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Tennant Company Rejects Karcher’s Charges of False Advertising

Tuesday, September 27, 2011

Tennant Company Rejects Karcher’s Charges of False Advertising
 
MINNEAPOLIS, Sept. 26, 2011—Tennant Company (NYSE: TNC), a world leader in designing, manufacturing and marketing of solutions that help create a cleaner, safer, healthier world, today strongly defended its advertising against recent claims filed by Germany-based Karcher and affirmed the effectiveness of its patented ec-H2O™ water-based cleaning technology: “We are vigorously defending our company, technology and advertising against these baseless claims by a competitor,” said Chris Killingstad, Tennant Company’s president and chief executive officer. “We find it interesting that Karcher would attack our ec-H2O advertising now, after we have been in the marketplace for three years, satisfied thousands of customers and have 2011 projected sales of $130 million to $140 million.”
 
This innovative technology has been tested by independent third parties and by Tennant’s customers, who include many of the world’s largest professional facility services providers. “In industries such as retail, warehousing, education and others, our customers have found that Tennant’s ec-H2O technology cleans their floors well in many day-to-day situations,” stated Killingstad. “Its effectiveness has been validated in laboratories and in the field. Our customers also want to use less water and fewer chemicals, save money and improve productivity. Tennant’s ec-H2O technology delivers on all of these points. Our customers know it works because they have tested it and used it for themselves.”
 
Added Killingstad: “Tennant Company has a long 141-year history and is a cleaning industry leader in innovation. We take pride in the integrity of our business and in the value of our products. We strongly condemn any attempt to discredit our reputation or disparage our technology.”
 
Karcher’s Attacks are Unwarranted and Flawed
Despite assertions in Karcher’s own report that there is no “fully appropriate standard” for testing automatic scrubbers, Karcher bases its claims against Tennant’s advertisements on flawed tests from one laboratory in Germany. Its allegation that ec-H2O “does not have a cleansing effect” is refuted by Tennant’s testing and three years of customer testing and experience as well as by findings in Karcher’s own report to the effect that ec-H2O performed identically to chemically based detergent in three out of four soil samples. Moreover, the Karcher-sponsored tests were applied to unrealistic soil samples and failed to control for certain key variables.

The Patented Science Behind Tennant’s Water-Based Cleaning Technology is a Significant Advance Over Traditional Automated Floor-Scrubbing Methods
Water-electrolysis technology is a well-established science that has been known for over 150 years. It has been used in a variety of industries and cleaning applications. In electrolysis, an electric current is applied to water, separating it into its acidic and alkaline components. Tennant’s patented new applications of electrolysis technology are revolutionizing the floor-cleaning industry.
 
Tennant’s ec-H2O harnesses electrolysis for use in cleaning applications by combining it with microbubbles of oxygen to create a revolutionary cleaning agent, all while using up to 70 percent less water than traditional automatic scrubbers. This technology is a significant advance over traditional automated floor-scrubbing methods that have historically required the addition of general-purpose floor cleaning chemicals, which add cost and complexity.
 
Based on its technical contributions to the adaptation of this technology, Tennant has at least 30 published patent applications in the United States relating to electrolysis, at least 10 of which currently have been granted or allowed by the U.S. Patent and Trademark Office. Tennant also has at least 20 published international patent applications and at least 25 applications published in individual foreign countries relating to electrolysis, at least four of which have been granted, including two patents in China and two patents in the European Patent Office. 
 
Customer Experience Confirms that ec-H2O Technology Works Well
Due in part to the great variability in soil and flooring materials and conditions, many customers consider their own onsite testing and experience as the most relevant factor for their significant purchasing decisions. Large professional facility customers have been converting to Tennant ec-H2O scrubbers after conducting their own analyses and tests of the product’s effectiveness. These sophisticated customers often purchase fleets of dozens or hundreds of scrubbers, each costing thousands of dollars. Their own reputations depend upon delivering results. Customers routinely conduct side-by-side comparison tests of ec-H2O equipment and their existing equipment before buying Tennant’s ec-H2O scrubbers. They have approved the ec-H2O technology with their purchases and with their public statements. 
 
