DOUGLAS DYNAMICS, INC (PLOW)

Results of Operations

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The Company’s two reportable business segments are as follows:

Work Truck Attachments.  The Work Truck Attachments segment includes the Company's operations that manufacture and sell snow and ice control attachments and other products sold under the FISHER®, WESTERN® and SNOWEX® brands, and truck-mounted service cranes and dump hoists under the VENCO® and VENTURO® brands. As described under “Seasonality and Year-To-Year Variability,” the Work Truck Attachments Segment is seasonal and, as a result, its results of operations can vary from quarter-to-quarter and from year-to-year.

Work Truck Solutions.  The Work Truck Solutions segment includes manufactured municipal snow and ice control products under the HENDERSON® brand and the up-fit of market leading attachments and storage solutions under the HENDERSON® brand, and the DEJANA® brand and its related sub-brands.

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In addition, segment results include an allocation of all corporate costs to Work Truck Attachments and Work Truck Solutions.

Business Update

​As a result of recent market volatility, enacted or potential tariffs, supply chain disruptions, labor strikes, labor shortages, inflationary pressures (including around materials, freight including as a result of the war in Iran, labor and benefits) and other economic trends, our results of operations may be significantly impacted in future quarters. While Douglas Dynamics is primarily a domestic manufacturer and upfitter and most of our revenue is from domestic customers, we do rely on a global supply chain to source our parts and materials. We source certain materials from China and other countries where tariffs and export restrictions have been enacted or proposed. We may see increased materials costs as a result of these existing or future tariffs and export restrictions, and we may be unable to effectively offset these tariffs or export restrictions with price increases, which could negatively impact our profitability in future quarters. We may also not be able to effectively offset increased freight costs resulting from the war in Iran with price increases, which could negatively impact our profitability in future quarters. We may have challenges in short-term liquidity that could impact our ability to fund working capital needs. We have taken various steps to preserve liquidity. We reduce discretionary spending where possible and defer payments where appropriate within existing contractual terms, while remaining committed to long term growth projects. In consideration of these recent macroeconomic trends and the various actions that we have taken to preserve our liquidity, we expect that cash on hand and cash we generate from operations, as well as available credit under our senior credit facilities, will provide adequate funds for the foreseeable future.

On February 20, 2026, the United States Supreme Court issued a decision invalidating the broad-based tariffs imposed under the International Emergency Economic Powers Act (IEEPA). We incurred tariffs under IEEPA, and are following the established refund filing and validation process through the CAPE system, along with other importers seeking IEEPA refunds. As of June 30, 2026, approximately $0.9 million in refunds have been received, and a receivable of approximately $2.8 million was recorded for additional tariffs that have been accepted through the CAPE system but have not yet been received in cash. The refunds were reflected as a reduction to Cost of sales in the Condensed Consolidated Statements of Operations and Comprehensive Income in the three and six months ended June 30, 2026 for amounts related to goods already sold, or as a reduction in Inventories on the Condensed Consolidated Balance Sheet as of June 30, 2026 to the extent the related goods remain on hand.

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Overview

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The following table sets forth, for the three and six months ended June 30, 2026 and 2025, the consolidated statements of operations of the Company and its subsidiaries.  All intercompany balances and transactions have been eliminated in consolidation.  In the table below and throughout this “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” consolidated statements of operations data for the three and six months ended June 30, 2026 and 2025 have been derived from our unaudited consolidated financial statements. The information contained in the table below should be read in conjunction with our unaudited condensed consolidated financial statements and the related notes included elsewhere in this Quarterly Report on Form 10-Q.

The following table sets forth for the three and six months ended June 30, 2026 and 2025 the percentage of certain items in our Condensed Consolidated Statements of Operations and Comprehensive Income, relative to net sales: ​

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Net Sales

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Net sales were $214.6 million for the three months ended June 30, 2026 compared to $194.3 million in the three months ended June 30, 2025, an increase of $20.3 million, or 10.4%. Net sales were $352.4 million for the six months ended June 30, 2026 compared to $309.4 million in the six months ended June 30, 2025, an increase of $43.0 million, or 13.9%. The increase in sales for the three months ended June 30, 2026 compared to the same period in 2025 is a result of higher volumes at Work Truck Attachments related to improved snowfall levels. The increase in sales for the six months ended June 30, 2026 compared to the same period in 2025 is a result of higher volumes at Work Truck Attachments related to improved snowfall levels. See below for a discussion of net sales for each of our segments.

