Tennant Co.'s pursuit of environmentally friendly cleaning technology continued to pay off in the third quarter for the Golden Valley-based maker of floor scrubbing machines, boosting sales 9 percent and earnings 29 percent.
Wall Street took notice after the company posted the better-than-expected results Tuesday and raised its 2010 guidance, sending the shares up almost 10 percent for the day. The stock, which closed at $34.35 a share, was the fifth highest percentage gainer on the New York Stock Exchange.
The company reported earnings of $7.5 million, or 39 cents a share on sales of $168.6 million for the period ended Sept. 30. Analysts had estimated earnings per share of 30 cents and sales of $162.3 million for the period.
Tennant said sales of products introduced in the past three years generated about 46 percent of equipment sales during the quarter and about 40 percent year-to-date. That compares to the company's ongoing goal of 30 percent.
One such product, cleaning machines that use its chemical-free ecH2O technology, had record sales in the third quarter. The technology, introduced in 2008, electronically converts water into a powerful detergent. Sales of products using the technology have jumped from $17 million in 2008, to $50 million on 2009 to an expected range of $90 million to $100 million this year.
"We believe this technology is potentially relevant to a vast array of other applications that offer significant growth opportunities," said CEO Chris Killingstad. To continue to gain market share through ecH2O and other new products, the company plans to spend up to $26.6 million this year on research and development, up about $3 million from last year.
Tennant raised its full-year earnings guidance to a range of $1.25 to $1.35 per share on sales of between $655 million and $665 million. Previous guidance anticipated earnings in the range of $1 to $1.30 per share on sales of $645 million to $665 million. Tennant's 2009 earnings totaled 67 cents per share on sales of $596 million.
Susan Feyder • 612-673-1723