Douglas Dynamics, Inc.

Good day and thank you for standing by. Welcome to the Douglas Dynamics First Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star zero. I would now like to hand the conference over to Sarah Loeber, Chief Financial Officer. Please go ahead.

Thank you. Welcome, everyone, and thank you for joining us on today's call. Before we begin, I'd like to remind you that some of the comments that will be made during this conference call, including answers to your questions, will constitute forward-looking statements. These forward-looking statements are subject to risks that could cause actual results to be materially different. Those risks include, among others, matters that we have described in yesterday's press release and in our filings with the SEC. Joining me on the call today is Bob McCormick, our President and Chief Executive Officer. In a moment, Bob will provide an overview of our performance. Then I'll review our financial results and guidance. After that, we'll open the call for your questions. With that, I'll hand the call to Bob.

Thanks, Sarah. Good morning, everyone. Our first quarter performance met expectations as we continue to navigate through the same challenges we've been facing in recent quarters. While external conditions aren't improving yet, we haven't seen any new curveballs recently. Net sales were essentially flat compared to the record results for the same period last year, with higher pricing at both segments upset by lower volumes. We had a return to a more typical first quarter than attachments versus the tremendously profitable first quarter we delivered last year, driven by concentrated snowfall in February 2021. We did not expect to repeat this snowfall-driven performance. We've experienced lower production volumes in the solution segment this quarter, stemming from chassis and component shortages, which hadn't yet started to impact us in first quarter 2021. Pandemic-related absenteeism ebbs and flows generally in line with the country and local markets. Omicron had an impact in the first quarter, but we have learned to manage through such surges well. Very proud of our team for maintaining their focus on pandemic safety for more than two years now. We continue to demonstrate flexibility and creativity as we strive to deliver for our customers every day. We're very pleased with the demand outlook in both segments, setting us up for long-term success. Our headwinds remain the same and don't seem to be getting any worse. First, supply chain disruption and component shortages. We expect the situation to stabilize in the coming months and slowly start to improve later this year. We've been monitoring the latest pandemic disruptions in China carefully. The majority of our supply partners are in provinces outside of those facing lockdowns, so we're not overly concerned at this point. Second, material price inflation remains a factor. We are now recapturing price in attachments as promised, and still have work to do in solutions, which is a much more complex situation. And lastly, we continue to navigate a tight labor market. We're seeing the benefits of ideas and programs put in place last year, and kudos to our HR team for finding creative ways to address the issues every employer is facing. While uncertainty still exists, it's now somewhat expected given the past few years. We've always been better than most at adapting. The constant need to pivot, adjust, and find solutions rapidly is just how we're built. We are comfortable maintaining our guidance, which Sarah will discuss later. Now let's discuss the latest developments at each of our sites. beginning with burnt truck attachments, where we generated $45.8 million of net sales and $3 million of adjusted EBITDA. First quarter 2022 volumes met our expectations, despite slightly below average snowfall. Net sales increased 9% due to higher pricing on higher input costs, which offset lower volumes when compared to the robust first quarter of 2021. Profitability was impacted by lower volumes and product mix, as well as a return to more normal spending levels, particularly the in-person NTEA work truck show in March. Our preseason is off to a strong start, seeing significant interest in our non-truck products. Dealer inventories are in good shape, and dealer sentiment is positive. We're pleased with the continued execution and outlook for the attachments group. That brings us to Work Truck Solutions, where we experienced a continuation of recent trends. We delivered $56.8 million of net sales and $1.6 million of adjusted EBITDA. Performance was down compared to last year and continues to be impacted by a restricted flow of chassis and other supply chain constraints. Supply and chassis headwinds are more robust now than first quarter 2021. Looking ahead, demand remains strong, as does our backlog. When supply chain disruptions start to subside, we are well positioned to meet customer expectations, driving revenue and earnings growth. Our teams work tirelessly to alleviate the issues wherever possible, and we continue to expect the situation to slowly start to improve in the second half of 2022. Overall, we are encouraged with where both segments stand today. In conclusion, Q1 results were in line with expectations. Attachments preseason is off to a strong start. In our solutions group, demand and backlog remain strong. We continue to believe supply chain difficulties will gradually improve in the second half of the year, and we are reiterating our full year guidance. Despite the challenging backdrop, demand signals remain strong across the board. We continue to invest and innovate to ensure that we are ready to deliver when supply chains improve and are well positioned to drive towards our long-term financial targets. With that, I'd like to pass the call to Sarah to walk through our financials. Sarah?