Douglas Dynamics, Inc.

Good day and welcome to the Douglas Dynamics first quarter 2026 earnings conference call. All participants will be in 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 touch tone phone. To withdraw your question, please press star then two. Please note, this event is being recorded. I would now like to turn the conference over to Nathan Elwell, Vice President, Investor Relations. Please go ahead.

Thank you, Chad. 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 the quarterly fact sheet can be found on our IR website. Joining me on the call today is Mark Van Genderen, President and CEO, and Sarah Lauber, Executive Vice President and CFO. Mark 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 Mark. Please go ahead.

Thanks, Nathan, and welcome everyone to our call. So this was another excellent quarter for our company across the board, with both segments executing successfully and delivering just really solid results. We're running efficiently. In the attachment segment, our team has responded admirably to the above-average snowfall-driven demand of this past winter. And the employees in our solution segment have delivered another great performance, continuing a strong trend. If you look back at our typical first quarter results, you'll see that it is often the case where we don't generate a profit due to the seasonality of our attachments business. But this year, we produced record sales, adjusted earnings, and EPS. Just a tremendous achievement on behalf of the teams. This significant year-over-year growth was really driven, primarily driven by three factors. First, significantly above average snowfall, boosting demand at attachments. Second, the ongoing strength of demand in our municipal operations. And third, strong execution across the board from our teams to both address this demand and make meaningful progress against our strategic priorities. Okay, let's talk work truck attachments. Before I discuss the quarter specifically, I want to make a general point on snowfall in our business. Yes, snow is absolutely the main driver of demand in the attachments business. We need snow to drive excellent results. But it's more than that. Snowfall creates the demand, but it's the relationship we have with our dealers and contractors, it's the projects we undertake every day, it's our fantastic product, our culture, our strategic pillars, the sheer hard work and determination of our team that fulfills that demand. So in short, it's execution that gets product shipped, sold, and serviced. And that doesn't happen without our people and their commitment to operational excellence every day. So my continued and heartfelt thanks to the 1,700 people who are Douglas Dynamics. Okay, looking back at the winter, snowfall was significantly above average in many of our core markets. In total, the season came in roughly 20% above the 10-year average and 40% higher than last winter. This winter, snowfall came early, with major November and December storms in the Midwest and significant, persistent lake effect snow in the Great Lakes region. In the first quarter, several large snow and ice storms made their way across much of the country, including Fern and Hernando. record breakers which brought significant and widespread snowfall totals across the heartland and up the east coast, all the way from New Mexico to Maine. Elsewhere in the country, both out west and the south, experienced lower snowfall than normal. As a skier myself, I don't like to see dry conditions in the mountains, but it was sure great to see the snowfall where it did. Of course, all this weather meant that many of our dealers and contractors in our core markets in the Midwest and on the East Coast were working tirelessly to keep people safe and get communities back on their feet after the storms. It shouldn't be overlooked how important flowers are to the safety and well-being of the general public, and in turn, our dealers who keep the contractors on the road. It is at the very core of our mission statement to keep people safe and communities thriving. As equipment was used during the winter, dealers were drawing down on their inventories, which we believe are now solidly below their 10-year averages. We will see how our dealers replenish their inventories with their preseason orders. All of these elements came together to contribute to a record first quarter top line for attachments, with sales up just over 65%. This included our first full quarter of sales from Venco Venturo, the crane and hoist manufacturer we acquired in November of last year. These excellent results were driven first and foremost by demand for our parts and accessories, as the persistent snowfall took its toll on equipment. In fact, we achieved record shipments of P&A during the quarter. Sales of plows and hoppers also increased, But the first quarter at attachments is always about parts and accessories, and this quarter was no different. So we pretty much exited winter and rolled straight into preseason, which kicked off at the beginning of April. Now, as a refresher, we typically receive around two-thirds of our annual orders from dealers in the second and third quarters of the year. We shipped these orders in time for our dealers to be stocked and ready to install equipment before the first snowflake of the season fly. While it was still early in pre-season, while it's still early, as expected, we were off to a good start following the robust winter I detailed earlier. More specifically, sales of parts and accessories continued to come in strong. Prowl sales, while not as directly correlated to last season's snowfall as P&A, are also tracking ahead of last year. And the great news is that we are in a strong position operationally. Plans are lining up as expected, inventories are in good shape, and our teams are hard at work. We continue to invest in the business and are even pulling ahead select equipment and technology projects given current demand. As it stands right now, we are optimistic about how the year is unfolding. That excitement will build at CYMA, the Snow and Ice Management Association Annual Symposium, which will be held in June, this year in Cincinnati. As a market leader, this is a great opportunity each year for us to showcase our expanding line of products and spend quality time with our dealers and contractors. All right, turning to Work Truck Solutions, where the teams consistently continue to perform, now measuring their ability to drive improvements in years, not quarters or months. The team produced near-record sales and, once again, record-adjusted earnings and record margins. And