Tennant (TNC) 28 Apr 222023 Q1 Earnings call transcript

Good morning. My name is Devon and I will be your conference operator today. At this time, I would like to welcome everyone to Tennant Company’s First Quarter 2023 Earnings Conference Call. This call is being recorded. There will be time for Q&A at the end of the call. for call. Tennant you XXXX first Thank conference earnings Instructions] participating Company’s in quarter [Operator

call Mr. may today’s Tennant Beginning is Company. Finance President Mr. for of Bassi, you begin conference. Lorenzo your Bassi, Vice

everyone conference I’m earnings morning, quarter of Vice call. and Company’s Lorenzo Tennant Good first to XXXX President Bassi, Finance. welcome

Fay the President and Vice call on Huml, me Senior are Dave Tennant’s West, President Joining today and CEO; and CFO.

you performance. an with an on update our Dave Today, will enterprise will quarter provide and will provide you operations we Fay cover update financials. XXXX our on and first strategy, our

our the on note conference Please After investors.tennantco.com. Investor we remarks, accompanies and call prepared at will our call to this presentation slide open Relations questions. available is website the

remarks risks We questions expectations and Harbor subject answers differ and Before we those of Commission. our and with Exchange this statements and performance. uncertainties, are begin, news morning and for review Safe contained and may documents, description in risks the results Company’s Forward-Looking actual please to Statements of regarding future risks and are the may Such that statement may our our results. to uncertainties be from our contain Securities particularly we really, that a in the those our documents today’s materially you the filed the These affect to encourage statement. described uncertainties advised

exclude certain conference we measures call, include will items. this on or non-GAAP Additionally, discuss that

quarter those results. first earnings the GAAP of GAAP non-GAAP XXXX Our our reconciliation includes and to comparable measures release measures a

on at posted by release Wire was is Business investors.tennantco.com. our also Relations earnings this Investor morning website a Our issued and

to over I will now turn call Dave. the

geographic first consumables. call record and joining product all along and Thank you growth service very had Thanks and with categories, all time for Lorenzo and an with parts a for across today. balanced and the regions quarter Tennant sales everyone. hello strong

we Overall, growth of organic year-over-year achieved XX%.

driven by of boosted volume. price saw benefited output. remainder the good backlog manufacturing in growth was was realization sales both reduction, growth pricing which We attributed volume our driven QX, growth by Our business. and availability, our to and parts in was XX% sales base our improved from while

we actions remain that continue supply and would reading enable optimistic chain with are to took respect The in more We predictable to cautiously stabilize, supply will through. our which XXXX increased output.

inflation is able and need pre-pandemic are now which an levels realization to to Price demonstrates ability our and margin moderating parts the Tennant’s led gross secure back we efficiently. of to operate to when and perform expansion we to productively

of QX million for XX.X% was $XX nearly revenue. or Adjusted EBITDA

strong converted cash allowed and top-line gross of continue operating margin Our income flow. net in to us to we free to QX XXX% and our managing costs we expansion create disciplined our leverage be as

exceeded in-line for QX income demand was be QX our Demand robust total order as initial continued full-year and in guidance. with expectations Tennant in products to our

Our position and historic strong above still especially open order of in levels significantly North backlog $XXX industrial is America. million is

supply and chain quarter an Even of point in backlog meet persistent to demand. efforts important customer so, since XXXX our turning believe challenges was the of QX represents first QX reduction mitigate we and strong meaningful

reaffirming capitalize to environment. our and already the supply on although any discuss, in that demonstrated will chain full-year are QX Fay we and As remains, uncertainty able we improvement macroeconomic guidance

As such, we patterns are reacting monitoring closely and order accordingly.

our product teams current management work the product and continue same R&D to portfolio. our time, enhance At to

break bleachers all ideal cleaning our cluttered and restrooms, like mechanized delivers This a For of rooms. i-mop of new public or spaces difficult kinds mobility navigate the with it performance scrubber for light flat makes category, to small, of small example, spaces, in our mop. a stadium staff the

the clean common is with maneuverability walk obstacles more like locker dining range, top to lobbies, spaces areas, XXL meeting and the scrubber advanced includes designed other of i-mop XL matches size i-mop enhanced rooms, full the for capabilities a around rooms, of At larger irregular The features, behind and Plus and slightly Plus the areas. layouts.

