[ü]
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
For
the quarterly period ended September 30, 2009
|
|
OR
|
[ ]
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
For
the transition period from ___________ to
__________
|
Minnesota
|
41-0572550
|
(State
or other jurisdiction of incorporation or organization)
|
(I.R.S.
Employer Identification No.)
|
Yes
|
ü
|
No
|
Yes
|
|
No
|
Large
accelerated filer
|
Accelerated
filer
|
ü
|
||
Non-accelerated
filer
|
(Do
not check if a smaller reporting company)
|
Smaller
reporting company
|
Yes
|
No
|
ü
|
PART
I – Financial Information
|
Page
|
||
Item
1
|
|||
3
|
|||
4
|
|||
5
|
|||
6
|
|||
Item
2
|
19
|
||
Item
3
|
27
|
||
Item
4
|
28
|
||
PART II – Other
Information
|
|||
Item
1
|
29
|
||
Item
1A
|
29
|
||
Item
2
|
29
|
||
Item
6
|
30
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
September
30
|
September
30
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Net
Sales
|
$ | 154,427 | $ | 185,935 | $ | 431,651 | $ | 548,120 | ||||||||
Cost
of Sales
|
89,539 | 107,383 | 253,939 | 317,725 | ||||||||||||
Gross
Profit
|
64,888 | 78,552 | 177,712 | 230,395 | ||||||||||||
Operating
Expense:
|
||||||||||||||||
Research
and Development Expense
|
5,466 | 6,033 | 16,837 | 17,773 | ||||||||||||
Selling
and Administrative Expense
|
51,800 | 56,074 | 146,271 | 171,904 | ||||||||||||
Goodwill
Impairment Charge
|
- | - | 43,363 | - | ||||||||||||
Gain
on Divestiture of Assets
|
- | - | - | (246 | ) | |||||||||||
Total
Operating Expenses
|
57,266 | 62,107 | 206,471 | 189,431 | ||||||||||||
Profit
(Loss) from Operations
|
7,622 | 16,445 | (28,759 | ) | 40,964 | |||||||||||
Other
Income (Expense):
|
||||||||||||||||
Interest
Income
|
96 | 306 | 301 | 834 | ||||||||||||
Interest
Expense
|
(726 | ) | (1,142 | ) | (2,290 | ) | (2,827 | ) | ||||||||
Net
Foreign Currency Transaction Gains (Losses)
|
353 | 2,538 | 145 | 1,925 | ||||||||||||
ESOP
Income
|
252 | 769 | 740 | 1,783 | ||||||||||||
Other
Income (Expense), Net
|
21 | (844 | ) | (27 | ) | (1,588 | ) | |||||||||
Total
Other Income (Expense), Net
|
(4 | ) | 1,627 | (1,131 | ) | 127 | ||||||||||
Profit
(Loss) Before Income Taxes
|
7,618 | 18,072 | (29,890 | ) | 41,091 | |||||||||||
Income
Tax Expense (Benefit)
|
1,835 | 4,087 | 3,066 | 13,578 | ||||||||||||
Net
Earnings (Loss)
|
$ | 5,783 | $ | 13,985 | $ | (32,956 | ) | $ | 27,513 | |||||||
Earnings
(Loss) per Share:
|
||||||||||||||||
Basic
|
$ | 0.31 | $ | 0.77 | $ | (1.78 | ) | $ | 1.50 | |||||||
Diluted
|
$ | 0.31 | $ | 0.76 | $ | (1.78 | ) | $ | 1.48 | |||||||
Weighted
Average Shares Outstanding:
|
||||||||||||||||
Basic
|
18,591,713 | 18,216,063 | 18,466,989 | 18,338,025 | ||||||||||||
Diluted
|
18,954,008 | 18,478,095 | 18,466,989 | 18,648,262 | ||||||||||||
Cash
Dividend Declared per Common Share
|
$ | 0.13 | $ | 0.13 | $ | 0.39 | $ | 0.39 |
September
30,
|
December
31,
|
|||||||
2009
|
2008
|
|||||||
ASSETS
|
||||||||
Current
Assets:
|
||||||||
Cash
and Cash Equivalents
