Highlights:
- Produced record full year net sales of $475 million
- Fourth quarter net sales increased 6.0% over prior year
driven by year-over-year demand trends and sequentially improved chassis availability
- Announced 10% increase to quarterly dividend to $0.265 per diluted share
- Full year 2018 guidance outlines further growth and margin expansion
MILWAUKEE, Feb. 26, 2018 (GLOBE NEWSWIRE) -- Douglas Dynamics, Inc. (NYSE:PLOW), North America's premier
manufacturer and upfitter of work truck attachments and equipment, today announced financial results for the fourth quarter and
full year ended December 31, 2017.
James L. Janik, Chairman, President and Chief Executive Officer commented, “We were pleased to close out the
year on a positive note, producing overall results that were in line with our expectations. We continue to see sequential
improvements in chassis availability for both our municipal products and in our Work Truck Solutions segment. We believe the
negative impact on our operations from the chassis availability delays during the past year is slowly diminishing and our teams are
working diligently to upfit and deliver trucks to our customers.”
Janik added, “We are proud of the tremendous efforts undertaken across our company to address the external
challenges we faced in 2017, and believe we entered 2018 in a stronger position because of that hard work. Our 2017 performance
reflects the cumulative negative impact of two consecutive significantly below average snowfall seasons, plus the chassis
availability issues that impacted our operations throughout the year. Fortuitously, the fourth quarter of 2017 produced average
snowfall across our core markets and the chassis issues began to moderate. We entered 2018 focused on executing our growth and
diversification plans including ramping up our newest Work Truck Solutions facility in Kansas City.”
Consolidated Fourth Quarter 2017 Results
Net sales in the fourth quarter were $138.0 million, an increase of 6.0% when compared to the prior year fourth
quarter net sales of $130.1 million. The increase relates to stronger demand in Work Truck Attachments and incremental sales
related to ramping up new facilities in Work Truck Solutions.
Net income of $34.5 million, or $1.50 per diluted share, reflects an increase of $24.4 million, or $1.06 per
diluted share, when compared to the year ago quarter. The increase is primarily due to a one-time benefit associated with
U.S. Tax Reform totaling $22.5 million, or $0.97 per diluted share. Adjusted net income of $12.1 million, or $0.53 per diluted
share, compares with adjusted net income of $10.3 million, or $0.45 per diluted share, for the fourth quarter of 2016.
Adjusted EBITDA of $30.3 million increased $2.9 million compared to adjusted EBITDA of $27.4 million recorded in
the same period of the prior year on higher volumes and improved margins in both segments.
Work Truck Attachments Segment Fourth Quarter 2017 Results
Work Truck Attachments recorded revenue of $103.5 million, resulting in income from operations of $25.9 million,
compared to $97.8 million in revenue and income from operations of $23.3 million in the year ago period. Both revenue and
operating income increased due to ongoing strength of select light pickup truck sales and average snowfall across core markets
during the quarter, which positively impacted sales of commercial snow and ice control products and offset the negative impact of
chassis availability for municipal products.
Work Truck Solutions Segment Fourth Quarter 2017 Results
Work Truck Solutions produced revenue of $41.0 million, an increase of 8.1% compared to revenue of $37.9 million
in the fourth quarter of the prior year. Income from operations of $4.7 million compares to $3.5 million during the same
quarter in 2016. While revenue was impacted by a short-term decrease in chassis availability, the decline was more than
offset by sales from new upfit facilities that began ramping up earlier in 2017. Operating income increased based on higher
volumes, which also contributed to improved operating margins.
Consolidated Full Year 2017 Results
Net sales were a record $474.9 million, compared to $416.3 million last year. The increase was due to the
acquisitions of Dejana Truck & Utility Equipment in July 2016 and Arrowhead Equipment in May 2017, both of which are reflected in
the Work Truck Solutions segment. This increase was partially offset by lower revenue in the Work Truck Attachments segment,
which related to the cumulative negative impact of two consecutive significantly below average snowfall seasons, plus the chassis
availability issues that impacted our municipal and Work Truck Solutions operations.
Net income was $55.3 million, or $2.40 per diluted share, compared to prior year net income of $39.0 million, or
$1.70 per diluted share. The increase is primarily due to a provisional one-time benefit associated with U.S. Tax Reform totaling
$22.5 million, or $0.97 per diluted share partially offset by a non-recurring gain of approximately $10 million, or $0.27 per
diluted share net of tax, related to the successful conclusion of a patent infringement lawsuit in 2016. Adjusted net income was
$33.5 million, or $1.45 per diluted share, compared with adjusted net income of $36.4 million, or $1.58 per diluted share, for the
prior year.
