Tennant (TNC) Reports 65.2% Surge in Net Income

By Bobby Samwell • Thursday, February 22 11:12 • Permanent Link

Tennant Company (NYSE: TNC) has reported its fourth-quarter and full-year financial results for 2023, showcasing robust growth in net sales and net income. The company achieved a 13.9% increase in net sales, reaching $1,243.6 million, and a 65.2% surge in net income to $109.5 million.

Dave Huml, Tennant President, and CEO, expressed satisfaction with the strong fourth-quarter results, stating, "Our full-year results represent record achievements for the company in terms of net sales, adjusted EBITDA, and EBITDA margin." Huml attributed the success to the company's organic growth across all geographies and product categories, effectively offsetting inflationary pressures through price realization.

Huml also outlined the company's strategic focus for 2024, emphasizing a new enterprise strategy targeting long-term revenue growth, margin expansion, and continued strong cash flow generation. He highlighted specific growth initiatives in new product innovation, expanded go-to-market strategies, and disciplined pricing, expressing confidence in Tennant's ability to drive sustained long-term growth.

In terms of financial performance, Tennant delivered a gross profit margin increase to 42.4% for the full year 2023, compared to 38.5% in 2022. Additionally, the company achieved full-year adjusted EBITDA of $192.9 million, marking a 44.3% increase from 2022, with an adjusted EBITDA margin of 15.5%, representing a 330-basis-point improvement.

Tennant also significantly strengthened its financial position by repaying $100.0 million of debt during 2023, resulting in a net leverage ratio of 0.43x adjusted EBITDA. The company returned over $40 million of capital to shareholders in 2023 through dividends and share repurchases.

Looking ahead, Tennant introduced its full-year 2024 guidance, targeting organic net sales growth between 2% and 4%, split equally between price and volume growth. The company also expects adjusted diluted net income per share between $6.05 and $6.65, and adjusted EBITDA in the range of $198 million to $213 million.

Tennant Company's full 8-K submission is available here.

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