Tennant Q3 sales rise 6.2%; net income hits $19.5M
A $6.1 million tariff refund added about 190 basis points to quarterly gross margin, while nine-month operating cash flow was a $14.3 million use.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Form Type
10-Q
Rhea-AI Filing Summary
Tennant Company (TNC) reported third-quarter 2026 net sales of $322.3 million, up 6.2% from $303.3 million a year earlier, and net income of $19.5 million versus $14.9 million. Diluted earnings per share were $1.12, compared with $0.80. Organic sales growth was 5.7%, led primarily by higher North American volumes. Gross profit margin was 42.3%, down 40 basis points year over year; a $6.1 million tariff refund contributed about 190 basis points.
For the first nine months, sales were $944.2 million versus $911.9 million, while net income was $27.3 million versus $48.2 million. Operating activities used $14.3 million of cash, compared with $50.8 million provided a year earlier, as working-capital needs and North America ERP-related process inefficiencies affected cash conversion. As of September 30, 2026, cash was $75.3 million and revolving borrowings were $357.5 million, with approximately $289.4 million of unused borrowing capacity. The company said elevated input costs, trade-policy uncertainty and regional demand differences continue to affect operations.
2 points · 0 major0 major · 2 points
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Moderate pointThird-quarter sales rose 6.2% to $322.3 million.
- Moderate pointThird-quarter net income increased to $19.5 million from $14.9 million.
Negative
- Moderate pointNine-month net income fell to $27.3 million from $48.2 million.
- Moderate pointOperating cash flow shifted from $50.8 million provided to $14.3 million used.
Filing Explained
The company links higher quarterly interest expense to repurchase funding, while 2,562,493 shares remained authorized—not purchased—at September 30.
Tennant reports completed common-stock repurchases and stock-plan issuances, with 17,047,520 shares outstanding on
For the first nine months, the equity statement lists 949,770 shares repurchased. In the third quarter, 3,665 shares were purchased in total, including 1,865 withheld for employee-plan taxes; 1,800 were listed as purchases under publicly announced plans.
Quarterly net interest expense was
Key Figures
Net sales: $322.3 million
Net income: $19.5 million
Diluted earnings per share: $1.12
+4 more
7 metrics
Net sales
$322.3 million
Three months ended September 30, 2026; $303.3 million in 2025
Net income
$19.5 million
Three months ended September 30, 2026; $14.9 million in 2025
Diluted earnings per share
$1.12
Three months ended September 30, 2026; $0.80 in 2025
Gross profit margin
42.3%
Three months ended September 30, 2026; down 40 basis points from 2025
Net income
$27.3 million
Nine months ended September 30, 2026; $48.2 million in 2025
Operating cash flow
$14.3 million used
Nine months ended September 30, 2026; $50.8 million provided in 2025
Tariff refunds
Approximately $6.1 million
Claims approved and refunds received during the third quarter of 2026
Key Terms
organic sales, gross profit margin, working capital, cash flow hedges
4 terms
organic sales financial
"Net sales excluding acquisitions and foreign currency translation (i.e., organic sales)"
Organic sales are the change in a company’s revenue that comes from its existing business operations, excluding effects of acquisitions, divestitures, and currency swings. Think of it like measuring how much a garden grows from the plants you already tended, rather than adding new pots; investors use organic sales to judge whether demand and core business performance are genuinely improving or if growth is driven by one‑time deals or accounting shifts.
gross profit margin financial
"Gross profit margin was 42.3% in the third quarter of 2026"
Gross profit margin shows how much money a company keeps from sales after paying for the goods or services it sold. It’s like checking how much profit is left over from each dollar earned before covering other costs. A higher margin indicates the company makes more money from its sales, which helps assess its profitability and efficiency.
working capital financial
"increased working capital requirements"
Working capital is the money a business has available to cover its daily expenses, like paying bills and buying supplies. It’s like the cash in your wallet that helps you handle everyday costs; having enough ensures the business can operate smoothly without running into money shortages.
cash flow hedges financial
"Derivatives designated as cash flow hedges"
A cash flow hedge is an accounting label companies use when they enter financial contracts—like currency or interest-rate agreements—to protect expected future cash payments or receipts from unpredictable moves. For investors, it signals that the company is trying to smooth out future cash variability (think of locking in a price to avoid surprises), which can reduce reported profit swings but also means the company has exposure to derivative instruments and their associated risks.
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
How much revenue did TNC report in the third quarter of 2026?
TNC reported $322.3 million in net sales for the three months ended September 30, 2026, up 6.2% from $303.3 million in the same period of 2025. The company reported organic sales growth of 5.7%, driven primarily by higher North American volumes.
What was TNC’s net income in the third quarter of 2026?
TNC reported $19.5 million in net income for the third quarter of 2026, compared with $14.9 million a year earlier. Diluted earnings per share were $1.12, compared with $0.80 for the third quarter of 2025.
How much tariff refunds did TNC receive in the third quarter of 2026?
TNC received approximately $6.1 million in refunds on previously paid tariffs during the third quarter of 2026. The company recognized the benefit in cost of sales; it increased gross profit margin by approximately 190 basis points.
How much unused revolving credit capacity did TNC have at September 30, 2026?
TNC had approximately $289.4 million of unused borrowing capacity on its revolving facility as of September 30, 2026. The company also reported $357.5 million in outstanding revolving-facility borrowings and $3.1 million in letters of credit and bank guarantees.
AI-generated analysis. How Rhea-AI works. Not financial advice.
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the quarterly period ended September 30, 2026
OR
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the transition period from ___________ to __________
Commission File Number 1-16191
__________________________________________
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||
(Address of principal executive offices)
(Zip Code)
(763 ) 540-1200
(Registrant’s telephone number, including area code)
____________________________________________________
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
| þ | No | o | ||||||||||||
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
| þ | No | o | ||||||||||||
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
| þ | Accelerated filer | o | ||||||||||||
| Non-accelerated filer | o | Smaller reporting company | ||||||||||||
| Emerging growth company | ||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
| o | ||||||||
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
| Yes | o | No | ||||||||||||
As of October 30, 2026, there were 17,009,836 shares of common stock outstanding.
1
Table of Contents
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION (Unaudited) | Page | |||||||
Item 1. | Financial Statements | 3 | ||||||
Consolidated Statements of Income | 3 | |||||||
Consolidated Statements of Comprehensive Income | 4 | |||||||
Consolidated Balance Sheets | 5 | |||||||
Consolidated Statements of Cash Flows | 6 | |||||||
Consolidated Statements of Equity | 8 | |||||||
Notes to Consolidated Financial Statements | 10 | |||||||
Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations | 25 | ||||||
Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 32 | ||||||
Item 4. | Controls and Procedures | 33 | ||||||
PART II - OTHER INFORMATION | ||||||||
Item 1. | Legal Proceedings | 33 | ||||||
Item 1A. | Risk Factors | 33 | ||||||
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 33 | ||||||
| Item 5. | Other Information | 34 | ||||||
Item 6. | Exhibits | 35 | ||||||
Signatures | 36 | |||||||
2
Table of Contents
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements
TENNANT COMPANY
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
| (In millions, except shares and per share data) | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Net sales | $ | $ | $ | $ | |||||||||||||||||||
| Cost of sales | |||||||||||||||||||||||
| Gross profit | |||||||||||||||||||||||
| Selling and administrative expense | |||||||||||||||||||||||
| Research and development expense | |||||||||||||||||||||||
| Operating income | |||||||||||||||||||||||
| Interest expense, net | ( | ( | ( | ( | |||||||||||||||||||
| Net foreign currency transaction gain (loss) | ( | ( | |||||||||||||||||||||
| Other expense, net | ( | ( | ( | ( | |||||||||||||||||||
| Income before income taxes | |||||||||||||||||||||||
| Income tax expense | |||||||||||||||||||||||
| Net income | $ | $ | $ | $ | |||||||||||||||||||
| Net income per share | |||||||||||||||||||||||
| Basic | $ | $ | $ | $ | |||||||||||||||||||
| Diluted | $ | $ | $ | $ | |||||||||||||||||||
| Weighted average shares outstanding | |||||||||||||||||||||||
| Basic | |||||||||||||||||||||||
| Diluted | |||||||||||||||||||||||
See accompanying notes to consolidated financial statements.
3
Table of Contents
TENNANT COMPANY
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
| (In millions) | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Net income | $ | $ | $ | $ | |||||||||||||||||||
| Other comprehensive (loss) income: | |||||||||||||||||||||||
Foreign currency translation adjustments (net of related tax (expense) benefit of $( | ( | ( | ( | ||||||||||||||||||||
Derivative financial instruments (net of related tax (expense) benefit of $( | |||||||||||||||||||||||
| Total other comprehensive (loss) income, net of tax | ( | ( | ( | ||||||||||||||||||||
| Total comprehensive income including noncontrolling interest | |||||||||||||||||||||||
| Foreign currency translation adjustments attributable to noncontrolling interest | ( | ( | |||||||||||||||||||||
| Comprehensive income attributable to Tennant Company | $ | $ | $ | $ | |||||||||||||||||||
See accompanying notes to consolidated financial statements.
4
Table of Contents
TENNANT COMPANY
CONSOLIDATED BALANCE SHEETS
| (Unaudited) | |||||||||||
| (In millions, except shares and per share data) | September 30, 2026 | December 31, 2025 | |||||||||
| ASSETS | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
Receivables, less allowances of $ | |||||||||||
| Inventories | |||||||||||
| Prepaid and other current assets | |||||||||||
| Total current assets | |||||||||||
Property, plant and equipment, less accumulated depreciation of $ | |||||||||||
| Operating lease assets | |||||||||||
| Goodwill | |||||||||||
| Intangible assets, net | |||||||||||
| Other assets | |||||||||||
| Total assets | $ | $ | |||||||||
| LIABILITIES AND EQUITY | |||||||||||
| Current portion of long-term debt | $ | $ | |||||||||
| Accounts payable | |||||||||||
| Employee compensation and benefits | |||||||||||
| Other current liabilities | |||||||||||
| Total current liabilities | |||||||||||
| Long-term debt | |||||||||||
| Long-term operating lease liabilities | |||||||||||
| Employee benefits | |||||||||||
| Deferred income taxes | |||||||||||
| Other liabilities | |||||||||||
| Total long-term liabilities | |||||||||||
| Total liabilities | $ | $ | |||||||||
| Commitments and contingencies (Note 13) | |||||||||||
Common Stock, $ | |||||||||||
| Additional paid-in capital | |||||||||||
| Retained earnings | |||||||||||
| Accumulated other comprehensive loss | ( | ( | |||||||||
| Total Tennant Company shareholders' equity | |||||||||||
| Noncontrolling interest | |||||||||||
| Total equity | |||||||||||
| Total liabilities and total equity | $ | $ | |||||||||
See accompanying notes to consolidated financial statements.
