Tennant Co (TNC) 2024 Q2 法說會逐字稿

Good morning. My name is Karen, and I'll be your conference operator today. At this time, I'd like to welcome everyone to Tennant Company's second-quarter 2024 earnings conference call. This call is being recorded. (Operator Instructions) Thank you for participating in Tennant Company's second-quarter 2024 earnings conference call.

早安.我叫凱倫，今天我將擔任你們的會議操作員。現在，我歡迎大家參加坦能公司 2024 年第二季財報電話會議。此通話正在錄音。（操作員說明）感謝您參加坦能公司 2024 年第二季財報電話會議。

Beginning today's meeting is Mr. Lorenzo Bassi, Vice President, Finance and Investor Relations for Tennant Company. Mr. Bassi, you may begin.

今天的會議由坦能公司財務和投資者關係副總裁 Lorenzo Bassi 先生主持。巴西先生，您可以開始了。

Good morning, everyone, and welcome to Tennant Company's second-quarter 2024 earnings conference call. I'm Lorenzo Bassi, Vice President, Finance and Investor Relations. Joining me on the call today are Dave Huml, Tennant's President and CEO; and Fay West, Senior Vice President and CFO.

大家早安，歡迎參加坦能公司 2024 年第二季財報電話會議。我是洛倫佐·巴西 (Lorenzo Bassi)，負責財務和投資者關係的副總裁。今天和我一起參加電話會議的還有 Tennant 總裁兼執行長 Dave Huml；以及資深副總裁兼財務長 Fay West。

Today, we will provide an update on our 2024 second-quarter performance. Dave will discuss our results and enterprise strategy, and Fay will cover our financials. After our prepared remarks, we will open the call to questions. Our earnings press release and slide presentation that accompany this conference call are available on our investor relations website.

今天，我們將提供 2024 年第二季業績的最新資訊。戴夫將討論我們的業績和企業策略，費伊將討論我們的財務狀況。在我們準備好發言後，我們將開始提問。我們的投資者關係網站上提供了本次電話會議附帶的收益新聞稿和幻燈片簡報。

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

在我們開始之前，請注意，我們今天上午的言論和對問題的回答可能包含有關公司未來業績預期的前瞻性陳述。此類陳述存在風險和不確定性，我們的實際結果可能與陳述中包含的結果有重大差異。這些風險和不確定性在今天的新聞稿和我們向美國證券交易委員會提交的文件中進行了描述。我們鼓勵您查看這些文件，特別是我們的安全港聲明，以了解可能影響我們結果的風險和不確定性的描述。

Additionally, on this conference call, we will discuss non-GAAP measures that include or exclude certain items. Our 2024 second-quarter earnings release includes the comparable GAAP measures and a reconciliation of non-GAAP measures to our GAAP results.

此外，在本次電話會議上，我們將討論包含或排除某些項目的非公認會計原則措施。我們的 2024 年第二季財報發布包括可比較的 GAAP 指標以及非 GAAP 指標與 GAAP 業績的調整表。

I'll now turn the call over to Dave.

我現在將把電話轉給戴夫。

Thank you, Lorenzo, and hello, everyone. On the call today, I will be discussing highlights from the second quarter 2024, our outlook for the remainder of the year, and the progress on our enterprise strategy.

謝謝你，洛倫佐，大家好。在今天的電話會議上，我將討論 2024 年第二季的亮點、我們對今年剩餘時間的展望以及我們企業策略的進展。

I am pleased to report on our strong results in the quarter. Lapping a previous record-high second quarter in the prior year, we achieved both organic net sales growth and increased adjusted EBITDA. Our performance was driven by generating strong order demand as well as continued strong backlog benefits. Enabled by the execution of our enterprise strategy initiatives, we expect to drive continued order growth in the second half of 2024.

我很高興地報告我們本季的強勁業績。我們在去年第二季創下了歷史新高，實現了有機淨銷售額成長和調整後 EBITDA 的成長。我們的業績是由強勁的訂單需求以及持續強勁的積壓效益所推動的。透過執行我們的企業策略計劃，我們預計將在 2024 年下半年推動訂單持續成長。

For the second quarter of 2024, net sales increased 2.9% to $331 million and adjusted EBITDA rose to $58.6 million, resulting in an adjusted EBITDA margin of 17.7%. We are pacing ahead of our year-to-date backlog reduction expectations and we are confident in our ability to achieve the $80 million to $100 million of backlog reduction in the full year 2024, as we previously communicated. With this backlog reduction, we now believe we will exit 2024 with a normalized backlog level and market-competitive lead times across the entire product portfolio globally.