Adjusted EBITDA of $90.9 million declined $0.5 million compared to adjusted EBITDA of $91.4 million for the
prior year due to lower volumes in Work Truck Attachments and higher labor and overhead costs in light of the chassis availability
challenges experienced in 2017. These declines were substantially offset with additional volume in the Work Truck Solutions
segment, implemented cost reductions and lower incentive compensation.
The effective tax rate for the year was a benefit of 4.6% of pre-tax income due to changes resulting from U.S.
tax reform. Excluding the one-time benefit related to U.S. tax reform, the effective tax rate would have been 37.9% for the
year, which compares to an effective tax rate of 38.8% for the prior year.
Work Truck Attachments Segment Full Year 2017 Results
Work Truck Attachments recorded revenue of $350.6 million, and income from operations of $78.1 million, or 22.3%
of net sales, compared to the prior year revenue of $360.6 million, and income from operations of $85.9 million, or 23.8% of net
sales. Revenue was negatively impacted by chassis availability issues affecting sales of municipal products throughout the
year, and significantly below average snowfall in the previous two winter seasons, which impacted demand for commercial snow and
ice control products. Operating income declined primarily due to lower volumes.
Work Truck Solutions Segment Full Year 2017 Results
As a reminder, the acquisition of Dejana Truck and Utility Equipment was completed on July 15, 2016, creating the Work Truck
Solutions segment. As such, all references to these segment results for 2016 refer to the period from July 16, 2016 to December 31,
2016.
Work Truck Solutions recorded revenue of $137.8 million, and income from operations of $9.8 million, or 7.0% of
net sales, compared to revenue of $65.0 million and income from operations of $3.1 million, or 4.8% of net sales, during the
reported period in 2016. The increase in revenue and operating income relates to capturing a full year of sales for the
segment as compared to a partial year in 2016, as noted above. In addition, the segment produced incremental sales from the new
facilities that began ramping up in mid-2017.
Balance Sheet
Full year net cash provided by operating activities of $67.2 million compares to $69.9 million in the prior
year. Excluding a cash settlement of approximately $6.2 million, net of tax, received in 2016 upon the successful conclusion of a
patent infringement lawsuit, net cash from operating activities improved $3.5 million.
Inventory at December 31, 2017 was $71.5 million, compared to $70.9 million at the end of 2016. The increase in
inventory is due to the addition of four new locations in Work Truck Solutions during 2017, substantially offset by lower
inventories in Work Truck Attachments.
Accounts receivable totaled $79.1 million at the end of 2017, similar to accounts receivable of $78.6 million at
the end of 2016.
Cash generated during the year increased cash on hand at year end from $18.6 million at the end of 2016 to $36.9
million at the end of 2017.
Dividend
As previously reported, on December 7, 2017, the Company declared a quarterly cash dividend of $0.24 per share
of the Company's common stock. The dividend was paid on December 29, 2017 to stockholders of record as of the close of business on
December 19, 2017.
In addition, the Company announced that its Board of Directors approved and declared a quarterly cash dividend
of $0.265 per share for the first quarter of 2018, which equates to a projected full year annual increase in the dividend of
approximately 10%, or $0.10 per diluted share. The declared dividend will be paid on March 30, 2018 to stockholders of record as of
the close of business on March 22, 2018.
Mr. Janik noted, “Our primary capital allocation goal of returning cash to shareholders via a robust and
sustainable dividend remains unchanged. Based on our financial performance and the recent changes in the corporate tax rate,
the Board has decided to increase the dividend by a larger amount this year when compared to previous years.”
Outlook
Based on recent results, the overall economic climate, dealer sentiment, information on chassis availability
from OEM partners, snowfall data, and industry trends, the Company is outlining its 2018 financial outlook as follows, which
includes the expected impact of U.S. tax reform:
- Net sales are expected to be in the range of $475 million and $535 million.
- Adjusted EBITDA is predicted to be in the range of $85 million to $115 million.
- Adjusted earnings per share are expected to be in the range of $1.60 per share to $2.20 per share.
Mr. Janik explained, “We expect 2018 to be a year of execution as we continue to implement DDMS across the
Company, while satisfying the growing demand for our market leading products and services. While the temporary headwinds related to
chassis supply persist, their impact has moderated recently, and we expect availability to slowly return to normal as we progress
through the year.”
Webcast Information
The Company will host a conference call on Tuesday, February 27, 2018 at 10:00 a.m. Eastern Time (9:00 a.m.
