Good morning. My name is Rebecca, and I will be your conference operator today. At this time, I would like to welcome everyone to Tennant Company's 2021 First Quarter Earnings Conference call. This call is being recorded. [Operator Instructions] Thank you for participating in Tennant 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 Tennant Company. Mr. Prate, you may begin..

Thank you, Rebecca. Good morning, everyone, and welcome to Tennant Company's first quarter 2021 earnings conference call. I'm William Prate, Senior Director of Global Financial Planning and Analysis and Investor Relations. Joining me today are Dave Huml, Tennant's President and CEO; and Fay 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 Fay will cover the financials. After their remarks, we will open the call to questions.

Please note a slide presentation accompanies this conference call and is available on our Investor Relations website at investors.tennantco.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 risks 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 GAAP measures and a reconciliation of these non-GAAP measures to our GAAP results. Our earnings release was issued this morning via Business Wire and is also posted on our Investor Relations website at investors.tennantco.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. It required significant effort from everyone at Tennant. 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 disruptions.

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 T16AMR, 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 desires 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 Tennant 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 transition.

The first quarter saw a number of senior level changes, including Rusty Zay's promotion to Chief Commercial Officer; Kristin Stokes' promotion to General Counsel; and Barb Balinski's promotion to Senior Vice President of Innovation and Technology. And most recently, we welcomed Fay West as our new CFO. Fay 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, PepsiAmericas 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 Tennant's 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 Fay for a discussion of our financials.

Fay, welcome aboard..

the Americas, which includes all of North America and Latin America, EMEA, which covers Europe, the Middle East and Africa; and Asia Pacific, which includes China, Japan, Australia and other Asian markets.

In the first quarter, sales in the Americas declined 3%, reflecting the divestiture of the coatings business earlier this year, which impacted results by negative 2.6%, along with a foreign currency effect of negative 0.8%.

Organically, the region grew 0.4%, reflecting the limited impact that the pandemic had on the prior year period as well as solid growth in the direct and distribution channels in North America, along with growth in Brazil. Sales for strategic accounts were down from the prior year period due to the lapping of some large orders in Q1 of last year.

Sales in the EMEA region increased 12.4% or 2.3% organically, driven by performance in France, Italy and Germany and also benefited from a foreign currency effect of 10.1%. However, pandemic-related restrictions did continue to have an impact in some markets, particularly in the United Kingdom, Central and Eastern Europe, the Middle East and Africa.

Sales in the Asia Pacific region rose 40.6%, with a foreign currency effect of positive 8.8%. On an organic basis, sales in the region rose 31.8%. Tennant recorded organic growth across all APAC countries, product categories and channels as the region rebounded strongly from the pandemic related slowdown of last year. Turning to margins.

Gross margin in the first quarter of 2021 was 43% compared to 40.8% in the prior year period. Adjusted gross margin was 43% compared to 41.5% in Q1 of last year. This increase was attributed to increased productivity, product mix and actions related to the company's enterprise strategy, including pricing and cost reduction initiatives.

This more than offset commodity and freight cost pressures we experienced in the quarter. As far as expenses, during the first quarter, our adjusted S&A expenses were 30.2% of net sales compared to 31.8% in the year ago period.

In addition to careful expense management, this improvement included some temporary savings related to the suspension of most business travel and in-person trade shows and customer events. Net income increased to $25.7 million or $1.37 per diluted share compared to $5.2 million or $0.28 per diluted share in the year ago period.

Adjusted EPS, which excluded nonoperational items and amortization expense, was $1.17 per share compared to $0.57 per share in the year ago period. Adjusted results in the quarter excluded the gain on sale from the divestiture of the coatings business.

Adjusted EBITDA in the first quarter of 2021 increased to $40.7 million or 15.5% of sales compared to $26.1 million or 10.4% of sales in the first quarter of 2020.

As for our tax rate in the first quarter, Tennant had an adjusted effective tax rate, excluding the amortization expense adjustment of 21.4% compared to 20.5% in the year ago period, which increased primarily due to the mix in full year taxable earnings by country and a decrease in certain discrete tax benefit items.

Turning to cash flow and balance sheet items. Tennant generated $18.4 million in cash flow from operations in the first quarter of 2021, mainly due to strong business performance. As of March 31, 2021, the company had $175.2 million in cash and cash equivalents.