brands, models budget introduced to we portfolio. our the the effective want maneuverability new scrubber do to combination We continue want Ride-On Gaomei two customers product leverage sacrifice and of to the simple, machine, The dependability. our have size, and quality TXXX additions and TXXX, and platforms of features who or IPC these but right but minded not for a

renewed a strategy. executing sustainability to addition initiatives, our we commitment our on enterprise formalized In and strategy to refreshed

letter the XXXX SBTI have a gas across for we achieving of Targets X goal by commitment has a Scopes set emissions and year Based net to validation. Science greenhouse Specifically, zero X the or of submitted X, and Initiative

reach we value cuts chain. zero, operations across to net and deep emissions our plan To make

will partner of the source electricity portfolio will increase efficiency and to our customers XXXX. sources energy of seek our renewable We to we with globally from XXX% by

electrify of to global striving are and both our vehicle XXX% also XXXX. We product fleet by offerings, our

a to toward affect industry future. is innovation innovation, to industry development for partners confident can I’m with drive reputation will we lead we that on scale. a with global an Furthermore, and technology cleaner a leader and change Tennant collaborate the

By people within to we embedding while and will healthier with our contribute their targets. sustainability thrive cleaning that sustainable will own help biggest thinking a and own stakeholders, solve customers into deliver our addressing solutions can help challenges, our planet. Working we continue how to their we work, business

that to the turn will for over Fay financials. a discussion of call With I our

and you, everyone. hello Thank Dave,

increases quarter the As year up by partly prior $XX.X income was geographies, costs, operating $XX strong price Dave offset from performance costs first higher million and we income very taxes. all million was variable noted, the higher and interest driven of by Improved Americas was and operating period. particularly a net reported volume in realization

up $XXX,XXX coupled on due Net to $X.X interest increased variable with the period. prior level The million interest QX debt. rates in year our from expense rising to interest in was rate higher debt increase

to an performance. expense $X.X by over tax million income million largely improvement Adjusted operating $X.X period, year prior driven of increased the

XX.X% first with expectations. effective The adjusted rate tax of quarter full-year is in-line

amortization earnings per excludes share per prior nearly which adjusted and share to $X.XX First doubled restructuring year charges share, diluted per the $X.XX from period. in quarter

to reported last growth half sales year. to growth XX%, $XXX.X driven by of the $XXX.X attributed other Tennant volume. first pricing of organic compared QX half million, net the quarter the and with represented This roughly in of For million XXXX,

from and went at orders. $XXX of of production us $XXX backlog the quarter end fulfill allowed end Our better increased million output the better first customer XXXX to availability to our predictability the of parts at million as the

East impacted sales which Foreign Europe, includes covers three Australia, unfavorably Pacific, groups Africa, and Asia by America, Latin Tennant which North and markets. Middle Japan, the X.X%. which other China, Asian America Americas, currency into translation of geographies, includes EMEA, all sales and it and the

million, XX.X% In regions grew basis, on achieved year-over-year organic QX, sales had Sales an or all FX while three a growth. Americas X.X%. unfavorable to geographic $XXX.X impact net approximately XX.X% the of in

and our region all price growth equally increases realization volume significant This categories. driven and product was largest by year-over-year across

production Our elevated order levels. North and plants were backlog American address and able production to to meet parts constrained demand increased obtain

care in drove across especially increased categories on an the floor year to million, in product and direct over this growth Sales by led Broad and the X.X% prior geographies, organic based $XX.X Iberia EMEA all basis. UK increased. equipment, across all year-over-year or XX.X%

by prior especially to and was X.X% across performance particularly over impacted directly of Sales growth first million India. all increased restrictions direct quarter. on the geographies, organic and Australia, in basis. equipment by X% categories, early China’s or Pacific was the related XX.X across an our region in year driven China the product Asia improved lifting the This COVID

was an $XX.X EBITDA, of to versus basis Adjusted million, EBITDA for increase EBITDA adjusted increase prior was points or million an adjusted year. QX Turning of of the the XX.X% prior sales, XX% versus year period. XXX $XX

was growth and an sales was of top-line EBITDA expansion also driven both gross by and operating Our significant driver leverage growth. margin most EBITDA growth. driven by of margin price created volume by the by

compared of points basis last the to by QX from on quarter points were fourth positive margin of profit has Gross inflation improved what and pricing of labor. to increases margin quarter realization XXXX. impact improved sequentially profit in the basis driven first trend, offset multi-year a which the Continuing been gross materials The year. XXX XX% XXX

administrative increase warranty and a of to costs performance, $X.X by compared variable operating higher Selling the was XXXX, an other employee expense The primarily costs increased quarter for and such as million driven first with million $XX.X was associated year-ago. of increase costs.