2024 年第二季度，淨銷售額成長 2.9%，達到 3.31 億美元，調整後 EBITDA 升至 5,860 萬美元，調整後 EBITDA 利潤率為 17.7%。正如我們之前所傳達的那樣，我們正在提前實現今年迄今減少積壓訂單的預期，並且我們對 2024 年全年積壓訂單減少 8000 萬至 1 億美元的能力充滿信心。隨著積壓訂單的減少，我們現在相信，到 2024 年，我們將在全球整個產品組合中實現標準化的積壓水準和具有市場競爭力的交貨時間。

Second-quarter order rates were very strong, up double-digits compared to both the first quarter of 2024 and second quarter of 2023. This order demand generation is a direct result of the investments we made and the execution of our enterprise growth strategy. Looking ahead to the second half of the year, we are forecasting continued strong order growth, driven by rigorous execution of targeted growth initiatives. We expect increased impact on growth from incoming orders as the backlog reduction benefit moderates in the second half.

第二季的訂單率非常強勁，與 2024 年第一季和 2023 年第二季相比成長了兩位數。這種訂單需求的產生是我們投資和執行企業成長策略的直接結果。展望今年下半年，我們預計，在嚴格執行目標成長計畫的推動下，訂單將持續強勁成長。我們預計，隨著下半年積壓訂單減少效益的放緩，新訂單對成長的影響將會加大。

With our strong first-half performance as a company, we are increasing full-year guidance for both net sales and adjusted EBITDA. Despite known challenges and reasons for caution in the macroeconomic environment, demand for Tennant products and services remain strong. Tennant's enterprise performance during the quarter gives us momentum, and we are forecasting higher net sales in the second half of the year.

憑藉公司上半年的強勁業績，我們正在提高淨銷售額和調整後 EBITDA 的全年指引。儘管宏觀經濟環境中存在已知的挑戰和需要謹慎的理由，但對坦能產品和服務的需求仍然強勁。坦能本季的企業業績為我們帶來了動力，我們預計下半年的淨銷售額將會更高。

Circling back to our solid second quarter as a company, our business results varied by geography. In the Americas, order rates during the quarter were up double-digits compared to the prior year period, and we continue to reduce the backlog in our industrial machines. Our strategic investments in this region continue to deliver strong order rates, outpacing market growth, giving us reason to believe our strong leadership position is growing.

回到我們公司穩健的第二季度，我們的業務表現因地理位置而異。在美洲，本季的訂單率比去年同期成長了兩位數，我們持續減少工業機器的積壓。我們在該地區的策略性投資持續帶來強勁的訂單率，超過市場成長速度，使我們有理由相信我們強大的領導地位正在不斷增強。

In EMEA, it was a challenging quarter across the region, compounded by lapping a previous quarter with higher backlog reduction benefit. Economic activity in EMEA's manufacturing sector remains sluggish and our sales were flat. Despite this broad-based market softness, we are seeing indicators that give us reasons for optimism in our outlook for the region. In Italy, for example, we are seeing strong order rates as we build out our distribution network with a focus on industrial, BSE and retail vertical market customers.

在歐洲、中東和非洲地區，本季是一個充滿挑戰的季度，積壓訂單減少效益比上一季更高，雪上加霜。歐洲、中東和非洲地區製造業的經濟活動仍然低迷，我們的銷售額持平。儘管市場普遍疲軟，但我們看到的指標使我們有理由對該地區的前景感到樂觀。例如，在義大利，我們在建立重點關注工業、瘋牛症和零售垂直市場客戶的分銷網絡時看到了強勁的訂單率。

Also, across the region, we are building a strong pipeline of opportunities, leveraging our market-leading AMR product portfolio and value proposition. Overall, order rates in the region are up compared to the prior year quarter, and we expect to see continued improvement during the second half of 2024.

此外，在整個地區，我們正在利用我們市場領先的 AMR 產品組合和價值主張，建立強大的機會管道。總體而言，該地區的訂單率與去年同期相比有所上升，我們預計 2024 年下半年將繼續改善。

In APAC, we faced a difficult quarter, driven primarily by stark declines in China, where we are experiencing slowing demand. As has been widely reported, excess manufacturing capacity and government-induced overproduction in China are pressuring market prices in our mid-tier product offerings. This is affecting not just the China market, but the broader region as well, and we do not see this dynamic changing for the remainder of the year.

在亞太地區，我們面臨著一個艱難的季度，主要是由於中國的需求大幅下滑，我們的需求正在放緩。正如廣泛報導的那樣，中國過剩的製造能力和政府引發的生產過剩正在給我們中端產品的市場價格帶來壓力。這不僅影響中國市場，也影響更廣泛的地區，我們認為這種動態在今年剩餘時間內不會改變。

In Australia, we are seeing customer caution and a moderating in demand as some customers delay order decisions. As a result of the Q2 slowdown, we are expecting minimal growth in the APAC region for the full year 2024.

