Tennant at Sidoti’s Small-Cap: Robotics Drive Growth

On Thursday, 12 June 2025, Tennant Company (NYSE:TNC) shared its strategic insights and financial performance at Sidoti’s Small-Cap Virtual Conference. The company highlighted its robust position in the mechanized cleaning equipment market while addressing challenges such as a significant backlog reduction. Tennant’s focus on automation and strategic investments in robotics were central themes, underscoring its growth potential despite recent hurdles.

Key Takeaways

• Tennant aims for 3% to 5% annual revenue growth, leveraging strategic pricing and product innovation.
• The company has shipped 10,000 robotic scrubbers, with AMR sales reaching $75 million in 2024.
• Tennant targets a $100 million AMR run rate by 2027, driven by strong demand and strategic partnerships.
• A significant backlog reduction of $125 million impacted 2024 sales, but order rates increased by 13% in Q1.
• Tennant’s capital allocation prioritizes business funding, dividends, debt management, and potential share buybacks.

Financial Results

• Tennant faced negative year-over-year sales growth due to a $125 million backlog reduction in 2024.
• The company maintains a revenue growth target of 3% to 5%, requiring order rates between 5% and 6%.
• A 13% increase in orders from Q1 indicates positive momentum despite backlog challenges.
• Tennant is committed to converting 100% of net income into free cash flow.
• The company repurchased $20 million in shares in Q1 and plans to continue disciplined buybacks.

Operational Updates

• Tennant’s AMR platforms, X4 and X6, are pivotal to its growth strategy, with the X6 targeting large-scale retail and industrial applications.
• The Clean360 program offers "robots as a service," providing a fair market value lease with a 90% uptime guarantee.
• Tennant’s acquisition of TCS and equity stake in Brain Corp enhance its M&A strategy and robotics capabilities.
• The company is expanding its robotics offerings, aiming to cover all core vertical markets.

Future Outlook

• Tennant does not foresee any decline in demand, driven by the need for automation and clean spaces.
• The company emphasizes automation as a response to labor shortages and sustainability trends.
• Tennant is optimistic about growth opportunities and remains committed to shareholder value.

Q&A Highlights

• High demand for AMRs is fueled by labor challenges, with a $100 million+ run rate goal by 2027.
• Early adoption of the X6 is promising, with positive feedback from industrial clients and co-development partners.

In conclusion, Tennant Company remains focused on leveraging its strengths in robotics and automation to drive future growth. For a detailed understanding, readers are encouraged to refer to the full transcript below.

Full transcript - Sidoti’s Small-Cap Virtual Conference:

Steve Furrazzani, Analyst, Sidoti: Good morning, everyone. I’m Steve Furrazzani, an analyst at Sidoti. For joining us for day two of Sidoti’s Virtual Investor Conference. I see there’s still some folks coming into the room. Before we kick it off, let me take this opportunity to remind everyone we should have some time for questions following, which should be a very informative presentation.

If you have press questions, please press that q and a box at the bottom of your screen, type in the question, and we’ll get absolutely as many as we can, time permitting. I don’t wanna take up any more time. From from our next presenter, it’s Dave Hummel, President and CEO of Tennant Company. The ticker is TNC. With that, Dave, let me turn it over to you.

Dave Hummel, President and CEO, Tennant Company: Thanks, Steve, and thank you all for taking the time to to join us today. I appreciate the opportunity to tell the, you know, tell the tenant story and as Steve mentioned leave some time to field your questions about the business. We prepared a short slide deck that I’ll walk through just to land some of the key points for people that may be newer to the stock and maybe as launching pad for the Q and A session that Steve is going to moderate at the end. Let me just give a brief thumbnail overview of Tenant Company and I’m going to come at it from the standpoint of an investment thesis, the seat you’re sitting in and as you look at Tenant Company why we think it’s a compelling investment opportunity. And I point to these aspects of the business.

I’ll cover them quickly here and then provide a little more color in a few more slides. Listen, we’re a global leader in this mechanized cleaning equipment space. It’s about a $9,000,000,000 space. We have about a 14% share of that market on a global basis. We have a differentiated position in that market and I’ll walk through the points of differentiation that provide us an advantage but also a competitive mode and we think a compelling growth platform for the future.

