Tennant Company

Good morning. My name is Rebecca and I will be your conference operator today. At this time I would like to welcome everyone to Tenant Company's 2021 First Quarter Earnings Conference Call. This call is being recorded. There will be time for Q&A at the end of the call. Please press star 1 if you would 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 2021 First Quarter Earnings Conference Call. Beginning today's meeting is Mr. William Prate, Senior Director of Global Financial Planning and Analysis and Investor Relations for Tenant Company. Mr. Prate, you may begin.

Thank you, Rebecca. Good morning, everyone, and welcome to Tenant Company's first quarter 2021 earnings conference call. I'm William Prate, Senior Director of Global Financial Planning and Analysis in Investor Relations. Joining me today are Dave Hummel, Tenant's President and CEO, and Faye West, our Senior Vice President and CFO. On today's call, we will update you regarding our first quarter performance and guidance for 2021. Dave will brief you on our operations and enterprise strategy, and Faye will cover the financials. After the remarks, we will open the call to questions. Please note the slide presentation accompanies this conference call and is available on our investor relations website at investors.tenantco.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 the 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 may affect our results. Additionally, on this conference call, we will discuss non-GAAP measures that include or exclude certain items. Our 2021 first quarter earnings release includes the comparable gap measures and a reconciliation of these non-gap measures to our gap results. Our earnings release was issued this morning via BusinessWire and is also posted on our investor relations website at investors.tenantco.com. I'll now turn the call over to Dave.

Thanks, William, and thank you, everyone, for joining us. We hope that you and your loved ones are continuing to stay safe. Today, we are pleased to report a strong first quarter, one that exceeded our expectations due to increased customer demand and highlighted by the organic revenue growth we achieved in all regions. We were able to meet that demand thanks to the operational improvements we made in the past year and the way we have navigated the pandemic to date. Specifically, we've remained committed to resourcing and investing in our enterprise strategy while staying focused on serving our customers. This approach preserved our ability to ramp up quickly as global markets began showing signs of recovery. I am especially proud of the way our team worked to overcome the unprecedented operational challenges of the past year. Also, our prudent expense management and ongoing commitment to our long-term strategy continues to yield solid bottom line results. While the pandemic will continue to pose market uncertainty, the Q1 growth and strong order demand are certainly encouraging and give us optimism that the positive overall sales trends we saw in the second half of last year represented the beginning of a market recovery, which we have taken into account in raising our full-year guidance. Our strong Q1 was not a simple or inevitable result. required significant effort from everyone intended. For example, in the past year, our operations and supply chain teams have faced significant challenges from commodity inflation, transportation related issues, parts shortages and supply based disruption. but they have worked tirelessly to mitigate the impact of these challenges while also driving aggressive cost reduction programs and delivering productivity leverage that allowed us to offset what could have been a much larger financial impact. 2020 was not the year any of us planned for, but it did not stop us from implementing the long-term strategy we unveiled at the end of 2019. Key improvements to our operating model include value engineering, plant optimization, improved discounting, and adjusting our go-to-market approach in specific regions. At the same time, we strive to win where we have competitive advantage, and the recent sale of our coatings business is an example of redirecting resources toward more strategic and profitable activities. All of these actions have combined to yield an expansion in gross margins that is now beginning to read out. In 2020, we also maintained investments and resourcing across a broad number of initiatives, including product development, operations, and simplifying our product offering, all of which were designed to better meet the needs of our customers. As a result, we're now well positioned with a full portfolio of new products, including our autonomous cleaning solutions, to launch into a recovering market. Initial customer feedback regarding the launches of our T16 AMR industrial robotic floor scrubber, new standard product offerings, and new commercial mid-tier offerings have been positive. While we have not yet reached pre-pandemic sales levels across all regions, we remain optimistic for the year ahead. Going forward, we will continue to execute against our enterprise strategy and will serve our customers with an aim of maintaining our industry leadership in quality, service, and innovation. Regarding the future of industrial and commercial cleaning, one of the questions we hear most often is how the pandemic has impacted our customers. Certainly, the importance of cleaning has been elevated with the new desire to turn cleaning from something invisible to a visible and tangible benefit for their customers and employees. At the same time, labor challenges have grown all the more acute, which places greater emphasis on the importance of technology and the products and services we offer. The pandemic has accelerated market trends and taught us new ways of working, which we believe will ultimately be beneficial for tenants and the cleaning industry. We think the long-term benefits are less about COVID and more about how we continue to be a trusted partner for our customers in meeting their needs. Lastly, I'd like to say a word about our leadership transitions. The first quarter saw a number of senior-level changes, including Rusty Zay's promotion to Chief Commercial Officer, Kristen Stokes' promotion to General Counsel, and Barb Walensky's promotion to Senior Vice President of Innovation and Technology. And most recently, we welcomed Faye West as our new CFO. Faye is an accomplished finance executive. She is the former senior vice president and CFO of Suncoke Energy and has held numerous positions, including leadership positions at United Airlines, Pepsi Americas, and GATX Corporation. As CEO, I am thrilled to be working with such a talented group of executives. Collectively, their managerial expertise, industry knowledge, and appreciation of tenants' legacy and corporate culture will ensure a seamless transition as we continue to execute on the enterprise strategy that everyone at the company has worked so hard to put in place. With that, I will turn the call over to Faye for a discussion of our financial. Faye, welcome aboard.