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TNC, Tennant Company

Tennant, Tennant Company, headquartered in Eden Prairie, Minnesota, is a world leader in designing, manufacturing and marketing of solutions that help create a cleaner, safer and healthier world.

Throughout its history, the Company has remained focused on advancing its industry by aggressively pursuing new technologies and creating a culture that celebrates innovation.

Our commitment to innovation and excellence extends across every aspect of our business—from product development and customer service to manufacturing and marketing.

Latest annual: FY2025 10-K

TNC · Tennant Company

The business

What it sells, where the money comes from, the kind of company it is.

Revenue · FY2025

$1.2B

−6.5% YoY · 4% 5-yr CAGR

Vital signs · TTM, with 5-yr average

Revenue $1.2B 5-yr avg $1.2B

Gross margin 39% 5-yr avg 41%

Operating margin 4.4% 5-yr avg 8.5%

ROIC 5% 5-yr avg 12%

Owner-earnings margin 1% 5-yr avg 4%

Free cash flow margin 1% 5-yr avg 4%

The business in brief

read the 10-K →

What this business is and what moves its needle, from its own SEC filings.

What it is: Revenue is Equipment (59%), Parts and consumables (23%) and Service and other (18%).
What moves the needle: Gross margin has run about 40% and operating margin about 6.4% through the cycle, a solid spread between what it charges and what the product costs to make. The operating margin has swung widely — from 3.3% to 11% — on a steadier 40% gross margin, so what moves it sits below the gross line, in operating spend and one-off charges more than in the cost of the product itself. Inventory runs near 13% of sales, so how fast it turns back into cash — and the risk of writing it down when demand softens — sits alongside the margin. Read this kind of business on the capital-goods cycle and the aftermarket. On its own account, the filing leans hardest on pricing power & competition, set against the numbers in what the filing emphasizes, below.
Is it a good business?: Return on capital has sat near the cost of capital (median 10%). By owner earnings: roughly 5% of revenue reaches owners as cash, consistently. This is price-taker territory, where the balance sheet and the cycle matter more than any multiple; the rest is in the 10-K.

Every line is arithmetic on the company's filings, shown in full in the sections below.

Where the money comes from

read the 10-K →

Revenue spreads across 3 lines, the largest Equipment at 59%.

Revenue by product line, FY2025

Equipment59%$715M
Parts and consumables23%$276M
Service and other18%$213M

By geographyUnited States56%EMEA28%Other Americas10%Asia Pacific6%

From the segment footnote of the company's own 10-K. Shares are of total revenue; the profit bar shows each segment's share of segment operating profit, before unallocated corporate costs.

The record

Ten years of arithmetic, read across the cycle.

