TABLE OF CONTENTS



PART I - FINANCIAL INFORMATION (Unaudited)							Page
Item 1.		Financial Statements ~~(Unaudited)~~				43
		~~Condensed~~ Consolidated Statements of ~~Operations~~Income				43
		~~Condensed~~ Consolidated Statements of Comprehensive Income		54
		~~Condensed~~ Consolidated Balance Sheets				65
		~~Condensed~~ Consolidated Statements of Cash Flows				76
		Consolidated Statements of Equity		8
		Notes to ~~the Condensed~~ Consolidated Financial Statements				9
		~~1. Summary of Significant Accounting Policies~~Item 2.			9
	~~2. Newly Adopted Accounting Pronouncements~~		9
	~~3. Investment in Joint Venture~~		10
	~~4. Management Action~~		10
	~~5. Acquisitions~~		10
	~~6. Inventories~~		14
	~~7. Goodwill and Intangible Assets~~		14
	~~8. Debt~~		15
	~~9. Warranty~~		17
	~~10. Derivatives~~		18
	~~11. Fair Value Measurements~~		20
	~~12. Retirement Benefit Plans~~		21
	~~13. Commitments and Contingencies~~		22
	~~14. Accumulated Other Comprehensive Loss~~		22
	~~15. Income Taxes~~		23
	~~16. Share-Based Compensation~~		23
	~~17. Earnings (Loss) Attributable to Tennant Company Per Share~~		24
	~~18. Segment Reporting~~		24
	~~19. Related Party Transactions~~		24
~~Item 2.~~	Management's Discussion and Analysis of Financial Condition and Results of Operations		2523
Item 3.		Quantitative and Qualitative Disclosures About Market Risk				3528
Item 4.		Controls and Procedures					3528
PART II - OTHER INFORMATION
Item 1.		Legal Proceedings						3529
Item 1A.		Risk Factors						3529
Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds				3629
Item 6.5.		~~Exhibits~~Other Information						3732
Item 6.		Exhibits		30
Signatures						3831

Table of Contents

PART I – FINANCIAL INFORMATION


~~Item 1.~~	~~Financial Statements~~

Item 1.Financial Statements

TENNANT COMPANY

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)


(In millions, except shares and per share data)	Three Months Ended March 31,
	2024		2023
Net sales	$	311.0	$	305.8
Cost of sales	173.5		180.3
Gross profit	137.5		125.5
Selling and administrative expense	89.9		81.7
Research and development expense	10.1		7.9
Operating income	37.5		35.9
Interest expense, net	(2.3)		(3.7)
Net foreign currency transaction loss	(0.2)		(0.1)
Other income (expense), net	0.1		(0.1)
Income before income taxes	35.1		32.0
Income tax expense	6.7		7.7
Net income	$	28.4	$	24.3

Net income per share
Basic	$	1.52	$	1.32
Diluted	$	1.49	$	1.30

Weighted average shares outstanding
Basic	18,665,570		18,449,430
Diluted	19,077,767		18,682,268

TENNANT COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Nine Months Ended
(In thousands, except shares and per share data) September 30 September 30
2017 2016 2017 2016
Net Sales $ 261,921
$ 200,134
$ 723,771
$ 596,826
Cost of Sales 157,317
114,839
434,877
338,740
Gross Profit 104,604
85,295
288,894
258,086

Operating Expense:
Research and Development Expense 7,907
8,418
24,239
24,712
Selling and Administrative Expense 85,651
60,623
247,067
187,315
Loss on Sale of Business —
—
—
149
Total Operating Expense 93,558
69,041
271,306

212,176
Profit from Operations 11,046
16,254
17,588

45,910

Other Income (Expense):
Interest Income 698
107
1,575
188
Interest Expense (6,093 ) (329 ) (18,720 ) (919 )
Net Foreign Currency Transaction (Losses) Gains (842 ) (149 ) (2,375 ) 175
Other Expense, Net (482 ) (10 ) (700 ) (360 )
Total Other Expense, Net (6,719 ) (381 ) (20,220 )
(916 )

Profit (Loss) Before Income Taxes 4,327
15,873
(2,632 )
44,994
Income Tax Expense 731
4,396
385
13,750
Net Earnings (Loss) Including Noncontrolling Interest 3,596
11,477
(3,017 ) 31,244
Net Earnings (Loss) Attributable to Noncontrolling Interest 37
—
(28 ) —
Net Earnings (Loss) Attributable to Tennant Company $ 3,559
$ 11,477
$ (2,989 )
$ 31,244

Net Earnings (Loss) Attributable to Tennant Company per Share:
Basic $ 0.20
$ 0.66
$ (0.17 ) $ 1.78
Diluted $ 0.20
$ 0.64
$ (0.17 ) $ 1.74

Weighted Average Shares Outstanding:
Basic 17,729,857
17,498,808
17,673,656
17,516,941
Diluted 18,171,444
17,973,206
17,673,656
17,955,499

Cash Dividend Declared per Common Share $ 0.21
$ 0.20
$ 0.63
$ 0.60

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TENNANT COMPANY

CONSOLIDATEDSTATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)


(In millions)	Three Months Ended March 31,
	2024		2023
Net income	$	28.4	$	24.3
Other comprehensive (loss) income:
Foreign currency translation adjustments (net of related tax (expense) benefit of $(0.2) and $0.1, respectively)	(8.2)		5.3
Derivative financial instruments (net of related tax (expense) benefit of $(0.3), $0.2, respectively)	1.0		(0.6)
Total other comprehensive (loss) income, net of tax	(7.2)		4.7

Comprehensive income	$	21.2	$	29.0

See accompanying ~~Notes~~notes to ~~the Condensed Consolidated Financial Statements.~~

consolidated financial statements.

TENNANT COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
Three Months Ended Nine Months Ended
(In thousands) September 30 September 30
2017 2016 2017 2016
Net Earnings (Loss) Including Noncontrolling Interest $ 3,596
$ 11,477
$ (3,017 ) $ 31,244
Other Comprehensive Income:

Foreign currency translation adjustments 9,033
381
25,073
4,380
Pension and retiree medical benefits 379
23
541
61
Cash flow hedge (1,732 ) 35
(6,311 ) (394 )
Income Taxes:
Foreign currency translation adjustments —
10
—
15
Pension and retiree medical benefits (138 ) (9 ) (160 ) (23 )
Cash flow hedge 646
(13 ) 2,354
147
Total Other Comprehensive Income, Net of Tax 8,188
427
21,497

4,186

Total Comprehensive Income Including Noncontrolling Interest 11,784
11,904
18,480
35,430
Comprehensive Income (Loss) Attributable to Noncontrolling Interest 37
—
(28 ) —
Comprehensive Income Attributable to Tennant Company $ 11,747
$ 11,904
$ 18,508
$ 35,430

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TENNANT COMPANY

CONSOLIDATED BALANCE SHEETS


	(Unaudited)
(In millions, except shares and per share data)	March 31, 2024		December 31, 2023
ASSETS
Cash, cash equivalents, and restricted cash	$	88.8	$	117.1
Receivables, less allowances of $7.1 and $7.2, respectively	257.3		247.6
Inventories	181.4		175.9
Prepaid and other current assets	33.6		28.5
Total current assets	561.1		569.1
Property, plant and equipment, less accumulated depreciation of $307.4 and $304.0, respectively	184.7		187.7
Operating lease assets	40.4		41.7
Goodwill	192.2		187.4
Intangible assets, net	72.3		63.1
Other assets	101.0		64.4
Total assets	$	1,151.7	$	1,113.4
LIABILITIES AND EQUITY
Current portion of long-term debt	$	7.2	$	6.4
Accounts payable	124.9		111.4
Employee compensation and benefits	46.7		67.3
Other current liabilities	81.6		88.6
Total current liabilities	260.4		273.7
Long-term debt	207.4		194.2
Long-term operating lease liabilities	27.1		27.4
Employee benefits	13.7		13.3
Deferred income taxes	8.4		5.0
Other liabilities	18.8		21.5
Total long-term liabilities	275.4		261.4
Total liabilities	$	535.8	$	535.1
Commitments and contingencies (Note 12)
Common Stock, $0.375 par value; 60,000,000 shares authorized; 19,006,838 and 18,631,384 shares issued and outstanding, respectively	7.1		7.0
Additional paid-in capital	86.5		64.9
Retained earnings	570.5		547.4
Accumulated other comprehensive loss	(49.5)		(42.3)
Total Tennant Company shareholders' equity	614.6		577.0
Noncontrolling interest	1.3		1.3
Total equity	615.9		578.3
Total liabilities and total equity	$	1,151.7	$	1,113.4

See accompanying ~~Notes~~notes to ~~the Condensed Consolidated Financial Statements.~~

consolidated financial statements.

TENNANT COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
September 30, December 31,
(In thousands, except shares and per share data) 2017 2016
ASSETS
Current Assets:
Cash and Cash Equivalents $ 55,947
$ 58,033
Restricted Cash 1,292
517
Accounts Receivable, less Allowances of $2,972 and $3,108, respectively 193,725
149,134
Inventories 141,519
78,622
Prepaid Expenses 26,281
9,204
Other Current Assets 4,909
2,412
Total Current Assets 423,673
297,922
Property, Plant and Equipment 389,391
298,500
Accumulated Depreciation (207,882 ) (186,403 )
Property, Plant and Equipment, Net 181,509
112,097
Deferred Income Taxes 19,857
13,439
Goodwill 179,048
21,065
Intangible Assets, Net 175,752
6,460
Other Assets 22,959
19,054
Total Assets $ 1,002,798
$ 470,037
LIABILITIES AND TOTAL EQUITY
Current Liabilities:
Short-Term Borrowings and Current Portion of Long-Term Debt $ 5,281
$ 3,459
Accounts Payable 88,618
47,408
Employee Compensation and Benefits 35,085
35,997
Income Taxes Payable 10,599
2,348
Other Current Liabilities 63,327
43,617
Total Current Liabilities 202,910
132,829
Long-Term Liabilities:
Long-Term Debt 383,252
32,735
Employee-Related Benefits 25,247
21,134
Deferred Income Taxes 62,167
171
Other Liabilities 32,686
4,625
Total Long-Term Liabilities 503,352
58,665
Total Liabilities 706,262
191,494
Commitments and Contingencies (Note 13)

Equity:
Preferred Stock, $0.02 par value; 1,000,000 shares authorized; no shares issued or outstanding —
—
Common Stock, $0.375 par value; 60,000,000 shares authorized; 17,840,854 and 17,688,350 shares issued and outstanding, respectively 6,690
6,633
Additional Paid-In Capital 12,062
3,653
Retained Earnings 303,987
318,180
Accumulated Other Comprehensive Loss (28,426 ) (49,923 )
Total Tennant Company Shareholders' Equity 294,313
278,543
Noncontrolling Interest 2,223
—
Total Equity 296,536
278,543
Total Liabilities and Total Equity $ 1,002,798
$ 470,037

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TENNANT COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


(In millions)	Three Months Ended March 31,
	2024		2023
OPERATING ACTIVITIES
Net income	$	28.4	$	24.3
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation expense	9.6		8.3
Amortization expense	3.9		3.9
Deferred income tax benefit	(1.0)		(2.0)
Share-based compensation expense	3.2		1.2
Bad debt and returns expense	0.3		1.0
Other, net	0.1		0.2
Changes in operating assets and liabilities:
Receivables	(10.1)		(2.5)
Inventories	(9.2)		(1.5)
Accounts payable	13.9		(6.6)
Employee compensation and benefits	(20.3)		0.5
Other assets and liabilities	(15.9)		4.3
Net cash provided by operating activities	2.9		31.1
INVESTING ACTIVITIES
Purchases of property, plant and equipment	(3.0)		(6.8)
Purchase of investment	(32.1)		—
Payments made in connection with business acquisition, net of cash acquired	(25.5)		—
Investment in leased assets	(0.2)		(0.2)
Cash received from leased assets	0.2		0.2
Net cash used in investing activities	(60.6)		(6.8)
FINANCING ACTIVITIES
Proceeds from borrowings	40.0		20.0
Repayments of borrowings	(26.2)		(21.4)
Change in finance lease obligations	—		0.2
Proceeds from exercise of stock options, net of employee tax withholdings obligations	19.5		0.8
Repurchases of common stock	(1.1)		(5.0)
Dividends paid	(5.3)		(4.9)
Net cash provided by (used) in financing activities	26.9		(10.3)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	2.5		—
Net (decrease) increase in cash, cash equivalents and restricted cash	(28.3)		14.0
Cash, cash equivalents and restricted cash at beginning of period	117.1		77.4
Cash, cash equivalents and restricted cash at end of period	$	88.8	$	91.4

Table of Contents


SUPPLEMENTAL CASH FLOW INFORMATION	Three Months Ended March 31,
(In millions)	2024		2023
Cash paid for income taxes	$	1.6	$	0.8
Cash paid for interest	4.5		4.5
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	4.7		4.6
Lease assets obtained in exchange for new operating lease liabilities	3.8		4.6
Supplemental non-cash investing and financing activities:
Capital expenditures in accounts payable	2.1		1.5

See accompanying ~~Notes~~notes to ~~the Condensed Consolidated Financial Statements.~~

consolidated financial statements.

TENNANT COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended
(In thousands) September 30
2017 2016
OPERATING ACTIVITIES
Net (Loss) Earnings Including Noncontrolling Interest $ (3,017 ) $ 31,244
Adjustments to Reconcile Net (Loss) Earnings to Net Cash Provided by Operating Activities:
Depreciation 18,515
13,150
Amortization of Intangible Assets 11,430
323
Amortization of Debt Issuance Costs 896
—
Debt Issuance Cost Charges Related to Short-Term Financing 6,200
—
Fair Value Step-Up Adjustment to Acquired Inventory 8,445
—
Deferred Income Taxes (4,848 ) (676 )
Share-Based Compensation Expense 4,915
5,747
Allowance for Doubtful Accounts and Returns 983
779
Loss on Sale of Business —
149
Other, Net 175
(418 )
Changes in Operating Assets and Liabilities:
Receivables (524 ) 5,752
Inventories (9,866 ) (4,873 )
Accounts Payable 5,747
(6,415 )
Employee Compensation and Benefits (9,462 ) (5,448 )
Other Current Liabilities 10,019
(3,097 )
Income Taxes 4,149
2,248
Other Assets and Liabilities (11,634 ) (5,183 )
Net Cash Provided by Operating Activities 32,123
33,282
INVESTING ACTIVITIES
Purchases of Property, Plant and Equipment (16,239 ) (22,499 )
Proceeds from Disposals of Property, Plant and Equipment 2,456
559
Proceeds from Principal Payments Received on Long-Term Note Receivable 500
—
Issuance of Long-Term Note Receivable (1,500 ) —
Acquisition of Businesses, Net of Cash Acquired (354,073 ) (12,358 )
Purchase of Intangible Asset (2,500 ) —
Proceeds from Sale of Business —
285
(Increase) Decrease in Restricted Cash (133 ) 116
Net Cash Used in Investing Activities (371,489 ) (33,897 )
FINANCING ACTIVITIES
Proceeds from Short-Term Debt 300,000
—
Repayments of Short-Term Debt (300,000 ) —
Proceeds from Issuance of Long-Term Debt 440,000
15,000
Payments of Long-Term Debt (81,262 ) (3,452 )
Payments of Debt Issuance Costs (16,465 ) —
Purchases of Common Stock —
(12,762 )
Proceeds from Issuances of Common Stock 4,728
2,893
Excess Tax Benefit on Stock Plans —
447
Dividends Paid (11,204 ) (10,583 )
Net Cash Provided by (Used in) Financing Activities 335,797
(8,457 )
Effect of Exchange Rate Changes on Cash and Cash Equivalents 1,483
55
Net Decrease in Cash and Cash Equivalents (2,086 ) (9,017 )
Cash and Cash Equivalents at Beginning of Period 58,033
51,300
Cash and Cash Equivalents at End of Period $ 55,947
$ 42,283

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Supplemental Disclosure of Cash Flow Information:
Cash Paid for Income Taxes $ 8,127
$ 11,329
Cash Paid for Interest $ 3,741
$ 796
Supplemental Non-cash Investing and Financing Activities:
Long-Term Note Receivable from Sale of Business $ —
$ 5,489
Capital Expenditures in Accounts Payable $ 1,265
$ 1,322
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, 2023	18,631,384	$	7.0	$	64.9	$	547.4	$	(42.3)	$	577.0	$	1.3	$	578.3
Net income		—		—		28.4		—		28.4		—		28.4
Other comprehensive income		—		—		—		(7.2)		(7.2)		—		(7.2)
Issue stock for directors, employee benefit and stock plans, net of related tax withholdings and repurchases of 27,808 shares	388,179	0.1		19.5		—		—		19.6		—		19.6
Share-based compensation		—		3.2		—		—		3.2		—		3.2
Repurchases of common stock	(12,725)	—		(1.1)		—		—		(1.1)		—		(1.1)
Dividends paid $0.28 per common share		—		—		(5.3)		—		(5.3)		—		(5.3)
Balance, March 31, 2024	19,006,838	$	7.1	$	86.5	$	570.5	$	(49.5)	$	614.6	$	1.3	$	615.9


	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, 2022	18,521,485	$	7.0	$	56.0	$	458.0	$	(50.2)	$	470.8	$	1.3	$	472.1
Net income		—		—		24.3		—		24.3		—		24.3
Other comprehensive loss		—		—		—		4.7		4.7		—		4.7
Issue stock for directors, employee benefit and stock plans, net of related tax withholdings and repurchases of 18,468 shares	93,073	—		0.8		—		—		0.8		—		0.8
Share-based compensation		—		1.2		—		—		1.2		—		1.2
Repuchases of common stock	(73,525)	—		(5.0)		—		—		(5.0)		—		(5.0)
Dividends paid $0.265 per common share		—		—		(4.9)		—		(4.9)		—		(4.9)
Balance, March 31, 2023	18,541,033	$	7.0	$	53.0	$	477.4	$	(45.5)	$	491.9	$	1.3	$	493.2

See accompanying ~~Notes~~notes to ~~the Condensed Consolidated Financial Statements.~~consolidated financial statements.