在澳大利亞，我們看到客戶持謹慎態度，並且由於一些客戶推遲了訂單決定，因此需求有所放緩。由於第二季經濟放緩，我們預計 2024 年全年亞太地區的成長將微乎其微。

Last year, we introduced the three pillars of our new enterprise strategy: growth, performance, and people. We continue to resource, invest, and execute targeted initiatives across each of these pillars, and I'd like to take the opportunity to provide you with several key updates from the quarter.

去年，我們推出了新企業策略的三大支柱：成長、績效和人才。我們繼續在每個支柱上提供資源、投資和執行有針對性的舉措，我想藉此機會向您提供本季度的幾項關鍵更新。

Within the growth pillar, pricing is a critical piece to driving growth. Our pricing strategy is about maximizing our market position to realize growth and capture the value we deliver to our customers. During the second quarter and throughout the first half of 2024, we saw price growth across each of our key geographies. At an enterprise level, we are targeting approximately 50 to 100 basis points of annual price growth as part of our long-term goals. We are well positioned to achieve that in 2024 as we continue to monitor market dynamics to capture both long-term price and volume growth.

在成長支柱中，定價是推動成長的關鍵因素。我們的定價策略是最大化我們的市場地位，以實現成長並獲得我們為客戶提供的價值。在 2024 年第二季和整個上半年，我們看到每個關鍵地區的價格都在成長。在企業層面，我們的長期目標是每年價格成長約 50 至 100 個基點。我們有能力在 2024 年實現這一目標，因為我們將繼續監控市場動態，以捕捉長期價格和銷售的成長。

New product development is another important focus in our growth pillar. During the second quarter of 2024, we started shipping our first X4 ROVR orders to customers. As previously discussed, the X4 ROVR is our first purpose-built autonomous floor-cleaning machine and our fourth robotic scrubber. The new X4 ROVR is the first machine to be powered by the Gen3 BrainOS robotics platform available exclusively to Tennant. Last quarter, we evaluated increasing production due to strong initial customer interest and opportunity pipelines. As orders and customer interest for the X4 ROVR continued to increase throughout the second quarter, we decided to increase our manufacturing capacity to support the anticipated order demand.

新產品開發是我們成長支柱的另一個重要重點。2024 年第二季度，我們開始向客戶出貨第一批 X4 ROVR 訂單。如前所述，X4 ROVR 是我們的第一台專用自動地板清潔機，也是我們的第四台機器人洗地機。新型 X4 ROVR 是第一台由 Tennant 獨家提供的 Gen3 BrainOS 機器人平台提供動力的機器。上季度，我們評估了由於最初客戶的強烈興趣和機會管道而增加的產量。隨著 X4 ROVR 的訂單和客戶興趣在整個第二季度持續增加，我們決定提高製造能力以支援預期的訂單需求。

In addition to the strong market reception for our new X4 ROVR, we also continued to see high demand in each of our existing AMR products as customers are replacing and expanding their existing AMR fleet with new units. These reorders demonstrate the continued market preference for the Tennant AMR value proposition and the potential for continued growth across each of our AMR product lines.

除了我們的新型 X4 ROVR 受到強烈的市場歡迎外，我們還繼續看到對我們現有的每種 AMR 產品的高需求，因為客戶正在用新設備替換和擴展其現有的 AMR 車隊。這些重新訂購顯示市場對坦能 AMR 價值主張的持續偏好以及我們每個 AMR 產品線持續成長的潛力。

The T16AMR, our first industrial robotic floor scrubber targeting manufacturing, warehousing and logistics verticals, has seen some of the strongest adoption rates. Customers in those verticals are already familiar with the benefits of robotics and are excited to take advantage of the T16AMR capabilities. AMR unit sales, including the X4 ROVR, for the first half of 2024 are trending well ahead of both the prior year and previous multi-year averages. This trend supports our belief that we have a winning product portfolio and strong value proposition in the market.

T16AMR 是我們首款針對製造、倉儲和物流垂直產業的工業機器人洗地機，其採用率最高。這些垂直產業的客戶已經熟悉機器人技術的優勢，並且很高興能夠利用 T16AMR 功能。2024 年上半年，包括 X4 ROVR 在內的 AMR 單位銷售趨勢遠高於去年和之前的多年平均值。這一趨勢支持了我們的信念，即我們在市場上擁有成功的產品組合和強大的價值主張。

Also within our growth pillar is our M&A strategy, which prioritizes opportunities that provide Tennant with the right strategic value, operational fit and financial return. Our focus is on three areas: one, growing the core; two, driving value through connected autonomy; and three, expanding into select adjacencies. Our previously mentioned investment in Brain Corp aligns with our second focus area, driving value through connected autonomy, and has been a key driver in our AMR success this year.

