Announces Fourth Quarter and Full Year Results
line results better than anticipated on fourth quarter net sales of $153
provides 2009 outlook
Minn., February 24, 2009—Tennant Company (NYSE: TNC) today reported a
net loss of $16.9 million, or a $0.92 loss per diluted share, on net sales
of $153.3 million for the fourth quarter ended December 31, 2008. Fourth quarter
net earnings were reduced by $19.8 million pretax, or $0.88 per diluted share,
for the previously disclosed fourth quarter restructuring activities. Tennant
reported net earnings in the comparable 2007 quarter of $12.6 million, or $0.66
per diluted share, on record net sales of $182.6 million. In its December 17,
2008 restructuring release, Tennant said it expected fourth quarter 2008 net
sales of $140 million to $155 million and anticipated a loss per diluted share
of $0.98 to $1.08.
$19.8 million pretax charge for restructuring activities recorded in the 2008
fourth quarter, $14.6 million was related to a workforce reduction which is
estimated to achieve annualized savings of at least $15 million in 2009 and $20
million in 2010. The company also recorded a $5.2 million charge for other
unusual items, including $3.4 million for increased accounts receivable reserves
due to the global credit crisis and a $1.8 million write-off related to
technology investments that are being replaced by new solutions.
swift and appropriate actions in the fourth quarter to lower our cost structure
and preserve cash in order to align our business with current economic
conditions,” said Chris Killingstad, Tennant Company’s president and chief
executive officer. “Although the global recession hurt our sales volume and
profitability in 2008, we completed three strategic acquisitions that increased
net sales and expanded our markets, and we introduced several key new products.
Moreover, our efforts to improve operating efficiency were successful.
Through our global low-cost sourcing and lean manufacturing initiatives, we
met our goal to achieve approximately $10 million in gross savings in 2008.
We continue our efforts to aggressively control our cost structure through this
difficult business cycle.”
company has no plans to reduce its quarterly dividend. However, to preserve cash
it temporarily suspended repurchases of stock as of September 2008. Management
also decreased capital expenditures to $20.8 million in 2008 from $28.7 million