The record, 2016–2025

realized figures from each filing · older years to the left

2016’16	2017’17	2018’18	2019’19	2020’20	2021’21	2022’22	2023’23	2024’24	2025’25	TTMTTMMar 2026
											Income statement
$809M	$1.0B	$1.1B	$1.1B	$1.0B	$1.1B	$1.1B	$1.2B	$1.3B	$1.2B	$1.2B	RevenueRevenue
43%	40%	40%	41%	41%	40%	39%	42%	43%	40%	39%	Gross marginGross mgn
31%	33%	32%	31%	31%	30%	28%	28%	30%	31%	32%	SG&A / revenueSG&A/rev
4%	3%	3%	3%	3%	3%	3%	3%	3%	3%	3%	R&D / revenueR&D/rev
$68M	$33M	$58M	$72M	$64M	$94M	$87M	$139M	$114M	$68M	$54M	Operating incomeOp. inc.
8.4%	3.3%	5.2%	6.3%	6.4%	8.6%	8.0%	11.1%	8.9%	5.7%	4.4%	Operating marginOp. mgn
$47M	($6M)	$33M	$46M	$34M	$65M	$66M	$110M	$84M	$44M	$31M	Net incomeNet inc.
30%	—	6%	15%	18%	12%	17%	12%	20%	24%	26%	Effective tax rateTax rate
											Cash flow & returns
$58M	$54M	$80M	$72M	$134M	$69M	($25M)	$188M	$90M	$65M	$34M	Operating cash flowOp. cash
$18M	$26M	$32M	$32M	$33M	$33M	$33M	$36M	$40M	$45M	$46M	DepreciationDeprec.
($11M)	$28M	$6M	($18M)	$62M	($38M)	($132M)	$31M	($46M)	($34M)	($51M)	Working capital & otherWC & other
$27M	$20M	$19M	$38M	$30M	$19M	$25M	$23M	$21M	$22M	$18M	CapexCapex
3.3%	2.0%	1.7%	3.4%	3.0%	1.8%	2.3%	1.8%	1.6%	1.8%	1.5%	Capex / revenueCapex/rev
$40M	$34M	$61M	$34M	$104M	$50M	($50M)	$166M	$69M	$43M	$16M	Owner earningsOwner earn.
4.9%	3.4%	5.4%	2.9%	10.4%	4.6%	−4.6%	13.3%	5.3%	3.6%	1.3%	Owner earnings marginOE mgn
$31M	$34M	$61M	$34M	$104M	$50M	($50M)	$166M	$69M	$43M	$16M	Free cash flowFCF
3.9%	3.4%	5.4%	2.9%	10.4%	4.6%	−4.6%	13.3%	5.3%	3.6%	1.3%	Free cash flow marginFCF mgn
$13M	$354M	$0	$20M	$0	$0	$0	$0	$26M	$3M	$10M	AcquisitionsAcquis.
$14M	$15M	$15M	$16M	$16M	$18M	$19M	$20M	$21M	$22M	$22M	Dividends paidDiv. paid
$13M	$0	$0	$0	$0	$15M	$5M	$22M	$20M	$89M	—	BuybacksBuybacks
19%	—	9%	10%	9%	14%	10%	18%	13%	7%	5%	ROICROIC
17%	-2%	11%	13%	8%	15%	14%	19%	13%	7%	6%	Return on equityROE
12%	−7%	6%	8%	4%	11%	10%	15%	10%	4%	2%	Retained to equityRetained/eq
											Balance sheet
$58M	$58M	$86M	$75M	$141M	$124M	$77M	$117M	$100M	$106M	$83M	Cash & investmentsCash+inv
$145M	$203M	$208M	$217M	$200M	$211M	$252M	$248M	$259M	$257M	$281M	ReceivablesReceiv.
$79M	$128M	$135M	$150M	$128M	$161M	$207M	$176M	$184M	$199M	$205M	InventoryInvent.
$47M	$96M	$98M	$94M	$106M	$122M	$126M	$111M	$127M	$128M	$123M	Accounts payablePayables
$177M	$235M	$245M	$273M	$221M	$251M	$332M	$312M	$316M	$328M	$362M	Operating working capitalOper. WC
$298M	$423M	$469M	$481M	$494M	$527M	$575M	$569M	$577M	$600M	$611M	Current assetsCur. assets
$133M	$237M	$249M	$275M	$254M	$290M	$262M	$274M	$292M	$293M	$289M	Current liabilitiesCur. liab.
2.2×	1.8×	1.9×	1.7×	1.9×	1.8×	2.2×	2.1×	2.0×	2.0×	2.1×	Current ratioCurr. ratio
$21M	$186M	$183M	$195M	$208M	$193M	$182M	$187M	$186M	$209M	$210M	GoodwillGoodwill
$470M	$994M	$993M	$1.1B	$1.1B	$1.1B	$1.1B	$1.1B	$1.2B	$1.3B	$1.3B	Total assetsAssets
$36M	$377M	$355M	$339M	$323M	$272M	$306M	$207M	$201M	$274M	$359M	Total debtDebt
($22M)	$318M	$269M	$264M	$182M	$148M	$228M	$90M	$101M	$168M	$276M	Net debt / (cash)Net debt
53.4×	1.3×	2.5×	4.0×	3.7×	12.8×	—	—	—	—	7.3×	Interest coverageInt. cov.
$279M	$297M	$314M	$360M	$405M	$434M	$471M	$577M	$621M	$602M	$531M	Shareholders’ equityEquity
0.5%	0.6%	0.7%	1.0%	0.6%	0.9%	0.7%	0.9%	0.9%	0.9%	0.7%	Stock comp / revenueSBC/rev
											Per share
18.0M	17.7M	18.3M	18.5M	18.6M	18.8M	18.7M	18.8M	19.1M	18.6M	17.8M	Shares out (diluted)Shares
$44.98	$56.69	$61.26	$61.65	$53.72	$57.87	$58.41	$66.21	$67.38	$64.77	$68.04	Revenue / shareRev/sh
$2.59	$-0.35	$1.82	$2.48	$1.81	$3.44	$3.55	$5.83	$4.38	$2.36	$1.74	EPS (diluted)EPS
$2.22	$1.91	$3.34	$1.82	$5.58	$2.65	$-2.68	$8.82	$3.60	$2.33	$0.92	Owner earnings / shareOE/sh
$1.74	$1.91	$3.34	$1.82	$5.58	$2.65	$-2.68	$8.82	$3.60	$2.33	$0.92	Free cash flow / shareFCF/sh
$0.80	$0.85	$0.83	$0.87	$0.87	$0.93	$1.01	$1.07	$1.12	$1.18	$1.22	Dividends / shareDiv/sh
$1.48	$1.15	$1.03	$2.08	$1.60	$1.03	$1.34	$1.21	$1.09	$1.17	$1.01	Cap. spending / shareCapex/sh
$15.50	$16.76	$17.14	$19.50	$21.72	$23.01	$25.18	$30.72	$32.51	$32.38	$29.83	Book value / shareBVPS