well first driven a the of sales, for from as quarter as basis As cost to gross XXX growth, initiatives. our points both and containment top-line, by XX.X% S&A year, to XX.X% decreased attributable last our expense percentage net QX margin of leverage in

require We are pleased monitor closely signals our that remain we performance performance, cautious patterns swift same supplier and the time, but and moderating to would first any to quarter action. continue anticipate order at with

Overall, business. year progresses, a XXXX to for further strong full-year QX will we have our our evaluate our we established results foundation As believe support achieving investments guidance. the

was operating Capital compared In investments improved to capital expenditures the million our now Turning activities The to full-year working of in in-line operating and million approximately by approximately are on guidance. QX, $XX.X capital. expectations of with cash deployment. in with $X million, was performance meet were to moderating year-ago net increase period. the result pace $XX.X coupled provided our

allocation we our with for of repurchase to XX,XXX million. aligned our These dividend capital actions of approximately capital $X $X.X continue our shareholders are of return QX, the million, stock to and In common shares payments with priorities.

range, X.XX end $XX.X million the than of adjusted of with Company’s and Tennant’s credit quarter that of times. $XXX.X equivalents leverage our of full-year and times a our goal EBITDA liquidity lower of the first stated revolving million guidance to capacity the X.X strong was unused of cash remains At X.X approximately at facility. balance net the on borrowing midpoint our cash

we reflecting of guidance, detailed to $XXX $X.XXX to $XXX sales X% guidance adjusted EBITDA to of the on billion net million. $X.XXX growth sales and slide, to as billion, Turning reaffirm million X% including organic of our

economic our our which confidence Overall, chain cautiously for range and products us commitment. the uncertainty the first global see stability full-year tenant guidance, long strong despite our we XXXX and strength about in-line is improved quarter demand of optimistic the conditions. we Moreover, regarding with gives financial of supply continued remain our

back will call the Dave. to With turn that, I

start guidance. Thank proud deliver sets of advantage summary, In us to team a up and full-year take ability year opportunities to great Fay. the the and of very the to our global to I’m This you, on presented was us. our

go please call With Operator, ahead. the questions. to that, will we open

question [Operator take first Securities. Thank our We you. Instructions] Moore with from Chris CJS will

open. line Your is

Backlog how great would up taking of gone pricing morning a million, thanks Good sharply prices have Steel backlog? XXX the guys. your characterize few for quarter, questions. you of year-to-date.

kind of you pricing? at look that how curious current Just

delay half And flow can to increase it backlog. In our analyze out a you of or that quarter we how it much between get about through aggregate of one into to and will necessity is granular Great a our more P&L. a quarter have of a question, out Chris. realizing out price trying and had price think

Obviously, the weighted as we industrial more our is stated equal in backlog weighted heavily America, in all more backlog North heavily where around script, globally. and products is our not

So in you it can aggregate. think about

backlog it possible as on operating The not are trying makes work we customer other to satisfy predict reduce dynamic on a pure the allocating customer we will difficult to how as backlog. is are that many needs based that we price demand, basis, and as flow to through FIFO customers

I that positive very strong price point the think realization. have we is

QX. product the realization as in you flow that and holding the category, is different numbers at we the well rates, on for that so orders our very or region, through the up see just depending And posted backlog

about break call volume. and backlog say down from you of and from I would base split that an between would what that price growth, organic I growth, equally business that If split, XX%, XX% growth the reduction, XX% came

business, are realization price price we So are as on our getting through uneven certainly thinking on benefiting. backlog is stronger about But we an our an realization, basis. rolling impact

benefit As extent to to published backlog we the will marketplace. be out reduce expect we to into prices from the we future, on the look can the continue

Got it, very helpful.

