit Agreement contains the following covenants: • a covenant requiring us to maintain an indebtedness to EBITDA ratio, determined as of the end of each of its fiscal quarters, of no greater than 3.75 to 1.00, with certain alternative requirements for permitted acquisitions of at least $ 50.0 million; • a covenant requiring us to maintain an EBITDA to interest expense ratio for a period of four consecutive fiscal quarters as of the end of each quarter of no less than 3.00 to 1; and • 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 were in compliance with the above financial covenants as of March 31, 2026. 15 Table of Contents Debt Outstanding Debt outstanding consisted of the following: March 31, 2026 December 31, 2025 Credit facility borrowings: Revolving credit facility borrowings $ 357.5 $ 272.5 Finance lease liabilities 1.2 1.1 Total debt 358.7 273.6 Less: current portion of long-term debt (a) ( 0.4 ) ( 0.4 ) Long-term debt $ 358.3 $ 273.2 (a) As of March 31, 2026, the Company was required to repay $ 0.4 million of finance lease liabilities over the next 12 months. As of March 31, 2026, we had outstanding borrowings of $ 357.5 million under our revolving credit facility. We had letters of credit and bank guarantees outstanding in the amount of $ 3.2 million, leaving approximately $ 289.3 million of unused borrowing capacity on our revolving facility. Commitment fees on unused lines of credit for the three months ended March 31, 2026 were $ 0.1 million. The overall weighted average cost of debt was approximately 5.0 % and net of related cross-currency swap instruments and fixed rate interest rate swap instruments was approximately 4.1 %. Further details regarding the cross-currency swap instrument and fixed rate interest rate swap instrument are discussed in Note 10. 9. Warranty We record a liability for warranty claims at the time of sale. The amount of the liability is based on the trend in the historical ratio of claims to sales, the historical length of time between the sale and resulting warranty claim, new product introductions and other factors. Warranty terms on machines generally range from one to four years . The majority of the liability for estimated warranty claims represents amounts to be paid out in the near term for qualified warranty issues. The changes in warranty reserves were as follows: Three Months Ended March 31, 2026 2025 Beginning balance $ 9.7 $ 10.5 Additions charged to expense 0.9 1.4 Foreign currency fluctuations — 0.1 Claims paid ( 1.1 ) ( 1.8 ) Ending balance $ 9.5 $ 10.2 10. Derivatives We report all derivative instruments as either assets or liabilities in our consolidated balance sheets at fair value. As a global organization, we are exposed to market risks, including fluctuations in foreign currency exchange rates and interest rates. To manage the volatility associated with these exposures, we enter into derivative instruments from time to time in accordance with our risk management policies. We designate instruments as hedges on a transaction basis to support hedge accounting when the applicable criteria are met. The changes in fair value on these hedging instruments are intended to offset, in part or in whole, the corresponding changes in the fair value or cash flows of the underlying exposures being hedged. 16 Table of Contents Gains and losses resulting from changes in fair value are accounted for based on the nature and use of the derivative and whether it is designed and qualifies for hedge accounting. We assess hedge effectiveness at the inception of the hedging relationship and on an ongoing basis, both prospectively and retrospectively, in accordance with our policy. Any ineffective portion of a hedging instrument is recorded in the same line item of the consolidated statements of income as the item being hedged. Our hedging policy also establishes maximum limits for each counterparty to reduce concentration of credit risk. We do not purchase, hold, or sell derivative financial instruments for trading purposes. Cash Flow Hedges The Company manages exposure to variability in cash flows related to its floating rate debt through the use of interest rate swaps. As of March 31, 2026, the Company had interest rate swaps with an aggregate notional amount of $ 120.0 million that effectively convert a portion of its variable rate debt to a fixed interest rate of 3.443 %. The interest rate swaps are designated as cash flow hedges under ASC 815. Changes in the fair value of the swaps, net of tax, are recorded in accumulated other comprehensive loss and are reclassified to interest expense, net, in the periods in which the hedged interest payments affect earnings. The swaps are scheduled to mature on October 1, 2029. Fair Value Hedges On April 5, 2022, we entered into Euro to U.S. dollar foreign exchange cross-currency swaps associated with an intercompany loan to a wholly owned European subsidiary. We enter into these foreign exchange cross-currency swaps to hedge the foreign currency risk associated with this intercompany loan, and