What changed in this filing

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Item 1. Financial Statements

2022-08-09 compared with 2022-04-28 · 258 added, 115 removed, 585 unchanged (39% of the section changed)

3 unchanged sentences

Three Months Ended

Six Months Ended

(In millions, except shares and per share data)

1 unchanged sentence

$ 279.1  

$ 538.3  

$ 542.4  

Cost of sales

1 unchanged sentence

Research and development expense

Gain on sale of business

Gain on sale of assets

( 3.7 )  

Operating income

1 unchanged sentence

( 1.2 )  

Net foreign currency transaction gain

( 2.1 )  

( 1.5 )  

Net foreign currency transaction (loss) gain

( 1.0 )  

( 0.4 )  

Loss on extinguishment of debt

( 11.3 )  

Other (expense) income, net

( 0.3 )  

( 0.5 )  

Income before income taxes

Income tax expense

Net income attributable to Tennant Company

Income tax expense (benefit)

( 2.6 )  

$ 16.6  

Net income attributable to Tennant Company per share

$ 26.9  

$ 35.5  

Net income per share

$ 0.90  

$ 0.53  

$ 1.46  

$ 1.92  

$ 0.89  

$ 0.51  

$ 1.44  

$ 1.88  

Weighted average shares outstanding

3 unchanged sentences

18,501,930  

18,683,798  

18,931,703  

18,735,913  

18,879,616  

TENNANT COMPANY

2 unchanged sentences

Three Months Ended

Six Months Ended

(In millions)

Net income attributable to Tennant Company

$ 16.6  

$ 26.9  

Other comprehensive loss:

Foreign currency translation adjustments (net of related tax (expense) benefit of $ (0.4) and $ 0.1 , respectively)

$ 35.5  

Cash flow hedge (net of related tax benefit (expense) of $ 0.1 and $ 0.0 , respectively)

Other comprehensive (loss) income:

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

( 16.9 )  

Total other comprehensive loss, net of tax

( 20.7 )  

Comprehensive income attributable to Tennant Company

Pension and postretirement medical benefits (net of related tax benefit of $ 0 , $ 0.1 , $ 0 , and $ 0.1 , respectively)

Cash flow hedge (net of related tax expense of $ 0.3 , $ 0 , $ 0.2 , and $ 0 , respectively)

( 0.1 )  

Total other comprehensive (loss) income, net of tax

( 16.1 )  

( 20.1 )  

Comprehensive income

$ 14.7  

$ 29.7  

See accompanying notes to consolidated financial statements.

22 unchanged sentences

Long-term operating lease liabilities

Employee-related benefits

Employee benefits

Deferred income taxes

20 unchanged sentences

CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended

Six Months Ended

(In millions)

OPERATING ACTIVITIES

Net income including noncontrolling interest

$ 26.9  

$ 35.5  

Adjustments to reconcile net income to net cash provided by operating activities:

Adjustments to reconcile net income to net cash (used in) provided by operating activities:

Depreciation expense

Amortization expense

Deferred income tax expense (benefit)

Deferred income tax benefit

( 4.4 )  

1 unchanged sentence

Bad debt and returns expense

Gain on sale of business

Acquisition contingent consideration adjustment

Gain on sale of assets

( 3.7 )  

Debt extinguishment cost

Changes in operating assets and liabilities:

( 9.5 )  

( 44.7 )  

Accounts payable

8 unchanged sentences

( 10.5 )  

Proceeds from sale of business, net of cash divested

Purchase of intangible assets

Proceeds from sale of assets, net of cash divested

Investment in leased assets

7 unchanged sentences

( 16.6 )  

Debt extinguishment payment

Contingent consideration payments

Change in finance lease obligations

(Repurchases) proceeds from exercise of stock options, net of employee tax withholdings obligations

2 unchanged sentences

( 9.2 )  

Net cash provided by (used in) financing activities

Net cash used in financing activities

( 12.2 )  