I So QX which slower seven growth think a after orders quarters QX resumed growth. followed of

that grow Did or year-over-year? QX they sequentially orders indicated expectations. exceeded your You

call. year about talked from up and the but to we had our on ramp were last had the ramp versus to to calendarized as We QX. I Yes, think orders calendarized this QX we plan, year

So we on we while guidance were full-year our we just orders orders in-line deliver beat need for full-year in-line with plan, what if we actually to are our straight that line a basis. you need what QX just

coming out They So in-line guidance the that we calendarzation. with and the were on were trend up a established QX. off on and we bit of

it. Goy

the what XX/X? So to EBITDA you is you put How for actually You adjusted XXX? versus range compare kind expectations a few up quarter have of a the of still would ago, your plus QX XXX months data.

Yes, said, calendarized start I as we our quite out modestly. to year

perspective our from that into shortage of QX, we that parts call recovery bit availability little shortage from Your began build a a QX. projects parts to continued trend expectations, above in some a

exceeded QX achieve our to full-year we expectations. And with so quarters say QX, of in-line But plan kind I would our is deliver the guidance. need really to

look So, we When quarter. are at pleased what is you the with performance. the underneath

think we first proof reduction point for. also down only that base base not when that get product backlog which quarter that fact those orders growth we parts our can in fact had The million, had backlog is the important the our reduced been was and waiting taking show get backlog we that I business, by to but customers business they’ve this meaningful that XX of strong serve growth, we

last investments team XXXX. the in releases. the lot a actions all the It has move we those And really as detailed through have is we prior over of direct of throughout a and taken result the detail

the it able think Chris can that QX, is when I monetize deliver. we important demonstrates we get and to point about parts other the that backlog, are

So focus ready complex have parts on the one demonstrates been I shortages, react with labor if and the revenue parts, we it down? posed the work in turn and have do backlog to start production all in past of the get QX to are the quickly. given and you is quickly capacity think that we the you into questions

it. Thanks will there. helpful, leave I it Got guys. Very

Thanks Chris

Thank you.

Steve Ferazani we Sidoti. next, will And go to with

open. is line Your

in questions guidance. you of Obviously, of everyone. were to what morning thinking. sort previous to have the significantly exceeded terms Good we follow-up going I’m

raising you You didn’t said, what with or least at internal rate it, expectations, much guidance, What exceed in-line thinking. it were order was is holding said you back the pretty narrowing upper you you to end? from

question great Yes Steve.

clarify with deliver were for, we but above full-year had to in-line order Just we rates what need planned what to guidance.

on logical is such one in across first for having It metric over is quarter, and a P&L. logical the So it and strong virtually ask guidance, it to question having how listen preparation performed have approach is yourself, actually, to considered we to mathematically release. thoughtfully a every

current give thought give the that full-year reaffirmed me you points an of few a increased our guidance. held as confidence and results the let guidance. we about, So in us Listen, we QX

range that and the it is so are positive, a And is out we there. feeling about good guidance

and can QX, three year quarter is have at is we there only to the I When learned, really deliver. through from very year. still quarters have rapidly you look and one have years anything If the are three within environment of learned so a change we we last the that

environment component so And we People macro you consideration. is key optimistic is about and continuing sort really demand the signals important for we year, both certainly the the to reasons signals outlook operating from there still customers of from that in. into a are when marketplace, uncertainty but reasonably take for monitor are think

against, perspective, We started just in say positive we performance more availability last really, really, availability eight quarters, the for QX XXX-days, quarters. seven we in was began that you and from in kind trend parts other a parts the of some struggled of have factor and last we thought end fueled availability The it about that a earnest improvement parts QX our saw results. the could

And want. all delivering want But we we cannot get the and shortages, predictably. quantity are not parts managing parts still are suppliers we the that we all

by the so to to so worth to And a are to we that still pattern, we while XXX-day try ramp not full-year’s confident we encouraged are parts And that a extrapolate availability, are production. enough improve can experience. we working

to make this in backlog The the orders I is and and point would script. mentioned next relative I

in America industrial on weighted weighted is heavily terms backlog on is in in coverage product heavily pretty we backlog North delivering so Our and and have from our geography. those guidance the good backlog in of that categories

the we won’t rest regions to the full-year incoming we the the on the ship revenue because rest the demands guidance. of of order, and the deliver don’t where product if and In get categories the of matters, world, order have incoming

is order about I are the business business this orders past. our Well, in we first America patterns I our quarter. think have largest unit very in were we strong and There and to seasonality So monitoring point talked North would and closely.