accordingly, they are not speculative in nature. These cross-currency swaps are designated as fair value hedges. As of March 31, 2026 and December 31, 2025, these cross-currency swaps included € 75.0 million of total notional value. As of March 31, 2026, the aggregated scheduled interest payments over the course of the loan and related swaps amounted to € 2.4 million. These swaps are scheduled to mature in April 2027. Net Investment Hedges On April 5, 2022, we entered into Euro to U.S. dollar foreign exchange cross-currency swaps to hedge our exposure to adverse foreign currency exchange rate movements between Tennant Company and its European subsidiaries. We enter into these fixed-to-fixed cross-currency swap agreements to protect a designated monetary amount of the Company’s net investment in its Euro functional currency subsidiaries against the risk of changes in the Euro to U.S. dollar foreign exchange rate. These cross-currency swaps are designated as net investment hedges. As of March 31, 2026 and December 31, 2025, the cross-currency swaps included € 75.0 million of total notional value. These swaps are scheduled to mature in April 2027. Foreign Currency Forward Contracts Not Designated as Hedges 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 March 31, 2026 and December 31, 2025, the notional amounts of foreign currency forward contracts outstanding not designated as hedging instruments were $ 85.5 million and $ 92.9 million, respectively. Balance Sheet Classification 17 Table of Contents Derivatives are classified as either current or non-current assets or liabilities based on their anticipated settlement dates. The following table summarizes the location and respective fair values of the Company's derivative financial instruments on a gross basis: March 31, 2026 Other Current Assets Other Current Liabilities Other Assets Other Liabilities Derivatives designated as cash flow hedges: Interest rate swaps $ 0.2 $ — $ 0.1 $ — Derivatives designated as fair value hedges: Cross-currency swaps 1.2 — — 7.4 Derivatives designated as net investment hedges: Cross-currency swaps 1.2 — — 7.4 Derivatives not designated as hedging instruments: Foreign currency forward contracts 0.5 0.1 — — December 31, 2025 Other Current Assets Other Current Liabilities Other Assets Other Liabilities Derivatives designated as cash flow hedges: Interest rate swaps $ — $ — $ — $ 0.4 Derivatives designated as fair value hedges: Cross-currency swaps 1.2 — — 8.9 Derivatives designated as net investment hedges: Cross-currency swaps 1.2 — — 8.9 Derivatives not designated as hedging instruments: Foreign currency forward contracts 0.3 0.1 — — The amount of the gains and losses on hedging instruments and the classification of those gains and losses within our consolidated financial statements for the three months ended March 31, 2026 were as follows: 18 Table of Contents Gain (Loss) Recognized in Accumulated Other Comprehensive Loss, net of tax Gain (Loss) Reclassified into Income Three Months Ended March 31, Three Months Ended March 31, 2026 2025 2026 2025 Location of Gain (Loss) in Income Statement Derivatives designated as cash flow hedges: Interest rate swaps $ 0.6 $ ( 0.4 ) $ — $ 0.1 Interest Expense, Net Derivatives designated as fair value hedges: Cross-currency swaps 0.3 0.7 0.2 0.3 Interest Expense, Net Derivatives designated as net investment hedges: Cross-currency swaps 1.4 ( 1.9 ) 0.2 0.2 Interest Expense, Net The amount of gains and losses on derivative instruments not designated as hedging instruments and the classification of those gains and losses within our consolidated financial statements during the three months ended March 31, 2026 were as follows: Gain (Loss) Reclassified into Income Three Months Ended March 31, 2026 2025 Location of Gain (Loss) in Income Statement Derivatives not designated as hedging instruments: Foreign currency forward contracts $ 1.4 $ ( 2.5 ) Net foreign currency transaction loss During the next twelve-month period, net (losses) gains expected to be reclassified into earnings are shown below: Interest rate swaps $ ( 0.1 ) Cross-currency swaps 1.2 Total $ 1.1 Such losses will be reclassified at the time that the underlying hedged transactions are realized. 19 Table of Contents 11. 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 securities include $ 12.1 million of redeemable convertible preferred stock, $ 12.2 million of non-redeemable convertible preferred stock, and $ 7.8 million of warrants. The redeemable convertible preferred stock is accounted for as an available-for-sale debt security. The non-redeemable convertible preferred stock and warrants are accounted for as equity securities. All securities were recorded at their allocated fair value at the acquisition date. In December 2025, the Company obtained the ability to exercise significant influence over Brain Corp and, as a result, adopted the equity method of accounting for its equity securities investment (see Note 12 – Equity Method Investments). The available-for-sale debt security is carried at fair value with changes in fair value recognized in accumulated other comprehensive loss. The Company estimates fair value using Level 3 inputs. As of March 31, 2026 and December 31, 2025, 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, 2026 Available-for-sale debt securities $ 12.1 $ 11.8 $ — $ ( 0.3 ) Total debt securities $ 12.1 $ 11.8 $ — $ ( 0.3 ) Balance as of December 31, 2025 Available-for-sale debt securities $ 12.1 $ 11.8 $ — $ ( 0.3 ) Total debt securities $ 12.1 $ 11.8 $ — $ ( 0.3 ) 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 $ 11.8 Total debt securities $ 12.1 $ 11.8 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 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 20 Table of Contents 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: • Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities. • Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. • Level 3: Unobservable inputs that reflect the reporting entity’s own assumptions. Our population of assets and liabilities subject to fair value measurements at March 31, 2026 was as follows: Fair Value Level 1 Level 2 Level 3 Assets: Debt securities 11.8 — — 11.8 Foreign currency forward contracts 0.5 — 0.5 — Cross-currency swaps 2.4 — 2.4 — Interest rate swaps 0.3 — 0.3 — Total assets 15.0 — 3.2 11.8 Liabilities: Foreign currency forward contracts 0.1 — 0.1 — Cross-currency swaps 14.8 — 14.8 — Total liabilities $ 14.9 $ — $ 14.9 $ — Our population of assets and liabilities subject to fair value measurements at December 31, 2025 was as follows: Fair Value Level 1 Level 2 Level 3 Assets: Debt securities 11.8 — — 11.8 Foreign currency forward contracts 0.3 — 0.3 — Cross-currency swaps 2.4 — 2.4 — Total assets 14.5 — 2.7 11.8 Liabilities: Foreign currency forward contracts 0.1 — 0.1 — Cross-currency swaps 17.8 — 17.8 — Interest rate swaps 0.4 — 0.4 — Total liabilities $ 18.3 $ — $ 18.3 $ — Our foreign currency forward 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 10. There were no transfers into or out of Level 3 investments in the periods ended March 31, 2026 and December 31, 2025. The fair value and carrying value of total debt, including current portion, was $ 370.6 million and $ 358.7 million, respectively, as of March 31, 2026. The fair value and carrying value of total debt, including current portion, was $ 281.4 million and $ 273.6 million, respectively, as of December 31, 2025. The fair value was estimated using 21 Table of Contents Level 3 inputs based on the borrowing rates currently available to us for bank loans with similar terms and remaining maturities. 12. Equity Method Investments On February 21, 2024, the Company acquired certain investment securities of Brain Corp, as further described in Note 11 - Fair Value Measurements. The investment consists of $ 12.2 million of non-redeemable convertible preferred stock and $ 7.8 million of warrants to purchase common shares. Prior to the vesting of all warrants on December 9, 2025, the Company accounted for the investment as an equity security under the measurement alternative. Upon vesting of the warrants, the Company's voting interest in Brain Corp increased to approximately 18 % and its overall ownership interest increased to approximately 12 %. Based on the voting interest, together with the board representation obtained in connection with the investment, the Company concluded that it has the ability to exercise significant influence over Brain Corp's operating and financial policies, but does not have controlling financial interest. Accordingly, beginning on December 9, 2025, the Company accounts for its investment in Brain Corp under the equity method of accounting. Due to the timing and availability of Brain Corp's financial information, the Company recognizes its share of Brain Corp's earnings or losses on a three-month lag, based on the investee's most recently available financial statements. The Company did not recognize material equity method earnings/(losses) for the three months ended March 31, 2026. As of March 31, 2026, the carrying amount of the Company's equity method investment in Brain Corp was $ 20.0 million and is included in Other Assets in the consolidated balance sheets. 13. Commitments and Contingencies 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. Oxygenator Water Techs vs. Tennant Company The Company is a defendant in an intellectual property litigation matter with Oxygenator Water Technologies, Inc. (OWT) in the United States District Court for the District of Minnesota. In November 2024, a jury returned a verdict against the Company, and in September 2025, the Court issued a post‑trial ruling enhancing damages. As of December 31, 2025 the Company has recorded a total accrued liability of approximately $ 20.5 million related to this matter. In the first quarter of 2026, the Company recorded an incremental accrued expense and corresponding liability of $ 0.2 million based on updated estimates of interest costs. The Company and OWT have appealed certain aspects of