Douglas Dynamics, Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Summary of Significant Accounting Policies (Tables)

Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2021

Summary of Significant Accounting Policies

Credit losses for trade accounts receivable


	Balance at		Additions					Changes to		Balance at
	December 31,		charged to		Writeoffs			reserve, net		December 31,
	2020		Earnings							2021
Year Ended December 31, 2021
Work Truck Attachments	$	1,480	$	(60)		$	-	$	10	$	1,430
Work Truck Solutions		1,449		127			(10)		(26)		1,540
Total	$	2,929	$	67		$	(10)	$	(16)	$	2,970


	Balance at		Adoption of		Additions				Changes to		Balance at
	December 31,		ASU 2016-03		charged to		Writeoffs		reserve, net		December 31,
	2019				earnings						2020
Year Ended December 31, 2020
Work Truck Attachments	$	600	$	400	$	401	$	(12)	$	91	$	1,480
Work Truck Solutions		887		350		680		(416)		(52)		1,449
Total	$	1,487	$	750	$	1,081	$	(428)	$	39	$	2,929

Schedule of estimated useful lives of the assets



	Years
Land improvements and buildings	15	-	40
Leasehold improvements	12
Machinery and equipment	3	-	20
Furniture and fixtures	3	-	12
Mobile equipment and other	3	-	10

Schedule of changes in deferred financing costs



Balance at December 31, 2018	$	2,386
Amortization of deferred financing costs		(823)
Balance at December 31, 2019		1,563
Deferred financing costs capitalized on new debt		1,133
Write-off of unamortized deferred financing costs		(197)
Amortization of deferred financing costs		(763)
Balance at December 31, 2020		1,736
Deferred financing costs capitalized on new debt		1,409
Write-off of unamortized deferred financing costs		(972)
Amortization of deferred financing costs		(493)
Balance at December 31, 2021	$	1,680

Schedule of financial assets and liabilities measured at fair value on a recurring basis and disclosure of the fair value of long-term debt



		Fair Value at December 31, 2021		Fair Value at December 31, 2020
Assets:
Non-qualified benefit plan assets (a)	$	10,347	$	9,041

Total Assets	$	10,347	$	9,041

Liabilities:
Interest rate swaps (b)		6,428		13,073
Long term debt (c)		218,875		241,278

Total Liabilities	$	225,303	$	254,351

(a)

Included in Non-qualified benefit plan assets is the cash surrender value of insurance policies on various individuals that are associated with the Company. The carrying amounts of these insurance policies approximates their fair value.

(b)

Valuation models are calibrated to initial trade price. Subsequent valuations are based on observable inputs to the valuation model (e.g. interest rates and credit spreads). Model inputs are changed only when corroborated by market data. A credit risk adjustment is made on each swap using observable market credit spreads. Thus, inputs used to determine fair value of the interest rate swap are Level 2 inputs. Interest rate swaps of $3,479 and $2,949 at December 31, 2021 are included in Accrued expenses and other current liabilities and Other long-term liabilities, respectively. Interest rate swaps of $4,075 and $8,998 at December 31, 2020 are included in Accrued expenses and other current liabilities and Other long-term liabilities, respectively.

(c)

The fair value of the Company’s long-term debt, including current maturities, is based on rates for instruments with comparable maturities and credit quality (Level 2 inputs), and approximates its carrying value. Prior to the Company’s most recent debt refinancing, the fair value of the Company’s long-term debt, including current maturities, was estimated using discounted cash flows based on the Company’s current incremental borrowing rates for similar types of borrowing arrangements, which was a Level 2 input for all periods presented. See Note 9 for additional information. Long-term debt is recorded at carrying amount, net of discount and deferred financing costs, as disclosed on the face of the balance sheet.