QX their school as where close the particularly vertical, over education most seasonality full-year and that to is restorative the funnel their schools for prepare equipment of their of see while they we can fleets the, of There on to fleets, to need seasonality, aren’t buy deliver equipment year, that the tend by for materialize that driven fall. summer they bolster commercial the cleaning our renew there do guidance. they and the fill students part QX border so to part rates We floor that

better. but And uncertain uncertainty gotten worse, the in of the we laid say the environment, looming that the lastly, on. I certainly recession, across is time for place, are when look end Ukraine we any when about people thought for gotten kind it war plan hasn’t was the year, Interest XXXX, potential are at of all when it about high, we macro an rates materially continues wouldn’t

macro environment, don’t the more So we see certainty.

And negative to are on to on our say a that was of guidance looming, communicate. are anyone the as on don’t delivering anything that, infer wouldn’t to see I caution we want degree that year by continue would not make we we we we having can just guidance predictability the prudent said that into move sure the horizon. somehow to saw exercising, linked We something I raising build

do QX plays a in could out? fully you is on start, think it extremely are XXXX, thinking How another the you guessing what China When in right. but about that indeed, that I saw the see if open to That about that. unpredictable started could China, reopened, I be area, just appreciate helpful, very thoughts what detailed. I’m

Yes.

guidance So did first we I approving had baked China we heard. the did hope have a into China of reopen a some and promise solid of that time our we China. quarter it were and and action, but the a whether customers place. to talked, had government going in hold it and little cautious channel and would partners, still the taken our our remain was last

that seen will to We revenue demand it so response that China China the, getting in to QX lost from normal. since and stock quo continue have so government the up our have and generated, increase status in to back posted in capitalize double-digit is we distributors we shutdowns. more We are the real we begun loss that on to can and time the the for optimistic hopeful during continue that demand,

we just Yes you us, because could be the largest China, on only it are bullish a for potential, look data single it around our not is, fantastic market on at the represents the planet in lifetime. market if the cleaning from China opportunity

we ground and so and make And a and firm and that to the our that drive channel happens solid we brands, and our on product with are sure want the it mechanization. reach as have mechanization we to prepare cleaning on footprint, very portfolio our capitalize

China, for optimistic So still the we are near-term. on and returns are really bullish early good

can number probably the I new you of products one have get provide can in and if I can over last more of six than a And so Great. months, if remember. terms color, just out kind rolled in more any obviously you of

In is how terms any the of impacting robots? update of on and results kind that

rich is our punctuated that leader marketplace a times. Yes, in innovation of has recent and being been legacy the absolutely. Tennant in

start largely I robotics sort our commercial with later robotics, - our and were expanding TX applications. will portfolio AMRs on have and retail our of been TX focused and We aggressively

more we across to applications, but plays and love portfolio, retail we on is focused look industrial Our as industrial TXX our AMR excited and is commercial type we are about strengths. applications, and the position our actually

not be large to that can a And while may system, get smaller orders. industrial school you unit the in fleet volume in it be retail or orders tends

And with have service We sales our in in are operating really a our industrial comfortable that factory organization unique direct we organization. strength verticals, our environment. and direct factory

and investing have to on We doesn’t think actually those so they are more through efficiently inside and achieve. drive public because to in automation business, able their investment at industrial could it accelerated, their four the more they Those adept adoption can customers environments. that be measure walls the are return the walking the

on results to They did which they our of costing is one do, robotics invasive labor contribute cleaning. find employ continues can’t contribute are So problems, it our is to very and more to them when assaults challenges. robotics and labor biggest their customer’s for bullish labor

of have Gaomei other products the do were got we launched. The you products, XXXX, when products through These products business IPC platforms have that that we of you we new think referenced, have acquisition line suite full the extension acquisition. a some about, we business in through and

accelerated launch products price are to compete competitive compete different at challenged of and that the on price these be we were products, those are competitively to accelerated tenant parts launch props. the of points different product And different as designed some the points. of offerings us lines, and at value legacy we allowed to We other those

business. It the for very marketplace has received it our been great is well by and