In April, after the close of the first quarter, the company restructured its credit agreement to optimize its debt structure. This restructure allows for enhanced flexibility with minimal covenants and no prepayment penalties, while also reducing future interest expense by approximately $1 million per month. Lastly, turning to guidance.

As Dave mentioned, our raised guidance reflects our optimism regarding the pace of a continued and broad economic recovery and in Tennant's ability to implement its long term growth strategy. As included in today's earnings announcement, our guidance for full year 2021 is as follows.

Net sales of $1.09 billion to $1.11 billion, with organic sales rising 9% to 11%. GAAP EPS of $3.45 to $3.85 per share. Adjusted EPS of $4.10 to $4.50 per share, which excludes certain nonoperational items and amortization expense.

Adjusted EBITDA in the range of $140 million to $150 million, capital expenditures of $20 million to $25 million and an adjusted effective tax rate of approximately 20%, which excludes the amortization expense adjustment. With that, we will open the call to questions. Operator, please go ahead..

[Operator Instructions] Your first question comes from the line of Mike Shlisky with Colliers Securities..

Can you hear me okay?.

Yes, we can hear you, Mike..

And Fay, welcome aboard. I kind of wanted to touch on the question we've been asking for really a whole year. Now you've kind of provided an answer to it in your prepared comments, Dave. That we're seeing a more of a larger focus on being visible about your cleanliness in a commercial space.

And I'm just kind of curious, have you given any thought as to whether that makes your organic growth outlook beyond 2021, which is a pandemic bounce back.

But is your longer-term growth outlook more than just like a few percent? Does it kind of double it perhaps even over the maybe 3 to 5-year range here?.

Thanks, Mike. We have given that some thought, and I'll tell you, it's just too early to take the signs and signals we're getting from the marketplace and try to project that into a long term potential for our business. So we're holding to our long range plan for now.

The comment that you made -- that I made that you would be focused in on, is an important one. I think that our customers are viewing cleaning differently in many of their spaces, where it used to be something they wanted to hide from their employees and hide from their customers and have it be largely invisible.

Now there seems to be, and our customers are talking about the value in their floor cleaning being visible as a sign that their space is safe to operate in, whether that be for their employees or their customers. So long term impact on both the industry, our applications, our customers and our business, it's too early to tell.

But we do believe that it's neutral to positive for us. That our customers will have a broader range of hours that they can use our equipment and that will result in overall cleaner spaces for our customers. So we'll wait and see, but early signs are certainly positive for us..

I kind of want to go up there and perhaps unpack that a bit. I'm starting to see ways that commercial spaces can get a certification of a certain level of cleanliness, I guess, from an outside entity.

In some cases it's a sponsored entity, for example, in barbershops, people that make the barber cleaning, the scissor fluids have created a barber shop cleanliness certification course.

And some of the bigger spaces, are you seeing floor care being an important part of some of the wider certification efforts out there?.

Yes. Mike, I've seen some of the similar that you're referencing where some companies are offering some -- or agencies are offering some sort of a certification of clean or a cleaning standard. That's something that we think has always been missing in our industry, we call it the proof of clean.

And I would just highlight that the role the Tennant can play in that with our technology as we can actually provide our customer assurance that the floor scrubber has been used, when it was used, how long it was used. And in the case of AMR, whether it was used to cover the entire floor space.

And so from a proof of clean perspective, we think the role we can play is give the customer proof that the equipment was used to clean their floors and then they can apply that proof in whatever way they'd like to out to their stakeholders..

And then I also wanted to touch on the cash balance on the balance sheet. You're at $175 million or so here. I mean you've had higher in the past in various points in time, but not by much. And you've got a really strong, it appears to be free cash outlook for the rest of this year.

I'm kind of curious you can maybe outline some of your M&A outlook or some other areas of capitalization that we should be thinking about over the next 12 months..

So you're right. So I think the cash balance where it sits is about $175 million, and we do have some nice -- a nice liquidity profile for Tennant. Certainly, we will always evaluate opportunities that our shareholder experience and look for ways to provide shareholder return.

From a capital allocation perspective, we're focused on maintaining the right leverage as well as returning capital to shareholders by way of dividend.

Maybe you wanted to add there?.

Yes, I will just add. We don't specifically comment on forward-looking M&A activity. I'll just assure you that this team is committed to putting our cash to work to return a positive return for our shareholders. Thanks Mike..

Your next question comes from the line of Chris Moore with CJS Securities..