|
$ | 13,938 | $ | 29,285 | ||||
Receivables,
less Allowances of $5,405 and $7,319, respectively
|
114,650 | 123,812 | ||||||
Inventories
|
60,809 | 66,828 | ||||||
Prepaid
Expenses
|
12,055 | 18,131 | ||||||
Deferred
Income Taxes, Current Portion
|
8,974 | 12,048 | ||||||
Other
Current Assets
|
215 | 315 | ||||||
Total
Current Assets
|
210,641 | 250,419 | ||||||
Property,
Plant and Equipment
|
288,500 | 278,812 | ||||||
Accumulated
Depreciation
|
(189,186 | ) | (175,082 | ) | ||||
Property,
Plant and Equipment, Net
|
99,314 | 103,730 | ||||||
Deferred
Income Taxes, Long-Term Portion
|
7,406 | 6,388 | ||||||
Goodwill
|
20,068 | 62,095 | ||||||
Intangible
Assets, Net
|
30,094 | 28,741 | ||||||
Other
Assets
|
6,544 | 5,231 | ||||||
Total
Assets
|
$ | 374,067 | $ | 456,604 | ||||
LIABILITIES
AND SHAREHOLDERS’ EQUITY
|
||||||||
Current
Liabilities:
|
||||||||
Current
Portion of Long-Term Debt
|
$ | 4,954 | $ | 3,946 | ||||
Short-Term
Borrowings
|
389 | - | ||||||
Accounts
Payable
|
37,669 | 26,536 | ||||||
Employee
Compensation and Benefits
|
25,620 | 23,334 | ||||||
Income
Taxes Payable
|
3,005 | 3,154 | ||||||
Other
Current Liabilities
|
37,454 | 50,189 | ||||||
Total
Current Liabilities
|
109,091 | 107,159 | ||||||
Long-Term
Liabilities:
|
||||||||
Long-Term
Debt
|
38,022 | 91,393 | ||||||
Employee-Related
Benefits
|
28,774 | 29,059 | ||||||
Deferred
Income Taxes, Long-Term Portion
|
11,061 | 11,671 | ||||||
Other
Liabilities
|
7,929 | 7,418 | ||||||
Total
Long-Term Liabilities
|
85,786 | 139,541 | ||||||
Total
Liabilities
|
194,877 | 246,700 | ||||||
Commitments
and Contingencies (Note 11)
|
||||||||
Shareholders'
Equity:
|
||||||||
Preferred
Stock, $0.02 par value; 1,000,000 shares authorized; no shares issued or
outstanding
|
- | - | ||||||
Common
Stock, $0.375 par value; 60,000,000 shares authorized; 18,703,249 and
18,284,746 shares issued and outstanding, respectively
|
7,014 | 6,857 | ||||||
Additional
Paid-In Capital
|
7,242 | 6,649 | ||||||
Retained
Earnings
|
187,479 | 223,692 | ||||||
Accumulated
Other Comprehensive Income (Loss)
|
(20,900 | ) | (26,391 | ) | ||||
Receivable
from ESOP
|
(1,645 | ) | (903 | ) | ||||
Total
Shareholders’ Equity
|
179,190 | 209,904 | ||||||
Total
Liabilities and Shareholders’ Equity
|
$ | 374,067 | $ | 456,604 |
Nine
Months Ended
|
||||||||
September
30
|
||||||||
2009
|
2008
|
|||||||
OPERATING
ACTIVITIES
|
||||||||
Net
Earnings (Loss)
|
$ | (32,956 | ) | $ | 27,513 | |||
Adjustments
to Net Earnings (Loss) to Arrive at Operating Cash Flow:
|
||||||||
Depreciation
|
14,765 | 14,933 | ||||||
Amortization
|
2,409 | 1,888 | ||||||
Deferred
Tax Expense (Benefit)
|
1,384 | 1,788 | ||||||
Goodwill
Impairment Charge
|
43,363 | - | ||||||
Stock-Based
Compensation Expense
|
1,416 | 484 | ||||||
ESOP
Income
|
219 | (612 | ) | |||||
Tax
Benefit on ESOP
|
6 | 24 | ||||||
Allowance
for Doubtful Accounts and Returns
|
965 | 1,366 | ||||||
Other,
Net
|
4,029 | 901 | ||||||
Changes
