Douglas Dynamics, Inc.

To withdraw your question, please press star, then two. Please note this event is being recorded. I'd now like to turn the conference over to Nathan Elwell. Please go ahead.

Thank you. Welcome, everyone, and thank you for joining us on today's call. Before we begin, I would like to remind you that some of the comments that we 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 Jim Janik, Chairman and Interim President and CEO, and Sarah Lauber, Executive Vice President and CFO. Jim will provide an overview of our performance, followed by Sarah reviewing our financial results and guidance. After that, we'll open the call for questions. With that, I'll hand the call over to Jim. Please go ahead.

Thank you, Nathan. I'm pleased to be back talking to you all today as interim president and CEO following Bob McCormick's retirement. On behalf of everyone at Douglas, I want to reiterate our gratitude to Bob for his dedicated service to the company over the past 20 years as CFO, COO, and most recently, president and CEO. We wish him all the best in his retirement. Now, many of you may already know me, but here's a reminder about my background for those who don't. I joined the company in 1992 as director of sales and served in several roles before becoming president and CEO in 2000. I led the company in that role for 18 years before retiring at the end of 2018. I joined the board in 2000 and became chairman in 2014. As chairman, I've stayed very involved since I retired, and it's been quite straightforward to step back into the CEO role. In fact, it's been a pleasure to reconnect with some people and meet others. I've traveled around. Many of our locations have been invigorated by the quality of the people that I've talked to and the ideas being generated. I'm relishing the opportunities to collaborate with our world-class team as we work to maximize our near-term performance. It's worth reiterating that I am committed to staying in this role while we find the next CEO to lead the company. We are not focused on a specific timeline, and everyone on the board agrees it is most important to appoint the right person rather than complete a quick search. We are evaluating both internal and external candidates and are willing to take the time necessary to conduct the search to make sure we get the right person to lead Douglas into the future. With that said, let's talk about the second quarter. The story is straightforward and a continuation of the trends we've seen recently. Under the circumstances, we turned in a positive performance driven by fantastic improvement at Work Truck Solutions. The teams at DeGena and Henderson did a great job of capitalizing on the opportunities and getting trucks through the facilities this quarter, producing our best second quarter results for this segment on record. The other important factor this quarter was the successful implementation of the 2024 Cost Savings Program. As a public company, we have a duty to our stakeholders, including our investors and employees, to make tough decisions when situations dictate. 2024 Cost Savings Program is a great example of that. During the first half of the year, the team made difficult decisions to align our cost structure and attachments and in our corporate team in light of the demand outlook. The program initially implemented in the first quarter and expanded in the second quarter continues to prove its worth and is now expected to deliver $11 to $12 million in sustainable annual savings. This program is one of the main reasons we improved our profitability in the second quarter despite lower net sales. Overall, results for the second quarter were approximately in line with the same period last year. Adjusted EBITDA and margins increased, which highlights the recent improvements in throughput at solutions and the cost structure changes at attachments. And we maintained our 2024 full-year outlook, which Sarah will talk to later in the call. Now turning to the results in each segment, starting with attachments. Preseason orders were softer than expected, with results continuing to be impacted by two years in a row of significant below average snowfall in our core markets, particularly on the East Coast. The most recent snow season was approximately 40% below the 10-year average, which led to difficult operating conditions during the first half of 2024. Frankly, we've not seen back-to-back low snowfall seasons of this magnitude since the late 1980s and is certainly going to have an ongoing impact on demand. Despite lower net sales because of the successful implementation of the 2024 cost savings program, adjusted EBITDA margins were an impressive 30% for the second quarter and in line with the same period last year. It is worth noting that margins were also positively impacted by the mix of the products this quarter. To be clear, we do not anticipate quite the same favorable mix in the third quarter. Based on second quarter shipments, the ratio of preseason shipments in 2024 will be closer to a 65-35 split between the second and third quarters rather than the 55-45 that we had initially been expecting. Of course, the lack of snowfall in recent years negatively impacted preseason orders, as we predicted, due to due to the equipment not being used as much. This lengthens the equipment replacement cycle, and rest assured, we will be paying careful attention to order activity and dealer inventories in the third quarter. Given these circumstances, we are pleased with our operational performance and cost control efforts. With the continued focus from end users in getting more jobs done faster, we are also focused on expanding our product lines. Our teams launched several innovative new products this year that have been well received by the dealers and today our equipment offering covers virtually every aspect of commercial snow and ice control with more exciting products in development finally i'm pleased to say that both dealer sentiment and financial health also remain positive before going further i want to briefly mention two new and interesting projects at work at work truck attachments. First, the expansion of our strategic alliance with John Deere, which marks an important milestone in the ongoing partnership that began four years ago. This agreement expands the strategic sales alliance to include tractors and industrial equipment. Through this partnership, John Deere can now offer Western Products plows and spreaders for a wide range of gear vehicles, from the smallest UTVs to the largest tractors and wheel loaders, opening new sales channels and reinforcing the ongoing partnership efforts. But keep in mind, the traditional truck equipment dealer network remains the main focus of our distribution channels. While this alliance allows us to reach different customer groups that don't currently have access to our equipment. I'm also pleased to report that we also recently finalized a national partnership with a leading vehicle and equipment rental company, which designates Western Products as their preferred snow and ice partner. The primary goal of this collaboration is to equip our partner with our full line of snow and ice removal equipment for their network in the snow belt. This is a terrific job by our business development team at Attachments, while securing these strategic partnerships. Okay, turning to results at Solutions. I'm pleased to confirm that the Solutions team delivered a record second quarter results with 24% net sales growth and adjusted EBITDA margin of 9.7%. This is the eighth consecutive quarter of improved performance versus the prior year. This performance demonstrates that our long-term goals are very achievable when external circumstances allow. However, progress is not going to be linear, and we expect margins to be flat in the third and fourth quarters when compared to the previous year. Our team at Najana continues to focus their attention to match the industry trends and driving improvements in the fleet business where the supply of chassis are currently the strongest. While customers are becoming more price conscious, demand remains positive. We are working on new projects and initiatives to broaden our offering and drive sustainable long-term growth. While we still don't have great visibility into future trends, I'm glad to report chassis availability no longer seems to be a major issue. At Henderson, the low margin contracts that have been a drag on our performance are virtually complete. which has definitely helped our profitability. Municipal demand remains positive, and despite increasing the velocity of trucks being up-fit, our backlog remains robust. These results bode well for the future, and it's important to remember, in general, the supply of chassis is less constrained today than any point since the start of the pandemic. Demand remains positive at both municipal and commercial customers. We still have 12 months of backlog to work through and in some cases is growing due to order intake. And we continue to improve the efficiency of our operations. The goal of delivering improved mid to high single-digit EBITDA margins for 2024 remains intact. However, we do expect to see some softness in profitability with adjusted EBITDA margins expected to be a lower in Q3 than the first half of 2024, and close to the same levels as third quarter 2023. All of this reinforces our confidence that we can achieve our longer-term growth and profitability goals in the years ahead. So in closing, we're encouraged by the progress made by the solutions team over the past 12 months, and we see a positive future going forward. We're doing the things we need to do despite being painful, but today we see a clear path forward. Carefully managing our manufacturing operations is allowing us to maintain our market position. While we manage through the current situation, we are always keeping an eye on the future. We will continue to address opportunities and challenges in a logical and effective manner, making the tough decisions when we have to, as well as choosing when to stay the course and when to double down. I look forward to leading the company through this period. until the new CEO is ready to take the reins. And with that, I'd like to pass the call to Sarah to walk through our financials.