PLOW - Earnings call transcript Q1 2024

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Operator

Good day and welcome to the Douglas Dynamics First Quarter 2024 Earnings Conference Call. [Operator Instructions] Please note this event is being recorded.I would now like to turn the conference over to Nathan Elwell, VP of IR. Please go ahead.

Nathan Elwell

Thank you. Welcome, everyone, and thank you for joining us on today's call.

questions would that remind this will including to I of that conference begin, statements. answers comments forward-looking the be your we like you to some call, Before constitute will made during These forward-looking that actual to results to materially could different. cause be are statements subject risks Sarah described and today filings Executive risks SEC.Joining with Lauber, Those have me among CEO; is release CFO. press on matters others, yesterday's include, call Bob the President McCormick, and and we the and President that in in Vice our Bob Sarah will and provide followed an overview of reviewing guidance. our performance, by results our financial After that, Bob. I'll the for to hand questions.With we'll that, open up over the call call ahead. go Please

Robert McCormick

Thanks, Nathan.

Our Attachments, Having conditions said of team of deliver winter compared by Truck continues markets, report record day results run to was results managed row last than reflect conditions. more segment. to along XXXX, our knowing Coast, measurable saw is fourth unprecedented across core significantly first results, compared gap weather break each on are that of year we in the quarter Work Great Truck performance When every a our improved of of snowfalls previous in board its the day, continued supply glad teams while the work. second of segment versus their This was better still highlight. Work me supply our I-XX focused like performance year Solutions first improved consecutive performance control the being Attachments cities, prior the trends Snowfall this in for the improved for XXX-plus hindered the Truck continuation again last the seventh to used to pleased average the they'd quarter worst, snowfall XXXX, that, with experiencing East stronger could get to we year. DDMS quarter. corridor. better year.The thank winter.We is the were they were chassis and through the quarter I'd Work the than hard to what Solutions a to performance Despite at stayed on important chassis deliver same was Solutions they and to improved all below quarter in profitable. quarter the better our improved, exit year. last job.Now let between the when and in this

in February XX-plus the February, X the never and began.I above snowfall are However, after as January, and many markets so years there a early of first rest to we've snowfall seen the with of a years average snowfall in lack it reiterate, was nor'eastern seasons extent. the to territory positive unchartered in in quarter, poorly some start in this the March, of back-to-back during first and we we've should as magnitude been ended season business, over through

savings are bringing year. While will the Sarah we and top $X program, the already to million at weather the later.Given million we with the XXXX guidance expanded season, Again, $X reason end to speak in XX-year and our down range, total in cost finish late that deterioration the were in with of totals expectations the with winter have snowfall, average. annualized coming million, weather final to this more savings we the season our $XX-plus of below growing to low XX% average expected the is below end the

Truck the this to are manage in that will teams compromising the through allow Show to making grow.One and right Indianapolis. spot us NTEA to committed the during operate our was without situation, ability decisions bright Work Our quarter

in more, major remembering categories. and every wing that It's several hopper snow ice hydraulic spreader, customers worth pusher to blade dynamics straight is are a more of product a plow, by pay were launched well-received and one demand emerging new sitting teams including demanding faster to a willing continue.First, we Our innovative poly our the products plow, expect for that industry dealers, also and which removal.

virtually ready continues more as the covers when we non-truck always growth development, and team but landscapers start possibilities commercial Attachment further the third, profitable leading expanding incredibly in expand conditions and of fleets that been with our return. where delivering doubt need XXXX, segment exit jobs let's get often south. are means strong exist difficult creating to ice solutions no efficiently, our like for continued didn't team on that team, the positive snow DDMS product future the control, recent which improvement The number and on XXXX. After and ago. to Truck build Work profit results and initiatives, broader the strong will Second, Today, the about product industry Solutions horizon.Listen, with These brands again to new another very from new Solutions, the trends to normal our winter X upon exciting.Now finish more more continued to opportunity for our faster drive outlook weather to the just employees, every encouraging. same of is and momentum, And there of remain years it's be recently core and just baseline to their opportunities offering equipment with are focus their talk completing team, aspect done include and the this our a environment, improvements, products they're Attachments will weather knowing stronger equipment.