Central Time). The conference call will be available via the Investor Relations section of the Company’s website at
www.douglasdynamics.com. To listen to the live call, please go to the website at least fifteen minutes early to register,
download and install any necessary audio software. For those who cannot listen to the live broadcast, an Internet replay will
be available shortly after the call.
About Douglas Dynamics
Home to the most trusted brands in the industry, Douglas Dynamics is North America’s premier manufacturer and
upfitter of work truck attachments and equipment. For more than 65 years, the Company has been innovating products that not only
enable people to perform their jobs more efficiently and effectively, but also enable businesses to increase profitability. Through
its proprietary Douglas Dynamics Management System (DDMS), the Company is committed to continuous improvement aimed at consistently
producing the highest quality products, at industry-leading levels of service and delivery that ultimately drive shareholder value.
The Douglas Dynamics portfolio of products and services is separated into two segments: First, the Work Truck Attachments
segment, which includes manufactured snow and ice control attachments sold under the FISHER®, HENDERSON®, SNOWEX® and WESTERN®
brands. Second, the Work Truck Solutions segment, which includes the upfit of market leading attachments and storage solutions for
commercial work vehicles under the DEJANA® brand and its related sub-brands.
Use of Non-GAAP Financial Measures
This press release contains financial information calculated other than in accordance with U.S. Generally
Accepted Accounting Principles (“GAAP”). The non-GAAP measures used in this press release are Adjusted EBITDA, Adjusted Net
Income and Adjusted Earnings Per Share.
These non-GAAP disclosures should not be construed as an alternative to the reported results determined in
accordance with GAAP.
Adjusted EBITDA represents net income before interest, taxes, depreciation and amortization, as further adjusted
for stock based compensation, litigation proceeds, non-cash purchase accounting adjustments and certain charges related to certain
unrelated legal fees and consulting fees. The Company uses, and believes its investors benefit from the presentation of,
Adjusted EBITDA in evaluating the Company’s operating performance because Adjusted EBITDA provides the Company and its investors
with additional tools to compare its operating performance on a consistent basis by removing the impact of certain items that
management believes do not directly reflect the Company’s core operations. In addition, the Company believes that Adjusted EBITDA
is useful to investors and other external users of its consolidated financial statements in evaluating the Company’s operating
performance as compared to that of other companies, because it allows them to measure a company’s operating performance without
regard to items such as interest expense, taxes, depreciation and amortization, which can vary substantially from company to
company depending upon accounting methods and book value of assets and liabilities, capital structure and the method by which
assets were acquired. The Company’s management also uses Adjusted EBITDA for planning purposes, including the preparation of its
annual operating budget and financial projections, and to evaluate the Company’s ability to make certain payments, including
dividends, in compliance with its senior credit facilities, which is determined based on a calculation of “Consolidated Adjusted
EBITDA” that is substantially similar to Adjusted EBITDA.
Adjusted Net Income and Adjusted Earnings Per Share (calculated on a diluted basis) represents net income and
earnings per share (as defined by GAAP), excluding the impact of stock based compensation, litigation proceeds, non-cash purchase
accounting adjustments, tax reform and certain charges related to certain unrelated legal fees and consulting fees, net of their
income tax impact. Management believes that Adjusted Net Income and Adjusted Earnings Per Share are useful in assessing the
Company’s financial performance by eliminating expenses and income that are not reflective of the underlying business performance.
We believe that the presentation of adjusted net income for the periods presented allows investors to make meaningful comparisons
of our operating performance between periods and to view our business from the same perspective as our management. Because the
excluded items are not predictable or consistent, management does not consider them when evaluating our performance or when making
decisions regarding allocation of resources.
Consistent with Regulation G under the U.S. federal securities laws, the non-GAAP measures in this press release
have been reconciled to the nearest GAAP measure, and these reconciliations are located under the heading "Net Income to Adjusted
EBITDA Reconciliation" and “Reconciliation of Net Income to Adjusted Net Income” following the Consolidated Statements of Cash
Flows included in this press release.
With respect to the Company’s 2018 guidance, the Company is not able to provide a reconciliation of the non-GAAP
financial measures to GAAP because it does not provide specific guidance for the various extraordinary, nonrecurring or unusual
charges and other certain items. These items have not yet occurred, are out of the Company’s control and/or cannot be reasonably
predicted. As a result, reconciliation of the non-GAAP guidance measures to GAAP is not available without unreasonable effort and
the Company is unable to address the probable significance of the unavailable information.