So maybe just a quick follow-up on the cash flow. So obviously, good cash flow in Q1. Given the revenue growth that you're looking for, I would assume there's going to be a little more working capital needs.

Can you give some -- unless I missed it, some thoughts on what cash flow looked like in '21?.

So I think with kind of where we are with our guidance, and you're right, there'll probably be a little bit of working capital need here just based on the way the working capital flows. We will have really strong full year operating cash flow. We've not significantly changed our CapEx.

So our free cash flow should be strong for the year and will be down slightly from 2020, and that's just really driven by changes in working capital. But really strong working cash -- free cash flow for 2020..

I think what you're -- I'll just add what you're seeing is really the result of the structural changes that we're driving in our business in our enterprise strategy. And it's -- and it's beginning to read out -- read out in 2020. It was a bit more difficult to see because of the muted top line.

But I think you're seeing really the benefits of executing against our long term strategy. And I'm really pleased to have Fay in her role now to help us chart our forward-looking strategies around capital allocation and uses of cash..

Switch to this steel conversation. My understanding is that price increases at the beginning of this year were perhaps a little less aggressive than usual to help drive demand. And I'm just trying to understand from where you sit right.

Now that balance between -- with the rapid rise in steel, between increasing prices and demand? Maybe you could talk to that a little bit..

Yes. You saw the expansion of gross margins in Q1. So let me comment in that context, let me comment a bit about what happened in Q1, and then I can comment on our forward-looking projection relative to not only steel, but other commodities.

And I'll broaden it to make some comments about supply chain in general, because I think it's a relevant topic that's top of mind for many of our stakeholders and investors. Tennant was not immune to the global supply chain challenges that the globe experienced in the first quarter of 2021.

We did see commodity inflation across our key commodities, and for us, that's steel, resin and lead, which is used in batteries. We also saw challenges in transportation and freight logistics, whether it was container availability or the cost of freight -- the air freight or ocean freight.

And we also managed through a number of general supply based challenges, including everyone's familiar with the electronics and ship shortage challenges going on globally, some capacity constraints and also financial solvency of our supply base.

And so our team -- our operations and supply chain team has done an absolutely fantastic job monitoring the health of our supply chain and taking definitive action to mitigate both the financial impact to Tennant, but also insulate our customers from the impact of those challenges we're managing.

So I couldn't be more proud of the work the team has done and how the team has positioned us to weather what is really broad based, a significant portion of supply chain challenges. In Q1, we offset the impact through increased productivity in the plants, leveraging the volume, some favorable product mix.

And as I mentioned earlier, continuing to execute and benefit from our enterprise strategy, notably strategic pricing and cost reduction activities. So while we expect the supply chain challenges to continue into 2021, we have reflected that in our full year guidance.

And again, I'm just so proud of the actions the team has taken to help Tennant overcome the challenges here in 2021..

When I look at the 3.1% organic growth then, how does that break down between price and volume?.

We haven't really broken that out for a while, Chris. So this is William. In terms of price, we did take pricing actions, but just knowing the market that we were coming into, it's probably not to the historical, which would have been around 1.5% net. So it's definitely lower than that.

But we haven't really broken it out from that vantage point for a while. Expect growth on manufactured units and the price fell this year..

And your next question comes from the line of Steve Ferazani with Sidoti & Company..

I want to follow-up a little bit on the guidance. So with $41 million in adjusted EBITDA in the quarter, it implies so more than 25%, even at the high end of your guidance range.

Just trying to get a sense if you're being relatively conservative, that you're concerned about costs, why that -- why this wouldn't be the low point of the year?.

So our guidance is based on our current visibility into order rates and assumes a continuing trend in kind of the microeconomic environment and improvement there. And we are now -- we do know that we will start to lap the hardest month in the prior year that were hit by the pandemic. I think that our guidance is balanced at this point.

And our Q1 results did come in above our initial expectations, and that's reflected in our revised guidance. But we're encouraged by the trends that we're seeing at this point, and I think our range is reflective of that..

I mean, based on the -- yes..

Steve, the only thing that I'd just add is just maybe take a step further on that. To Dave's prior points around the headwinds that we're facing in commodity pricing and freight.

We've also proven that as we're improving ourselves in terms of revenue and gross margin early in the year, we will invest back into the business to drive other strategic initiatives in the back half of the year. So you'll see that on the S&A line, like you would have seen last year and in 2019.