5
Table of Contents
TENNANT COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| (In millions) | Nine Months Ended September 30, | ||||||||||
| 2026 | 2025 | ||||||||||
| OPERATING ACTIVITIES | |||||||||||
| Net income | $ | $ | |||||||||
| Adjustments to reconcile net income to net cash used in operating activities: | |||||||||||
| Depreciation expense | |||||||||||
| Amortization expense | |||||||||||
| Loss from equity method investments | |||||||||||
| Deferred income tax expense | |||||||||||
| Share-based compensation expense | |||||||||||
| Bad debt and returns expense | |||||||||||
| Other, net | |||||||||||
| Changes in operating assets and liabilities: | |||||||||||
| Receivables | ( | ||||||||||
| Inventories | ( | ( | |||||||||
| Accounts payable | ( | ( | |||||||||
| Employee compensation and benefits | ( | ||||||||||
| Other assets and liabilities | ( | ( | |||||||||
| Net cash (used in) provided by operating activities | ( | ||||||||||
| INVESTING ACTIVITIES | |||||||||||
| Purchases of property, plant and equipment | ( | ( | |||||||||
| Proceeds from sale of property, plant and equipment | |||||||||||
| Payments made in connection with business acquisition, net of cash acquired | ( | ( | |||||||||
| Investment in leased assets | ( | ( | |||||||||
| Cash received from leased assets | |||||||||||
| Net cash used in investing activities | ( | ( | |||||||||
| FINANCING ACTIVITIES | |||||||||||
| Proceeds from borrowings | |||||||||||
| Repayments of borrowings | ( | ( | |||||||||
Repurchases from exercise of stock options, net of employee tax withholdings obligations of $ | ( | ( | |||||||||
| Repurchases of common stock | ( | ( | |||||||||
| Dividends paid | ( | ( | |||||||||
| Net cash provided by (used in) financing activities | ( | ||||||||||
| Effect of exchange rate changes on cash and cash equivalents | ( | ||||||||||
| Net decrease in cash and cash equivalents | ( | ( | |||||||||
| Cash and cash equivalents at beginning of period | |||||||||||
| Cash and cash equivalents at end of period | $ | $ | |||||||||
6
Table of Contents
| SUPPLEMENTAL CASH FLOW INFORMATION | Nine Months Ended September 30, | ||||||||||
| (In millions) | 2026 | 2025 | |||||||||
| Cash paid for income taxes | $ | $ | |||||||||
| Cash paid for interest | |||||||||||
| Cash paid for amounts included in the measurement of lease liabilities: | |||||||||||
| Operating cash flows from operating leases | |||||||||||
| Financing cash flows from financing leases | |||||||||||
| Lease assets obtained in exchange for new operating lease liabilities | |||||||||||
| Lease assets obtained in exchange for new financing lease liabilities | |||||||||||
| Supplemental non-cash investing and financing activities: | |||||||||||
| Capital expenditures in accounts payable | |||||||||||
See accompanying notes to consolidated financial statements.
7
Table of Contents
TENNANT COMPANY
CONSOLIDATED STATEMENTS OF EQUITY
(Unaudited)
(In millions, except shares and per share data)
| Tennant Company Shareholders | |||||||||||||||||||||||||||||||||||||||||||||||
| Common Shares | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Tennant Company Shareholders' Equity | Noncontrolling Interest | Total Equity | ||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2025 | $ | $ | $ | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive loss | — | — | — | — | ( | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
Issue stock for directors, employee benefit and stock plans, net of related tax withholdings of | — | ( | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||
| Share-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Repurchases of common stock, including excise tax | ( | ( | ( | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||
Dividends paid $ | — | — | — | ( | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
| Other | — | — | — | ( | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
| Balance, March 31, 2026 | $ | $ | $ | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive loss | — | — | — | — | ( | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
Issue stock for directors, employee benefit and stock plans, net of related tax withholdings of | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
| Share-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Repurchases of common stock, including excise tax | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Dividends paid $ | — | — | — | ( | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
| Other | — | — | ( | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
| Balance, June 30, 2026 | $ | $ | $ | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive loss | — | — | — | — | ( | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
Issue stock for directors, employee benefit and stock plans, net of related tax withholdings of | — | ( | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||
| Share-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Repurchases of common stock, including excise tax | ( | — | ( | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
Dividends paid $ | — | — | — | ( | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
| Other | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||
| Balance, September 30, 2026 | $ | $ | $ | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
8
Table of Contents
| Tennant Company Shareholders | |||||||||||||||||||||||||||||||||||||||||||||||
| Common Shares | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Tennant Company Shareholders' Equity | Noncontrolling Interest | Total Equity | ||||||||||||||||||||||||||||||||||||||||
| Balance, December 31, 2024 | $ | $ | $ | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Issue stock for directors, employee benefit and stock plans, net of related tax withholdings of | ( | ( | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||
| Share-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Repurchases of common stock, including excise tax | ( | — | ( | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
Dividends paid $ | — | — | — | ( | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
| Other | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Balance, March 31, 2025 | $ | $ | $ | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Issue stock for directors, employee benefit and stock plans, net of related tax withholdings and repurchases of | — | ( | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||
| Share-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Repurchases of common stock, including excise tax | ( | — | ( | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
Dividends paid $ | — | — | — | ( | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
| Other | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Balance, June 30, 2025 | $ | $ | $ | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive loss | — | — | — | — | ( | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
Issue stock for directors, employee benefit and stock plans, net of related tax withholdings and repurchases of | — | ( | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||
| Share-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Repurchases of common stock, including excise tax | ( | ( | ( | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
Dividends paid $ | — | — | — | ( | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
| Balance, September 30, 2025 | $ | $ | $ | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
See accompanying notes to consolidated financial statements.
9
Table of Contents
TENNANT COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(In millions, except shares and per share data)
1. Nature of Business
Tennant Company ("the Company", "we", "us", or "our") is a world leader in designing, manufacturing and marketing solutions that help create a cleaner, safer, healthier world. The Company is committed to creating and commercializing breakthrough, sustainable cleaning innovations to enhance its broad suite of products, including floor maintenance and cleaning equipment, detergent-free and other sustainable cleaning technologies, aftermarket parts and consumables, equipment maintenance and repair service, and asset management solutions.
Our products are used in many types of environments, including retail establishments, distribution centers, factories and warehouses, public venues such as arenas and stadiums, office buildings, schools and universities, hospitals and clinics, and more.
Customers include contract cleaners to whom organizations outsource facilities maintenance as well as businesses that perform facilities maintenance themselves. The Company reaches these customers through the industry's largest direct sales and service organization and through a strong and well-supported network of authorized distributors worldwide.
2. Significant Accounting Policies
Basis of Presentation – The accompanying unaudited consolidated financial statements have been prepared in accordance with the U.S. Securities and Exchange Commission (“SEC”) requirements for interim reporting. In our opinion, the consolidated financial statements contain all adjustments (consisting of only normal recurring adjustments) necessary for the fair presentation of our financial position and results of operations.
These statements should be read in conjunction with the consolidated financial statements and notes included in our annual report on Form 10-K for the year ended December 31, 2025. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year.
There are no newly adopted accounting pronouncements during the three months ended September 30, 2026 that impacted the Company.
3. Revenue
Disaggregation of Revenue
The following tables illustrate the disaggregation of revenue by geographic area, groups of similar products and services and sales channels:
Net sales by geographic area
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Americas | $ | $ | $ | $ | |||||||||||||||||||
| Europe, Middle East and Africa | |||||||||||||||||||||||
| Asia Pacific | |||||||||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||||||||
Net sales are attributed to each geographic area based on the end-user country and are net of intercompany sales.
10
Table of Contents
Net sales by groups of similar products and services
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Equipment | $ | $ | $ | $ | |||||||||||||||||||
| Parts and consumables | |||||||||||||||||||||||
| Service and other | |||||||||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||||||||
Net sales by sales channel
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Sales direct to consumer | $ | $ | $ | $ | |||||||||||||||||||
| Sales to distributors | |||||||||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||||||||
Contract Liabilities
Sales Returns
The right of return may exist explicitly or implicitly with our customers. When the right of return exists, we adjust the transaction price for the estimated effect of returns. We estimate the expected returns using the expected value method by assessing historical sales levels and the timing and magnitude of historical sales return levels as a percent of sales and projecting this experience into the future.
Sales Incentives
Our sales contracts may contain various customer incentives, such as volume-based rebates or other promotions. We reduce the transaction price for certain customer programs and incentive offerings that represent variable consideration. Sales incentives given to our customers are recorded using the most likely amount approach for estimating the amount of consideration to which the Company will be entitled. We forecast the most likely amount of the incentive to be paid at the time of sale, update this forecast quarterly, and adjust the transaction price accordingly to reflect the new amount of incentives expected to be earned by the customer. A majority of our customer incentives are settled within one year. We record our accruals for volume-based rebates and other promotions in other current liabilities on our consolidated balance sheets.
The change in our sales incentive accrual balance was as follows:
| Nine Months Ended September 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Beginning balance | $ | $ | |||||||||
| Additions to sales incentive accrual | |||||||||||
| Contract payments | ( | ( | |||||||||
| Foreign currency fluctuations | ( | ||||||||||
| Ending balance | $ | $ | |||||||||
11
Table of Contents
Deferred Revenue
Deferred revenue represents consideration received or billed in advance of satisfying performance obligations that are recognized over time.
Our deferred revenue balance primarily consists of (i) amounts related to Autonomous Robotic Machine ("AMR") arrangements that are recognized over time and (ii) prepaid service and maintenance contracts for our machines. Service and maintenance contracts generally provide routine maintenance, parts coverage, and support services and are recognized ratably over the contractual service period, which typically ranges from 12 months to 60 months.