in Operating Assets and Liabilities, Excluding the Impact of
Acquisitions:
|
||||||||
Accounts
Receivable
|
8,454 | (8,272 | ) | |||||
Inventories
|
6,433 | (5,580 | ) | |||||
Accounts
Payable
|
13,029 | (5,039 | ) | |||||
Employee
Compensation and Benefits and Other Accrued Expenses
|
(9,340
|
) | (10,640 | ) | ||||
Income
Taxes Payable/Prepaid
|
6,738 | (5,372 | ) | |||||
Other
Assets and Liabilities
|
(2,494 | ) | (56 | ) | ||||
Net
Cash Provided by (Used for) Operating Activities
|
58,420 | 13,326 | ||||||
INVESTING
ACTIVITIES
|
||||||||
Purchases
of Property, Plant and Equipment
|
(8,830 | ) | (16,917 | ) | ||||
Proceeds
from Disposals of Property, Plant and Equipment
|
287 | 690 | ||||||
Acquisition
of Businesses, Net of Cash Acquired
|
(2,162 | ) | (82,161 | ) | ||||
Net
Cash Flows Provided by (Used for) Investing Activities
|
(10,705 | ) | (98,388 | ) | ||||
FINANCING
ACTIVITIES
|
||||||||
Payments
on Capital Leases
|
(3,506 | ) | (2,204 | ) | ||||
Change
in Short-Term Borrowings, Net
|
353 | 8,478 | ||||||
Payment
of Long-Term Debt
|
(59,016 | ) | (461 | ) | ||||
Issuance
of Long-Term Debt
|
6,000 | 87,500 | ||||||
Purchases
of Common Stock
|
- | (14,349 | ) | |||||
Proceeds
from Issuance of Common Stock
|
333 | 1,871 | ||||||
Tax
Benefit on Stock Plans
|
11 | 1,198 | ||||||
Dividends
Paid
|
(7,238 | ) | (7,178 | ) | ||||
Net
Cash Flows Provided by (Used for) Financing Activities
|
(63,063 | ) | 74,855 | |||||
Effect
of Exchange Rate Changes on Cash and Cash Equivalents
|
1 | (111 | ) | |||||
Net
Increase (Decrease) in Cash and Cash Equivalents
|
(15,347 | ) | (10,318 | ) | ||||
Cash
and Cash Equivalents at Beginning of Period
|
29,285 | 33,092 | ||||||
Cash
and Cash Equivalents at End of Period
|
$ | 13,938 | $ | 22,774 | ||||
SUPPLEMENTAL
CASH FLOW INFORMATION
|
||||||||
Cash
Paid (Received) During the Year for:
|
||||||||
Income
Taxes
|
$ | (5,355 | ) | $ | 13,998 | |||
Interest
|
$ | 2,092 | $ | 2,522 | ||||
Supplemental
Non-cash Investing and Financing Activities:
|
||||||||
Capital
Expenditures Funded Through Capital Leases
|
$ | 2,703 | $ | 1,325 | ||||
Collateralized
Borrowings Incurred for Operating Lease Equipment
|
$ | 1,564 | $ | 1,482 |
1.
|
Basis
of Presentation
|
2.
|
Newly
Adopted Accounting Guidance
|
3.
|
Management
Actions
|
Severance,
Early Retirement and Related Costs
|
||||
2008
workforce reduction action
|
$ | 14,261 | ||
Cash
payments
|
(355 | ) | ||
Foreign
currency adjustments
|
5 | |||
Balance
as of December 31, 2008
|
13,911 | |||
Cash
payments
|
(6,390 | ) | ||
Foreign
currency adjustments
|
(318 | ) | ||
Adjustment
of accrual
|
(1,328 | ) | ||
Balance
as of March 31, 2009
|
5,875 | |||
Cash
payments
|
(3,113 | ) | ||
Foreign
currency adjustments
|
190 | |||
Adjustment
of accrual
|
(65 | ) | ||
Balance
as of June 30, 2009
|
2,887 | |||
Cash
payments
|
(1,528 | ) | ||
Foreign
currency adjustments
|
77 | |||
Adjustment
of accrual
|
(320 | ) | ||
Balance
as of September 30, 2009
|
$ | 1,116 |
4.