Among other customer testimonials and videos are UGL-Unicco and Elliott study compared a Tennant ec-H2O floor scrubber to the same type of scrubber (Tennant Model 5680) using a conventional chemical cleaner. The test shows that on multiple attributes (organic and bacterial load reduction, visual appearance, and water and chemical usage reduction) in a real-world bottling plant, Tennant’s “ec-H2O system delivered more consistent soil and contamination load removal over the course of the study” than the scrubber using a conventional chemical-cleaning solution. 
 
Aspen Laboratories compared ec-H2O to traditional daily chemical floor cleaners on four types of soils. The study concluded that based on the test results, ec-H2O “consistently cleans as well as and, more often, better than general-purpose cleaners.” 
 
Industry and Business Awards
Since its introduction in 2008, Tennant’s ec-H2O technology has received numerous international industry and business honors for its innovation and sustainability, including:
  • ISSA Innovation Award – 2007, the leading cleaning industry association
  • R&D Magazine Top 100 Award – 2008, Most Technologically Significant Innovations
  • Australia Business Award – 2008, Best Eco-Friendly Product
  • Tekne CleanTech Award – 2008, Minnesota High Tech Association
  • European Business Award – 2009, Innovation Category
  • Premier Healthcare Innovation – 2009
  • Sustainable Industries – Green Building Products TOP 10 2009
Growing a Sustainable Platform
Sales of scrubbers equipped with Tennant's ec-H2O technology grew approximately 85 percent in the 2011 second quarter compared to the 2010 second quarter. In the first six months of 2011, sales of scrubbers equipped with ec-H2O totaled $67 million and Tennant expects 2011 full year ec-H2O sales in the range of $130 million to $140 million.

“We’re very pleased with the ec-H2O growth we’ve achieved to date. Tennant is committed to providing our customers with the most innovative cleaning technologies, products and solutions to meet their needs. Our ec-H2O platform is a testament to that commitment and it is only the beginning. Tennant is aggressively investing in a variety of water-based and other sustainable cleaning technologies to continue our reputation as the floor-cleaning innovation leader,” concluded Killingstad.

Company Profile
Minneapolis-based Tennant Company (NYSE: TNC) is a world leader in designing, manufacturing and marketing solutions that help create a cleaner, safer, healthier world. Its products include equipment for maintaining surfaces in industrial, commercial and outdoor environments; chemical-free and other sustainable cleaning technologies; and coatings for protecting, repairing and upgrading floors. Tennant's global field service network is the most extensive in the industry. Tennant has manufacturing operations in Minneapolis, Minn.; Holland, Mich.; Louisville, Ky; Uden, The Netherlands; the United Kingdom; São Paulo, Brazil; and Shanghai, China; and sells products directly in 15 countries and through distributors in more than 80 countries. For more information, visit www.tennantco.com.

Forward-Looking Statements
Certain statements contained in this document, as well as other written and oral statements made by us from time to time, are considered “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act. These statements do not relate to strictly historical or current facts and provide current expectations or forecasts of future events. Any such expectations or forecasts of future events are subject to a variety of factors. These include factors that affect all businesses operating in a global market as well as matters specific to us and the markets we serve. Particular risks and uncertainties presently facing us include: geopolitical and economic uncertainty throughout the world; the competition in our business; our ability to effectively manage organizational changes; our ability to comply with laws and regulations; our ability to effectively maintain and manage the data in our computer systems; our ability to develop new innovative products and services; our ability to successfully upgrade and evolve the capabilities of our computer systems; our ability to attract and retain key personnel; the occurrence of a significant business interruption; fluctuations in the cost or availability of raw materials and purchased components; unforeseen product liability claims or product quality issues; our ability to acquire, retain and protect proprietary intellectual property rights; and the relative strength of the U.S. dollar, which affects the cost of our materials and products purchased and sold internationally.

We caution that forward-looking statements must be considered carefully and that actual results may differ in material ways due to risks and uncertainties both known and unknown. Shareholders, potential investors and other readers are urged to consider these factors in evaluating forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. For additional information about factors that could materially affect Tennant's results, please see our other Securities and Exchange Commission filings, including disclosures under “Risk Factors.”

We do not undertake to update any forward-looking statement, and investors are advised to consult any further disclosures by us on this matter in our filings with the Securities and Exchange Commission and in other written statements we make from time to time. It is not possible to anticipate or foresee all risk factors, and investors should not consider any list of such factors to be an exhaustive or complete list of all risks or uncertainties.