tnc-20240331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


þ			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024


o			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to __________

Commission File Number 1-16191

__________________________________________

TENNANT COMPANY

(Exact name of registrant as specified in its charter)


Minnesota			41-0572550
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

10400 Clean Street

Eden Prairie, Minnesota 55344

(Address of principal executive offices)

(Zip Code)

(763) 540-1200

(Registrant’s telephone number, including area code)

____________________________________________________

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.375 per share

TNC

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.


			o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes

As of April 26, 2024, there were 19,007,460 shares of common stock outstanding.

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TABLE OF CONTENTS


PART I - FINANCIAL INFORMATION (Unaudited)		Page
Item 1.	Financial Statements	3
	Consolidated Statements of Income	3
	Consolidated Statements of Comprehensive Income	4
	Consolidated Balance Sheets	5
	Consolidated Statements of Cash Flows	6
	Consolidated Statements of Equity	8
	Notes to Consolidated Financial Statements	9
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	23
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	28
Item 4.	Controls and Procedures	28
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	29
Item 1A.	Risk Factors	29
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	29
Item 5.	Other Information	32
Item 6.	Exhibits	30
Signatures		31

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PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

TENNANT COMPANY

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)


(In millions, except shares and per share data)	Three Months Ended March 31,
	2024		2023
Net sales	$	311.0	$	305.8
Cost of sales	173.5		180.3
Gross profit	137.5		125.5
Selling and administrative expense	89.9		81.7
Research and development expense	10.1		7.9
Operating income	37.5		35.9
Interest expense, net	(2.3)		(3.7)
Net foreign currency transaction loss	(0.2)		(0.1)
Other income (expense), net	0.1		(0.1)
Income before income taxes	35.1		32.0
Income tax expense	6.7		7.7
Net income	$	28.4	$	24.3

Net income per share
Basic	$	1.52	$	1.32
Diluted	$	1.49	$	1.30

Weighted average shares outstanding
Basic	18,665,570		18,449,430
Diluted	19,077,767		18,682,268

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TENNANT COMPANY

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)


(In millions)	Three Months Ended March 31,
	2024		2023
Net income	$	28.4	$	24.3
Other comprehensive (loss) income:
Foreign currency translation adjustments (net of related tax (expense) benefit of $(0.2) and $0.1, respectively)	(8.2)		5.3
Derivative financial instruments (net of related tax (expense) benefit of $(0.3), $0.2, respectively)	1.0		(0.6)
Total other comprehensive (loss) income, net of tax	(7.2)		4.7

Comprehensive income	$	21.2	$	29.0

See accompanying notes to consolidated financial statements.

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TENNANT COMPANY

CONSOLIDATED BALANCE SHEETS


	(Unaudited)
(In millions, except shares and per share data)	March 31, 2024		December 31, 2023
ASSETS
Cash, cash equivalents, and restricted cash	$	88.8	$	117.1
Receivables, less allowances of $7.1 and $7.2, respectively	257.3		247.6
Inventories	181.4		175.9
Prepaid and other current assets	33.6		28.5
Total current assets	561.1		569.1
Property, plant and equipment, less accumulated depreciation of $307.4 and $304.0, respectively	184.7		187.7
Operating lease assets	40.4		41.7
Goodwill	192.2		187.4
Intangible assets, net	72.3		63.1
Other assets	101.0		64.4
Total assets	$	1,151.7	$	1,113.4
LIABILITIES AND EQUITY
Current portion of long-term debt	$	7.2	$	6.4
Accounts payable	124.9		111.4
Employee compensation and benefits	46.7		67.3
Other current liabilities	81.6		88.6
Total current liabilities	260.4		273.7
Long-term debt	207.4		194.2
Long-term operating lease liabilities	27.1		27.4
Employee benefits	13.7		13.3
Deferred income taxes	8.4		5.0
Other liabilities	18.8		21.5
Total long-term liabilities	275.4		261.4
Total liabilities	$	535.8	$	535.1
Commitments and contingencies (Note 12)
Common Stock, $0.375 par value; 60,000,000 shares authorized; 19,006,838 and 18,631,384 shares issued and outstanding, respectively	7.1		7.0
Additional paid-in capital	86.5		64.9
Retained earnings	570.5		547.4
Accumulated other comprehensive loss	(49.5)		(42.3)
Total Tennant Company shareholders' equity	614.6		577.0
Noncontrolling interest	1.3		1.3
Total equity	615.9		578.3
Total liabilities and total equity	$	1,151.7	$	1,113.4