|
Acquisitions
and Divestitures
|
Current
Assets
|
$ | 15,148 | ||
Identified
Intangible Assets
|
35,144 | |||
Goodwill
|
47,615 | |||
Other
Long-Term Assets
|
6,126 | |||
Total
Assets Acquired
|
104,033 | |||
Current
Liabilities
|
11,211 | |||
Long-Term
Liabilities
|
9,203 | |||
Total
Liabilities Assumed
|
20,414 | |||
Net
Assets Acquired
|
$ | 83,619 |
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
September
30
|
September
30
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Pro
Forma Net Sales
|
$ | 154,427 | $ | 185,935 | $ | 431,651 | $ | 557,291 | ||||||||
Pro
Forma Net Earnings (Loss)
|
5,783 | 13,985 | (32,956 | ) | 27,887 | |||||||||||
Pro
Forma Earnings (Loss) per Share:
|
||||||||||||||||
Basic
|
0.31 | 0.77 | (1.78 | ) | 1.52 | |||||||||||
Diluted
|
0.31 | 0.76 | (1.78 | ) | 1.50 | |||||||||||
Weighted
Average Common Shares Outstanding:
|
||||||||||||||||
Basic
|
18,591,713 | 18,216,063 | 18,466,989 | 18,338,025 | ||||||||||||
Diluted
|
18,954,008 | 18,478,095 | 18,466,989 | 18,648,262 |
5.
|
Inventories
|
September
30,
|
December
31,
|
|||||||
2009
|
2008
|
|||||||
Inventories
carried at LIFO:
|
||||||||
Finished
goods
|
$ | 43,445 | $ | 52,289 | ||||
Raw
materials, production parts and work-in-process
|
18,657 | 17,468 | ||||||
LIFO
reserve
|
(29,532 | ) | (32,481 | ) | ||||
Total
LIFO inventories
|
32,570 | 37,276 | ||||||
Inventories
carried at FIFO:
|
||||||||
Finished
goods
|
15,255 | 17,200 | ||||||
Raw
materials, production parts and work-in-process
|
12,984 | 12,352 | ||||||
Total
FIFO inventories
|
28,239 | 29,552 | ||||||
Total
inventories
|
$ | 60,809 | $ | 66,828 |
6.
|
Goodwill
and Intangible Assets
|
Nine
Months Ended
|
||||
September
30
|
||||
Balance
at December 31, 2008
|
$ | 62,095 | ||
Additions
|
909 | |||
Impairment
|
(43,363 | ) | ||
Foreign
currency fluctuations
|
427 | |||
Balance
at September 30, 2009
|
$ | 20,068 |
Customer
Lists,
|
||||||||||||||||
Service
Contracts
|
Trade
|
|||||||||||||||
and
Order Book
|
Name
|
Technology
|
Total
|
|||||||||||||
Balance
as of September 30, 2009:
|
||||||||||||||||
Original
cost
|
$ | 26,867 | $ | 5,113 | $ | 3,773 | $ | 35,753 | ||||||||
Accumulated
amortization
|
(4,262 | ) | (515 | ) | (882 | ) | (5,659 | ) | ||||||||
Carrying
value
|
$ | 22,605 | $ | 4,598 | $ | 2,891 | $ | 30,094 | ||||||||
Weighted-average
original life (in years)
|
14 | 14 | 11 | |||||||||||||
Balance
as of December 31, 2008:
|
||||||||||||||||
Original
cost
|
$ | 23,520 | $ | 4,927 | $ | 3,770 | $ | 32,217 | ||||||||
Accumulated
amortization
|
(2,184 | ) | (474 | ) | (818 | ) | (3,476 | ) | ||||||||
Carrying
value
|
$ | 21,336 | $ | 4,453 | $ | 2,952 | $ | 28,741 | ||||||||
Weighted-average
original life (in years)
|
14 | 14 | 12 |
Remaining
2009
|
$ | 794 | ||
2010
|
3,162 | |||
2011
|
3,162 | |||
2012
|
2,634 | |||
2013
|
2,508 | |||
Thereafter
|
17,834 | |||
Total
|
$ | 30,094 |
7.