that's on top of a record first quarter last year. So just really outstanding work. The strongest part of the business remains our municipal-focused operations. Both demand and backlog from municipal customers remains robust, and our sales teams continue to pursue and win important, profitable multi-year contracts. From what we've heard across the industry, our excellent lead times are proving tough to match, and combined with our attentive and knowledgeable customer support, we are well-positioned to continue our track record of steady, profitable growth. The strength in our municipal operation helped offset slightly softer demand in certain commercial business segments. The outlook is mixed overall, but there are pockets of that business that aren't performing as well as last year. While end users are approaching the current economic environment cautiously, and demand for dealer orders remains dynamic in real time, the business is holding its own overall. We are focused on the factors we can influence to continually optimize the business and rapidly adapt to any changes and shifts in customer behavior. And finally, backlog in solutions remains positive and above traditional levels. We are booking production dates well beyond the current year. Now, as we've noted before, our backlog includes vehicles that customers have ordered now for future delivery. Our goal is to make sure that vehicles are delivered exactly when and where they were promised, and our solutions team does that exceptionally well. All right, so before handing it over to Sarah, I'd like to just take a step back from our operational results and provide a brief strategic update regarding the optimize, expand, and activate pillars of our strategic framework that we first shared late last year, and how we are now migrating from introduction to action. The first priority is to continue to optimize our current operations across the board. As we said in the past, optimize is not a new concept for Douglas Dynamics. In fact, it's been a core tenant of our company for decades. Striving to get better every day is in the company's DNA. And at any one point in time, there are dozens of project examples, some of which are beginning this year, some are already in progress, and many will span multiple years. So let me mention just a few. As much as we and you, I imagine, would like to predict the weather for next winter, we can't. But we continue to improve our demand and production planning processes to more quickly, accurately, and precisely respond to whatever Mother Nature throws our way. we are using a more data-driven approach that incorporates algorithms, statistics, historical trends, and more recently, AI, leading to a more sophisticated way of smoothing out volatility that is benefiting us this year and will continue to pay dividends in the years ahead. At Attachments, we continue to expand our suite of communication tools with our dealer network through a greater exchange of data, information, and ordering capabilities resulting in greater efficiency and an improved ease of doing business, which is certainly appreciated by our dealers. On the solution side of the business, we're working hard on enhancing our CPQ process, which stands for Configure Price Quote, at our municipal operations. This increasingly automated process is helping to produce greater efficiency and accuracy in order taking. which is then helping to streamline many additional processes from sourcing to production planning. And at the same time, providing the appropriate level of customization required and desired by our customers. And finally, we recently broke ground on an exciting project at our municipal operations main facility in Manchester, Iowa. We are building a dedicated logistics building adjacent to our existing manufacturing facility. This new facility will serve as a centralized hub for all municipal logistics operations, including receiving raw materials, staging components, and shipping finished products. Additionally, this will also help improve efficiency by freeing up critical floor space and reducing congestion at and around our manufacturing facility. So I've picked just a few to mention today, but there are many more exciting projects, both being planned and underway. The second pillar is expand, which is our focus on internally driven growth. More specifically, continuing to develop new products across our divisions to meet the emerging needs of customers and geographic expansion where it makes sense. On previous calls, I mentioned our plans to build a new upfit center in Missouri to replace an outdated operation with a brand new purpose-built facility in an ideal location for both new builds and to make it convenient for customers in the region to have existing trucks serviced. I am pleased to report that the process is virtually complete. The ribbon-cutting ceremony is a few weeks away with production beginning around mid-year. The new facility will add much-needed capacity to Henderson and is an important factor to help us maintain our best-in-class delivery times. This expansion will allow us to better serve existing customers in surrounding markets, to continue to deliver trucks on time, and to increase our attractiveness to new customers, all of which will strengthen our competitive advantage. My sincere thanks to everyone involved in making this important project a success. And finally, activate, which refers to last year's restart of our M&A efforts, which led to the acquisition of Venco Ventura last November. Our integration team is making good progress, and the Venco team, as we believe would be the case, are proving to be a great cultural fit. Moving forward, we continue to look for the right businesses and product lines to acquire that align with our attachment-centric strategy. So in summary, 2026 is off to a great start. It is an exciting time at Douglas Dynamics, with market conditions and company performance aligning well across most of the business. We are in a strong position, and as a more resilient company today, we are prepared for a wide variety of potential scenarios, with strategies in place to capitalize on these opportunities. With our strategic framework now really taking hold in the business, we are hitting our stride, always striving to maximize our business and operational agility. While we are proud of our recent results, we know we have a lot more work to do to reach our potential. Our leadership team is working in lockstep, intently focused on executing our strategic plans to produce profitable, sustainable, long-term growth. And with that, I'd like to pass the call to Sarah.