我們的成長支柱還包括我們的併購策略，該策略優先考慮為坦能提供正確的策略價值、營運適應性和財務回報的機會。我們的重點是三個面向：一是發展核心；二、透過互聯自治驅動價值；第三，擴展到選定的鄰近地區。我們之前提到的對 Brain Corp 的投資與我們的第二個重點領域一致，即透過互聯自治來推動價值，並且是我們今年 AMR 成功的關鍵驅動力。

Our investment in Brain Corp provides us exclusive access to Gen 3 technology, increased selling efficiency, and the opportunity to benefit from annual recurring revenue. We are realizing the intended benefits of our strengthened relationship with Brain Corp and are excited to continue to lead the robotics disruption of the global mechanized cleaning equipment industry.

我們對 Brain Corp 的投資使我們能夠獨家獲得第三代技術、提高銷售效率以及從年度經常性收入中受益的機會。我們正在認識到與 Brain Corp 加強合作關係的預期好處，並很高興能夠繼續引領全球機械化清潔設備產業的機器人顛覆。

Our previously announced acquisition of TCS, Tennant's longstanding distributor based in Austria, aligns with the first focus area within our M&A strategy, growing the core. Our TCS integration is on track to date and the business is performing in line with expectations. We are impressed by the teams in these geographies and are developing aggressive growth plans for the business in this attractive region.

我們先前宣布的對 TCS（坦能在奧地利的長期經銷商）的收購符合我們併購策略中的第一個重點領域，即發展核心。迄今為止，我們的 TCS 整合進展順利，業務表現符合預期。這些地區的團隊給我們留下了深刻的印象，並且正在為這個有吸引力的地區的業務制定積極的成長計劃。

Our successful execution on our M&A strategy is due to our financial strength and disciplined capital allocation strategy. As we continue to generate strong cash flow and maintain a strong balance sheet, we are well positioned to act on those target opportunities aligned with our M&A strategy.

我們成功執行併購策略得益於我們的財務實力和嚴格的資本配置策略。隨著我們繼續產生強勁的現金流並保持強勁的資產負債表，我們處於有利位置，可以根據我們的併購策略來抓住這些目標機會。

Now, turning to our performance pillar and sustainability, In June, Tennant published our 2024 sustainability report. This year's report marks the first year of reporting aligned to our new sustainability framework, Thriving People, Healthy Planet. We are proud of the work we are doing to embed sustainability in how we think, plan, and operate our business. We believe that by setting ambitious goals, we will drive progress for our customers, our business, our people, our communities, and the planet. The report details the significant progress we made, including integrating our net zero goals into our product line strategies, continuing progress toward our validated net zero targets by reducing our Scope 1 and 2 greenhouse gas emissions 13%, sourcing 92% of our global electricity from renewable energy sources, and reducing our Scope 3 emissions by 8%.

現在，轉向我們的績效支柱和永續發展，坦能於 6 月發布了我們的 2024 年永續發展報告。今年的報告是第一年與我們新的永續發展框架「繁榮的人類，健康的地球」保持一致的報告。我們為將永續發展融入我們的思考、規劃和運作方式所做的工作感到自豪。我們相信，透過設定雄心勃勃的目標，我們將推動我們的客戶、我們的業務、我們的員工、我們的社區和地球的進步。該報告詳細介紹了我們取得的重大進展，包括將我們的淨零目標納入我們的產品線策略、透過將範圍 1 和 2 溫室氣體排放量減少 13%、將全球 92% 的電力採購自可再生能源，並將我們的範圍3 排放量減少8%。

Our ERP modernization journey is the second piece of our performance pillar. The project is on track and our focus in 2024 continues to be on the design and build phase of the implementation. Our significant investment in this ERP consolidation project will provide a strong and secure digital infrastructure to enable globally standardized processes and systems for scalable growth by better serving more customers and unlocking operational efficiency. Overall, our second-quarter results reflect solid execution on our enterprise growth strategy, providing strong momentum for the remainder of 2024 and the years ahead.

我們的 ERP 現代化之旅是我們績效支柱的第二部分。該專案正在按計劃進行，我們 2024 年的重點仍然是實施的設計和建造階段。我們對此 ERP 整合專案的重大投資將提供強大且安全的數位基礎設施，透過更好地服務更多客戶並釋放營運效率，實現全球標準化流程和系統的可擴展成長。總體而言，我們第二季的業績反映了我們企業成長策略的紮實執行，為 2024 年剩餘時間和未來幾年提供了強勁動力。

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

這樣，我會將電話轉給費伊，討論我們的財務狀況。

Thank you, Dave, and good morning, everyone.

謝謝戴夫，大家早安。

In the second quarter of 2024, Tennant delivered GAAP net income of $27.9 million compared to $31.3 million in the prior year period. Net income performance in the quarter was driven by higher net sales from price realization. This was partly offset by volume declines in the EMEA and APAC regions. Overall, while our volumes remain flat, we are pleased with the net volume growth we are seeing in the Americas.

