Exhibit 99.1

 

For further information contact:

Douglas Dynamics, Inc.

Nathan Elwell

847-530-0249

investorrelations@douglasdynamics.com

 

DOUGLAS DYNAMICS ANNOUNCES FOURTH QUARTER

AND FULL YEAR 2017 RESULTS

Results in Line with Internal Expectations Despite Chassis Availability Issues

 

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

 

February 26, 2018 — Milwaukee, Wisconsin — 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.

 



 

PRIVILEGED AND CONFIDENTIAL

 

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 acquisition 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.

 

- MORE

 

2



 

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.

 

3



 

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.

 

4



 

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

 

5



 

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 strategiesSuch 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

 

6



 

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.

 

7



 

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

 

 

8



 

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

 

 

9



 

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

 

 

10



 

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

 

 

11



 

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.  

 

12



 

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.

 

13