help our which velocity are key centers, several teams we are to upfit collectively improving Henderson improved of baseline our trends trucks Our positive seeing, driving are Dejana which us really profitability.There is through their the results. increasing and

dealer that are focused today. Speaking about it's and clear Dejana, business our partners more on fleet OEM

are fleet are trend we that today.So business through year throughout to and longer low margin adjusting complete, the in parts and the which continues contracts are come a supply to teams truck we've our Overall Henderson, stable, the virtually chassis be match I'm trends, the and truck to years profitability. to has mix improvements customer drag starting XXXX. program a is industry certain improvement we launched both in business where of been lasts Our fleet are easier well been no areas.Additionally, expect to that last our driving and our recent base At focus signs chassis cargo by on dependable in pleased show to battling traction. gain business are by report received, growing, our

profit redesigns, initiatives. our internal continue product drivers We as improvements, focus and do sourcing DDMS year, including on every we

chassis starting center. expect, backlog, say higher our still improved order would you great improvements we're during to we averages, but and significantly upfit year, through to backlog, pleased trends to into I'm the As results historical eat poised the remain continue new positive.We also are move our a supply if increased than mean have velocity

overall for Our the especially as demand year, coming outlook, performance remain bodes backlog recent well positive. and

right progress see short, strength-to-strength.In Solutions within solutions together our a improvements proud the work making logical the we navigate great of and may how While teams the be headwinds external group linear, through to in manner. that going to always direction. I'm challenges, not to moving from In things clearly it's our the are to closing, continue while are find factors effective to so control. in

stronger times, Our ensure but these and a culture not only before. position, than will we of see better emerge smarter continuous improvement us tough in through

to and driving creativity, Sarah like of a and the is think to a success in pass call targets.With key our Sarah? our I for team's will I'd combination mindset, towards our long-term the financials. collaboration to walk long-term CI be recipe factor progress, that, through

Sarah Lauber

quarter at first increased Thanks, pleased million, to results decreased parts to last to XXXX. to first X.X% Net our driven was Bob. higher Solutions all compared million to XX% and profit gross expenses at $XX.X I'm accessory quarter metrics. and when report The the and across increased of volume to Attachments. higher SG&A $XX.X compared improved sales XX.X% million. improvement year, price that, realization and by volumes $XX.X

$X.X driven program. last EBITDA at the million, the negative XXXX XXXX.On savings was related savings In recorded $X.XX, $X.X to program, cost the the to adjusted and an and January, and chassis came the increased year, Work implementation XX% realization. compared above impairment this that lower offset generated plus an and margins is million. last we addition, improvements which the the our up The accessories our million, successful our incurred million. point we're a first based for increasing to of expense $X.XX Net GAAP million The million to loss million a EPS by to in implementation This improvement results we for We quarter, loss corresponding linger, XXXX quarter on since first million accessories, improvements improve. period net the of conjunction of consolidated led negative adjusted to $X.XX million we've prior improve. partially highest XXXX.While loss or of of XXXX in and of net financials. any The based compared parts record significant expenses the $XX.X across quarter was situation is Attachments With business. increased increased $X.X $X.XX year.Let's negative share. of pleased ongoing issues and per pleased Truck positive, the cost continue typical, EBITDA of costs.In parts year. On I'm last month.Now the volume, $X.X compared $X.X expectations. of despite average in recorded to $X.X improvement start improved net basis, see Solutions issue. loss worked on net supply for in net remaining to savings to the Truck results to and availability, were implementation of diluted million, to negative compared backlog Work loss program, some sales to compared slowly weather the for compared prior period in which impairment EBITDA same higher we the year charges the and hard line $XX.X X.X%, to with by continues the which diluted improved to which with overall Interest Net XX.X% demand severance board, translates our increased $XX.X in an same given million seasonality generated quarter in component to segments. stabilize, compared an adjusted restructuring for that sales show $X.X increased the results $X.X in XXXX million negative was to for, $X.X approximately snowfall basis, to the price the was of year, review per to Similarly, X share cost adjusted of report led sales a $X.X million, million, the to period the adjusted or sales $XX.X negative

activities million operating a the of capital, still $XX.X $XX.X and $XX.X including of figures. to is due last in negative were cash level the we a holdover quarter The the moving at quarter first end on by the end The flex quarter, of as we year the in million $XXX.X million the accounts and at segment end was advance While in attachments the changes to to of in I'll than were cash lower million in increase $XX.X same million to end $X.X inventory the cash turn improvement build the for the keenly XXXX curtail the to primarily things million at are our expected, continue of the as is working we the end. and compared in spending the first our lower quarter which Net half and incurred $XXX.X last. improved was receivable Inventory was to $XX.X go right million goods to goals, the adjusting year quarter flow sheet in operating the this our have quarter same used XX% part as number quarter first the million year. covered, to decrease inventory, favorable at ways current $XX.X results.Inventory year the and in payable at million compared compared quarter typically of held last in XXXX from last the $X.X finished to inventory.Accounts now less end year a Capital at needed improved than $XX.X quarter activity, as direction savings Solutions.With quarter this focused our first program. X.X% of at of for reach as expenditures manufacturing Attachments is negative used are in about cost to results preseason XXXX year, liquidity of grows of an increase XXXX. we XXXX, million, as first to elevated million, compared free balance at much the

We will to range timing the targeted consistent. with revenue, the on expect CapEx of be our remain of to X% X% allocation, prudent the capital low investment.Turning to be of of end of our and we priorities

ratio paid first last leverage expect to cover to quarter, of than at quarterly us the tax we covenant a tax for XX, dividend had expense compensation. greater the related The $X.XXX to flow is the couple approximately lower flexibility, produce of net the to compared a XXXX. credit points cash September cash effective $XX ratio discrete share of than XX% end are excess at X.Xx, June tax at a X.Xx at the rates of the from always, stock our debt cost free with is rate providing based lower year.Both we X.Xx which and we priority, the the At end for on to the leverage Xx XX, of quarter remains during top XXXX, dividend year, first March. facility until of returning million. As per amended XXXX. was dividend, financial higher The of our quarter The end XX.X% typical the enough

through manage I'll positioned our are to walk well guidance. through situation.Finally, temporary this We updated

in comments First, approximately that would assumption revisit volume I'd our that XXXX. made the like was quarter. recovered to of be guidance I XXXX the in noted weather-driven in decline half largest I last XXXX

our in tightening are guidance we saw As our release, earnings ranges. you

Following expectations the snow lowered the indications preseason our XXXX-XXXX at of early attachments, orders. of conclusion the and poor preseason we've season, for

XX-XX our we're to We now lower XXXX we our was to means a QX, Although historical QX split lower last ordering preseason of revised are XXXX. year's preseason XXXX.However, expect closer in shipments expecting while be we XX-XX. to than to tracking early expect to between forecast. to be QX to closer and preseason This we period, volumes are be similar split, volumes,

in found cost which still program, results year changed remain the looking which has have We for compared recognize full-year of savings row, to and expected allocation deliver with million. savings of approximately The is improved cost back half our expand year a of more to they pre-tax half top dividend worth million. and outlook the reiterating track, for line XXXX.And $XX year, year the opportunities than XXXX top year, to annual on to the capital remains amount third bottom for similar to We equates yield improvements $X first finally, the expect not expanded XX% this now in stronger also priority. savings to the $X it's the with when that million to Solutions last this to of year,

now stable conditions, core of to So underlying is to previous in fourth to range details, now net stable snowfall just share markets is includes of outlook the the $XXX be million XX% effective $XXX the to to million, range be slightly relatively updated assumptions, expected compared chassis of XXXX. $X.XX compared the XXXX worth expected sales are to the to range share, such range of confirm noting $XX our economic be financial average quarter $XXX components, previous outlook versus $X.XX. in earnings $X.XX is from and million and as and rate approximately of per our to supply to The our between XX%.It's tax per experience as range million improving to follows: to $X.XX adjusted $XXX will of $XX million, $XXX the share million. million. expected to to predicted And previous Adjusted to EBITDA $XX now million per is

looking we targets deliver low in our consistent.For financial to segment the mid-single-digit margins can we EBITDA remain longer term, However, growth, believe adjusted attachments, sales and XXs. mid-to-high

success due expect to the along growth, both margins.In and longer we over like are improvement questions. double-digit Operator? single-digit improve expected for Solutions, towards to These For with call EBITDA XXXX, margin achieving open towards to continued we'd the sales keep profit mid-to-high profiles, path, on term.With XXXX, the maintain baseline greater both segments on improvements, their segments us that, realization. to up price over actions continued

Operator

comes Baird. first today The Instructions] from [Operator question Schultz with Robert

Robert Schultz

seasons now just changes any to ask, in during with wanted been call noticed that now attachments. snowfall you or from out X past X totals I it's about lower have So seasons environment, and the competitive the you'd anything here, perspective?

Robert McCormick

base No. every year. do Terrific We question. dealer our surveys share market with formal

and our share to As XX% is XX% solid. very share you market know, got market holding we've

market Our areas. growth is those some in in Non-Truck segments, of some adding our share

in that think even we this Bobby, landscape fairly is environment. the stable, So competitive

Robert Schultz

on then the had not quantify bit Solutions some you maybe quarter the impact? expected this impact strike. Were last a UAW QX, think even seen performance guys on to side, have Got able out it. from could and quarter, Solution called guys the little And been I you impact any you better had

Sarah Lauber

actually saw UAW little Yes, the very impact strike. from we

I those really think teams experienced experienced. enough those the to probably we to was delays were of we strike, creative, different was things, some standpoint some types which backlog, that, the of chassis prior of other maybe good. and the delayed It around some no chassis, from of have we'd the interruptions than work