2024 年第二季度，坦能實現 GAAP 淨利為 2,790 萬美元，而去年同期為 3,130 萬美元。本季的淨利潤表現是由價格實現帶來的淨銷售額增加所推動的。這部分被歐洲、中東和非洲和亞太地區銷售下降所抵銷。總體而言，雖然我們的銷售量保持不變，但我們對美洲的淨銷售成長感到滿意。

Operating expenses were higher in the current year due to the ERP implementation, as well as transaction and integration costs associated with our investment in Brain Corp and the acquisition of TCS. Looking beyond operating income, interest expense in the second quarter was $1.5 million lower than the prior year period. This was driven mostly by lower debt balances as we meaningfully reduced debt during the second half of 2023.

由於 ERP 的實施，以及與我們投資 Brain Corp 和收購 TCS 相關的交易和整合成本，本年度的營運費用較高。除了營業收入外，第二季的利息支出比去年同期減少了 150 萬美元。這主要是由於我們在 2023 年下半年大幅減少了債務，導致債務餘額下降。

Our average interest rate net of hedging for the second quarter of 2024 was 3.88% compared to 4.35% in the prior year quarter. Income tax expense in the quarter was $0.4 million higher than the prior year period. Our effective tax rate was 24.4% in the second quarter of 2024 compared to 21.6% in the prior year. The increase was primarily due to an increase in non-deductible executive compensation and unfavorable changes in the mix of forecasted earnings by country.

2024 年第二季我們的平均利率（扣除避險後）為 3.88%，去年同期為 4.35%。本季所得稅費用比去年同期增加 40 萬美元。2024 年第二季我們的有效稅率為 24.4%，而前一年為 21.6%。這一增長主要是由於不可扣除的高管薪酬的增加以及各國預測收益組合的不利變化。

Excluding ERP implementation and other non-GAAP costs, adjusted net income in the second quarter of 2024 was $35.2 million compared to $34.7 million in the prior year period, a 1.4% increase. Adjusted EPS for the second quarter of 2024 decreased 1.6% to $1.83 per diluted share compared to the prior year period.

不包括 ERP 實施和其他非 GAAP 成本，2024 年第二季調整後淨利為 3,520 萬美元，較上年同期的 3,470 萬美元成長 1.4%。與去年同期相比，2024 年第二季調整後每股盈餘下降 1.6%，至稀釋後每股 1.83 美元。

Looking a little more closely at our quarterly results, for the second quarter of 2024, consolidated net sales totaled $331 million, a 2.9% increase compared to $321.7 million in the second quarter of 2023. On a constant currency basis, organic sales increased 2.7%, driven primarily by strong price realization across all regions. Additionally, there was a shift in product mix from smaller commercial equipment to larger industrial equipment.

仔細觀察我們的季度業績，2024 年第二季的合併淨銷售額總計 3.31 億美元，比 2023 年第二季的 3.217 億美元成長 2.9%。以固定匯率計算，有機銷售額成長了 2.7%，這主要得益於所有地區強勁的價格實現。此外，產品結構也從小型商業設備轉向大型工業設備。

Volumes in the current period were negatively impacted by sluggish economic growth in EMEA and difficult business conditions in APAC. As a reminder, we group our net sales into the following categories: equipment, parts and consumables, and service and other. We experienced growth in both equipment and service product categories in the second quarter as compared to the prior year period. Equipment net sales grew 3.7% and service grew 8.2%. Parts and consumables declined 3%, driven primarily by a distributor consolidation.

本期銷售量受到歐洲、中東和非洲地區經濟成長緩慢以及亞太地區艱難商業環境的負面影響。提醒一下，我們將淨銷售額分為以下幾類：設備、零件和消耗品、服務及其他。與去年同期相比，第二季我們的設備和服務產品類別均出現成長。設備淨銷售額成長 3.7%，服務淨銷售額成長 8.2%。零件和消耗品下降了 3%，主要是由於分銷商整合所致。

Tennant also groups its sales into three regions. The Americas includes all of North America and Latin America. EMEA covers Europe, the Middle East and Africa. And Asia Pacific includes Australia, China, Japan and other Asian markets. Organic sales in the Americas increased 5.5% compared to the prior year period. The increase was driven primarily by price realization and favorable product and channel mix across the region. This was partially offset by unit volume decreases in North America, specifically in our commercial machines, which had a higher backlog benefit in the prior year period.

坦能也將其銷售分為三個區域。美洲包括整個北美洲和拉丁美洲。EMEA 涵蓋歐洲、中東和非洲。亞太地區包括澳洲、中國、日本和其他亞洲市場。美洲的有機銷售額與去年同期相比成長了 5.5%。這一增長主要是由於該地區的價格實現以及有利的產品和通路組合所推動的。這被北美單位數量的減少所部分抵消，特別是我們的商用機器，該機器在上一年期間具有較高的積壓效益。

Organic sales declined 0.3% in EMEA due to volume declines in both equipment sales and parts and consumables, partially offset by price realization in all product categories. EMEA volumes were impacted by weaker than expected market conditions and a smaller contribution from backlog reduction in the current period.