And that serve so customers serve to it to be competitive market, of as and we allows more just in strategy, will the and segments more continue it profitably. them more deploy us

one is our last the space offering. small And

fantastic great because serve. one to it clean, is XXL, there the that every i-mop And the customers i-mop spaces the can of We in currently verticals are spaces. allow efficiently, products we we products, have part our have smaller small launched very this these product i-mop XL, we are sell about

with while we the the for equipment of larger spaces can and their those script. floor them on are product spaces so we the entrenched smallest outlined sell and for larger some now within in we a And building,

sales to customers talk in out to our markets sell we products customer So on. vertical new focus every and and member launched organization the we go when new something every about our new across you existing look that recently products, for have of and

customers a we those the in perspective solutions customers great well then really new can are product once and product, demonstrate we with are we from and as tenants about new full sell semi can meetings these So have to customers. to suite of demonstrating exciting a openers, talk we door product positioned get to are things

for there. Thanks detail all the Fantastic.

You bet. Thank you Steve.

Next to Tim we Moore Hutton. will EF with go

is open. line Your

Thanks on end congratulations clarifying of guidance organic expense. EBITDA strong sales could your growth. and your alter including thanks leverage, amazing that the sales Dave, factors your and operating growth pretty the top conservative the SG&A for the and

want to with just start I out part two a question.

You can from that on quarter or that half of to lot tell there of any the at explained boosted orders a that March the maybe least volumes in the Americas ship late seem to bit backlog. might converging the bit June volumes of out the that any more seem be March taking pull little little June from quarter the be have a the of Was a you quarter?

largely from happens I’m no. that sure time-to-time but speaking,

have the is serving customers Those demand. you base are value, of our value we proposition our size that focused those on down given waiting Tennant backlog, backlog the customers we order are backlog have addition that in and got the placed working have are our focus. the patiently We been to the are their

of any Not aware pull-ins.

mean what you customer order is our because you mean think I or they product? had future we pulled and in wanted preordered the do a where it what we

just things quicker towards out that you may any either. I’m of behavior Or end be notice shipped abnormal of if March? the wondering

all. not No, at

this. cadence realization on that please enough, and pricing fair the want quarterly boost is just If correctly, I Good, great. clarify me remember pricing, on - a feel basis. free to I correct to

started realized September. hikes getting pricing your in more of Some

the the year-ago, if look this in will trying was maybe quarter just have it about, lowest fourth And that year, we already probably kind growth organic sales quarter of pricing like to obviously, place. of I’m faces So comparable. a fourth think tailwind harder XX% the would

in pricing September the quarter. a to to way lap So in meaningful probably just if get trying will sense start a

Yes.

You think of logic - with levels XXXX lap different can think will your as increases begin goes at across price in at holds to different your and geographies, we increases price multiple listen, down. I price different but times

year-over-year to be So the will impact moderated. start

and market as monitoring to. The closely inflation add is need opportunity I only are the obviously only and would pricing we we are Tim thing we

couple yet the move in So, we to change lap to the good will as that on for are deliver picture would to if again, we we last continue we that price realization. are have of pretty and getting price that what years and able out of terms need of

it will just each realization but and the We we it is not of of and negotiating world’s back I in add to getting inflationary part of sell is operating adept in an very they kind verticals, largest are due our and at pushing strong easy. companies really obviously environment price. are

price it stick. And shows power selling the and in brand able they fact so and I for and but a get and proposition, it of compelling And just good to the case power the to articulate it shows value to our organization. go also of our think still the our is that why a are make value the customer

be a the the been I not are the in all sense. strong want little you just inflation. cost know and value it for that makes and I is adding your enhancements didn’t pricing features very to that And is and prop customers. Now It

how maybe pre-pandemic margin chain. sense of it categorizing can us of is I absorption on by just there supply manufacturing you question now chain gross to give supply what because getting kind your pricing bit manufacturing of the split, better maybe if expansion two-thirds wondering the net a a rough just of and maybe what much you driven came was were had impressive the levels, from back that maybe better, I’m and is facility. the and third, components a efficiencies less of better, under little pricing your just maybe predictability, -

the to gross almost the also margin are continue way have a operating year-over-year. you think seeing But inflation too should kind increase also significant move in gross the that as laid is efficiencies been that plants, of portion we so multi-year we I that and is it I you able us there helping out. that the of and cover And to ratio, in through drives plant say pricing up volume also through you margin.

