Company Performance - Douglas Dynamics (PLOW) has shown a year-to-date performance increase of approximately 37.9%, significantly outperforming its peers in the Auto-Tires-Trucks sector, which have averaged a loss of about 6.4% [4] - The Zacks Consensus Estimate for PLOW's full-year earnings has risen by 4.7% over the past 90 days, indicating improved analyst sentiment and a stronger earnings outlook [4] - Douglas Dynamics holds a Zacks Rank of 2 (Buy), suggesting it has favorable characteristics for outperforming the market in the near term [3] Industry Context - Douglas Dynamics is part of the Automotive - Replacement Parts industry, which consists of 6 companies and currently ranks 193 in the Zacks Industry Rank, with an average loss of 4.4% year-to-date [6] - In contrast, QuantumScape Corporation (QS), another stock in the Auto-Tires-Trucks sector, has increased by 60.9% year-to-date and belongs to the Automotive - Original Equipment industry, which ranks 81 and has gained 10.9% this year [5][6] - The Auto-Tires-Trucks sector as a whole is ranked 11 among 16 different sector groups according to the Zacks Sector Rank [2]

Company Overview - Douglas Dynamics, Inc. (NYSE: PLOW) is anticipated to report increased revenue growth year-over-year in FY2025 [1] - The expected growth is primarily driven by the Work Truck Attachment segment and the Municipal business [1] Investment Focus - The company focuses on GARP (Growth at Reasonable Price) opportunities within the industrial, consumer, and technology sectors [1]

Core Viewpoint - The Zacks Automotive Replacement Parts industry is facing challenges due to evolving vehicle technology, which increases complexity and repair costs, while also pressuring supply chains to adapt quickly. However, the aging U.S. vehicle fleet is expected to support strong demand for replacement parts, as consumers focus on maintaining older vehicles rather than purchasing new ones [1]. Industry Overview - The Zacks Automotive - Replacement Parts industry includes companies involved in the production, marketing, and distribution of replacement components for the automotive aftermarket. Key components include engine, steering, drive axle, suspension, brakes, and gearbox parts. The market is less exposed to downturns as consumers prioritize maintenance over new purchases [2]. Factors Influencing Industry Dynamics - Evolving technology is creating significant challenges for the automotive supply chain, as modern vehicles require specialized knowledge and equipment for maintenance and repair. This complexity can lead to longer repair times and higher costs, particularly with the rise of electric and autonomous vehicles [3]. - The shift towards e-commerce is forcing companies to invest heavily in digital capabilities to remain competitive, which can pressure near-term cash flows despite enhancing long-term growth prospects [4]. - The average age of vehicles in the U.S. has increased to 12.8 years in 2025, up from 12.6 years in 2024, leading to higher demand for replacement parts as owners delay new purchases [5]. Industry Performance and Valuation - The Zacks Automotive – Replacement Parts industry currently holds a Zacks Industry Rank of 197, placing it in the bottom 20% of approximately 250 Zacks industries, indicating weak near-term prospects [6][7]. - Over the past year, the industry has underperformed compared to the Auto, Tires, and Truck sector, losing 19.5% against the sector's growth of 12.2% and the S&P 500's return of 15.7% [9]. - The industry is trading at an EV/EBITDA ratio of 6.89X, significantly lower than the S&P 500's 17.81X and the sector's 22.03X, with historical trading ranges between 6.04X and 12.15X over the past five years [12]. Notable Companies - **Dorman Products, Inc. (DORM)**: A leading supplier of replacement parts, Dorman's Light Duty segment introduced new automotive repair solutions, creating over 12 million new sales opportunities. The company revised its 2025 net sales forecast to a growth of 7-9% year-over-year, up from 3-5% [14]. The Zacks Consensus Estimate for Dorman's 2025 earnings implies an 18.1% year-over-year growth [15]. - **Standard Motor Products, Inc. (SMP)**: A major manufacturer of automotive replacement parts, SMP's acquisition of Nissens is expected to yield $8-$12 million in annualized cost savings within 24 months. The Zacks Consensus Estimate for SMP's 2025 sales and earnings indicates year-over-year growth of 19.8% and 16.7%, respectively [19][20]. - **Douglas Dynamics, Inc. (PLOW)**: Specializing in snow and ice control equipment, Douglas's Solutions segment reported a 5.4% increase in net sales and a 39.8% growth in adjusted EBITDA in Q2 2025. The company raised its 2025 net sales forecast to $630-$660 million [23]. The Zacks Consensus Estimate for Douglas's 2025 sales and earnings suggests year-over-year growth of 13.3% and 46.9%, respectively [24].

Company Performance - Douglas Dynamics (PLOW) shares have increased by 11.4% over the past month, reaching a new 52-week high of $32.41 [1] - The stock has gained 36.5% since the beginning of the year, outperforming the Zacks Auto-Tires-Trucks sector, which declined by 8.2%, and the Zacks Automotive - Replacement Parts industry, which fell by 4.2% [1] Earnings and Revenue - Douglas Dynamics has consistently beaten earnings estimates, reporting an EPS of $1.14 against a consensus estimate of $0.84 in its last earnings report [2] - For the current fiscal year, the company is expected to post earnings of $2.16 per share on revenues of $644.1 million, reflecting a 46.94% increase in EPS and a 13.3% increase in revenues [3] - For the next fiscal year, earnings are projected to be $2.34 per share on revenues of $673.9 million, indicating year-over-year changes of 8.33% and 4.63%, respectively [3] Valuation Metrics - Douglas Dynamics has a Value Score of A, with Growth and Momentum Scores of B and D, respectively, resulting in a VGM Score of A [6] - The stock trades at 14.9 times current fiscal year EPS estimates, which is a premium compared to the peer industry average of 14.4 times [7] - On a trailing cash flow basis, the stock trades at 15.2 times, while the peer group's average is 8.5 times, and it has a PEG ratio of 1.07, positioning it favorably for value investors [7] Zacks Rank - Douglas Dynamics holds a Zacks Rank of 2 (Buy) due to rising earnings estimates, aligning with the recommendation for investors to select stocks with Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B [8] Industry Comparison - In comparison to industry peers, Standard Motor Products, Inc. (SMP) also shows strong performance with a Zacks Rank of 2 (Buy) and a Value Score of A [9] - SMP is expected to post earnings of $3.67 per share on revenue of $1.74 billion for the current fiscal year, having beaten consensus estimates by 32.99% last quarter [10] - SMP shares have gained 23.6% over the past month, trading at a forward P/E of 10.96 times and a P/CF of 8.41 times, indicating potential for both PLOW and SMP despite the Automotive - Replacement Parts industry's overall ranking in the bottom 71% [11]

PART I. FINANCIAL INFORMATION This section presents the company's unaudited condensed consolidated financial statements and management's discussion and analysis of financial condition and results of operations [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements and comprehensive notes for the periods ended June 30, 2025, and December 31, 2024 [Unaudited Condensed Consolidated Balance Sheets](index=4&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) This section provides a snapshot of the company's financial position, detailing assets, liabilities, and equity at specific dates Condensed Consolidated Balance Sheets (in thousands) | Item | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------------- | :-------------- | :------------------ | | Total Assets | $671,471 | $589,983 | | Current Assets | $326,749 | $238,225 | | Total Liabilities | $398,130 | $305,696 | | Total Stockholders' Equity | $273,264 | $264,215 | - Total assets increased by **$81.49 million (13.8%)** from December 31, 2024, to June 30, 2025, primarily driven by increases in accounts receivable and inventories[8](index=8&type=chunk) [Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income](index=5&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income) This section details the company's financial performance, including net sales, gross profit, and net income over specified periods Condensed Consolidated Statements of Operations (in thousands, except per share data) | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net sales | $194,327 | $199,902 | $309,394 | $295,557 | | Gross profit | $60,296 | $61,303 | $88,435 | $80,223 | | Income from operations | $36,995 | $36,303 | $40,197 | $29,881 | | Net income | $25,954 | $24,338 | $26,102 | $15,986 | | Basic EPS | $1.10 | $1.03 | $1.10 | $0.68 | | Diluted EPS | $1.09 | $1.02 | $1.09 | $0.66 | | Cash dividends declared and paid per share | $0.30 | $0.30 | $0.59 | $0.59 | - For the six months ended June 30, 2025, net sales increased by **4.7%** and net income increased by **63.3%** compared to the same period in 2024[9](index=9&type=chunk) [Unaudited Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section outlines the company's cash inflows and outflows from operating, investing, and financing activities Condensed Consolidated Statements of Cash Flows (Six Months Ended June 30, in thousands) | Activity | 2025 (in thousands) | 2024 (in thousands) | | :------------------------------------ | :----- | :----- | | Net cash used in operating activities | $(12,721) | $(19,114) | | Net cash used in investing activities | $(5,126) | $(2,751) | | Net cash provided by financing activities | $20,708 | $1,905 | | Change in cash and cash equivalents | $2,861 | $(19,960) | | Cash and cash equivalents at end of period | $7,980 | $4,196 | - Net cash used in operating activities decreased by **$6.39 million**, while net cash provided by financing activities significantly increased by **$18.80 million** for the six months ended June 30, 2025, compared to the prior year[12](index=12&type=chunk) [Unaudited Condensed Consolidated Statements of Shareholders' Equity](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Shareholders%27%20Equity) This section presents changes in the company's equity, reflecting net income, dividends, and stock transactions Condensed Consolidated Statements of Shareholders' Equity (Six Months Ended June 30, in thousands) | Item | December 31, 2024 (in thousands) | June 30, 2025 (in thousands) | | :------------------------------------ | :---------------- | :------------ | | Total Stockholders' Equity | $264,215 | $273,264 | | Net income | $26,102 | | | Dividends paid | $(13,926) | | | Repurchase of common stock | $(6,000) | | - Total stockholders' equity increased by **$9.05 million** for the six months ended June 30, 2025, driven by net income, partially offset by dividends and share repurchases[14](index=14&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) These notes provide detailed disclosures on accounting policies and financial statement components [1. Basis of presentation](index=8&type=section&id=1.%20Basis%20of%20presentation) This note outlines the accounting principles used for interim financial statements and identifies the company's operating segments - The interim financial statements are prepared in accordance with GAAP for interim financial information, omitting some fiscal year-end footnotes[16](index=16&type=chunk) - The Company operates in two segments: Work Truck Attachments and Work Truck Solutions[17](index=17&type=chunk) [2. Revenue Recognition](index=8&type=section&id=2.%20Revenue%20Recognition) This note details the company's revenue recognition policies and presents total revenue by segment and contract liabilities Total Revenue by Segment (Six Months Ended June 30, in thousands) | Segment | 2025 (in thousands) | 2024 (in thousands) | Change (%) | | :-------------------- | :----- | :----- | :--------- | | Work Truck Attachments | $144,571 | $141,977 | **1.8%** | | Work Truck Solutions | $164,823 | $153,580 | **7.3%** | | **Total Revenue** | **$309,394** | **$295,557** | **4.7%** | Contract Liabilities (Six Months Ended June 30, in thousands) | Metric | 2025 (in thousands) | 2024 (in thousands) | | :-------------------- | :----- | :----- | | Balance at Beginning of Period | $5,063 | $4,009 | | Additions | $15,413 | $14,569 | | Deductions | $(7,557) | $(7,014) | | Balance at End of Period | $12,919 | $11,564 | [3. Credit Losses](index=12&type=section&id=3.%20Credit%20Losses) This note details the allowance for credit losses, including changes and balances by segment Allowance for Credit Losses (Six Months Ended June 30, in thousands) | Segment | Balance at Dec 31, 2024 (in thousands) | Additions charged to earnings (in thousands) | Writeoffs (in thousands) | Changes to reserve, net (in thousands) | Balance at June 30, 2025 (in thousands) | | :-------------------- | :---------------------- | :---------------------------- | :-------- | :---------------------- | :----------------------- | | Work Truck Attachments | $1,768 | $200 | $(8) | $(3) | $1,957 | | Work Truck Solutions | $604 | $115 | $(2) | $18 | $735 | | **Total** | **$2,372** | **$315** | **$(10)** | **$15** | **$2,692** | - The total allowance for credit losses increased to **$2.69 million** at June 30, 2025, from **$2.37 million** at December 31, 2024[27](index=27&type=chunk) [4. Fair Value](index=12&type=section&id=4.%20Fair%20Value) This note describes the fair value measurements of financial assets and liabilities, categorized by input levels Financial Assets and Liabilities Measured at Fair Value (in thousands) | Item | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------------- | :-------------- | :---------------- | | **Assets:** | | | | Non-qualified benefit plan assets | $11,362 | $10,482 | | Interest rate swaps | $1,337 | $2,340 | | Steel hedging instrument | $76 | - | | **Total Assets** | **$12,775** | **$12,822** | | **Liabilities:** | | | | Long-term debt | $147,725 | $147,526 | | Steel hedging instrument | - | $54 | | **Total Liabilities** | **$147,725** | **$147,580** | - Fair value measurements are categorized into Level 1, Level 2, or Level 3 inputs, with most significant inputs being Level 2 (observable market inputs)[28](index=28&type=chunk)[31](index=31&type=chunk)[33](index=33&type=chunk) [5. Inventories](index=14&type=section&id=5.%20Inventories) This note provides a breakdown of inventory components and changes, including truck chassis inventory Inventories (in thousands) | Category | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------- | :-------------- | :---------------- | | Finished goods | $68,877 | $67,897 | | Work-in-process | $19,183 | $13,337 | | Truck chassis inventory | $21,839 | $10,146 | | Raw material and supplies | $43,387 | $45,654 | | **Total Inventories** | **$153,286** | **$137,034** | - Truck chassis inventory financed through floor plan obligations increased significantly from **$2,612 thousand** at December 31, 2024, to **$20,216 thousand** at June 30, 2025[34](index=34&type=chunk) [6. Property, plant and equipment](index=14&type=section&id=6.%20Property%2C%20plant%20and%20equipment) This note details the net carrying amount of property, plant, and equipment, including accumulated depreciation Property, Plant and Equipment, Net (in thousands) | Category | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------------- | :-------------- | :---------------- | | Total property, plant and equipment | $135,077 | $130,172 | | Less accumulated depreciation | $(93,374) | $(88,861) | | **Property, plant and equipment, net** | **$41,703** | **$41,311** | - Net property, plant, and equipment increased slightly by **$392 thousand** from December 31, 2024, to June 30, 2025[35](index=35&type=chunk) [7. Leases](index=14&type=section&id=7.%20Leases) This section provides an overview of the company's lease obligations and related expenses Lease Expense (in thousands) | Metric | Three Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :-------------------- | :------------------------------- | :----------------------------- | :------------------------------- | :----------------------------- | | Operating lease expense | $3,274 | $6,543 | $1,581 | $3,177 | | Short term lease cost | $156 | $279 | $60 | $153 | | **Total lease cost** | **$3,430** | **$6,822** | **$1,641** | **$3,330** | - In September 2024, the Company completed a sale-leaseback transaction for seven properties, generating gross proceeds of **$64,150 thousand** and recognizing a gain of **$42,298 thousand**[37](index=37&type=chunk) Operating Lease Liabilities (in thousands) | Item | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------------- | :-------------- | :---------------- | | Operating lease right-of-use assets | $66,420 | $70,801 | | Total operating lease liabilities | $68,205 | $72,179 | | Weighted Average Remaining Lease Term (months) | 149 | 151 | | Weighted Average Discount Rate | **7.10%** | **7.05%** | [8. Other Intangible Assets](index=18&type=section&id=8.%20Other%20Intangible%20Assets) This note presents the net carrying amount of intangible assets and related amortization expenses Net Carrying Amount of Other Intangible Assets (in thousands) | Category | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------- | :-------------- | :---------------- | | Trademark and tradenames | $77,600 | $77,600 | | Customer relationships | $30,458 | $33,044 | | Patents | $1,225 | $1,630 | | Trademarks | $1,167 | $1,276 | | **Total** | **$110,450** | **$113,550** | - Amortization expense for intangible assets was **$3,100 thousand** for the six months ended June 30, 2025, down from **$4,260 thousand** in the prior year[43](index=43&type=chunk) [9. Long-Term Debt](index=18&type=section&id=9.