Tennant Co. (NYSE: TNC) reported Q1 EPS of $0.57, $0.08 better than the analyst estimate of $0.49. Revenue for the quarter came in at $252.1 million versus the consensus estimate of $256.62 million.

• Net sales of $252.1 million, decrease of 2.4 percent organically
• First-quarter GAAP net income of $5.2 million, or $0.28 diluted earnings per share; adjusted diluted EPS of $0.57 per share
• Adjusted EBITDA of $26.1 million, or 10.4 percent of sales
• Strong cash and liquidity position

“Our first quarter was the story of two strong months and one difficult one as our global operations weathered the impact of the coronavirus pandemic,” said Chris Killingstad, Tennant Company’s president and chief executive officer. “The primary impacts of the pandemic on our business were related to temporary plant shutdowns, as well as a slowdown in sales to some end markets, amid widespread closures of customer facilities and operations. Our China factories were closed for two weeks in February, and we temporarily suspended operations at our plants in Italy and the United States at times during the month of March, in accordance with local directives.”

2020 Business Outlook

As previously announced, the Company withdrew the full-year guidance it provided on February 20, 2020, due to the uncertain nature of the coronavirus pandemic. At this time, the Company does not have the ability to accurately predict the level of impact on its businesses and financial results for the remainder of fiscal 2020. Accordingly, the Company is not updating its outlook, but plans to share further updates in its second-quarter earnings announcement and conference call.

In response to this pandemic, the Company has already taken a number of actions globally to minimize the financial impact. Specifically, the Company implemented a combination of reduced work schedules and furlough programs for all employees globally, while operating within the local laws and regulations, and maintaining health coverage for all impacted employees. As previously announced, Tennant’s CEO will forgo 100 percent of his salary, while senior leaders within the organization will forgo 35 percent of their salaries and the board of directors will take a 50 percent cut in pay, through the second quarter of 2020. Additionally, the Company has been proactive in establishing a dedicated enterprise-wide response team, limiting travel to business-critical trips only, implementing work-from-home processes where possible, reducing non-essential discretionary and project spending, and developing multiple financial scenario plans to ensure liquidity and to identify additional actions, if needed.

“While the extent of the impact of the pandemic is uncertain and continually evolving, we will continue to manage costs and cash flow while maintaining our ability to ramp up quickly as markets recover,” said Killingstad. “The health and safety of our employees, customers and business partners remains our top priority and we are committed to providing the equipment, parts and service our customers need to keep their facilities clean and safe. In its 150-year history, Tennant has always been a resilient and adaptable company, and we will do whatever is necessary to emerge from this crisis in a strong position.”

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