Effect of exchange rate changes on cash, cash equivalents and restricted cash

( 3.9 )  

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

Net (decrease) in cash, cash equivalents and restricted cash

( 49.8 )  

4 unchanged sentences

SUPPLEMENTAL CASH FLOW INFORMATION

Three Months Ended

Six Months Ended

Cash paid for income taxes

$ 10.7  

Cash paid for interest

1 unchanged sentence

Operating cash flows from operating leases

Lease assets obtained in exchange for new finance lease liabilities

Lease assets obtained in exchange for new operating lease liabilities

30 unchanged sentences

( 4.6 )  

Balance, March 31, 2022

18,579,816  

$ 54.6  

Balance, March 31, 2022

$ 416.3  

2 unchanged sentences

$ 437.3  

Other comprehensive income

( 16.1 )  

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

( 0.1 )  

Share-based compensation

Dividends paid $ 0.25 per common share

( 4.6 )  

Balance, June 30, 2022

18,589,675  

$ 55.4  

$ 428.3  

$ ( 58.0 )  

$ 432.7  

$ 434.0  

Tennant Company Shareholders

28 unchanged sentences

$ 421.4  

Other comprehensive income

Issue stock for directors, employee benefit and stock plans, net of related tax withholdings of 3,305 shares

58,579  

Share-based compensation

Dividends paid $ 0.23 per common share

( 4.4 )  

Balance, June 30, 2021

18,665,065  

$ 64.9  

$ 390.2  

$ ( 25.9 )  

$ 436.2  

$ 437.5  

See accompanying notes to consolidated financial statements.

20 unchanged sentences

Reference Rate Reform (Topic  

 This ASU provides optional expedients to applying generally accepted accounting principles to certain contract modifications, hedging relationships, and other transactions affected by the reference rate reform, which affects the London Interbank Offered Rate, if certain criteria are met.

The amendments are effective 

7 unchanged sentences

Three Months Ended

$ 160.3  

$ 157.8  

Six Months Ended

Europe, Middle East and Africa

$ 258.1  

$ 263.3  

Net sales are attributed to each geographic area based on the end-user country and are net of intercompany sales.

1 unchanged sentence

Three Months Ended

Six Months Ended

$ 172.1  

$ 177.1  

$ 330.2  

$ 338.0  

Parts and consumables

3 unchanged sentences

$ 279.1  

(a) On February 1, 2021, we sold our Coatings business. 

$ 538.3  

$ 542.4  

On February 1, 2021, we sold our Coatings business.

Further details regarding the sale are discussed in Note 5.

1 unchanged sentence

Three Months Ended

Six Months Ended

Sales direct to consumer

1 unchanged sentence

$ 172.9  

$ 343.5  

$ 341.9  

Sales to distributors

1 unchanged sentence

$ 279.1  

$ 538.3  

$ 542.4  

Contract Liabilities

11 unchanged sentences

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

Three Months Ended

Six Months Ended

Beginning balance

14 unchanged sentences

The change in the deferred revenue balance was as follows:

Three Months Ended

Six Months Ended

Beginning balance

4 unchanged sentences

Foreign currency fluctuations

( 0.3 )  

Ending balance

1 unchanged sentence

$ 10.1  

At March 31, 2022 , $ 8.7 million and $ 3.5 million of deferred revenue was reported in other current liabilities and other liabilities, respectively, on our consolidated balance sheets.

At June 30, 2022 , $ 8.4 million and $ 3.3 million of deferred revenue was reported in other current liabilities and other liabilities, respectively, on our consolidated balance sheets.

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

4 unchanged sentences

Restructuring Actions

During the three months ended March 31, 2022 and March 31, 2021, we implemented restructuring actions as part of our global reorganization efforts.

The pre-tax severance-related charges were as follows:

During the three and six months ended June 30, 2022 and June 30, 2021, 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

Selling and administrative expense

Cost of sales

Total pre-tax severance-related costs

The charges in 2022 primarily impacted the Americas operating segment.

Six Months Ended

Severance-related costs

Total pre-tax restructuring costs

The charges in 2022 primarily impacted the Americas and APAC operating segments.

The charges in 2021 primarily impacted the EMEA and APAC operating segments.

1 unchanged sentence

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

Three Months Ended

Six Months Ended

Beginning balance

6 unchanged sentences

Ending balance

Acquisition and Divestiture

During the first quarter of 2021, we sold the Coatings business. The resulting pre-tax gain was $ 9.8 million and is reflected within gain on sale of business in the consolidated statements of income.

Proceeds from sale of business, net of cash divested, was $ 24.7 million.

Acquisition and Divestitures

Sale of building

During the second quarter of 2022, we sold a building located in Golden Valley, Minnesota.

The resulting pre-tax gain was $ 3.7 million and is reflected within gain on sale of assets in the consolidated statements of income.

Proceeds from sale of assets was $ 4.1 million.

Sale of Coatings business

During the first quarter of 2021, we sold the Coatings business. The resulting pre-tax gain was $ 9.8 million and is reflected within gain on sale of assets in the consolidated statements of income.

Proceeds from sale of assets, net of cash divested, was $ 24.7 million.

Acquisition of Gaomei

On January 4, 2019, we completed the acquisition of Hefei Gaomei Cleaning Machines Co., Ltd.

25 unchanged sentences

$ 160.6  

(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.

Finished goods include machines, parts and consumables and component parts that are used in our products.

The difference between replacement cost and the stated LIFO inventory value is not materially different from the reserve for the LIFO valuation method.

We are currently operating in a more volatile inflationary environment and we experienced higher product cost inflation in most categories during the second quarter of 2022.

Our LIFO charge for the three and six months ended June 30, 2022 was $ 4.9 million and $ 6.0 million, respectively, compared to $ 2.4 million and $ 2.2 million in the three and six months ended June 30, 2021, respectively.

The increase in each period was attributable to the broad effects of inflation on materials.

Goodwill and Intangible Assets

The changes in the carrying amount of goodwill for the three months ended March 31, 2022 were as follows:

The changes in the carrying amount of goodwill for the six months ended June 30, 2022 were as follows:

Balance as of December 31, 2021

4 unchanged sentences

( 16.7 )  

Balance as of March 31, 2022

Balance as of June 30, 2022

$ 217.2  

3 unchanged sentences

Customer Lists

Balance as of March 31, 2022

Balance as of June 30, 2022

Original cost

27 unchanged sentences

Weighted average original life (in years)

Amortization expense on intangible assets for the three months ended March 31, 2022 and 2021 was $ 4.5 million and $ 5.3 million, respectively.

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

Amortization expense on intangible assets for the three and six months ended June 30, 2021 was $ 5.0 million and $ 10.3 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

$ 83.1  

$ 91.6  

2021 Credit Agreement

26 unchanged sentences

2021  Credit Agreement contains customary representations, warranties and covenants, including but 

not  limited to covenants restricting our ability to incur indebtedness and liens and merge or consolidate with another entity.

not  limited to covenants restricting our ability to incur indebtedness and liens and to merge or consolidate with another entity.

Further, the 

2021  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 our fiscal quarters, of 

2 unchanged sentences

1.00,  with certain alternative requirements for permitted acquisitions greater than $ 50.0  million;

• 

A covenant requiring us to maintain an EBITDA to interest expense ratio for a period of 

2 unchanged sentences

3.00  to 

• 

A covenant restricting us from paying dividends or repurchasing stock if, after giving effect to such payments and assuming 

19 unchanged sentences

$ 263.4  

As of March 31, 2022 , the Company is required to repay $ 4.4 million in outstanding credit facility borrowings and $ 0.3 million of current maturities of secured borrowings over the next 12 months.