So we've embedded those items, both the things that we see positive and the headwinds that we feel on the commodity pricing, freight and the investments we'll make into our business into our guidance. So that's how we're thinking through what we've provided..

And then noting that the call was at the end of February, did you see significant improvement in March? And did that -- has that carried on?.

And really, we did actually see an uptick in the month of March. And so post our year-end call, which was in the end of February, I think we saw a really strong performance in March and continuing here into April..

And last one for me is, just can you give any kind of updates on marketing and sales effort with the new industrial AMR?.

Yes, I'll comment briefly on that. We're really excited about our T16AMR, and this is our -- as you know, this is our industrial robotics offering. Customer interest is very, very high in our entire robotics offering. But with the introduction of the T16AMR, we now have a product to enter into industrial vertical markets.

And importantly, with our 3 product portfolio of robotics, we can engage a broad range of customers across a broad range of vertical markets, broadest in the industry. And so we were able to activate our global sales organization and attack the AMR opportunity in earnest across every geography.

It's important -- an important point around AMR is that our early adopters are reordering and expanding their robotics programs. So we're drawing some confidence from that, some optimism from that. We're really well positioned around AMR with our product offering.

Our teams are doing a fantastic job supporting deployment and delivering a fantastic customer experience, which we know is critical to driving an accelerated adoption. And we're bullish on the potential. So we are well prepared to ramp at the pace of customer adoption in AMR globally..

[Operator Instructions] Your next question comes from the line of Marco Rodriguez with Stonegate Capital..

I wanted to follow-up a little bit just here on the supply chain. I appreciate the commentary that you provided. It's very helpful.

But in terms of just the rising inflation, can you maybe just talk a little bit about what your expectations are there? I mean, obviously, everyone's seeing prices go up, FX markets are continuing to show a lot of rise in commodity prices.

How are you guys thinking about your ability to continue to pass-through these costs and raising prices perhaps?.

Yes. It's a great question. It's top of mind for us. I mentioned earlier some of the sensing we're doing in the marketplace and how proud I am of the team rallying around a specific set of actions to help us offset and mitigate the risks.

I will tell you that our confidence in our ability to offset the supply chain challenges is reflected in our guidance. And so we do expect to have to manage against these headwinds for the rest of 2021. And we do expect that these will subside over time.

Well, we prepared ourselves to manage against it in the remainder of 2021, and that's reflected in our guidance..

And then in terms of the supply chain constraints that you're seeing, is there any way or any sort of color that you can kind of help us understand? I mean, what sort of -- how long are the lead times or any other information that might kind of give us a little bit better sense as far as the constraints you're seeing?.

Yes. It's a great question. It's so broad-based. It's also difficult to quantify a specific data point that would be meaningful to you. I gave you the major buckets. I'll repeat them again. Really, there's a commodity inflation component. There's transportation, freight and logistics challenges that we're seeing, which is both availability and of cost.

And then I lump the rest into just general supply based challenges. As our supply base has come back online post pandemic, they've had to ramp their capacity to meet their demand. And so you saw -- you're familiar with the chip shortage, and that -- there's a halo effect around electronics, in general.

There are capacity constraints across many of our parts and suppliers as they ramp back up to their capacity and try to project what capacity they'll need to serve 2021. And then I noted also, we're tracking the financial solvency of our supply base. Some suppliers did not weather the pandemic as well as others.

And so where we have an early signal that a supplier may be in trouble, we reach out and talk to them to understand what their recovery plan is. And if we need to augment that supplier with someone else, then we'll certainly take action to get ahead of any supply chain disruption. So it's tough to dimensionalize.

I will just tell you that, again, the team did a fantastic job responding to it in Q1, and we expect challenges to continue for '21, but we've reflected our ability to mitigate it and offset it in our guidance..

And last one for me here. Obviously, you guys saw some really strong growth in Asia. Just wondering how you guys are thinking about that region just kind of given the rising coronavirus cases that we see out there, driven by the new variants in that part of the world..

Yes. We're -- like everyone, we're watching the various aspects of this pandemic, whether its vaccination -- vaccination deployment as well as case spread, and then importantly, what government restrictions are being put in place in response to try to manage the pandemic.

In Asia Pacific, specifically, really the -- in China, the pandemic started and that economy was hardest hit early. And so in some regards, they're further ahead on the journey of what recovery looks like. I think what you see in China is that it's a choppy, uneven recovery. It's not a straight-line trajectory.