Talking about growth, our growth strategy is very intentional and I’ll talk through the components of that growth strategy that we’re resourcing and investing in and how we will read out over the next coming years. We’ve made a growth commitment as a company to grow top line revenues by 3% to 5% on a compound basis over the long term. And our growth opportunities are really underpinned and have tailwinds from global megatrends. And so I’ll articulate what those megatrends are and so that you can connect kind of the mega excuse me the macro market dynamics to how they will affect tenant company and how they’ll fuel our growth in the future. We have a world class service model and service aftermarket is a very important part of our business.

It’s important to our customer base and it’s a growing and profitable segment of our business as well. We also think it’s part of our unique competitive advantage and competitive moat as a business. We are known for innovation within this industry and as a business. We’re 154 year old business and throughout our history we have perpetually reinvented ourselves to stay relevant. A key part of that transformation has been through innovation both in product and technology but also in business model and go to market how we serve our customers.

At present, we are in the midst of a significant disruption bringing robotics and automation to bear on the floor cleaning application on a global basis. And really proud of the success we’ve had in robotics and excited about the upside opportunity in driving continued disruption from autonomous cleaning machines in floor cleaning applications globally. And all of this is underpinned by a really strong business structurally. We have a very solid balance sheet. We’re very disciplined about execution in the business, maintaining margins, expanding margins, but also a very disciplined capital allocation prioritization.

And so we think we’re in good shape to not only fund our own journey as a business, but also we have the firepower to grow both organically and inorganically over the coming quarters and years. So we think we’re a really good position to fund our own journey as a business. And we think these are the compelling reasons why Tenet would make sense in a growth portfolio. Deep diving into some of the aspects I just covered about Tenet Company. I mentioned we have about a 14% share of about a $9,000,000,000 global TAM.

That varies by geography. In The Americas which is our legacy strength geography we have about a 25% share and that’s about a $3,500,000,000 market. EMEA, we have grown organically and inorganically through a major acquisition in 2017. We have bought a 10% share position in EMEA and that’s a similarly sized market to The Americas. So that means we occupy not a number one position but more of a two, three or four position in each of the major geographies within Europe which is a significant and strong starting point, but obviously we’ve got upside from a growth potential taking share within the EMEA marketplace.

Asia Pacific about 5% share of the entire Asia Pacific region. A lot of emerging markets in this emerging geographies within the APAC segment and that’s about $1,000,000,000 of TAM. The APAC region is growing at a higher rate and given our significant position, starting position, but also the upside for share gain and market growth, We’re in APAC for the long haul. So we thought we got if you sum it all together, we’ve got a solid starting position and a right to win in these geographies with upside from both the market and a share perspective. I talked earlier about our growth agenda and before I jump into the actions and activities and strategies that we’re deploying, let’s just talk about the macro trends that provide the tailwind for our industry and for our business.

And the biggest one is really around automation, the need for automation based on the availability and cost of labor. Since the pandemic this has been exacerbated. Labor is now one of the top three to five challenges that virtually every customer notes within their business and especially as it relates to the floor cleaning part of their business. If you think about a building service contractor someone like an EBM or an Aramark that provides cleaning services the turnover in those the labor turnover in those businesses approaches 70% and that was pre pandemic benchmark. So when you think about that kind of turnover and now with increasingly lower labor availability and high variability in the cost of labor, it provides a significant opportunity for us to provide greater productivity and robotics to reduce and eliminate the reliance on labor.

That labor dynamic is a global phenomenon in mature markets like Western Europe and Americas, North America. It is acute and driving a significant interest in our product portfolio especially AMR. But we also see labor challenges in other markets beyond those geographies. We think that this trend is here to stay. We don’t see this as short term trend that will correct itself.