As of March 31, 2022 , we had outstanding borrowings of $ 183.0 million and $ 98.1 million under our revolving facility and term loan facility, respectively.

As of June 30, 2022 , the Company is required to repay $ 5.0 million in outstanding credit facility borrowings and $ 0.2 million of current maturities of secured borrowings over the next 12 months.

As of June 30, 2022 , we had outstanding borrowings of $ 168.0 million and $ 97.5 million under our revolving facility and term loan facility, respectively.

We had letters of credit and bank guarantees outstanding in the amount of $ 2.9 million, leaving approximately $ 279.1 million of unused borrowing capacity on our revolving facility.

Commitment fees on unused lines of credit for the three months ended March 31, 2022 were $ 0.2 million.

Commitment fees on unused lines of credit for the six months ended June 30, 2022 were $ 0.4 million.

The overall weighted average cost of debt is approximately 

1.4 % and net of a related cross-currency swap instrument is approximately 0.3 %.

2.0 % and net of related cross-currency swap instruments is approximately 0.9 %.

Further details regarding the cross-currency swap instrument are discussed in Note 10.

5 unchanged sentences

The changes in warranty reserves were as follows:

Three Months Ended

Six Months Ended

Beginning balance

4 unchanged sentences

( 0.1 )  

( 4.1 )  

Ending balance

6 unchanged sentences

Our hedging policy establishes maximum limits for each counterparty to mitigate any concentration of risk.

Balance Sheet Hedging

Hedges of Foreign Currency Assets and Liabilities

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.

1 unchanged sentence

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, 2022 and December 31, 2021 , the notional amounts of foreign currency forward exchange contracts outstanding not designated as hedging instruments were $ 52.7 million and $ 45.0 million, respectively.

Cash Flow Hedging

Hedges of Forecasted Foreign Currency Transactions

In countries outside the U.S., we transact business in U.S.

dollars and in various other currencies.

We may use foreign exchange option contracts or forward contracts to hedge certain cash flow exposures resulting from changes in these foreign currency exchange rates.

These foreign exchange contracts, carried at fair value, have maturities of up to one year.

We enter into these foreign exchange contracts to hedge a portion of our forecasted foreign currency denominated revenue in the normal course of business, and accordingly, they are not speculative in nature.

As of March 31, 2022 and December 31, 2021, we had no outstanding foreign currency forward contracts or foreign currency option contracts designated as cash flow hedges.

Foreign Currency Derivatives

At June 30, 2022 and December 31, 2021 , the notional amounts of foreign currency forward exchange contracts outstanding not designated as hedging instruments were $ 145.8 million and $ 45.0 million, respectively.

Cash Flow Hedges

We use foreign currency exchange rate derivatives to hedge our exposure to fluctuations in exchange rates for anticipated intercompany cash transactions between Tennant Company and its subsidiaries.

We entered into Euro to U.S.

dollar foreign exchange cross-currency swaps for all of the anticipated cash flows associated with an intercompany loan from a wholly-owned European subsidiary.

We enter into these foreign exchange cross-currency swaps to hedge the foreign currency denominated cash flows associated with this intercompany loan, and accordingly, they are not speculative in nature.

These cross-currency swaps are designated as cash flow hedges.

The hedged cash flows as of March 31, 2022 and December 31, 2021 included 

150.6 million and 

€152.4 million of total notional values, respectively.

As of March 31, 2022, the aggregated scheduled interest payments over the course of the loan and related swaps amounted to €

The hedged cash flows as of December 31, 2021 included 

€152.4 million of total notional values.

The loan and related swaps matured in April 2022.

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 from 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 June 30, 2022 these cross-currency swaps included 

€85.9 million of total notional value.

As of June 30, 2022, the aggregated scheduled interest payments over the course of the loan and related swaps amounted to €10.9 million.

The scheduled maturity and principal payment of the loan and related swaps of 

151.2 million are due in April 2022.

There were no new cross-currency swaps designated as cash flow hedges as of March 31, 2022 .