Prior to March 1, 2026, certain AMR customer arrangements required an active autonomy subscription for customers to benefit from autonomous functionality. Amounts allocated to these subscription-based arrangements were recognized over the contractual subscription period and included in deferred revenue. Effective March 1, 2026, the Company amended its AMR arrangements such that customers receive full rights to the embedded autonomy software upon delivery of the machine along with ongoing connectivity services. Revenue associated with the embedded autonomy software is recognized at the time of sale. Revenue related to connectivity services (which include cloud connectivity, software updates, diagnostic, monitoring and support services) is recognized on a straight-line basis over the period the services are made available.
In arrangements that include multiple performance obligations, the transaction price is allocated to each performance obligation based on relative standalone selling prices.
The change in the deferred revenue balance was as follows:
| Nine Months Ended September 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Beginning balance | $ | $ | |||||||||
| Increase in deferred revenue representing our obligation to satisfy future performance obligations | |||||||||||
| Decrease in deferred revenue for amounts recognized in net sales for satisfied performance obligations | ( | ( | |||||||||
| Foreign currency fluctuations | ( | ||||||||||
| Ending balance | $ | $ | |||||||||
As of September 30, 2026, $15.5 million and $14.1 million of deferred revenue was reported in other current liabilities and other liabilities, respectively, on our consolidated balance sheets. Of these amounts, we expect to recognize the following approximate amounts in net sales in the following periods:
Remaining 2026 | $ | ||||
| 2027 | |||||
| 2028 | |||||
| 2029 | |||||
| 2030 | |||||
| Thereafter | |||||
| Total | $ | ||||
As of December 31, 2025, $16.6 million and $15.8 million of deferred revenue was reported in other current liabilities and other liabilities, respectively, on our consolidated balance sheets.
12
Table of Contents
4. Management Actions
Restructuring Actions
During the three and nine months ended September 30, 2026, we recognized restructuring activity as part of our ongoing global reorganization efforts. The following pre-tax restructuring charges were included in selling and administrative expense in the consolidated statements of income.
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Severance-related costs | $ | ( | $ | $ | $ | ||||||||||||||||||
| Total pre-tax restructuring costs | $ | ( | $ | $ | $ | ||||||||||||||||||
Our restructuring actions represent the execution of a multi-year enterprise strategy to drive increased productivity throughout our operations. The charges in 2026 and 2025 impacted all operating segments and were related to a global workforce realignment to support our key strategic initiatives.
A reconciliation of the beginning and ending net liability balances for severance-related costs is as follows:
| Nine Months Ended September 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Beginning balance | $ | $ | |||||||||
| New charges | |||||||||||
| Cash payments | ( | ( | |||||||||
| Foreign currency fluctuations | ( | ||||||||||
| Adjustments to accrual | ( | ( | |||||||||
| Ending balance | $ | $ | |||||||||
5. Acquisitions
Clean Machine
On February 2, 2026, we acquired 100 % of our distributors, Clean Machine Falkenberg AB and Repax AB (collectively, "Clean Machine"), as we continue to expand our footprint in the EMEA region. The total purchase price was $7.7 million. The financial results for Clean Machine have been included in our consolidated financial statements since the acquisition date. The acquisition was not material to our consolidated financial statements.
R4Y
13
Table of Contents
6. Inventories
Inventories are valued at the lower of cost or net realizable value and consisted of the following:
| September 30, 2026 | December 31, 2025 | ||||||||||
| Inventories carried at LIFO: | |||||||||||
Finished goods(a) | $ | $ | |||||||||
| Raw materials and work-in-process | |||||||||||
Excess of FIFO over LIFO cost(b) | ( | ( | |||||||||
| Total LIFO inventories | $ | $ | |||||||||
| Inventories carried at FIFO: | |||||||||||
Finished goods(a) | $ | $ | |||||||||
| Raw materials and work-in-process | |||||||||||
| Total FIFO inventories | $ | $ | |||||||||
| Total inventories | $ | $ | |||||||||
(a)Finished goods include machines, parts and consumables and component parts that are used in our products.
(b)The difference between replacement cost and the stated LIFO inventory value is not materially different from the reserve for the LIFO valuation method.
7. Goodwill and Intangible Assets
The changes in the carrying amount of goodwill for the nine months ended September 30, 2026 were as follows:
| Goodwill | Accumulated Impairment Losses | Total | |||||||||||||||
Balance as of December 31, 2025 | $ | $ | ( | $ | |||||||||||||
| Additions | — | ||||||||||||||||
| Foreign currency fluctuations | ( | ( | |||||||||||||||
Balance as of September 30, 2026 | $ | $ | ( | $ | |||||||||||||
The balances of acquired intangible assets, excluding goodwill, were as follows:
| Customer Lists | Trade Names | Technology | Total | ||||||||||||||||||||
Balance as of September 30, 2026 | |||||||||||||||||||||||
| Original cost | $ | $ | $ | $ | |||||||||||||||||||
| Accumulated amortization | ( | ( | ( | ( | |||||||||||||||||||
| Carrying value | $ | $ | $ | $ | |||||||||||||||||||
| Weighted average original life (in years) | |||||||||||||||||||||||
Balance as of December 31, 2025 | |||||||||||||||||||||||
| Original cost | $ | $ | $ | $ | |||||||||||||||||||
| Accumulated amortization | ( | ( | ( | ( | |||||||||||||||||||
| Carrying value | $ | $ | $ | $ | |||||||||||||||||||
| Weighted average original life (in years) | |||||||||||||||||||||||
14
Table of Contents
Amortization expense on intangible assets for the three and nine months ended September 30, 2026 was $3.1 million and $9.9 million, respectively. Amortization expense on intangible assets for the three and nine months ended September 30, 2025 was $3.4 million and $10.2 million, respectively.
Estimated aggregate amortization expense based on the current carrying value of amortizable intangible assets for each of the five succeeding years and thereafter is as follows:
Remaining 2026 | $ | ||||
| 2027 | |||||
| 2028 | |||||
| 2029 | |||||
| 2030 | |||||
| Thereafter | |||||
| Total | $ | ||||
8. Debt
On August 7, 2024, we and certain of our foreign subsidiaries entered into an Amended and Restated Credit Agreement (the "2024 Credit Agreement"), which amends and restates the Amended and Restated Credit Agreement, dated April 5, 2021, as amended on November 10, 2022. The 2024 Credit Agreement provides us and certain of our foreign subsidiaries access to a senior secured credit facility until August 7, 2029, consisting of a revolving facility in an amount up to $650.0 million, with an option to expand the revolving facility or obtain incremental term loans by up to $325.0 million, with the consent of the lenders willing to provide additional borrowings in the form of increases to their revolving facility commitment or funding of incremental term loans. Borrowings may be denominated in U.S. dollars or certain other currencies.
The fee for undrawn committed funds under the revolving facility of the 2024 Credit Agreement ranges from an annual rate of 0.15 % to 0.30 %, depending on our leverage ratio. Borrowings denominated in U.S. dollars under the 2024 Credit Agreement bear interest at a rate per annum equal to (a) the greatest of (i) the prime rate, (ii) the NYFRB Rate (as defined in the 2024 Credit Agreement) plus 0.50 % and (iii) the Adjusted Term SOFR Rate (as defined in the 2024 Credit Agreement) for a one month period plus 1 %; but in any case not less than 1 %, plus an additional spread of 0.25 % to 1 %, depending on our leverage ratio, (b) the Adjusted Term SOFR Rate plus an additional spread of 1.25 % to 2 %, depending on our leverage ratio, or (c) the Adjusted Daily Simple RFR (as defined in the 2024 Credit Agreement) plus an additional spread of 1.25 % to 2 %, depending on our leverage ratio.
In connection with the 2024 Credit Agreement, we reaffirmed our security interest in favor of the lenders in substantially all its personal property and pledged the stock of certain of our domestic and foreign subsidiaries. The obligations under the 2024 Credit Agreement are also guaranteed by certain of the Company’s subsidiaries and those subsidiaries also provided a security interest in their similar personal property.
The 2024 Credit Agreement contains customary representations, warranties and covenants, including but not limited to covenants restricting the Company’s ability to incur indebtedness and liens and merge or consolidate with another entity. Further, the 2024 Credit Agreement contains the following covenants:
•a covenant requiring us to maintain an indebtedness to EBITDA ratio, determined as of the end of each of our fiscal quarters, of no greater than 3.75 to 1.00, with certain alternative requirements for permitted acquisitions of at least $50.0 million;
•a covenant requiring us to maintain an EBITDA to interest expense ratio for a period of four consecutive fiscal quarters as of the end of each quarter of no less than 3.00 to 1; and
•a covenant restricting us from paying dividends or repurchasing stock if, after giving effect to such payments and assuming no default exists or would result from such payment, our leverage ratio is greater than 2.50 to 1, in such case limiting such payments to the greater of 10% of consolidated total assets and $100.0 million during any fiscal year.
15
Table of Contents
We were in compliance with the above financial covenants as of September 30, 2026.
Debt Outstanding
Debt outstanding consisted of the following:
| September 30, 2026 | December 31, 2025 | ||||||||||
| Credit facility borrowings: | |||||||||||
| Revolving credit facility borrowings | $ | $ | |||||||||
| Finance lease liabilities | |||||||||||
| Total debt | |||||||||||
Less: current portion of long-term debt(a) | ( | ( | |||||||||
| Long-term debt | $ | $ | |||||||||
(a)As of September 30, 2026, the Company was required to repay $0.4 million of finance lease liabilities over the next 12 months.
As of September 30, 2026, we had outstanding borrowings of $357.5 million under our revolving credit facility. We had letters of credit and bank guarantees outstanding in the amount of $3.1 million, leaving approximately $289.4 million of unused borrowing capacity on our revolving facility. Commitment fees on unused lines of credit for the nine months ended September 30, 2026 were $0.4 million. The overall weighted average cost of debt was approximately 5.3 % and net of related cross-currency swap instruments and fixed rate interest rate swap instruments was approximately 4.5 %. Further details regarding the cross-currency swap instrument and fixed rate interest rate swap instrument are discussed in Note 10.
9. Warranty
We record a liability for warranty claims at the time of sale. The amount of the liability is based on the trend in the historical ratio of claims to sales, the historical length of time between the sale and resulting warranty claim, new product introductions and other factors. Warranty terms on machines generally range from to four years . The majority of the liability for estimated warranty claims represents amounts to be paid out in the near term for qualified warranty issues.