%20Long-Term%20Debt) This note details the company's long-term debt, including credit facilities, outstanding borrowings, and refinancing impacts - On March 26, 2025, the Company entered into an Amended and Restated Credit Agreement, providing a **$150,000 thousand** senior secured term loan and a **$125,000 thousand** senior secured revolving credit facility, maturing March 26, 2030[45](index=45&type=chunk) - Outstanding borrowings at June 30, 2025, included **$147,725 thousand** under the term loan and **$42,000 thousand** on the revolving credit facility, with **$82,450 thousand** remaining borrowing availability[47](index=47&type=chunk) - The refinancing resulted in a debt modification expense of **$176 thousand** and a loss on extinguishment of debt of **$156 thousand** for the six months ended June 30, 2025[46](index=46&type=chunk) [10. Accrued Expenses and Other Current Liabilities](index=21&type=section&id=10.%20Accrued%20Expenses%20and%20Other%20Current%20Liabilities) This note provides a breakdown of accrued expenses and other current liabilities, including payroll, benefits, and warranty Accrued Expenses and Other Current Liabilities (in thousands) | Category | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------- | :-------------- | :---------------- | | Payroll and related costs | $9,555 | $9,876 | | Employee benefits | $7,132 | $6,391 | | Accrued warranty | $3,735 | $3,379 | | Other | $10,604 | $6,536 | | **Total** | **$31,026** | **$26,182** | - Accrued expenses and other current liabilities increased by **$4.84 million** from December 31, 2024, to June 30, 2025[57](index=57&type=chunk) [11. Warranty Liability](index=21&type=section&id=11.%20Warranty%20Liability) This note details the changes in the company's warranty liability, including provisions and claims paid Warranty Liability Rollforward (Six Months Ended June 30, in thousands) | Metric | 2025 (in thousands) | 2024 (in thousands) | | :-------------------------- | :----- | :----- | | Balance at the beginning of the period | $5,559 | $6,957 | | Warranty provision | $2,083 | $1,672 | | Claims paid/settlements | $(1,943) | $(1,948) | | **Balance at the end of the period** | **$5,699** | **$6,681** | - The total warranty reserve increased to **$5.70 million** at June 30, 2025, from **$5.56 million** at December 31, 2024[58](index=58&type=chunk) [12. Earnings per Share](index=21&type=section&id=12.%20Earnings%20per%20Share) This note presents the basic and diluted earnings per share calculations and related net income allocations Earnings Per Common Share (Six Months Ended June 30) | Metric | 2025 | 2024 | | :------------------------------------ | :----- | :----- | | Basic EPS | $1.10 | $0.68 | | Diluted EPS | $1.09 | $0.66 | - Net income allocated to common shareholders (diluted) for the six months ended June 30, 2025, was **$25,781 thousand**, compared to **$15,588 thousand** in 2024[61](index=61&type=chunk) [13. Employee Stock Plans](index=23&type=section&id=13.%20Employee%20Stock%20Plans) This note details compensation expenses related to restricted stock units and performance share units - The Company recognized **$2,919 thousand** of compensation expense related to restricted stock unit awards and **$785 thousand** for performance share unit awards for the six months ended June 30, 2025[64](index=64&type=chunk)[65](index=65&type=chunk) - Unrecognized compensation expense for restricted shares was approximately **$5,681 thousand** as of June 30, 2025, expected to be recognized through 2028[65](index=65&type=chunk) [14. Commitments and Contingencies](index=23&type=section&id=14.%20Commitments%20and%20Contingencies) This note discloses the company's involvement in litigation and management's assessment of potential financial impact - The Company is engaged in various litigation, including product liability and intellectual property disputes, in the ordinary course of business[66](index=66&type=chunk) - Management does not believe any pending litigation will have a material adverse effect on its consolidated financial position[66](index=66&type=chunk) [15. Segments](index=23&type=section&id=15.%20Segments) This note provides detailed financial information for the company's operating segments, including net sales and Adjusted EBITDA Segment Net Sales (Six Months Ended June 30, in thousands) | Segment | 2025 (in thousands) | 2024 (in thousands) | Change (%) | | :-------------------- | :----- | :----- | :--------- | | Work Truck Attachments | $144,571 | $141,977 | **1.8%** | | Work Truck Solutions | $164,823 | $153,580 | **7.3%** | | **Total** | **$309,394** | **$295,557** | **4.7%** | Segment Adjusted EBITDA (Six Months Ended June 30, in thousands) | Segment | 2025 (in thousands) | 2024 (in thousands) | Change (%) | | :-------------------- | :----- | :----- | :--------- | | Work Truck Attachments | $31,897 | $31,324 | **1.8%** | | Work Truck Solutions | $20,151 | $13,905 | **45.0%** | | **Total** | **$52,048** | **$45,229** | **15.1%** | - The Work Truck Attachments segment focuses on commercial snow and ice management attachments, while the Work Truck Solutions segment includes municipal snow and ice control products and up-fit services[70](index=70&type=chunk)[71](index=71&type=chunk) [16. Income Taxes](index=27&type=section&id=16.%20Income%20Taxes) This note explains the effective tax rate and deferred income taxes, highlighting temporary differences - The effective tax rate for the six months ended June 30, 2025, was **24.6%**, lower than **27.9%** in 2024, primarily due to the establishment of reserves for uncertain tax positions in the prior year[76](index=76&type=chunk) - Deferred income taxes reflect temporary differences, with the largest item being the difference between book and tax amortization of goodwill and other intangibles[77](index=77&type=chunk) [17. Restructuring and Impairment](index=27&type=section&id=17.%20Restructuring%20and%20Impairment) This note details restructuring expenses and impairment charges, particularly for internally developed software Restructuring Expenses (Six Months Ended June 30, 2024, in thousands) | Category | 2024 (in thousands) | | :-------------------------------- | :----- | | Severance and employee costs | $857 | | Write down of property, plant and equipment | $333 | | Legal, consulting and other costs | $212 | | **Total** | **$1,402** | - Impairment charges of **$1,224 thousand** were recorded in the six months ended June 30, 2024, related to certain internally developed software in the Work Truck Attachments segment[79](index=79&type=chunk) [18. Recent Accounting Pronouncements](index=27&type=section&id=18.%20Recent%20Accounting%20Pronouncements) This note discusses recently issued accounting standards and the company's evaluation of their potential impact - ASU 2024-03, 'Disaggregation of Income Statement Expenses,' is effective for annual periods beginning after December 15, 2026[80](index=80&type=chunk) - ASU 2023-09, 'Improvements to Income Tax Disclosures,' is effective for annual periods beginning after December 15, 2024[81](index=81&type=chunk) - The Company is evaluating the updated disclosure requirements of both new standards[80](index=80&type=chunk)[81](index=81&type=chunk) [19. Changes in Accumulated Other Comprehensive Income by Component](index=28&type=section&id=19.%20Changes%20in%20Accumulated%20Other%20Comprehensive%20Income%20by%20Component) This note details changes in accumulated other comprehensive income, including unrealized gains/losses and reclassifications Changes in Accumulated Other Comprehensive Income (Six Months Ended June 30, 2025, in thousands) | Component | Balance at Dec 31, 2024 (in thousands) | Other comprehensive gain (loss) before reclassifications (in thousands) | Amounts reclassified from AOCI (in thousands) | Balance at June 30, 2025 (in thousands) | | :------------------------------------ | :---------------------- | :------------------------------------------------------- | :----------------------------- | :----------------------- | | Unrealized Net Gain (Loss) on Interest Rate Swap | $1,836 | $(1,491) | $749 | $1,094 | | Unrealized Net Gain (Loss) on Steel Hedging Swap | $(40) | $96 | — | $56 | | Retiree Health Benefit Obligation | $3,676 | — | $(24) | $3,652 | | **Total** | **$5,472** | **$(1,395)** | **$725** | **$4,802** | - Accumulated other comprehensive income decreased by **$670 thousand** for the six months ended June 30, 2025, primarily due to unrealized losses on interest rate swaps and reclassifications to interest expense[82](index=82&type=chunk) [20. Stockholders' Equity](index=28&type=section&id=20.%20Stockholders%27%20Equity) This note provides details on the company's common stock repurchase plan and remaining authorization - The Board of Directors authorized a **$50,000 thousand** common stock repurchase plan on February 16, 2022, with no expiration date[83](index=83&type=chunk) - The Company repurchased approximately **$6,000 thousand** in shares during the six months ended June 30, 2025[84](index=84&type=chunk) - As of June 30, 2025, **$38,000 thousand** remained under the repurchase authorization[84](index=84&type=chunk) [21. Subsequent Events](index=29&type=section&id=21.