由於設備銷售以及零件和消耗品銷量下降，歐洲、中東和非洲地區的有機銷售額下降了 0.3%，但部分被所有產品類別的價格實現所抵消。歐洲、中東和非洲地區的銷售量受到市場狀況弱於預期以及本期積壓訂單減少貢獻較小的影響。

Organic sales decreased 11.9% in APAC primarily due to volume declines in Australia and China, partially offset by price growth in Australia.

亞太地區的有機銷售額下降了 11.9%，主要是由於澳洲和中國的銷量下降，但部分被澳洲的價格成長所抵消。

Adjusted EBITDA for the second quarter of 2024 was $58.6 million, up 1.7% compared to the second quarter of 2023. Adjusted EBITDA margin for the second quarter of 2024 was 17.7% of sales, essentially flat compared to the second quarter of 2023.

2024 年第二季調整後 EBITDA 為 5,860 萬美元，較 2023 年第二季成長 1.7%。2024 年第二季調整後 EBITDA 利潤率的 17.7%，與 2023 年第二季基本持平。

Gross margin was 43.1% in the second quarter, a 30-basis-point decrease compared to the prior year quarter. The slight margin rate decrease is attributed to higher inflation, while price realization and cost-saving activities materially offset inflation during the quarter. Our overall margin rate is supported by a continued shift to industrial equipment and the direct sales channel.

第二季毛利率為43.1%，較去年同期下降30個基點。利潤率小幅下降是由於通膨上升，而價格實現和成本節約活動實質上抵消了本季的通膨。我們的整體利潤率受到持續轉向工業設備和直銷管道的支撐。

Adjusted selling and administrative expenses in the quarter totaled $87.5 million, a $1.7 million increase compared to the second quarter of 2023. The increase was driven in part by higher compensation and benefit expense related to incremental resources to support the company's enterprise strategy. Adjusted S&A expense as a percent of net sales was 26.4%, essentially flat to the 26.7% in the second quarter of 2023.

本季調整後的銷售和管理費用總計 8,750 萬美元，比 2023 年第二季增加 170 萬美元。這一增長的部分原因是與支持公司企業策略的增量資源相關的薪酬和福利費用增加。調整後的銷售與管理費用佔淨銷售額的百分比為 26.4%，與 2023 年第二季的 26.7% 基本持平。

Turning now to capital deployment. Net cash provided by operating activities was $18.6 million during the second quarter compared to $39.1 million in the year-ago period. The decrease in operating cash flow was primarily driven by increases in working capital due to the timing of sales during the quarter, as well as investments in ERP modernization costs totaling $9 million, resulting in free cash flow of $14.4 million for the quarter. Excluding these non-operating items, free cash flow was $23.4 million for the second quarter of 2024.

現在轉向資本部署。第二季經營活動提供的現金淨額為 1,860 萬美元，去年同期為 3,910 萬美元。營運現金流的減少主要是由於本季銷售時間導致的營運資金增加以及 ERP 現代化成本投資總計 900 萬美元，導致本季自由現金流為 1,440 萬美元。不包括這些非經營項目，2024 年第二季的自由現金流為 2,340 萬美元。

The company continues to deploy cash towards operational capital needs and to return capital to shareholders, in line with its capital allocation priorities. During the second quarter, the company invested $4.2 million in capital expenditures and returned $13.3 million to shareholders through dividends and share repurchases. Tennant's liquidity remains strong with a balance of $84.6 million in cash and cash equivalents at the end of the second quarter and approximately $321.8 million of unused borrowing capacity on the company's revolving credit facility.

該公司繼續根據其資本配置優先事項部署現金以滿足營運資本需求並向股東返還資本。第二季度，該公司投資了 420 萬美元的資本支出，並透過股利和股票回購向股東返還 1,330 萬美元。Tennant 的流動性仍然強勁，第二季末現金和現金等價物餘額為 8,460 萬美元，公司循環信貸額度的未使用借款能力約為 3.218 億美元。

On August 7, the company refinanced its existing debt agreement, increasing its revolving credit facility limit to $650 million. This gives the company more flexibility and capability for growth through M&A and offers significant potential for driving expansion and creating value for our stakeholders.

8 月 7 日，該公司對其現有債務協議進行再融資，將其循環信貸額度提高至 6.5 億美元。這為公司提供了更大的靈活性和透過併購實現成長的能力，並為推動擴張和為利害關係人創造價值提供了巨大的潛力。

The company continues to effectively manage debt and maintain a strong balance sheet. Our net leverage was 0.61 times adjusted EBITDA, below our targeted range of 1 to 2 times of adjusted EBITDA.