See accompanying notes to consolidated financial statements.

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TENNANT COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


(In millions)	Three Months Ended March 31,
	2024		2023
OPERATING ACTIVITIES
Net income	$	28.4	$	24.3
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation expense	9.6		8.3
Amortization expense	3.9		3.9
Deferred income tax benefit	(1.0)		(2.0)
Share-based compensation expense	3.2		1.2
Bad debt and returns expense	0.3		1.0
Other, net	0.1		0.2
Changes in operating assets and liabilities:
Receivables	(10.1)		(2.5)
Inventories	(9.2)		(1.5)
Accounts payable	13.9		(6.6)
Employee compensation and benefits	(20.3)		0.5
Other assets and liabilities	(15.9)		4.3
Net cash provided by operating activities	2.9		31.1
INVESTING ACTIVITIES
Purchases of property, plant and equipment	(3.0)		(6.8)
Purchase of investment	(32.1)		—
Payments made in connection with business acquisition, net of cash acquired	(25.5)		—
Investment in leased assets	(0.2)		(0.2)
Cash received from leased assets	0.2		0.2
Net cash used in investing activities	(60.6)		(6.8)
FINANCING ACTIVITIES
Proceeds from borrowings	40.0		20.0
Repayments of borrowings	(26.2)		(21.4)
Change in finance lease obligations	—		0.2
Proceeds from exercise of stock options, net of employee tax withholdings obligations	19.5		0.8
Repurchases of common stock	(1.1)		(5.0)
Dividends paid	(5.3)		(4.9)
Net cash provided by (used) in financing activities	26.9		(10.3)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	2.5		—
Net (decrease) increase in cash, cash equivalents and restricted cash	(28.3)		14.0
Cash, cash equivalents and restricted cash at beginning of period	117.1		77.4
Cash, cash equivalents and restricted cash at end of period	$	88.8	$	91.4

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SUPPLEMENTAL CASH FLOW INFORMATION	Three Months Ended March 31,
(In millions)	2024		2023
Cash paid for income taxes	$	1.6	$	0.8
Cash paid for interest	4.5		4.5
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	4.7		4.6
Lease assets obtained in exchange for new operating lease liabilities	3.8		4.6
Supplemental non-cash investing and financing activities:
Capital expenditures in accounts payable	2.1		1.5

See accompanying notes to consolidated financial statements.

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TENNANT COMPANY

CONSOLIDATED STATEMENTS OF EQUITY

(Unaudited)

(In millions, except shares and per share data)


	Tennant Company Shareholders
	Common Shares	Common Stock		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Tennant Company Shareholders' Equity		Noncontrolling Interest		Total Equity
Balance, December 31, 2023	18,631,384	$	7.0	$	64.9	$	547.4	$	(42.3)	$	577.0	$	1.3	$	578.3
Net income		—		—		28.4		—		28.4		—		28.4
Other comprehensive income		—		—		—		(7.2)		(7.2)		—		(7.2)
Issue stock for directors, employee benefit and stock plans, net of related tax withholdings and repurchases of 27,808 shares	388,179	0.1		19.5		—		—		19.6		—		19.6
Share-based compensation		—		3.2		—		—		3.2		—		3.2
Repurchases of common stock	(12,725)	—		(1.1)		—		—		(1.1)		—		(1.1)
Dividends paid $0.28 per common share		—		—		(5.3)		—		(5.3)		—		(5.3)
Balance, March 31, 2024	19,006,838	$	7.1	$	86.5	$	570.5	$	(49.5)	$	614.6	$	1.3	$	615.9