%20Subsequent%20Events) This note discloses significant events occurring after the reporting period, such as new tax legislation - On July 4, 2025, the 'One Big Beautiful Bill Act' (OBBBA) was signed into law, amending U.S tax law[85](index=85&type=chunk) - The Company is evaluating the impacts of OBBBA but does not currently expect its provisions to have a material impact on its effective tax rate for 2025[85](index=85&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=30&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides an overview of the company's financial performance, liquidity, and capital resources [Forward-Looking Statements](index=30&type=section&id=Forward-Looking%20Statements) This section outlines forward-looking statements, associated risks, and uncertainties, including market and operational factors - The report contains forward-looking statements regarding future events, product demand, financial performance, and strategies, subject to known and unknown risks and uncertainties[88](index=88&type=chunk) - Key risk factors include weather conditions (snowfall), material price increases (steel, fuel), supply chain disruptions, economic conditions, and the ability to maintain OEM and distributor relationships[88](index=88&type=chunk) - The company also notes risks related to managing artificial intelligence and successfully implementing its new enterprise resource planning (ERP) system[88](index=88&type=chunk) [Results of Operations](index=30&type=section&id=Results%20of%20Operations) The company's consolidated financial performance for the six months ended June 30, 2025, showed increased net sales and a significant rise in net income [Overview](index=32&type=section&id=Overview) This overview summarizes the company's consolidated financial performance, highlighting key changes in sales, profit, and income Consolidated Statements of Operations (Six Months Ended June 30, in thousands) | Metric | 2025 (in thousands) | 2024 (in thousands) | Change (%) | | :------------------------------------ | :----- | :----- | :--------- | | Net sales | $309,394 | $295,557 | **4.7%** | | Gross profit | $88,435 | $80,223 | **10.2%** | | Income from operations | $40,197 | $29,881 | **34.5%** | | Net income | $26,102 | $15,986 | **63.3%** | Consolidated Statements of Operations as % of Net Sales (Six Months Ended June 30) | Metric | 2025 | 2024 | | :------------------------------------ | :----- | :----- | | Net sales | **100.0%** | **100.0%** | | Cost of sales | **71.4%** | **72.9%** | | Gross profit | **28.6%** | **27.1%** | | Net income | **8.4%** | **5.4%** | [Net Sales](index=32&type=section&id=Net%20Sales) This section analyzes the drivers of consolidated net sales growth across the company's operating segments - Consolidated net sales increased by **$13.8 million (4.7%)** to **$309.4 million** for the six months ended June 30, 2025, compared to **$295.6 million** in 2024[95](index=95&type=chunk) - Work Truck Attachments segment sales increased by **$2.6 million (1.8%)** to **$144.6 million** for the six months ended June 30, 2025, due to improved snowfall in core markets[97](index=97&type=chunk) - Work Truck Solutions segment sales grew by **$11.2 million (7.3%)** to **$164.8 million** for the six months ended June 30, 2025, driven by price increase realization and improved municipal volumes[98](index=98&type=chunk) [Cost of Sales](index=34&type=section&id=Cost%20of%20Sales) This section details the changes in cost of sales and its impact on gross profit margins - Cost of sales increased by **$5.7 million (2.6%)** to **$221.0 million** for the six months ended June 30, 2025[99](index=99&type=chunk) - As a percentage of sales, cost of sales decreased to **71.4%** for the six months ended June 30, 2025, from **72.9%** in 2024, reflecting higher volumes, efficiencies, and product mix[99](index=99&type=chunk) [Gross Profit](index=34&type=section&id=Gross%20Profit) This section discusses the increase in gross profit and its improvement as a percentage of net sales - Gross profit increased by **$8.2 million (10.2%)** to **$88.4 million** for the six months ended June 30, 2025[100](index=100&type=chunk) - As a percentage of net sales, gross profit improved to **28.6%** for the six months ended June 30, 2025, from **27.1%** in 2024, due to higher volumes, efficiencies, and product mix[100](index=100&type=chunk) [Selling, General and Administrative Expense](index=34&type=section&id=Selling%20General%20and%20Administrative%20Expense) This section analyzes the changes in selling, general, and administrative expenses, including amortization and compensation - Selling, general, and administrative expenses (including intangibles amortization) decreased by **$0.9 million (1.8%)** to **$48.2 million** for the six months ended June 30, 2025[101](index=101&type=chunk) - The decrease was driven by lower intangibles amortization (**$1.2 million**) and employee benefits costs (**$0.9 million**), partially offset by higher stock-based compensation (**$0.9 million**) and incentive-based compensation (**$0.5 million**)[101](index=101&type=chunk) [Impairment charges](index=35&type=section&id=Impairment%20charges) This section details impairment charges recorded, specifically related to internally developed software - Impairment charges of **$1.2 million** were recorded in the six months ended June 30, 2024, related to certain internally developed software at the Work Truck Attachments segment[102](index=102&type=chunk) [Debt Modification Expense](index=35&type=section&id=Debt%20Modification%20Expense) This section explains the debt modification expense incurred due to credit facility refinancing - A debt modification expense of **$0.2 million** was incurred in the six months ended June 30, 2025, due to fees associated with the refinancing of the company's term loan and revolving credit facilities[103](index=103&type=chunk) [Loss on Extinguishment of Debt](index=36&type=section&id=Loss%20on%20Extinguishment%20of%20Debt) This section reports the loss recognized from the extinguishment of debt during the refinancing process - A loss on extinguishment of debt of **$0.2 million** was recognized in the six months ended June 30, 2025, resulting from the refinancing of the company's credit facilities[104](index=104&type=chunk) [Interest Expense](index=36&type=section&id=Interest%20Expense) This section analyzes the changes in net interest expense, including impacts from borrowings and floor plan interest - Net interest expense for the six months ended June 30, 2025, decreased by **$2.29 million** to **$5.36 million**, primarily due to lower interest on revolver and term loan borrowings, partially offset by higher floor plan interest[105](index=105&type=chunk) [Income Taxes](index=36&type=section&id=Income%20Taxes) This section discusses the effective tax rate and its drivers, including prior year uncertain tax positions - The effective tax rate for the six months ended June 30, 2025, was **24.6%**, down from **27.9%** in the prior year, mainly due to the establishment of reserves for uncertain tax positions in 2024[106](index=106&type=chunk) [Net Income](index=36&type=section&id=Net%20Income) This section highlights the significant increase in net income and its improvement as a percentage of net sales - Net income for the six months ended June 30, 2025, increased significantly by **$10.1 million** to **$26.1 million**, compared to **$16.0 million** in the prior year[107](index=107&type=chunk) - As a percentage of net sales, net income rose to **8.4%** for the six months ended June 30, 2025, from **5.4%** in 2024[107](index=107&type=chunk) [Discussion of Critical Accounting Policies and Estimates](index=36&type=section&id=Discussion%20of%20Critical%20Accounting%20Policies%20and%20Estimates) This section confirms no material changes to critical accounting policies and estimates since the last annual report - There have been no material changes to the company's critical accounting policies and estimates since those disclosed in its 2024 Annual Report on Form 10-K[108](index=108&type=chunk) [Liquidity and Capital Resources](index=36&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's liquidity, capital resources, and cash flow from operating, investing, and financing activities - Total liquidity as of June 30, 2025, was **$90.5 million**, comprising **$8.0 million** in cash and cash equivalents and **$82.5 million** of borrowing availability under the revolving credit facility[112](index=112&type=chunk) - Total liquidity decreased from **$154.6 million** as of December 31, 2024, primarily due to the seasonality of the business[112](index=112&type=chunk) - Net cash used in operating activities decreased by **$6.4 million** for the six months ended June 30, 2025, to **$(12.7) million**, primarily due to a **$9.7 million** increase in net income adjusted for reconciling items[116](index=116&type=chunk) - Net cash provided by financing activities