Tennant Company has reported net sales of $280.7 million for the 2019 third quarter, representing a 2.7 per cent improvement year on year.
Excluding the impact of the company’s Gaomei acquisition and foreign currency, organic sales grew 2.8 per cent, led by solid growth in North and Latin America. Net earnings were $14.6 million, compared to $9.7 million, in the 2018 third quarter.
Excluding non-operational items, adjusted net earnings grew 15.8 per cent to $11.7 million, compared to $10.1 million, in the 2018 third quarter.
Chris Killingstad, Tennant Company’s president and CEO, said: “During the third quarter, we continued to make progress across our three strategic pillars – winning where we have competitive advantage, reducing complexity and building scalable processes, and building on our position as an innovation leader—to drive profitable growth amid mixed economic and market conditions worldwide.
“Sales growth in the quarter was driven by continued strength in the Americas, partially offset by market softness in Europe and Asia Pacific, and unfavorable currency impacts. Demand for our autonomous cleaning machine, the T7 AMR, also contributed to the quarterly sales performance.
“This innovative robotic solution addresses the labor challenges faced by an increasing number of our customers and demonstrates our commitment to advancing our position as an innovation leader. Our gross margin gains during the quarter reflect our ongoing operating model improvement efforts, which substantially improved our cash flow and EBITDA performance.”
Sales in the Americas rose 6.2 per cent, and were up 6.7 percent organically, reflecting strong performance in North and Latin America.
The company said North America growth was driven by demand for Tennant’s autonomous cleaning machine, strength in the direct channel related to industrial equipment, along with continued growth in the service and parts and consumables businesses.
Latin America reported year-over-year organic growth for the ninth consecutive quarter and was driven by strength in Mexico and South America.
Sales in EMEA declined 6.2 per cent, down 2.8 per cent organically, as a result of persistent market weakness across the region, with specific sales weakness within the United Kingdom and CEEMEA regions.
Sales in APAC increased 5.1 per cent while declining 9.4 per cent organically, primarily as a result of significant softening in China.
Looking to the fourth quarter, Killingstad said the company is lowering its top-line expectations as a result of softening global market conditions.
“At the same time, as a result of the success of our operating model improvement efforts, we are raising our EPS and EBITDA guidance ranges.
“We remain focused on our three strategic pillars with an ultimate goal of achieving reasonable growth, improving EBITDA margin and driving shareholder value.”
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