Tennant, the maker of industrial- and commercial-cleaning equipment and products, saw its second-quarter revenue decline 28.6% as the pandemic upset sales in all its global regions. However, expense-reduction measures were effective in limiting the same level of decline in net earnings.
Tennant's President and CEO Chris Killingstad struck a more upbeat note by saying sales trends had started to improve.
"We are encouraged with the trend we saw in the quarter as the decline in revenue was significantly less in June than in the earlier months of the quarter," Killingstad said in a news release.
The company earned $14.3 million, or 77 cents per share, off from the $14.8 million, or 81 cents per share in the same period last year. Adjusted earnings for the quarter were 96 cents per share, down from $1.35 in the second quarter of 2019.
The adjusted earnings exceeded the consensus estimate of 20 cents among four analysts.
During the quarter the company took significant cost-saving maneuvers including staff furloughs, reduced work hours and pay reductions for leadership and board members. Reduced travel and cuts to nonessential and project spending also helped trim expenses by $15 million in the quarter.
Killingstad noted that he doesn't expect to repeat those same cost savings in the third and fourth quarters.
"While our profitability measures for the second quarter reflect some considerable cost savings that we do not expect will repeat in subsequent quarters, they are consistent with our overall commitment to successfully manage through this period of uncertainty," Killingstad said in the release.
For the quarter, sales were $214 million, down 28.6% from the $299.7 million in the second quarter of 2019. Sales were down 32.3% in the Europe, Middle East and Africa region; down 28.1% in the Americas; and down 21.8% in the Asia-Pacific region.
The company withdrew financial guidance for 2020 earlier this year and, citing continued uncertainties, has not reinstituted guidance. Shares of Tennant closed Thursday at $66.46, down 4.5%.