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TENNANT COMPANY

NOTES TO ~~THE CONDENSED~~ CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(In ~~thousands,~~millions, except shares and per share data)


1.	~~Summary of Significant Accounting Policies~~

1. Summary of Significant Accounting Policies

Tennant Company ("the Company", "we", "us", or "our") is a world leader in designing, manufacturing and marketing solutions that empower customers to achieve quality cleaning performance, reduce environmental impact and 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.

Basis of Presentation – The accompanying unaudited ~~Condensed Consolidated Financial Statements~~consolidated financial statements have been prepared in accordance with the U.S. Securities and Exchange Commission (“SEC”) requirements for interim ~~reporting, which allows certain footnotes and other financial information normally required by accounting principles generally accepted in the United States of America to be condensed or omitted.~~reporting. In our opinion, the ~~Condensed Consolidated Financial Statements~~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~~consolidated financial statements and ~~Notes~~notes included in our annual report on Form 10-K for the year ended December 31, ~~2016~~.2023. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year.

~~Equity Method Investment~~ ~~– Investments in which we have~~

2. Newly Adopted Accounting Pronouncements

There are no newly adopted accounting pronouncements during the ~~ability~~three months ended March 31, 2024 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 March 31,
	2024		2023
Americas	$	215.6	$	204.4
Europe, Middle East and Africa	76.8		82.1
Asia Pacific	18.6		19.3
Total	$	311.0	$	305.8

Net sales are attributed to ~~exercise significant influence, but do not control, are accounted for under~~each geographic area based on the ~~equity method of accounting~~end-user country and are ~~included in Other Assets on~~net of intercompany sales.

Table of Contents

Net sales by groups of similar products and services


	Three Months Ended March 31,
	2024		2023
Equipment	$	189.8	$	186.4
Parts and consumables	70.6		73.4
Service and other	50.6		46.0
Total	$	311.0	$	305.8

Net sales by sales channel


	Three Months Ended March 31,
	2024		2023
Sales direct to consumer	$	221.4	$	205.1
Sales to distributors	89.6		100.7
Total	$	311.0	$	305.8

Contract Liabilities

Sales Returns

The right of return may exist explicitly or implicitly with our customers. When the ~~Condensed Consolidated Balance Sheets. Under this~~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 ~~accounting, our share of the net earnings or losses of the investee are presented~~historical sales return levels as a ~~component~~percent of ~~Other Expense, Net on~~sales and projecting this experience into the ~~Condensed Consolidated Statements of Operations. The details regarding~~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 ~~equity method investment in i-team North America B.V., a joint venture that operates as the distributor of the i-mop in North America, are further described in Note 3.~~

~~New Accounting Pronouncements~~ ~~– In accordance with Accounting Standards Update ("ASU") No. 2016-09, Compensation–Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, all excess tax benefits and tax deficiencies~~customers are recorded ~~as a component of~~using the ~~provision~~most likely amount approach for income taxes in the reporting period in which they occur. Additionally, we present excess tax benefits along with other income tax cash flows on the Condensed Consolidated Statements of Cash Flows as an operating activity rather than, as previously required, a financing activity. For further details regarding the implementation of this ASU and the impact on our financial statements, see Note 2.

We documented the summary of significant accounting policies in the Notes to the Consolidated Financial Statements of our annual report on Form 10-K for the fiscal year ended December 31, 2016. Other than the accounting policies noted above, there have been no material changes to our accounting policies since the filing of that report.


2.	~~Newly Adopted Accounting Pronouncements~~

~~On March 30, 2016, the Financial Accounting Standards Board ("FASB") issued ASU 2016-09, Compensation–Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, which amends Accounting Standards Codification ("ASC")~~ ~~Topic 718, Compensation – Stock Compensation.~~ ASU 2016-09 simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities and classification on the Condensed Consolidated Statements of Cash Flows. Under the new standard, all excess tax benefits and tax deficiencies are recorded as a component of the provision for income taxes in the reporting period in which they occur. Additionally, ASU 2016-09 requires that the company present excess tax benefits along with other income tax cash flows on the Condensed Consolidated Statements of Cash Flows as an operating activity rather than, as previously required, a financing activity. ASU 2016-09 is effective for fiscal years beginning after December 15, 2016.

~~We have adopted ASU 2016-09 effective January 1, 2017 on a prospective basis where permitted by the new standard. As a result of this adoption:~~

For the three and nine months ended September 30, 2017, we recognized discrete tax benefits of $5 and $1,149, respectively, in the Income Tax Expense line item of our Condensed Consolidated Statements of Operations related to excess tax benefits upon vesting or settlement in that period.

We elected to adopt the cash flow presentation of the excess tax benefits prospectively where the tax benefits are classified along with other income tax cash flows as operating cash flows in 2017. Our prior year's excess tax benefits are recognized as financing cash flows. However, other income tax cash flows are classified as operating cash flows.

~~We have elected to account for forfeitures as they occur, rather than electing to estimate the number of share-based awards expected to vest to determine~~estimating the amount of ~~compensation cost~~consideration to which the Company will be entitled. We forecast the most likely amount of the incentive to be ~~recognized~~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 ~~each period.~~ other current liabilities on our consolidated balance sheets.

The ~~difference of such~~ change ~~is immaterial.~~in our sales incentive accrual balance was as follows:


	Three Months Ended March 31,
	2024		2023
Beginning balance	$	21.2	$	20.0
Additions to sales incentive accrual	6.3		6.6
Contract payments	(11.3)		(11.3)
Foreign currency fluctuations	(0.4)		0.1
Ending balance	$	15.8	$	15.4

Deferred Revenue

We ~~excluded~~sell separately priced prepaid contracts to our customers where we receive payment at the ~~excess tax benefits~~inception of the contract and defer recognition of the consideration received because we have to satisfy future performance obligations. Our deferred revenue balance is primarily attributed to prepaid maintenance contracts on our

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machines ranging from ~~the assumed proceeds available~~12 months to ~~repurchase shares~~60 months. In circumstances where prepaid contracts are bundled with machines, we use an observable price to determine stand-alone selling price for separate performance obligations.

The change in the ~~computation~~deferred revenue balance was as follows:


	Three Months Ended March 31,
	2024		2023
Beginning balance	$	10.3	$	9.3
Increase in deferred revenue representing our obligation to satisfy future performance obligations	5.0		5.5
Decrease in deferred revenue for amounts recognized in net sales for satisfied performance obligations	(4.3)		(4.7)
Foreign currency fluctuations	(0.1)		0.1
Ending balance	$	10.9	$	10.2

At March 31, 2024, $7.1 million and $3.8 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 2024	$	6.6
2025	2.1
2026	1.3
2027	0.6
2028	0.2
Thereafter	0.1
Total	$	10.9

At December 31, 2023, $7.9 million and $2.4 million of deferred revenue was reported in other current liabilities and other liabilities, respectively, on our consolidated balance sheets.

4. Management Actions

Restructuring Actions

During the three months ended March 31, 2024 and March 31, 2023, we incurred no restructuring expenses as part of our ~~diluted earnings per share~~ongoing global reorganization efforts.

A reconciliation of the beginning and ending liability balances for severance-related costs is as follows:


	Three Months Ended March 31,
	2024		2023
Beginning balance	$	2.4	$	1.7
New charges	—		—
Cash payments	(0.4)		(0.5)
Foreign currency fluctuations	(0.1)		—
Adjustments to accrual	—		—
Ending balance	$	1.9	$	1.2

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5. Acquisitions

On February 29, 2024, we acquired 100% of M&F Management and Financing GmbH ("M&F"), the parent company of TCS EMEA GmbH ("TCS"), as we seek to accelerate growth in the EMEA region.

Based in Austria, TCS was Tennant Company's largest Central and Eastern Europe distributor. The acquisition gives Tennant a knowledgeable and experienced sales force and an established direct channel into countries including Romania, Hungary, Czech Republic, and Slovakia, along with an expanded network in Austria, Switzerland, Poland, and other nations in the region, as well as the Middle East and Africa.

Our consolidated financial results for the three ~~and nine~~ months ended ~~September 30, 2017.~~March 31, 2024 include $2.1 million of revenue and immaterial net income related to TCS. The proforma impact of this acquisition is immaterial to our operations.


3.	~~Investment in Joint Venture~~

~~On February 13, 2017, the company, through a Dutch subsidiary, and i-team Global, a Future Cleaning Technologies, B.V. company headquartered in~~ The Netherlands, announced the January 1, 2017 formation of i-team North America B.V., a joint venture that will operate as the distributor of the i-mop in North America. We began selling and servicing the i-mop in the second quarter of 2017. We own a 50% ownership interest in the joint venture, which is accounted for under the equity method of accounting, with our proportionate share of income or loss presented as a component of Other Expense, Netpurchase price has been preliminarily allocated based on the ~~Condensed Consolidated Statements of Operations.~~

~~As of September 30, 2017, the carrying~~estimated fair value of ~~the company's investment in the joint venture was $66. In March 2017, we issued a $1,500 loan to the joint venture~~assets acquired and ~~as a result, recorded a long-term note receivable in Other Assets on the Condensed Consolidated Balance Sheets.~~


4.	~~Management Action~~

During the first quarter of 2017, we implemented a restructuring action to better align our global resources and expense structure with a lower growth global economic environment. The pre-tax charge of $8,018, including other associated costs of $961, consisted primarily of severance and was included within Selling and Administrative Expense in the Condensed Consolidated Statements of Operations. The charge impacted our Americas, Europe, Middle East and Africa ("EMEA") and Asia Pacific ("APAC") operating segments. We believe the anticipated savings will offset the pre-tax charge in approximately one year fromliabilities assumed at the date of the ~~action. We do not expect additional costs~~acquisition. The preliminary purchase price allocation is subject to further refinement and may require adjustments to arrive at the final purchase price allocation. These changes will ~~be incurred related to this restructuring action.~~

~~A reconciliation~~primarily relate to the ~~ending liability balance~~fair value of ~~severance~~intangible assets and ~~related costs as of September 30, 2017 is as follows:~~

Severance and Related Costs
Q1 2017 restructuring action $ 7,057
Cash payments (5,792 )
Foreign currency adjustments 164
September 30, 2017 balance $ 1,429


5.	~~Acquisitions~~

~~IP Cleaning S.p.A.~~

On ~~April 6, 2017, we acquired~~ ~~100 percent~~ ofimpacts associated with income taxes. Such finalization may result in material changes from the ~~outstanding capital stock of~~ ~~IP Cleaning S.p.A. and its subsidiaries ("IPC Group")~~ ~~for a~~preliminary purchase price of ~~$353,769, net of cash acquired of~~ ~~$8,804~~. The primary seller was Ambienta SGR S.p.A., a European private equity fund. IPC Group, based in Italy, is a designer and manufacturer of innovative professional cleaning equipment, cleaning tools and supplies. The acquisition strengthens our presence and market share in Europe and will allow us to better leverage our EMEA cost structure. We funded the acquisition of IPC Group, along with related fees, including refinancing of existing debt, with funds raised through borrowings under a senior secured credit facility in an aggregate principal amount of ~~$420,000~~. ~~Further details regarding our acquisition financing arrangements are discussed in Note 8.~~

allocation.

The following table summarizes the preliminary fair value measurement of the assets acquired and liabilities assumed as of the date of acquisition:


Components of purchase price:
Cash paid	$	30.8
Settlement of preexisting transactions	3.9
Total purchase price	34.7

ASSETS
Cash	5.3
Other current assets	8.0
Intangible assets subject to amortization
Customer lists	13.6
Backlog	0.6
Other assets	5.3
Total identifiable assets acquired	32.8
LIABILITIES
Current liabilities	(1.5)
Long-term liabilities	(5.0)
Total identifiable liabilities assumed	(6.5)
Net assets acquired	26.3

Goodwill	$	8.4

ASSETS
Restricted Cash $ 538
Receivables 40,067
Inventories 54,256
Other Current Assets 4,362
Assets Held for Sale 2,247
Property, Plant and Equipment 63,256
Intangible Assets Subject to Amortization:
Trade Name 26,753
Customer Lists 123,061
Technology 9,631
Other Assets 4,168
Total Identifiable Assets Acquired 328,339
LIABILITIES
Accounts Payable 31,529
Accrued Expenses 15,756
Deferred Income Taxes 61,694
Other Liabilities 6,967
Total Identifiable Liabilities Assumed 115,946
Net Identifiable Assets Acquired 212,393
Noncontrolling Interest (2,266 )
Goodwill 143,642
Total Estimated Purchase Price, net of Cash Acquired $ 353,769

The ~~acquired assets, liabilities and operating results have been included in our Condensed Consolidated Financial Statements from the date of acquisition. During the~~ ~~three months ended~~ ~~September 30, 2017, we~~ ~~included net sales of $56,110 and a net loss of $6,850~~ ~~from IPC Group in our Condensed Consolidated Statements of Operations. During the nine~~ ~~months endedSeptember 30, 2017, we included net sales of~~ ~~$115,184and a net loss of$12,037~~ ~~from IPC Group in our Condensed Consolidated Statements of Operations. For the three and nine months ended~~ ~~September 30, 2017, the net loss includes a fair value adjustment, net of tax, of $1,619~~ ~~and$6,089, respectively, to the acquired inventory of IPC Group. In addition, costs of~~ ~~$622~~ ~~and $8,180, net of tax, associated with the acquisition of the IPC Group were expensed as incurred in the Condensed Consolidated Statements of Operations for the three and nine months ended~~ ~~September 30, 2017, respectively. The preliminary gross amount of the accounts receivable acquired~~ ~~is $43,785, of which $3,718 is expected to be uncollectible.~~

~~Amortization expense recorded for acquired intangible assets for the three and nine months ended September 30, 2017~~ ~~was$7,331 and $10,438, respectively. For the~~ ~~three months ended~~ September 30, 2017, amortization expense includes a $1,999 measurement period adjustment resulting from updates to the provisional fair values of the acquired intangible assets recorded in the second quarter of 2017 as well as the use of an accelerated method of amortization for the acquired customer lists and technology. This charge affected s~~elling and administrative expense~~ ~~in the Condensed Consolidated Statements of Operations, along with an associated reduction to income tax expense of$553.~~

~~The fair value measurement~~total purchase price was ~~preliminary at~~ ~~September 30, 2017~~.~~During the measurement period, we expect to record adjustments relating to~~ ~~the finalization of intangible assets, inventories, restricted cash and property, plant and equipment valuations, and various income tax matters, among others. We expect~~ ~~the fair value measurement process to be completed not later than one year from the acquisition date.~~

~~Goodwill was calculated as the difference between~~paid on the acquisition date ~~fair value~~ of February 29, 2024. Included in the ~~total purchase price consideration~~transaction is cash paid of $30.8 million and the ~~fair value~~settlement of ~~the net identifiable assets acquired, and represents the future economic benefits that we expect to achieve as a result~~$3.9 million of ~~the acquisition. This resulted in an estimated purchase price in excess of the fair value of identifiable net assets acquired.~~

preexisting transactions.

The estimated purchase price also included the fair value of other assets that were not identifiable and not separately recognizable under accounting rules (e.g., assembled workforce) or these assets were of immaterial value. In addition, there is a going concern element that represents our ability to earn a higher rate of return on the group of assets than would be expected on the separate assets as determined during the valuation process. Based on preliminary fair value measurement of the assets acquired and liabilities assumed, we allocated $143,642 to goodwill for the expected synergies from combining IPC Group with our existing business. None of the goodwill is not expected to be deductible for income tax purposes. The ~~assignment of goodwill to reporting units is not complete, pending finalization of the valuation measurements.~~

~~The fair value of acquired identifiable intangible assets was primarily determined using discounted~~ expected cash flows. The fair value of acquired identifiable tangible assets was primarily determined using the cost or market approach. The valuations were based on the information that was available as of the acquisition date and the expectations and assumptions that have been deemed reasonable by us. There are inherent uncertainties and management judgment required in these determinations. The fair value measurements of the assets acquired and liabilities assumed were based on valuations involving significant unobservable inputs, or Level 3 in the fair value hierarchy.

~~The preliminary fair value~~lives of the acquired intangible assets is ~~$159,445. The expected lives of the acquired amortizable intangible assets are approximately 15 years for customer lists, 10 years for trade names~~3 months and 10 years for ~~technology. Trade names~~backlog and customer lists, respectively, and are being amortized on a straight-line ~~basis while the customer lists and technology are being amortized on an accelerated~~ basis.

~~The following unaudited pro forma financial information presents the combined results~~

Table of operations of Tennant Company as if the acquisition of IPC Group had occurred as of January 1, 2017 and 2016. The unaudited pro forma financial information is presented for informational purposes only. It is not necessarily indicative of what our consolidated results of operations actually would have been had the acquisition occurred at the beginning of each year, nor does it attempt to project the future results of operations of the combined company.

