This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Douglas Dynamics Announces Third Quarter 2013 Results

Consistent with Regulation G under the U.S. federal securities laws, the non-GAAP measures in this press release have been reconciled to the nearest GAAP measures, and this reconciliation is located under the headings "Net Income to Adjusted EBITDA Reconciliation" and "Reconciliation of Net Income to Adjusted Net Income" following the Consolidated Statements of Cash Flows included in this press release.

Forward Looking Statements

This press release contains certain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. These statements include information relating to future events, future financial performance, strategies, expectations, competitive environment, regulation, product demand, the payment of dividends, and availability of financial resources. These statements are often identified by use of words such as "anticipate," "believe," "intend," "estimate," "expect," "continue," "should," "could," "may," "plan," "project," "predict," "will" and similar expressions and include references to assumptions and relate to our future prospects, developments and business strategies. Such statements involve known and unknown risks, uncertainties and other factors that could cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, weather conditions, particularly lack of or reduced levels of snowfall and the timing of such snowfall, a significant decline in economic conditions, our inability to maintain good relationships with our distributors,  lack of available or favorable financing options for our end-users or distributors, increases in the price of steel or other materials necessary for the production of our products that cannot be passed on to our distributors, increases in the price of fuel, the inability of our suppliers to meet our volume or quality requirements, inaccuracies in our estimates of future demand for our products, our inability to protect or continue to build our intellectual property portfolio, the effects of laws and regulations and their interpretations on our business and financial condition, our inability to develop new products or improve upon existing products in response to end-user needs, losses due to lawsuits arising out of personal injuries associated with our products, factors that could impact the future declaration and payment of dividends, our inability to compete effectively against competition, our inability to achieve the projected financial performance with the TrynEx assets and unexpected costs or liabilities related to the acquisition of the TrynEx assets, as well as those discussed in the section entitled "Risk Factors" in our annual report on Form 10-K for the year ended December 31, 2012. You should not place undue reliance on these forward-looking statements. In addition, the forward-looking statements in this release speak only as of the date hereof and we undertake no obligation, except as required by law, to update or release any revisions to any forward-looking statement, even if new information becomes available in the future.

Douglas Dynamics, Inc.
Consolidated Balance Sheets
( In thousands)
     
  September 30, December 31,
  2013 2012
  (unaudited) (audited)
     
Assets    
Current assets:    
Cash and cash equivalents $ 3,975 $ 24,136
Accounts receivable, net  71,269  25,425
Inventories  35,964  30,292
Refundable income taxes paid  4,328  4,870
Deferred income taxes  3,636  3,710
Prepaid and other current assets  1,568  1,149
Total current assets  120,740  89,582
     
Property, plant, and equipment, net  24,648  19,887
Assets held for sale  1,085  1,732
Goodwill  112,944  107,222
Other intangible assets, net  125,355  116,548
Deferred financing costs, net  2,360  2,794
Other long-term assets  1,193  606
Total assets $ 388,325 $ 338,371
     
Liabilities and stockholders' equity    
Current liabilities:    
Accounts payable $ 3,781 $ 5,370
Accrued expenses and other current liabilities  13,652  10,329
Short term borrowings  50,000  -- 
Current portion of long-term debt  971  971
Total current liabilities  68,404  16,670
     
Retiree health benefit obligation  6,568  6,541
Pension obligation  14,367  14,401
Deferred income taxes  37,073  33,805
Deferred compensation  658  756
Long-term debt, less current portion  110,266  110,995
Other long-term liabilities   5,612  1,471
     
Total stockholders' equity  145,377  153,732
Total liabilities and stockholders' equity $ 388,325 $ 338,371
     
 
Douglas Dynamics, Inc.
Consolidated Statements of Operations and Comprehensive Income
(In thousands, except per share data)
         
  Three Month Period Ended Nine Month Period Ended
  September 30, 2013 September 30, 2012 September 30, 2013 September 30, 2012
  (unaudited) (unaudited)
         
         
Net sales $ 52,026 $ 37,774 $ 121,323 $ 111,833
Cost of sales  36,982  26,208  83,075  75,387
Gross profit  15,044  11,566  38,248  36,446
         
Selling, general, and administrative expense  10,733  5,051  22,740  15,388
Intangibles amortization  1,447  1,300  4,142  3,901
Impairment of assets held for sale  --   --   647  -- 
         
Income from operations  2,864  5,215  10,719  17,157
         
Interest expense, net (2,130) (2,080) (6,190) (6,304)
Other expense, net (40) (44) (117) (277)
Income before taxes  694  3,091  4,412  10,576
         
Income tax expense  91  745  1,304  3,525
         
Net income $ 603 $ 2,346 $ 3,108 $ 7,051
Less: Net income attributable to participating securities  9  19  45  51
Net income attributable to common shareholders $ 594 $ 2,327 $ 3,063 $ 7,000
         
Weighted average number of common shares outstanding:        
Basic  22,053,555 21,922,173  22,021,226  21,885,301
Diluted  22,080,037 21,979,015  22,061,713  21,958,473
         