Per-share growththe realized rate an owner's share compounded

	9-yr	5-yr
Revenue / share	+4.1%/yr	+3.8%/yr
Owner earnings / share	+0.5%/yr	−16.0%/yr
EPS	−1.1%/yr	+5.4%/yr
Dividends / share	+4.5%/yr	+6.1%/yr
Capital spending / share	−2.6%/yr	−6.2%/yr
Book value / share	+8.5%/yr	+8.3%/yr

The record, charted

FY2016–2025

Each measure over its full record; the current point and the worst year marked.

Share count

19Mpeak FY2024

ROIC

7%low FY2025

Gross margin

40%low FY2022

Net debt ÷ owner earnings

3.9×peak FY2017

Owner earnings vs. net income

Owner earningsNet income

The accountant's number, and the cash an owner can take; the gap is the tell.

$43Mowner earningsvs.$44Mnet incomelow FY2022

Where the cash went

ReinvestBuybacksDividendsAcquisitionsRetainedBeyond op. cash

Each year's outlays against its operating cash: the mix, and how it drifts. The hatched cap is spending beyond that year's operating cash — financed from the balance sheet or borrowing, not operations.

FY2016FY2025

Owner-earnings bridge

FY2021–FY2025cash-flow statement, SEC EDGAR →

Net income is the accountant's number; owner earnings is the cash an owner could take out. The walk between them, off the cash-flow statement, and whether the gap is widening or holding.

In fiscal 2025 the business reported $44M of profit but $43M of owner earnings: $500K less than the profit line, taken out by capital spending and the timing of cash.

Reported net income$44M

Owner earnings$43M · 4% of revenue

	FY2025	FY2024	FY2023	FY2022	FY2021
Reported net income	$44M	$84M	$110M	$66M	$65M
Depreciation & amortizationnon-cash charge added back	+$45M	+$40M	+$36M	+$33M	+$33M
Stock-based compensationreal costnon-cash, but a real cost	+$10M	+$12M	+$12M	+$8M	+$10M
Working capital & othertiming of cash in and out, other non-cash items	−$34M	−$46M	+$31M	−$132M	−$38M
Cash from operations	$65M	$90M	$188M	($25M)	$69M
Capital expenditurecash put back in to keep running and to grow	−$22M	−$21M	−$23M	−$25M	−$19M
Owner earnings	$43M	$69M	$166M	($50M)	$50M
Owner-earnings marginowner earnings ÷ revenue	4%	5%	13%	-5%	5%

Owner earnings is the cash an owner could pull out without starving the business: operating cash less the capital it must spend to hold its position . The cash-flow statement also adds stock comp back as non-cash, but it is a real cost paid in shares; counted as the expense it is (less $10M), owner earnings is nearer $33M.

Much of fiscal 2025's profit didn't arrive as operating cash; it sits in “working capital & other” above. That can be a real inventory or timing swing, or profit that doesn't run through operating cash at all: a heavy tax year, equity-method earnings, or investment income booked through investing. For a year like this, owner earnings understates the cash earned; the full cash-flow statement carries the rest.

Maintenance capex is estimated as depreciation where a growing business invests above it; free cash flow is the figure the scorecard's free-cash margin reads.