Contents

Pro Forma Financial Information (Unaudited)
Three Months Ended Nine Months Ended
(In thousands, except per share data) September 30 September 30
2017 2016 2017 2016
Net Sales
Pro forma $ 261,921
$ 250,050
$ 777,832
$ 747,943
As reported 261,921
200,134
723,771
596,826

Net Earnings (Loss) Attributable to Tennant Company
Pro forma $ 5,800
$ 7,696
$ 14,875
$ 20,659
As reported 3,559
11,477
(2,989 ) 31,244

Net Earnings (Loss) Attributable to Tennant Company per Share
Pro forma $ 0.32
$ 0.43
$ 0.84
$ 1.15
As reported 0.20
0.64
(0.17 ) 1.74
6. Inventories

The unaudited pro forma financial information is based on certain assumptions which we believe are reasonable, directly attributable to the transaction, factually supportable and do not reflect any cost savings, operating synergies or revenue enhancements that we may achieve, nor the costs necessary to achieve those cost savings, operating synergies, revenue enhancements or integration efforts.

~~The unaudited pro forma financial information above gives effect to the following:~~

Incremental amortization and depreciation expense related to the estimated fair value of the identifiable intangible assets and property, plant and equipment from the preliminary purchase price allocation.

Exclusion of the purchase accounting impact of the inventory step-up reported in cost of sales for the three and nine months ended September 30, 2017 related to the sale of acquired inventory of $2,246 and $8,445, respectively.

~~Incremental interest expense related to additional debt used to finance the acquisition.~~

~~Exclusion of non-recurring acquisition-related transaction and financing costs.~~

~~Pro forma adjustments tax affected based on the jurisdiction where the costs were incurred.~~

~~Other Acquisitions~~

~~On July 28, 2016, pursuant to an asset purchase agreement and real estate purchase agreement with~~ ~~Crawford Laboratories, Inc. and affiliates thereof ("Sellers"), we acquired selected assets and liabilities of the Sellers' commercial floor coatings business, including the Florock~~^®Polymer Flooring brand ("Florock"). Florock manufactures commercial floor coatings systems in Chicago, IL. The purchase price was $11,843, including working capital and other adjustments, and is comprised of $10,965 paid at closing, with the remaining $878 paid in two installments. We paid the first installment of $575 on October 14, 2016. The remaining amount was paid during ~~the 2017 first quarter.~~

~~On September 1, 2016, we acquired selected assets and liabilities of~~ ~~Dofesa Barrido Mecanizado ("Dofesa")~~ ~~which was our largest distributor in Mexico. The operations are based in Aguascalientes, Mexico, and their addition allows us to expand our sales and service network in an importa~~nt market. The purchase price was $4,650 less assumed liabilities of $3,448, subject to customary working capital adjustments. The net purchase price of $1,202 and a value added tax of $191 were paid at closing.

The acquisitions have been accounted for as business combinations and the results of their operations have been included in the Condensed Consolidated Financial Statements since their respective dates of acquisition. ~~The impact of the incremental revenue and earnings recorded as a result of the acquisitions are not material to our Condensed Consolidated Financial Statements.~~ ~~The purchase price allocations for both the Florock and Dofesa acquisitions are complete.~~

~~The components of the final purchase price of the business combinations described above have been allocated as follows:~~

Current Assets $ 5,949
Property, Plant and Equipment, net 4,112
Identified Intangible Assets 6,055
Goodwill 1,739
Other Assets 7
Total Assets Acquired 17,862
Current Liabilities 4,764
Other Liabilities 53
Total Liabilities Assumed 4,817
Net Assets Acquired $ 13,045


6.	~~Inventories~~

Inventories are valued at the lower of cost or ~~market. Inventories at September 30, 2017~~net realizable value and ~~December 31, 2016~~ consisted of the following:


	March 31, 2024		December 31, 2023
Inventories carried at LIFO:
Finished goods(a)	$	75.4	$	74.7
Raw materials and work-in-process	37.1		38.5
Excess of FIFO over LIFO cost(b)	(47.5)		(47.7)
Total LIFO inventories	$	65.0	$	65.5

Inventories carried at FIFO:
Finished goods(a)	$	56.9	$	52.8
Raw materials and work-in-process	59.5		57.6
Total FIFO inventories	$	116.4	$	110.4
Total inventories	$	181.4	$	175.9

September 30,
2017 December 31,
2016
Inventories carried at LIFO:
Finished goods $ 47,734
$ 39,142
Raw materials, production parts and work-in-process 24,275
23,980
LIFO reserve (28,190 ) (28,190 )
Total LIFO inventories 43,819
34,932
Inventories carried at FIFO:

Finished goods 56,477
31,044
Raw materials, production parts and work-in-process 41,223
12,646
Total FIFO inventories 97,700
43,690
Total inventories $ 141,519
$ 78,622
(a)Finished goods include machines, parts and consumables and component parts that are used in our products.

(b)The ~~LIFO reserve approximates the~~ difference between ~~LIFO carrying~~replacement cost and ~~FIFO.~~the stated LIFO inventory value is not materially different from the reserve for the LIFO valuation method.


7.	~~Goodwill and Intangible Assets~~

7. Goodwill and Intangible Assets

The changes in the carrying ~~value~~amount of goodwill for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2024 were as follows:


	Goodwill		Accumulated Impairment Losses		Total
Balance as of December 31, 2023	$	220.7	$	(33.3)	$	187.4
Additions	8.4		—		8.4
Foreign currency fluctuations	(3.9)		0.3		(3.6)
Balance as of March 31, 2024	$	225.2	$	(33.0)	$	192.2

Table of Contents

Goodwill
Accumulated
Impairment
Losses
Total
Balance as of December 31, 2016 $ 58,397
$ (37,332 ) $ 21,065
Additions 143,642
—
143,642
Purchase accounting adjustments (1,865 ) —
(1,865 )
Foreign currency fluctuations 19,632
(3,426 ) 16,206
Balance as of September 30, 2017 $ 219,806
$ (40,758 ) $ 179,048

The balances of acquired intangible assets, excluding goodwill, ~~as of~~ ~~September 30, 2017~~ ~~and~~ ~~December 31, 2016~~, were as follows:


	Customer Lists			Trade Names			Technology			Total
Balance as of September 30, 2017
	Customer Lists												Customer Lists	Trade Names	Technology	Total
Balance as of March 31, 2024
Original cost
Original cost
Original cost	$	147,582		$	31,515		$	14,425		$	193,522
Accumulated amortization	(13,492		)	(1,631		)	(2,647		)	(17,770		)
Carrying value	$	134,090		$	29,884		$	11,778		$	175,752
Weighted average original life (in years)	15			10			11

Balance as of December 31, 2016
Balance as of December 31, 2023

Balance as of December 31, 2023

Balance as of December 31, 2023
Original cost
Original cost
Original cost	$	8,016		$	2,000		$	5,136		$	15,152
Accumulated amortization	(5,948		)	—			(2,744		)	(8,692		)
Carrying value	$	2,068		$	2,000		$	2,392		$	6,460
Weighted average original life (in years)	15			15			13

The additions to ~~goodwill~~Goodwill recorded during the first ~~nine months~~quarter of ~~2017~~2024 were ~~based on the preliminary purchase price allocation of~~related to our acquisition of ~~the IPC Group,~~TCS, as described further in Note 5.

As part of our acquisition of ~~the IPC Group,~~TCS, we acquired customer lists ~~trade names~~ and ~~technology for~~backlog with a combined preliminary fair value ~~measurement~~ of ~~$159,445.~~$14.2 million. Further details regarding the preliminary purchase price allocation of ~~our acquisition of the IPC Group~~TCS are described further in Note 5.

As part of the formation of the i-team North America B.V. joint venture, we purchased the distribution rights to sell the i-mop in North America for $2,500. The distribution rights were recorded in intangible assets, net as a customer list on the Condensed Consolidated Balance Sheets as of September 30, 2017. The i-mop distribution rights have a useful life of five years. Further details regarding the joint venture are discussed in Note 3.

Amortization expense on intangible assets for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2024 and March 31, 2023 was ~~$7,650 and $11,430, respectively. Amortization expense on intangible assets for the three and nine months ended September 30, 2016 was $99 and $323, respectively.~~$3.9 million.

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 2024	$	11.2
2025	13.1
2026	11.9
2027	8.6
2028	6.9
Thereafter	20.6
Total	$	72.3

8. Debt

Remaining 2017 $ 5,635
2018 22,042
2019 21,398
2020 19,928
2021 18,315
Thereafter 88,434
Total $ 175,752
2021 Credit Agreement


8.	~~Debt~~

~~JPMorgan Credit Facility~~

~~In order to finance the acquisition of the IPC Group, on~~On April ~~4, 2017, the Company~~5, 2021, we and certain of our foreign subsidiaries entered into aan Amended and Restated Credit Agreement (the ~~“2017~~“2021 Credit Agreement”) with JPMorgan Chase Bank, N.A. as administrative agent, Goldman Sachs Bank USA, as syndication agent, Wells Fargo, National Association, U.S. Bank National Association, and HSBC Bank USA, National Association, as co-documentation agents, and the lenders (including JPMorgan) from time to time party thereto.agent. The ~~2017~~2021 Credit Agreement provides ~~the company~~us and certain of our foreign subsidiaries access to a senior secured credit facility until April ~~4, 2022,~~3, 2026, consisting of a ~~multi-tranche~~ term loan facility in an amount up to ~~$400,000~~$100.0 million and a revolving facility in an amount up to ~~$200,000~~$450.0 million with an option to expand the ~~revolving~~credit facility by ~~$150,000,~~up to $275.0 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~~On November 10, 2022, we amended the 2021 Credit Agreement (the "Amendment") to update the benchmark provisions to replace LIBOR with Term SOFR (as defined in the Amendment) as the reference rate for ~~committed funds~~purposes of calculating interest under the ~~revolving facility~~2021 Credit Agreement. Pursuant to the Amendment, borrowings denominated

Table of ~~the 2017 Credit Agreement ranges from an annual rate of 0.175% to 0.35%, depending on the company’s leverage ratio. Borrowings denominated~~ Contents

in U.S. dollars ~~under the 2017 Credit Agreement~~ bear interest at a rate per annum equal to (a) the Term SOFR Rate (as defined in the Amendment) plus a credit spread adjustment of 0.10% per annum, but in any case, not less than 0%, plus an additional spread of 1.10% to 1.70%, depending on the Company’s leverage ratio, or (b) the Alternate Base Rate (as defined in the Amendment), which is the greatest of (i) the prime rate, (ii) the federal funds rate plus 0.50% and (iii) the adjusted ~~LIBOR rate~~Term SOFR Rate for a one month period, but in any case, not less than 0%1.0%, plus, in any such case, ~~1.00%~~1.0%, plus an additional spread of ~~0.075%~~0.10% to ~~0.90% for revolving loans and 0.25% to 1.25% for term loans,~~0.70%, depending on the ~~company’s~~Company’s leverage ratio. All other material terms included in the 2021 Credit Agreement remain unchanged as a result of the Amendment.

In connection with the 2021 Credit Agreement, we reaffirmed our security interest in favor of the lenders in substantially all our personal property and pledged the stock of our domestic subsidiaries and 65% of the stock of our first-tier foreign subsidiaries. The obligations under the 2021 Credit Agreement are also guaranteed by certain of our first-tier domestic subsidiaries, and those subsidiaries also provided a security interest in their similar personal property.

The 2021 Credit Agreement restricts the payment of dividends or repurchasing of stock requiring that, after giving effect to such payments, no default exists or would result from such payment. Additionally, cash dividends are restricted to $7.5 million per quarter and approved levels of other restricted payments range from $60.0 million to unlimited based on our net leverage ratio ~~or (b) the LIBOR Rate, as adjusted for statutory reserve requirements for eurocurrency liabilities, but in~~(not taking into account any ~~case, not less than 0%, plus an additional spread of 1.075%~~acquisition holiday) after giving effect to ~~1.90% for revolving loans and 1.25% to 2.25% for term loans, depending on the company’s leverage ratio.~~such payment.

Upon entry into the 2017 Credit Agreement, the company repaid $45,000 in outstanding borrowings under our Amended and Restated Credit Agreement, as described in Note 9 of our annual report on Form 10-K for the year ended December 31, 2016, and terminated the Amended and Restated Credit Agreement.

The ~~2017~~2021 Credit Agreement contains customary representations, warranties and covenants, including but not limited to covenants restricting ~~the company’s~~our ability to incur indebtedness and liens and to merge or consolidate with another entity. ~~The 2017~~Further, the 2021 Credit Agreement ~~also~~ contains ~~financial covenants, requiring us to maintain a~~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 3.50 to 1.00, with certain alternative requirements for permitted acquisitions greater than $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 1.00; 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 1.00, in such case limiting such payments to $60.0 million during any fiscal year.

Debt Outstanding

Debt outstanding consisted of ~~consolidated total indebtedness to consolidated earnings before income, taxes, depreciation and amortization, subject to certain adjustments ("Adjusted EBITDA")~~the following:


	March 31, 2024		December 31, 2023
Credit facility borrowings:
Revolving credit facility borrowings	$	125.0	$	110.0
Term loan facility borrowings	88.8		90.0
Finance lease liabilities	0.8		0.6
Total debt	214.6		200.6
Less: current portion of long-term debt(a)	(7.2)		(6.4)
Long-term debt	$	207.4	$	194.2

(a)As of ~~not greater than 4.25 to 1, as well as requiring us to maintain a ratio of consolidated Adjusted EBITDA to consolidated interest expense of no less than 3.50 to 1 for~~March 31, 2024, the quarter ended September 30, 2017. The 2017 Credit Agreement also contains a financial covenant requiring us to maintain a senior secured net indebtedness to Adjusted EBITDA ratio of not greater than 3.50 to 1. These financial covenants may restrict our ability to pay dividends and purchase outstanding shares of our common stock. We were in compliance with our financial covenants at September 30, 2017.

~~We will be~~Company is required to repay ~~the senior credit agreement with 25% to 50% of our excess cash flow from the preceding fiscal year, as defined~~$6.9 million in ~~the agreement, unless our net leverage ratio for such preceding fiscal year is less than or equal to 3.00 to 1, which will be first measured using our fiscal year ended December 31, 2018.~~

~~The full terms and conditions of the senior secured~~outstanding credit facility ~~including our financial covenants, are set forth in~~borrowings and $0.3 million of finance lease liabilities over the ~~2017 Credit Agreement. A copy of the 2017 Credit Agreement was filed as Exhibit 10.1 to the company's Current Report on Form 8-K filed April 5, 2017, as amended on Form 8-K/A filed July 27, 2017.~~next 12 months.

~~Issuance of 5.625% Senior Notes due 2025~~

On April 18, 2017, we issued and sold $300,000 in aggregate principal amount of our 5.625% Senior Notes due 2025 (the “Notes”), pursuant to an Indenture, dated as of April 18, 2017, among the company, the Guarantors (as defined therein), and Wells Fargo Bank, National Association, a national banking association, as trustee. The Notes are guaranteed by Tennant Coatings, Inc. and Tennant Sales and Service Company (collectively, the “Guarantors”), which are wholly owned subsidiaries of the company.

The Notes will mature on May 1, 2025. Interest on the Notes will accrue at the rate of 5.625% per annum and will be payable semiannually in cash on each May 1 and November 1, commencing on November 1, 2017.

The Notes and the guarantees constitute senior unsecured obligations of the company and the Guarantors, respectively. The Notes and the guarantees, respectively, are: (a) equal in right of payment with all of the company’s and the Guarantors’ senior debt, without giving effect to collateral arrangements; (b) senior in right of payment to all of the company’s and the Guarantors’ future subordinated debt, if any; (c) effectively subordinated in right of payment to all of the company’s and the Guarantors’ debt and obligations that are secured, including borrowings under the company’s senior secured credit facilities for so long as the senior secured credit facilities are secured, to the extent of the value of the assets securing such liens; and (d) structurally subordinated in right of payment to all liabilities (including trade payables) of the company’s and the Guarantors’ subsidiaries that do not guarantee the Notes. The Notes also contain customary representations, warranties and covenants, and are less restrictive than those contained in the 2017 Credit Agreement.

We used the net proceeds from this offering to refinance a $300,000 term loan under our 2017 Credit Agreement that we borrowed as part of the financing for the acquisition of the IPC Group and to pay related fees and expenses.

~~The full terms and conditions of the Indenture are set forth in Exhibit 4.1 to the Company's Current Report on Form 8-K filed April 24, 2017.~~

~~Registration Rights Agreement~~

In connection with the issuance and sale of the Notes, the company entered into a Registration Rights Agreement, dated April 18, 2017, among the company, the Guarantors and Goldman, Sachs & Co. and J.P. Morgan Securities LLC (the “Registration Rights Agreement”). Pursuant to the Registration Rights Agreement, the company agreed (1) to use its commercially reasonable efforts to consummate an exchange offer to exchange the Notes for new registered notes (the “Exchange Notes”), with terms substantially identical in all material respects with the Notes (except that the Exchange Notes will not contain terms with respect to additional interest, registration rights or transfer restrictions) and (2) if required, to have a shelf registration statement declared effective with respect to resales of the Notes. If the company fails to satisfy its obligations under the Registration Rights Agreement within 360 days, it will be required to pay additional interest to the holders of the Notes under certain circumstances.