Robert McCormick

to some chassis we Yes, delays. point, certainly I think saw Sarah's

team, mix. not But up the some were saying, chassis for hats and moving exactly here's OEMs reprioritizing the to and jumping Now impact. other the off the

could our we get still center. that through decent flow upfit So

that appears to impact and total behind pleased in was now we're the be So pretty us. negligible

Robert Schultz

from to then hear. last And one Got That's me. good one it.

see of the at it for segment year? your of year? rest Solutions that you how the the I expectations kind out the of margins were pretty strong remainder the from And Does margin this playing perspective all for quarter. do change guess,

Sarah Lauber

our not change the no, expectations for does Yes, year. it

improve in prior bit I comps. margin front long-term back expect double-digit little year, making still Solutions more are progress than But those better little expect whereas half expect margins XXXX, the I full those tougher towards I year, profile. flat the be will year, the for year half last a of So year. over be a margins to the the to of to

Operator

next comes question with The from Davidson. Shlisky D.A. Mike

Unknown Analyst

This is Linda for Mike.

So those? is, what think What your the from products? think us Do you can any you reactions my Show? are? this some were year to tailwinds thoughts customer from you question new there And give do some growth of NTEA some are there first

Robert McCormick

launched, made had. which one Oh, line; rounds yes, I be very sentiment there. most pusher of product we sticks me the pusher dealer we've that there. reference the product Probably plow a turn plow lots out we the out that that our very, out of my plow efficient for launches pusher most new comments, new absolutely. to In productive, industry.So This number in the to is positive excitement got will hydraulic

Now low elevated have because prospects grab bit lines. that in to going with and we inventory the existing work there inventories, historic to some take new a X snowfalls temper But long-term our calendar a through little to product the before it's time this still of our of bit back-to-back year, little they some retail just dealers terrific. are

Unknown Analyst

That's end like cash to doesn't many Have businesses flow affected equipment, low like to hearing that years other ability financial it are snowfall of dealers from have buy them hear. health then businesses, users? landscaping have of supported enough And you had Great. financial the distress? their their on multiple you of that, or what some seem good about of

Sarah Lauber

year similar reaction is to year. the say last this would I Yes,

of guess, weather lot dramatically are And not experiencing, last what with their couple end changed I I of because they the We not to guess, negative, very the would users input a that has patterns. years. partnered of, had us strong in We've are dealer dealers. be from

Unknown Analyst

is, last has my increased then order far at Dejana? And backlogs so Have cadence the question been this year? Okay. what

Sarah Lauber

can speak total. I to Yes, in Solutions

Solutions in strong. total, our orders have been very

record very still high. its is down only high. come really backlog has Our It XX% about from

So demand. softening of we seen have not

Unknown Analyst

enough on then the it your balance offset And snow doesn't Solutions? Do your question, if backlog, know think Attachment most view segments outcome, likely you have Got year? do but it. you what's it or are think visibility you last sheet could that not And I next it's an how winter, and be next my positioned?

Sarah Lauber

say, have lot if changed year you another in Yes, backlog things last look that to I in would to mentioned, I year, would Xthere's we that mean, similar solutions. would be, the One, tailwinds for that have business of us. a we be

implemented a a savings little Our and backlog plus And solutions million look than in we've at we've bit cost year. a year, savings profit addition then improvements that a still $XX the baseline in other of to is when greater year, possibly you made. program that,

similar I flow like will this at for point, standpoint, that mean, cover this any dividend in our to have I cash from on our do So year concerns the a free year. not ability it

Operator

would This any to turn like to [Operator remarks. Instructions] question-and-answer concludes our conference Bob for back the session. over closing McCormick I

Robert McCormick

Thanks. in for Dynamics. continued your Thank interest you Douglas

finish me few with Let brief a thoughts.

our continue execute the We markets guess you the that confident on our focused manage and will positions around continuous weather headwinds uncertainty, while, our are effectively, in within we're we factors by you those I that a been on as know focus quite long-term for subside.And continuous us growth all through external that thrive have improvement. control. of us to the encouraged serve We're intact. our to remain we allow prospects and improvement today mindset,

XXXX; back. we weather our our we're top our results. group dividend right?And come that weather We're through, enough navigating weather subside, generate when improvement be, financial long-term Solutions like also I that in weather And while and all Number reach. X, never to will back. terms these of things: are headwinds and when our that a X this of we is remember Attachments dividend get free within day our and cash say short-term. ongoing targets X, number know clearly those to Weather The will priority flow always You seen remind have just mentality. still in remains everybody cover showing continuous will will driven back every we've before, stronger group come come this better something it challenge is company, conditions

with soon. So that, speaking your look for you to you support. forward thank We with

Operator

The conference today's concluded. for has Thank now attending presentation. you

You may disconnect. now

Douglas Dynamics (PLOW) 30 Apr 242024 Q1 Earnings call transcript