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Net sales at our Work Truck Attachments segment were $129.3 million for the three months ended June 30, 2026 compared to $108.1 million in the three months ended June 30, 2025, an increase of $21.2 million. Net sales at our Work Truck Attachments segment were $190.2 million for the six months ended June 30, 2026 compared to $144.6 million in the six months ended June 30, 2025, an increase of $45.6 million. The increase in sales in the three and six months ended June 30, 2026 was due to higher equipment volumes and parts and accessories sales related to improved snowfall levels, as well as the addition of sales from Venco Venturo, which was acquired on November 3, 2025.  The most recent snow season ended March 2026 was approximately 26.0% above the 10-year average, compared to the prior snow season which saw snowfall 12.0% below the 10-year average.

​Net sales at our Work Truck Solutions segment were $85.3 million for the three months ended June 30, 2026 compared to $86.2 million in the three months ended June 30, 2025, a decrease of $0.9 million. Net sales at our Work Truck Solutions segment were $162.2 million for the six months ended June 30, 2026 compared to $164.8 million in the six months ended June 30, 2025, a decrease of $2.6 million. The decrease in sales for the three and six months ended June 30, 2026 compared to the same periods in 2025 was a result of lower commercial volumes, somewhat offset by price increase realization.

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Cost of Sales

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Cost of sales was $147.9 million for the three months ended June 30, 2026 compared to $134.0 million for the three months ended June 30, 2025, an increase of $13.9 million or 10.4%. Cost of sales was $247.9 million for the six months ended June 30, 2026 compared to $221.0 million for the six months ended June 30, 2025, an increase of $26.9 million or 12.2%. The increase in cost of sales for the three and six months ended June 30, 2026 compared to the same periods in the prior year was driven by the higher volumes at our Work Truck Attachments segment. Cost of sales as a percentage of sales were 68.9% for the three months ended June 30, 2026, compared to 69.0% for the three months ended June 30, 2025, respectively. Cost of sales as a percentage of sales were 70.3% for the six months ended June 30, 2026, compared to 71.4% for the six months ended June 30, 2025, respectively. The decrease in cost of sales as a percentage of sales in the three and six months ended June 30, 2026 is related to segment mix, as Work Truck Attachments typically has higher gross margins than Work Truck Solutions.

Gross Profit

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Gross profit was $66.8 million for the three months ended June 30, 2026 compared to $60.3 million for the three months ended June 30, 2025, an increase of $6.5 million, or 10.8%. Gross pr

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Item 7.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations for the years ended December 31, 2024 and 2025 should be read together with our audited consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10‑K. For a discussion and analysis of the year ended December 31, 2024 compared to December 31, 2023, please refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 25, 2025. Some of the information contained in this discussion and analysis or set forth elsewhere in this Annual Report on Form 10‑K, including information with respect to our plans and strategies for our business, includes forward‑looking statements that involve risks and uncertainties. You should review the “Risk Factors” section of this Annual Report on Form 10‑K for a discussion of important factors that could cause actual results to differ materially from the results described in, or implied by, the forward‑looking statements contained in this Annual Report on Form 10‑K.

Results of Operations

Operating Segments

We conduct business in two segments: Work Truck Attachments and Work Truck Solutions. Under this reporting structure, our two reportable business segments are as follows:

Work Truck Attachments.  The Work Truck Attachments segment includes our operations that manufacture and sell snow and ice control attachments and other products sold under the FISHER®, WESTERN®, and SNOWEX® brands, and truck-mounted service cranes and dump hoists under the VENCO® and VENTURO® brands. As described under “Seasonality and Year-To- Year Variability,” the Work Truck Attachments segment is seasonal and, as a result, its results of operations can vary from quarter-to-quarter and from year-to-year.

Work Truck Solutions.  The Work Truck Solutions segment includes manufactured municipal snow and ice control products under the HENDERSON® brand and the upfit of market leading attachments and storage solutions under the HENDERSON® brand, and the DEJANA® brand and its related sub-brands.

See Note 16 to the Consolidated Financial Statements for information concerning individual segment performance for the years ended December 31, 2025, December 31, 2024 and December 31, 2023, respectively.

Business Update

As a result of recent market volatility, supply chain disruptions, labor strikes, labor shortages, tariffs, inflationary pressures (including around materials, freight, labor and benefits), and other economic trends, our results of operations have been impacted in the years ended December 31, 2025, 2024 and 2023, and may be significantly impacted in future years. See below for further discussion of the impact to our financial statements.

