Douglas Dynamics(PLOW) - 2024 Q3 - Quarterly Report

Financial Performance - Net sales for the three months ended September 30, 2024, were $129.4 million, a decrease of$14.7 million or 10.2% compared to $144.1 million in the same period of 2023[113]. - Net sales for the nine months ended September 30, 2024, were$425.0 million, a decrease of $8.9 million or 2.1$433.9 million in the same period of 2023[113]. - The Work Truck Attachments segment reported net sales of $60.2 million for the three months ended September 30, 2024, down$15.7 million from $75.9 million in the same period of 2023[114]. - The Work Truck Solutions segment achieved net sales of$69.1 million for the three months ended September 30, 2024, an increase of $0.9 million from$68.2 million in the same period of 2023[115]. - Net income for the three months ended September 30, 2024 was $32.3 million, an increase of$26.5 million from $5.8 million in the same period in 2023[124]. - Net income for the nine months ended September 30, 2024 was$48.2 million, compared to $16.6 million in the same period in 2023[143]. Profitability Metrics - Gross profit for the three months ended September 30, 2024, was$30.9 million, compared to $32.1 million in the same period of 2023, reflecting a gross margin of 23.9$30.9 million, a decrease of $1.2 million or 3.7$32.1 million in the same period in 2023[117]. - Adjusted EBITDA for the three months ended September 30, 2024 was $15.3 million, a decrease of$1.98 million compared to $17.3 million in the same period in 2023[146]. - Adjusted EBITDA for the nine months ended September 30, 2024 was$60.6 million, an increase of $7.36 million compared to$53.2 million in the same period in 2023[146]. - Adjusted net income for the nine months ended September 30, 2024, was $25.897 million, up from$19.840 million in the same period of 2023, reflecting a growth of approximately 30%[150]. Expenses and Cost Management - Selling, general, and administrative expenses increased to $25.7 million for the three months ended September 30, 2024, compared to$18.0 million in the same period of 2023[111]. - Selling, general and administrative expenses increased by $6.7 million or 32.5$27.3 million for the three months ended September 30, 2024, compared to $20.6 million for the same period in 2023[119]. - The company implemented a 2024 Cost Savings Program in January 2024, primarily involving restructuring charges for salaried headcount reductions[109]. Cash Flow and Liquidity - Total liquidity as of September 30, 2024 was$90.9 million, down from approximately $126.7 million as of December 31, 2023[129]. - Net cash used in operating activities decreased by$30.9 million to $(33.3) million for the nine months ended September 30, 2024, compared to$(64.1) million for the same period in 2023[133]. - Net cash provided by investing activities increased by $68.3 million to$60.5 million for the nine months ended September 30, 2024, primarily due to gross proceeds from a sale leaseback transaction[134]. - Free cash flow for the three months ended September 30, 2024 was ($15.4) million, a decrease of$15.0 million compared to ($0.4) million in the same period in 2023[136]. - Free cash flow for the nine months ended September 30, 2024 was ($37.3) million, an increase of $34.6 million compared to ($71.9) million in the same period in 2023[136]. Transactions and Financing - The company executed a sale leaseback transaction in September 2024 for gross proceeds of $64.2 million, using$42.0 million to pay down its term loan[109]. - Gain on sale leaseback transaction was $42.3 million for the three and nine months ended September 30, 2024, compared to$0.0 million in the same periods in the prior year[121]. - The company closed a sale leaseback transaction with a total of approximately $88.9 million in committed future lease payments over the next 15 years[152]. Market Conditions and Impact - The most recent snow season ended March 2024 was approximately 39.0$1.00 in steel costs without the ability to pass on the increase could lead to a $1.00 decline in gross margins[167]. - The company has historically mitigated increased steel costs through price increases or temporary surcharges[167].