III

Quality & stewardship

Returns, the balance sheet, capital allocation, and pay.

Owner’s Scorecard

FY2025 10-K · source on SEC EDGAR →

Will it survive?

Can it pay its interest? 9.4×

Comfortable

Operating income $68M ÷ interest expense $7M

What this means
Operating profit covers interest with the kind of margin Graham wanted for a defensive holding. Necessary, not sufficient, it says solvent, not cheap.
How heavy is the debt, net of cash? $168M · 2.5× operating profit

Meaningful net debt

Cash $106M − debt $274M

What this means
Netting $106M of cash and short-term investments against $274M of debt leaves $168M owed, about 2.5× a year's operating profit (4.0× on the gross debt, before the cash). Net debt is the leverage figure that matters: the cash is already set against the debt. Strategic or illiquid investments aren't counted here.
How long is cash tied up? 114d

Long (60+ days)

DSO 78 + DIO 101 − DPO 65 days

What this means
Days cash is tied up between paying suppliers and collecting from customers. Lower is better; a long cycle means growth itself eats cash.

Is it a good business?

Return on invested capital 10%

Solid through the cycle

9-yr median, range 7%–19%; 7% latest = NOPAT $52M ÷ invested capital $769M

Industry peers: median 10%

What this means
The rate the business earns on the money tied up in it, Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; a return below the cost of capital (~8%) erodes value as a business grows rather than building it — the test Buffett weighs most. The headline is the median of the last 9 years (it ran 7% most recently), so one peak or trough year doesn't set the verdict. Asset-light businesses (R&D expensed, little capital) read artificially high, pair this with Owner Earnings.
Owner-earnings margin 4%

Thin, recently turned positive

latest $43M = operating cash $65M − maintenance capex $22M; positive each of the last 3 years, after an earlier loss stretch (10-yr median 5%)

Industry peers: median 10%

What this means
What an owner could take out without starving the business: operating cash less the maintenance capital it must spend to hold its position — Buffett's owner earnings. That's 4% of revenue this year, a 5% median across 10 years. Treating stock comp as the real expense it is (less $10M of SBC) leaves $33M.
Are earnings backed by cash? 1.48×

Cash-backed

Cash from ops $65M ÷ net income $44M

What this means
How much of reported profit showed up as operating cash. Above 1× is reassuring; well below suggests earnings lean on accruals. One year is noisy, growth and working-capital swings distort it, and this is operating cash, not free cash. Watch the multi-year trend.

How is the cash used?

Where do the earnings go? 255%

Returned more than it generated

Dividends + buybacks $110M ÷ Owner Earnings $43M

What this means
The company returned more than it generated: against $43M of Owner Earnings, $110M (255%) went back to shareholders, $22M dividends, $89M buybacks — the excess came from the balance sheet or borrowing, not the year's operations. Net of $10M stock comp, the real buyback was about $78M. Sustained, that pattern draws down cash or adds debt; the net-debt line above shows where it stands.
Investing or harvesting? 0.48×

Harvesting

Capex $22M ÷ depreciation $45M

What this means
Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.

Graham’s defensive tests · 4 of 6 met

Graham’s numerical criteria for the defensive investor (The Intelligent Investor, ch. 14), run on the filings. A floor of safety, not a buy signal; many fine modern businesses fail his strictest liquidity rules by design.

Adequate size Near

Revenue ≥ $2B · $1.2B

What this means
Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.
Strong liquidity Pass

Current ratio ≥ 2× · 2.05×

What this means
Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.
Conservative debt Pass

Debt ≤ working capital · $274M vs $307M WC

What this means
Graham's rule that borrowings not exceed net current assets. Capital-heavy and buyback-heavy firms routinely fail it, read it next to interest coverage, not alone.
Earnings stability Near

A profit every year (10-yr record) · 1 loss year

What this means
Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.
Dividend record Pass

Uninterrupted dividends · paid every year (10)

What this means
An unbroken dividend was Graham's mark of durability. He wanted twenty years; the filings show about ten, and a single suspension breaks the streak. Non-payers, many fine modern compounders, fall outside his defensive net by design.
Earnings growth Pass

Earnings +33% over the record · +221%

What this means
At least a third more earnings than a decade ago, averaging three years at each end. Net income (not per-share), so stock splits don't distort it, buybacks and dilution show up in the share-count line instead.
Moderate price —

P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price

What this means
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Three-year average earnings are $4.64/share (latest year $2.57), the averaged base the calculator's gate runs on, and book value is $35.31/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.

