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    Aaron Reed • Northcoast Research

    Aaron Reed's questions to Tennant Co (TNC) leadership

    Aaron Reed's questions to Tennant Co (TNC) leadership • Q2 2025

    Question

    Aaron Reed of Northcoast Research Partners LLC asked for clarification on AMR sales as a percentage of revenue, the market reception of the new 'equipment as a service' leasing program, the apparent weakness in industrial sales versus the strong order pipeline, order-to-revenue lead times, and future pricing plans considering potential semiconductor tariffs.

    Answer

    CEO David Huml clarified that AMR sales constituted 6% of total enterprise revenue, not just North America, and are up nearly 20% year-to-date. He noted the new 'Clean 360' leasing program has seen positive early adoption with orders booked and a strong pipeline. Mr. Huml explained that reported industrial sales appear weak due to lapping a significant prior-year backlog reduction, but underlying order activity and the opportunity pipeline remain strong. He also detailed that lead times vary from days for commercial products to several months for large industrial machines. Regarding pricing, he confirmed the company has already acted to offset tariffs but remains prepared to make further adjustments if necessary.

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    Aaron Reed's questions to Tennant Co (TNC) leadership • Q1 2025

    Question

    Aaron Reed asked if the business's performance could be characterized as 'lumpy' and inquired about the new Clean 360 program, specifically its origin and potential to accelerate AMR adoption.

    Answer

    President and CEO Dave Huml clarified that while the business has normal seasonality, recent 'lumpiness' was due to working down a large post-pandemic backlog and winning significant orders from major accounts. Regarding the Clean 360 program, Huml explained it was developed both internally to drive growth and in response to customer feedback about the high upfront cost of AMR machines. He stated the program, which bundles the machine, software, and service into a monthly subscription with an uptime guarantee, is designed to lower adoption barriers and could potentially accelerate AMR sales growth beyond current targets.

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    Aaron Reed's questions to Tennant Co (TNC) leadership • Q4 2024

    Question

    Aaron Reed sought details on the geographic deployment of Tennant's five AMR products, inquired about a rumored manufacturing facility in the Netherlands, and asked for an update on the ERP implementation timeline, milestones, and expected benefits.

    Answer

    CEO David Huml confirmed the five-product AMR portfolio is deployed across 25 countries, roughly mirroring the company's geographic sales mix, and denied the existence of a new Netherlands facility. He outlined the ERP project is on track for staged go-lives in H2 2025. CFO Fay West reiterated the project is expected to yield $10M to $15M in annual run-rate savings upon completion.

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    Aaron Reed's questions to FreightCar America Inc (RAIL) leadership

    Aaron Reed's questions to FreightCar America Inc (RAIL) leadership • Q2 2025

    Question

    Aaron Reed from Northcoast Research Partners LLC sought clarification on the projected $6 million EBITDA from the tank car line over 2026-2027. He also asked about the potential business impact from recent Class 1 rail carrier mergers and whether a resurgence in coal could drive demand for new or repaired hopper cars.

    Answer

    President, CEO & Director Nicholas Randall confirmed the $6 million EBITDA contribution is expected over two years from a specific contract starting mid-2026. Regarding rail mergers, he stated that while it's early, industry productivity improvements are generally positive for builders. On the topic of coal cars, Randall acknowledged increased inquiries for life-extension services, benefiting the aftermarket business, and suggested conversions are more likely than new builds in the near term given the existing fleet.

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    Aaron Reed's questions to FreightCar America Inc (RAIL) leadership • Q1 2025

    Question

    Aaron Reed of Northcoast Research asked for more color on the types and margin profiles of new orders. He also inquired about the timeline for the first tank car production and sought to clarify if the potential activation of a fifth production line was a preemptive move or based on current order needs.

    Answer

    CEO Nicholas Randall reiterated that new orders were a healthy mix across their portfolio, with improved margins benefiting from the absence of low-margin box cars. He clarified three distinct initiatives: a potential fifth general production line, a tank car retrofit program starting shipments in H1 2026, and a future new tank car program for deliveries post-2026. He confirmed the current 2025 guidance does not rely on activating the fifth line; it would only be commissioned if demand exceeded current capacity.

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    Aaron Reed's questions to Applied Industrial Technologies Inc (AIT) leadership

    Aaron Reed's questions to Applied Industrial Technologies Inc (AIT) leadership • Q1 2025

    Question

    Aaron Reed asked about any remaining pockets of inflationary pressure and whether the 'waiting for the election' sentiment from customers is a legitimate reason for delayed spending or an excuse. He also inquired about the potential timing for pent-up demand to translate into revenue.

    Answer

    CFO David Wells described the current environment as one of 'slow, steady inflation,' which is manageable and generally positive for distributors, with no major pockets of concern. President and CEO Neil Schrimsher suggested the election is more of a talking point than a fundamental driver. He believes general project deferrals have occurred and that a release of this pent-up demand could begin after November and into early 2025, which corresponds to the company's third fiscal quarter.

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