And it’s driven by the world’s need for better clean spaces, better clean and shared spaces, but also the just the lack of availability of cleaning labor and the cost of cleaning labor. Beyond automation, there’s also a megatrend of modernization shift to mechanized cleaning and away from mop and bucket cleaning in developing and emerging geographies. As the standard of living increases, people have a higher standard for clean in their shared spaces which drives the need for mechanization in order to provide clean at a high productivity rate. And then last but not least the need for electrified products. We still have products today that utilize internal combustion engines.

The advancement in technology of batteries primarily have made it have given us the opportunity to eliminate internal combustion engines and offer products that operate battery power electric vehicles for their cleaning applications and sustainability. Beyond the power source obviously EVs and cleaning equipment is a sustainable solution and helps our customers achieve their net zero goals. Beyond that we also have technologies to help our customers reduce their water usage and the reliance on chemicals which support their own sustainability aspirations in their operations. So we think we’re uniquely positioned to help customers not only with their labor challenges and their floor cleaning challenges but also with their sustainability goals as businesses. We’ve committed to top line organic growth of 3% to 5% CAGR over the long term.

The components of that growth are pricing, new product innovation and what we call go to market or new channels to market so we can reach more customers with our value proposition and service more customers with our aftermarket service capabilities. Those are the components we stood up specific initiatives within each of those pillars to be sure that we can deliver on the 3% to 5% top line organic growth commitment over the long term. At the same time, we have activated and demonstrated the ability to expand bottom line margins. So we committed to 50 to 100 basis points of EBITDA expansion over the long term per year. And the components of EBITDA expansion are driven both through the gross margin line.

You can think of it as about 30 bps from a gross margin perspective and about 45 bps of expansion through S and A leverage. Within gross margin expansion, we benefit obviously from price and mix and new products. But we also have a cost out muscle that we’ve built so that we have an evergreen discipline around identifying and executing cost out, cost reduction, COGS cost reduction actions in the business to more than offset inflation and offer us the opportunity to expand margin. From an S and A efficiency perspective, we’re investing in systems harmonizing our ERPs, standardizing our processes so that we can get the leverage and scale profitably as we grow this business. In addition to our organic growth, we’ve committed to robust M and A effort.

We’re actively working on funnel as we speak. We’ve articulated an M and A strategy. I’ll touch on that a bit later in the presentation. And we’ve targeted about $150,000,000 of revenue, top line revenue added from M and A over three years 2024, 2025, 2026 and we’ve already begun that journey. We’re actively working a funnel of targets.

Everything from kind of bolt on and tuck in smaller strategic acquisitions, think about product lines and channel acquisitions all the way up to a handful of transformational acquisitions that will put us in a differentiated position as a business within our marketplace. So it’s difficult to predict M and A, but we’re actively working the funnel and confident that we can find attractive targets and execute here in the coming quarters and years. All of this is enabled by our financial position, a very strong balance sheet, very disciplined in our operation of the business, strong cash flow conversion. We’ve committed to 100% of net income to free cash flow conversion. So really in a good position to fund our own journey organically.

And then inorganically, we’ve worked our balance sheet down. We have low debt leverage, lots of borrowing debt capacity. And so we think we’ve got the firepower to not only fund our own journey organically, but go out and do the acquisitions that we want to over the mid term here. I mentioned a little bit about innovation. Let me deep dive our new product roadmap and portfolio where we’re investing for growth.

There are really three pillars. We’re investing in robotics, expanding our robotics offering and improving our robotics capability. We view this as an opportunity to disrupt our own core market. The AMR product offering we have today is five robots that so we have coverage across all the core vertical markets we serve and can engage any customer that’s interested in moving into robotics with a product that will meet their application requirements. I’m most excited in robotics about our most recent introductions the X4 Rover and the X6 Rover.

X4 was launched last year about this time and X6 is just launching now as we speak. The reason I’m most excited about these two robots, the older robots are great and customers prefer those and have ordered and reordered those robots. But our latest X4 product the X platform AMR are built as purpose built robots. They’re not manual machines that we turned into robots. They don’t have seats and steering wheels on them.

