Despite record revenue in the second quarter, Tennant Co. lost $2.6 million because of costs associated with a worldwide restructuring and an acquisition that greatly expands its markets overseas.
"Our performance during the 2017 second quarter primarily reflected near-term operational headwinds mainly stemming from our first-quarter 2017 restructuring," said President and Chief Executive Chris Killingstad in a statement on Wednesday.
The company also closed on its $350 million acquisition of the Italian IPC Group — its biggest purchase to date — resulting in charges related to closing the deal and starting to integrate the business.
"IPC boosts our presence and market share in Europe and more than doubles Tennant's current [European, Middle East and Africa] business, and we are pleased with IPC's contribution at this early stage," Killingstad said.
During the first quarter, the Golden Valley-based cleaning products and solutions company announced a global restructuring that included a 3 percent decrease in Tennant's global workforce.
Killingstad told analysts on the company's earnings conference call that the company is in a period of transition but that it has the right strategies for profitable growth.
"We have more work to do as we move through this transition period," Killingstad said. "We remain committed to our core strategies and reaching important milestones."
Those milestones include $1 billion in annual sales and 12 percent or better operating profit margins.
