- Net Sales: $568.5 million, essentially flat compared to the previous year.
- Gross Profit: $146.8 million, a 9% increase.
- Gross Margin: Increased by 220 basis points to 25.8%.
- Cost Savings Program: Pre-tax savings of more than $10 million in 2024, with expected annualized savings of $11 million to $12 million.
- Selling, General and Administrative Expenses: Increased by 16% to $91.7 million.
- Net Income: $56.2 million, up from $23.7 million, influenced by a one-time gain from a sale leaseback transaction.
- Adjusted EBITDA: Increased 16% to $79.3 million.
- Adjusted EBITDA Margin: Improved by 200 basis points to approximately 14%.
- Adjusted Net Income: $35.2 million, a 45% increase.
- Adjusted Earnings Per Share: $1.47, a 45% increase.
- Total Backlog: $348 million, an increase of $52 million.
- Work Truck Attachments Sales: Down 12% to $256 million.
- Work Truck Attachments Adjusted EBITDA: $48.5 million, a 4% decline.
- Work Truck Attachments Adjusted EBITDA Margin: Improved by 160 basis points to 18.9%.
- Work Truck Solutions Sales: Grew 13% to $312.5 million.
- Work Truck Solutions Adjusted EBITDA: Increased 76% to $30.9 million.
- Work Truck Solutions Adjusted EBITDA Margin: Improved by 350 basis points to 9.9%.
- Net Cash Provided by Operating Activities: Increased 229% to $41.1 million.
- Free Cash Flow: $33.3 million, an increase of $31.4 million.
- 2025 Net Sales Guidance: Expected to be between $610 million and $650 million.
- 2025 Adjusted EBITDA Guidance: Predicted to range from $75 million to $95 million.
- 2025 Adjusted Earnings Per Share Guidance: Expected to be in the range of $1.30 to $2.10 per share.
Release Date: February 25, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Douglas Dynamics Inc (PLOW, Financial) reported improved consolidated results across all metrics compared to the prior year, driven by strong growth in the solution segment and increased margins in the attachment segment.
- The company successfully implemented a cost savings program in 2024, exceeding expectations and resulting in pre-tax savings of over $10 million.
- The Work Truck Solutions segment delivered a record year with impressive top and bottom line growth, driven by strong municipal performance and improved operating performance.
- Douglas Dynamics Inc (PLOW) maintained a strong balance sheet, providing additional options for potential small and medium-sized acquisitions.
- The company appointed a highly qualified new President of Work Truck Attachments, Chris Bernauer, bringing extensive experience and a strong reputation for creating positive and collaborative cultures.
Negative Points
- The Work Truck Attachments segment faced challenging market conditions due to lower than average snowfall, resulting in a 12% decline in sales.
- Selling, general, and administrative expenses increased by approximately 16% due to one-time items, including costs for a sale leaseback transaction and CEO transition costs.
- The effective tax rate for 2024 increased to 24% from 18.9% in the previous year, impacting net income.
- The company experienced softness in the commercial side of the Work Truck Solutions segment, with growth primarily focused on municipal customers.
- Douglas Dynamics Inc (PLOW) remains cautious about the elongated equipment replacement cycle due to lower snowfall in recent years, impacting near-term demand.
Q & A Highlights
Q: There was winter weather in the south and southeast US last month. Were you able to ship units to those areas and help dealers reduce their channel inventories?
A: Mark Van Genderen, President - Work Truck Attachments: We don't have a strong dealer presence in the deep South, but our Snow X line uses a distribution model that allows for nimble sales to independent dealers. We saw products being sold in non-traditional markets due to the snowfall. Additionally, contractors from the north often travel south during snowstorms to help with snow removal, which indirectly aids equipment usage and eventual replacement.
Q: Can you update us on the private sector trends in the solutions segment? Are large fleets making significant orders, or is growth focused on government-related customers?
A: Mark Van Genderen, President - Work Truck Attachments: Growth is primarily in the municipal sector, with strong backlogs for Henderson and Dejana. The commercial side has seen some softness, but we are focusing on areas where we have competitive capabilities, such as fleet sales and dealer relationships. Sarah Lauber, CFO: Our guidance implies mid-single-digit growth, mainly driven by municipal contracts, which will span over 2025 and 2026.
Q: Regarding working capital and free cash flow in 2025, are there any major changes expected in inventory levels?
A: Sarah Lauber, CFO: We expect free cash flow in 2025 to be at or better than 2024's $33 million. The biggest change will be higher capital expenditures, closer to 3% of sales. Our working capital position is more nimble, and we expect it to be better than in 2024.
Q: Can you remind us of your most important markets for snowfall?
A: Mark Van Genderen, President - Work Truck Attachments: Our national footprint covers anywhere it snows, but key markets are east of the Mississippi and north of Tennessee/Virginia, including the upper Midwest, Ohio Valley, mid-Atlantic, New York, New Jersey, and up into Maine. We also have a strong presence in Canada.
Q: What are your plans for improving margins in the solutions segment?
A: Sarah Lauber, CFO: We entered the target range for margins this year at the low end. The largest mover to improve margins to the 13% range will be increased throughput at both businesses. We are also pursuing other initiatives focused on margin improvement.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