該公司繼續有效管理債務並維持強勁的資產負債表。我們的淨槓桿率為調整後 EBITDA 的 0.61 倍，低於調整後 EBITDA 1 至 2 倍的目標範圍。

Moving to 2024 guidance, overall, based on the strong order growth rates and demand for our products and services, we are now forecasting slightly higher net sales for the full year 2024. As backlog returns to normal, removing the higher pricing within, we anticipate a shift back to a typical product mix between industrial and commercial machines and the return to a more normal growth margin. We anticipate higher operating expenses in the second half of 2024 compared to the first half with targeted focus on new product development within R&D. We will remain disciplined and prudent in our spending, focusing our investments in areas that position us for future growth and increased operating efficiency.

總體而言，轉向 2024 年指導，基於強勁的訂單成長率以及對我們產品和服務的需求，我們現在預測 2024 年全年的淨銷售額將略有上升。隨著積壓恢復正常，消除內部較高的定價，我們預計工業和商業機器之間的典型產品組合將回歸，並恢復更正常的成長利潤。我們預計 2024 年下半年的營運費用將高於上半年，重點在於研發領域的新產品開發。我們將在支出方面保持紀律和審慎，將投資重點放在有利於我們未來成長和提高營運效率的領域。

Given these factors and the strong profitable growth in the first half of the year, we are raising our outlook for the full year 2024. Specifically, we now expect net sales to be in the range of $1.28 billion to $1.305 billion, reflecting organic sales growth between 2.5% and 4.5%; adjusted EPS of $6.15 to $6.55 per diluted share, which excludes certain non-operational items and amortization expense; adjusted EBITDA in the range of $205 to $215 million; adjusted EBITDA margin in the range of 16% to 16.5%; and capital expenditures of approximately $20 million.

考慮到這些因素以及上半年利潤的強勁增長，我們上調了 2024 年全年的預期。具體來說，我們現在預計淨銷售額將在 12.8 億美元至 13.05 億美元之間，反映出有機銷售額成長 2.5% 至 4.5% 之間；調整後每股攤薄每股收益為 6.15 美元至 6.55 美元，其中不包括某些非營運項目和攤銷費用；調整後的 EBITDA 在 2.05 至 2.15 億美元之間；調整後的 EBITDA 利潤率在 16% 至 16.5% 之間；資本支出約2000萬美元。

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

這樣，我會將電話轉回給戴夫。

Thank you, Fay.

謝謝你，費伊。

In summary, I am very proud of the global team and our ability to continue our growth trajectory as we are lapping a record prior year. The investments we are making and innovative products we are delivering to our customers position us well to deliver on our increased full-year guidance.

總而言之，我對全球團隊以及我們繼續成長軌蹟的能力感到非常自豪，因為我們在去年創下了紀錄。我們正在進行的投資和我們向客戶提供的創新產品使我們能夠很好地實現我們增加的全年指導。

I wanted to thank everyone who joined us for our Investor Day at the New York Stock Exchange in May. It was well attended, and we received positive feedback from those who attended in person as well as remotely. A recording of the event, along with the presentation, is available on our investor website.

我要感謝五月在紐約證券交易所參加我們投資者日的所有人。出席人數眾多，我們收到了親自和遠端參加者的正面回饋。我們的投資者網站上提供了該活動的錄音以及簡報。

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

至此，我們將開始提問。接線員，請繼續。

(Operator Instructions) Steve Ferazani, Sidoti.

（操作員說明）Steve Ferazani，Sidoti。

This is Daniel. I'm actually filling in for Steve today. Given the strength, once again, of EPS and the good, strong orders, can you maybe just provide a little bit of color on why you decided to lower the high range of your EPS guidance?

這是丹尼爾.今天我其實是在代替史蒂夫。再次考慮到每股盈餘的強勁勢頭以及良好、強勁的訂單，您能否提供一些資訊來解釋為什麼您決定降低每股盈餘指引的上限？

Yes. I think as we look at tax rate, as we look at interest expense, as we look at kind of the overall expense, I think that's a contributing factor to our overall kind of EPS.

是的。我認為，當我們考慮稅率、利息支出、整體支出時，我認為這是影響我們整體每股收益的一個因素。

And then you touched on the geographic areas, but and you -- Italy is promising right now, but in general, are you seeing any recovery in any other areas within EMEA?

然後您談到了地理區域，但是義大利現在很有希望，但總的來說，您是否看到歐洲、中東和非洲地區的任何其他地區出現復甦？

We are seeing I would call it still sluggish demand across the region. We highlighted Italy because it's an area that we have made specific investments in, and we're starting to see green shoots of return on those investments. Coming just on the quarter, we saw positivity in the UK as well as from our acquisition in Central and Eastern Europe, the TCS acquisition. So those would be points I would highlight as points of positivity coming through the quarter from a market demand perspective.