million happen died any haven’t can the what free free I’m maybe know you this going is Great, and XX this to summer of thanks in do Do you to million have fall? flow see close think to on or just that the working sense I strong of say you mean, quarter. you Fay as through very cash you get maybe had and you year, flow, I capital $XX cash

but you and to don’t right. free We of go into are flow, some cash there the components think Yes, are consider. I

line of we fact by that In kind driven had first we flow was strong very came that a operations item. had through quarter cash operating the

would in we I anticipate year. the quarters say working next capital thing is, other three the increased from The of contribution

think see through to perspective. coming helping should and we I with cash flow the free that So contribution start

That color, My ERP I for the and maybe timeframe on appreciate last update us terrific you the just making project question that around then not? evaluation or decision can is that. maybe is,

Yes.

process that early actually in into anticipate release that will We in So QX are we and the have forward. work be will on now. evaluating a to fall of summer the color the provide largely we additional probably path some done that over right likely and

Thank Terrific. you. it That questions. was for my

Tim. Thanks

Next, Kearney go with Brett to we will Gabelli Funds.

open. now is line Your

much at position, Tennant your year the in over your of needed data the good plus. that the out When their some unlock, customers, has team retailers the with hard have machines larger morning. own chemical going. you are that targets. into you with your curious, are for conversations terms conversations that Does goals guys very the Curious, doing been about the that on off has very these this water the into credible or machines on of where work hit anything factor you strong capturing larger autonomous, very think now sustainability much guys that point? there is factors Congrats the of past customers say execution sustainability coming Hi some in efficiency larger to aligned that

You general, know a It customer. overtime. increasing it to think the varying is is on factors I degrees, But we question. it depending see great in in

to part can conversation sustainability selling it the going as number for think long So be up. is But time a process we forms. of different take of a the customers catch come in to

strategy their strategies most can customers that our is our sustainability I’m sustainability And with solve by our it sustainability helping excited one about goals. we of is the areas, achieve new goals

for a play It is can product only area from help engines on their so portfolio pivotal example, products greenhouse that customers can eliminate their gas not that X which emissions Scope combustion internal electrifying environment, our of emissions. role, Our site. in, we helps

positioned. you also, But are uniquely said, our we like

We participate, have contribute to technologies, potentially goals, can contribute our free machines, products we use water, to also customer we cleaning circularity. which have we our reconditioned and product robotics data sustainability have can and chemical that we

is value it think that customers to And sustainability potential integrated problems. so to But is points around do value solve is real who they It we into and they that are a a we activity there their also and what sustainability. trying with multiple sideline reach helping or is are benefits. go our where trying is really add can It to partner it ultimately their a as of their has not I are them goals business.

customer you been to industrial whether call popping I seeing have or market. the back customers growth North this you obviously seeing you with about good of and coming some strong this them of In some America, plants then strong in reshoring region. existing Excellent. core potential, of your hear of new as some curious an up guys with suppliers kind opportunities we are from with And was it opportunity position activity. have a the

are I would in both. say seeing about talk lot We hear a resource. we opportunity of

existing are others capacity production are for have existing of just facilities. footprint their some footprint, where moving customers adding into Some they back

The time it. a that ground facilities, to lead pretty, pretty up has new long

that been new starts and not we is purchase. there late stage how can’t many has are really it a we quantify So

the building and then about the the equipment, buy staffing think putting up would equipment, production, then you running property and the you land procuring and cleaning getting in equipment. equipment, If maintenance then

challenges So posed a with cycle continuing perspective. having turmoil. freights square a pandemics from and footage long that think reshoring, we and late could the the trend geopolitical in are I with But at shortages, looking lived could on-shoring stage be now us a new hopefully through parts, be availability, purchase process then helps

own We to more their serves lot that took of of to having control of same their we their close those the see production in as home other geography considering thing in more and you the geography in or being disruptions. companies the production eliminate for destiny, read complete by one a or are potential

positive is positive and a add then be a think footage claimed. obviously as to we had that trend us, for to companies square needs So

guys. Thanks helpful. much so very Yep,

Brett. Thanks

[Operator Instructions] closing for Since there management are turn now the no will further questions at this time, I back to call remarks. over

website quarterly business Tennant’s deeper that our we growth that IR we please a offer series posting note of before second look and strategy. in the videos will into our you close Thank to be

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concludes This today’s call. conference

may now You disconnect.