Tennant Cuts Jobs, Projects Lower Earnings

Minneapolis, MN, Dec. 18, 2008--Tennant Co. said Wednesday it will cut 8 percent of its work force, to reduce expenses in the face of "an unprecedented economic period."

The company, which makes floor cleaning equipment, said the cuts will save $20 million annually. Tennant expects a one-time $15 million charge in the fourth quarter to cover severance costs.

"Since then, the business conditions in North America and Europe have significantly deteriorated, demand for our equipment is much weaker than projected, and we do not see a quick recovery," Tennant Chief Executive Chris Killingstad said in a statement.

The company now projects 2008 earnings of 40 cents to 50 cents per share on sales of $688 million to $703 million. Tennant said it expects a loss of 98 cents to $1.08 for the fourth quarter with sales ranging between $140 million and $155 million.

Both earnings figures include a one-time charge of 88 cents per share for severance and other charges, the company said.

Tennant said its restructuring will not force the closure of any plants, but it has reduced work hours at locations with excess capacity, frozen wages and salaries for 2009 and reduced capital expenditures to about $22 million in 2008, from a previous estimate of $25 million.