Forward Looking Statements
This press release contains certain forward-looking statements within the meaning of Section 21E of the
Securities Exchange Act of 1934, as amended. These statements include information relating to future events, future financial
performance, strategies, expectations, competitive environment, regulation, product demand, the payment of dividends, and
availability of financial resources. These statements are often identified by use of words such as "anticipate," "believe,"
"intend," "estimate," "expect," "continue," "should," "could," "may," "plan," "project," "predict," "will" and similar expressions
and include references to assumptions and relate to our future prospects, developments and business
strategies. Such statements involve known and unknown risks, uncertainties and other factors that
could cause our actual results, performance or achievements to be materially different from any future results, performance or
achievements expressed or implied by these forward-looking statements. Factors that could cause or contribute to such
differences include, but are not limited to, weather conditions, particularly lack of or reduced levels of snowfall and the timing
of such snowfall, a significant decline in economic conditions, our inability to maintain good relationships with the original
equipment manufacturers with whom we currently do significant business, lack of available or favorable financing options for our
end-users or distributors, increases in the price of steel or other materials necessary for the production of our products that
cannot be passed on to our distributors, increases in the price of fuel, the inability of our suppliers and original equipment
partners to meet our volume or quality requirements, inaccuracies in our estimates of future demand for our products, our inability
to protect or continue to build our intellectual property portfolio, the effects of laws and regulations and their interpretations
on our business and financial condition, our inability to develop new products or improve upon existing products in response to
end-user needs, losses due to lawsuits arising out of personal injuries associated with our products, factors that could impact the
future declaration and payment of dividends, our inability to compete effectively against competition, the impact on our financial
statements and results of operations from U.S. tax reform, our inability to achieve the projected financial performance with the
business of Henderson Enterprises Group, Inc., which we acquired in 2014, or the assets of Dejana Truck & Utility Equipment
Company, Inc., which we acquired in 2016, and unexpected costs or liabilities related to such acquisitions, as well as those
discussed in the section entitled “Risk Factors” in our annual report on Form 10-K for the year ended December 31, 2016. You should
not place undue reliance on these forward-looking statements. In addition, the forward-looking statements in this release
speak only as of the date hereof and we undertake no obligation, except as required by law, to update or release any revisions to
any forward-looking statement, even if new information becomes available in the future.
Financial Statements
Douglas Dynamics, Inc. |
|
|
|
|
Consolidated Balance Sheets |
|
|
|
|
(In thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, |
December 31, |
|
|
|
2017 |
2016 |
|
|
|
(unaudited) |
(unaudited) |
|
|
|
|
|
|
|
Assets |
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash equivalents |
$ |
36,875 |
$ |