In April 2022, we entered into new cross-currency swaps.

The scheduled maturity and principal payment of the loan and related swaps of €

150 million are due in April 2027.

€75.0 million are due 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 a wholly owned European subsidiary.

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 subsidiary 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 June 30, 2022, the cross-currency swaps included €75.0 million of total notional values.

These swaps are scheduled to mature in April 2027.

The fair value of derivative instruments on our consolidated balance sheets was as follows:

2 unchanged sentences

Balance Sheet Location

March 31, 2022

June 30, 2022  

December 31, 2021

Balance Sheet Location

March 31, 2022

June 30, 2022  

December 31, 2021

Derivatives designated as hedging instruments:

Derivatives designated as cash flow hedges:

Foreign currency forward contracts

2 unchanged sentences

$ 10.4  

Derivatives designated as fair value hedges:

Cross-currency swaps

Other current assets

Other current liabilities

Cross-currency swaps

Other liabilities

Derivatives designated as net investment hedges:

Cross-currency swaps

Other current assets

Other current liabilities

Cross-currency swaps

Other liabilities

Derivatives not designated as hedging instruments:

2 unchanged sentences

Other current liabilities

As of March 31, 2022 , we anticipate reclassifying less than $ 0.1 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 cash flow hedges are recorded and the effects of cash flow hedge activity on these line items:

As of June 30, 2022 , we anticipate reclassifying $ 1.2 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

Amount of Gain (Loss) on Cash Flow Hedge Activity

Six Months Ended

Amount of Gain (Loss) on Hedging Activity

Derivatives designated as cash flow hedges:

$ 280.2  

$ 279.1  

$ ( 0.2 )  

$ 538.3  

$ 542.4  

Interest expense, net

( 1.2 )  

Net foreign currency transaction gain

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

Foreign Currency Forward Contracts  

( 2.1 )  

( 1.5 )  

( 6.0 )  

Net foreign currency transaction (loss) gain

( 1.0 )  

( 1.9 )  

( 0.4 )  

Derivatives designated as fair value hedges:

Interest expense, net

( 1.2 )  

( 2.1 )  

( 1.5 )  

( 6.0 )  

Net foreign currency transaction (loss) gain

( 1.0 )  

( 0.4 )  

Derivatives designated as net investment hedges:

Interest expense, net

( 1.2 )  

( 2.1 )  

( 1.5 )  

( 6.0 )  

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

Derivatives in cash flow hedging relationships:

Six Months Ended

Derivatives designated as cash flow hedges:

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

$ ( 1.3 )  

Net loss reclassified from accumulated other comprehensive loss into income, net of tax, effective portion to net sales

( 0.2 )  

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

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

( 1.5 )  

Derivatives designated as fair value hedges:

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

1 unchanged sentence

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

Derivatives designated as net investment hedges:

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

Derivatives not designated as hedging instruments:

Net gain recognized in income (b)

Net gain (loss) recognized in income (b)

( 0.7 )  

Net change in the fair value of the effective portion classified in other comprehensive loss.

Classified in net foreign currency transaction gain.

Classified in net foreign currency transaction (loss) gain.

Fair Value Measurements

11 unchanged sentences

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

Our population of assets and liabilities subject to fair value measurements at March 31, 2022 were as follows:

Our population of assets and liabilities subject to fair value measurements at June 30, 2022 was as follows:

Foreign currency forward exchange contracts

Cross-currency swaps

Foreign currency forward exchange contracts

1 unchanged sentence

Our population of assets and liabilities subject to fair value measurements at 

December 31, 2021 were as follows:

December 31, 2021 was as follows:

Foreign currency forward exchange contracts

3 unchanged sentences

$ 11.4  

Our foreign currency forward exchange contracts 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 foreign currency forward exchange and option contracts are discussed in Note 10.

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

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

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 $ 284.2 million and $ 281.6 million, respectively, as of March 31, 2022 .