	Tennant Company Shareholders
	Common Shares	Common Stock		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Tennant Company Shareholders' Equity		Noncontrolling Interest		Total Equity
Balance, December 31, 2022	18,521,485	$	7.0	$	56.0	$	458.0	$	(50.2)	$	470.8	$	1.3	$	472.1
Net income		—		—		24.3		—		24.3		—		24.3
Other comprehensive loss		—		—		—		4.7		4.7		—		4.7
Issue stock for directors, employee benefit and stock plans, net of related tax withholdings and repurchases of 18,468 shares	93,073	—		0.8		—		—		0.8		—		0.8
Share-based compensation		—		1.2		—		—		1.2		—		1.2
Repuchases of common stock	(73,525)	—		(5.0)		—		—		(5.0)		—		(5.0)
Dividends paid $0.265 per common share		—		—		(4.9)		—		(4.9)		—		(4.9)
Balance, March 31, 2023	18,541,033	$	7.0	$	53.0	$	477.4	$	(45.5)	$	491.9	$	1.3	$	493.2

See accompanying notes to consolidated financial statements.

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TENNANT COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(In millions, except shares and per share data)

1. Summary of Significant Accounting Policies

Tennant Company ("the Company", "we", "us", or "our") is a world leader in designing, manufacturing and marketing solutions that empower customers to achieve quality cleaning performance, reduce environmental impact and help create a cleaner, safer, healthier world. The Company is committed to creating and commercializing breakthrough, sustainable cleaning innovations to enhance its broad suite of products, including floor maintenance and cleaning equipment, detergent-free and other sustainable cleaning technologies, aftermarket parts and consumables, equipment maintenance and repair service, and asset management solutions.

Our products are used in many types of environments, including retail establishments, distribution centers, factories and warehouses, public venues such as arenas and stadiums, office buildings, schools and universities, hospitals and clinics, and more.

Customers include contract cleaners to whom organizations outsource facilities maintenance as well as businesses that perform facilities maintenance themselves. The Company reaches these customers through the industry's largest direct sales and service organization and through a strong and well-supported network of authorized distributors worldwide.

Basis of Presentation – The accompanying unaudited consolidated financial statements have been prepared in accordance with the U.S. Securities and Exchange Commission (“SEC”) requirements for interim reporting. In our opinion, the consolidated financial statements contain all adjustments (consisting of only normal recurring adjustments) necessary for the fair presentation of our financial position and results of operations.

These statements should be read in conjunction with the consolidated financial statements and notes included in our annual report on Form 10-K for the year ended December 31, 2023. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year.

2. Newly Adopted Accounting Pronouncements

There are no newly adopted accounting pronouncements during the three months ended March 31, 2024 that impacted the Company.

3. Revenue

Disaggregation of Revenue

The following tables illustrate the disaggregation of revenue by geographic area, groups of similar products and services and sales channels:

Net sales by geographic area


	Three Months Ended March 31,
	2024		2023
Americas	$	215.6	$	204.4
Europe, Middle East and Africa	76.8		82.1
Asia Pacific	18.6		19.3
Total	$	311.0	$	305.8

Net sales are attributed to each geographic area based on the end-user country and are net of intercompany sales.

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Net sales by groups of similar products and services


	Three Months Ended March 31,
	2024		2023
Equipment	$	189.8	$	186.4
Parts and consumables	70.6		73.4
Service and other	50.6		46.0
Total	$	311.0	$	305.8

Net sales by sales channel


	Three Months Ended March 31,
	2024		2023
Sales direct to consumer	$	221.4	$	205.1
Sales to distributors	89.6		100.7
Total	$	311.0	$	305.8

Contract Liabilities

Sales Returns

The right of return may exist explicitly or implicitly with our customers. When the right of return exists, we adjust the transaction price for the estimated effect of returns. We estimate the expected returns using the expected value method by assessing historical sales levels and the timing and magnitude of historical sales return levels as a percent of sales and projecting this experience into the future.