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We may have challenges in short-term liquidity that could impact our ability to fund working capital needs. We have taken various steps to preserve liquidity, including reducing discretionary spending and deferring payments where appropriate within existing contractual terms, while remaining committed to long term growth projects.  In January 2024, we implemented the 2024 Cost Savings Program, which was primarily in the form of restructuring charges for salaried headcount reductions and impacted both the Work Truck Attachments segment and corporate functions in 2024. See Note 21 to the Consolidated Financial Statements for additional information regarding the 2024 Cost Savings Program. As discussed in Note 6 and Note 8 to the Consolidated Financial Statements, in September 2024, we executed a sale leaseback transaction for gross proceeds of $64.2 million, and, using a portion of the proceeds, we paid down $42.0 million on our term loan.  In addition, as discussed in Note 8 to the Consolidated Financial Statements, in March 2025, we refinanced our term loan. In consideration of these recent macroeconomic trends and the various actions that we have taken to preserve our liquidity, cash on hand and cash we generated from operations, as well as available credit under our senior credit facilities, provided adequate and incremental funds throughout 2025, and we expect will continue to provide us with adequate funds in the foreseeable future.

On February 20, 2026, the U.S. Supreme Court struck down certain tariffs imposed under the International Emergency Powers Act. It is unclear at this time what impact this decision will have on our future financial results, including whether we will be able to obtain refunds of amounts previously collected for such tariffs or the level of replacement tariffs the current U.S. Administration imposes through other means.

Overview

While our Work Truck Solutions operations are not as reliant on snowfall, snowfall is still the primary factor in evaluating our business results due to its significant impact on the results of operations of our Work Truck Attachments segment. We typically compare the snowfall level in a given period both to the snowfall level in the prior season and to those snowfall levels we consider to be average. References to “average snowfall” levels below refer to the aggregate average inches of snowfall recorded in cities in snow‑belt states in the United States during the annual snow season, from October 1 through March 31, from 1980 to 2025 (covering 66 cities and 26 states through 2022, and 81 cities and 35 states since 2023). During this period, snowfall averaged 2,967 inches, with the low in such period being 1,794 inches and the high being 4,502 inches. Meanwhile, over the last 10 years, snowfall averaged 2,623 inches for the snow periods ending March 31, 2016 through 2025. The lowest rolling ten-year period occurred with the snow season ended March 31, 2025.

During the six‑month snow season ended March 31, 2025, snowfall was 2,445 inches, which was 17.6% lower than averages from 1980 to 2025. During the six‑month snow season ended March 31, 2024, we experienced snowfall that was 38.4% lower than averages from 1980 to 2024. During the six-month snow season ended March 31, 2023, we experienced snowfall that was 11.4% lower than averages from 1980 to 2023. Snowfall was 6.8% below average during the snow season ended March 31, 2025 when compared to the average over the last 10 years and was the seventh snow season in a row below this average. Snowfall was 32.9% below average during the snow season ended March 31, 2024 when compared to the average over the previous 10 years. Additionally, the timing and location of snowfall can have an impact on our financial results. Specifically, in the snow season ended March 31, 2024, low snowfall in our core markets led to lower volumes, and in the snow season ended March 31, 2023, major cities along the I-95 corridor on the East Coast did not see any measurable snowfall. We believe the below-average snowfall in the years ended December 31, 2025 and 2024 negatively impacted our business. In 2023 and 2024, we encountered chassis availability issues with certain of our OEM partners, which negatively impacted our business.

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The following table sets forth, for the periods presented, the consolidated statements of income of the Company and its subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. In the table below and throughout this “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” consolidated statements of income data for the years ended December 31, 2023, 2024 and 2025 have been derived from our audited consolidated financial statements. The information contained in the table below should be read in conjunction with our consolidated financial statements and the related notes included elsewhere in this Annual Report on Form 10‑K.

The following table sets forth, for the periods indicated, the percentage of certain items in our consolidated statement of income data, relative to net sales:

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Year Ended December 31, 2025 Compared to Year Ended December 31, 2024

Net Sales. Net sales were $656.1 million for the year ended December 31, 2025 compared to $568.5 million in 2024, an increase of $87.6 million, or 15.4%. Net sales increased for the year ended December 31, 2025 primarily due to higher volumes at Work Truck Solutions, as well as higher volumes at Work Truck Attachments related to strong snowfall in the fourth quarter of 2025. See below for a discussion of net sales for each of our segments.

Net sales at our Work Truck Attachment segment were $295.7 million for the year ended December 31, 2025 compared to $256.0 million in the year ended December 31, 2024, an increase of $39.7 million primarily due to improved snowfall in our core markets leading to higher volumes in 2025, and price increase realization.  In 2024, the impact of multiple years of below ave

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