18,609 |
|
|
Accounts receivable, net |
|
79,120 |
|
78,589 |
|
|
Inventories |
|
71,524 |
|
70,871 |
|
|
Inventories - truck chassis floor plan |
|
7,711 |
|
3,939 |
|
|
Refundable income taxes paid |
|
- |
|
1,541 |
|
|
Prepaid and other current assets |
|
2,883 |
|
2,886 |
|
|
Total current assets |
|
198,113 |
|
176,435 |
|
|
|
|
|
|
|
Property, plant, and equipment, net |
|
53,962 |
|
52,141 |
|
|
Goodwill |
|
241,006 |
|
238,286 |
|
|
Other intangible assets, net |
|
186,150 |
|
194,851 |
|
|
Other long-term assets |
|
5,945 |
|
4,460 |
|
|
Total assets |
$ |
685,176 |
$ |
666,173 |
|
|
|
|
|
|
|
Liabilities and stockholders' equity |
|
|
|
|
Current liabilities: |
|
|
|
|
Accounts payable |
$ |
16,323 |
$ |
17,299 |
|
|
Accrued expenses and other current liabilities |
|
21,004 |
|
27,325 |
|
|
Floor plan obligations |
|
7,711 |
|
3,939 |
|
|
Income taxes payable |
|
2,996 |
|
- |
|
|
Current portion of long-term debt |
|
32,749 |
|
2,829 |
|
|
Total current liabilities |
|
80,783 |
|
51,392 |
|
|
|
|
|
|
|
Retiree health benefit obligation |
|
6,809 |
|
7,193 |
|
|
Pension obligation |
|
9,761 |
|
10,184 |
|
|
Deferred income taxes |
|
39,269 |
|
54,563 |
|
|
Long-term debt, less current portion |
|
274,872 |
|
306,726 |
|
|
Other long-term liabilities |
|
17,004 |
|
15,652 |
|
|
|
|
|
|
|
Total stockholders' equity |
|
256,678 |
|
220,463 |
|
|
Total liabilities and stockholders' equity |
$ |
685,176 |
$ |
666,173 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Douglas Dynamics, Inc. |
|
|
Consolidated Statements of
Income |
|
|
(In thousands, except share and per share
data) |
|
|
|
|
|
|
|
|
|
|
|
Three Month Period
Ended |
|
Twelve Month Period
Ended |
|
|
|
December 31,
2017 |
December 31,
2016 |
|
December 31,
2017 |
December 31,
2016 |
|
|
|
(unaudited) |
|
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
$ |
137,969 |
|
$ |
130,143 |
|
|
|
$ |
474,927 |
|
$ |
416,268 |
|
|
|
Cost of sales |
|
93,158 |
|
|
88,465 |
|
|
|
|
331,841 |
|
|
282,294 |
|
|
|
Gross profit |
|
44,811 |
|
|
41,678 |
|
|
|
|
143,086 |
|
|
133,974 |
|
|
|
|
|
|
|
|
|
|
|
Selling, general, and administrative expense |
|
16,520 |
|
|
16,274 |
|
|
|
|
61,594 |
|
|
54,260 |
|
|
|
Intangibles amortization |
|
2,869 |
|
|
2,749 |
|
|
|
|
11,401 |
|
|
10,596 |
|
|
|
|
|
|
|
|
|
|
|
Income from operations |
|
25,422 |
|
|
22,655 |
|
|
|
|
70,091 |
|
|
69,118 |
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net |
|
(3,988 |
) |
|
(4,942 |
) |
|
|
|
(18,336 |
) |
|
(15,195 |
) |
|
|
Litigation proceeds |
|
- |
|
|
- |
|
|
|
1,275 |
|
|
10,050 |
|
|
|
Other income (expense), net |
|
17 |
|
|
(47 |
) |
|
|
|
(115 |
) |
|
(277 |
) |
|
|
Income before taxes |
|
21,451 |
|
|
17,666 |
|
|
|
|
52,915 |
|
|
63,696 |
|
|
|
|
|
|
|
|
|
|
|
Income tax expense (benefit) |
|
(13,077 |
) |
|
7,565 |
|
|
|
|
(2,409 |
) |
|
24,687 |
|
|
|
|
|
|
|
|
|
|
|
Net income |
$ |
34,528 |
|
$ |
10,101 |
|
|
|
$ |
55,324 |
|
$ |
39,009 |
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of common shares outstanding: |
|
|
|
|
|
|
|
Basic |
|
22,590,897 |
|
|
22,501,640 |
|
|
|
22,576,381 |
|
|
22,480,679 |
|
|
|
Diluted |
|
22,604,344 |
|
|
22,501,640 |
|
|
|
22,587,648 |
|
|
22,480,679 |
|
|
|
|
|
|
|
|
|
|
|
Earnings per share: |
|
|
|
|
|
|
|
Basic earnings per common share attributable to common
shareholders |
$ |
1.51 |
|
$ |
0.44 |
|
|
|
$ |
2.42 |
|
$ |
1.71 |
|
|
|
Earnings per common share assuming dilution attributable to common
shareholders |
$ |
1.50 |
|
$ |
0.44 |
|
|
|
$ |
2.40 |
|
$ |
1.70 |
|
|
|
