TO OUR SHAREHOLDERS

     Net sales of $76.8 million for the first quarter of 1996 were up 4 
percent from the prior year's $74.1 million. Net earnings of $4.0 million, or 
40 cents per share, increased 3 percent from the $3.9 million, or 39 cents 
per share, for last year's first quarter.

ORDER SLOWDOWN AFFECTS SALES, MARGINS

     The quarter's relatively low sales increase resulted from an order 
slowdown that began last year. We believe the key factor in our order 
performance has been weak conditions in the North American and European 
economies, especially in the industrial sectors.

     The low level of sales growth for the quarter contributed to a decline 
in operating margin to 7.4 percent of sales from 7.6 percent last year. 
Despite expense controls implemented early this year, expenses were up 
somewhat more than sales primarily due to general inflation, increased 
depreciation expense resulting from a higher level of capital spending in 
recent years, and continued funding of several projects considered important 
to the Company's long-term success.

CAUTIOUSLY OPTIMISTIC FOR REMAINDER OF 1996

     The consensus economic view is that we are in the final stages of a "soft
landing" and that growth will resume soon. We believe that Tennant is well
positioned to take advantage of better economic conditions. We have a 
significant number of new and updated products in our line, our floor 
coatings and export businesses are performing well, and our two subsidiaries, 
both of which experienced profitability challenges last year, continue to 
show improvement.

     Assuming economic growth resumes as expected, we believe Tennant will be 
able to improve on last year's record sales and earnings. However, in the 
near-term we will continue to face a profitability challenge. We are 
therefore instituting additional expense controls that will remain in effect 
until orders strengthen.

OPERATING CASH FLOW UP OVER LAST YEAR

     Net cash flow related to operating activities was $3.1 million versus 
$0.7 million for last year's first quarter. The increase in cash flow 
resulted from a reduction in the unusually high level of receivables at 
December 31, 1995. While receivables declined, the need to improve on our 
collection experience continues.

     Inventories increased $4.3 million from year-end 1995. While an increase 
during first quarter is normal due to sales and production patterns, this 
year's increase was somewhat above normal. The primary reasons for the 
increase were the relatively low level of sales for the quarter and a need to 
build inventory to support new product introductions.

     Based on our outlook for full-year results, we expect to be able to show 
productivity improvements for both receivables and inventory by year-end. 
This is a key element in our objective to steadily reduce debt as a percent 
of capitalization from last year-end's 26%.

Roger L. Hale
CHIEF EXECUTIVE OFFICER                                         April 15, 1996


TENNANT AT A GLANCE

     Tennant's strategic mission is to be the preeminent company in 
nonresidential floor maintenance equipment, floor coatings and related 
product offerings. We expect to maintain and expand our market leadership in 
industrial equipment, and continue above-average growth in commercial 
equipment and floor coatings, through a commitment to long-term partnerships 
with our customers. This partnership commitment, described in our 1995 Annual 
Report, is characterized by:



- -    Offering the most complete range of innovative products. Our 
     industry-leading investment in product development and quality will 
     continue to yield new, high value offerings.

- -    Bringing together our three complementary product lines so we can work 
     closely with customers to help them develop and implement total solutions
     to their floor maintenance needs.

- -    Developing a companywide integrated base of information focused on the 
     customer to improve service levels and become more effective and efficient
     in our operations.

     We believe this approach will allow us to achieve our long-term financial 
goals, as indicated below, and meet our financial mission of providing an 
above-average total return to shareholders:

- -    5% real (inflation adjusted) annual sales increases over the long-term.

- -    20% return on beginning shareholders' equity in the growth years of the 
     economic cycle.


PRODUCTS FOR A CLEANER AND SAFER WORLD

     Once again at the cutting edge of cleaning technology, Tennant 
introduces the newest generation of compact, battery-powered riding 
scrubbers: the 515 Series. Able to clean congested facilities with the power 
of larger Tennant scrubbers, the Series comes in both the Model 515 scrubber 
and the Model 515 SS sweeper/scrubber. 

     Each can be tailored to fit individual cleaning needs with a variety of 
path sizes and cleaning operations.  Each offers features not found on any 
competing scrubber: a fully engaged Electronic Monitoring System, Class 
1/Division 2 UL Safety Seal, and roll-out batteries. 

     Truly, the 515 Series marks a new revolution of compact, battery-powered 
riding scrubbers.