~~The full terms and conditions of the the Registration Rights Agreement are set forth in Exhibit 4.2 to the company's Current Report on Form 8-K filed April 24, 2017.~~

~~Debt outstanding at September 30, 2017 is summarized as follows:~~

September 30,
2017 December 31,
2016
Long-Term Debt:
Senior Unsecured Notes $ 300,000
$ —
Credit Facility Borrowings 95,000
36,143
Capital Lease Obligations 671
51
Total Long-Term Debt 395,671
36,194
Less: Unamortized Debt Issuance Costs (7,138 ) —
Less: Current Maturities of Credit Facility Borrowings, Net of Debt Issuance Costs⁽¹⁾
(4,887 ) (3,459 )
Less: Current Maturities of Capital Lease Obligations⁽¹⁾
(394 ) —
Long-Term Portion, Net $ 383,252
$ 32,735


⁽¹⁾	Current maturities of long-term debt include $5,000 of current maturities, less $113 of unamortized debt issuance costs, under our 2017 Credit Agreement and $394 of current maturities of capital lease obligations.

As of ~~September 30, 2017,~~March 31, 2024, we had outstanding borrowings of $125.0 million and $88.8 million under our ~~2017 Credit Agreement, totaling $75,000 under our~~revolving facility and term loan facility, ~~and $20,000 under our revolving facility. There were $300,000 in outstanding borrowings under the Notes as of September 30, 2017. In addition, we~~respectively. We had ~~stand alone~~ letters of credit and bank guarantees outstanding in the amount of ~~$4,721.~~$3.2 million, leaving approximately $321.8 million of unused borrowing capacity on our revolving facility. Commitment fees on unused lines of credit for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2024 were ~~$353.~~$0.1 million. The overall weighted average cost of debt iswas approximately ~~5.0%~~6.5% and net of a related cross-currency

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swap ~~instrument, is~~instruments and fixed rate interest rate swap instruments was approximately ~~4.2%~~5.1%. Further details regarding the cross-currency swap instrument are discussed in Note 10.

~~Prudential Investment Management, Inc.~~

In March 2017, we repaid $11,143 of debt evidenced by the notes issued under our Private Shelf Agreement, as described in Note 9 of our annual report on Form 10-K for the year ended December 31, 2016, and terminated the Private Shelf Agreement.9. Warranty

~~The aggregate maturities of our outstanding debt, including capital lease obligations as of September 30, 2017, are as follows:~~

Remaining 2017 $ 1,348
2018 5,386
2019 7,062
2020 9,375
2021 11,875
Thereafter 360,625
Total aggregate maturities $ 395,671


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 one to four years. ~~However, the majority of our claims are paid out within the first six to nine months following a sale.~~ The majority of the liability for estimated warranty claims represents amounts to be paid out in the near term for qualified warranty ~~issues, with immaterial amounts reserved to be paid for older equipment warranty~~ issues.

The changes in warranty reserves ~~for the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2017~~ ~~and~~ ~~2016~~were as follows:


	Three Months Ended March 31,
	2024		2023
Beginning balance	$	11.1	$	10.9
Additions charged to expense	1.6		3.4
Foreign currency fluctuations	—		0.1
Claims paid	(1.8)		(3.1)
Ending balance	$	10.9	$	11.3

10. Derivatives

Nine Months Ended
September 30
2017 2016
Beginning balance $ 10,960
$ 10,093
Additions charged to expense 8,879
8,888
Acquired warranty obligations 384
—
Foreign currency fluctuations 225
85
Claims paid (8,912 ) (8,707 )
Ending balance $ 11,536
$ 10,359


~~10.~~	~~Derivatives~~

Hedge Accounting and Hedging Programs

We recognize all derivative instruments as either assets or liabilities in our ~~Condensed Consolidated Balance Sheets~~consolidated balance sheets and measure them at fair value. Gains and losses resulting from changes in fair value are accounted for depending on the use of the derivative and whether it is designated and qualifies for hedge accounting.

We evaluate hedge effectiveness on our hedges that are designated and qualify for hedge accounting at the inception of the hedge prospectively, as well as retrospectively, and record any ineffective portion of the hedging instruments along with the time value of purchased contracts in the same line item of the income statement as the item being hedged on our consolidated statements of income.

Our hedging policy establishes maximum limits for each counterparty to mitigate any concentration of risk.

Balance Sheet ~~Hedging~~

Hedges ~~of Foreign Currency Assets and Liabilities~~

We hedge ~~portions of~~ our net recognized foreign currency denominated assets and liabilities with foreign exchange forward contracts to reduce the risk that the value of these assets and liabilities will be adversely affected by changes in 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, 2017~~March 31, 2024 and December 31, ~~2016,~~2023, the notional amounts of foreign currency forward exchange contracts outstanding not designated as hedging instruments were ~~$67,672~~$81.5 million and ~~$42,866,~~$73.0 million, respectively.

~~During~~Cash Flow Hedges

We manage our floating rate debt exposure using interest rate swaps. Fixed rate swaps are used to reduce our risk of the ~~first quarter~~possibility of ~~2017, in connection with our acquisition of IPC Group, we~~increased interest costs. We entered into ~~a foreign currency option contract not designated as a hedging instrument for a~~an aggregate $120 million notional amount of ~~€180,000. The option contract has since expired and there were no outstanding foreign currency option contracts not designated as hedging instruments as~~interest rate swaps effective December 1, 2022 that exchange a variable rate of ~~September 30, 2017 and December 31, 2016.~~

~~Cash Flow Hedging~~

~~Hedges~~interest for a fixed rate of ~~Forecasted Foreign Currency Transactions~~

In countries outside the United States, we transact business in U.S. dollars and in various other currencies. We may use foreign exchange option contracts or forward contracts to hedge certain cash flow exposures resulting from changes in these foreign currency exchange rates.interest of 4.076%. These foreign exchange contracts, carried at fair value, have maturities of up to one year. We enter into these foreign exchange contracts to hedge a portion of our forecasted foreign currency denominated revenue in the normal course of business, and accordingly, theyinterest rate swaps are ~~not speculative in nature. The notional amounts of outstanding foreign currency forward contracts~~ designated as cash flow ~~hedges were $3,033 and $2,127 as~~hedges. These swaps are scheduled to mature on December 1, 2026.

Table of September 30, 2017 and December 31, 2016, respectively. The notional amounts of outstanding foreign currency option contracts designated as cash flow hedges were $8,870 and $8,522 as of September 30, 2017 and December 31, 2016, respectively.Contents

~~Foreign Currency Derivatives~~Fair Value Hedges

We use foreign currency exchange rate derivatives to hedge our exposure to fluctuations in exchange rates for anticipated intercompany cash transactions between Tennant Company and its subsidiaries. During the second quarter of 2017On April 5, 2022, we entered into Euro to U.S. dollar foreign exchange ~~cross currency~~cross-currency swaps ~~for all of the anticipated cash flows~~ associated with an intercompany loan from a ~~wholly-owned~~wholly owned European subsidiary. We ~~entered~~enter into these foreign exchange ~~cross currency~~cross-currency swaps to hedge the foreign currency ~~denominated cash flows~~risk associated with this intercompany loan, and accordingly, they are not speculative in nature. WeThese cross-currency swaps are designated as fair value hedges. As of March 31, 2024 and December 31, 2023, these ~~cross currency~~cross-currency swaps ~~as cash flow hedges. The hedged cash flows as of September 30, 2017~~ included ~~€183,000~~€75.0 million of total notional value. As of ~~September 30, 2017,~~March 31, 2024, the ~~aggregate~~aggregated scheduled interest payments over the course of the loan and related swaps amounted to ~~€33,000.~~€6.9 million. The scheduled maturity and principal payment of the loan and related ~~swaps~~interest payments of ~~€150,000~~€81.9 million are due in April ~~2022. There were no cross~~2027.

Net Investment Hedges

On April 5, 2022, we 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 a wholly owned European subsidiary. 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 subsidiary against the risk of changes in the Euro to U.S. dollar foreign exchange rate. These cross-currency swaps are designated as ~~cash flow hedges as~~net investment hedges. As of March 31, 2024 and December 31, ~~2016.~~

2023, the cross-currency swaps included €75.0 million of total notional value. These swaps are scheduled to mature in April 2027.

The fair value of derivative instruments on our ~~Condensed Consolidated Balance Sheets as of September 30, 2017 and December 31, 2016 were~~consolidated balance sheets was as follows:


	Derivative Assets					Derivative Liabilities
	Balance Sheet Location	March 31, 2024		December 31, 2023		Balance Sheet Location	March 31, 2024		December 31, 2023
Derivatives designated as cash flow hedges:
Interest rate swaps	Other current assets	$	1.1	$	0.8	Other current liabilities	$	—	$	—
Interest rate swaps	Other assets	—		—		Other liabilities	0.4		1.9
Derivatives designated as fair value hedges:
Cross-currency swaps	Other current assets	1.4		1.3		Other current liabilities	—		—
Cross-currency swaps	Other assets	—		—		Other liabilities	1.9		3.3
Derivatives designated as net investment hedges:
Cross-currency swaps	Other current assets	1.2		1.2		Other current liabilities	—		—
Cross-currency swaps	Other assets	—		—		Other liabilities	2.1		3.4
Derivatives not designated as hedging instruments:
Foreign currency forward contracts	Other current assets	$	0.9	$	—	Other current liabilities	$	0.1	$	1.6

September 30, 2017 December 31, 2016
Fair Value Asset Derivatives Fair Value Liability Derivatives Fair Value Asset Derivatives Fair Value Liability Derivatives
Derivatives designated as hedging instruments:
Foreign currency option contracts⁽¹⁾
$ 67
$ —
$ 184
$ —
Foreign currency forward contracts⁽¹⁾
8,346
31,921
—
13
Derivatives not designated as hedging instruments:
Foreign currency option contracts —
—
—
—
Foreign currency forward contracts⁽¹⁾
$ 539
$ 2,010
$ 12
$ 162

⁽¹⁾

Contracts that mature within the next 12 months are included in Other Current Assets and Other Current Liabilities for asset derivatives and liability derivatives, respectively, on our Condensed Consolidated Balance Sheets. Contracts with maturities greater than 12 months are included in Other Assets and Other Liabilities for asset derivatives and liability derivatives, respectively, on our Condensed Consolidated Balance Sheets. Amounts included in our Condensed Consolidated Balance Sheets are recorded net where a right of offset exists with the same derivative counterparty.

As of ~~September 30, 2017,~~March 31, 2024, we anticipate reclassifying ~~approximately $2,004~~$2.4 million of gains from ~~Accumulated Other Comprehensive Loss~~accumulated other comprehensive loss to net ~~earnings~~income during the next 12 months.

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The following tables include the amounts in the consolidated statements of income in which the effects of derivatives designated as hedging instruments are recorded:


	Three Months Ended March 31,
	2024				2023
	Total		Gain on Hedging		Total		Gain (Loss) on Hedging
Derivatives designated as cash flow hedges:
Interest expense, net	$	(2.3)	$	1.2	$	(3.7)	$	0.1
Net foreign currency transaction (loss)	(0.2)		—		(0.1)		—
Derivatives designated as fair value hedges:
Interest expense, net	(2.3)		2.2		(3.7)		1.2
Net foreign currency transaction gain (loss)	(0.2)		1.5		(0.1)		1.2
Derivatives designated as net investment hedges:
Interest expense, net	$	(2.3)	$	1.9	$	(3.7)	$	0.9

The effect of ~~foreign currency~~ derivative instruments designated as ~~cash flow~~ hedges and ~~of foreign currency~~ derivative instruments not designated as hedges in our ~~Condensed Consolidated Statements~~consolidated statements of ~~Operations for the three and nine months ended September 30, 2017~~income was as follows:


	Three Months Ended March 31,
	2024		2023
Derivatives designated as cash flow hedges:
Net gain (loss) recognized in other comprehensive loss, net of tax(a)	$	1.6	$	(0.9)
Net gain reclassified from accumulated other comprehensive loss into income, net of tax, effective portion to interest expense, net	0.3		0.1
Derivatives designated as fair value hedges:
Net gain recognized in other comprehensive loss, net of tax(a)	—		0.7
Net gain (loss) reclassified from accumulated other comprehensive loss into income, net of tax, effective portion to interest expense, net	0.3		0.3
Derivatives designated as net investment hedges:
Net (loss) recognized in other comprehensive loss, net of tax(a)	(1.3)		(0.1)
Net gain (loss) reclassified from accumulated other comprehensive loss into income, net of tax, effective portion to interest expense, net	0.2		0.2
Derivatives not designated as hedging instruments:
Net (loss) recognized in income(b)	$	—	$	0.8

Three Months Ended Nine Months Ended
September 30, 2017 September 30, 2017
Foreign Currency Option Contracts Foreign Currency Forward Contracts Foreign Currency Option Contracts Foreign Currency Forward Contracts
Derivatives in cash flow hedging relationships:
Net loss recognized in Other Comprehensive Income, net of
tax⁽¹⁾
$ (40 ) $ (4,492 ) $ (177 ) $ (14,026 )
Net (loss) gain reclassified from Accumulated Other Comprehensive Loss into earnings, net of tax, effective portion to Net Sales (141 ) 26
(140 ) (76 )
Net gain reclassified from Accumulated Other Comprehensive Loss into earnings, net of tax, effective portion to Interest Income —
374
—
823
Net loss reclassified from Accumulated Other Comprehensive Loss into earnings, net of tax, effective portion to Net Foreign Currency Transaction (Losses) Gains —
(3,705 ) —
(10,853 )
Net (loss) gain recognized in earnings⁽²⁾
(7 ) 3
(12 ) 8
Derivatives not designated as hedging instruments:
Net loss recognized in earnings⁽³⁾
$ —
$ (2,062 ) $ (1,132 ) $ (7,369 )
(a)Net change in the fair value of the effective portion classified in other comprehensive income (loss).

~~The effect of~~(b)Classified in net foreign currency derivative instruments designated as cash flow hedges and of foreign currency derivative instruments not designated as hedges in our Condensed Consolidated Statements Operations for the three and nine months ended September 30, 2016 was as follows:transaction gain (loss).

Three Months Ended Nine Months Ended
September 30, 2016 September 30, 2016
Foreign Currency Option Contracts Foreign Currency Forward Contracts Foreign Currency Option Contracts Foreign Currency Forward Contracts
Derivatives in cash flow hedging relationships:
Net loss recognized in Other Comprehensive Income, net of tax⁽¹⁾
$ (20 ) $ (9 ) $ (250 ) $ (74 )
Net (loss) gain reclassified from Accumulated Other Comprehensive Loss into earnings, net of tax, effective portion to Net Sales (88 ) 37
(88 ) 11
Net (loss) gain recognized in earnings⁽²⁾
(11 ) 1
(17 ) 1
Derivatives not designated as hedging instruments:
Net loss recognized in earnings⁽³⁾
$ —
$ (330 ) $ —
$ (2,392 )
11. Fair Value Measurements


⁽¹⁾	~~Net change in the fair value of the effective portion classified in Other Comprehensive Income.~~


⁽²⁾	~~Ineffective portion and amount excluded from effectiveness testing classified in Net Foreign Currency Transaction (Losses) Gains.~~


⁽³⁾	~~Classified in Net Foreign Currency Transaction (Losses) Gains.~~


~~11.~~	~~Fair Value Measurements~~

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

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flow) and the cost approach (cost to replace the service capacity of an asset or replacement cost). The 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 ~~on a recurring basis~~ at ~~September 30, 2017~~ isMarch 31, 2024 was as follows:


	Fair Value		Level 1		Level 2		Level 3
Assets:
Equity securities	$	20.0	$	—	$	—	$	20.0
Debt securities	12.1		—		—		12.1
Foreign currency forward exchange contracts	0.9		—		0.9		—
Cross-currency swaps	2.6		—		2.6		—
Interest rate swaps	1.1		—		1.1		—
Total assets	36.7		—		4.6		32.1
Liabilities:
Foreign currency forward exchange contracts	0.1		—		0.1		—
Cross-currency swaps	4.0		—		4.0		—
Interest rate swaps	0.4		—		0.4		—
Total liabilities	$	4.5	$	—	$	4.5	$	—

Fair
Value
Level 1 Level 2 Level 3
Assets:
Foreign currency forward exchange contracts $ 8,885
$ —
$ 8,885
$ —
Foreign currency option contracts 67
—
67
—
Total Assets $ 8,952
$ —
$ 8,952
$ —
Liabilities:

Foreign currency forward exchange contracts $ 33,931
$ —
$ 33,931
$ —
Foreign currency option contracts $ —
—
—
—
Total Liabilities $ 33,931
$ —
$ 33,931
$ —
Our population of assets and liabilities subject to fair value measurements at December 31, 2023 was as follows:


	Fair Value		Level 1		Level 2		Level 3
Assets:
Cross-currency swaps	$	2.5	$	—	$	2.5	$	—
Interest rate swaps	0.8		—		0.8		—
Total assets	3.3		—		3.3		—
Liabilities:
Foreign currency forward exchange contracts	1.6		—		1.6		—
Cross-currency swaps	6.7		—		6.7		—
Interest rate swaps	1.9		—		1.9		—
Total liabilities	$	10.2	$	—	$	10.2	$	—

Our foreign currency forward ~~and option~~ exchange 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 ~~foreign currency forward exchange and option contracts~~derivative instruments are discussed in Note 10.