Cash dividends declared and paid per share |
$ |
0.24 |
|
$ |
0.24 |
|
|
|
$ |
0.96 |
|
$ |
0.94 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Douglas Dynamics, Inc. |
|
|
|
Consolidated Statements of Cash Flows |
|
|
|
(In thousands) |
|
|
|
|
|
|
|
|
Twelve Month Period
Ended |
|
|
December 31,
2017 |
December 31,
2016 |
|
|
(unaudited) |
|
|
|
|
|
Operating activities |
|
|
|
Net income |
$ |
55,324 |
|
$ |
39,009 |
|
|
Adjustments to reconcile net income to net cash provided by operating
activities: |
|
|
|
Depreciation and amortization |
|
18,584 |
|
|
16,742 |
|
|
Inventory step up of acquired business included in cost of sales |
|
- |
|
|
125 |
|
|
Amortization of deferred financing costs and debt discount |
|
1,214 |
|
|
950 |
|
|
Stock-based compensation |
|
3,500 |
|
|
2,898 |
|
|
Provision for losses on accounts receivable |
|
1,475 |
|
|
208 |
|
|
Deferred income taxes |
|
(15,242 |
) |
|
5,413 |
|
|
Earnout liability |
|
(1,786 |
) |
|
(1,128 |
) |
|
Changes in operating assets and liabilities, net of
acquisitions: |
|
|
|
Accounts receivable |
|
(1,154 |
) |
|
2,419 |
|
|
Inventories |
|
894 |
|
|
605 |
|
|
Prepaid and other assets and refundable income taxes paid |
|
65 |
|
|
1,699 |
|
|
Accounts payable |
|
(1,670 |
) |
|
(113 |
) |
|
Accrued expenses and other current liabilities |
|
5,481 |
|
|
(3,434 |
) |
|
Benefit obligations and other long-term liabilities |
|
486 |
|
|
4,527 |
|
|
Net cash provided by operating activities |
|
67,171 |
|
|
69,920 |
|
|
|
|
|
|
Investing activities |
|
|
|
Capital expenditures |
|
(8,380 |
) |
|
(9,830 |
) |
|
Acquisition of business |
|
(7,385 |
) |
|
(181,344 |
) |
|
Net cash used in investing activities |
|
(15,765 |
) |
|
(191,174 |
) |
|
|
|
|
|
Financing activities |
|
|
|
Shares withheld on restricted stock vesting paid for employees’
taxes |
|
(923 |
) |
|
-- |
|
|
Payments of financing costs |
|
(1,608 |
) |
|
(2,320 |
) |
|
Borrowings on long-term debt |
|
-- |
|
|
129,350 |
|
|
Earnout payment |
|
(5,487 |
) |
|
-- |
|
|
Dividends paid |
|
(21,974 |
) |
|
(21,451 |
) |
|
Repayment of long-term debt |
|
(3,148 |
) |
|
(2,560 |
) |
|
Net cash provided by (used in) financing activities |
|
(33,140 |
) |
|
103,019 |
|
|
Change in cash and cash equivalents |
|
18,266 |
|
|
(18,235 |
) |
|
Cash and cash equivalents at beginning of year |
|
18,609 |
|
|
36,844 |
|
|
Cash and cash equivalents at end of year |
$ |
36,875 |
|
$ |
18,609 |
|
|
|
|
|
|
Non-cash operating and financing activities |
|
|
|
Truck chassis inventory acquired through floorplan obligations |
$ |
45,472 |
|
$ |
13,697 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Douglas Dynamics, Inc. |
|
|
|
Segment Disclosures (unaudited) |
|
|
(In thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
Three Months
Ended |
|
Twelve Months
Ended |
|
Twelve Months
Ended |
|
|
|
|
December,
31 |
|
December,
31 |
|
December,
31 |
|
December,
31 |
|
|
|
|
|
2017 |
|
|
|
2016 |
|
|
|
2017 |
|
|
|
2016 |
|
|
|
|
Net Sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Work Truck Attachments |
$ |
103,476 |
|
|
$ |
97,778 |
|
|
$ |
350,564 |
|
|
$ |
360,638 |
|
|
|
|
Work Truck Solutions |
|
41,003 |
|
|
|
37,937 |
|
|
|
137,770 |
|
|
|
65,044 |
|
|
|
|
Corporate & Eliminations |
|
(6,510 |
) |
|
|
(5,572 |
) |
|
|
(13,407 |
) |
|
|
(9,414 |
) |
|
|
|
|
$ |
137,969 |
|
|
$ |
130,143 |
|
|
$ |
474,927 |
|
|
$ |
416,268 |
|
|
|
|
Selling, General & Administrative
Expenses |
|
|
|
Work Truck Attachments |
$ |
8,618 |
|
|
$ |
8,134 |
|
|
$ |
31,398 |
|
|
$ |
31,181 |
|
|
|
|
Work Truck Solutions |