They’re built to a very compact form factor. So they’re highly maneuverable in the application which provides the customer the opportunity to clean more and more quickly without having to assist the robot. And they’re built with the functionality of our generation three navigation software which we have exclusivity on in the floor cleaning space. So this Gen three navigation software is through our partnership with Brain Corp. We announced this partnership and maybe exclusivity to this navigation software in January first quarter of last year.

This not only gives us the best navigation software package we believe available in the industry, it utilizes three d LiDAR, high def cameras, NVIDIA chips. So this is very high performing, high computing power onboard the robot which allows the robot to be very responsive in the application, make decisions very quickly and it gives the customer even greater productivity with better cleaning outcomes on the floor. This exclusivity with Brain Corp also has afforded us the opportunity participate in the annual recurring revenue from navigation software subscriptions and so it represents an incremental revenue stream. And because we’re exclusive now with Brain Corp, it’s reduced a lot of the commercial friction and operational friction So we think we can accelerate more better new products to market and sell more efficiently now that we’re not having to share brains attention with any of our competitors.

So really excited about the X4 and X6 platforms more new products to come in AMR, but we think AMR, it solves our customers, one of our customers leading issues which is around the cost and availability of labor and we do it in a really financially attractive way. Provides a great cleaning outcome, but they can get less than a three year payback on the investment by reducing and eliminating the need for labor and floor cleaning. It’s also financially attractive to us at Tennant Company because an AMR sells for about three times the sell price of its non robotic equivalent at similar margin profile. So you can imagine what the margin drop through is on an AMR even if we just cannibalize ourselves and sell an AMR in the place of a non robotic piece So really excited about the AMR opportunity and we’ve leaned heavily into R and D to bring more new products, more robotics to market faster.

We’re also investing in small space cleaning. This is not a space we’ve historically participated. This offers an opportunity to penetrate new vertical market segments but also give our customers solutions for cleaning smaller spaces within their existing environment. So think about a large manufacturing space probably has bathrooms that need to be cleaned, an entry way, maybe a break room that the large equipment can’t fit into and now we can sell a suite of solutions to existing customers through existing channels, existing brands. We’re also leveraging product line extensions and so we’re bringing products from acquisitions that are designed to a different performance spec and a lower cost point.

We’re bringing them into the market to participate both at mid tier prices and at premium prices. What that allows us to do is capture share from some of our price point competitors without having to discount our premium offering. And so we’re picking up incremental unit market share at good margin and not sacrificing margin on the premium side of the house as we continue to grow there as well. So a two tiered offering strategy through our product line extensions. Matt mentioned that we participate.

We fund our own internal development. We’re increasing and relying on partnerships as well. I’m sorry that was on the previous call you mentioned that I’m mixing calls Matt. We rely on partnerships as well to accelerate our new product development and new products to market as a business. I mentioned M and A earlier.

We have a three pronged three pillar strategy in M and A. I’ll focus on the two pillars because that’s where we’re focusing our the majority of our efforts. Our priority is to defend and grow our cleaning core. That’s our core $9,000,000,000 TAM with our 14% share. We are primarily focused on adding products.

So product OEMs to our existing portfolio where we think our brand equity, our channel reach and our aftermarket service can accelerate growth for us and in those segments. We’re also looking at adding channel. So where we can buy out distribution partners to establish a direct presence in a given geography that can be an attractive value creation and growth lever for us. We announced our TCS acquisition in the first quarter of twenty twenty four that’s going very well for us. That was an acquisition of a master distributor in Eastern Europe that now gives us a direct sales and service footprint in places like Romania and Czech Republic and Hungary and Austria where there are smaller geographies growing at a more rapid rate and quickly modernizing their cleaning applications.

Acquiring that space also gives us the opportunity to service pan regional accounts that have locations across those geographies in Eastern Europe. Our pillar is around driving value for connected autonomy. I mentioned how important and interesting our disruption to robotics is to the business. We are opening our aperture to make sure that there’s an opportunity to acquire technology in the space of autonomy connected autonomy or robotics that will enable us to accelerate the adoption of robotics. We want to thoughtfully consider those.