The changes in warranty reserves were as follows:
| Nine Months Ended September 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Beginning balance | $ | $ | |||||||||
| Additions charged to expense | |||||||||||
| Foreign currency fluctuations | |||||||||||
| Claims paid | ( | ( | |||||||||
| Ending balance | $ | $ | |||||||||
10. Derivatives
We report all derivative instruments as either assets or liabilities in our consolidated balance sheets at fair value. As a global organization, we are exposed to market risks, including fluctuations in foreign currency exchange rates and interest rates. To manage the volatility associated with these exposures, we enter into derivative instruments from time to time in accordance with our risk management policies.
We designate instruments as hedges on a transaction basis to support hedge accounting when the applicable criteria are met. The changes in fair value on these hedging instruments are intended to offset, in part or in whole, the corresponding changes in the fair value or cash flows of the underlying exposures being hedged.
16
Table of Contents
Gains and losses resulting from changes in fair value are accounted for based on the nature and use of the derivative and whether it is designated and qualifies for hedge accounting.
We assess hedge effectiveness at the inception of the hedging relationship and on an ongoing basis, both prospectively and retrospectively, in accordance with our policy. Any ineffective portion of a hedging instrument is recorded in the same line item of the consolidated statements of income as the item being hedged.
Our hedging policy also establishes maximum limits for each counterparty to reduce concentration of credit risk. We do not purchase, hold, or sell derivative financial instruments for trading purposes.
Cash Flow Hedges
The Company manages exposure to variability in cash flows related to its floating rate debt through the use of interest rate swaps. As of September 30, 2026, the Company had interest rate swaps with an aggregate notional amount of $120.0 million that effectively convert a portion of its variable rate debt to a fixed interest rate of 3.443 %.
The interest rate swaps are designated as cash flow hedges under ASC 815. Changes in the fair value of the swaps, net of tax, are recorded in accumulated other comprehensive loss and are reclassified to interest expense, net, in the periods in which the hedged interest payments affect earnings. The swaps are scheduled to mature on October 1, 2029.
Fair Value Hedges
We have entered into Euro to U.S. dollar foreign exchange cross-currency swaps associated with an intercompany loan to a wholly owned European subsidiary. We enter into these foreign exchange cross-currency swaps to hedge the foreign currency risk associated with this intercompany loan, and accordingly, they are not speculative in nature. These cross-currency swaps are designated as fair value hedges.
On July 28, 2026, we amended and extended the two existing foreign exchange cross-currency swaps designated as fair value hedges. The amendments did not change the aggregate notional amount or the EUR-USD exchange rate of 1.0652 . Due to changes in the economic terms, we discontinued previous hedge accounting relationships and prospectively redesignated the amended swaps in new fair value hedging relationships under ASC 815.
As of September 30, 2026 and December 31, 2025, these cross-currency swaps included €75.0 15.8 million. These swaps are scheduled to mature in July 2030.
Net Investment Hedges
We have entered into Euro to U.S. dollar foreign exchange cross-currency swaps to hedge our exposure to adverse foreign currency exchange rate movements between Tennant Company and its European subsidiaries. We enter into these fixed-to-fixed cross-currency swap agreements to protect a designated monetary amount of the Company’s net investment in its Euro functional currency subsidiaries against the risk of changes in the Euro to U.S. dollar foreign exchange rate. These cross-currency swaps are designated as net investment hedges.
On July 28, 2026, we amended and extended the two existing foreign exchange cross-currency swaps designated as net investment hedges. The amendments did not change the aggregate notional amount or the EUR-USD exchange rate of 1.0652 . Due to changes in economic terms, we discontinued the previous hedge accounting relationships and prospectively redesignated the amended swaps in new net investment hedging relationships under ASC 815.
As of September 30, 2026 and December 31, 2025, the cross-currency swaps included €75.0
Foreign Currency Forward Contracts Not Designated as Hedges
We hedge our net recognized foreign currency denominated assets and liabilities with foreign currency forward contracts to reduce the risk that the value of these assets and liabilities will be adversely affected by changes in
17
Table of Contents
exchange rates. These contracts hedge assets and liabilities that are denominated in foreign currencies and are carried at fair value as either assets or liabilities on the consolidated balance sheets with changes in the fair value recorded to net foreign currency transaction gain (loss) in our consolidated statements of income. These contracts do not subject us to material balance sheet risk due to exchange rate movements because gains and losses on these derivatives are intended to offset gains and losses on the assets and liabilities being hedged.
At September 30, 2026 and December 31, 2025, the notional amounts of foreign currency forward contracts outstanding not designated as hedging instruments were $93.7 million and $92.9 million, respectively.
Balance Sheet Classification
Derivatives are classified as either current or non-current assets or liabilities based on their anticipated settlement dates.
The following table summarizes the location and respective fair values of the Company's derivative financial instruments on a gross basis:
| September 30, 2026 | |||||||||||||||||||||||
| Other Current Assets | Other Current Liabilities | Other Assets | Other Liabilities | ||||||||||||||||||||
| Derivatives designated as cash flow hedges: | |||||||||||||||||||||||
| Interest rate swaps | $ | $ | $ | $ | |||||||||||||||||||
| Derivatives designated as fair value hedges: | |||||||||||||||||||||||
| Cross-currency swaps | |||||||||||||||||||||||
| Derivatives designated as net investment hedges: | |||||||||||||||||||||||
| Cross-currency swaps | |||||||||||||||||||||||
| Derivatives not designated as hedging instruments: | |||||||||||||||||||||||
| Foreign currency forward contracts | |||||||||||||||||||||||
| December 31, 2025 | |||||||||||||||||||||||
| Other Current Assets | Other Current Liabilities | Other Assets | Other Liabilities | ||||||||||||||||||||
| Derivatives designated as cash flow hedges: | |||||||||||||||||||||||
| Interest rate swaps | $ | $ | $ | $ | |||||||||||||||||||
| Derivatives designated as fair value hedges: | |||||||||||||||||||||||
| Cross-currency swaps | |||||||||||||||||||||||
| Derivatives designated as net investment hedges: | |||||||||||||||||||||||
| Cross-currency swaps | |||||||||||||||||||||||
| Derivatives not designated as hedging instruments: | |||||||||||||||||||||||
| Foreign currency forward contracts | |||||||||||||||||||||||
The amount of the gains and losses on hedging instruments and the classification of those gains and losses within our consolidated financial statements for the three and nine months ended September 30, 2026 were as follows. Gains and losses on hedging instruments are located within interest expense, net on our consolidated income statements.
18
Table of Contents
| Gain (Loss) Recognized in Accumulated Other Comprehensive Loss, net of tax | Gain (Loss) Reclassified into Income | ||||||||||||||||||||||
| Three Months Ended September 30, | Three Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Derivatives designated as cash flow hedges: | |||||||||||||||||||||||
| Interest rate swaps | $ | $ | $ | $ | |||||||||||||||||||
| Derivatives designated as fair value hedges: | |||||||||||||||||||||||
| Cross-currency swaps | ( | ||||||||||||||||||||||
| Derivatives designated as net investment hedges: | |||||||||||||||||||||||
| Cross-currency swaps | ( | ( | |||||||||||||||||||||
| Gain (Loss) Recognized in Accumulated Other Comprehensive Income | Gain (Loss) Reclassified into Income | ||||||||||||||||||||||
| Nine Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Derivatives designated as cash flow hedges: | |||||||||||||||||||||||
| Interest rate swaps | $ | $ | ( | $ | ( | $ | |||||||||||||||||
| Derivatives designated as fair value hedges: | |||||||||||||||||||||||
| Cross-currency swaps | |||||||||||||||||||||||
| Derivatives designated as net investment hedges: | |||||||||||||||||||||||
| Cross-currency swaps | ( | ||||||||||||||||||||||
The amount of gains and losses on derivative instruments not designated as hedging instruments and the classification of those gains and losses within our consolidated financial statements during the three and nine months ended September 30, 2026 were as follows. Gains and losses on foreign currency forward contracts not designated as hedging instruments were reclassified into income as net foreign currency transaction gains or losses.
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Derivatives not designated as hedging instruments: | |||||||||||||||||||||||
| Foreign currency forward contracts | $ | $ | ( | $ | $ | ( | |||||||||||||||||
During the next twelve-month period, net gains expected to be reclassified into earnings are shown below:
| Interest rate swaps | $ | ||||
| Cross-currency swaps | |||||
| Total | $ | ||||
19
Table of Contents
11. Fair Value Measurements
Financial Instruments
The carrying amounts reported in the consolidated balance sheets for cash and cash equivalents, accounts receivable, other current assets, accounts payable and other current liabilities approximate fair value due to their short-term nature.
On February 21, 2024, the Company acquired certain investment securities in Brain Corp, a privately held autonomous technology company located in San Diego, California. The investment securities include $12.1 million of redeemable convertible preferred stock, $12.2 million of non-redeemable convertible preferred stock, and $7.8 million of warrants. The redeemable convertible preferred stock is accounted for as an available-for-sale debt security. The non-redeemable convertible preferred stock and warrants are accounted for as equity securities. All securities were recorded at their allocated fair value at the acquisition date.
In December 2025, following achievement of a contractual milestone under the Company’s warrant agreement with Brain Corp, the Company concluded that it had obtained the ability to exercise significant influence over Brain Corp under ASC 323, Investments – Equity Method and Joint Ventures, and adopted the equity method of accounting for its equity securities investment (see Note 12 – Equity Method Investments).
The available-for-sale debt security is carried at fair value with changes in fair value recognized in accumulated other comprehensive loss. The Company estimates fair value using Level 3 inputs.
As of September 30, 2026 and December 31, 2025, the cost and market values of our debt and equity securities were as follows:
| Cost | Fair Value | Gross Unrealized Gains | Gross Unrealized Losses | ||||||||||||||||||||
Balance as of September 30, 2026 | |||||||||||||||||||||||
| Available-for-sale debt securities | $ | $ | $ | $ | ( | ||||||||||||||||||
| Total debt securities | $ | $ | $ | $ | ( | ||||||||||||||||||
Balance as of December 31, 2025 | |||||||||||||||||||||||
| Available-for-sale debt securities | $ | $ | $ | $ | ( | ||||||||||||||||||
| Total debt securities | $ | $ | $ | $ | ( | ||||||||||||||||||
The aggregate unrealized gains and losses on available-for-sale debt securities, net of tax effects, are classified in accumulated other comprehensive loss within shareholders' equity.