|
3,829 |
|
|
|
4,369 |
|
|
|
15,138 |
|
|
|
7,303 |
|
|
|
|
Corporate & Eliminations |
|
4,073 |
|
|
|
3,771 |
|
|
|
15,058 |
|
|
|
15,776 |
|
|
|
|
|
$ |
16,520 |
|
|
$ |
16,274 |
|
|
$ |
61,594 |
|
|
$ |
54,260 |
|
|
|
|
Income from Operations |
|
|
|
Work Truck Attachments |
$ |
25,902 |
|
|
$ |
23,311 |
|
|
$ |
78,088 |
|
|
$ |
85,888 |
|
|
|
|
Work Truck Solutions |
|
4,682 |
|
|
|
3,454 |
|
|
|
9,825 |
|
|
|
3,077 |
|
|
|
|
Corporate & Eliminations |
|
(5,162 |
) |
|
|
(4,110 |
) |
|
|
(17,822 |
) |
|
|
(19,847 |
) |
|
|
|
|
$ |
25,422 |
|
|
$ |
22,655 |
|
|
$ |
70,091 |
|
|
$ |
69,118 |
|
|
|
|
Depreciation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Work Truck Attachments |
$ |
1,448 |
|
|
$ |
1,365 |
|
|
$ |
5,533 |
|
|
$ |
5,377 |
|
|
|
|
Work Truck Solutions |
|
421 |
|
|
|
363 |
|
|
|
1,507 |
|
|
|
572 |
|
|
|
|
Corporate & Eliminations |
|
31 |
|
|
|
48 |
|
|
|
143 |
|
|
|
197 |
|
|
|
|
|
$ |
1,900 |
|
|
$ |
1,776 |
|
|
$ |
7,183 |
|
|
$ |
6,146 |
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Work Truck Attachments |
$ |
425,148 |
|
|
$ |
439,937 |
|
|
|
|
|
|
|
|
|
|
Work Truck Solutions |
|
220,211 |
|
|
|
203,811 |
|
|
|
|
|
|
|
|
|
|
Corporate & Eliminations |
|
39,817 |
|
|
|
22,425 |
|
|
|
|
|
|
|
|
|
|
|
$ |
685,176 |
|
|
$ |
666,173 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital Expenditures |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Work Truck Attachments |
$ |
2,848 |
|
|
$ |
2,313 |
|
|
$ |
6,408 |
|
|
$ |
8,752 |
|
|
|
|
Work Truck Solutions |
|
316 |
|
|
|
433 |
|
|
|
1,972 |
|
|
|
1,078 |
|
|
|
|
|
$ |
3,164 |
|
|
$ |
2,746 |
|
|
$ |
8,380 |
|
|
$ |
9,830 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Douglas Dynamics, Inc. |
|
Net Income
to Adjusted EBITDA reconciliation (unaudited) |
|
(In thousands) |
|
|
|
|
|
Three month period
ended December 31, |
|
Twelve month period
ended December 31, |
|
|
|
|
2017 |
|
|
|
2016 |
|
|
|
2017 |
|
|
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
34,528 |
|
|
$ |
10,101 |
|
|
$ |
55,324 |
|
|
$ |
39,009 |
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense - net |
|
|
3,988 |
|
|
|
4,942 |
|
|
|
18,336 |
|
|
|
15,195 |
|
|
Income tax expense (benefit) |
|
|
(13,077 |
) |
|
|
7,565 |
|
|
|
(2,409 |
) |
|
|
24,687 |
|
|
Depreciation expense |
|
|
1,900 |
|
|
|
1,776 |
|
|
|
7,183 |
|
|
|
6,146 |
|
|
Intangibles amortization |
|
|
2,869 |
|
|
|
2,749 |
|
|
|
11,401 |
|
|
|
10,596 |
|
|
EBITDA |
|
|
30,208 |
|
|
|
27,133 |
|
|
|
89,835 |
|
|
|
95,633 |
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation |
|
|
750 |
|
|
|
640 |
|
|
|
3,500 |
|
|
|
2,898 |
|
|
Litigation proceeds |
|
|
- |
|
|
|
- |
|
|
|
(1,275 |
) |
|
|
(10,050 |
) |
|
Purchase accounting (1) |
|
|
(600 |
) |
|
|
(1,077 |
) |
|
|
(1,786 |
) |
|
|
(1,003 |
) |
|
Other charges (2) |
|
|
(75 |
) |
|
|
730 |
|
|
|
653 |
|
|
|
3,969 |
|
|
Adjusted EBITDA |
|
$ |
30,283 |
|
|
$ |
27,426 |
|
|
$ |
90,927 |
|
|
$ |
91,447 |
|
|
|
|
|
|
|
|
|
|
|
|
(1) Reflects $600 in reversal of
earn-out compensation related to Dejana in the three months ended December 31, 2017. Reflects $1,786 in reversal of
earn-out compensation related to Dejana in the twelve months ended December 31, 2017. Reflects $1,250 in reversal of
earn-out compensation related to TrynEx in the three months ended December 31, 2016. Reflects $173 in earn-out
compensation expense related to Dejana in the three months ended December 31, 2016. Reflects $1,301 in reversal of earnout
compensation related to TrynEx in the twelve months ended December 31, 2016. Reflects $173 in earnout compensation