I mentioned earlier that we negotiated exclusivity with Brain Corp. We announced that in the first quarter of last year. The underpinning of that, we took an equity stake in Brain Corp, a minority equity stake that unlocked all of this commercial advantage for us from an exclusivity standpoint, from a go to market standpoint, from participating in the ARR. And so while it’s not academically it wasn’t an acquisition, but I would say taking an equity stake in a strategic partner to gain commercial advantage, I would view that as putting our capital to work to create value for the enterprise. And so we count that within our M and A actions.

And last but not least, we are monitoring some adjacent equipment categories, mobile equipment categories to see if there’s something interesting for the rest of action. It’s a lower priority for us, but we are monitoring those spaces to see if something is interesting over long term. With that Steve, think I’ll turn it back to you and see if the group has any questions.

Steve Furrazzani, Analyst, Sidoti: Great. Dave, thanks so much for that informative presentation. We do have several questions in the queue already. We do have ten minutes remaining, so I’ll remind everyone. If you do have a question, press that q and a button at the bottom of your screen, and we’ll get to as many as we can.

question is regarding AMRs. You had a you didn’t you I don’t think you cited in the presentation, but you did have a nice press release hitting a milestone a couple weeks ago regarding the 10 robotic scrubber you’ve sold. Can you talk about general demand for the AMRs right now? And let me ask on top of that, I believe U. S.

Deliveries for the X6 just started this quarter. Can you talk about what your early signs around the X6?

Dave Hummel, President and CEO, Tennant Company: Yes. Thanks, Steve, the question. And we did reach an important milestone having shipped our 10 units since we started in robotics about five years ago. It’s a milestone along a mile marker along the way. I think the other compelling points about our AMR business, this business cumulatively is over $250,000,000 in revenue, profitable revenue, growing nicely.

We sold $75,000,000 worth of AMR in prior year full year 2024. So we think we’ve got demonstrated not only growth but good momentum. We’ve committed to growing this business to $100,000,000 plus by 2027 from a run rate perspective and I think that’s well within our grasp. 10,000 units is an impressive number. To give you a sense of the makeup of that 10,000 units, it’s to over 900 individual customers across 25 countries.

And so this was not just we did go public with the fact that we landed Walmart. We continue to Walmart continues to reorder from us. They’re important big customer. There’s only one Walmart in the world. And so we’re glad to have them, but we are selling to a vast array of customers beyond kind of the big flagship customers with some significant wins.

And I think we referenced this in the first quarter, we deployed AMR to TJ Maxx and there’s a sort of a mass retailer that’s moving into robotics. It gives you an example of kind of the sort of customers. We’re also selling robotics successfully into industrial customers, people that have run manufacturing operations or warehousing logistics operations. So yes, listen we’re really pleased about the progress. I’m proud of what we’ve accomplished.

I yearn to grow this business because the value proposition to customers is just so compelling. And virtually everyone we talk to has labor challenges this space of cleaning. We think there’s nothing but upside for us as we go forward with AMR. One more comment I’ll make on AMR. Launched we commented on this on the call.

In addition to the product and we’re really excited about our product especially the X4 and X6. Steve you asked about the X6. We have shipped customer units. We’ve sold customer units and we booked orders under what we call our Clean three sixty program. And what a Clean three sixty program is, is you think about it as robots as a service.

So we offer the customer the opportunity to pay one monthly price embedded in that price is the robot, the navigation software subscription and a service maintenance contract one price per month for the customer with a 90% uptime guarantee. So one of the questions I get is, hey, what are you doing to try to drive adoption of robotics with your customers? We’ve got great products. They perform safely, reliably, really deliver a great outcome. We’re getting better and better with that performance with the X platform.

Now we’ve got a business model that says if the CapEx was a hurdle, coming up with the cash to put into robotics, so you’re hesitant to make the CapEx, you can move into a clean three sixty type program where now you have a known monthly operating expense with an uptime commitment from tenant company to keep the machine available for use which gives you a better guarantee you’re going to get the return on your investment. So I think the Clean three sixty bundle is an interesting and really important part of accelerating adoption.