Earnings per common share:        
Basic  $ 0.03  $ 0.11  $ 0.14  $ 0.32
Diluted  $ 0.02  $ 0.10  $ 0.13  $ 0.31
Cash dividends declared and paid per share  $ 0.21  $ 0.21  $ 0.62  $ 0.62
Comprehensive income  $ 802 $ 2,371  $ 3,716  $ 7,064
         
 
Douglas Dynamics, Inc.
Consolidated Statements of Cash Flows
(In thousands)
     
  Nine Month Period Ended
  September 30, 2013 September 30, 2012
  (unaudited)
     
Operating activities    
Net income $ 3,108 $ 7,051
Adjustments to reconcile net income to net cash used in operating activities:    
Depreciation and amortization  6,400  5,998
Amortization of deferred financing costs and debt discount  568  763
Loss recognized on impairment of assets held for sale  647  -- 
Stock-based compensation  2,024  1,700
Provision for losses on accounts receivable  163  208
Deferred income taxes  3,342  3,631
Earnout liability   3,814  -- 
Changes in operating assets and liabilities, net of acquisitions:    
Accounts receivable (45,403) (36,867)
Inventories (1,542) (6,375)
Prepaid and other assets and prepaid income taxes (423) (2,145)
Accounts payable (2,369) (2,939)
Accrued expenses and other current liabilities  2,177 (5,429)
Deferred compensation (156) (156)
Benefit obligations and other long-term liabilities  928 (533)
Net cash used in operating activities (26,722) (35,093)
     
Investing activities    
Capital expenditures (1,747) (1,083)
Proceeds from sale of equipment  --   80
Acquisition of Trynex  (26,734)  -- 
Net cash used in investing activities (28,481) (1,003)
     
Financing activities    
Shares withheld on restricted stock vesting paid for employees' taxes (160)  -- 
Dividends paid (13,935) (13,631)
Revolver borrowings  50,000  23,000
Repayment of long-term debt (863) (10,863)
Net cash provided by (used in) financing activities  35,042 (1,494)
Change in cash and cash equivalents (20,161) (37,590)
Cash and cash equivalents at beginning of year  24,136  39,432
Cash and cash equivalents at end of quarter $ 3,975 $ 1,842
     
 
Douglas Dynamics, Inc.
Net Income to Adjusted EBITDA reconciliation (unaudited)
(in thousands)
         
  Three month period ended September 30, Nine month period ended September 30,
  2013 2012 2013 2012
         
Net income  $ 603  $ 2,346  $ 3,108  $ 7,051
         
Interest expense - net  2,130  2,080  6,190  6,304
Income tax expense  91  745  1,304  3,525
Depreciation expense  804  695  2,258  2,097
Amortization  1,447  1,300  4,142  3,901
EBITDA  5,075  7,166  17,002  22,878
         
Stock based compensation  565  794  2,024  1,700
Trynex purchase accounting (1)  4,369  --   4,369  -- 
Other charges (credits) (2)   179  (152)  1,399  970
Adjusted EBITDA  $ 10,188  $ 7,808  $ 24,794  $ 25,548
         
(1) Reflects $3,814 and $555 in earn out compensation and inventory that was written up for purchase accounting and sold in both the three and nine months ended September 30, 2013.   
(2) Reflects $179 and ($152) of unrelated legal and consulting fees for the three months ended September 30, 2013 and 2012, respectively, and $752 and $970 for the nine months ended September 30, 2013 and 2012, respectively; and a write down of asset held for sale of $647 for the nine months ended September 30, 2013.
 
 
Douglas Dynamics, Inc.
Reconciliation of Net Income to Adjusted Net Income
$ Millions, except share data
         
  Three month period ended Nine month period ended
   September 30, September 30,
  2013 2012 2013 2012
Net income (GAAP) $0.6 $2.3 $3.1 $7.1
Addback expenses, net of tax at 38.0% for 2013:        
 -Loss recognized on impairment of assets held for sale:  --   --   0.4  -- 
         
Adjusted net income (non-GAAP) $0.6 $2.3 $3.5 $7.1
         
Weighted average basic common shares outstanding  22,053,555 21,922,173  22,021,226 21,885,301
Weighted average common shares outstanding assuming dilution  22,080,037 21,979,015  22,061,713 21,958,473
         
Adjusted earnings per common share - basic  $ 0.03  $ 0.11  $ 0.16  $ 0.32
Adjusted earnings per common share - dilutive  $ 0.02  $ 0.10  $ 0.15  $ 0.31
CONTACT: For further information contact:
         Douglas Dynamics, Inc.
         Bob McCormick
         414-362-3868
         investorrelations@douglasdynamics.com

Douglas Dynamics, Inc. Logo

5 of 5

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,083.80 -2.83 -0.02%
S&P 500 1,987.98 +0.97 0.05%
NASDAQ 4,472.1080 -1.5890 -0.04%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs