Tennant Company

Good morning. My name is Jesse, and I'll be your conference operator today. At this time, I'd like to welcome everyone to the Tenant Company's 2019 Third Quarter Earnings Conference Call. This call is being recorded. It will be time for Q&A at the end of the call. Please press star 1 if you'd like to ask a question. After the Q&A, please stay on the line for closing remarks from management. If you have joined our call today via telephone and logged into the conference call presentation on your computer, please mute the audio on your computer to avoid potential quality issues during the call. Thank you for participating in Tenant Company's 2019 Third Quarter Earnings Conference Call. Beginning today's meeting is Mr. William Preet, Director of Global Financial Planning and Analysis and Investor Relations for Tenant Company. Mr. Preet, you may begin.

Thank you, Jesse. Good morning, everyone, and welcome to Tenant Company's Third Quarter 2019 Earnings Conference Call. I'm William Preet, Director of Global Financial Planning and Analysis and Investor Relations. Joining me today are Chris Killingstad, Tenants President and CEO, Keith Woodward, Senior Vice President and CFO, Tom Stueve, Vice President and Treasurer, Andy Cibula, Vice President of Finance and Corporate Controller, and Mary Talbot, Senior Vice President and General Counsel. Today we will update you regarding our progress against our core strategies, our third quarter performance, and our four-year guidance. Chris will first brief you on our strategies and operations, and Keith will cover the financials. After our remarks, we will open the call up for questions. We are using slides to accompany this conference call. These slides, along with a replay of today's call, will be available on our investor relations website at investors.tenetco.com. Before we begin, please be advised that our remarks this morning and our answers to questions may contain forward-looking statements regarding the company's expectations of future performance. Such statements are subject to risk and uncertainties and our actual results may differ materially from those contained in these statements. These risks and uncertainties are described in today's news release and the documents we file with the Securities and Exchange Commission. We encourage you to review those documents, particularly our Safe Harbor Statement, for a description of the risks and uncertainties that affect our results. Additionally, on this call, we will discuss non-GAAP measures that include or exclude certain items, Our 2019 third quarter earnings release include a reconciliation of these non-GAAP measures to our GAAP results. Our earnings release was issued this morning via BusinessWire and is also posted on our investor relations website at investors.tenantco.com. Now, I'll turn the call over to Chris.

Thank you, William, and thanks to all of you for joining us today. Our third quarter results reflect our commitment to delivering consistent profitable growth in order to create long-term shareholder value. During the quarter, we once again delivered positive organic growth and EBITDA expansion while navigating mixed economic and market conditions worldwide. Specifically, our organic growth was 2.8% and we expanded EBITDA margins by 50 basis points over the prior year quarter to 11.2%. As we shared with you in previous quarters, is moving from a period of strategic expansion during which we extended our geographic footprint and addressable market. And we are now focused on unlocking the value and profitable growth potential of our broader platform. This will involve the balancing of reasonable growth with stronger EBITDA performance, which represents the core of the strategy we've been implementing. and we're encouraged that the initial results of that strategy can be seen in our performance thus far in 2019. And our year to date and third quarter results signal that we are on the right track as we move forward in improving our operating model. As you may recall from our last earnings call, our strategy is based on three pillars in support of profitable growth. The first strategic pillar is winning where we have competitive advantage. We are evaluating all aspects of our business portfolio, including our products, geographies, channels, and customers to truly understand where we have the strongest competitive advantage. Tenant is a much larger and more diversified organization than it was three years ago. This gives us many strengths and advantages. but also underscores the importance of refining our business portfolio to optimize its capabilities. The second strategic pillar is reducing complexity and building scale across our products and operational and business processes. By focusing on the most popular machine configurations and the highest demand options, we will create efficiencies that flow through our plants and supply chain. and help simplify our selling processes. Equally important is our effort to simplify and standardize key business process across the entire organization to enhance the quality, speed and efficiency of our decision making. These actions are designed to increase the overall profitability of our business and are completely within our control. The third pillar is building on our position as an innovation leader. by finding creative ways to bring new compelling solutions to our customers as they face challenges associated with labor pressures, health and cleanliness standards, and sustainability goals. Our three strategic pillars are highly interconnected and mutually reinforcing. In implementing our overarching strategy, we are identifying where we have the strongest competitive advantage. simplifying our product offerings and adjusting our go-to-market strategy accordingly. Doing so will enable us to further innovate in the areas where we can generate the greatest value for our customers and shareholders. With that in mind, similar to last quarter, we are announcing additional product discontinuations in the industrial category. that tie directly to our first strategic pillar. Specifically, we are discontinuing our ATLV, all-terrain outdoor vacuum, and the Sentinel, a ride-on outdoor vacuum sweeper. Both products have experienced declines in customers, unit volumes, and margins, and have required operational support and investment that detract from tenants' growth plan. Winning with these products would require significant investment that does not fit within our profitable growth strategy. These changes are customer-centric and are about optimizing our portfolio and allowing us to refocus our investments in order to deliver the greatest differentiated value. In doing so, we are executing on our second strategic pillar. By eliminating overlapping products Holder Models and Reducing Machine Configurations were simplifying the decision-making process for our sales team and customers. That same simplification will also reduce manufacturing lead times and make us a more agile manufacturer that remains ready to meet the dynamic and evolving needs of our customers. Simplification can also drive innovation Our third strategic pillar. Optimizing our product portfolio will enable us to increase our efforts in bringing new, high-value products to market. To that end, we're investing in technology that directly addresses the biggest pain points for our customers. As we highlighted last quarter, a great example of our industry-leading innovation is our T7 AMR, our autonomous robot. which directly addresses the labor challenges faced by an increasing number of customers. This time last year, we were excited to announce the commercialization of this new product in North America. We are equally excited to introduce this innovative product to our customers in the EMEA region starting this month. In all, this is just scratching the surface of where we are going as a company, and what we can accomplish. We look forward to sharing more with you in the months ahead. Now, with that, I will turn the call over to Keith.