Steve Furrazzani, Analyst, Sidoti: Is that just essentially a lease to buy type situation or how does that work?

Dave Hummel, President and CEO, Tennant Company: It’s a you can think about it as a fair market value lease as far as the mechanics of it underneath it. But from what we’ve heard from customers is it’s appealing to them. They like the idea of having a known cost to operate the robot on a monthly basis and then they can bake that into their operation and it just flows as an operating expense. So they don’t they won’t get any surprises.

Steve Furrazzani, Analyst, Sidoti: Got it. Got it. Okay. And X6 adoption so far, can you give any sense how it compares to other past launches at this point? Or is it too early?

Dave Hummel, President and CEO, Tennant Company: Yes. Well, it’s good. We’re not public with any of the early wins, but I would tell you that what we’ve learned around robotics is it’s great to have some co development partners as you’re developing the product. In this case we’re working with some really large co development partners and we expect them to we expect that we’ll win some larger deployments here and be able to announce those shortly with those partners. Beyond that the excitement is really high because the X6 can kind of fit large scale retail formats because it can clean 75,000 square foot on a charge on one battery charge.

That’s a big operation. So it’s appealing to sort of large scale retail as well as manufacturing, warehousing, logistics, where the X4 Rover was a bit undersized for industrial. So our industrial selling organization is really excited about it there and I’ll beat the bushes. The pipeline of opportunity looks really solid.

Steve Furrazzani, Analyst, Sidoti: Excellent. Excellent. Do have a question. I know this has come up quite a bit over the last couple quarters. And if if you could just explain it to everybody.

The question is you had stated a growth tar revenue growth target of three to 5%. Obviously, q one was soft, which you had clearly indicated multiple quarters ago. And this also ties into how you’re reporting backlog. If you can just walk through quickly the issues there so people can who might be new to this can understand why this year is a little bit different.

Dave Hummel, President and CEO, Tennant Company: Yes. Thanks, Steve. It really is a headline about overcoming a backlog reduction hurdle from prior year. We shipped coming through the supply chain challenges, we amassed about $327,000,000 worth of backlog and we’re 1.3 business. So that was a big backlog to work down.

We worked that backlog down $150,000,000 of it in 2023 dollars $125,000,000 worth of it in 2024. I’d say in 2024, we’re back to normal lead times and we’re no more backlog to work down. Great position to be in from a company because now we can take orders ship reliably within a stated lead time, competitive lead times. The downside is from an enterprise perspective we’re up against that 125,000,000 backlog reduction benefit we got in 2024. That benefit well $50,000,000 of that benefit was in Q1 of twenty twenty four.

So we had to overcome that $50,000,000 in Q1. That becomes less of a hurdle as we go through Q2, Q3 and Q4, but it still means we’re up against that backlog reduction benefit in prior year quarter and on a full year basis. So I know just at surface level we show negative year over year sales growth. It’s entirely because of overcoming the backlog reduction challenge in 2024. Underneath our guidance what it will take to deliver and we’re confident we can deliver on guidance.

We need to drive order rates between 56%. So when you think about when you do the math and look at what do they need to do to deliver on guidance, we’ve got to grow this business at the high end of our long term commitment of 3% to 5% to deliver on guidance. So early returns are good. We came through Q1 with about a 13% quarter over quarter order increase. The comp was a bit easier on 2024, but we’re still high single digits if you account for the comp.

And then the pipeline looks strong. I would tell you based on all the negativity in headlines and all the reasons to be concerned about demand, we’re monitoring our demand signals very closely and we’re talking to all of our customers and we don’t yet see storm clouds on the horizon and we don’t see any signals of softening demand. So we’re full steam ahead from an order growth perspective.

Steve Furrazzani, Analyst, Sidoti: Excellent. Excellent. That’s good news. Quite a few questions around the balance sheet and use of it in terms of you obviously have that very large revolver and a nice cash position. Can you talk about capital allocation?

And in more detail, I wanna mention the the the February 25 announcement around the authorization of the 2,000,000 share buyback program, which is, what, 10% plus of your float. You haven’t traditionally been big repurchaser of shares, but your balance sheet is in such great shape. Can you talk about how you’re balancing those now?