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 will drive the development and adoption of Brain Corp's next generation of robotic and AI technologies.

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The investment securities include $12.1 million of redeemable convertible preferred stock, accounted for as available-for-sale debt instruments. The investment securities also include $12.2 million of non-redeemable convertible preferred stock and $7.8 million of warrants, accounted for as equity instruments under the elected measurement alternative.

The equity and debt securities were recorded at closing at their allocated fair values. For equity instruments, the carrying amount will be adjusted to fair value through net income each period based upon observable transactions for identical or similar investments of the same issuer and monitored for impairment. For debt instruments, the carrying amount will be adjusted to fair value each period through other comprehensive income. The securities will be measured to fair value based on a Level 3 fair value calculation. As of March 31, 2024, the total carrying value of our equity and debt instruments was $20.0 million and $12.1 million, respectively, which is recorded in other assets on the consolidated balance sheet. The debt instruments will mature on February 21, 2029. There have been no remeasurements of the equity or debt securities as of March 31, 2024.

The carrying amounts reported in the ~~Condensed Consolidated Balance Sheets~~consolidated balance sheets for ~~Cash~~cash and ~~Cash Equivalents, Restricted Cash, Accounts Receivable, Other Current Assets, Accounts Payable~~cash equivalents, restricted cash, accounts receivable, other current assets, accounts payable and ~~Other Current Liabilities~~other current liabilities approximate fair value due to their short-term nature.

The fair value and carrying value of ~~our Long-Term Debt approximates cost~~total debt, including current portion, was $215.8 million and $214.6 million, respectively, as of March 31, 2024. The fair value and carrying value of total debt, including current portion, was $198.2 million and $200.6 million, respectively, as of December 31, 2023. The fair value was calculated based on the borrowing rates currently available to us for bank loans with similar terms and remaining ~~maturities.~~

~~From time to time, we measure certain assets at fair value on~~maturities, which is a non-recurring basis, including evaluation of long-lived assets, goodwill and other intangible assets, as part of a business acquisition. These assets are measured and recognized at amounts equal to the fair value determined as of the date of acquisition. Fair value valuations are based on the information available as of the acquisition date and the expectations and assumptions that have been deemed reasonable by us. There are inherent uncertainties and management judgment required in these determinations. The fair value measurements of assets acquired and liabilities assumed as part of a business acquisition are based on valuations involving significant unobservable inputs, or Level 3,2 in the fair value hierarchy.

These assets are also subject to periodic impairment testing by comparing the respective carrying value of each asset to the estimated fair value of the reporting unit or asset group in which they reside.

12. Commitments and Contingencies

In the ~~event~~ordinary course of business, we ~~determine~~may become liable with respect to pending and threatened litigation, tax, environmental and other matters. While the ultimate results of current claims, investigations and lawsuits involving us are unknown at this time, we do not expect that these ~~assets to be impaired, we would recognize an impairment loss equal to the amount by which the carrying value~~matters will have a material adverse effect on our consolidated financial position or results of the reporting unit, impaired asset or asset group exceeds its estimated fair value. These periodic impairment tests utilize company-specific assumptions involving significant unobservable inputs, or Level 3, in the fair value hierarchy.


~~12.~~	~~Retirement Benefit Plans~~

~~Our defined benefit pension plans and postretirement medical plan~~operations. Legal costs associated with such matters are described in Note 13 of our annual report on Form 10-K for the year ended December 31, 2016. We have contributed $145 and $198 during the third quarter of 2017 and $410 and $493 during the first nine months of 2017 to our pension plans and postretirement medical plan, respectively.

~~The components of the net periodic (benefit) cost for the three and nine months ended~~ ~~September 30, 2017~~ ~~and~~ ~~2016~~ ~~were~~expensed as ~~follows:~~incurred.

Three Months Ended
September 30
Pension Benefits Postretirement
U.S. Plans Non-U.S. Plans Medical Benefits
2017 2016 2017 2016 2017 2016
Service cost $ —
$ 88
$ 124
$ 32
$ 6
$ 25
Interest cost 373
414
96
96
91
99
Expected return on plan assets (581 ) (599 ) (101 ) (89 ) —
—
Amortization of net actuarial loss 12
13
—
—
—
—
Amortization of prior service cost —
10
50
29
—
—
Foreign currency —
—
135
(57 ) —
—
Net periodic (benefit) cost $ (196 ) $ (74 ) $ 304
$ 11
$ 97
$ 124

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Nine Months Ended
September 30
Pension Benefits Postretirement
U.S. Plans Non-U.S. Plans Medical Benefits
2017 2016 2017 2016 2017 2016
Service cost $ —
$ 265
$ 172
$ 104
$ 46
$ 73
Interest cost 1,153
1,244
315
304
272
298
Expected return on plan assets (1,752 ) (1,799 ) (298 ) (283 ) —
—
Amortization of net actuarial loss 33
30
—
—
—
—
Amortization of prior service cost —
31
146
93
—
—
Settlement charge 205
—
—
—
—
—
Foreign currency —
—
364
(33 ) —
—
Net periodic (benefit) cost $ (361 ) $ (229 ) $ 699
$ 185
$ 318
$ 371
13. Shareholders' Equity


~~13.~~	~~Commitments and Contingencies~~

Certain operating leases for vehicles contain residual value guarantee provisions, which would become due at the expiration of the operating lease agreement if the fair value of the leased vehicles is less than the guaranteed residual value. As of September 30, 2017, of those leases that contain residual value guarantees, the aggregate residual value at lease expiration was $14,630, of which we have guaranteed $11,820. As of September 30, 2017, we have recorded a liability for the estimated end of term loss related to this residual value guarantee of $458 for certain vehicles within our fleet. Our fleet also contains vehicles we estimate will settle at a gain. Gains on these vehicles will be recognized at the end of the lease term.

~~The minimum rentals for aggregate lease commitments as of September 30, 2017 are as follows:~~

Remaining 2017 $ 4,033
2018 11,835
2019 7,828
2020 4,826
2021 2,710
Thereafter 4,360
Total $ 35,592


~~14.~~	Accumulated Other Comprehensive Loss

~~Components of Accumulated Other Comprehensive Loss, net of tax, within the Condensed Consolidated Balance Sheets, are as follows:~~

September 30, 2017 December 31, 2016
Foreign currency translation adjustments $ (19,371 ) $ (44,444 )
Pension and retiree medical benefits (5,010 ) (5,391 )
Cash flow hedge (4,045 ) (88 )
Total Accumulated Other Comprehensive Loss $ (28,426 ) $ (49,923 )

The changes in components of ~~Accumulated Other Comprehensive Loss,~~accumulated other comprehensive loss, net of tax, are as follows:


	Three Months Ended March 31, 2024
	Foreign Currency Translation Adjustments		Pension and Post- Retirement Medical Benefits		Derivative Financial Instruments		Total
Beginning balance	$	(45.6)	$	3.7	$	(0.4)	$	(42.3)
Other comprehensive (loss) income before reclassifications	(8.0)		—		1.6		(6.4)
Amounts reclassified from accumulated other comprehensive loss	(0.2)		—		(0.6)		(0.8)
Net current period other comprehensive income	(8.2)		—		1.0		(7.2)
Ending balance	$	(53.8)	$	3.7	$	0.6	$	(49.5)


	Three Months Ended March 31, 2023
	Foreign Currency Translation Adjustments		Pension and Post- Retirement Medical Benefits		Derivative Financial Instruments		Total
Beginning balance	$	(53.9)	$	2.7	$	1.0	$	(50.2)
Other comprehensive income (loss) before reclassifications	5.5		—		(0.2)		5.3
Amounts reclassified from accumulated other comprehensive loss	(0.2)		—		(0.4)		(0.6)
Net current period other comprehensive income (loss)	5.3		—		(0.6)		4.7
Ending balance	$	(48.6)	$	2.7	$	0.4	$	(45.5)

Foreign Currency Translation Adjustments Pension and Post Retirement Benefits Cash Flow Hedge Total
December 31, 2016 $ (44,444 ) $ (5,391 ) $ (88 ) $ (49,923 )
Other comprehensive income (loss) before reclassifications 25,073
361
(14,203 ) 11,231
Amounts reclassified from Accumulated Other Comprehensive Loss —
20
10,246
10,266
Net current period other comprehensive income (loss) $ 25,073
$ 381
$ (3,957 ) $ 21,497
September 30, 2017 $ (19,371 ) $ (5,010 ) $ (4,045 ) $ (28,426 )

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14. Income Taxes


~~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 ~~2014 and, with limited exceptions,~~2018. The number of years which remain open for audit for U.S. state ~~and~~or foreign tax purposes varies by jurisdiction but generally ranges from three to five years. We are currently undergoing income tax examinations ~~for taxable years before 2012.~~in various 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.~~income tax expense. In addition to the liability of ~~$2,475~~$4.3 million for unrecognized tax benefits as of ~~September 30, 2017,~~March 31, 2024, there was approximately ~~$426~~$0.5 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, 2017~~March 31, 2024 was ~~$2,130.~~$3.9 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.~~

Unrecognized tax benefits were reduced by $688 during the first nine months of 2017 as a result of the expiration of the statute of limitations in various jurisdictions and settlement with tax authorities.

We are currently under examination by the Internal Revenue Service for the 2015 tax year. Although the outcome of this matter cannot currently be determined, we believe adequate provision has been made for any potential unfavorable financial statement impact. We are currently undergoing income tax examinations in various state and foreign jurisdictions covering 2014 to 2016. Although the final outcome of these examinations cannot be currently determined, we believe that we have adequate reserves with respect to these examinations.expense.


~~16.~~	~~Share-Based Compensation~~

15. Share-Based Compensation

Our share-based compensation plans are described in Note 1718 of our annual report on Form 10-K for the year ended December 31, ~~2016.~~2023. During the three months ended ~~September 30, 2017~~March 31, 2024 and ~~2016,~~2023, we recognized total ~~Share-Based Compensation Expense~~share-based compensation expense of ~~$1,293~~$3.2 million and ~~$1,321, respectively. During the nine months ended September 30, 2017 and 2016, we recognized total Share-Based Compensation Expense of $4,915 and $5,747,~~$1.2 million, respectively. The total excess tax ~~benefit~~ recognized for share-based compensation arrangements during the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2024 and ~~2016~~2023 was ~~$1,149~~a tax benefit of $2.4 million and ~~$447,~~tax expense of $0.1 million, respectively.

During the first nine months of 2017, we granted 19,971 restricted shares. The weighted average grant date fair value of each share awarded was $73.16. Restricted share awards generally have a three year vesting period from the effective date of the grant. The total fair value of shares vested during the nine months ended September 30, 2017 and 2016 was $1,295 and $1,835, respectively.

16. Earnings Per Share


~~17.~~	~~Earnings (Loss) Attributable to Tennant Company Per Share~~

The computations of ~~Basic~~basic and ~~Diluted Earnings (Loss) Attributable to Tennant Company~~diluted earnings per ~~Share~~share were as follows:

Three Months Ended Nine Months Ended
September 30 September 30
2017 2016 2017 2016
Numerator:
Net Earnings (Loss) Attributable to Tennant Company $ 3,559
$ 11,477
$ (2,989 ) $ 31,244
Denominator:
Basic - Weighted Average Shares Outstanding 17,729,857
17,498,808
17,673,656
17,516,941
Effect of Dilutive Securities:
Share-Based Compensation Plans 441,587
474,398
—
438,558
Diluted - Weighted Average Shares Outstanding 18,171,444
17,973,206
17,673,656
17,955,499
Basic Earnings (Loss) per Share $ 0.20
$ 0.66
$ (0.17 ) $ 1.78
Diluted Earnings (Loss) per Share $ 0.20
$ 0.64
$ (0.17 ) $ 1.74


	Three Months Ended March 31,
	2024		2023
Numerator:
Net income	$	28.4	$	24.3
Denominator:
Basic - weighted average shares outstanding	18,665,570		18,449,430
Effect of dilutive securities	412,197		232,838
Diluted - weighted average shares outstanding	19,077,767		18,682,268
Basic earnings per share	$	1.52	$	1.32
Diluted earnings per share	$	1.49	$	1.30

Excluded from the dilutive securities shown above were options to purchase and shares to be paid out under share-based compensation plans of ~~340,239~~37,508 and ~~313,711~~393,242 shares of common stock during the three months ended ~~September 30, 2017~~March 31, 2024 and 2016, respectively. Excluded from the dilutive securities shown above were options to purchase and shares to be paid out under share-based compensation plans of 714,687 and 382,075 shares of common stock during the nine months ended September 30, 2017 and 2016,2023, respectively. These exclusions were made if the exercise prices of the options are greater than the average market price of our common stock for the period, if the number of shares we can repurchase under the treasury stock method exceeds the weighted average shares outstanding in the options or if we have a net loss, as these effects ~~are~~would be anti-dilutive.

Table


~~18.~~	~~Segment Reporting~~

~~We are organized into~~ ~~four~~ operating segments: North America, Latin America, EMEA and APAC. 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.~~Contents

~~Net Sales attributed to each geographic area for the three and nine months ended~~ ~~September 30, 2017~~ ~~and~~ ~~2016~~ ~~were as follows:~~

Three Months Ended Nine Months Ended
September 30 September 30
2017 2016 2017 2016
Americas $ 161,037
$ 152,294
$ 472,953
$ 449,704
EMEA 78,851
29,309
189,483
94,433
APAC 22,033
18,531
61,335
52,689
Total $ 261,921
$ 200,134
$ 723,771
$ 596,826

~~Net Sales are attributed to each geographic area based on the end user country and are net of intercompany sales.~~


~~19.~~	~~Related Party Transactions~~

During the first quarter of 2008, we acquired Sociedade Alfa Ltda. and entered into lease agreements for certain properties owned by or partially owned by the former owners of this entity. Some of these individuals are current employees of Tennant. Lease payments made under these lease agreements are not material to our financial position or results of operations.


~~Item 2.~~	~~Management's Discussion and Analysis of Financial Condition and Results of Operations~~

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 March 31, 2024 and 2023. 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 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 ~~empower customers to achieve quality cleaning performance, significantly reduce their environmental impact and~~ help create a cleaner, safer, healthier world. ~~Tennant~~The Company is committed to creating and commercializing breakthrough, sustainable cleaning innovations to enhance its broad suite of products, ~~including:~~including floor maintenance and ~~outdoor~~ cleaning equipment, detergent-free and other sustainable cleaning technologies, ~~cleaning tools and supplies,~~ aftermarket parts and consumables, equipment maintenance and repair service, ~~specialty surface coatings~~ and asset management solutions. ~~Tennant~~Our products are used in many types of environments, ~~including:~~including retail establishments, distribution centers, factories and warehouses, public venues such as arenas and stadiums, office buildings, schools and universities, hospitals and clinics, ~~parking lots~~ and ~~streets.~~more. Customers include contract cleaners to whom organizations outsource facilities maintenance as well as businesses that perform facilities maintenance themselves. The ~~company~~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.

~~Historical~~ Macroeconomic Events

Supply chain challenges continue to impact the global economy. Our operating performance during the first quarter of 2024 has benefited from fewer supply chain disruptions enabling us to obtain key component parts, increase production and reduce backlog.

We are impacted by customer spend and global demand for our products. We have been able to successfully manage volatility in demand through our broad and expanding product offerings.

The global nature of our operations subjects us to exposures resulting from both foreign currency exchange fluctuations in the normal course of business and geopolitical risks stemming from global conflicts. While we do not have any direct operations or employees in areas experiencing conflicts, our operating results have been and may continue to be negatively impacted by supply chain constraints and inflationary pressures from these conflicts.

As described in Part I, Item 1A - Risk Factors in the annual report on Form 10-K for the fiscal year ended December 31, 2023, we may encounter financial difficulties if the U.S. or other global economies experience an additional or continued long-term economic downturn as our product sales are sensitive to 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. We are actively monitoring the global macroeconomic environment, including geopolitical conflict, the potential impact of global supply chain constraints on material inflation, and change in demand for our products.

Outlook

While global economic conditions continue to be uncertain, including the ability to attract and retain skilled labor, lingering and targeted supply chain disruptions, and evolving compliance regulations, we remain agile as we continue to manage evolving conditions. We are confident in the long-term growth trends for all our products and services in the markets we service.