我們看到，我認為整個地區的需求仍然低迷。我們之所以強調義大利，是因為我們在該領域進行了具體投資，並且我們開始看到這些投資回報的萌芽。就在本季度，我們在英國以及我們在中歐和東歐的收購（TCS 收購）中看到了積極的一面。因此，從市場需求的角度來看，這些都是我要強調的本季正面的觀點。

And then just one more, if you don't mind. Could you just touch a little bit on the M&A pipeline that you see right now?

如果你不介意的話，那就再來一張吧。您能否簡單介紹一下目前看到的併購管道？

So we've been very transparent with our strategy around M&A. We're focused on deals that depend and grow our core business, that allow us to grow and capture value in the connected autonomy space, and then the adjacency of other mobile equipment. We developed a funnel of over 800 target companies aligned with that strategy, and we are actively working that funnel.

因此，我們的併購策略一直非常透明。我們專注於依賴和發展我們的核心業務的交易，這些交易使我們能夠在互聯自治領域以及其他行動裝置的鄰近領域發展和獲取價值。我們開發了一個由 800 多家符合該策略的目標公司組成的管道，並且我們正在積極開展該管道的工作。

I would point at the Brain agreement, although technically not an acquisition. The equity stake we took in Brain and the agreement we signed are providing commercial benefits to accelerate our AMR adopts and our AMR sales in the marketplace, and we are realizing benefits from that investment. And TCS, which was our acquisition in Central and Eastern Europe, is on track and yielding the intended benefits.

我會指出 Brain 協議，儘管從技術上講這不是一項收購。我們在 Brain 中的股權以及我們簽署的協議正在提供商業利益，以加速我們的 AMR 採用和 AMR 在市場上的銷售，我們正在從這項投資中實現收益。我們在中歐和東歐收購的 TCS 正在步入正軌並產生了預期的效益。

We have two proof points of action here early in the year within our M&A funnel. We are actively working that funnel and prioritizing targets. As you know, M&A can be a bit episodic and out of our control as far as pacing, but we are actively engaged working the funnel. And when I say we, this is an enterprise priority. So Fay and I are hands-on with some targets, and we have resources within the company that are also identifying high-priority relationships to form and strategic areas within the funnel that we should be focusing for acquisition.

今年年初，我們的併購管道中有兩個行動證據點。我們正在積極努力，確定目標的漏斗和優先順序。如您所知，併購可能有點間歇性，並且就節奏而言超出了我們的控制範圍，但我們正在積極參與漏斗工作。當我說我們時，這是企業的首要任務。因此，費伊和我正在親自處理一些目標，我們在公司內部擁有資源，這些資源也在確定要形成的高優先關係以及我們應該重點關注的收購漏斗中的策略領域。

The other thing I would highlight, and Fay mentioned in her opening remarks, we got our debt leverage below one time. We expanded our revolver, and we're showing strong cash conversion on the year. So we've got the financial firepower that when the right deal comes along, we're prepared to move quickly. We've got the financial firepower to do it.

我要強調的另一件事，費伊在她的開場白中提到，我們的債務槓桿一度低於這個水準。我們擴大了左輪手槍的規模，今年我們的現金轉換表現強勁。因此，我們擁有足夠的財務實力，當合適的交易出現時，我們準備迅速採取行動。我們有足夠的財力來做到這一點。

So we look forward to updating you more on specifics as we move to the second half, and it's 2025. But I assure you this is an enterprise priority and will be a strong contributor to our value creation strategies in the coming years.

因此，我們期待在 2025 年下半年向您提供更多具體資訊。但我向您保證，這是企業的首要任務，並將為我們未來幾年的價值創造策略做出巨大貢獻。

(Operator Instructions) Since there are no further questions at this time, we'll like to turn the call over to management for closing remarks.

（操作員說明）由於目前沒有其他問題，我們希望將電話轉交給管理階層進行結束語。

Thank you. I want to thank you all for your participation today and for your interest in Tennant Company. And a special congratulations and thank you to the entire global Tennant team that may be listening to the call. We're fond of saying that growth is a team sport at Tennant Company, so these results are a direct reflection of your efforts and contributions.

謝謝。我要感謝大家今天的參與以及對坦能公司的興趣。特別祝賀並感謝整個全球坦能團隊正在傾聽這項呼籲。我們喜歡說，成長是坦能公司的團隊運動，因此這些結果是您的努力和貢獻的直接反映。

This concludes our earnings call. Have a great day.

我們的財報電話會議到此結束。祝你有美好的一天。

Thank you, ladies and gentlemen. This concludes today's call. Thank you for joining. You may now disconnect.

謝謝你們，女士們、先生們。今天的電話會議到此結束。感謝您的加入。您現在可以斷開連線。