Durability & moat, 2016–2025

Whether the record’s returns held, and what the capital reinvested earned.

Profitable years 9 of 10

What this means
Lost money in 1 year(s), look at what happened there before trusting the average.
Return on capital ≥ 15% 2 of 10 yrs

What this means
A moat shows up as a high return on invested capital that holds year after year, not one good vintage.
Operating margin 6% → 9% (3-yr avg ends)

In the filing’s words The words confirm the number: the filing says price increases held their volume, and the margin widened with them — Buffett’s strongest mark of pricing power.

What this means
Through the cycle the operating margin widened — about 6% early to 9% lately, median 6% — pricing power intact or improving.
Reinvestment, incremental ROIC 20%

What this means
Every extra dollar the business reinvested came back at a high incremental return — the lens GBM read for a moat that reinvests rather than merely harvests. The record and the 10-K are where you check whether the rate holds.
Owner earnings growth +5%/yr

What this means
Owner earnings grew about 5% a year over the record.
Worst year 2017 · 3.3% op. margin

What this means
Stayed profitable even in its hardest year, the resilience that survives recessions.
Share count +0.4%/yr

What this means
Roughly flat share count, little dilution, little buyback.
Dividend record rising

What this means
Paid and raised the dividend across the record, the continuity Graham prized.
How management talks about it Promotional

What this means
The record is compounding, but the filing leans on a promoter’s vocabulary rather than the per-share, return-on-capital terms an owner uses. The results back the talk here; the register is still worth noting.

Does AI threaten the moat?

Low contestability

The moat is physical, regulated or balance-sheet-funded, the kind AI cuts costs within but does not contest.

AI is unlikely to contest a moat that is physical, regulated or balance-sheet-funded; here it reads more as a cost tool than a threat.

Read from the filing's own risk factors, paired with the industry's structure under its SIC code; the durability is read above, the price below.

All figures as filed; the source filing is linked above.

Current Position

as of the latest quarter, Mar 31, 2026

Can the business pay what it owes this year, off the freshest balance sheet: the quality of the assets, the debt actually coming due, and what a low ratio means here.

Current assets$611M

Cash & short-term investments$83M
Receivables$281M
Inventory$205M
Other current assets$43M

Current liabilities$289M

Debt due within a year$400K
Accounts payable$123M
Other current liabilities$165M

Current ratio2.12×all current assets ÷ what's due · Graham looked for 2×

Quick ratio1.41×stricter: inventory excluded

Cash ratio0.29×strictest: cash alone against what's due

Working capital$323Mthe cushion left after near-term bills

Debt due this year vs. cash$400K due · $83M cash covered by cash on hand, no refinancing forced · both figures from the Mar 31, 2026 balance sheet

Revenue, latest quarter vs. a year ago+2.7%the freshest read on whether the business is still growing

Current ratio, recent quarters2.2× → 2.1×

Deeper floors

Tangible book value$269Mequity stripped of goodwill & intangibles

Net current asset value($133M)Graham's net-net: current assets less all liabilities

Debt incl. operating leases$330M$56M of it operating leases

Deferred revenue$20Mcustomer cash collected before delivery; operating float

From the company's latest filing.

Debt maturity

the debt note, SEC EDGAR →

Not how much it owes, but when it falls due, and against what. The ladder the company files, beside cash on hand and a year's owner earnings.

'26$400K

'27$400K

'28$200K

'29$273M

'30$0

Bars scaled to the largest single year.

Due in the next 12 months$400Kthe first rung: what must be repaid or rolled over within the year

Within two years$800Kthe near wall, the part most exposed to today’s credit conditions

Biggest single year$273Min 2029the lumpiest maturity, where a refinancing, if needed, is largest

Due over the next five years$274Mthe near slice; the balance sheet carries $274M of debt in all

Against what the business has and earns

Cash & short-term investments, Mar 31, 2026$83M

One year of owner earnings (FY2025)$43M

Together, against $400K due next year314.8×

Cash on hand as of Mar 31, 2026 plus a year’s owner earnings comes to $126M against the $400K due in the twelve months after the Dec 31, 2025 schedule: 315 times it.