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Results

The following table compares the ~~historical~~ results of operations for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2024 and ~~2016~~,2023, respectively ~~and as a percentage of Net Sales~~ (in ~~thousands,~~millions, except per share data and percentages):


	Three Months Ended March 31,
	2024		%	2023		%
Net sales	$	311.0	100.0	$	305.8	100.0
Cost of sales	173.5		55.8	180.3		59.0
Gross profit	137.5		44.2	125.5		41.0
Selling and administrative expense	89.9		28.9	81.7		26.7
Research and development expense	10.1		3.2	7.9		2.6
Operating income	37.5		12.1	35.9		11.7
Interest expense, net	(2.3)		(0.7)	(3.7)		(1.2)
Net foreign currency transaction loss	(0.2)		(0.1)	(0.1)		—
Other income (expense), net	0.1		—	(0.1)		—
Income before income taxes	35.1		11.3	32.0		10.5
Income tax expense	6.7		2.2	7.7		2.5
Net income	$	28.4	9.1	$	24.3	7.9
Net income per share - diluted	$	1.49		$	1.30

Three Months Ended Nine Months Ended
September 30 September 30
2017 % 2016 % 2017 % 2016 %
Net Sales $ 261,921
100.0
$ 200,134
100.0
$ 723,771
100.0
$ 596,826
100.0
Cost of Sales 157,317
60.1
114,839
57.4
434,877
60.1
338,740
56.8
Gross Profit 104,604
39.9
85,295
42.6
288,894
39.9
258,086
43.2
Operating Expense:

Research and Development Expense 7,907
3.0
8,418
4.2
24,239
3.3
24,712
4.1
Selling and Administrative Expense 85,651
32.7
60,623
30.3
247,067
34.1
187,315
31.4
Loss on Sale of Business —
—
—
—
—
—
149
—
Total Operating Expense 93,558
35.7
69,041
34.5
271,306
37.5
212,176
35.6
Profit from Operations 11,046
4.2
16,254
8.1
17,588
2.4
45,910
7.7
Other Income (Expense):

Interest Income 698
0.3
107
0.1
1,575
0.2
188
—
Interest Expense (6,093 ) (2.3 ) (329 ) (0.2 ) (18,720 ) (2.6 ) (919 ) (0.2 )
Net Foreign Currency Transaction (Losses) Gains (842 ) (0.3 ) (149 ) (0.1 ) (2,375 ) (0.3 ) 175
—
Other Expense, Net (482 ) (0.2 ) (10 ) —
(700 ) (0.1 ) (360 ) (0.1 )
Total Other Expense, Net (6,719 ) (2.6 ) (381 ) (0.2 ) (20,220 ) (2.8 ) (916 ) (0.2 )
Profit (Loss) Before Income Taxes 4,327
1.7
15,873
7.9
(2,632 ) (0.4 ) 44,994
7.5
Income Tax Expense 731
0.3
4,396
2.2
385
0.1
13,750
2.3
Net Earnings (Loss) Including Noncontrolling Interest 3,596
1.4
11,477
5.7
(3,017 ) (0.4 ) 31,244
5.2
Net Earnings (Loss) Attributable to Noncontrolling Interest 37
—
—
—
(28 ) —
—
—
Net Earnings (Loss) Attributable to Tennant Company $ 3,559
1.4
$ 11,477
5.7
$ (2,989 ) (0.4 ) $ 31,244
5.2
Net Earnings (Loss) Attributable to Tennant Company per Diluted Share $ 0.20
$ 0.64

$ (0.17 ) $ 1.74

Net Sales

Consolidated ~~Net Sales~~net sales for the ~~third~~first quarter of ~~2017~~2024 totaled ~~$261.9~~$311.0 million, a ~~30.9%~~1.7% increase as compared to consolidated ~~Net Sales~~net sales of ~~$200.1~~$305.8 million in the ~~third~~first quarter of ~~2016. Consolidated Net Sales for the first nine months of 2017 totaled $723.8 million, a 21.3% increase as compared to consolidated Net Sales of $596.8 million for the first nine months of 2016.~~

2023. The components of the consolidated ~~Net Sales~~net sales change ~~for the~~ ~~three~~ ~~and nine months ended~~ ~~September 30, 2017~~ ~~as compared to the same periods in~~ ~~2016~~ were as follows:

2017 v. 2016
Three Months Ended Nine Months Ended
September 30 September 30
Organic Growth:
  Volume 0.3% 0.1%
  Price 1.0% 1.0%
Organic Growth 1.3%
1.1%
  Foreign Currency 1.2% 0.1%
  Acquisitions & Divestiture 28.4% 20.1%
Total 30.9% 21.3%


						Three Months Ended March 31,
						2024 vs. 2023
Price						4.6%
Volume						(3.7)%
Organic growth						0.9%
Acquisitions						0.3%
Foreign currency						0.5%
Total growth						1.7%

The ~~30.9%~~ 1.7% increase in consolidated ~~Net Sales~~net sales in the ~~third~~first quarter of ~~2017~~2024 as compared to the same period in ~~2016~~2023 was driven by:

~~28.4%~~

•Organic sales growth of 0.9% primarily due to equipment sales growth, particularly in the Americas;

•A net favorable impact from ~~the April 2017 acquisition of the IPC Group and the expansion of our commercial floor coatings business through the August 2016 acquisition of the Florock® brand.~~

~~A favorable direct foreign currency translation exchange impact of approximately 1.2%.~~

~~An organic sales increase of approximately 1.3% which excludes the effects of~~ foreign currency exchange of approximately 0.5%; and ~~acquisitions and divestitures, due to an approximate 1.0% price increase and a~~

•Inorganic growth of 0.3% ~~volume increase.~~ driven by the acquisition of TCS.

Table of Contents

The ~~price increase was~~following table sets forth the result of selling price increases, typically in the range of 2% to 4% in most geographies, with an effective date of February 1, 2017. We expect the increase in selling prices to increase Net Sales in the range of 1% to 2%net sales by geographic area for the ~~2017 full year. The impact to gross margin is estimated to be minimal as these selling~~three months ended March 31, 2024 and 2023 (in millions, except percentages):


	Three Months Ended March 31,
	2024		2023		% Change
Americas	$	215.6	$	204.4	5.5	%
Europe, Middle East and Africa	76.8		82.1		(6.5)	%
Asia Pacific	18.6		19.3		(3.6)	%
Total	$	311.0	$	305.8	1.7	%

Americas

Americas net sales were $215.6 million for the first quarter of 2024, an increase of 5.5% from the first quarter of 2023 driven by:

•Organic sales growth of 5.1% was driven primarily by price realization in North America and price realization and volume increases ~~were taken to offset inflation. The volume increase~~in Latin America. This was ~~primarily due to increased sales in the EMEA,~~ partially offset by volume decreases in the APAC region. Sales of new products introduced within the past three years totaled 52% of equipment revenue for the third quarter of 2017. This compares to 40% of equipment revenue in the 2016 third quarterNorth America; and

•A net favorable impact from ~~sales of new products introduced within the past three years.~~

~~The 21.3%~~ ~~increase~~ ~~in consolidated Net Sales in the first nine months of 2017 as compared to the same period in 2016 was driven by:~~

20.1% from the April 2017 acquisition of the IPC Group and the expansion of our commercial floor coatings business through the August 2016 acquisition of the Florock® brand, partially offset by the sale of our Green Machines outdoor city cleaning line in January 2016.

~~An organic sales increase of approximately 1.1% which excludes the effects of~~ foreign currency exchange and acquisitions and divestitures, due to an approximate 1.0% price increase and a 0.1% volume increase. The impact to gross margin is estimated to be minimal as these selling price increases were taken to offset inflation. The volume increase was primarily due to increased sales in the EMEA region, partially offset by volume decreases in the Americas and APAC regions. Sales of new products introduced within the past three years totaled 47% of equipment revenue for the first nine months of 2017. This compares to 37% of equipment revenue in the first nine months of 2016 from sales of new products introduced within the past three years.

~~A favorable direct foreign currency translation exchange impact of approximately 0.1%.~~

~~The following table sets forth the Net Sales by geographic area for the~~ ~~three~~ ~~months and nine months ended~~ ~~September 30, 2017~~ ~~and~~ ~~2016~~ ~~and the percentage change from the prior year (in thousands, except percentages):~~

Three Months Ended Nine Months Ended
September 30 September 30
2017 2016 % 2017 2016 %
Americas $ 161,037
$ 152,294
5.7 $ 472,953
$ 449,704
5.2
Europe, Middle East and Africa 78,851
29,309
169.0 189,483
94,433
100.7
Asia Pacific 22,033
18,531
18.9 61,335
52,689
16.4
Total $ 261,921
$ 200,134
30.9 $ 723,771
$ 596,826
21.3

~~Americas~~

Net Sales in the Americas were $161.0 million for the third quarter of 2017, an increase of 5.7% from the third quarter of 2016. Organic sales in the third quarter decreased approximately 0.2%, excluding the direct impacts of the IPC Group and Florock acquisitions of 5.5% and favorable foreign currency translation exchange effects of approximately 0.4%. Strong sales growth in Latin America, particularly Mexico, favorably impacted Net Sales, however this was more than offset by lower sales in North America, driven by lower volume from the strategic account channel.

Net Sales in the Americas were $473.0 million for the first nine months of 2017, an increase of 5.2% from first nine months of 2016. Organic sales in the first nine months increased approximately 0.3%, excluding the direct impacts of the IPC Group and Florock acquisitions of 4.5% and favorable foreign currency translation exchange effects of approximately 0.4%. Solid sales performance in Latin America was partially offset by lower sales in North America, where sales through our direct and distribution sales channels were more than offset by sales declines through strategic accounts.

Europe, Middle East and Africa ("EMEA")

~~Net Sales in~~ EMEA net sales were $78.9 million for the third quarter of 2017, an increase of 169.0% from the third quarter of 2016. Organic sales in the third quarter increased approximately 14.6%, excluding the direct impacts of the IPC Group acquisition of 148.7% and the favorable foreign currency translation exchange effects of approximately 5.7%. Solid sales performance in Western European countries driven by volume in the strategic account channel was partially offset by sales declines in the Central Eastern Europe, Middle East and Africa ("CEEMEA") markets.

~~Net Sales in EMEA were $189.5~~$76.8 million for the first ~~nine months~~quarter of ~~2017, an increase~~2024, a decrease of ~~100.7%~~6.5% from the first ~~nine months~~quarter of ~~2016.~~ 2023 driven by:

•Organic sales decline of 9.2% driven by volume declines in ~~the first nine months increased approximately 7.5%, excluding the direct impacts of the April 2017 IPC Group acquisition~~both equipment and ~~the divestiture of our Green Machines outdoor city cleaning line~~parts and consumables partly offset by price realization in ~~January 2016 that had a~~all product categories;

•A net favorable ~~effect of 94.5% and unfavorable~~impact from foreign currency ~~translation~~ exchange ~~effects~~ of approximately ~~1.3%. Strong~~1.4%; and

•Inorganic sales ~~growth in most European countries were partially offset~~increase of 1.3% driven by ~~lower sales in~~ the ~~UK.~~acquisition of TCS.

Asia Pacific ("APAC")

~~Net Sales in the~~ APAC ~~region~~net sales were $22.0 million for the third quarter of 2017, an increase of 18.9% from the third quarter of 2016. Organic sales in the third quarter decreased approximately 8.5%, excluding the direct impacts of the IPC Group acquisition of 27.0% and the favorable foreign currency translation exchange effects of approximately 0.4%. ~~Sales in the APAC region reflected declines primarily driven by Korea, China and the Southeast Asia regions.~~

~~Net Sales in the APAC region were $61.3~~$18.6 million for the first ~~nine months~~quarter of ~~2017, an increase~~2024, a decrease of ~~16.4%~~3.6% from the first ~~nine months~~quarter of ~~2016.~~ 2023 driven by:

•A net unfavorable impact from foreign currency exchange of approximately 2.5%; and

•Organic sales ~~in the first nine months decreased approximately 3.2%, excluding the direct impacts~~decline of ~~the IPC Group acquisition of 19.9% and unfavorable foreign currency translation exchange effects of approximately 0.3%. Sales growth~~1.1% driven by volume declines in China and ~~Korea was more than~~Australia, partly offset by ~~sales declines~~price realization in ~~Australia and Southeast Asia.~~Australia.

Gross Profit

Gross ~~Profit~~profit margin of 44.2% was 320 basis points higher in the ~~third~~first quarter of ~~2017~~2024 compared to the first quarter of 2023. The increase was ~~$104.6~~driven by pricing realization and cost saving initiatives. Gross profit margin expansion year over year was also due to mix shift to higher margin sectors, including industrial equipment and the direct sales channel.

Operating Expense

Selling and Administrative Expense

Selling and administrative expense ("S&A expense") was $89.9 million ~~or 39.9%~~for the first quarter of 2024, an increase of $8.2 million compared to the first quarter of 2023. As a percentage of net sales, ~~as compared~~S&A expense for the first quarter of 2024 increased 220 basis points to ~~$85.3~~28.9% from 26.7% in the first quarter of 2023. The S&A expense increase was primarily driven by annualization of resources to support growth and investment in enterprise initiatives.

Table of Contents

Research and Development Expense

Research and development expense ("R&D expense") was $10.1 million, or ~~42.6%~~3.2% of net sales, infor the ~~third~~first quarter of 2016. Gross margin was 270 basis points lower in the third quarter of 2017 due primarily to the $2.2 million, or 86 basis points, fair value inventory step-up flow through related to our acquisition of the IPC Group, a 68 basis point dilutive impact of the IPC acquisition, 32 basis points from a higher mix of EMEA region sales, which are ordinarily lower margin, raw material inflation, which reduced gross margins by 26 basis points, and continued field service productivity challenges related to organization changes from the restructuring and the near-term unfavorable impact from investments in manufacturing automation initiatives.

Gross Profit in the first nine months of 2017 was $288.9 million, or 39.9% of net sales, as compared to $258.1 million, or 43.2% of net sales in the first nine months of 2016. Gross margin was 330 basis points lower in the first nine months of 2017 due primarily to the $8.4 million, or approximately 120 basis points, fair value inventory step-up flow through related to our acquisition of the IPC Group, field service productivity challenges related to organizational changes from the restructuring, the near-term unfavorable impact from investments in manufacturing automation initiatives, and raw material cost inflation.

~~Operating Expense~~

~~Research & Development Expense~~

2024, with R&D ~~Expense for the~~ ~~third~~ ~~quarter of~~ ~~2017~~ ~~was $7.9 million, a decrease of 6.1% from $8.4 million in the~~ ~~third~~ ~~quarter of~~ ~~2016. R&D Expense~~expense as a percentage of ~~Net Sales was 3.0% for the~~ ~~third~~ ~~quarter of~~ ~~2017~~ ~~and 4.2% for the~~ ~~third~~ ~~quarter of~~ ~~2016. The decrease in R&D spending was primarily due to~~ ~~headcount reduction related~~net sales increasing 60 basis points compared to the first quarter ~~2017 restructuring action.~~of 2023.

R&D Expense for the first nine months of 2017 was $24.2 million, a decrease of 1.9% from $24.7 million in the first nine months of 2016. R&D Expense as a percentage of Net Sales was 3.3% for the first nine months of 2017 and 4.1% for the first nine months of 2016. The decrease in R&D spending was primarily due to ~~headcount reduction related to the first quarter 2017 restructuring action.~~

We continue to invest in developing innovative ~~new~~ products and technologies at levels necessary to propel our technology and ~~the advancement of detergent-free products, fleet management and other sustainable technologies. New products are a key driver of sales growth. There were 32 new products and product variants launched~~innovative leadership position.

Total Other Expense, Net

Interest Expense, Net

Interest expense, net was $2.3 million in the first ~~nine months~~quarter of ~~2017 consisting of a new family of T500 commercial walk-behind scrubbers, the enhanced IRIS~~^® ~~Web Based Fleet Management System, the i-mop, the V3e compact dry canister vacuum, the T350 stand-on commercial scrubber and the A140 micro-scrubber.~~

~~Selling & Administrative Expense~~

~~S&A Expense~~2024 compared to $3.7 million in the ~~third quarter~~same period of ~~2017~~2023. The decrease was the result of lower weighted average outstanding borrowings. The following table compares the debt levels, average interest rate, interest income and interest expense for the three months ended March 31, 2024 and 2023, respectively (in millions, except percentages):


	Three Months Ended March 31,
	2024			2023
Weighted Average Outstanding Borrowings	$	217.8		$	316.5
Average interest rate	6.52		%	5.81		%
Interest expense	3.6			4.6
Interest income	(1.3)			(0.9)
Interest expense, net	$	2.3		$	3.7

Our debt portfolio as of March 31, 2024 was comprised of debt predominately 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 ~~41.3% to $85.7~~interest costs. The Company has an aggregate $120.0 million ~~as compared to $60.6~~notional amount of interest rate swaps that exchange a variable rate of interest for a fixed rate of interest of 4.076% over the term of the agreements.

Net Foreign Currency Transaction Loss

Net foreign currency transaction loss was $0.2 million in the third quarter of 2016. S&A Expense as a percentage of Net Sales was 32.7% for the third quarter of 2017, an increase of 240 basis points from 30.3% in the third quarter of 2016. S&A Expense in the 2017 third quarter was unfavorably impacted by $7.3 million, or 280 basis points, and $0.9 million, or 30 basis points, of amortization expense and acquisition costs, respectively, related to our acquisition of the IPC Group. The 2017 third quarter amortization expense includes a catch-up adjustment of $2.0 million to reflect an accelerated amortization method used by the company as a result of an adjustment to our preliminary valuation of intangible assets as part of our acquisition of the IPC Group. Excluding these costs, S&A Expense was 70 basis points lower in the third quarter of 2017 compared to the same period in 2016 due primarily to the lower relative IPC S&A Expense to revenue percentage and our continued balance of disciplined spending control with investments in key growth initiatives.

S&A Expense for the first nine months of 2017 increased 31.9% to $247.1 million, as compared to $187.3 million for the first nine months of 2016. S&A Expense as a percentage of Net Sales was 34.1% for the first nine months of 2017, an increase of 270 basis points from 31.4% in the first nine months of 2016. S&A Expense in the first nine months of 2017 was unfavorably impacted by $10.4 million, or 140 basis points, and $8.4 million, or 120 basis points, of amortization expense and acquisition costs, respectively, related to our acquisition of the IPC Group and an $8.0 million, or 110 basis points, restructuring charge taken in our 2017 first quarter to better align our global resources and expense structure with a lower growth global economic environment. Excluding these costs, S&A Expense was 100 basis points lower for the first nine months of 2017 compared to the same period in 2016 due primarily to the lower relative IPC S&A Expense to revenue percentage and our continued balance of disciplined spending control with investments in key growth initiatives.