expense related to Dejana in the twelve months ended December 31, 2016. Reflects $125 in inventory step up related to Dejana
included in cost of sales in the twelve months ended December 31, 2016. |
|
(2) Reflects one time, unrelated legal and consulting
fees for the periods presented. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Douglas Dynamics, Inc. |
|
Reconciliation of Net Income to Adjusted Net
Income (unaudited) |
|
(In thousands, except share and per share
data) |
|
|
|
|
|
Three month period
ended December 31, |
|
Twelve month period
ended December 31, |
|
|
|
|
2017 |
|
|
|
2016 |
|
|
|
2017 |
|
|
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
34,528 |
|
|
$ |
10,101 |
|
|
$ |
55,324 |
|
|
$ |
39,009 |
|
|
Adjustments: |
|
|
|
|
|
|
|
|
|
Stock based compensation |
|
|
750 |
|
|
|
640 |
|
|
|
3,500 |
|
|
|
2,898 |
|
|
Litigation proceeds |
|
|
- |
|
|
|
- |
|
|
|
(1,275 |
) |
|
|
(10,050 |
) |
|
Purchase accounting (1) |
|
|
(600 |
) |
|
|
(1,077 |
) |
|
|
(1,786 |
) |
|
|
(1,003 |
) |
|
Other charges (2) |
|
|
(75 |
) |
|
|
730 |
|
|
|
653 |
|
|
|
3,969 |
|
|
Tax reform (3) |
|
|
(22,452 |
) |
|
|
- |
|
|
|
(22,452 |
) |
|
|
- |
|
|
Tax effect on adjustments |
|
|
(28 |
) |
|
|
(111 |
) |
|
|
(415 |
) |
|
|
1,591 |
|
|
Adjusted net income |
|
$ |
12,123 |
|
|
$ |
10,283 |
|
|
$ |
33,549 |
|
|
$ |
36,414 |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding assuming dilution |
|
22,604,344 |
|
|
|
22,501,640 |
|
|
|
22,587,648 |
|
|
|
22,480,679 |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted earnings per common share - dilutive |
$ |
0.53 |
|
|
$ |
0.45 |
|
|
$ |
1.45 |
|
|
$ |
1.58 |
|
|
|
|
|
|
|
|
|
|
|
|
GAAP diluted earnings per share |
$ |
1.50 |
|
|
$ |
0.44 |
|
|
$ |
2.40 |
|
|
$ |
1.70 |
|
|
Adjustments net of income taxes: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock based compensation |
|
|
0.02 |
|
|
|
0.02 |
|
|
|
0.09 |
|
|
|
0.07 |
|
|
Litigation proceeds |
|
|
- |
|
|
|
- |
|
|
|
(0.04 |
) |
|
|
(0.27 |
) |
|
Purchase accounting (1) |
|
|
(0.02 |
) |
|
|
(0.03 |
) |
|
|
(0.05 |
) |
|
|
(0.03 |
) |
|
Other charges (2) |
|
|
- |
|
|
|
0.02 |
|
|
|
0.02 |
|
|
|
0.11 |
|
|
Tax reform (3) |
|
|
(0.97 |
) |
|
|
- |
|
|
|
(0.97 |
) |
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted diluted earnings per
share |
|
$ |
0.53 |
|
|
$ |
0.45 |
|
|
$ |
1.45 |
|
|
$ |
1.58 |
|
|
|
|
|
|
|
|
|
|
|
|
(1) Reflects $600 in reversal of
earn-out compensation related to Dejana in the three months ended December 31, 2017. Reflects $1,786 in reversal of
earn-out compensation related to Dejana in the twelve months ended December 31, 2017. Reflects $1,250 in reversal of
earn-out compensation related to TrynEx in the three months ended December 31, 2016. Reflects $173 in earn-out
compensation expense related to Dejana in the three months ended December 31, 2016. Reflects $1,301 in reversal of earnout
compensation related to TrynEx in the twelve months ended December 31, 2016. Reflects $173 in earnout compensation
expense related to Dejana in the twelve months ended December 31, 2016. Reflects $125 in inventory step up related to Dejana
included in cost of sales in the twelve months ended December 31, 2016. |
|
(2) Reflects one time, unrelated legal and consulting
fees for the periods presented. |
|
(3) Reflects one-time benefit associated with U.S. tax
reform. |
|
|
|
|
|
|
|
|
|
|
|
For further information contact:
Douglas Dynamics, Inc.
Nathan Elwell
847-530-0249
investorrelations@douglasdynamics.com