And different governments are trying to manage this thing as we dig our way out of it. Generally speaking, we see -- we saw in Q1 organic growth rate across the entire APAC region, and that was in every product category, every geography and every channel.

So we really view APAC as on a trajectory of broad-based economic market recovery, which we are prepared to capitalize on. But I do expect a bit of unevenness as we get back to normal or, say, pre-pandemic levels, because we've seen that in every other geography. It's just not a straight-line recovery..

Your next question comes from the line of Mike Shlisky with Colliers Securities..

I want to ask about the margin performance in the quarter. It was one of your best EBITDA margin in the quarters ever. I mean I guess, the only better quarter was last year's second quarter when you had some of the extreme furloughs and extreme cost cuts that were in the worst of the pandemic.

I'm kind of curious, I think, Fay, you alluded to, there were still some tailwinds from pandemic related reductions.

But can you maybe help us quantify how much of EBITDA in the quarter was -- could come back in the future quarters?.

So a couple of things. I think the improvement that you saw in the quarter really reflects higher productivity, which we mentioned, the mix of products and a number of actions that the company has taken, including pricing actions and cost reduction initiatives.

And so that was a big impact into kind of the gross margin percentage and performance through this quarter.

From an S&A perspective, there was significant cost management that we saw in the first quarter, and part of that was pandemic related, because you have onetime certain costs that just were not occurring on travel and trade shows and other costs like that.

So the quarter benefited from very specific actions taken by the company as well as just kind of actions that were related to the pandemic..

Yes. I would just add, Q1, in my mind, is an important proof point. You'll recall during the entirety of 2020, we discussed our ability to continue to execute against our enterprise strategy and drive the structural improvements in our business so that we can get leverage with volume, and we were -- we called it emerge strong.

We were getting our house in order so that when the markets recover, we'd not only be in a position to service the demand, but get the leverage with the volume. And I think what you're seeing in Q1 is, we're demonstrating we can deliver productivity and use the volume, drive leverage from the volume to our benefit.

So to me it's a proof point of the actions that the team took in 2020 despite a very challenging operating environment to drive structural improvements in the business, and now we're beginning to reap the rewards in Q1..

Absolutely, no. It's been a great job all along here. But there's no number you can give us as to what travel and trade show may have impacted the EBITDA by? Or was that really just not much of a material number.

That full 15.5% was almost entirely due to ongoing initiatives?.

Yes. I think Mike, the S&A impact of those items is maybe a couple of million dollars. But I also then wouldn't then say, if you add a couple of million dollars to our S&A Q1 numbers, that wouldn't necessarily be a good baseline for our future quarter S&A either, though.

To the prior point that I made, we are continuing to make strategic investments into our business so we can continue to implement our strategic plan and get dividends in future years. So the question is really getting to, can we take Q1 and just extrapolate it out.

I'd be careful there and really lean on our guidance that we've provided that accounts for the headwinds that Dave and Fay have talked about on the gross margin line and the incremental investments we want to make in the business..

And perhaps the last one for me.

Can you comment on the pricing environment from competitors out there? Is anybody being irrational in the current environment?.

Yes, I'll take that. It's -- pricing in our business is difficult to assess because the only way you find out about it is sort of back channel through customers and they're hesitant to share, because it removes their leverage in the negotiation.

So our competitors are, in large part, very rational competitors and pricing is rational in the marketplace. That doesn't mean that we don't see some odd behaviors from time-to-time. But at the end of the day, we're going to be rational about our pricing, and we're going to get paid for the value we're delivering.

And one of the Tennant's -- one of the pillars of our enterprise strategy is just that, and to make sure that we price to market, and we price strategically to make sure that we're delivering value to our customers and getting paid for the value that we're delivering to our customers.

So yes, competitive pricing is interesting and something we need to take mind of. And our customers are ultimately the gauge of whether we are a commandable premium or not when we price them. So we haven't seen anything crazy this year, but we'll continue to keep an eye on it. Thank you..

Since there are no further questions at this time, I would like to turn the call over to management for closing remarks..

Thank you, again, all for joining us and for your interest in Tennant. I also want to give a special thank you to our global Tennant teams for all they have done and continue to do in meeting the challenges of the ongoing pandemic. This concludes our earnings call. Hope you have a nice day..

Thank you for participating. This concludes today's conference call. You may now disconnect..