~~Profit from Operations~~

Operating Profit for the third quarter of 2017 was $11.0 million, or 4.2% of Net Sales, as compared to Operating Profit of $16.3 million, or 8.1% of Net Sales, in the third quarter of 2016. The third quarter 2017 Operating Profit was $5.3 million lower than the third quarter of 2016 Operating Profit due primarily to $7.3 million of amortization expense related to IPC intangible assets, the $2.2 million fair value inventory step-up flow through and $0.9 million of acquisition costs, all related to our acquisition of the IPC Group. ~~These decreases were partially offset by Operating Profit obtained from the IPC acquisition and reduced expenses resulting from our first quarter 2017 restructuring charge.~~

Operating Profit for the first nine months of 2017 was $17.6 million, or 2.4% of Net Sales, as compared to Operating Profit of $45.9 million, or 7.7% of Net Sales, in the first nine months of 2016. The first nine months of 2017 Operating Profit was $28.3 million lower than the first nine months of 2016 Operating Profit due primarily to $10.4 million of amortization expense related to IPC intangible assets, the $8.4 million fair value inventory step-up flow through and $8.4 million of acquisition costs, all related to our acquisition of the IPC Group. We also recorded an $8.0 million restructuring charge in the first nine months of 2017 to better align our global resources and expense structure with a lower growth global economic environment.~~These decreases were partially offset by Operating Profit obtained from the IPC acquisition and reduced expenses resulting from our first quarter 2017 restructuring charge.~~

~~Other Expense, Net~~

~~Interest Income~~

~~Interest Income in the third quarter of 2017 was $0.7 million, as~~2024 compared to $0.1 million in the ~~third~~first quarter of ~~2016. Interest Income in the first nine months of 2017 was $1.6 million, as compared to $0.2 million in the first nine months of 2016.~~2023. The ~~higher Interest Income in the third quarter and first nine months of 2017 as compared to the same periods in 2016~~unfavorable impact was primarily due to ~~interest income related to foreign currency swap activities.~~

~~Interest Expense~~

~~Interest Expense in~~ the ~~third quarter~~strengthening of ~~2017 was $6.1 million, as compared to $0.3 million in~~ the ~~third quarter of 2016. The higher Interest Expense in the third quarter of 2017 as compared~~U.S. dollar relative to the ~~same period in 2016 was primarily due to carrying a higher level of debt on our Condensed Consolidated Balance Sheets related to our acquisition activities.~~Brazilian real and other currencies.

Interest Expense in the first nine months of 2017 was $18.7 million, as compared to $0.9 million in the first nine months of 2016. The higher Interest Expense in the first nine months of 2017 as compared to the same period in 2016 was primarily due to carrying a higher level of debt on our Condensed Consolidated Balance Sheets related to our acquisition activities as well as a $6.2 million charge to expense the debt issuance costs for loans which were refinanced or repaid, as further described in the Liquidity and Capital Resources section that follows.

~~Net Foreign Currency Transaction (Losses) Gains~~

Net Foreign Currency Transaction Losses in the third quarter of 2017 were $0.8 million, as compared to Net Foreign Currency Transaction Losses of $0.1 million in the third quarter of 2016. The unfavorable change in the impact from foreign currency transactions in the third quarter of 2017 was primarily due to fluctuations in foreign currency rates, driven by changes in the Euro, and settlement of transactional hedging activity in the normal course of business.

Net Foreign Currency Transaction Losses in the first nine months of 2017 were $2.4 million, as compared to Net Foreign Currency Transaction Gains of $0.2 million in the first nine months of 2016. The unfavorable change in the impact from foreign currency transactions in the first nine months of 2017 was primarily due to a $1.1 million mark-to-market adjustment of a foreign exchange call option, an instrument held in connection with our acquisition of the IPC Group on April 6, 2017, and also fluctuations in foreign currency rates, specifically between the Euro and US dollar, and settlement of transactional hedging activity in the normal course of business.

~~Other Expense, Net~~

~~There was no significant change in Other Expense, Net in the third quarter and first nine months of 2017, as compared to the same periods in 2016.~~

Income Taxes

The effective tax rate in the third quarter of 2017 was 16.9%, as compared to the effective tax rate in the third quarter of the prior year of 27.7%. The tax expense for the third quarter of 2017 included a $0.6 million tax benefit associated with $2.2 million of expense related to inventory step-up amortization and a $0.3 million tax benefit associated with $0.9 million of acquisition costs related to the IPC Group acquisition. Excluding these items, the third quarter 2017 overall effective tax rate would have been 21.7%.

The decrease in the overall effective tax rate to 21.7% in the third quarter 2017 compared to 27.7% in the third quarter 2016, excluding the 2017 special items, was primarily related to mix of third quarter taxable earnings by country.

~~The year-to-date overall effective tax rate was (14.6%) for 2017 compared to 30.6% for 2016. The tax expense~~ for the first ~~nine months~~quarter of ~~2017 included a $3.0 million~~2024 was 19.1% compared to 24.1% for the first quarter of 2023. The decrease was primarily due to an increase in discrete tax ~~benefit~~benefits associated with ~~$15.8 million~~share-based compensation.

In general, it is our practice and intention to permanently reinvest the earnings of ~~acquisition~~our foreign subsidiaries and ~~financing costs related to~~repatriate earnings only when the ~~IPC Group acquisition, a $2.4 million~~ tax benefit associated with $8.4 million of expense related to inventory step-up amortization and a $2.2 million tax benefit associated with an $8.0 million restructuring charge. Excluding the effects of 2017 special items, the 2017 year-to-date overall effective tax rate wouldimpact is zero or immaterial. No deferred taxes have been ~~26.9%.~~

The decrease in the overall effective tax rate to 26.9% in 2017 compared to 30.6% in 2016, excluding the 2017 special items, was primarily related to the mix in expected full year taxable earnings by country and to the implementation of Accounting Standards Update (“ASU”) 2016-09 in Q1 2017. See Note 2 to the Condensed Consolidated Financial Statementsprovided for ~~further information regarding the implementation of ASU 2016-09.~~

~~We do not have any plans to repatriate the undistributed earnings of non-U.S. subsidiaries. Any repatriation from foreign subsidiaries~~withholding taxes or other taxes that would result ~~in incremental taxation is not being considered. We believe that reinvesting these earnings outside~~upon repatriation of our foreign investments to the U.S.

Backlog

Backlog is one of the ~~most efficient use~~many indicators of ~~capital.~~

~~Net Earnings (Loss) and Earnings (Loss) Per Share~~

~~Net Earnings Attributable to Tennant Company for~~business conditions in the ~~third quarter of 2017 were $3.6~~Company's markets. Our order backlog was $136.7 million ~~or $0.20 per diluted share, as~~at March 31, 2024 compared to ~~Net Earnings of $11.5~~$186.2 million ~~or $0.64 per diluted share, in~~at December 31, 2023. The decrease was the third quarter of 2016. The third quarter 2017 Net Earnings Attributable to Tennant Company included $1.6 million, net of tax, or $0.09 per share, from the fair value inventory step-up flow through related to our acquisitionresult of the ~~IPC Group~~Company's ability to obtain key component parts and ~~$0.6 million, net of tax,~~drive strong production levels. Backlog includes orders that can be cancelled or ~~$0.03 per share, for acquisition costs related to our acquisition~~postponed at the option of the IPC Group. The decrease in earnings per share was driven by higher amortization expense related to the IPC acquisition and higher interest expense, partially offset by earnings from the recently acquired IPC Group.customer at any time without penalty.

~~Net Loss Attributable to Tennant Company for the first nine months~~

Table of 2017 was $3.0 million, or $(0.17) per diluted share, as compared to Net Earnings of $31.2 million, or $1.74 per diluted share, in the first nine months of 2016. The first nine months of 2017 Net Loss Attributable to Tennant Company included $8.1 million, net of tax, or $0.47 per share, $7.5 million, net of tax, or $0.43 per share, $6.1 million, net of tax, or $0.34 per share, and $4.6 million, net of tax, or $0.26 per share, for acquisition costs, amortization expense, the fair value inventory step-up flow through and financing costs, respectively, all related to our acquisition of the IPC Group. In addition, Net Loss Attributable to Tennant Company for the first nine months of 2017 included a $5.8 million, net of tax, or $0.32 per share, restructuring charge taken in our 2017 first quarter and a $0.2 million, net of tax, or $0.01 per share, pension settlement charge.Contents

Liquidity and Capital Resources

Liquidity

Cash, cash equivalents and ~~Cash Equivalents~~restricted cash totaled ~~$55.9~~$88.8 million at ~~September 30, 2017, as~~March 31, 2024 compared to ~~$58.0~~$117.1 million as of December 31, ~~2016~~.2023. 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 March 31, 2024 and 2.1 as of December 31, 2023. Our primary working capital, which is comprised of accounts receivable, inventories and accounts payables, was ~~2.1 and $220.8~~$313.8 million ~~respectively,~~ as of ~~September 30, 2017~~ ~~compared to a current ratio~~March 31, 2024 and ~~working capital of 2.2 and $165.1~~$312.1 million ~~respectively,~~ as of December 31, ~~2016~~.2023. Our debt-to-capital ratio was ~~56.9%~~25.8% as of ~~September 30, 2017~~,March 31, 2024 compared to ~~11.5%~~25.8% as of December 31, ~~2016. The increase in the debt-to-capital ratio was driven by the borrowings related to the IPC acquisition.~~

~~Cash Flow Summary~~

~~Cash provided by (used in) our operating, investing and financing activities is summarized as follows (in thousands):~~

Nine Months Ended
September 30
2017 2016
Operating Activities $ 32,123
$ 33,282
Investing Activities:
Purchases of Property, Plant and Equipment, Net of Disposals (13,783 ) (21,940 )
Proceeds from Principal Payments Received on Long-Term Note Receivable 500
—
Issuance of Long-Term Note Receivable (1,500 ) —
Acquisition of Businesses, Net of Cash Acquired (354,073 ) (12,358 )
Purchase of Intangible Asset (2,500 ) —
Proceeds from Sale of Business —
285
(Increase) Decrease in Restricted Cash (133 ) 116
Financing Activities 335,797
(8,457 )
Effect of Exchange Rate Changes on Cash and Cash Equivalents 1,483
55
Net Decrease in Cash and Cash Equivalents $ (2,086 ) $ (9,017 )

~~Operating Activities~~

~~Operating activities~~ ~~provided$32.1 million~~ of cash for the nine months ended September 30, 2017. Cash provided by operating activities was driven primarily by strong earnings, adding back non-cash items, partially offset by $9.9 million increase in inventory to support anticipated revenue growth.

~~Operating activities~~ ~~provided~~ ~~$33.3 million of cash for the nine months ended September 30, 2016. Cash~~ ~~provided by~~ operating activities was driven primarily by cash inflows from Net Earnings of $31.2 million and a decrease in Accounts Receivable of $5.8 million from strong collections, partially offset by cash outflows resulting from a decrease in Accounts Payable due to the general timing of payments of $6.4 million.

Management evaluates how effectively we utilize two of our key operating assets, Accounts Receivable and Inventories, using Accounts Receivable “Days Sales Outstanding” (DSO) and “Days Inventory on Hand” (DIOH), on a FIFO basis. The metrics are calculated on a rolling three month basis in order to more readily reflect changing trends in the business. These metrics for the quarters ended were as follows (in days):

September 30,
2017 December 31,
2016
DSO 66 59
DIOH 104 89
2023.

As of ~~September 30, 2017, DSO increased 7 days compared to December~~March 31, 2016. The increase was primarily due to the variety of terms offered and mix of business, somewhat offset by the trend of continued proactive management of our receivables by enforcing tighter credit limits and continuing to successfully collect past due balances.

As of September 30, 2017, DIOH increased 15 days as compared to December 31, 2016. The increase was primarily due to a lower level of sales than anticipated that resulted in higher levels of inventory, somewhat offset by progress from inventory reduction initiatives.

~~Investing Activities~~

Investing activities during the nine months ended September 30, 2017 used $371.5 million. We used $354.1 million in relation to our acquisition of the IPC group and the final installment payment for the acquisition of the Florock brand and $13.8 million for net capital expenditures. Net capital expenditures included investments in information technology process improvement projects, tooling related to new product development, and manufacturing equipment. We also used $2.5 million for the purchase of the distribution rights to sell the i-mop and $1.5 million as a result of a loan to i-team North America B.V., a joint venture that operates as the distributor of the i-mop in North America. The details regarding the joint venture and our distribution of the i-mop are described further in Note 3 to the Condensed Consolidated Financial Statements.

~~Investing activities during the nine months ended September 30, 2016 used $33.9 million. Net capital expenditures used $21.9 million and our acquisition of the Florock~~brand and the assets of Dofesa Barrido Mecanizado, a long-time distributor based in central Mexico, used $12.4 million, net of cash acquired, as described further in Note 5. Capital expenditures included investments in information technology process improvement projects, tooling related to new product development, and manufacturing equipment.

~~Financing Activities~~

Net cash provided by financing activities was $335.8 million during the first nine months of 2017. Proceeds from the incurrence of Long-Term Debt associated with the IPC acquisition and the issuance of Common Stock provided $440.0 million and $4.7 million, respectively. These cash inflows were partially offset by cash outflows resulting from $81.3 million of Long-Term Debt payments, $16.5 million related to payments of debt issuance costs and dividend payments of $11.2 million.

Net cash used in financing activities was $8.5 million during the first nine months of 2016. The purchases of our Common Stock per our authorized repurchase program used $12.8 million, dividend payments used $10.6 million and the payments of Long-Term Debt used $3.5 million, partially offset by proceeds from the incurrence of Long-Term Debt of $15.0 million, the issuance of Common Stock of $2.9 million and the excess tax benefit on stock plans of $0.4 million.

~~Indebtedness~~

In order to finance the acquisition of the IPC Group, on April 4, 2017, the Company and certain of our foreign subsidiaries entered into a Credit Agreement (the “2017 Credit Agreement”) with JPMorgan, as administrative agent, Goldman Sachs Bank USA, as syndication agent, Wells Fargo, National Association, U.S. Bank National Association, and HSBC Bank USA, National Association, as co-documentation agents, and the lenders (including JPMorgan) from time to time party thereto. The 2017 Credit Agreement provides the company and certain of our foreign subsidiaries access to a senior secured credit facility until April 4, 2022, consisting of a multi-tranche term loan facility in an amount up to $400.0 million and a revolving facility in an amount up to $200.0 million with an option to expand the revolving facility by $150.0 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.

Upon entry into the 2017 Credit Agreement, the company repaid $45.0 million in outstanding borrowings under our Amended and Restated Credit Agreement, as described in Note 9 of our annual report on Form 10-K for the year ended December 31, 2016, and terminated the Amended and Restated Credit Agreement.

The 2017 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. The 2017 Credit Agreement also contains financial covenants, requiring us to maintain a ratio of consolidated total indebtedness to consolidated earnings before income, taxes, depreciation and amortization, subject to certain adjustments ("Adjusted EBITDA") of not greater than 4.25 to 1, as well as requiring us to maintain a ratio of consolidated Adjusted EBITDA to consolidated interest expense of no less than 3.50 to 1 for the quarter ended September 30, 2017. The 2017 Credit Agreement also contains a financial covenant requiring us to maintain a senior secured net indebtedness to Adjusted EBITDA ratio of not greater than 3.50 to 1. These financial covenants may restrict our ability to pay dividends and purchase outstanding shares of our common stock. We were in compliance with our financial covenants at September 30, 2017.

We will be required to repay the senior credit agreement with 25% to 50% of our excess cash flow from the preceding fiscal year, as defined in the agreement, unless our net leverage ratio for such preceding fiscal year is less than or equal to 3.00 to 1, which will be first measured using our fiscal year ended December 31, 2018.

~~Further details regarding our financing under the 2017 Credit Agreement are discussed in Note 8 to the Condensed Consolidated Financial Statements.~~

~~On April 18, 2017,~~2024, we issued and sold $300.0 million in aggregate principal amount of our 5.625% Senior Notes due 2025 (the “Notes”), pursuant to an Indenture, dated as of April 18, 2017, among the company, the Guarantors (as defined therein), and Wells Fargo Bank, National Association, a national banking association, as trustee. The Notes are guaranteed by Tennant Coatings, Inc. and Tennant Sales and Service Company (collectively, the “Guarantors”), which are wholly owned subsidiaries of the company.

~~The Notes contain customary representations, warranties and covenants, and are less restrictive than those contained in the 2017 Credit Agreement.~~

We used the net proceeds from this offering to refinance a $300.0 million term loan under our 2017 Credit Agreement that we borrowed as part of the financing for the acquisition of the IPC Group and to pay related fees and expenses.

~~Further details regarding our financing under the Notes are discussed in Note 8 to the Condensed Consolidated Financial Statements.~~

In connection with the issuance and sale of the Notes, the company entered into a Registration Rights Agreement, dated April 18, 2017, among the company, the Guarantors and Goldman, Sachs & Co. and J.P. Morgan Securities LLC (the “Registration Rights Agreement”). Pursuant to the Registration Rights Agreement, the company agreed (1) to use its commercially reasonable efforts to consummate an exchange offer to exchange the Notes for new registered notes (the “Exchange Notes”), with terms substantially identical in all material respects with the Notes (except that the Exchange Notes will not contain terms with respect to additional interest, registration rights or transfer restrictions) and (2) if required, to have a shelf registration statement declared effective with respect to resales of the Notes. If the Company fails to satisfy its obligations under the Registration Rights Agreement within 360 days, it will be required to pay additional interest to the holders of the Notes under certain circumstances.

