Douglas Dynamics, Inc. (NYSE:PLOW) Q4 2022 Earnings Conference Call February 21, 2023 10:00 AM ET

Company Participants

Sarah Lauber – Executive Vice President and Chief Financial Officer

Bob McCormick – President and Chief Executive Officer

Conference Call Participants

Mike Shlisky – D.A. Davidson

Tim Wojs – Baird

Greg Burns – Sidoti & Co.

Operator

Good morning, and welcome to the Douglas Dynamics Fourth Quarter 2022 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded.

I would now like to turn the conference over to Sarah Lauber, Executive Vice President and Chief Financial Officer. Please go ahead.

Sarah Lauber

Thank you. Welcome everyone, and thank you for joining us on today's call. Before we begin, I'd like to remind you that some of the comments that will be made during this conference call, including answers to your questions, will constitute forward-looking statements. These forward-looking statements are subject to risks that could cause actual results to be materially different. Those risks include, among others, matters that we have described in yesterday's press release and in our filings with the SEC.

With that, I will turn the call over to Bob McCormick.

Bob McCormick

Thanks, Sarah. Good morning, everyone. Overall, 2022 was a good year for Douglas Dynamics, and we delivered significantly improved full year results. 2022 net sales increased approximately 14% when compared to 2021 and net income and diluted earnings per share both increased around 26%, and both segments produced improved year-over-year results. While external headwinds persisted and progress is slower than we'd like, I am pleased with how our teams are managing the factors within our control.

Demand remained strong in 2022, and our teams are able to find ways to deliver for our customers, while implementing profit improvement initiatives and controlling costs. The trend for the first three quarters of the year was a very strong performance from attachments in each quarter, while solutions showed small improvements, but we're still being impacted by inflation and supply chain issues. That changed somewhat in the fourth quarter. Although our financial performance improved across the board, it was driven by continued price realization at both segments and higher volumes in Work Truck Solutions.

Now let's talk about the segments in more detail. First, Attachments. Our Work Truck Attachments segment had a tremendous year overall, introducing innovative new products and taking advantage of changing industry dynamics. Full year net sales increased 17%, primarily due to pricing actions, as well as the strong preseason. Despite slightly below average snowfall for the season ending in March 2022, we received record preseason orders as dealers were attempting to get ahead of any potential supply chain issues with stronger than normal holders.