increased by **$18.8 million** for the six months ended June 30, 2025, to **$20.7 million**, mainly due to net revolver borrowings[118](index=118&type=chunk) [Free Cash Flow](index=38&type=section&id=Free%20Cash%20Flow) This section presents the company's free cash flow and its components, highlighting improvements from operating activities Free Cash Flow (Six Months Ended June 30, in thousands) | Metric | 2025 (in thousands) | 2024 (in thousands) | | :------------------------------------ | :----- | :----- | | Net cash provided by (used in) operating activities | $(12,721) | $(19,114) | | Acquisition of property and equipment | $(5,126) | $(2,751) | | **Free cash flow** | **$(17,847)** | **$(21,865)** | - Free cash flow for the six months ended June 30, 2025, improved by **$4.1 million** to **$(17.8) million**, compared to **$(21.9) million** in the prior year, primarily due to lower cash used in operating activities[119](index=119&type=chunk) [Non-GAAP Financial Measures](index=38&type=section&id=Non-GAAP%20Financial%20Measures) This section defines and reconciles non-GAAP financial measures used to evaluate operating performance - The company uses non-GAAP measures such as Free Cash Flow, Adjusted EBITDA, and Adjusted Net Income/EPS to evaluate operating performance and compare results consistently by removing the impact of certain non-core items[121](index=121&type=chunk)[122](index=122&type=chunk)[123](index=123&type=chunk)[125](index=125&type=chunk)[133](index=133&type=chunk) Adjusted EBITDA Reconciliation (Six Months Ended June 30, in thousands) | Metric | 2025 (in thousands) | 2024 (in thousands) | | :-------------------------- | :----- | :----- | | Net income | $26,102 | $15,986 | | EBITDA | $47,641 | $39,583 | | Stock-based compensation expense | $3,704 | $2,833 | | Impairment charges | - | $1,224 | | Debt modification expense | $176 | - | | Loss on extinguishment of debt | $156 | - | | Other charges | $371 | $1,589 | | **Adjusted EBITDA** | **$52,048** | **$45,229** | Adjusted Net Income and EPS Reconciliation (Six Months Ended June 30) | Metric | 2025 | 2024 | | :------------------------------------ | :----- | :----- | | Net income (GAAP) | $26,102 | $15,986 | | Adjusted net income (non-GAAP) | $29,407 | $20,005 | | GAAP diluted earnings per share | $1.09 | $0.66 | | Adjusted diluted earnings per share (non-GAAP) | $1.23 | $0.83 | [Future Obligations and Commitments](index=44&type=section&id=Future%20Obligations%20and%20Commitments) This section confirms no material changes to the company's future obligations and commitments during the period - There have been no material changes to the company's future obligations and commitments in the three months ended June 30, 2025[138](index=138&type=chunk) [Impact of Inflation](index=44&type=section&id=Impact%20of%20Inflation) This section discusses the material impact of inflation on profitability and mitigation strategies, including price adjustments - Inflation in materials and labor had a material impact on profitability in the three and six months ended June 30, 2025, and 2024[139](index=139&type=chunk) - The company expects ongoing impacts from tariffs and inflationary pressures in the remainder of 2025[139](index=139&type=chunk) - Mitigation strategies include raising prices, but timing differences between cost increases and price realization may occur[139](index=139&type=chunk) [Seasonality and Year-to-Year Variability](index=44&type=section&id=Seasonality%20and%20Year-to-Year%20Variability) This section explains the seasonal nature of the Work Truck Attachments segment and its impact on sales and working capital - The Work Truck Attachments segment is highly seasonal and variable, with sales heavily influenced by snowfall levels in the prior snow season (October to March)[140](index=140&type=chunk)[141](index=141&type=chunk) - The company manages seasonality through a pre-season sales program, offering pricing, payment, and freight incentives to distributors in the second and third quarters[142](index=142&type=chunk) - Working capital requirements typically peak towards the end of the third quarter due to increased accounts receivable from pre-season sales[143](index=143&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=46&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section details the company's exposure to market risks, primarily from changes in interest rates and steel price fluctuations [Interest Rate Risk](index=46&type=section&id=Interest%20Rate%20Risk) This section details the company's exposure to interest rate risk from variable-rate borrowings and mitigation strategies - The company is exposed to interest rate risk due to variable-rate borrowings, including its term loan and revolving credit facility[148](index=148&type=chunk) - Interest rate swaps are utilized to mitigate a portion of the interest rate risk associated with the term loan[148](index=148&type=chunk) - A hypothetical **1%** interest rate change would impact interest incurred by **$0.1 million** for both the **$147.7 million** term loan and **$42.0 million** revolving credit facility for the three months ended June 30, 2025[149](index=149&type=chunk)[150](index=150&type=chunk) [Commodity Price Risk](index=46&type=section&id=Commodity%20Price%20Risk) This section outlines the company's exposure to commodity price risk, primarily from steel, and hedging strategies - The company faces commodity price risk from steel purchases, which constituted **6.5%** of revenue for the six months ended June 30, 2025[151](index=151&type=chunk) - A steel hedging agreement was entered into on December 17, 2024, for a notional quantity of **3,000 short tons**, effective August 1, 2025, through December 31, 2025, at a fixed payment of **$819 per short ton**[152](index=152&type=chunk) - The steel hedging instrument's fair value was positive **$0.1 million** at June 30, 2025, and negative **$0.1 million** at December 31, 2024[152](index=152&type=chunk) [Item 4. Controls and Procedures](index=46&type=section&id=Item%204.%20Controls%20and%20Procedures) This section addresses the effectiveness of the company's disclosure controls and procedures and reports on any changes in internal control over financial reporting, including the impact of a recent ERP system implementation [Evaluation of Disclosure Controls and Procedures](index=46&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) This section confirms the effectiveness of the company's disclosure controls and procedures as of June 30, 2025 - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of June 30, 2025[153](index=153&type=chunk) - These controls provide reasonable assurance that required information is recorded, processed, summarized, and reported timely[153](index=153&type=chunk) [Changes in Internal Control Over Financial Reporting](index=47&type=section&id=Changes%20in%20Internal%20Control%20Over%20Financial%20Reporting) This section reports on changes in internal control, including the impact of a recent ERP system implementation - In March 2025, the company completed an ERP system implementation at its Dejana subsidiary, leading to changes in processes and procedures[154](index=154&type=chunk) - This implementation is expected to either strengthen or minimally impact existing internal controls over financial reporting[154](index=154&type=chunk) - No other material changes in internal control over financial reporting occurred during the period[155](index=155&type=chunk) PART II. OTHER INFORMATION This section covers legal proceedings, risk factors, equity security sales, and other required disclosures [Item 1. Legal Proceedings](index=48&type=section&id=Item%201.%20Legal%20Proceedings) This section discloses the company's involvement in various legal proceedings, primarily product liability and intellectual property disputes - The company is engaged in various litigation, primarily product liability and intellectual property disputes[157](index=157&type=chunk) - Management does not believe any current litigation is material to the company's operations or financial position[157](index=157&type=chunk) [Item 1A. Risk Factors](index=48&type=section&id=Item%201A.