~~The full terms and conditions of the Indenture are set forth in Exhibit 4.1 to the company's Current Report on Form 8-K filed April 24, 2017.~~

~~As of September 30, 2017, we~~ had outstanding borrowings under our 2017 Credit Agreement, totaling $75.0 million under our term loan facility and $20.0 million under our revolving facility. There were $300.0 million in outstanding borrowings under the Notes as of September 30, 2017. In addition, we had stand alone letters of credit and bank guarantees outstanding in the amount of ~~$4.7 million. Commitment fees~~$3.2 million, leaving approximately $321.8 million of unused borrowing capacity on ~~unused lines~~our revolving facility.

Cash Flow from Operating Activities

Net cash provided by operating activities during the three months ended March 31, 2024 was $2.9 million compared to net cash provided by operating activities of ~~credit~~$31.1 million during the three months ended March 31, 2023. The decrease was the result of consumption of working capital, mainly related to bonus payouts and spend on our ERP modernization project, which was partly offset strong operating performance.

Cash Flow from Investing Activities

Net cash used in investing activities during the three months ended March 31, 2024 was $60.6 million compared to net cash used by investing activities of $6.8 million during the three months ended March 31, 2023. The increase in cash outflows was primarily driven by cash used for the ~~nine~~investment in Brain Corp of $32.1 million and cash used, net of cash acquired, for the acquisition of TCS of $25.5 million.

Cash Flow from Financing Activities

Net cash provided by financing activities during the three months ended September 30, 2017 were $0.4 million. The overall weighted average cost of debt is approximately 5.0% and, net of a related cross-currency swap instrument, is approximately 4.2%. Further details regarding the cross-currency swap instrument are discussed in Note 10 to the Condensed Consolidated Financial Statements.

~~Prudential Investment Management, Inc.~~

In March ~~2017, we repaid $11.1~~31, 2024 was $26.9 million of debt evidenced by the notes issued under our Private Shelf Agreement, as described in Note 9 of our annual report on Form 10-K for the year ended December 31, 2016, and terminated the Private Shelf Agreement.

~~Contractual Obligations~~

As of September 30, 2017, as a result of our acquisition of the IPC Group, there have been material changes in our contractual obligations related to our minimum rental payments for aggregate operating lease commitments as well as our long-term debt compared to ~~our contractual obligations as disclosed~~net cash used by financing activities of $10.3 million during the three months ended March 31, 2023. The increase in ~~our annual report on Form 10-K for the year ended December 31, 2016. Further details regarding our contractual obligations related~~cash inflows was primarily driven by proceeds from exercises of stock options, in addition to ~~our aggregate operating lease commitments and long-term debt are discussed in Notes 13 and 8, respectively, to the Condensed Consolidated Financial Statements.~~net borrowings.

Other than the contractual obligations identified above, there have been no material changes with respect to contractual obligations as disclosed in our annual report on Form 10-K for the year ended December 31, 2016.

Newly Issued Accounting Guidance

See Note 2 to the consolidated financial statements for information on new accounting pronouncements.

In ~~May 2014,~~October 2023, the ~~Financial Accounting Standards Board ("FASB")~~FASB issued ~~Accounting Standards~~ASU 2023-06 Disclosure Improvements: Codification Amendments in Response to the SEC's Disclosure Update ~~("ASU") No. 2014-09,~~ ~~Revenue from Contracts~~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 ~~Customers (Topic 606). This ASU will replace all existing revenue recognition standards~~the Securities and ~~significantly expand the disclosure requirements for revenue arrangements.~~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 2023, the FASB issued ASU 2023-07 Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. This guidance provides a five-step analysis of transactions to determine whendisclose significant segment expenses impacting profit and how revenue is recognized. This guidance also requires enhanced disclosures regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity's contracts with customers.

~~In August 2015, the FASB issued ASU No. 2015-14,~~ ~~Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date~~, which defers the effective date of the new revenue recognition standard by one year from the original effective date specified in ASU No. 2014-09. The guidance now permits us to apply the new revenue recognition standard to annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period, which is our fiscal 2018.

~~Management will adopt the revenue recognition standard using the modified retrospective approach. Under this approach, the new standard would only be applied to new contracts and those contracts~~loss that are not yet complete at January 1, 2018, with a cumulative catch-up adjustment recorded to beginning retained earnings for existing contracts that still require performance. We are utilizing a comprehensive approach to assess the impact of the standard on the company by reviewing our current accounting policies and practices to identify potential difference that would result from applying the new requirements to our revenue contracts. We are finalizing our contract reviews and, at this time, we have not identified any impacts to our financial statements that we believe will be material in the year of adoption. We anticipate the primary impact of the standard to be the additional required disclosures around revenue recognition in the notesregularly provided to the consolidated financial statements. We continue to develop accounting policies and assess changes to the relevant business processes and the control activities within them as a result of the provisions of this standard.

~~In February 2016, the FASB issued ASU No. 2016-02,~~ ~~Leases (Topic 842). This ASU changes current U.S. GAAP for lessees to recognize lease assets and lease liabilities on the balance sheet for those leases classified as~~chief operating ~~leases under previous U.S. GAAP. Under the new guidance, lessor accounting is largely unchanged.~~decision maker. The amendments in this ASU are ~~effective~~required to be adopted for ~~annual periods~~fiscal years beginning after December 15, ~~2018, including~~2023, and interim periods within ~~that reporting period, which~~fiscal years beginning after December 15, 2024. Early adoption is ~~our fiscal 2019. Early application is~~ permitted. Lessees and lessors must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The transition approach would not require any transition accounting for leases that expired before the earliest comparative period presented. A full retrospective transition approach is prohibited for both lessees and lessors. We will adopt this ASU beginning in 2019. We are currently evaluating the impact of ~~this amended guidance~~adoption on our ~~consolidated~~ financial ~~statements and related~~ disclosures.

In ~~January 2017,~~December 2023, the FASB issued ASU ~~No. 2017-01,~~ ~~Business Combinations~~2023-09 Income Taxes (Topic ~~805)~~740): ~~Clarifying~~Improvements to Income Tax Disclosures, which is intended to enhance the ~~Definition~~transparency and decision usefulness of ~~a Business.~~ ~~This~~income tax disclosures. The amendments in ASU ~~clarifies~~2023-09 address investor requests for enhanced income tax information primarily through changes to the ~~definition of a business when evaluating whether transactions should~~rate reconciliation and income taxes paid information. The amendments in this ASU are required to be ~~accounted~~adopted for ~~as acquisitions (or disposals) of assets or businesses. This ASU is effective for annual reporting periods~~fiscal years beginning after December 15, ~~2017, including interim periods within that reporting period, which is our fiscal 2018. We will apply this guidance to applicable transactions commencing in 2018.~~

~~In January 2017, the FASB issued ASU No. 2017-04,~~ ~~Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment,~~ which removes Step 2 of the goodwill impairment test. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. This ASU is effective for annual or any interim goodwill impairment tests beginning after December 15, 2019, which is our fiscal 2020.2024. Early adoption ~~of the standard~~ is permitted for ~~any interim or~~ annual ~~goodwill impairment tests performed on testing dates after January 1, 2017. We will apply this guidance to applicable goodwill impairment tests going forward.~~

~~In March 2017, the FASB issued ASU No. 2017-07,~~ ~~Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost,~~ which requires employers to report the service cost component in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost/credit are required to be presented in the income statement separately from the service cost component in nonoperating expenses. In addition, the line items used in the income statement to present the other components of net benefit cost/credit must be disclosed.financial statements that have not yet been issued. The amendments ~~also allow only the service cost component to~~should be ~~eligible for capitalization when applicable. This ASU~~applied on a prospective

Table of Contents

basis although retrospective application is ~~effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period, which is our fiscal 2018.~~permitted. We are currently evaluating the impact ~~that this standard is~~of adoption on our financial disclosures.

No other new accounting pronouncements issued but not yet effective have had, or are expected to have, a material impact on our ~~consolidated financial statements and related disclosures.~~

~~In August 2017, the FASB issued ASU No. 2017-12,~~ ~~Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities, which better aligns accounting rules with a company's risk management activities, better reflects the economic~~ results of ~~hedging in~~operations or financial statements and simplifies hedge accounting treatment. This ASU is effective for fiscal years beginning after after December 15, 2018, including interim periods within those fiscal years, which is our fiscal 2019. We are currently evaluating the impact that this standard is expected to have on our consolidated financial statements and related disclosures.position.

Cautionary Statement Relevant to Forward-Looking Information

This Quarterly Report, ~~on Form 10-Q,~~ 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 orof forecasts of future events. Any such expectations or forecasts of future events are subject to a variety of factors. Particular risks and uncertainties presently facing us include: geopolitical and economic uncertainty throughout the world; our ability to comply with global laws and regulations; our ability to adapt to customer pricing sensitivities; the competition in our business; our ability to attract, develop and retain key personnel; our ability to achieve operational efficiencies, including synergistic and other benefits of acquisitions; our substantial indebtedness could adversely affect our ability to raise additional capital to fund our operations, limit our ability to react to changes in the economy or our industry, expose us to interest rate risk to the extent of any variable rate debt, and prevent us from meeting our covenant and payment obligations related to our debt instruments; our ability to effectively manage organizational changes; our ability to successfully upgrade, evolve and protect our information technology systems; our ability to develop and commercialize new innovative products and services; unforeseen product liability claims or product quality issues; fluctuations in the cost, quality or availability of raw materials and purchased components; ~~foreign currency exchange rate fluctuations, particularly~~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 ~~relative strength of the U.S. dollar against other major currencies;~~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; the occurrence of a significant business interruption; our ability to ~~comply with laws~~maintain the health and ~~regulations;~~safety of our workers; our ability to integrate acquisitions; and our ability to ~~sufficiently remediate any material weaknesses or significant deficiencies in our internal control over financial reporting.~~develop and commercialize new innovative products and services.

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, ~~2016 and Part II, Item 1A of this Form 10-Q.~~2023.

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~~

Item 3.Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes in our market risk since December 31, ~~2016.~~2023. For additional information, refer to Item 7A of our ~~2016~~ annual report on Form 10-K for the year ended December 31, ~~2016.~~2023.


~~Item 4.~~	~~Controls and Procedures~~

Item 4.Controls and Procedures

Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and our Principal Financial and Accounting Officer, ~~have~~has evaluated the effectiveness of our disclosure controls and procedures ~~for the period ended~~ ~~September 30, 2017~~as of March 31, 2024 (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 Principal Financial and Accounting Officer have concluded that ~~due to material weaknesses in internal control over financial reporting described in Part II, Item 9A of our 2016 annual report on Form 10-K for the year ended December 31, 2016,~~ our disclosure controls and procedures ~~were not~~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.

Tableof ~~September 30, 2017.~~Contents

Changes in Internal Controls

There were no changes in our internal controls over financial reporting during the most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial ~~reporting, other than as described below.~~

~~Remediation Plan~~

~~We began implementing a remediation plan to address the control deficiencies that led to the material weaknesses mentioned above. The remediation plan includes the following:~~

~~Sponsoring ongoing training related to the COSO 2013 Framework best practices for personnel that are accountable for internal control over financing~~ reporting.

~~Performing a complete review of our accounting for revenue related to equipment maintenance and repair service to ensure the adequacy of the design and implementation of automated and manual controls.~~

~~Designing and implementing controls over the determination of technological feasibility and the capitalization of software development costs.~~

We are in the implementation phase of our remediation plan described above. The material weaknesses cannot be considered remediated until the controls have operated for a sufficient period of time and until management has concluded, through testing, that the control is operating effectively. Our goal is to remediate these material weaknesses by the end of 2017.

PART II – OTHER INFORMATION


~~Item 1.~~	~~Legal Proceedings~~

Item 1.Legal Proceedings

There are no material pending legal proceedings other than ordinary routine litigation incidental to our business.

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 ~~fiscal~~ year ended December 31, ~~2016. Other than the risk factor identified below, there~~2023. There have been no material changes to our risk factors since the filing of that report.

We may not be able to generate sufficient cash to service all of our indebtedness, and may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful.

In April 2017, in connection with the acquisition of IPC Cleaning S.p.A., we entered into a new senior credit facility and indenture, and issued debt totaling approximately $400,000, consisting of a $100,000 term loan and $300,000 of senior notes, which funded the acquisition and replaced our current debt facility. The new senior credit facility also includes a revolving facility in an amount up to $200,000. We cannot provide assurance that our business will generate sufficient cash flow from operations to meet all our debt service requirements, to pay dividends, to repurchase shares of our common stock, and to fund our general corporate and capital requirements.

Our ability to satisfy our debt obligations will depend upon our future operating performance. We do not have complete control over our future operating performance because it is subject to prevailing economic conditions, and financial, business and other factors.

~~Our current and future debt service obligations and covenants could have important consequences. These consequences include, or may include, the following:~~

~~our ability to obtain financing for future working capital needs or acquisitions or other purposes may be limited;~~

our funds available for operations, expansions, dividends or other distributions, or stock repurchases may be reduced because we dedicate a significant portion of our cash flow from operations to the payment of principal and interest on our indebtedness;

~~our ability to conduct our business could be limited by restrictive covenants; and~~

~~our vulnerability to adverse economic conditions may be greater than less leveraged competitors and, thus, our ability to withstand competitive pressures may be limited.~~

Restrictive covenants in our senior credit facility and in our indenture place limits on our ability to conduct our business. Covenants in our senior credit facility and indenture include those that restrict our ability to make acquisitions, incur debt, encumber or sell assets, pay dividends, engage in mergers and consolidations, enter into transactions with affiliates, make investments and permit our subsidiaries to enter into certain restrictive agreements. The senior credit facility additionally contains certain financial covenants. We cannot provide assurance that we will be able to comply with these covenants in the future.


~~Item 2.~~	Item 2.Unregistered Sales ~~of Equity Securities and Use of Proceeds~~

~~On October 31, 2016, the Board~~ of ~~Directors authorized the repurchase~~Equity Securities and Use of ~~an additional 1,000,000 shares of our common stock. This is in addition to the 393,965 shares remaining under our prior repurchase program as of September 30, 2017.~~ Proceeds

Share repurchases are made from time to time in the open market or through privately negotiated ~~transactions, primarily~~transactions. 808,688 shares remain authorized under the most recent share repurchase program approved by the Board of Directors on October 31, 2016.


For the Quarter Ended March 31, 2024	Total Number of Shares Purchased(1)	Average Price Paid Per Share		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
January 1-31, 2024	12,734	$	88.36	12,725	808,688
February 1-29, 2024	17,833	$	110.16	—	808,688
March 1-31, 2024	9,966	$	110.68	—	808,688
Total	40,533	$	103.44	12,725	808,688

(1)Includes 27,808 shares delivered or attested to ~~offset~~in satisfaction of the ~~dilutive effect of shares issued through our~~exercise price and/or tax withholding obligations by employees who exercised stock options or restricted stock under employee share-based compensation ~~programs. As~~plans.

Item 5. Other Information

On March 6, 2024, Donal L. Mulligan, Board of ~~September 30, 2017, our 2017 Credit Agreement restricts~~Directors, adopted a Rule 10b5-1 trading arrangement that is intended to satisfy the ~~payment~~affirmative defense of ~~dividends or repurchasing~~Rule 10b5-1(c) for the sale of up to 3,538 shares of the Company’s common 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 an amount ranging from $50.0 million to $75.0 million during any fiscal year based on our leverage ratio after giving effect to such payments. Our Senior Notes due 2025 also contain certain restrictions, which are generally less restrictive than those contained in the 2017 Credit Agreement.until April 28, 2026.

For the Quarter Ended June 30, 2017
Total Number
of Shares
Purchased⁽¹⁾

Average Price
Paid Per Share
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, 2017 603
$ 74.95
—
1,393,965
August 1 - 31, 2017 101
65.70
—
1,393,965
September 1 - 30, 2017 176
60.40
—
1,393,965
Total 880
$ 70.98
—
1,393,965


⁽¹⁾ Table of Contents	Includes 880 shares delivered or attested to in satisfaction of the exercise price and/or tax withholding obligations by employees who exercised stock options or restricted stock under employee share-based compensation plans.


~~Item 6.~~	~~Exhibits~~

Item 6.Exhibits

Item #

Description

~~Description~~

Method of Filing

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.

3ii

Amended and Restated By-Laws

Incorporated by reference to Exhibit 3,2 to the Company’s Form 8-K dated January 19, 2023.

3iii

Articles of Amendment of Restated Articles of Incorporation of Tennant Company

Incorporated by reference to Exhibit 3iii to the ~~Company’s Current Report~~Company's report on Form ~~8-K dated December 14, 2010.~~10-Q for the quarterly period ended March 31, 2018.

~~4.1~~

31.1

~~Indenture dated as of April 18, 2017~~

~~Incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed April 24, 2017.~~

~~4.2~~

~~Registration Rights Agreement dated April 18, 2017~~

~~Incorporated by reference to Exhibit 4.2 to the Company's Current Report on Form 8-K filed April 24, 2017.~~

~~31.1~~

Rule 13a-14(a)/15d-14(a) Certification of CEO