Key Highlights

  • TNC reported third quarter 2026 net sales of $322.3 million, up 6.2% from $303.3 million, with organic growth of 5.7%.
  • Diluted EPS rose 40.0% to $1.12, while adjusted diluted EPS fell 4.1% to $1.40.
  • Robotics sales were about $37.3 million, up 71%, and orders grew 9.5%.
  • Adjusted EBITDA was $48.8 million, a 15.1% margin, up 420 basis points from the second quarter.
  • The company reaffirmed 2026 net sales guidance of $1,270 million to $1,310 million.

Orders Up 9.5% and Robotics Up 71% Lift Third-Quarter Sales

Tennant Company (NYSE:TNC) reported results for the quarter ended Sep 30, 2026 in a news release dated Nov 2, 2026. Net sales rose 6.2% to $322.3 million, with Volume adding 4.1 percentage points and pricing 1.6 points, for organic growth of 5.7%. Founded in 1870, the Minnesota-based company makes floor-cleaning and surface-maintenance equipment and cleaning technologies.

Orders grew 9.5%, and Backlog was about $118 million, which management said supports fourth quarter sales. Robotics sales reached about $37.3 million, and year-to-date robotics sales already exceed the full-year 2025 total. The company recently launched the P1 autonomous vacuum to reach more customer applications and price points.

Organic sales rose 8.1% in the Americas and 2.3% in EMEA but fell 4.8% in Asia Pacific, where softer Demand and distributor overstock weighed on equipment volume.

One-Time Tariff Refund Props Up Gross Margin, but Adjusted EPS Slips to $1.40

Gross Margin was 42.3%, down 40 basis points. It included a one-time benefit of about $6.1 million, or 190 basis points, from refunds of previously paid tariffs. Excluding that, gross margin was about 40.4%, down 230 basis points, on inflationary costs tied to the Middle East conflict and part-availability constraints that caused production inefficiencies.

Operating income rose to $31.2 million from $22.3 million. Selling and administrative expense fell $3.9 million to $92.7 million on lower ERP costs and no repeat of last year's legal contingency charge, while Research and Development rose to $12.4 million from $10.5 million. Net interest expense climbed to $5.0 million from $2.4 million.

Net income increased to $19.5 million from $14.9 million, and diluted EPS rose to $1.12 from $0.80. Adjusted Net Income fell $3.2 million to $24.1 million, and adjusted diluted EPS declined to $1.40 from $1.46. Adjusted EBITDA slipped to $48.8 million from $49.8 million, with the margin at 15.1% versus 16.4%.

Operating Cash Flow Drops to $11.9 Million as Working Capital Builds

Operating cash flow was $11.9 million, down $16.8 million, on weaker operating performance and higher receivables and inventory. Management said North America ERP inefficiencies affected cash conversion and that working capital efficiency remains a focus. Capital expenditures were $6.7 million and dividends were $5.2 million.

Cash totaled $75.3 million, down from $106.4 million at Dec 31, 2025, with $289.4 million of unused revolving Credit capacity. Net Leverage was 2.0 times adjusted EBITDA. For the nine months, net sales rose 3.5% to $944.2 million, while net income fell to $27.3 million from $48.2 million.

Reaffirmed 2026 Guidance Leans on Converting an $118 Million Backlog

Tennant kept full-year 2026 guidance unchanged, including net sales of $1,270 million to $1,310 million, organic growth of 3.5% to 7.0%, adjusted EPS of $3.80 to $4.45 and adjusted EBITDA of $155 million to $170 million. Management is taking action on softer EMEA and APAC demand while parts shortages continue to limit North American shipments. The fourth quarter will show how much of the backlog converts to sales.