%20Risk%20Factors) This section confirms that there have been no significant changes to the risk factors previously identified in the company's most recent Annual Report on Form 10-K - No significant changes in risk factors from those described in the Annual Report on Form 10-K for the year ended December 31, 2024[158](index=158&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=48&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section reports on the company's equity security transactions and dividend restrictions [Unregistered Sales of Equity Securities](index=48&type=section&id=Unregistered%20Sales%20of%20Equity%20Securities) This section confirms the absence of unregistered sales of equity securities during the three months ended June 30, 2025 - No unregistered sales of equity securities occurred during the three months ended June 30, 2025[159](index=159&type=chunk) [Issuer Purchases of Equity Securities](index=48&type=section&id=Issuer%20Purchases%20of%20Equity%20Securities) This section details the company's common stock repurchases under its authorized plan during the period Issuer Purchases of Equity Securities (Three Months Ended June 30, 2025) | Period | Total number of shares purchased | Average price paid per share | Number of shares purchased as part of publicly announced program | Approximate dollar value of shares still available to be purchased under the program (000's) | | :-------------------- | :------------------------------- | :--------------------------- | :--------------------------------------------------------------- | :---------------------------------------------------------------------------------------- | | 4/1/2025 - 5/8/2025 | - | - | - | $44,000 | | 5/9/2025 - 5/15/2025 | 210,059 | $28.56 | 210,059 | $38,000 | | 5/16/2025 - 6/30/2025 | - | - | - | $38,000 | | **Total** | **210,059** | **$28.56** | **210,059** | **$38,000** | - The company repurchased **210,059 shares** of common stock for approximately **$6.0 million** during the three months ended June 30, 2025, under its **$50 million** repurchase plan[160](index=160&type=chunk)[161](index=161&type=chunk) [Dividend Payment Restrictions](index=48&type=section&id=Dividend%20Payment%20Restrictions) This section outlines restrictions on dividend payments imposed by the company's senior credit facilities - The company's senior credit facilities include restrictions on its ability to pay dividends and on its subsidiaries' ability to transfer assets to Douglas Dynamics, Inc[162](index=162&type=chunk) [Item 3. Defaults Upon Senior Securities](index=48&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section confirms that there were no reported defaults upon senior securities during the period - No defaults upon senior securities were reported[163](index=163&type=chunk) [Item 4. Mine Safety Disclosures](index=48&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section indicates that there are no mine safety disclosures to report for the period - No mine safety disclosures were reported[164](index=164&type=chunk) [Item 5. Other Information](index=48&type=section&id=Item%205.%20Other%20Information) This section provides information on other matters, specifically addressing Rule 10b5-1 trading plans [Rule 10b5-1 Trading Plans](index=48&type=section&id=Rule%2010b5-1%20Trading%20Plans) This section confirms no director or officer adopted or terminated Rule 10b5-1 trading plans during the period - No director or officer of the company adopted or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement during the three months ended June 30, 2025[166](index=166&type=chunk) [Item 6. Exhibits](index=50&type=section&id=Item%206.%20Exhibits) This section lists all documents filed as exhibits to the Quarterly Report on Form 10-Q - Exhibit 31.1: Certification of the Company's Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002[167](index=167&type=chunk) - Exhibit 31.2: Certification of the Company's Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002[167](index=167&type=chunk) - Exhibit 101: The financial statements from the quarterly report on Form 10-Q, formatted in inline XBRL[167](index=167&type=chunk) [Signatures](index=51&type=section&id=Signatures) This section contains the official signatures for the Quarterly Report on Form 10-Q, confirming its submission by authorized personnel - The report was signed by Sarah Lauber, Executive Vice President and Chief Financial Officer of Douglas Dynamics, Inc[170](index=170&type=chunk) - The report was dated August 5, 2025[170](index=170&type=chunk)

分组1 - Douglas Dynamics reported quarterly earnings of $1.14 per share, exceeding the Zacks Consensus Estimate of $0.84 per share, and showing an earnings surprise of +35.71% [1] - The company achieved revenues of $194.33 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 3.97%, although this represents a decline from year-ago revenues of $199.9 million [2] - The stock has increased approximately 18.1% since the beginning of the year, outperforming the S&P 500's gain of 6.1% [3] 分组2 - The current consensus EPS estimate for the upcoming quarter is $0.44 on revenues of $157.7 million, and for the current fiscal year, it is $2.05 on revenues of $634.7 million [7] - The Automotive - Replacement Parts industry, to which Douglas Dynamics belongs, is currently ranked in the bottom 22% of over 250 Zacks industries, indicating potential challenges ahead [8]

[Second Quarter 2025 Results Overview](index=1&type=section&id=Second%20Quarter%202025%20Results%20Overview) Douglas Dynamics achieved a 6.6% increase in Q2 2025 consolidated net income, driven by strong Work Truck Solutions performance and expected Attachments segment activity [Key Highlights of Q2 2025](index=1&type=section&id=Second%20Quarter%202025%20Highlights) Douglas Dynamics reported a 6.6% increase in consolidated net income for Q2 2025, reaching $26.0 million, or $1.09 per diluted share - Consolidated Net income improved by **6.6% to $26.0 million**, or **$1.09 per diluted share**[4](index=4&type=chunk) - Solutions segment delivered record second quarter results with **5.4% Net Sales growth**, and **39.8% Adjusted EBITDA growth**[4](index=4&type=chunk) - Pre-season demand and shipments at Attachments proceeding as expected[4](index=4&type=chunk) - Returned approximately **$13 million of cash to shareholders**[4](index=4&type=chunk) [Consolidated Financial Performance](index=1&type=section&id=Consolidated%20Financial%20Performance) Consolidated Q2 2025 results show a 2.8% net sales decrease but a 6.6% net income increase, with stable Adjusted EBITDA margins [Consolidated Q2 2025 Financial Metrics](index=1&type=section&id=Consolidated%20Second%20Quarter%202025%20Results%20-%20Table) This section presents the key consolidated financial metrics for Q2 2025 compared to Q2 2024, showing net sales, gross profit margin, income from operations, net income, and various adjusted figures Consolidated Q2 2025 Financial Metrics | $ in millions | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net Sales | $194.3 | $199.9 | | Gross Profit Margin | 31.0% | 30.7% | | Income from Operations | $37.0 | $36.3 | | Net Income | $26.0 | $24.3 | | Diluted EPS | $1.09 | $1.02 | | Adjusted EBITDA | $42.6 | $43.7 | | Adjusted EBITDA Margin | 21.9% | 21.9% | | Adjusted Net Income | $27.2 | $26.5 | | Adjusted Diluted EPS | $1.14 | $1.11 | [Consolidated Performance Analysis](index=2&type=section&id=Consolidated%20Second%20Quarter%202025%20Results%20-%20Narrative) Consolidated net sales for Q2 2025 decreased by 2.8% to $194.3 million, primarily due to expected lower volumes in the Attachments segment - Consolidated results for Q2 2025 were comparable to the prior year across all metrics, favorably impacted by Work Truck Solutions, offsetting expected lower volumes at Work Truck Attachments due to shipment timing[7](index=7&type=chunk) - Net sales decreased by **2.8% to $194.3 million**, a result of expected lower volumes at Attachments due to the timing of pre-season shipments between Q2 and Q3[7](index=7&type=chunk) - Net income increased by **6.6% to $26.0 million**, and diluted EPS increased by **6.9% to $1.09**[7](index=7&type=chunk) - Adjusted EBITDA margins remained flat at **21.9%**, reflecting the strength of Work Truck Solutions' margin improvements offsetting the impact of lower preseason shipments in Work Truck Attachments[7](index=7&type=chunk) [Segment Performance Analysis](index=2&type=section&id=Segment%20Performance) Work Truck Attachments saw sales decline due to shipment timing, while Work Truck Solutions achieved record sales and Adjusted EBITDA [Work Truck Attachments Segment](index=2&type=section&id=Work%20Truck%20Attachments%20Segment%20Second%20Quarter%202025%20Results) The Work Truck Attachments segment reported a decrease in Q2 2025 net sales to $108.1 million and Adjusted EBITDA to $31.6 million, primarily due to shipment timing Work Truck Attachments Segment Key Metrics | $ in millions | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net Sales | $108.1 | $118.1 | | Adjusted EBITDA | $31.6 | $35.8 | | Adjusted EBITDA Margin | 29.2% | 30.3% | - Net sales of **$108.1 million** and Adjusted EBITDA of **$31.6 million** are down **$10.0 million** and **$4.2 million**, respectively, primarily due to the timing of pre-season shipments between the second and third quarters[8](index=8&type=chunk) - The ratio of pre-season shipments in 2025 is expected to be close to the more traditional **55% (Q2) to 45% (Q3) split**, contrasting with the unusual **65% (Q2) to 35% (Q3) ratio in 2024**[8](index=8&type=chunk) [Work Truck Solutions Segment](index=3&type=section&id=Work%20Truck%20Solutions%20Segment%20Second%20Quarter%202025%20Results) The Work Truck Solutions segment achieved record second-quarter results, with net sales increasing by 5.4% to $86.2 million and Adjusted EBITDA surging by 