While the Tennant company saw an organic sales increase of more than 25% in the second quarter, it also saw its earnings dragged by increased labor, material and supply chain costs.
The Eden Prairie-based maker of industrial cleaning equipment and products still beat analysts' expectations for the quarter ended June 30.
"Tennant's second-quarter revenue results reflect the continuing market recovery we saw across our geographic markets," said Tennant Chief Executive Dave Huml in a news release.
The company reported revenue of $279.1 million for the quarter. Net profit was $9.8 million, or 51 cents a share, down from $14.3 million, or 77 cents a share, in the same period last year.
Adjusted earnings per share were $1.18, up from 96 cents last year, and 20 cents higher than analysts' estimates.
The 2020 results were driven by cost-saving initiatives because of the pandemic, including furloughs or reduced work schedules and government credits.
The company in this year's quarter experienced organic sales growth in each of its main geographic areas. The America's up 25.4%, Europe, Middle East and Africa (EMEA) up 40.2% and Asia-Pacific (APAC) up 9.6% compared to the same period last year.
Like other industrial manufacturers, the company continues to struggle with global supply chain issues but maintained its full-year guidance.
"We remain confident and committed to delivering our full-year guidance despite the current global supply-chain constraints and commodity inflation impacting our ability to fully meet the increase in customer demand," Huml added.
Huml told analysts on the company's earnings call that the supply chain shortages did impact the company's ability to fully meet customer demands.
For the full fiscal year, Tennant expects total organic revenue to grow 9% to 11% to $1.1 billion and full-year adjusted EPS of $4.10 to $4.50 per diluted share.
Shares of Tennant closed Tuesday at $77.91, down 1%. Over the past 52 weeks, shares have ranged between $57.99 and $87.40 per share.