|
Short-Term
Borrowings and Long-Term Debt
|
September
30,
|
December
31,
|
|||||||
2009
|
2008
|
|||||||
Short-Term
Borrowings:
|
||||||||
Bank
borrowings
|
$ | 389 | $ | - | ||||
Long-Term
Debt:
|
||||||||
Bank
borrowings
|
64 | 63 | ||||||
Credit
facility borrowings
|
34,500 | 87,500 | ||||||
Collateralized
borrowings
|
1,571 | 1,758 | ||||||
Capital
lease obligations
|
6,841 | 6,018 | ||||||
Total
Long-Term Debt
|
42,976 | 95,339 | ||||||
Less:
current portion
|
4,954 | 3,946 | ||||||
Long-Term
Portion
|
$ | 38,022 | $ | 91,393 | ||||
8.
|
Fair
Value of Financial Instruments
|
§
|
Level
1: Observable inputs such as quoted prices (unadjusted) in active markets
for identical assets or
liabilities.
|
§
|
Level
2: Inputs other than quoted prices that are observable for the asset or
liability, either directly or indirectly. These include quoted prices for
similar assets or liabilities in active markets and quoted prices for
identical or similar assets or liabilities in markets that are not
active.
|
§
|
Level
3: Unobservable inputs that reflect the reporting entity’s own
assumptions.
|
9.
|
Retirement
Benefit Plans
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
September
30
|
September
30
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Pension
Benefits:
|
||||||||||||||||
Service
cost
|
$ | 172 | $ | 221 | $ | 516 | $ | 675 | ||||||||
Interest
cost
|
574 | 638 | 1,727 | 1,930 | ||||||||||||
Expected
return on plan assets
|
(718 | ) | (799 | ) | (2,155 | ) | (2,418 | ) | ||||||||
Recognized
actuarial (gain) loss
|
(38 | ) | (54 | ) | (114 | ) | (162 | ) | ||||||||
Amortization
of transition (asset) obligation
|
(5 | ) | (5 | ) | (15 | ) | (17 | ) | ||||||||
Amortization
of prior service cost
|
139 | 139 | 416 | 415 | ||||||||||||
Foreign
currency
|
23 | (294 | ) | 42 | (222 | ) | ||||||||||
Net
periodic benefit cost
|
$ | 147 | $ | (154 | ) | $ | 417 | $ | 201 | |||||||
Postretirement
Medical Benefits:
|
||||||||||||||||
Service
cost
|
$ | 35 | $ | 32 | $ | 106 | $ | 96 | ||||||||
Interest
cost
|
214 | 198 | 640 | 594 | ||||||||||||
Amortization
of prior service cost
|
(145 | ) | (145 | ) | (435 | ) | (435 | ) | ||||||||
Net
periodic benefit cost
|
$ | 104 | $ | 85 | $ | 311 | $ | 255 |
10.
|
Warranty
|
Nine
Months Ended
|
||||||||
September
30
|
||||||||
2009
|
2008
|
|||||||
Beginning
balance
|
$ | 6,018 | $ | 6,950 | ||||
Additions
charged to expense
|
5,677 | 6,416 | ||||||
Acquired
liabilities
|
17 | 92 | ||||||
Foreign
currency fluctuations
|
101 | (46 | ) | |||||
Claims
paid
|
(6,055 | ) | (7,037 | ) | ||||
Ending
balance
|
$ | 5,758 | $ | 6,375 |
11.
|
Commitments
and Contingencies
|
12.
|
Income
Tax
|
13.
|
Stock-Based
Compensation
|
Nine
Months Ended
|
||||||||
September
30
|
||||||||
2009
|
2008
|
|||||||
Stock
options and stock appreciation rights
|
$ | 643 | $ | 281 | ||||
Restricted
share awards
|
629 | 661 | ||||||
Performance
share awards
|
- | (478 | ) | |||||
Share-based
liabilities
|
144 | 20 | ||||||
Total
stock-based compensation expense
|
$ | 1,416 | $ | 484 |
14.