Maturity schedule extracted from the company’s Dec 31, 2025 annual report and reconciled to the balance-sheet debt.

How the cash was used, 2016–2025

Over the record, the business generated $785M of operating cash; how management split it reads as a balanced allocator, splitting cash between the business, owners, and the balance sheet.

Reinvested$244M · 31%
Dividends$177M · 23%
Buybacks$163M · 21%
Retained (debt / cash)$202M · 26%

Returned to owners$339M
62% of the owner earnings the business produced over the span, $177M as dividends and $163M as buybacks.
Source of fundingOperating cash
Operating cash covered reinvestment and returns; over the span debt rose $323M and cash and short-term investments rose $25M.
Average price paid for buybacks$73.46
Across the years where the filing reports a share count, 1M shares were bought for $42M, about $73.46 each.
Net change in share count−1.0%
The diluted count barely moved (18M to 18M): buybacks roughly offset the stock issued to staff.
Dividend record$1.18/sh
Paid in 10 of the years on record, the per-share dividend growing about 4% a year. It was never cut over the span.
Return on what it retained26%
Of the earnings it kept rather than paid out ($182M over the span), annual owner earnings (first three years vs last three) grew $48M, so each retained $1 added about 0.26 of yearly owner earnings. Buffett's test, run on owner earnings instead of market value.

Buybacks are gross of stock issued to staff; the share-count line above is the net of that, the figure that decides whether owners gained. The average price paid blends a year of purchases (and any accelerated repurchase), so it is close, not exact. The record of where the cash went and on what terms.

Acquisitions & goodwill

from the balance sheet & the 10-year cash-flow record

Goodwill grows only when a company acquires and falls only when it concedes it overpaid. The size of that bet, the cash put into buying rather than building, and how much has already been written off.

Goodwill & intangibles$261M21% of all assets; the premium carried on the balance sheet for businesses acquired

Against book equity35%goodwill is this share of book equity; the rest is the company’s own retained and paid-in capital

Cash spent acquiring$416Mover 10 years buying other businesses, against $244M of capital spent building

None written down over the record; the goodwill is still carried at full cost. That is the deals holding their value on the books so far; whether they keep doing so is the test an owner watches, since the write-down, when it comes, is the admission the price was too high.

Goodwill, acquired intangibles and equity from the latest balance sheet; acquisition spend and write-downs summed across the 10-year record, from the company's own filings.

Management, ownership & pay

read the proxy →

From the proxy: how much of the business the people running it own, and how they are paid, beside what the business earned for its owners in the same years.

Fiscal year	Chief executive	Pay, as filed	“Actually paid”	Owner earnings
2021	David W. Huml	$4.3M	$4.9M	$50M
2021	David W. Huml	$2.7M	$4.7M	$50M
2022	David W. Huml	$4.1M	$2.1M	($50M)
2023	David W. Huml	$5.5M	$11.5M	$166M
2024	David W. Huml	$5.1M	$3.6M	$69M
2025	David W. Huml	$4.7M	$2.3M	$43M

Both pay figures are the company’s own, from the pay-versus-performance table its proxy statement files. “As filed” is the Summary Compensation Table total: salary, bonus, and equity awards at their value on the day of grant. “Actually paid” is the SEC’s prescribed recalculation, which re-marks those equity awards to what they became as they vested; it can swing far above or below the filed figure in either direction, and negative years occur. Owner earnings are the whole business's, from the record above, for the same fiscal years.

Stock-based compensation$10M
The slice of the business handed to employees in shares this year, 1% of revenue, equal to 15% of operating profit. Buffett's oldest accounting fight: this is compensation, compensation is an expense, real whether or not the headline earnings admit it. One trap: the cash-flow statement adds SBC back, so the operating cash, and the owner earnings drawn from it, are flattered by exactly this amount; counted as the cost it is, what an owner keeps is lower.

Inverting the record

Invert: instead of why Tennant Company is a good business, the question is what would make owning it a mistake, and whether those marks are in the record. Disconfirming tests across 2016–2025.

2 of the 5 tests turned up something to look into; the other 3 came back clean.

