Minneapolis, MN, August 1, 2005—-Maintenance products company Tennant today reported net earnings of $6.7 million, or $0.74 per diluted share, on net sales of $137.1 million for its second quarter ended June 30, 2005. In the 2004 second quarter, Tennant reported net earnings of $3.7 million, or $0.41 per diluted share, on net sales of $128.8 million.
For the six months ended June 30, 2005, Tennant reported net earnings of $10.2 million, or $1.13 per diluted share, on net sales of $263.1 million. In the comparable 2004 period, the company reported net earnings of $6.3 million, or $0.69 per diluted share, on net sales of $247.9 million.
Janet M. Dolan, Tennant Company's president and chief executive officer, attributed the 80% increase in second quarter net earnings per share primarily to revenue growth across all geographies and product categories coupled with persistent, company-wide efforts to improve profitability. "Our focus on operating excellence delivered outstanding results in our 2005 second quarter," said Dolan.
"On the top line, we are realizing gains from compelling new products and improved market coverage and sales execution. On the bottom line, we are benefiting from sustainable improvements in operating efficiency resulting from the focus on leveraging our cost structure which we are pursuing as a core corporate strategy."
Based on the strength of the company's performance through the first half of 2005, Tennant now expects net earnings per diluted share for the full year to range from $2.05 to $2.30. "While we expect the lagging impact of higher oil prices to affect results in the second half of 2005, we are confident our focus on operating excellence will enable us to generate 2005 full-year earnings growth of at least 25 percent, on single-digit revenue growth, compared with 2004 earnings excluding unusual items," said Dolan.
Tennant's consolidated net sales for the 2005 second quarter increased 6.4% compared with the 2004 second quarter. The increase resulted from organic growth in all regions, aided by contributions from new products such as T-Series scrubbers and the company's ReadySpace carpet care offerings. Favorable foreign currency exchange effects added about 2% to net sales in the 2005 second quarter. For the year to date, consolidated net sales increased 6.1% compared with the first six months of 2004, with favorable foreign currency exchange effects adding about 1.5% to the 2005 first half net sales.
In North America, 2005 second quarter net sales totaled $92.5 million, up 5.4% from the 2004 second quarter. Revenues increased in all three categories - equipment; service, parts and consumables; and coatings - primarily due to new products, improved market coverage and sales force effectiveness. For the first six months of 2005, net sales in North America increased 5.2% to $175.3 million.
In Europe, net sales for the 2005 second quarter increased 7% to $30.7 million. Growth in service, parts and consumables revenues more than offset a slight decline in equipment revenues. Favorable foreign currency exchange effects added about 4% to net sales in Europe in the 2005 second quarter. For the year to date, net sales in Europe increased 7.2% to $61.4 million compared with the first six months of 2004. Favorable foreign currency exchange effects added about 4% to net sales in Europe in the first six months of 2005.
In Tennant's other international markets, 2005 second quarter net sales increased 13% to $13.9 million compared with the 2004 second quarter. The increase is attributable to volume growth in most areas, including Latin America, the Middle East and Australia. Favorable foreign currency exchange effects added about 3% to net sales in other international markets in the 2005 second quarter. For 2005 to date, net sales to other international markets totaled $26.4 million, up 10% compared with the first six months of 2004.