|
Earnings
(Loss) Per Share Computations
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
September
30
|
September
30
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Numerator:
|
||||||||||||||||
Net
Earnings (Loss)
|
$ | 5,783 | $ | 13,985 | $ | (32,956 | ) | $ | 27,513 | |||||||
Denominator:
|
||||||||||||||||
Basic
- weighted average outstanding shares
|
18,591,713 | 18,216,063 | 18,466,989 | 18,338,025 | ||||||||||||
Effect
of dilutive securities:
|
||||||||||||||||
Employee
stock options
|
362,295 | 262,032 | - | 310,237 | ||||||||||||
Diluted
- weighted average outstanding shares
|
18,954,008 | 18,478,095 | 18,466,989 | 18,648,262 | ||||||||||||
Basic
Earnings (Loss) per Share
|
$ | 0.31 | $ | 0.77 | $ | (1.78 | ) | $ | 1.50 | |||||||
Diluted
Earnings (Loss) per Share
|
$ | 0.31 | $ | 0.76 | $ | (1.78 | ) | $ | 1.48 |
15.
|
Comprehensive
Income (Loss)
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
September
30
|
September
30
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Net
Earnings (Loss)
|
$ | 5,783 | $ | 13,985 | $ | (32,956 | ) | $ | 27,513 | |||||||
Foreign
currency translation adjustments
|
1,725 | (14,936 | ) | 5,324 | (10,499 | ) | ||||||||||
Pension
adjustments
|
(49 | ) | (66 | ) | 168 | 198 | ||||||||||
Comprehensive
Income (Loss)
|
$ | 7,459 | $ | (1,017 | ) | $ | (27,464 | ) | $ | 17,212 |
16.
|
Segment
Reporting
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
September
30
|
September
30
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
North
America
|
$ | 90,531 | $ | 107,193 | $ | 251,601 | $ | 314,008 | ||||||||
Europe,
Middle East, Africa
|
45,192 | 55,300 | 131,823 | 171,698 | ||||||||||||
Other
International
|
18,704 | 23,442 | 48,227 | 62,414 | ||||||||||||
Total
|
$ | 154,427 | $ | 185,935 | $ | 431,651 | $ | 548,120 |
17.
|
Related
Party Transactions
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||||||||||||||||||
September
30
|
September
30
|
|||||||||||||||||||||||||||||||
2009
|
%
|
2008
|
%
|
2009
|
%
|
2008
|
%
|
|||||||||||||||||||||||||
Net
Sales
|
$ | 154,427 | 100.0 | $ | 185,935 | 100.0 | $ | 431,651 | 100.0 | $ | 548,120 | 100.0 | ||||||||||||||||||||
Cost
of Sales
|
89,539 | 58.0 | 107,383 | 57.8 | 253,939 | 58.8 | 317,725 | 58.0 | ||||||||||||||||||||||||
Gross
Profit
|
64,888 | 42.0 | 78,552 | 42.2 | 177,712 | 41.2 | 230,395 | 42.0 | ||||||||||||||||||||||||
Operating
Expense:
|
||||||||||||||||||||||||||||||||
Research
and Development Expense
|
5,466 | 3.5 | 6,033 | 3.2 | 16,837 | 3.9 | 17,773 | 3.2 | ||||||||||||||||||||||||
Selling
and Administrative Expense
|
51,800 | 33.5 | 56,074 | 30.2 | 146,271 | 33.9 | 171,904 | 31.4 | ||||||||||||||||||||||||
Goodwill
Impairment Charge
|
- | - | - | - | 43,363 | 10.0 | - | - | ||||||||||||||||||||||||
Gain
on Divestiture of Assets
|
- | - | - | - | - | - | (246 | ) | - | |||||||||||||||||||||||
Total
Operating Expenses
|
57,266 | 37.1 | 62,107 | 33.4 | 206,471 | 47.8 | 189,431 | 34.6 | ||||||||||||||||||||||||
Profit
(Loss) from Operations
|
7,622 | 4.9 | 16,445 | 8.8 | (28,759 | ) | (6.7 | ) | 40,964 | 7.5 | ||||||||||||||||||||||
Other
Income (Expense):
|
||||||||||||||||||||||||||||||||
Interest
Income
|