Scheduled maturities of our debt securities were as follows:
| Cost | Fair Value | |||||||
| After 5 years through 10 years | $ | $ | ||||||
| Total debt securities | $ | $ | ||||||
Fair Value Measurements and Financial Statement Presentation
Estimates of fair value for financial assets and financial liabilities are based on the framework established in the accounting guidance for fair value measurements. The framework defines fair value, provides guidance for measuring fair value and requires certain disclosures. The framework discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow) and the cost approach (cost to replace the service capacity of an asset or replacement cost). The
20
Table of Contents
framework utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:
•Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.
•Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.
•Level 3: Unobservable inputs that reflect the reporting entity’s own assumptions.
Our population of assets and liabilities subject to fair value measurements at September 30, 2026 was as follows:
| Fair Value | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||
| Assets: | |||||||||||||||||||||||
| Debt securities | |||||||||||||||||||||||
| Foreign currency forward contracts | |||||||||||||||||||||||
| Cross-currency swaps | |||||||||||||||||||||||
| Interest rate swaps | |||||||||||||||||||||||
| Total assets | |||||||||||||||||||||||
| Liabilities: | |||||||||||||||||||||||
| Foreign currency forward contracts | |||||||||||||||||||||||
| Cross-currency swaps | |||||||||||||||||||||||
| Total liabilities | $ | $ | $ | $ | |||||||||||||||||||
Our population of assets and liabilities subject to fair value measurements at December 31, 2025 was as follows:
| Fair Value | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||
| Assets: | |||||||||||||||||||||||
| Debt securities | |||||||||||||||||||||||
| Foreign currency forward contracts | |||||||||||||||||||||||
| Cross-currency swaps | |||||||||||||||||||||||
| Total assets | |||||||||||||||||||||||
| Liabilities: | |||||||||||||||||||||||
| Foreign currency forward contracts | |||||||||||||||||||||||
| Cross-currency swaps | |||||||||||||||||||||||
| Interest rate swaps | |||||||||||||||||||||||
| Total liabilities | $ | $ | $ | $ | |||||||||||||||||||
Our foreign currency forward contracts, cross-currency swaps and interest rate swaps are valued using observable Level 2 market expectations at the measurement date and standard valuation techniques to convert future amounts to a single present value amount. Further details regarding our derivative instruments are discussed in Note 10.
There were no transfers into or out of Level 3 investments in the periods ended September 30, 2026 and December 31, 2025.
The fair value and carrying value of total debt, including current portion, was $365.7 million and $358.7 million, respectively, as of September 30, 2026. The fair value and carrying value of total debt, including current portion, was $281.4 million and $273.6 million, respectively, as of December 31, 2025. The fair value was estimated
21
Table of Contents
using Level 3 inputs based on the borrowing rates currently available to us for bank loans with similar terms and remaining maturities.
12. Equity Method Investments
On February 21, 2024, the Company acquired certain investment securities of Brain Corp, as further described in Note 11 - Fair Value Measurements. The investment consists of $12.2 million of non-redeemable convertible preferred stock and $7.8 million of warrants to purchase common shares.
Prior to the vesting of all warrants on December 9, 2025, the Company accounted for the investment as an equity security under the measurement alternative. Upon vesting of the warrants, the Company's voting interest in Brain Corp increased to approximately 18 % and its overall ownership interest increased to approximately 12 %. Based on the voting interest, together with the board representation obtained in connection with the investment, the Company concluded that it has the ability to exercise significant influence over Brain Corp's operating and financial policies, but does not have controlling financial interest. Accordingly, beginning on December 9, 2025, the Company accounts for its investment in Brain Corp under the equity method of accounting.
Due to the timing and availability of Brain Corp's financial information, the Company recognizes its share of Brain Corp's earnings or losses on a three-month lag, based on the investee's most recently available financial statements. The Company recognized equity method losses of $0.1 million and $0.6 million for the three and nine months ended September 30, 2026, respectively, which are included in other expense, net in our consolidated statements of income.
13. Commitments and Contingencies
In the ordinary course of business, we are subject to the effects of certain contractual stipulations, events, transactions, and laws and regulations that may, at times, require the recognition of liabilities, such as those related to self-insurance estimated liabilities and claims, legal and contractual issues, environmental laws and regulations, guarantees, and indemnities. We establish estimated liabilities when the associated costs related to uncertainties or guarantees become probable and can be reasonably estimated.
Oxygenator Water Techs vs. Tennant Company
The Company is a defendant in an intellectual property litigation matter with Oxygenator Water Technologies, Inc. (OWT) in the United States District Court for the District of Minnesota. In November 2024, a jury returned a verdict against the Company, and in September 2025, the Court issued a post‑trial ruling enhancing damages. As of December 31, 2025 the Company has recorded a total accrued liability of approximately $20.5 million related to this matter.
In the three and nine months ended September 30, 2026, the Company recorded an incremental accrued expense and corresponding liability of $0.1 million and $0.5 million, respectively, based on updated estimates of interest costs.
The Company and OWT have appealed certain aspects of the Court’s decisions. To stay execution of the judgment pending appeal, the Company has obtained a supersedeas bond in the amount of $20.3 million. The bond was issued by a third‑party surety, and no cash collateral has been posted.
While the ultimate resolution of this matter is uncertain, management believes it has appropriately accrued for its current estimate of probable loss. The ruling does not restrict the Company’s ability to sell its products and is not expected to impact its long‑term business objectives.
Other Matters
Except as described above, there have been no material changes in the Company’s estimated liabilities for self-insurance, litigation, environmental matters, guarantees, or indemnities, or in the related events and circumstances.
22
Table of Contents
14. Shareholders' Equity
Accumulated Other Comprehensive Loss
The changes in components of accumulated other comprehensive loss, net of tax, are as follows:
| Nine Months Ended September 30, 2026 | |||||||||||||||||||||||||||||
Foreign Currency Translation Adjustments (1) | Pension and Post- Retirement Medical Benefits | Derivative Financial Instruments | Unrealized Loss on Debt Securities | Total | |||||||||||||||||||||||||
| Beginning balance | $ | ( | $ | $ | ( | $ | ( | $ | ( | ||||||||||||||||||||
| Other comprehensive (loss) income before reclassifications | ( | ( | |||||||||||||||||||||||||||
| Amounts reclassified from accumulated other comprehensive loss | ( | ( | ( | ||||||||||||||||||||||||||
| Net current period other comprehensive (loss) income | ( | ( | |||||||||||||||||||||||||||
| Ending balance | $ | ( | $ | $ | $ | ( | $ | ( | |||||||||||||||||||||
(1) Includes foreign currency translation adjustments attributable to noncontrolling interests of $0.1 million.
| Nine Months Ended September 30, 2025 | |||||||||||||||||||||||||||||
Foreign Currency Translation Adjustments (1) | Pension and Post- Retirement Medical Benefits | Derivative Financial Instruments | Unrealized Gain on Debt Securities | Total | |||||||||||||||||||||||||
| Beginning balance | $ | ( | $ | $ | ( | $ | $ | ( | |||||||||||||||||||||
| Other comprehensive income (loss) before reclassifications | |||||||||||||||||||||||||||||
| Amounts reclassified from accumulated other comprehensive loss | ( | ( | ( | ||||||||||||||||||||||||||
| Net current period other comprehensive income (loss) | |||||||||||||||||||||||||||||
| Ending balance | $ | ( | $ | $ | ( | $ | $ | ( | |||||||||||||||||||||
(1) Includes foreign currency translation adjustments attributable to noncontrolling interests of $0.5 million.
15. Income Taxes
We and our subsidiaries are subject to U.S. federal income tax as well as income tax of numerous state and foreign jurisdictions. We are generally no longer subject to U.S. federal tax examinations for taxable years before 2020. The number of years which remain open for audit for U.S. state or foreign tax purposes varies by jurisdiction but generally ranges from to five years . We are currently undergoing income tax examinations in various U.S. state and foreign jurisdictions. Although the outcome of these examinations cannot be currently determined, we believe that we have adequate reserves with respect to these examinations.
We recognize potential accrued interest and penalties related to unrecognized tax benefits in income tax expense. In addition to the liability of $5.6 million for unrecognized tax benefits as of September 30, 2026, there was approximately $1.0 million for accrued interest and penalties. The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate as of September 30, 2026 was $5.1 million. To the extent interest and penalties are not assessed with respect to uncertain tax positions, amounts accrued will be revised and reflected as an adjustment of the income tax expense.
23
Table of Contents
16. Share-Based Compensation
17. Income Attributable to Tennant Company Per Share
The computations of basic and diluted earnings per share were as follows:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Numerator: | |||||||||||||||||||||||
| Net income | $ | $ | $ | $ | |||||||||||||||||||
| Denominator: | |||||||||||||||||||||||
| Basic - weighted average shares outstanding | |||||||||||||||||||||||
| Effect of dilutive securities | |||||||||||||||||||||||
| Diluted - weighted average shares outstanding | |||||||||||||||||||||||
| Basic earnings per share | $ | $ | $ | $ | |||||||||||||||||||
| Diluted earnings per share | $ | $ | $ | $ | |||||||||||||||||||
Excluded from the dilutive securities presented above were options to purchase and shares to be paid out under share-based compensation plans totaling 130,584 and 44,322 shares of common stock for the three months ended September 30, 2026 and 2025, respectively. Excluded from the dilutive securities presented above were options to purchase and shares to be paid out under share-based compensation plans totaling 136,790 and 153,540 shares of common stock for the nine months ended September 30, 2026 and 2025, respectively. These instruments were excluded when their exercise prices exceeded the average market price of our common stock for the period, when the number of shares we can repurchase under the treasury stock method exceeded the weighted average shares outstanding, or during periods of net loss, as their inclusion would have been anti-dilutive.
18. Segment Reporting
We are organized into four operating segments: North America; Latin America; Europe, Middle East, Africa; and Asia Pacific. We combine our North America and Latin America operating segments into the "Americas" for reporting net sales by geographic area. In accordance with the objective and basic principles of the applicable accounting guidance, we aggregate our operating segments into one reportable segment that consists of the design, manufacture and sale of products used primarily in the maintenance of nonresidential surfaces.