39.8% to $11.0 million Work Truck Solutions Segment Key Metrics | $ in millions | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net Sales | $86.2 | $81.8 | | Adjusted EBITDA | $11.0 | $7.9 | | Adjusted EBITDA Margin | 12.8% | 9.7% | - Work Truck Solutions produced record second quarter top- and bottom-line results[13](index=13&type=chunk) - Net Sales increased **5.4% to $86.2 million** based on favorable pricing realization and higher municipal volumes, somewhat offset by lower commercial volumes[13](index=13&type=chunk) - Adjusted EBITDA increased **39.8% to $11.0 million**, delivering record margins of **12.8%**, based on favorable product mix, price realization and higher municipal throughput[13](index=13&type=chunk) [Financial Outlook and Capital Management](index=3&type=section&id=Financial%20Outlook%20%26%20Capital%20Allocation) The company returned $12.9 million to shareholders, improved its leverage ratio, and raised its 2025 financial guidance ranges [Dividend & Liquidity](index=3&type=section&id=Dividend%20%26%20Liquidity) Douglas Dynamics successfully returned $12.9 million to shareholders and significantly improved its leverage ratio to 2.0X, well within its target range - Successfully returned **$12.9 million of cash to shareholders** through a quarterly cash dividend of **$0.295 per diluted share** and repurchase of approximately **210,000 shares** of company stock[13](index=13&type=chunk) - The leverage ratio at the end of the quarter was **2.0X**, a significant improvement when compared to **3.3X**, and well within our stated goal range of **1.5X to 3.0X**[13](index=13&type=chunk) - Net cash used in operating activities decreased **$6.4 million** in the first half of 2025 to **$12.7 million** compared to the same period last year, due to improved earnings somewhat offset by changes in working capital[13](index=13&type=chunk) - Total inventory was **$153.3 million** compared to **$139.4 million**, with Attachments reducing inventory and Solutions increasing it as planned[13](index=13&type=chunk) [2025 Outlook and Guidance](index=3&type=section&id=2025%20Outlook) Douglas Dynamics raised and narrowed its 2025 guidance ranges, anticipating net sales between $630 million and $660 million, and Adjusted EBITDA from $82 million to $97 million - Following another record quarter for Solutions and in-line pre-season orders at Attachments, the company is raising and narrowing its guidance ranges[11](index=11&type=chunk) - Economic and tariff uncertainty persists, but the U.S.-centric business model supports the belief of being well positioned[11](index=11&type=chunk) - The 2025 outlook assumes relatively stable economic and supply chain conditions, and average snowfall in the fourth quarter of 2025[15](index=15&type=chunk) [Updated 2025 Guidance Ranges](index=3&type=section&id=Updated%202025%20Outlook) The company updated its 2025 guidance, increasing ranges for net sales, Adjusted EBITDA, and Adjusted Earnings Per Share Updated 2025 Guidance Ranges | Metric | Previous Range | Updated Range | Change | | :--- | :--- | :--- | :--- | | Net Sales | $610M - $650M | $630M - $660M | Increased | | Adjusted EBITDA | $75M - $95M | $82M - $97M | Increased | | Adjusted Earnings Per Share | $1.30 - $2.10 | $1.65 - $2.15 | Increased | - The effective tax rate is still expected to be approximately **24% to 25%**[14](index=14&type=chunk) [Company Profile and Disclosures](index=4&type=section&id=Company%20Information%20%26%20Disclosures) This section provides details on the earnings call, company profile, non-GAAP financial measures, and forward-looking statements [Earnings Conference Call](index=4&type=section&id=Earnings%20Conference%20Call%20Information) Douglas Dynamics will host a conference call on Tuesday, August 5, 2025, at 10:00 a.m. Eastern Time to discuss the second quarter 2025 results - The Company will host a conference call on Tuesday, August 5, 2025, at **10:00 a.m. Eastern Time (9:00 a.m. Central Time)**[17](index=17&type=chunk) - The call will also be available via the Investor Relations section of the Company's website at www.douglasdynamics.com, with replays available for one week[17](index=17&type=chunk) [About Douglas Dynamics](index=4&type=section&id=About%20Douglas%20Dynamics) Douglas Dynamics is North America's leading manufacturer and up-fitter of commercial work truck attachments and equipment, operating for over 75 years - Douglas Dynamics is North America's premier manufacturer and up-fitter of commercial work truck attachments and equipment, with over **75 years of innovation**[18](index=18&type=chunk) - The Company's portfolio of products and services is separated into two segments: Work Truck Attachments (FISHER®, SNOWEX®, WESTERN® brands) and Work Truck Solutions (HENDERSON®, DEJANA® brands)[18](index=18&type=chunk) - The Company is committed to continuous improvement through its proprietary Douglas Dynamics Management System (DDMS) to drive shareholder value[18](index=18&type=chunk) [Use of Non-GAAP Financial Measures](index=4&type=section&id=Use%20of%20Non-GAAP%20Financial%20Measures) Douglas Dynamics uses non-GAAP financial measures such as Adjusted EBITDA, Adjusted Net Income, Adjusted Earnings Per Share, and Free Cash Flow to provide investors with additional tools for evaluating operating performance - Non-GAAP measures used include Adjusted EBITDA, Adjusted Net Income, Adjusted Earnings Per Share, and Free Cash Flow[19](index=19&type=chunk) - Adjusted EBITDA represents net income before interest, taxes, depreciation, and amortization, further adjusted for certain charges to remove the impact of items not directly reflecting core operations[20](index=20&type=chunk) - Adjusted Net Income and Adjusted Earnings Per Share exclude stock-based compensation, severance, restructuring, debt-related expenses, impairment charges, and derivative adjustments, net of their income tax impact[21](index=21&type=chunk) - Free Cash Flow is defined as net cash provided by (used in) operating activities less capital expenditures, representing the ability to generate additional cash flow from business operations[22](index=22&type=chunk) [Forward-Looking Statements](index=5&type=section&id=Forward%20Looking%20Statements) The press release contains forward-looking statements regarding future events, financial performance, and strategies, which are subject to known and unknown risks and uncertainties - Forward-looking statements involve known and unknown risks, uncertainties, and other factors that could cause actual results, performance, or achievements to be materially different[23](index=23&type=chunk) - Factors that could cause differences include weather conditions (snowfall), general economic, business and geopolitical conditions, increases in material prices (e.g., steel, tariffs), and inability to maintain distributor relationships[23](index=23&type=chunk) - The company undertakes no obligation to update or release any revisions to any forward-looking statement, except as required by law[23](index=23&type=chunk) [Consolidated Financial Statements](index=6&type=section&id=Consolidated%20Financial%20Statements) This section presents the consolidated balance sheets, statements of income, and statements of cash flows for the reported periods [Consolidated Balance Sheets](index=6&type=section&id=Consolidated%20Balance%20Sheets) As of June 30, 2025, Douglas Dynamics reported total assets of $671.471 million, an increase from $589.983 million at December 31, 2024 Consolidated Balance Sheets | Metric (in thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Assets | $671,471 | $589,983 | | Total Current Assets | $326,749 | $238,225 | | Accounts receivable, net | $141,167 | $87,407 | | Inventories | $153,286 | $137,034 | | Total Liabilities | $393,690 | $325,768 | | Total Current Liabilities | $154,669 | $70,192 | | Short term borrowings | $42,000 | $0 | | Total Stockholders' Equity | $273,264 | $264,215 | [Consolidated Statements of Income](index=7&type=section&id=Consolidated%20Statements%20of%20Income) For the three months ended June 30, 2025, net sales were $194.327 million, a decrease from $199.902 million in Q2 2024, while net income increased to $25.954 million Consolidated Statements of Income (Three Months) | Metric (in thousands, except EPS) | Three Month Period Ended June 30, 2025 | Three Month Period Ended June 30, 2024 | | :--- | :--- | :--- | | Net sales | $194,327 | $199,902 | | Gross profit | $60,296 | $61,303 | | Income from operations | $36,995 | $36,303 | | Net income | $25,954 | $24,338 | | Diluted EPS | $1.09 | $1.02 | | Cash dividends declared and paid per share | $0.30 | $0.30 | Consolidated Statements of Income (Six Months) | Metric (in thousands, except EPS) | Six Month Period Ended June 30, 2025 | Six Month Period Ended June 30, 2024 | | :--- | :--- | :--- | | Net sales | $309,394 | $295,557 | | Gross profit | $88,435 | $80,223 | | Income from operations | $40,197 | $29,881 | | Net income | $26,102 | $15,986 | | Diluted EPS | $1.09 | $0.66 | | Cash