Sales Incentives

Our sales contracts may contain various customer incentives, such as volume-based rebates or other promotions. We reduce the transaction price for certain customer programs and incentive offerings that represent variable consideration. Sales incentives given to our customers are recorded using the most likely amount approach for estimating the amount of consideration to which the Company will be entitled. We forecast the most likely amount of the incentive to be paid at the time of sale, update this forecast quarterly, and adjust the transaction price accordingly to reflect the new amount of incentives expected to be earned by the customer. A majority of our customer incentives are settled within one year. We record our accruals for volume-based rebates and other promotions in other current liabilities on our consolidated balance sheets.

The change in our sales incentive accrual balance was as follows:


	Three Months Ended March 31,
	2024		2023
Beginning balance	$	21.2	$	20.0
Additions to sales incentive accrual	6.3		6.6
Contract payments	(11.3)		(11.3)
Foreign currency fluctuations	(0.4)		0.1
Ending balance	$	15.8	$	15.4

Deferred Revenue

We sell separately priced prepaid contracts to our customers where we receive payment at the inception of the contract and defer recognition of the consideration received because we have to satisfy future performance obligations. Our deferred revenue balance is primarily attributed to prepaid maintenance contracts on our

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machines ranging from 12 months to 60 months. In circumstances where prepaid contracts are bundled with machines, we use an observable price to determine stand-alone selling price for separate performance obligations.

The change in the deferred revenue balance was as follows:


	Three Months Ended March 31,
	2024		2023
Beginning balance	$	10.3	$	9.3
Increase in deferred revenue representing our obligation to satisfy future performance obligations	5.0		5.5
Decrease in deferred revenue for amounts recognized in net sales for satisfied performance obligations	(4.3)		(4.7)
Foreign currency fluctuations	(0.1)		0.1
Ending balance	$	10.9	$	10.2

At March 31, 2024, $7.1 million and $3.8 million of deferred revenue was reported in other current liabilities and other liabilities, respectively, on our consolidated balance sheets. Of these amounts, we expect to recognize the following approximate amounts in net sales in the following periods:


Remaining 2024	$	6.6
2025	2.1
2026	1.3
2027	0.6
2028	0.2
Thereafter	0.1
Total	$	10.9

At December 31, 2023, $7.9 million and $2.4 million of deferred revenue was reported in other current liabilities and other liabilities, respectively, on our consolidated balance sheets.

4. Management Actions

Restructuring Actions

During the three months ended March 31, 2024 and March 31, 2023, we incurred no restructuring expenses as part of our ongoing global reorganization efforts.

A reconciliation of the beginning and ending liability balances for severance-related costs is as follows:


	Three Months Ended March 31,
	2024		2023
Beginning balance	$	2.4	$	1.7
New charges	—		—
Cash payments	(0.4)		(0.5)
Foreign currency fluctuations	(0.1)		—
Adjustments to accrual	—		—
Ending balance	$	1.9	$	1.2

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5. Acquisitions

On February 29, 2024, we acquired 100% of M&F Management and Financing GmbH ("M&F"), the parent company of TCS EMEA GmbH ("TCS"), as we seek to accelerate growth in the EMEA region.

Based in Austria, TCS was Tennant Company's largest Central and Eastern Europe distributor. The acquisition gives Tennant a knowledgeable and experienced sales force and an established direct channel into countries including Romania, Hungary, Czech Republic, and Slovakia, along with an expanded network in Austria, Switzerland, Poland, and other nations in the region, as well as the Middle East and Africa.

Our consolidated financial results for the three months ended March 31, 2024 include $2.1 million of revenue and immaterial net income related to TCS. The proforma impact of this acquisition is immaterial to our operations.