The Company's chief operating decision maker ("CODM") is our chief executive officer. The CODM evaluates segment performance and makes resource allocation decisions using both net income and gross profit. Net income, which is also reported as consolidated net income on the consolidated statements of income, is regularly reviewed to assess segment performance. Additionally, the CODM uses gross profit to evaluate pricing and compare actual results to historical and forecasted data.
24
Table of Contents
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
The following Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) provides a comparison of the Company's results of operations, as well as liquidity and capital resources for the quarters ended September 30, 2026 and 2025. The MD&A should be read in conjunction with the Company's consolidated financial statements and notes included in Item 1 of this Quarterly Report. Throughout this MD&A, the Company refers to measures used by management to evaluate performance, including financial measures that are not defined under generally accepted accounting principles (GAAP) in the U.S. Net sales excluding acquisitions and foreign currency translation (i.e., organic sales) is not a measure of financial performance under GAAP; however, the Company believes it is useful in understanding its financial results and provides comparable measures for understanding the operating results of the Company between different periods.
Overview
Tennant Company is a world leader in designing, manufacturing and marketing solutions that help create a cleaner, safer, healthier world. The Company is committed to creating and commercializing breakthrough, sustainable cleaning innovations to enhance its broad suite of products, including floor maintenance and cleaning equipment, detergent-free and other sustainable cleaning technologies, aftermarket parts and consumables, equipment maintenance and repair service, and asset management solutions. Our products are used in many types of environments, including retail establishments, distribution centers, factories and warehouses, public venues such as arenas and stadiums, office buildings, schools and universities, hospitals and clinics, and more. Customers include contract cleaners to whom organizations outsource facilities maintenance as well as businesses that perform facilities maintenance themselves. The Company reaches these customers through the industry's largest direct sales and service organization and through a strong and well-supported network of authorized distributors worldwide.
Macroeconomic Events
As a global company, we are exposed to risks and uncertainties arising from macroeconomic, geopolitical, and regulatory conditions, including inflationary pressures, interest rate volatility, foreign currency fluctuations, changes in global capital markets, supply chain conditions, and evolving international trade and tariff policies. These factors continue to influence our operating environment and may impact revenue growth, margins, liquidity, and the execution of our strategic initiatives.
During the third quarter of 2026, continued instability in the Middle East contributed to volatility in global energy markets, transportation routes, and supply chains. Although markets and supply chains continued to adapt, elevated energy, freight, and other input costs remained a source of pressure during the quarter.
Inflationary pressures remained elevated and varied by region and cost category, influenced in part by higher energy costs and ongoing trade-related uncertainty. In EMEA, economic conditions remained mixed, with demand and equipment volumes varying across markets and competitive pricing pressure continuing during the period. We also continued to experience higher input costs, including tariff-related material costs in the Americas. Foreign currency movements remained an additional source of uncertainty across the markets in which we operate.
We continue to take pricing, cost, and operational actions to mitigate these impacts and monitor changes in market conditions and input costs. While economic conditions have varied across regions and markets, persistent geopolitical, regulatory, and trade-related uncertainty, together with elevated costs, may continue to affect our business, financial condition, and results of operations.
Backlog remained elevated at the end of the third quarter, although it decreased modestly from the end of the second quarter. The timing and pace of further backlog reduction remain subject to supplier performance, material availability, changes in customer demand, and continued execution of our operational improvement efforts. We also continued to advance stabilization and optimization activities related to the North America ERP implementation.
As described in Part I, Item 1A - Risk Factors in the annual report on Form 10-K for the fiscal year ended December 31, 2025, we may encounter financial difficulties if the United States or other global economies experience an additional or continued long-term economic downturn as our product sales are sensitive to
25
Table of Contents
declines in capital spending by our customers. Any sustained adverse impacts to our business, the industries in which we operate, market demand for our products, and/or certain suppliers or customers may also affect our future results of operations, financial position, or cash flows. Changes in foreign currency may also adversely impact our net sales, earnings, and financial condition. We are actively monitoring the global macroeconomic environment, including geopolitical conflict, the potential impact of global supply chain constraints on material inflation, and changes in demand for our products.
Tariffs
On February 20, 2026, the United States Supreme Court ruled that the International Emergency Economic Powers Act (IEEPA) did not authorize the President to impose the challenged tariffs. Following the decision, the U.S. presidential administration imposed temporary tariffs under Section 122 of the Trade Act of 1974 for a 150-day period beginning February 24, 2026. The temporary tariffs expired on July 24, 2026, and subsequent tariff actions under Sections 301 and 232 and other statutory authorities have continued to create uncertainty regarding tariff rates and duration, refund eligibility, and the potential for additional tariffs or retaliatory measures.
During 2026, we submitted claims seeking refunds of certain previously paid IEEPA tariffs. During the third quarter of 2026, approximately $6.1 million of these claims were approved, and we received the related refunds. We recognized the benefit within cost of sales in our consolidated statements of income. Additional claims remain subject to legal, administrative, and governmental processes, and we cannot predict whether, when, or to what extent additional refunds will be approved or received.
We continue to monitor developments in U.S. and international trade policy, including changes in tariff rates and statutory authorities, refund procedures, replacement measures, and retaliatory actions. We are also evaluating sourcing, supply chain, pricing, and other commercial actions to reduce the potential impact of tariffs on our business, financial condition, and results of operations.
Outlook
We continue to operate in a dynamic environment characterized by elevated input costs, uncertainty in global trade and tariff policy, foreign currency volatility, and geopolitical developments. Customer demand and order activity have varied across regions, with strength in the Americas and continued interest in robotic and autonomous cleaning solutions, partially offset by softer conditions in certain EMEA and APAC markets. Operating performance will continue to depend on customer demand, regional market conditions, inflationary pressures, and our ability to mitigate higher costs through pricing, productivity, and other actions.
Fiscal year 2026 remains a period of operational transition as we focus on improving execution, optimizing the North America ERP platform, and realizing expected productivity and cost efficiencies. We continue to invest selectively in strategic growth initiatives while maintaining a disciplined approach to spending, working capital, liquidity, and capital allocation. The timing and extent of improved profitability will depend on our continued execution of these initiatives, as well as customer demand and broader macroeconomic conditions.
26
Table of Contents
Results
The following table compares the results of operations for the three and nine months ended September 30, 2026 and 2025, respectively (in millions, except per share data and percentages):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | % | 2025 | % | 2026 | % | 2025 | % | ||||||||||||||||||||||||||||||||||||||||
| Net sales | $ | 322.3 | 100.0 | $ | 303.3 | 100.0 | $ | 944.2 | 100.0 | $ | 911.9 | 100.0 | |||||||||||||||||||||||||||||||||||
| Cost of sales | 186.0 | 57.7 | 173.9 | 57.3 | 566.4 | 60.0 | 528.4 | 57.9 | |||||||||||||||||||||||||||||||||||||||
| Gross profit | 136.3 | 42.3 | 129.4 | 42.7 | 377.8 | 40.0 | 383.5 | 42.1 | |||||||||||||||||||||||||||||||||||||||
| Selling and administrative expense | 92.7 | 28.8 | 96.6 | 31.8 | 290.3 | 30.7 | 281.0 | 30.8 | |||||||||||||||||||||||||||||||||||||||
| Research and development expense | 12.4 | 3.8 | 10.5 | 3.5 | 35.5 | 3.8 | 30.0 | 3.3 | |||||||||||||||||||||||||||||||||||||||
| Operating income | 31.2 | 9.7 | 22.3 | 7.4 | 52.0 | 5.5 | 72.5 | 8.0 | |||||||||||||||||||||||||||||||||||||||
| Interest expense, net | (5.0) | (1.6) | (2.4) | (0.8) | (12.7) | (1.3) | (6.9) | (0.8) | |||||||||||||||||||||||||||||||||||||||
| Net foreign currency transaction gain (loss) | 0.2 | 0.1 | — | — | (0.5) | (0.1) | (1.0) | (0.1) | |||||||||||||||||||||||||||||||||||||||
| Other expense, net | (0.5) | (0.2) | (0.5) | (0.2) | (1.7) | (0.2) | (0.7) | (0.1) | |||||||||||||||||||||||||||||||||||||||
| Income before income taxes | 25.9 | 8.0 | 19.4 | 6.4 | 37.1 | 3.9 | 63.9 | 7.0 | |||||||||||||||||||||||||||||||||||||||
| Income tax expense | 6.4 | 2.0 | 4.5 | 1.5 | 9.8 | 1.0 | 15.7 | 1.7 | |||||||||||||||||||||||||||||||||||||||
| Net income | $ | 19.5 | 6.1 | $ | 14.9 | 4.9 | $ | 27.3 | 2.9 | $ | 48.2 | 5.3 | |||||||||||||||||||||||||||||||||||
| Net income per share - diluted | $ | 1.12 | $ | 0.80 | $ | 1.57 | $ | 2.57 | |||||||||||||||||||||||||||||||||||||||
Net Sales
Consolidated net sales for the third quarter of 2026 totaled $322.3 million, a 6.2% increase as compared to consolidated net sales of $303.3 million in the third quarter of 2025. The components of the consolidated net sales change were as follows:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||
| 2026 vs. 2025 | |||||||||||
| Price | 1.6% | 2.9% | |||||||||
| Volume | 4.1% | (1.8)% | |||||||||
| Organic growth | 5.7% | 1.1% | |||||||||
| Acquisitions | 0.4% | 0.5% | |||||||||
| Foreign currency | 0.1% | 1.9% | |||||||||
| Total | 6.2% | 3.5% | |||||||||
The 6.2% increase in consolidated net sales in the third quarter of 2026 as compared to the same period in 2025 was driven by:
•Organic sales growth of 5.7% driven primarily by higher volumes in North America and, to a lesser extent, price realization, despite continued production and fulfillment constraints and softer demand in certain APAC markets;
•Acquisition related growth of 0.4% driven by the acquisitions of distributors in EMEA; and
•A net favorable impact from foreign currency exchange of approximately 0.1% as favorable currency movements in Latin America and APAC were substantially offset by unfavorable currency movements in EMEA.