96 | 0.1 | 306 | 0.2 | 301 | 0.1 | 834 | 0.2 | ||||||||||||||||||||||||
Interest
Expense
|
(726 | ) | (0.5 | ) | (1,142 | ) | (0.6 | ) | (2,290 | ) | (0.5 | ) | (2,827 | ) | (0.5 | ) | ||||||||||||||||
Net
Foreign Currency Transaction Gains (Losses)
|
353 | 0.2 | 2,538 | 1.4 | 145 | - | 1,925 | 0.4 | ||||||||||||||||||||||||
ESOP
Income
|
252 | 0.2 | 769 | 0.4 | 740 | 0.2 | 1,783 | 0.3 | ||||||||||||||||||||||||
Other
Income (Expense), Net
|
21 | - | (844 | ) | (0.5 | ) | (27 | ) | - | (1,588 | ) | (0.3 | ) | |||||||||||||||||||
Total
Other Income (Expense), Net
|
(4 | ) | - | 1,627 | 0.9 | (1,131 | ) | (0.3 | ) | 127 | - | |||||||||||||||||||||
Profit
(Loss) Before Income Taxes
|
7,618 | 4.9 | 18,072 | 9.7 | (29,890 | ) | (6.9 | ) | 41,091 | 7.5 | ||||||||||||||||||||||
Income
Tax Expense (Benefit)
|
1,835 | 1.2 | 4,087 | 2.2 | 3,066 | 0.7 | 13,578 | 2.5 | ||||||||||||||||||||||||
Net
Earnings (Loss)
|
$ | 5,783 | 3.7 | $ | 13,985 | 7.5 | $ | (32,956 | ) | (7.6 | ) | $ | 27,513 | 5.0 | ||||||||||||||||||
Earnings
(Loss) per Diluted Share
|
$ | 0.31 | $ | 0.76 | $ | (1.78 | ) | $ | 1.48 |
%
Change from 2008
|
||||
Three
Months Ended
|
Nine
Months Ended
|
|||
September
30, 2009
|
September
30, 2009
|
|||
Organic
Growth:
|
||||
Volume
|
(15%)
|
(18%)
|
||
Price
|
0%
|
1%
|
||
(15%)
|
(17%)
|
|||
Foreign
Currency
|
(2%)
|
(5%)
|
||
Acquisitions
|
0%
|
1%
|
||
Total
|
(17%)
|
(21%)
|
|
· an
organic sales decline of 15%, excluding the effects of acquisitions and
foreign currency exchange, primarily due to the ongoing global recession
that resulted in lower sales volume across all geographies;
and
|
|
· an
unfavorable direct foreign currency exchange impact of
2%.
|
|
· an
organic sales decline of 17% primarily due to the ongoing global recession
that resulted in lower sales volume across all geographies;
and
|
|
· an
unfavorable direct foreign currency exchange impact of
5%.
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||||||||||
September
30
|
September
30
|
|||||||||||||||||||||||
2009
|
2008
|
%
|
2009
|
2008
|
%
|
|||||||||||||||||||
North
America
|
$ | 90,531 | $ | 107,193 | (15.5 | ) | $ | 251,601 | $ | 314,008 | (19.9 | ) | ||||||||||||
Europe,
Middle East and Africa
|
45,192 | 55,300 | (18.3 | ) | 131,823 | 171,698 | (23.2 | ) | ||||||||||||||||
Other
International
|
18,704 | 23,442 | (20.2 | ) | 48,227 | 62,414 | (22.7 | ) | ||||||||||||||||
Total
|
$ | 154,427 | $ | 185,935 | (16.9 | ) | $ | 431,651 | $ | 548,120 | (21.2 | ) |
Nine
Months Ended
|
||||||||
September
30
|
||||||||
2009
|
2008
|
|||||||
Operating
Activities
|
$ | 58,420 | $ | 13,326 | ||||
Investing
Activities:
|
||||||||
Purchases
of Property, Plant and Equipment, Net of Disposals
|
(8,543 | ) | (16,227 | ) | ||||
Acquistions
of Businesses, Net of Cash Acquired
|
(2,162 | ) | (82,161 | ) | ||||
Financing
Activities
|
(63,063 | ) | 74,855 | |||||
Effect
of Exchange Rate Changes on Cash and Cash Equivalents
|
1 | (111 | ) | |||||
Net
Increase (Decrease) in Cash and Cash Equivalents
|
$ | (15,347 | ) | $ | (10,318 | ) |
September
30, 2009
|
December
31, 2008
|
September
30, 2008
|
||||
DSO
|
66
|
77
|
70
|
|||
DIOH
|
94
|
101
|
89
|
·
|
Geopolitical,
economic and credit market uncertainty throughout the
world.