The purchase price has been preliminarily allocated based on the estimated fair value of assets acquired and liabilities assumed at the date of the acquisition. The preliminary purchase price allocation is subject to further refinement and may require adjustments to arrive at the final purchase price allocation. These changes will primarily relate to the fair value of intangible assets and impacts associated with income taxes. Such finalization may result in material changes from the preliminary purchase price allocation.

The following table summarizes the preliminary fair value measurement of the assets acquired and liabilities assumed as of the date of acquisition:


Components of purchase price:
Cash paid	$	30.8
Settlement of preexisting transactions	3.9
Total purchase price	34.7

ASSETS
Cash	5.3
Other current assets	8.0
Intangible assets subject to amortization
Customer lists	13.6
Backlog	0.6
Other assets	5.3
Total identifiable assets acquired	32.8
LIABILITIES
Current liabilities	(1.5)
Long-term liabilities	(5.0)
Total identifiable liabilities assumed	(6.5)
Net assets acquired	26.3

Goodwill	$	8.4

The total purchase price was paid on the acquisition date of February 29, 2024. Included in the transaction is cash paid of $30.8 million and the settlement of $3.9 million of preexisting transactions.

The goodwill is not expected to be deductible for income tax purposes. The expected lives of the acquired intangible assets is 3 months and 10 years for backlog and customer lists, respectively, and are being amortized on a straight-line basis.

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6. Inventories

Inventories are valued at the lower of cost or net realizable value and consisted of the following:


	March 31, 2024		December 31, 2023
Inventories carried at LIFO:
Finished goods(a)	$	75.4	$	74.7
Raw materials and work-in-process	37.1		38.5
Excess of FIFO over LIFO cost(b)	(47.5)		(47.7)
Total LIFO inventories	$	65.0	$	65.5

Inventories carried at FIFO:
Finished goods(a)	$	56.9	$	52.8
Raw materials and work-in-process	59.5		57.6
Total FIFO inventories	$	116.4	$	110.4
Total inventories	$	181.4	$	175.9

(a)Finished goods include machines, parts and consumables and component parts that are used in our products.

(b)The difference between replacement cost and the stated LIFO inventory value is not materially different from the reserve for the LIFO valuation method.

7. Goodwill and Intangible Assets

The changes in the carrying amount of goodwill for the three months ended March 31, 2024 were as follows:


	Goodwill		Accumulated Impairment Losses		Total
Balance as of December 31, 2023	$	220.7	$	(33.3)	$	187.4
Additions	8.4		—		8.4
Foreign currency fluctuations	(3.9)		0.3		(3.6)
Balance as of March 31, 2024	$	225.2	$	(33.0)	$	192.2

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The balances of acquired intangible assets, excluding goodwill, were as follows:


	Customer Lists		Trade Names		Technology		Total
Balance as of March 31, 2024
Original cost	$	161.7	$	28.7	$	16.1	$	206.5
Accumulated amortization	(101.5)		(19.5)		(13.2)		(134.2)
Carrying value	$	60.2	$	9.2	$	2.9	$	72.3
Weighted average original life (in years)	14		10		12

Balance as of December 31, 2023
Original cost	$	150.6	$	29.3	$	16.3	$	196.2
Accumulated amortization	(100.8)		(19.2)		(13.1)		(133.1)
Carrying value	$	49.8	$	10.1	$	3.2	$	63.1
Weighted average original life (in years)	15		11		11

The additions to Goodwill recorded during the first quarter of 2024 were related to our acquisition of TCS, as described further in Note 5.

As part of our acquisition of TCS, we acquired customer lists and backlog with a combined preliminary fair value of $14.2 million. Further details regarding the preliminary purchase price allocation of TCS are described further in Note 5.

Amortization expense on intangible assets for the three months ended March 31, 2024 and March 31, 2023 was $3.9 million.