27
Table of Contents
The 3.5% increase in consolidated net sales in the first nine months of 2026 as compared to the same period in 2025 was driven by:
•A net favorable impact from foreign currency exchange of approximately 1.9% primarily due to stronger average exchange rates for the euro, Brazilian real, and Mexican peso relative to the U.S. dollar compared with the prior-year period;
•Organic sales growth of 1.1%, as price realization more than offset lower volume, primarily reflecting ERP-related production and fulfillment constraints in North America and softer demand in certain APAC markets, partially offset by volume growth in Latin America; and
•Acquisition related growth of 0.5% driven by the acquisitions of distributors in EMEA.
The following table sets forth the net sales by geographic area for the three and nine months ended September 30, 2026 and 2025 (in millions, except percentages):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||
| 2026 | 2025 | % Change | 2026 | 2025 | % Change | ||||||||||||||||||||||||||||||
| Americas | $ | 221.0 | $ | 203.6 | 8.5 | % | $ | 633.7 | $ | 614.4 | 3.1 | % | |||||||||||||||||||||||
| Europe, Middle East and Africa | 82.5 | 80.5 | 2.5 | % | 255.9 | 241.2 | 6.1 | % | |||||||||||||||||||||||||||
| Asia Pacific | 18.8 | 19.2 | (2.1) | % | 54.6 | 56.3 | (3.0) | % | |||||||||||||||||||||||||||
| Total | $ | 322.3 | $ | 303.3 | 6.2 | % | $ | 944.2 | $ | 911.9 | 3.5 | % | |||||||||||||||||||||||
Americas
Americas net sales were $221.0 million for the third quarter of 2026, an increase of 8.5% from the third quarter of 2025 driven by:
•Organic sales growth of 8.1%, primarily driven by higher volumes in North America and price realization, with additional volume growth in Latin America; and
•A net favorable impact from foreign currency exchange of approximately 0.4%.
Americas net sales were $633.7 million for the first nine months of 2026, an increase of 3.1% from the first nine months of 2025 driven by:
•Organic sales growth of 2.2%, as price realization and volume growth in Latin America more than offset lower volumes in North America, primarily reflecting ERP-related production and fulfillment constraints; and
•A net favorable impact from foreign currency exchange of approximately 0.9%.
Europe, Middle East and Africa ("EMEA")
EMEA net sales were $82.5 million for the third quarter of 2026, an increase of 2.5% from the third quarter of 2025 driven by:
•Organic sales growth of 2.3%, driven primarily by price realization and higher volume across most European markets, partially offset by lower sales in Southern Europe; and
•Acquisition related growth of 1.4% driven by acquisitions of distributors; partly offset by
•A net unfavorable impact from foreign currency exchange of approximately 1.2%.
EMEA net sales were $255.9 million for the first nine months of 2026, an increase of 6.1% from the first nine months of 2025 driven by:
•A net favorable impact from foreign currency exchange of approximately 4.0%;
•Acquisition related growth of 1.9% driven by acquisitions of distributors; and
•Organic sales growth of 0.2%, as price realization more than offset lower volume, primarily in Southern Europe and export markets, with additional softness in certain other European markets.
28
Table of Contents
Asia Pacific ("APAC")
APAC net sales were $18.8 million for the third quarter of 2026, a decrease of 2.1% from the third quarter of 2025 driven by:
•Organic sales decline of 4.8%, driven by lower equipment volume and unfavorable pricing across certain markets, reflecting softer market demand and distributor overstock, partially offset by volume growth in India; partly offset by
•A net favorable impact from foreign currency exchange of approximately 2.7%.
APAC net sales were $54.6 million for the first nine months of 2026, a decrease of 3.0% from the first nine months of 2025 driven by:
•Organic sales decline of 6.1%, driven primarily by lower equipment volume and continued softness in China, Australia, and Southeast Asia, together with modestly unfavorable pricing, partially offset by growth in certain markets; partly offset by
•A net favorable impact from foreign currency exchange of approximately 3.1%.
Gross Profit
Gross profit margin was 42.3% in the third quarter of 2026, down 40 basis points from the third quarter of 2025. The quarter included a $6.1 million tariff refund benefit, which increased gross profit margin by approximately 190 basis points. The underlying decline was approximately two-thirds attributable to North America and one-third to EMEA, primarily reflecting inflationary pressures, largely related to the Middle East conflict, and parts availability constraints that resulted in production inefficiencies and under-absorption, partially offset by pricing.
Gross profit margin was 40.0% in the first nine months of 2026, down 210 basis points from the first nine months of 2025, primarily reflecting ERP-related recovery costs, inflationary and operational pressures, and unfavorable volume and mix in EMEA, partially offset by pricing.
Operating Expense
Selling and Administrative Expense
Selling and administrative expense ("S&A expense") was $92.7 million for the third quarter of 2026, a decrease of $3.9 million compared to the third quarter of 2025. As a percentage of net sales, S&A expense for the third quarter of 2026 decreased 300 basis points to 28.8%. The decrease primarily reflected lower ERP modernization costs and the absence of legal contingency costs incurred in the prior-year period, partially offset by higher employee-related costs, software licensing fees, investments in resources supporting robotics, and inflationary pressures.
S&A expense was $290.3 million for the first nine months of 2026, an increase of $9.3 million compared to the first nine months of 2025. As a percentage of net sales, S&A expense for the first nine months of 2026 decreased 10 basis points to 30.7%. The increase primarily reflected higher employee-related costs, software licensing fees, unfavorable foreign currency effects, and investments in resources supporting robotics. These increases were partially offset by lower ERP modernization costs, the absence of legal contingency costs incurred in the prior-year period, and lower variable incentive compensation and bad debt expense.
Research and Development Expense
Research and development expense ("R&D expense") was $12.4 million, or 3.8% of net sales, for the third quarter of 2026, with R&D expense as a percentage of net sales increasing 30 basis points compared to the third quarter of 2025. Research and development expense ("R&D expense") was $35.5 million, or 3.8% of net sales, for the first nine months of 2026, with R&D expense as a percentage of net sales increasing 50 basis points compared to the first nine months of 2025. The increase in both periods was primarily driven by continued investment in innovation, including robotics and autonomous solutions.
We continue to invest in developing innovative products and technologies at levels necessary to propel our technology and innovative leadership position and drive growth.
29
Table of Contents
Total Other Expense, Net
Interest Expense, Net
Interest expense, net was $5.0 million in the third quarter of 2026 compared to $2.4 million in the third quarter of 2025. The increase was the result of higher weighted average outstanding borrowings, including incremental borrowings to fund share repurchases, partly offset by a lower average interest rate. The following table compares the debt levels, average interest rate, interest income and interest expense for the three months ended September 30, 2026 and 2025, respectively (in millions, except percentages):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Weighted Average Outstanding Borrowings | $ | 365.6 | $ | 220.6 | $ | 346.2 | $ | 213.1 | |||||||||||||||
| Average interest rate | 5.4 | % | 5.7 | % | 5.3 | % | 5.7 | % | |||||||||||||||
| Interest expense | 5.6 | 3.1 | 15.2 | 9.3 | |||||||||||||||||||
| Interest income | (0.6) | (0.7) | (2.5) | (2.4) | |||||||||||||||||||
| Interest expense, net | $ | 5.0 | $ | 2.4 | $ | 12.7 | $ | 6.9 | |||||||||||||||
Our debt portfolio as of September 30, 2026 was comprised of debt predominantly in U.S. dollars. The Company manages its floating rate debt exposure using fixed rate interest rate swaps to reduce the Company's risk of the possibility of increased interest costs. The Company has an aggregate $120.0 million notional amount of interest rate swaps that exchange a variable rate of interest for a fixed rate of interest of 3.44% over the term of the agreements.
Net Foreign Currency Transaction Gain (Loss)
Net foreign currency transaction gain was $0.2 million for the third quarter of 2026 compared to $0.0 million for the third quarter of 2025. Net foreign currency transaction loss was $0.5 million for the first nine months of 2026 compared to $1.0 million for the first nine months of 2025. The year-over-year improvement was primarily due to lower exchange-rate volatility affecting unhedged foreign-currency exposures compared with the prior-year period.
Income Taxes
The effective tax rate for the third quarter of 2026 was 24.7% compared to 23.2% for the third quarter of 2025. The increase was primarily due to a decrease in tax benefits from research tax credits.
The effective tax rate for the first nine months of 2026 was 26.5% compared to 24.6% for the first nine months of 2025. The increase was primarily due to higher discrete tax costs associated with share-based compensation as well as a decrease in tax benefits from research tax credits recognized in the first nine months of 2025.
In general, it is our practice and intention to permanently reinvest the earnings of our foreign subsidiaries and repatriate earnings only when the tax impact is zero or immaterial. No deferred taxes have been provided for withholding taxes or other taxes that would result upon repatriation of our foreign investments to the U.S.
Liquidity and Capital Resources
Liquidity
Cash and cash equivalents totaled $75.3 million at September 30, 2026 compared to $106.4 million as of December 31, 2025. Wherever possible, cash management is centralized and intercompany financing is used to provide working capital to subsidiaries as needed. Our current ratio was 2.2 as of September 30, 2026 and 2.0 as of December 31, 2025. Our primary working capital, which is comprised of accounts receivable, inventories and accounts payable, was $389.0 million as of September 30, 2026 and $327.8 million as of December 31, 2025. Our debt-to-capital ratio was 39.5% as of September 30, 2026 compared to 31.2% as of December 31, 2025.
30
Table of Contents
As of September 30, 2026, we had letters of credit and bank guarantees outstanding in the amount of $3.1 million, leaving approximately $289.4 million of unused borrowing capacity on our revolving facility.
Cash Flow from Operating Activities
Net cash used in operating activities during the nine months ended September 30, 2026 was $14.3 million compared to net cash provided by operating activities of $50.8 million during the nine months ended September 30, 2025. The change was primarily driven by lower operating performance and increased working capital requirements, including higher accounts receivable and inventory balances and lower accounts payable. Working capital levels and cash conversion were adversely affected by operational and process inefficiencies associated with the North America ERP implementation, and management remains focused on improving working capital efficiency as stabilization and fulfillment efforts progress.
Cash Flow from Investing Activities
Net cash used in investing activities during the nine months ended September 30, 2026 was $22.0 million compared to net cash used in investing activities of $18.3 million during the nine months ended September 30, 2025. The increase was primarily attributable to cash paid for the acquisition of Clean Machine during the first quarter of 2026, partially offset by lower capital expenditures.
