On October 31, 2023, Tennant Co (TNC, Financial) released its financial results for the third quarter ended September 30, 2023. The company reported strong growth in net sales and net income, leading to an increase in its full-year 2023 guidance.
Financial Highlights
The company's net sales for the third quarter of 2023 reached $304.7 million, a 15.9% increase from the $262.9 million reported in the third quarter of 2022. This growth was attributed to strong pricing realization and volume growth, supported by a more stable supply-chain environment.
Net income for the quarter stood at $22.9 million, a significant 46.8% rise from the $15.6 million reported in the same period last year. The diluted EPS also saw a substantial increase of 45.8% to $1.21. Adjusted EBITDA rose by 35.8% to $45.9 million, while the Adjusted EBITDA margin improved by 220 basis points to 15.1%, primarily due to strong sales growth and gross margin improvements.
The company generated an operating cash flow of $54.4 million and converted over 100% of net income to free cash flow for the third consecutive quarter. Tennant Co (TNC, Financial) also announced a 5.7% increase in the company's quarterly cash dividend to $0.28 per share.
Updated 2023 Guidance
In light of the strong quarterly results, Tennant Co (TNC, Financial) has increased its full-year 2023 guidance. The company now expects net sales to be between $1.23 billion and $1.25 billion and Adjusted EBITDA to be between $190 million and $200 million.
CEO's Commentary
We are pleased to report Tennant's strong third quarter results, which built on the momentum in the first half of the year. This was the fourth consecutive quarter our global team delivered organic net sales and Adjusted EBITDA growth above our expectations and puts us on pace to deliver a record-setting year. We are raising our full-year 2023 guidance on the strength of the quarter's results, our remaining backlog position, and expectations of continuing resilience in demand for the remainder of the year,” said Dave Huml, Tennant President and Chief Executive Officer.
Looking Ahead
With a robust performance in Q3 2023 and a positive outlook for the remainder of the year, Tennant Co (TNC, Financial) is well-positioned for continued growth. The company's commitment to innovation and sustainability, coupled with its strategic initiatives, are expected to drive its performance in the coming quarters.
Explore the complete 8-K earnings release (here) from Tennant Co for further details.
