Douglas Dynamics — Third Quarter 2026 Earnings Summary

Financial Performance:

• Consolidated Net Sales increased 35% year-over-year to a record $218.0 million.
• Net Income increased 166% year-over-year to a record $21.2 million, resulting in diluted EPS of $0.89.
• Adjusted EBITDA increased 89% year-over-year to a record $37.9 million, with an Adjusted EBITDA margin of 17.4% compared to 12.4% in Q3 2025.
• Adjusted Net Income increased to $23.3 million, and Adjusted Diluted EPS rose 145% to $0.98.
• Gross Profit Margin improved to 27.4% from 23.5% in the prior year quarter.
• Income from Operations increased to $31.3 million from $14.1 million.
• Net cash used in operating activities for the first nine months of 2026 increased $26.3 million to $47.5 million, driven by increased working capital.
• Year-to-date capital expenditures increased $3.1 million to $11.2 million.
• Cash and cash equivalents decreased to $5.482 million from $8.297 million at the end of 2025.
• Short-term borrowings increased significantly to $96.0 million from $5.0 million.
• Total assets grew to $794.0 million from $626.7 million.

Guidance and Future Outlook:

• The company raised the lower end of its 2026 Net Sales guidance range to $770 million (from $765 million), keeping the high end at $805 million.
• The lower end of the 2026 Adjusted EBITDA guidance range was raised to $123 million (from $120 million), with the high end remaining at $135 million.
• The lower end of the 2026 Adjusted Diluted EPS guidance range was raised to $3.00 (from $2.90), with the high end remaining at $3.40.
• The 2026 outlook assumes core markets will experience average snowfall in the fourth quarter.
• Management noted that the fourth quarter for the Attachments segment can experience meaningful variability due to the timing and severity of winter weather.
• The company expects to begin operations at its new Ohio facility in the coming weeks.

Business Segments and Product Lines:

• Work Truck Attachments: Net Sales increased 78% to a record $121.5 million, driven by robust preseason demand, strong operational execution, and the addition of Venco Venturo. Adjusted EBITDA surged 188% to $30.1 million, with margins expanding 945 basis points to 24.8%.
• Work Truck Solutions: Net Sales increased 3% to a record $96.5 million. Adjusted EBITDA was $7.8 million, down from $9.6 million in the prior year, with margins declining to 8.1% from 10.2% due to inconsistent commercial demand.
• Parts and Accessories (P&A) shipments year-to-date already exceeded the previous annual record set in 2025.
• The ratio of pre-season shipments for the Attachments segment was a 50% to 50% split between the second and third quarters, compared to a 60% to 40% split in 2025.

Market and Competitive Landscape:

• The company operates as North America's premier manufacturer and upfitter of work truck attachments and equipment.
• Sustained strong demand was observed across municipal end markets within the Work Truck Solutions segment.
• Commercial demand within the Work Truck Solutions segment was noted as inconsistent.
• The company attributes strong performance to the timing of shipments and positive product mix.

Risks and Challenges:

• Fourth quarter results for the Attachments segment are influenced by the timing and severity of winter weather, creating potential variability.
• Inconsistent commercial demand impacted profitability in the Work Truck Solutions segment.
• Increased working capital requirements to support demand across both segments led to higher net cash used in operating activities.
• Forward-looking statements cite risks including weather conditions, economic conditions, labor strikes, geopolitical instability, supply chain disruptions, and raw material price increases.

Management Commentary and Tone:

• President & CEO Mark Van Genderen described the first nine months of the year as "exceptional," highlighting the earnings power of the business and the effectiveness of strategic actions.
• Van Genderen expressed confidence in the operational performance of the Attachments team and stated the company is "well positioned to continue advancing our strategic initiatives."
• CFO Sarah Lauber noted that the year has exceeded expectations and that full-year record Adjusted EPS achieved in 2019 was surpassed through the first nine months.
• Management emphasized disciplined execution of strategic initiatives and the ability to drive results through operational improvements.

Other Key Points:

• Approximately $27 million of cash was returned to shareholders year-to-date through a quarterly cash dividend of $0.295 per diluted share and stock repurchases.
• The company acquired Venco Venturo in 2025, with inventory step-up costs related to this acquisition included in cost of sales.
• The company is unable to provide a reconciliation of non-GAAP guidance measures to GAAP due to the unpredictability of extraordinary, nonrecurring, or unusual charges.
• The company plans to host an earnings conference call on November 3, 2026.
• Capital expenditures for 2026 are expected to fall within the traditional range of 2% to 3% of Net Sales.