the Court’s decisions. To stay execution of the judgment pending appeal, the Company has obtained a supersedeas bond in the amount of $ 20.3 million. The bond was issued by a third‑party surety, and no cash collateral has been posted. While the ultimate resolution of this matter is uncertain, management believes it has appropriately accrued for its current estimate of probable loss. The ruling does not restrict the Company’s ability to sell its products and is not expected to impact its long‑term business objectives. Other Matters Except as described above, there have been no material changes in the Company’s estimated liabilities for self-insurance, litigation, environmental matters, guarantees, or indemnities, or in the related events and circumstances. 22 Table of Contents 14. Shareholders' Equity Accumulated Other Comprehensive Loss The changes in components of accumulated other comprehensive loss, net of tax, are as follows: Three Months Ended March 31, 2026 Foreign Currency Translation Adjustments Pension and Post- Retirement Medical Benefits Derivative Financial Instruments Unrealized Loss on Debt Securities Total Beginning balance $ ( 33.9 ) $ 1.1 $ ( 0.1 ) $ ( 0.3 ) $ ( 33.2 ) Other comprehensive (loss) income before reclassifications ( 4.6 ) — 0.9 — ( 3.7 ) Amounts reclassified from accumulated other comprehensive loss ( 0.2 ) — ( 0.2 ) — ( 0.4 ) Net current period other comprehensive (loss) income ( 4.8 ) — 0.7 — ( 4.1 ) Ending balance $ ( 38.7 ) $ 1.1 $ 0.6 $ ( 0.3 ) $ ( 37.3 ) Three Months Ended March 31, 2025 Foreign Currency Translation Adjustments (1) Pension and Post- Retirement Medical Benefits Derivative Financial Instruments Unrealized Gain on Debt Securities Total Beginning balance $ ( 75.2 ) $ 2.8 $ ( 0.5 ) $ 0.2 $ ( 72.7 ) 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 income (loss) 15.5 ( 0.1 ) ( 0.1 ) — 15.3 Ending balance $ ( 59.7 ) $ 2.7 $ ( 0.6 ) $ 0.2 $ ( 57.4 ) (1) Includes foreign currency translation adjustments attributable to noncontrolling interests of $ 0.4 million. 15. Income Taxes We and our subsidiaries are subject to U.S. federal income tax as well as income tax of numerous state and foreign jurisdictions. We are generally no longer subject to U.S. federal tax examinations for taxable years before 2019. The number of years which remain open for audit for U.S. state or foreign tax purposes varies by jurisdiction but generally ranges from three to five years . We are currently undergoing income tax examinations in various foreign jurisdictions. Although the outcome of these examinations cannot be currently determined, we believe that we have adequate reserves with respect to these examinations. We recognize potential accrued interest and penalties related to unrecognized tax benefits in income tax expense. In addition to the liability of $ 6.1 million for unrecognized tax benefits as of March 31, 2026, there was approximately $ 0.9 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, 2026 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. 23 Table of Contents 16. Share-Based Compensation Our share-based compensation plans are described in Note 18 of our annual report on Form 10-K for the year ended December 31, 2025. During the three months ended March 31, 2026 and 2025, we recognized total share-based compensation expense of $ 1.5 million and $ 3.2 million, respectively. The total excess tax recognized for share-based compensation arrangements during the three months ended March 31, 2026 and 2025 was a tax expense of $ 0.4 million and a tax benefit of $ 0.2 million, respectively. 17. Income Attributable to Tennant Company Per Share The computations of basic and diluted earnings per share were as follows: Three Months Ended March 31, 2026 2025 Numerator: Net income $ 0.2 $ 13.1 Denominator: Basic - weighted average shares outstanding 17,558,556 18,702,438 Effect of dilutive securities 246,047 257,569 Diluted - weighted average shares outstanding 17,804,603 18,960,007 Basic earnings per share $ 0.01 $ 0.70 Diluted earnings per share $ 0.01 $ 0.69 Excluded from the dilutive securities presented above were options to purchase and shares to be paid out under share-based compensation plans totaling 232,444 and 83,269 shares of common stock for the three months ended March 31, 2026 and 2025, 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. 18. 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") is our chief executive officer. The 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. 24 Table of Contents 19. Subsequent Event On April 29, 2026, the Board of Directors authorized a new share repurchase program under which the Company may repurchase up to 2,000,000 shares its our common stock through open market or privately negotiated transactions. This authorization is in addition to the approximately 560,000 shares remaining under the Company's existing share repurchase program. As a result, the Company has aggregate capacity to repurchase up to approximately 2,560,000 shares of its common stock. 25 Table of Contents