Look hereDid debt outgrow the business?$36M → $359M
Debt rose from $36M to $359M while owner earnings went from about $45M to $93M — about 0.8 years of owner earnings in debt then, about 3.9 now: measured against what the business earns, the balance sheet carries more debt than it did. Debt raised for buybacks or deals rather than growth is the kind that bites in a downturn.
Look hereDid receivables and inventory outpace sales?28% → 40% of sales
Receivables and inventory grew from $224M to $485M while revenue grew 50%: working capital is climbing faster than sales (28% of revenue then, 40% now). That can mean customers paying slower, stock building up, or revenue pulled forward. The filing's cash-flow and receivables notes say which.

And these came back clean

Is it less profitable than it was?
Did the share count rise anyway?
Did reported profit become cash?

Each test is read from the filings and is noisy alone; a flag can mark a cyclical trough or a year of heavy investment as easily as a problem. The filing says which.

What an owner would ask, FY2025

read the 10-K →

Which reported numbers are a judgment call?
Management names Income taxes as critical estimates
each rests partly on management's judgment; the filing's note sets out the assumptionsverify →

The questions the record and the charts do not answer on their own; each carries the figure and the place to look.

Peers, Industrial Machinery

The same industry, side by side on owner economics. Each figure is a through-cycle median, so a peak or trough year can’t distort it; the group median at the foot is the line to read each against.

Company	Revenue	Gross margin	Op. margin	ROIC	Owner earn. margin
MIDDMiddleby	$3.2B	38%	16.9%	9%	15%
ALHAlliance Laundry Holdings Inc.	$1.7B	—	18.6%	—	9%
AAONAaon, Inc.	$1.4B	29%	15.8%	20%	10%
TNCTennant Company	$1.2B	40%	7.2%	10%	5%
CMCOColumbus McKinnon Corporation	$1.2B	34%	8.0%	5%	7%
HAYWHayward Holdings Inc.	$1.1B	45%	19.9%	9%	16%
KAIKadant	$1.1B	44%	14.0%	12%	12%
SXIStandex International Corporation	$790M	37%	11.9%	11%	7%
Group median	—	38%	14.9%	10%	10%

The price

What a price has to assume.

What the price implies

reverse-DCF

Type today's close and see the owner-earnings growth you'd have to believe to justify it, beside what Tennant Company has delivered.

Today’s price $

Through the cycle, Tennant Company earns about $57M on its 4.8% median owner-earnings margin. This year’s 3.6% margin runs below that; the reported figure may understate a lean year. Normalize, below, values the price on that through-cycle figure rather than the latest year.

Base Normalize · through-cycle ($57M) Net of stock comp (−$9M)

—

The assumptions Required return 9% Years of high growth 10 Terminal growth 2.5%

9.0% = the 4.55% 10-year Treasury (Jul 15, 2026) + 4.45 points of equity premium. The rate you require is yours to set.

Enter a price above to run it.

Implied by the price—

Owner-earnings growth · ’16→’25+6%/yr

Owner-earnings yield—

P/E (3-yr earnings ’23–’25)—

P/B—

Graham’s price gate—

Graham capped the multiple at 15×; Buffett and Munger let that rule go: a wonderful business can deserve 50× if the thesis holds. The gate marks the bargain-hunter's floor.

Against a high-grade bond: Graham’s yardstick bond yield%

Prefilled with the 10-year Treasury (4.55%, as of Jul 15, 2026). Edit it for today’s exact figure, or a AAA corporate yield.

Graham measured a stock against the bond you could own instead, the heart of his margin of safety. Enter a price above to weigh the owner-earnings yield against this bond.

Owner earnings $16M on 17M shares outstanding, per the 10-Q cover, as of 2026-05-01; net debt $276M. The if-converted diluted count is 18M, 4% above the shares outstanding: the dilution overhang (convertibles, options) a buyer inherits. The base is the latest year by default; Normalize values it on the through-cycle median owner-earnings margin (to avoid paying on a peak year). Net of stock comp treats option pay as the expense it is. The dials set the multiple a growth belief justifies; the price, and every dollar on this page, is yours.

Weigh TNC against another business →

The owners of TNC: the meeting and the votes →

Cite: Owner Scorecard, "Tennant Company (TNC), the owner's record," https://ownerscorecard.com/c/TNC, data as of 2026-07-09.

Manual order: ← TMUS its page in the Manual TNDM →

Industry order: ← TKR the Industrial Machinery chapter TRS →