Cash Flow from Financing Activities
Net cash provided by financing activities during the nine months ended September 30, 2026 was $6.0 million compared to net cash used in financing activities of $36.0 million during the nine months ended September 30, 2025. The increase was driven by increased net proceeds from borrowing, partly offset by higher repurchases of common stock.
Newly Issued Accounting Guidance
See Note 2 to the consolidated financial statements for information on new accounting pronouncements.
In October 2023, the FASB issued ASU 2023-06 Disclosure Improvements: Codification Amendments in Response to the SEC's Disclosure Update and Simplification Initiative, which aims to clarify or improve disclosure and presentation requirements on a variety of topics and align the requirements in the FASB accounting standard with the Securities and Exchange Commission regulations. This guidance is effective for the Company no later than June 30, 2027. We do not expect the amendments in this update to have a material impact on our consolidated financial statements.
In November 2024, the FASB issued ASU 2024-03 Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Topic 220) - Disaggregation of Income Statement Expenses, which requires disaggregation of certain income statement expense captions into specified categories to be disclosed within the notes to the financial statements, but does not change the expense captions on the consolidated income statement. The ASU is effective for annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Adoption of this ASU can either be applied prospectively to consolidated financial statements issued for reporting periods after the effective date of this ASU or retrospectively to any or all prior periods presented in the consolidated financial statements. We are evaluating the effect that this guidance will have on our consolidated financial statements and related disclosures.
In November 2025, the FASB issued ASU 2025-09 Derivatives and Hedging (Topic 815): Hedge Accounting Improvements, which includes amendments to more closely align hedge accounting with the economics of an entity's risk management activities. The ASU is effective for annual periods beginning after December 15, 2026, and interim periods within those fiscal years. Early adoption is permitted. The amendments should be applied on a prospective basis. We are evaluating the impact of the ASU to determine its impact on our consolidated financial statements and related disclosures.
In December 2025, the FASB issued ASU 2025-11 Interim Reporting (Topic 270): Narrow-Scope Improvements, which clarifies the applicability of the interim reporting guidance, the types of interim reporting, and the form and content of interim financial statements in accordance with U.S. generally accepted accounting principles. The amendment does not intend to change the fundamental nature of interim reporting or expand or reduce current
31
Table of Contents
interim reporting disclosure requirements, but rather aims to provide clarity and improve navigability of the existing interim reporting requirements. The update will be effective for interim periods within annual periods beginning after December 15, 2027. Adoption of this ASU can either be applied prospectively or retrospectively to any or all prior periods presented in the financial statements. We are evaluating the impact of the ASU to determine its impact on our consolidated financial statements and related disclosures.
In December 2025, the FASB issued ASU 2025-12 Codification Improvements, which aims to update the FASB Accounting Standards Codification for a broad range of topics arising from technical corrections, unintended application of the Codification, clarifications, and other minor improvements. The ASU is effective for annual periods beginning after December 15, 2026, including interim periods within those fiscal years. We are evaluating the effect that this guidance will have on our consolidated financial statements and related disclosures.
No other new accounting pronouncements issued but not yet effective have had, or are expected to have, a material impact on our results of operations or financial position.
Cautionary Statement Relevant to Forward-Looking Information
This Quarterly Report, including “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 2, contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally can be identified by the use of forward-looking terminology such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe,” “project,” or “continue” or similar words or the negative thereof. These statements do not relate to strictly historical or current facts and provide current expectations or forecasts of future events. Any such expectations or forecasts of future events are subject to a variety of factors. These include factors that affect all businesses operating in a global market as well as matters specific to us and the markets the Company serves. Particular risks and uncertainties presently facing us include: geopolitical and economic uncertainty throughout the world; our ability to comply with global laws and regulations; changes in foreign currency exchange rates; our ability to adapt to customer pricing sensitivities; the competition in our business; fluctuations in the cost, quality or availability of raw materials and purchased components; our ability to adjust pricing to respond to cost pressures; unforeseen product liability claims or product quality issues; our ability to attract, retain and develop key personnel and create effective succession planning strategies; our ability to effectively develop and manage strategic planning and growth processes and the related operational plans; our ability to successfully upgrade and evolve our information technology systems; our ability to successfully protect our information technology systems from cybersecurity risks; complications with our new ERP system; the occurrence of a significant business interruption; our ability to maintain the health and safety of our workers; our ability to integrate acquisitions; our ability to develop and commercialize new innovative products and services; and risks related to our business transformation and strategic initiatives.
We caution that forward-looking statements must be considered carefully and that actual results may differ in material ways due to risks and uncertainties both known and unknown. Shareholders, potential investors and other readers are urged to consider these factors in evaluating forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. Additional information about factors that could materially affect our results can be found in Part I, Item 1A, Risk Factors in our annual report on Form 10-K for the year ended December 31, 2025.
We undertake no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law. Investors are advised to consult any further disclosures by us in our filings with the SEC and in other written statements on related subjects. It is not possible to anticipate or foresee all risk factors, and investors should not consider any list of such factors to be an exhaustive or complete list of all risks or uncertainties.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
There have been no material changes in our market risk since December 31, 2025. For additional information, refer to Item 7A of our annual report on Form 10-K for the year ended December 31, 2025.
32
Table of Contents
Item 4. Controls and Procedures
Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures as of September 30, 2026 (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)). Based on that evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our principal executive and our principal financial officers, as appropriate, to allow timely decisions regarding required disclosure.
Changes in Internal Controls
There were no changes in our internal control over financial reporting during the fiscal quarter ended September 30, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II – OTHER INFORMATION
Item 1. Legal Proceedings
Refer to Note 17, Commitments and Contingencies, to the Consolidated Financial Statements in the Company’s Form 10-K for the year ended December 31, 2025, and Note 13, Commitments and Contingencies, to the Consolidated Financial Statements included in this Form 10-Q for information regarding the Company’s legal proceedings. Except as described therein, there have been no material developments in the Company’s legal proceedings.
Item 1A. Risk Factors
We documented our risk factors in Item 1A of Part I of our annual report on Form 10-K for the year ended December 31, 2025. There have been no material changes to our risk factors since the filing of that report.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Share repurchases are made from time to time in the open market or through privately negotiated transactions. On February 11, 2025, the Board of Directors authorized the repurchase of 2,000,000 shares of our common stock. On April 29, 2026, the Board of Directors authorized the repurchase of an additional 2,000,000 shares of our common stock. Under the 2025 and 2026 share repurchase programs, 562,493 and 2,000,000 shares remain authorized, respectively.
| For the Quarter Ended September 30, 2026 | Total Number of Shares Purchased(1) | Average Price Paid Per Share(2) | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs | ||||||||||
| July 1-31, 2026 | — | $ | — | — | 2,564,293 | |||||||||
| August 1-31, 2026 | 579 | $ | 69.47 | — | 2,564,293 | |||||||||
| September 1-30, 2026 | 3,086 | $ | 67.22 | 1,800 | 2,562,493 | |||||||||
| Total | 3,665 | $ | 67.58 | 1,800 | 2,562,493 | |||||||||
33
Table of Contents
(1)The total number of shares purchased includes 1,865 shares withheld to cover withholding taxes related to the exercise of stock options and the vesting of restricted stock under employee share-based compensation plans.
(2)The Inflation Reduction Act of 2022, which was enacted into law on August 16, 2022, imposes a nondeductible 1% excise tax on the net value of certain stock repurchases made after December 31, 2022. During the three months ended September 30, 2026, the Company reflected the applicable excise tax in treasury stock as part of the cost basis of the stock repurchased and recorded a corresponding liability for the excise taxes payable in other current liabilities on the consolidated balance sheets. All dollar amounts presented exclude such excise taxes.
Item 5. Other Information
During the three months ended September 30, 2026, no director or officer of the Company adopted terminated
The Company has determined to hold its 2027 annual meeting of shareholders (the “2027 Annual Meeting”) on Wednesday, April 28, 2027 at a time to be specified in the Company’s proxy statement for the 2027 Annual Meeting. Shareholders seeking to nominate director candidates to be considered at the 2027 Annual Meeting must submit the information required under the Company’s Restated Articles of Incorporation and Amended and Restated By-Laws no later than February 12, 2027.
34
Table of Contents
Item 6. Exhibits
| Item # | Description | Method of Filing | ||||||||||||
| 3.1 | Restated Articles of Incorporation | Incorporated by reference to Exhibit 3i to the Company’s report on Form 10-Q for the quarterly period ended June 30, 2006. | ||||||||||||
| 3.2 | Amended and Restated By-Laws | Incorporated by reference to Exhibit 3.2 to the Company’s Form 8-K dated January 19, 2023. | ||||||||||||
| 3.3 | Articles of Amendment of Restated Articles of Incorporation of Tennant Company | Incorporated by reference to Exhibit 3iii to the Company's report on Form 10-Q for the quarterly period ended March 31, 2018. | ||||||||||||
| 31.1 | Rule 13a-14(a)/15d-14(a) Certification of CEO | Filed herewith electronically. | ||||||||||||
| 31.2 | Rule 13a-14(a)/15d-14(a) Certification of CFO | Filed herewith electronically. | ||||||||||||
| 32.1 | Section 1350 Certification of CEO | Filed herewith electronically. | ||||||||||||
| 32.2 | Section 1350 Certification of CFO | Filed herewith electronically. | ||||||||||||
| 101 | The following financial information from Tennant Company's Quarterly Report on Form 10-Q for the period ended September 30, 2026, formatted in Inline eXtensible Business Reporting Language (iXBRL): (i) Consolidated Statements of Income for the three and nine months ended September 30, 2026 and 2025; (ii) Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2026 and 2025; (iii) Consolidated Balance Sheets as of September 30, 2026 and December 31, 2025; (iv) Consolidated Statements of Cash Flows for the nine months ended September 30, 2026 and 2025; (v) Consolidated Statements of Equity for the nine months ended September 30, 2026 and 2025; and (vi) Notes to the Consolidated Financial Statements | Filed herewith electronically. | ||||||||||||
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) | Filed herewith electronically. | ||||||||||||
35
Table of Contents
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| TENNANT COMPANY | ||||||||||||||
| Date: | November 3, 2026 | /s/ Fay West | ||||||||||||
Fay West Senior Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) | ||||||||||||||
36
Table of Contents
HIDDEN IXBRL
37