Dave Hummel, President and CEO, Tennant Company: Yes. Let just give you a thumbnail on our capital allocation strategy and then specifically around the share authorization. We have a really disciplined capital allocation prioritization. Job number one is to fund the business. We think that offers the highest reward, lowest risk.

We’re not a capital intensive business and we need about $20,000,000 $25,000,000 back into the business. That’s pretty evenly spread between R and D and back into the manufacturing plant to drive productivity and efficiency and R and D to fund our new product innovation. The next priority is around for capital allocation, our dividend payment. We’re a strong dividend payer and we’ve grown dividends over fifty plus years. And so we want to make we think that’s value expected from our shareholder base and just good hygiene.

So we want to maintain our ability to pay dividends and grow our dividends. We want to be good stewards of the capital and manage our debt. We target leverage kind of between one percent to 2%, 1% to 1.5%. We’re at 0.6 debt leverage now, which we think is appropriate given not only sort of the market, but also our aspirations. We want to maintain borrowing power to go out and do what we want to do, be in control of our own destiny.

And then the final facets of our capital allocation priorities are M and A. I talked a little bit about our M and A priorities. We think M and A is a higher priority than share buybacks. But if we can’t find a deal within a reasonable timeframe and our outlook over the next quarter or two would indicate we’re not going to have a deal to invest in and our stock price is a value then we’re going to buy back shares. At a minimum we want to offset dilution from shares issued to management.

But in recent times our stock has been a bit depressed and we think unfairly so. And so we think it’s a good value creation lever. We bought back 20,000,000 in shares for to come to the first quarter and we’ll remain active and disciplined around share buybacks. Again, if M and A isn’t readily available to put the capital to work share buyback is a great secondary alternative to create value for shareholders. The share authorization was really just to put us in a position to be in control of our own destiny.

We had remaining shares on authorization. We talked to our board and we aligned that we want to have we don’t want to have to wait in order to execute against our organic and inorganic value creation levers. So we’ve got our debt in line low debt, high borrowing power, high leverage. We’ve got the share authorization in place. If we have to go share buyback, we don’t have to go to the board for approval.

We’re a strong cash generator. We’re going to grow organically that creates the cash to fund the whole thing. The stars have aligned and it’s important to me that we have all of the arrows in the quiver. We don’t have to scramble if we want to go do And so we’ve got a disciplined capital allocation priority. We’ve got the firepower to do it and the balance sheet is in really good shape as well.

So I think we’re well positioned to execute.

Steve Furrazzani, Analyst, Sidoti: Fantastic. I know we’re just about out of time, Dave. Any closing thoughts before we wrap this up?

Dave Hummel, President and CEO, Tennant Company: My closing thought is, listen, I’m really optimistic for the future. I think that we’ve got fantastic opportunities. I’m really proud of the team. I think we’ve the right talent on the field as well as kind of coaches on the sidelines and our board is maybe the owners in the skybox. But I think we’re in a really good position to go out and deliver on the commitments we’ve made as a company.

I think the future is really bright for Tennant Company.

Steve Furrazzani, Analyst, Sidoti: And I know that I didn’t get to there are a lot of really good questions, Dave. Sorry. I wasn’t able to get to all of them in the time allowed. Certainly, you can forward the questions to us at Sidoti. I’m happy to send it to the team at Tennant or contact them directly.

I’m sure they’ll they’ll they’ll respond because there are quite a few good questions and a lot of interest, Dave. So good luck on on

Dave Hummel, President and CEO, Tennant Company: on Appreciate that. And thank you. And just a plug, Steve, you do a great job covering the company and have a depth of knowledge that that would really be informative and helpful to anyone interested in learning more. I would I would refer them back to many of your reports.

Steve Furrazzani, Analyst, Sidoti: Great. Thanks so much. Dave Hummels, President and CEO of Talented Company, thanks so much for being here and enjoy the remainder of the conference. Thanks, Dave.

Dave Hummel, President and CEO, Tennant Company: Thank you all.

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