Estimated aggregate amortization expense based on the current carrying value of amortizable intangible assets for each of the five succeeding years and thereafter is as follows:


Remaining 2024	$	11.2
2025	13.1
2026	11.9
2027	8.6
2028	6.9
Thereafter	20.6
Total	$	72.3

8. Debt

2021 Credit Agreement

On April 5, 2021, we and certain of our foreign subsidiaries entered into an Amended and Restated Credit Agreement (the “2021 Credit Agreement”) with JPMorgan Chase Bank, N.A. as administrative agent. The 2021 Credit Agreement provides us and certain of our foreign subsidiaries access to a senior secured credit facility until April 3, 2026, consisting of a term loan facility in an amount up to $100.0 million and a revolving facility in an amount up to $450.0 million with an option to expand the credit facility by up to $275.0 million, with the consent of the lenders willing to provide additional borrowings in the form of increases to their revolving facility commitment or funding of incremental term loans. Borrowings may be denominated in U.S. dollars or certain other currencies.

On November 10, 2022, we amended the 2021 Credit Agreement (the "Amendment") to update the benchmark provisions to replace LIBOR with Term SOFR (as defined in the Amendment) as the reference rate for purposes of calculating interest under the 2021 Credit Agreement. Pursuant to the Amendment, borrowings denominated

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in U.S. dollars bear interest at a rate per annum equal to (a) the Term SOFR Rate (as defined in the Amendment) plus a credit spread adjustment of 0.10% per annum, but in any case, not less than 0%, plus an additional spread of 1.10% to 1.70%, depending on the Company’s leverage ratio, or (b) the Alternate Base Rate (as defined in the Amendment), which is the greatest of (i) the prime rate, (ii) the federal funds rate plus 0.50% and (iii) the adjusted Term SOFR Rate for a one month period, but in any case, not less than 1.0%, plus, in any such case, 1.0%, plus an additional spread of 0.10% to 0.70%, depending on the Company’s leverage ratio. All other material terms included in the 2021 Credit Agreement remain unchanged as a result of the Amendment.

In connection with the 2021 Credit Agreement, we reaffirmed our security interest in favor of the lenders in substantially all our personal property and pledged the stock of our domestic subsidiaries and 65% of the stock of our first-tier foreign subsidiaries. The obligations under the 2021 Credit Agreement are also guaranteed by certain of our first-tier domestic subsidiaries, and those subsidiaries also provided a security interest in their similar personal property.

The 2021 Credit Agreement restricts the payment of dividends or repurchasing of stock requiring that, after giving effect to such payments, no default exists or would result from such payment. Additionally, cash dividends are restricted to $7.5 million per quarter and approved levels of other restricted payments range from $60.0 million to unlimited based on our net leverage ratio (not taking into account any acquisition holiday) after giving effect to such payment.

The 2021 Credit Agreement contains customary representations, warranties and covenants, including but not limited to covenants restricting our ability to incur indebtedness and liens and to merge or consolidate with another entity. Further, the 2021 Credit Agreement contains the following covenants:


•			A covenant requiring us to maintain an indebtedness to EBITDA ratio, determined as of the end of each of our fiscal quarters, of no greater than 3.50 to 1.00, with certain alternative requirements for permitted acquisitions greater than $50.0 million;


•			A covenant requiring us to maintain an EBITDA to interest expense ratio for a period of four consecutive fiscal quarters as of the end of each quarter of no less than 3.00 to 1.00; and


•			A covenant restricting us from paying dividends or repurchasing stock if, after giving effect to such payments and assuming no default exists or would result from such payment, our leverage ratio is greater than 2.50 to 1.00, in such case limiting such payments to $60.0 million during any fiscal year.

Debt Outstanding

Debt outstanding consisted of the following:


	March 31, 2024		December 31, 2023
Credit facility borrowings:
Revolving credit facility borrowings	$	125.0	$	110.0
Term loan facility borrowings	88.8		90.0
Finance lease liabilities	0.8		0.6
Total debt	214.6		200.6
Less: current portion of long-term debt(a)	(7.2)		(6.4)
Long-term debt	$	207.4