The fair value and carrying value of total debt, including current portion, was $ 266.8 million and $ 265.8 million, respectively, as of June 30, 2022 .

The fair value and carrying value of total debt, including current portion, was $ 271.2 million and $ 267.6 million, respectively, as of December 31, 2021 .

7 unchanged sentences

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

Three Months Ended March 31, 2022

Three Months Ended March 31, 2021

Six Months Ended June 30, 2022

Six Months Ended June 30, 2021

Foreign Currency Translation Adjustments

Pension and Post-Retirement Medical Benefits

Cash Flow Hedge

Derivative Financial Instruments

Foreign Currency Translation Adjustments

Pension and Post-Retirement Medical Benefits

Cash Flow Hedge

Derivative Financial Instruments

Beginning balance

7 unchanged sentences

( 12.2 )  

( 5.8 )  

Amounts reclassified from accumulated other comprehensive loss

18 unchanged sentences

The number of years which remain open for audit for U.S.

state or foreign tax purposes varies by jurisdiction but generally ranges from 3 - 5 years.

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.

1 unchanged sentence

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

In addition to the liability of $ 4.8 million for unrecognized tax benefits as of March 31, 2022 , there was approximately $ 0.8 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, 2022 was $ 4.6 million.

In addition to the liability of $ 4.1 million for unrecognized tax benefits as of June 30, 2022 , 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 June 30, 2022 was $ 3.9 million.

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

1 unchanged sentence

Our share-based compensation plans are described in Note 18 of our annual report on Form 10 -K for the year ended December 31, 2021 .

During the three months ended March 31, 2022 and 2021 , we recognized total share-based compensation expense of $ 1.8 million and $ 3.1 million, respectively.

The total excess tax benefit recognized for share-based compensation arrangements during the three months ended March 31, 2022 and 2021 was $ 0.3 million and $ 0.2 million, respectively.

Income Attributable to Tennant Company Per Share

During the three months ended June 30, 2022 and 2021 , we recognized total share-based compensation expense of $ 0.9 million and $ 3.9 million, respectively.

During the six months ended June 30, 2022 and 2021, we recognized total share-based compensation expense of $ 2.7 million and $ 7.0 million, respectively.

The total excess tax benefit recognized for share-based compensation arrangements during the six months ended June 30, 2022 and 2021 was $ 0.3 million and $ 0.4 million, respectively.

Earnings Per Share

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

Three Months Ended

Net income attributable to Tennant Company

Six Months Ended

$ 16.6  

$ 26.9  

$ 35.5  

Basic - weighted average shares outstanding

1 unchanged sentence

18,547,276  

18,485,367  

18,501,930  

Effect of dilutive securities:

1 unchanged sentence

384,427  

250,546  

377,686  

Diluted - weighted average shares outstanding

1 unchanged sentence

18,931,703  

Basic earnings per share attributable to Tennant Company

18,735,913  

18,879,616  

Diluted earnings per share attributable to Tennant Company

Basic earnings per share

$ 0.90  

$ 0.53  

$ 1.46  

$ 1.92  

Diluted earnings per share

$ 0.89  

$ 0.51  

$ 1.44  

$ 1.88  

Excluded from the dilutive securities shown above were options to purchase and shares to be paid out under share-based compensation plans of 

698,378 and 

142,027 shares of common stock during the three months ended March 31, 2022 and 2021 , respectively.

143,505 shares of common stock during the three months ended June 30, 2022 and 2021 , respectively.

Excluded from the dilutive securities shown above were options to purchase and shares to be paid out under share-based compensation plans of 402,696 and 146,191 shares of common stock during the six months ended June 30, 2022 and 2021 , 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.

Subsequent Event

On April 14, 2022, we sold a building located in Golden Valley, Minnesota .

Proceeds from sale of the building totaled $ 4.1 million.

We expect to record a gain on sale of approximately $ 3.7 million in the second quarter of 2022 in our consolidated statements of income. 

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