Douglas Dynamics, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Segments

Segments

6 Months Ended

Jun. 30, 2019

15. Segments

During the first quarter of 2019, the Company reorganized its business segments to reflect a new operating structure as a result of a change in how the Company’s chief operating decision maker allocates resources, makes operating decisions and assesses the performance of the business. Under this revised reporting structure, the Company’s two reportable business segments are as follows:

Work Truck Attachments. The Work Truck Attachments segment includes commercial snow and ice management attachments sold under the FISHER®, WESTERN® and SNOWEX® brands. This segment consists of our operations that manufacture and sell snow and ice control products.

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.

Separate financial information is available for the two operating segments. In addition, segment results include an allocation of all corporate costs to Work Truck Attachments and Work Truck Solutions. Prior period segment information has been recast to align with this change in reporting structure and to reflect an allocation of corporate costs.

Segment performance is evaluated based on segment net sales and Adjusted EBITDA. Segment results include an allocation of all corporate costs. No single customer’s revenues amounted to 10% or more of the Company’s total revenue. Sales are primarily within the United States and substantially all assets are located within the United States.

Historically, sales from Work Truck Attachments to Work Truck Solutions were recorded at third party pricing. In 2019, sales between Work Truck Attachments and Work Truck Solutions reflect the Company’s intercompany pricing policy. The following table shows summarized financial information concerning the Company’s reportable segments:



	Three Months Ended		Three Months Ended		Six Months Ended		Six Months Ended
	June 30,		June 30,		June 30,		June 30,
		2019		2018		2019		2018
Net sales
Work Truck Attachments	$	112,244	$	103,529	$	138,061	$	128,125
Work Truck Solutions		64,112		59,917		131,482		119,285
	$	176,356	$	163,446	$	269,543	$	247,410
Adjusted EBITDA
Work Truck Attachments	$	38,466	$	37,061	$	40,750	$	41,446
Work Truck Solutions		5,644		3,007		12,379		5,710
	$	44,110	$	40,068	$	53,129	$	47,156
Depreciation and amortization expense
Work Truck Attachments	$	2,522	$	2,367	$	5,055	$	4,707
Work Truck Solutions		2,277		2,363		4,552		4,724
	$	4,799	$	4,730	$	9,607	$	9,431
Assets
Work Truck Attachments	$	374,687	$	357,948
Work Truck Solutions		349,189		310,739
	$	723,876	$	668,687
Capital Expenditures
Work Truck Attachments	$	3,643	$	2,206	$	4,254	$	2,583
Work Truck Solutions		997		1,363		1,074		1,496
	$	4,640	$	3,569	$	5,328	$	4,079

All intersegment sales are eliminated in consolidation.