Douglas Dynamics, Inc.

Good day and welcome to the Douglas Dynamics third quarter 2025 earnings conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your touchtone phone. To withdraw your question, please press star, then two. Please note that this event is being recorded. I would now like to turn the conference over to Nathan Elwell, Vice President of Investor Relations. 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 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. Please note, in addition to our earnings release, we issued another press release yesterday afternoon regarding the acquisition of Venco Venturos. We also published a one-page fact sheet on our IR website that summarizes our results for the quarter. Joining me on the call today is Mark Van Genderen, President and CEO, and Sarah Laver, Executive Vice President and CFO. Mark will first discuss the acquisition of Venco Venturo before providing an overview of our performance for the quarter. Then Sarah will review our financial results and guidance. After that, we'll open the call for questions. With that, I'll hand the call over to Mark. Please go ahead.

Thanks, Nathan, and welcome, everyone. We had another solid quarter, which Sarah and I will discuss shortly. But I'd like to start by thanking the employees of Douglas Dynamics for their continued focus and resolve. This team truly cares about keeping people safe and communities thriving, especially important as we head into winter. I'd also like to take a moment to highlight two changes we recently announced regarding our Board of Directors. After 13 years of dedicated service, Margaret Dano decided to retire. We wish her the very best and want to thank her for her many meaningful contributions to Douglas Dynamics over the years. Always collaborative and thoughtful, her guidance will have a lasting positive impact on Douglas Dynamics for many years to come. Second, we are pleased to welcome Jennifer Ansberry and Brad Nelson as new independent directors. Jennifer is the Executive Vice President and General Counsel of Lincoln Electric. Her extensive legal and M&A experience and deep understanding of the industrial sector will be invaluable as we advance our strategic priorities. Brad possesses a strong track record and significant leadership experience in manufacturing from companies such as Oshkosh Corporation to his current role as CEO of Mastercraft Bolt Company. Both Jennifer and Brad bring valuable experience and fresh perspectives that will be essential to support our future progress. As a result of these changes, our board has now expanded from seven to eight members, six of whom are independent. Turning to the business and our announcement we made last night. Over the past several months, we've shared with our employees and with you, our shareholders, the optimize, expand, and activate strategic pillars. On our last quarterly call, I focused mostly on optimize and expand. So as you may have guessed, today I'll talk to activate, which refers to the restart of our M&A efforts as we look to build our portfolio of attachments over the long term. Today, I'm pleased to confirm that Venco Venturo has officially joined the Douglas Dynamics family. Adding this well-established and highly respected provider of truck-mounted cranes and dump hoists is a meaningful first step as we look to diversify and balance our portfolio over the long term. Sarah and I returned from Cincinnati last night after an energizing visit with a 70-person team at Venco Venturo. Brett Collins, Mike Stritholt, and the entire group in Ohio have built an exceptional business, and we're extremely proud to become the new stewards of the Venco Venturo brand. We're thrilled to welcome Venco Venturo's employees to our team and look forward to learning from their expertise, collaborating closely, and growing this great business with them. With access to Douglas Dynamics operational capabilities and continuous improvement processes, we believe there's a strong opportunity to build on Benco Ventura's success, driving profitable growth. Now that the deal is complete, the real work begins to fulfill that goal. Our integration team has been working diligently to lay out a clear plan to ensure a smooth transition and to start realizing the benefits of this partnership. This marks our first acquisition in more than nine years, and I want to emphasize that our approach to M&A remains disciplined and strategic. Over time, we're committed to building a diversified portfolio of complex attachments that require professional upfitting to work vehicles. This acquisition represents an excellent first step and a great example of the types of high-quality brands and businesses that align with our long-term vision. We're excited about the opportunities and look forward to partnering with the Benco Ventura team and to all that we will accomplish together in the years ahead. A heartfelt thank you to everyone involved in making this deal happen, including Sarah, John Sisolak, and the finance team for leading the charge with the financial analysis and legal review, plus Shannon Bleeger, Chris Bernauer, the work truck attachments team, and the Benco Ventura leadership team for making this a straightforward transition. Stepping back, I'm pleased to report that eight months into my tenure as CEO, our team is working collaboratively and effectively. This has been clear to me over the past few months as we pursued the Venco Venturo acquisition and with success of our established divisions. Speaking of, let's turn to our current operations. Needless to say, we are pleased with our results. The improvements this quarter were primarily driven by the excellent performance at Work Truck Solutions, which delivered growth of over 30% and record third quarter results again. And attachments pre-season shipments were in line with expectations. In fact, let's review the segment results, starting with Work Truck attachments. Results improved this quarter mainly due to the timing of pre-season orders and ongoing cost control measures. The ratio of preseason shipments was a more typical 60-40% between the second and third quarters this year versus the 65-35% split in 2024. Remember that 2024 was unusual, as higher finished goods inventory at the end of Q1 last year drove a stronger shipment mix in Q2. That wasn't the case this year, as the attachments team significantly decreased its inventory, with it currently down 11 million on a year-over-year basis. Additionally, based on our recent channel checks, dealer inventories are now back below the five-year average after being elevated for quite some time. This is healthy news, and when coupled with positive dealer sentiment and financial health, means we are ready for winter. Our operations are on the front foot, and we are primed and ready to respond to demand shifts, snowfall, and ice event trends as they occur. We're proud of the way our team has adapted and prevailed over the weather-driven challenges over the past few years. Assuming we receive a somewhat typical amount of snow and ice events in our core markets this winter, we are well aligned and well positioned for the season to come. Turning to work truck solutions, the teams exceeded expectations and produced record third quarter results yet again. With both net sales and adjusted EBITDA up over 30%, it's clear the strong demand and higher volumes are also being met with improved efficiencies. Our teams at Henderson and Dejana are really knocking it out of the park. This is even more impressive now that the comps are much tougher and we're being compared to a record third quarter last year. Our municipal business continues to grow thanks to the team's continuous improvement work in the recent years, which is now paying off as we'd hoped. When combined with a strong competitive position in a dynamic market, we are in a formidable position today. In our commercial business, after seeing softer order patterns in the local dealer markets in recent quarters, an overall reduction in economic and tariff concerns led to a stronger than expected performance in the third quarter. We hope these trends continue, but also understand that dealers still have inventory on the ground. And despite interest rates starting to come down, smaller customers are more price conscious and slower to make decisions. the commercial fleet business remains generally positive. Fleet buyers are less influenced by near-term issues, instead managing their business more for the medium term. So really a fantastic performance in the solution segment. Overall, we're still seeing strong demand from municipal customers and solid demand from commercial customers. Our teams are receiving the chassis and components they need, allowing them to flex their DDMS muscles, driving greater efficiency, and deliver improved profitability. From an operational standpoint, we are executing effectively across the segment. And when you add in our solid backlog, Solutions is set to have another fantastic year. In summary, this was an excellent quarter for Douglas Dynamics. characterized by important wins and strong execution. Work Truck Solutions continues to experience encouraging fleet business and substantial demand and backlog from municipal customers. Attachments pre-season came in as expected, and the team is primed and ready for winter. We have launched our strategic pillars internally, and the teams are building the specific divisional plans aligned with the optimize, expand, and activate strategic pillars. We are confident in both the direction we are taking and our ability to execute and deliver sustained impact in the years to come. With that, I'd like to pass the call to Sarah.