dividends declared and paid per share | $0.59 | $0.59 | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash used in operating activities decreased to $12.721 million, while net cash provided by financing activities significantly increased Consolidated Statements of Cash Flows | Metric (in thousands) | Six Month Period Ended June 30, 2025 | Six Month Period Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(12,721) | $(19,114) | | Net cash used in investing activities | $(5,126) | $(2,751) | | Net cash provided by financing activities | $20,708 | $1,905 | | Change in cash and cash equivalents | $2,861 | $(19,960) | | Cash and cash equivalents at end of period | $7,980 | $4,196 | - Net cash used in operating activities decreased **$6.4 million** in the first half of 2025 due to improved earnings, somewhat offset by changes in working capital[13](index=13&type=chunk)[29](index=29&type=chunk) - Capital expenditures increased by **$2.4 million** in the first half of 2025 compared to 2024 as planned[13](index=13&type=chunk) [Non-GAAP Financial Reconciliations](index=9&type=section&id=Non-GAAP%20Reconciliations) This section provides reconciliations for non-GAAP financial measures, including segment disclosures, Adjusted EBITDA, Adjusted Net Income, and Free Cash Flow [Segment Disclosures](index=9&type=section&id=Segment%20Disclosures%20(unaudited)) The segment disclosures provide a breakdown of Net Sales and Adjusted EBITDA for Work Truck Attachments and Work Truck Solutions, highlighting growth in Solutions despite a decline in Attachments Work Truck Attachments Segment Disclosures | Work Truck Attachments (in thousands) | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Sales | $108,114 | $118,137 | $144,571 | $141,977 | | Adjusted EBITDA | $31,570 | $35,792 | $31,897 | $31,324 | | Adjusted EBITDA Margin | 29.2% | 30.3% | 22.1% | 22.1% | Work Truck Solutions Segment Disclosures | Work Truck Solutions (in thousands) | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Sales | $86,213 | $81,765 | $164,823 | $153,580 | | Adjusted EBITDA | $11,047 | $7,903 | $20,151 | $13,905 | | Adjusted EBITDA Margin | 12.8% | 9.7% | 12.2% | 9.1% | [Net Income to Adjusted EBITDA Reconciliation](index=9&type=section&id=Net%20Income%20to%20Adjusted%20EBITDA%20reconciliation%20(unaudited)) The reconciliation shows how Net Income is adjusted to derive Adjusted EBITDA, with Q2 2025 Net Income of $25.954 million adjusted to an Adjusted EBITDA of $42.617 million Net Income to Adjusted EBITDA Reconciliation | Metric (in thousands) | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Net income | $25,954 | $24,338 | $26,102 | $15,986 | | EBITDA | $40,944 | $40,657 | $47,641 | $39,583 | | Stock-based compensation | $1,554 | $2,478 | $3,704 | $2,833 | | Other charges (legal, severance, restructuring, etc.) | $119 | $560 | $371 | $1,589 | | Adjusted EBITDA | $42,617 | $43,695 | $52,048 | $45,229 | [Net Income to Adjusted Net Income Reconciliation](index=10&type=section&id=Reconciliation%20of%20Net%20Income%20to%20Adjusted%20Net%20Income%20(unaudited)) This reconciliation details the adjustments made to Net Income to arrive at Adjusted Net Income and Adjusted Diluted EPS, resulting in Adjusted Net Income of $27.209 million for Q2 2025 Net Income to Adjusted Net Income Reconciliation | Metric (in thousands, except EPS) | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Net income | $25,954 | $24,338 | $26,102 | $15,986 | | Stock based compensation | $1,554 | $2,478 | $3,704 | $2,833 | | Other charges (net of tax) | -$418 | -$731 | -$1,102 | -$1,340 | | Adjusted net income | $27,209 | $26,530 | $29,407 | $20,005 | | Adjusted diluted earnings per common share | $1.14 | $1.11 | $1.23 | $0.83 | [Free Cash Flow Reconciliation](index=10&type=section&id=Free%20Cash%20Flow%20reconciliation%20(unaudited)) The Free Cash Flow reconciliation shows that for the six months ended June 30, 2025, Douglas Dynamics had a negative free cash flow of $17.847 million, an improvement from the prior year Free Cash Flow Reconciliation | Metric (in thousands) | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $(11,384) | $2,507 | $(12,721) | $(19,114) | | Net cash used in investing activities (Capital expenditures) | $(2,965) | $(1,423) | $(5,126) | $(2,751) | | Free cash flow | $(14,349) | $1,084 | $(17,847) | $(21,865) |

Core Insights - Douglas Dynamics, Inc. reported a net income of $26.0 million for Q2 2025, reflecting a 6.6% increase compared to Q2 2024, with diluted earnings per share rising to $1.09 from $1.02 [5][6][12] - The company experienced a 2.8% decrease in net sales, totaling $194.3 million, primarily due to lower volumes in the Work Truck Attachments segment related to pre-season shipment timing [6][10] - The Work Truck Solutions segment achieved record results with a 5.4% increase in net sales and a 39.8% growth in adjusted EBITDA [5][12] Financial Performance - Consolidated net sales for Q2 2025 were $194.3 million, down from $199.9 million in Q2 2024 [3][6] - Gross profit margin improved to 31.0% from 30.7% year-over-year [3] - Adjusted EBITDA remained flat at 21.9%, with adjusted net income increasing to $27.2 million from $26.5 million [3][6] Segment Performance - Work Truck Attachments segment reported net sales of $108.1 million, down from $118.1 million, with adjusted EBITDA of $31.6 million compared to $35.8 million [7][29] - Work Truck Solutions segment saw net sales rise to $86.2 million from $81.8 million, with adjusted EBITDA increasing to $11.0 million from $7.9 million [8][29] Shareholder Returns - The company returned approximately $13 million to shareholders through dividends and stock repurchases [5][12] - A quarterly cash dividend of $0.295 per diluted share was declared [12] 2025 Outlook - The company raised its guidance for 2025, expecting net sales between $630 million and $660 million, and adjusted EBITDA between $82 million and $97 million [10][18] - The outlook assumes stable economic conditions and average snowfall in Q4 2025 [13][18]

Core Viewpoint - Douglas Dynamics, Inc. will release its financial results for Q2 2025 on August 4, 2025, after market close, with a conference call scheduled for August 5, 2025, to discuss these results [1][2]. Company Overview - Douglas Dynamics is recognized as North America's leading manufacturer and upfitter of work truck attachments and equipment, with over 75 years of experience in the industry [3]. - The company operates through two main segments: the Work Truck Attachments segment, which includes snow and ice control equipment under the FISHER®, SNOWEX®, and WESTERN® brands, and the Work Truck Solutions segment, which focuses on up-fitting market-leading attachments and storage solutions under the HENDERSON® and DEJANA® brands [3]. - The company emphasizes continuous improvement through its proprietary Douglas Dynamics Management System (DDMS), aiming to produce high-quality products and deliver industry-leading service, ultimately driving shareholder value [3].

Company Performance - Douglas Dynamics (PLOW) has seen a stock increase of 14% over the past month, reaching a new 52-week high of $31.42, and has gained 32.7% since the start of the year, outperforming the Zacks Auto-Tires-Trucks sector which declined by 13.8% and the Zacks Automotive - Replacement Parts industry which returned 2.1% [1] Earnings and Revenue - The company has a strong record of positive earnings surprises, having beaten earnings consensus estimates in the last four quarters. In the latest earnings report on May 5, 2025, Douglas Dynamics reported EPS of $0.09 compared to a consensus estimate of -$0.16, and exceeded the revenue estimate by 9.9% [2] - For the current fiscal year, Douglas Dynamics is projected to post earnings of $2.05 per share on revenues of $634.7 million, reflecting a 39.46% change in EPS and an 11.64% change in revenues. For the next fiscal year, expected earnings are $2.3 per share on revenues of $666 million, indicating a year-over-year change of 12.2% and 4.93%, respectively [3] Valuation Metrics - The stock currently trades at 15.3 times the current fiscal year EPS estimates, which is a premium compared to the peer industry average of 12.8 times. On a trailing cash flow basis, it trades at 14.8 times versus the peer group's average of 7.6 times. The stock has a PEG ratio of 1.09, positioning it favorably for value investors [7] Zacks Rank - Douglas Dynamics holds a Zacks Rank of 2 (Buy), supported by favorable earnings estimate revisions from analysts [8] - The company meets the criteria for selection based on Zacks Rank and Style Scores, indicating potential for further growth in the coming weeks and months [9] Industry Comparison - In comparison to industry peers, Dorman Products, Inc. (DORM) also shows strong performance with a Zacks Rank of 2 (Buy) and solid earnings expectations, indicating a favorable environment for both PLOW and DORM within the Automotive - Replacement Parts industry, which is in the top 24% of all industries [10][12]