|
·
|
Cost
and availability of financing for ourselves and our
suppliers.
|
·
|
Our
customers’ ability to obtain credit to fund equipment
purchases.
|
·
|
Successful
integration of acquisitions, including ability to carry remaining goodwill
at current values.
|
·
|
Ability
to accurately project future financial and operating results and to
achieve such projections.
|
·
|
Ability
to achieve operational efficiencies while reducing expenses and
headcount.
|
·
|
Fluctuations
in the cost or availability of raw materials and purchased
components.
|
·
|
Ability
to achieve anticipated global sourcing cost
reductions.
|
·
|
Success
and timing of new technologies and
products.
|
·
|
Unforeseen
product quality problems.
|
·
|
Effects
of litigation, including threatened or pending
litigation.
|
·
|
Relative
strength of the U.S. dollar, which affects the cost of our materials and
products purchased and sold
internationally.
|
·
|
Ability
to effectively manage organizational changes, including workforce
reductions.
|
·
|
Ability
to achieve anticipated savings from our workforce
reductions.
|
·
|
Ability
to attract and retain key
personnel.
|
·
|
Effects
of potential impairment write-down of our intangible asset
values.
|
·
|
Ability
to acquire, retain and protect proprietary intellectual property
rights.
|
·
|
Potential
for increased competition in our
business.
|
·
|
Changes
in laws, including changes in accounting standards and taxation
changes.
|
Total
Number of
|
||||||||||||||||
Shares
Purchased
|
||||||||||||||||
Total
Number
of
Shares
Purchased
(1)
|
Average
Price
Paid
Per Share
|
as
Part of Publicly
|
Maximum
Number of
|
|||||||||||||
For
the Quarter Ended
|
Announced
Plans
|
Shares
that May Yet
|
||||||||||||||
September
30, 2009
|
or
Programs
|
Be
Purchased
|
||||||||||||||
July
1 - 31, 2009
|
- | $ | - | - | 288,874 | |||||||||||
August
1 - 31, 2009
|
195 | 20.27 | - | 288,874 | ||||||||||||
September
1 - 30, 2009
|
- | - | - | 288,874 | ||||||||||||
Total
|
195 | $ | 20.27 | - | 288,874 |
Item
#
|
Description
|
Method
of Filing
|
||
3i
|
Restated
Articles of Incorporation
|
Incorporated
by reference to Exhibit 3i to the Company’s report on Form 10-Q for the
quarterly period ended June 30, 2006.
|
||
3ii
|
Certificate
of Designation
|
Incorporated
by reference to Exhibit 3.1 to the Company’s Annual Report on Form 10-K
for the year ended December 31, 2006.
|
||
3iii
|
Amended
and Restated By-Laws
|
Incorporated
by reference to Exhibit 4(c) to the Company’s Registration Statement on
Form S-3, Registration No. 333-160887 filed on July 30,
2009.
|
||
10.1
|
Private
Shelf Agreement dated as of July 29, 2009
|
Incorporated
by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K
filed on July 30, 2009.
|
||
31.1
|
Rule
13a-14(a)/15d-14(a) Certification of CEO
|
Filed
herewith electronically.
|
||
31.2
|
Rule
13a-14(a)/15d-14(a) Certification of CFO
|
Filed
herewith electronically.
|
||
32.1
|
Section
1350 Certification of CEO
|
Filed
herewith electronically.
|
||
32.2
|
Section
1350 Certification of CFO
|
Filed
herewith electronically.
|
TENNANT
COMPANY
|
||||
Date:
|
November
3, 2009
|
/s/ H.
Chris Killingstad
|
||
H.
Chris Killingstad
President
and Chief Executive Officer
|
||||
Date:
|
November
3, 2009
|
/s/ Thomas
Paulson
|
||
Thomas
Paulson
Vice
President and Chief Financial Officer
(Principal
Financial and Accounting
Officer)
|